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SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM N8B-2
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUST
WHICH ARE CURRENTLY ISSUING SECURITIES
Dated August 20, 1998
Pursuant to Section 8(b) of the Investment Company Act of 1940
ALLMERICA SELECT SEPARATE ACCOUNT II
OF FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(Name of Unit Investment Trust)
440 Lincoln Street
Worcester MA 01653
(Address of Principal Office of Registrant)
Issuer of periodic payment plan certificates only for purposes of information
provided herein.
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I I. ORGANIZATION AND GENERAL INFORMATION
1. (a) FURNISH NAME OF THE TRUST AND THE INTERNAL REVENUE SERVICE
EMPLOYER IDENTIFICATION NUMBER.
The trust is the Allmerica Select II Separate Account of First
Allmerica Financial Life Insurance Company ("Separate Account").
The Separate Account is a separate investment account of First
Allmerica Financial Life Insurance Company (the "Company") and
has no employer identification number.
(b) FURNISH TITLE OF EACH CLASS OR SERIES OF SECURITIES ISSUED BY THE
TRUST.
The securities are individual or group flexible payment variable
life insurance policies and the Certificates thereunder
(collectively, the "Policies") unless the context requires
otherwise.
2. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
DEPOSITOR OF THE TRUST.
First Allmerica Financial Life Insurance Company
440 Lincoln Street
Worcester, Massachusetts 01653
FEIN: 04-1867050.
3. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
CUSTODIAN OR TRUSTEE OF THE TRUST INDICATING FOR WHICH CLASS OR
SERIES OF SECURITIES EACH CUSTODIAN OR TRUSTEE IS ACTING.
The Company will hold all of the securities in its own custody.
4. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING SECURITIES OF THE
TRUST.
Distribution of the Policies has not yet commenced. When
distribution commences, the principal underwriter will be:
Allmerica Investments, Inc.
440 Lincoln Street
Worcester MA 01653
FEIN: 04-2448927.
5. FURNISH NAME OF STATE OR OTHER SOVEREIGN POWER, THE LAWS OF WHICH
GOVERN WITH RESPECT TO THE ORGANIZATION OF THE TRUST.
Massachusetts.
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6. (a) FURNISH THE DATES OF EXECUTION AND TERMINATION OF AGREEMENT
CURRENTLY IN EFFECT UNDER THE TERMS OF WHICH THE TRUST WAS
ORGANIZED AND ISSUED OR PROPOSES TO ISSUE SECURITIES.
The Separate Account was authorized under Massachusetts law
pursuant to a resolution of the Board of Directors of the Company
on June 13, 1996. The resolution authorizing the Separate Account
will continue until amended by the Board of Directors of the
Company. The Policies will be issued pursuant to this
resolution.
(b) FURNISH THE DATES OF EXECUTION AND TERMINATION OF ANY INDENTURE
OR AGREEMENT CURRENTLY IN EFFECT PURSUANT TO WHICH THE PROCEEDS
OF PAYMENTS ON SECURITIES ISSUED OR TO BE ISSUED BY THE TRUST ARE
HELD BY THE CUSTODIAN OR TRUSTEE.
None.
7. FURNISH IN CHRONOLOGICAL ORDER THE FOLLOWING INFORMATION WITH
RESPECT TO EACH CHANGE OF NAME OF THE TRUST SINCE JANUARY 1,
1930. IF THE NAME HAS NEVER BEEN CHANGED, SO STATE.
The name of the Separate Account has never been changed.
8. STATE THE DATE ON WHICH THE FISCAL YEAR OF THE TRUST ENDS.
December 31.
MATERIAL LITIGATION
9. FURNISH A DESCRIPTION OF ANY PENDING LEGAL PROCEEDINGS, MATERIAL
WITH RESPECT TO THE SECURITY HOLDERS OF THE TRUST BY REASON OF
THE NATURE OF THE CLAIM OR THE AMOUNT THEREOF, TO WHICH THE
TRUST, THE DEPOSITOR, OR THE PRINCIPAL UNDERWRITER IS A PARTY
OR OF WHICH THE ASSETS OF THE TRUST ARE THE SUBJECT, INCLUDING
THE SUBSTANCE OF THE CLAIMS INVOLVED IN SUCH PROCEEDING AND THE
TITLE OF THE PROCEEDING. FURNISH A SIMILAR STATEMENT WITH
RESPECT TO ANY PENDING ADMINISTRATIVE PROCEEDING COMMENCED BY A
GOVERNMENTAL AUTHORITY OR ANY SUCH PROCEEDING OR LEGAL PROCEEDING
KNOWN TO BE CONTEMPLATED BY A GOVERNMENTAL AUTHORITY. INCLUDE
ANY PROCEEDINGS WHICH, ALTHOUGH IMMATERIAL ITSELF, IS
REPRESENTATIVE OF, OR ONE OF, A GROUP WHICH IN THE AGGREGATE IS
MATERIAL.
There are no current or pending legal or administrative
proceedings to which the Separate Account, the Company, or
Allmerica Investments Inc. is a party and which are material
with respect to the security holders of the Separate Account.
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
GENERAL INFORMATION CONCERNING THE SECURITIES OF THE TRUST AND THE RIGHTS
OF HOLDERS.
10. FURNISH A BRIEF STATEMENT WITH RESPECT TO THE FOLLOWING
MATTERS FOR EACH CLASS OR SERIES OF SECURITIES ISSUED BY THE
TRUST.
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(a) WHETHER THE SECURITIES ARE OF THE REGISTERED OR BEARER TYPE.
The Policies are variable life insurance policies and, as such,
are "registered" in the name of the Policyowner and the records
concerning the Policyowner are maintained by or on behalf of the
Company.
(b) WHETHER THE SECURITIES ARE OF THE CUMULATIVE OR DISTRIBUTIVE
TYPE.
The Policies are of the cumulative type, providing for no
distribution of income, dividends or capital gains except in
connection with a voluntary surrender or partial withdrawal of
Policy value by a Policyowner, or in connection with the payment
of death benefits.
(c) THE RIGHTS OF SECURITY HOLDERS WITH RESPECT TO WITHDRAWAL OR
REDEMPTION.
A Policy may be surrendered at any time, subject to the possible
imposition of a contingent deferred administrative charge and a
contingent deferred sales charge. See Item 13(a) "Surrender
Charge" and Item 17(a) "Surrender."
After the first Policy year, partial withdrawals in a minimum
amount of $500 may be made from the Policy value at any time upon
written request filed at the Company's Principal Office. A
transaction charge, which is the smaller of 2% of the amount
withdrawn or $25.00, will be assessed in all cases. A partial
withdrawal charge may also be deducted. The partial withdrawal
charge will not exceed the surrender charge, and the outstanding
surrender charge will be reduced by the amount of the partial
withdrawal charges. See Item 13(a) "Charges on Partial
Withdrawal" and Item 17(a) "Partial Withdrawal."
(d) THE RIGHTS OF SECURITY HOLDERS WITH RESPECT TO CONVERSION,
TRANSFER, PARTIAL-REDEMPTION, AND SIMILAR MATTERS.
TRANSFER - The Policies permit net premiums to be allocated
either to the Company's General Account or to the Sub-Accounts of
the Separate Account. Each Sub-Account invests exclusively in a
corresponding investment portfolio ("Underlying Fund") of the
Allmerica Investment Trust ("AIT"), managed by Allmerica
Financial Investment Management Services, Inc. ("AFIMS"), the
Variable Insurance Products Fund ("VIPF"), managed by Fidelity
Management and Research Company ("Fidelity Management"), or the
T. Rowe Price International Series, Inc. ("T. Rowe Price"),
managed by Rowe Price-Fleming International. Subject to the
consent of the Company, the Policyowner may transfer amounts
among all of the Sub-Accounts and between the Sub-Accounts and
the General Account, but at no time may have allocations in more
than seven Sub-Accounts. The transfer privilege is subject to
the consent of the Company and to the Company's then current
rules.
CONVERSION PRIVILEGE - During the first 24 Policy months after
the date of issue, subject to certain restrictions, the
Policyowner may convert the Policy to a flexible premium fixed
Policy by transferring all Policy value in the Sub-Accounts to
the General Account and by simultaneously changing the allocation
of future premiums to the General Account. A similar conversion
privilege is in effect for 24 Policy months after the date of an
increase in face amount, under which the Policyowner may convert
by transferring all or part of Policy value in the Sub-Accounts
to the General Account and by simultaneously changing the
allocation of all or part of future premiums to the General
Account.
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FREE LOOK PRIVILEGE - The Policy provides for an initial Free
Look Period. The Policyowner may cancel the Policy until the
latest of (a) 45 days after the application for the Policy is
signed, (b) 10 days after the Policyowner receives the Policy,
and (c) 10 days after the Company mails or personally delivers a
notice of withdrawal rights to the Policyowner. Upon returning
the Policy, the Policyowner will be sent within 7 days a refund
equal to the premiums paid. The refund of any premium paid by
check, however, may be delayed until the check has cleared the
Policyowner's bank.
A free look privilege also applies following a requested increase
in face amount. The Policyowner has the right to cancel the
increase before the latest of (a) 45 days after the application
for the increase is signed, (b) 10 days after receipt of the new
specification pages issued for the increase, and (c) 10 days
after the Company mails or delivers a notice of withdrawal
rights. Upon canceling the increase, the Policyowner will
receive a credit to the Policy value of charges which would not
have been deducted but for the increase. The amount to be
credited will be refunded if the Policyowner so requests. The
Company will also waive any surrender charge calculated for the
increase.
The Policyowner may make surrenders and partial withdrawals as
described in Items 10(c), 13(a) and 17(a).
(e) IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENTS WITH RESPECT TO LAPSES OR DEFAULTS BY SECURITY
HOLDERS IN MAKING PRINCIPAL PAYMENTS, AND WITH RESPECT TO
REINSTATEMENT.
CONTRACT LAPSE AND REINSTATEMENT - The failure to make premium
payments will not itself cause a Policy to lapse unless: (1) the
surrender value is insufficient to cover the next monthly
deduction plus loan interest accrued, if any, or (2) (2) Policy
debt ("Debt") exceeds the Policy value less surrender charges.
A 62-day grace period applies to each situation. Subject to
certain conditions (including Evidence of Insurability showing
that the Insured is insurable according to the Company's
underwriting rules and the payment of sufficient premium) a
Certificate may be reinstated at any time within 3 years after
the expiration of the grace period and prior to the Final Premium
Payment Date.
(f) THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENTS
WITH RESPECT TO VOTING RIGHTS, TOGETHER WITH THE NAMES OF ANY
PERSONS OTHER THAN SECURITY HOLDERS GIVEN THE RIGHT TO
EXERCISE VOTING RIGHTS PERTAINING TO THE TRUST'S SECURITIES OR
THE UNDERLYING SECURITIES AND THE RELATIONSHIP OF SUCH PERSONS
TO THE TRUST.
To the extent required by law, the Company will vote shares held
by each Sub-Account in accordance with instructions received from
the Policyowners with Policy value in such Sub-Account. Each
person having a voting interest will be provided with proxy
materials together with an appropriate form with which to give
voting instructions to the Company. Shares held in each
Sub-Account for which no timely instructions are received will be
voted in proportion to the instructions received from all persons
with an interest in the Sub-Account furnishing instructions to
the Company with respect to the Underlying Funds. The Company
will also vote shares held in the Separate Account that it owns
and which are not attributable to the Policies in the same
proportion.
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The number of votes which a Policyowner may cast will be
determined by the Company as of the record date established for
the Underlying Fund. The number of shares held in each
Sub-Account deemed attributable to each Policyowner is determined
by dividing Policy value in the Sub-Account, if any, by the net
asset value of one share in the corresponding Underlying Fund in
which the assets of the Sub-Account are invested. Fractional
votes will be counted.
If the 1940 Act or any rules thereunder should be amended or if
the present interpretation of the 1940 Act or such rules should
change, and as a result the Company determines that it is
permitted to vote shares of the Fund in its own right, whether or
not such shares are attributable to the Policies, the Company
reserves the right to do so.
The Company may, when required by state insurance regulatory
authorities, disregard voting instructions if the instructions
require that the shares be voted so as (1) to cause a change in
the subclassification or investment objective of one or more of
the Underlying Funds or (2) to approve or disapprove an
investment advisory contract for the Underlying Funds. In
addition the Company may disregard voting instructions calling
for a change in the investment policies, any investment adviser
or principal underwriter of any Underlying Fund which may be
initiated by Policyowners or its respective Trustees, provided
the Company's disapproval of the change is reasonable and, in the
case of a change in investment policies or investment adviser,
based on a good faith determination that such change would be
contrary to state law or otherwise inappropriate in light of the
Underlying Fund's objectives and purposes. In the event the
Company does disregard voting instructions, a summary of that
action and the reasons for that action will be included in the
next periodic report to Policyowners.
(g) WHETHER SECURITY HOLDERS MUST BE GIVEN NOTICE OF ANY CHANGES IN:
(1) THE COMPOSITION OF THE ASSETS OF THE TRUST.
The Company reserves the right, subject to applicable law,
to make additions to, deletions from, or substitutions for
the shares that are held in the Sub-Accounts of the Separate
Account or that the Sub-Accounts of the Separate Account may
purchase. If the shares of an Underlying Fund are no longer
available for investment or if in the Company's judgment
further investment in any Underlying Fund should become
inappropriate in view of the purposes of the Separate
Account or the affected Sub-Account, the Company may redeem
the shares of that Underlying Fund and substitute shares of
another registered open-end management company. The Company
will not substitute any shares attributable to a Policy
interest in a Sub-Account without notice and prior approval
of the SEC and state insurance authorities, to the extent
required by the 1940 Act or other applicable law.
The Company also reserves the right to establish additional
Sub-Accounts of the Separate Account, each of which would
invest in shares corresponding to a new Underlying Fund or
in shares of another investment company having a specified
investment objective. Subject to applicable law and any
required Commission approval, the Company may, in its sole
discretion, establish new Sub-Accounts or eliminate one or
more Sub-Accounts if marketing needs, tax considerations or
investment conditions warrant. Any new Sub-Accounts may be
made available to
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existing Policyowners on a basis to be determined by the
Company.
If any of these substitutions or changes are made, the
Company may by appropriate endorsement change the Policy to
reflect the substitution or change and will notify
Policyowners of all such changes. If the Company deems it
to be in the best interest of Policyowners, and subject to
any approvals that may be required under applicable law, the
Separate Account or any Sub-Account(s) may be operated as a
management company under the 1940 Act, may be deregistered
under that Act if registration is no longer required, or may
be combined with other Sub-Accounts or other Separate
Accounts of the Company.
(2) THE TERMS AND CONDITIONS OF THE SECURITIES ISSUED BY THE
TRUST.
No change in the terms and conditions of the Policies that
affect the Policyowner's rights will be made without notice
to Policyowner to the extent required by law.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF THE TRUST.
No notice to or consent from Policyowners is required for
any change in the Company's resolution establishing the
Separate Account.
(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR CUSTODIAN.
The depositor of the Separate Account cannot be changed.
The Separate Account has no Trustees.
Notice to Policyowners need not be given for the custodian
to be changed.
(h) WHETHER THE CONSENT OF SECURITY HOLDERS IS REQUIRED IN ORDER
FOR ACTION TO BE TAKEN CONCERNING ANY CHANGE IN:
(1) THE COMPOSITION OF THE ASSETS OF THE TRUST.
The Policies do not require consent of the Policyowners when
changing the underlying securities of the Separate Account,
except as may be required by currently applicable law or
regulation.
(2) THE TERMS AND CONDITIONS OF THE SECURITIES ISSUED BY THE
TRUST.
Except as appropriate to comply with federal or state law or
regulation the terms and conditions of a Policy cannot be
changed without the consent of the Policyowner.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF THE TRUST.
No consent is required.
(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR CUSTODIAN.
The depositor of the Separate Account cannot be changed.
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The Separate Account has no Trustees.
The consent of security holders is not required to change
the custodian.
(i) ANY OTHER PRINCIPAL FEATURE OF THE SECURITIES ISSUED BY THE
TRUST OR ANY OTHER PRINCIPAL RIGHT, PRIVILEGE OR OBLIGATION
NOT COVERED BY SUBDIVISIONS (A) TO (G) OR BY ANY OTHER ITEM IN
THIS FORM.
(1) PREMIUM PAYMENTS - SEE Items 14 and 15.
(2) QUALIFICATION AS LIFE INSURANCE
Federal tax law requires a minimum death benefit in relation
to the cash value for a Policy to qualify as life insurance.
Under current Federal tax law, A Guideline Premium test is
used to determine if a contract complies with the definition
of life insurance in Section 7702 of the Internal Revenue
Code ("Code").
The Guideline Premium test limits the amounts of premiums
payable under a policy as to a certain amount for an insured
of a particular age and sex. Policy owners may choose
between two Death Benefit options (Option 1 or Option 2).
The Policy owner designates the desired option in the
application form, the Policy owner may change the option
once per Policy year by written request. There is nor
charge for a change in option. The effective date of any
such change will be the monthly payment date on or following
the date of receipt of the request.
Under Option 1, the Death Benefit is equal to the greater of
the face amount of insurance or the Minimum Death Benefit.
Under Option 2, the death benefit is equal to the greater of
the face amount of insurance plus the Policy Value or the
Guideline Minimum Death Benefit. A minimum Death Benefit,
equivalent to a percentage of the Policy Value, will apply
if it is greater that the Death Benefit otherwise payable
under Option 1 or Option 2.
(3) DEATH PROCEEDS
As long as the Policy remains in force, the Company
will, upon due proof of the Insured's death, pay the
Death Proceeds of the Policy to the named beneficiary.
The Company will normally pay the Death Proceeds within
seven days of receiving due proof of the Insured's
death, but the Company may delay payments under certain
circumstances. The Death Proceeds may be received by the
beneficiary in cash or under one or more of the payment
options set forth in the Policy.
The Policy provides two Death Benefit Options: Option 1 and
Option 2, as described below. The Policyowner designates
the desired Death Benefit Option in the application. The
Policyowner may change the option once per Policy year by
written request. There is no charge for a change in Option.
The effective date of any such change will be the monthly
payment date on or following the date of receipt of the
request.
The Death Proceeds are: (a) The Death Benefit provided under
Option 1 or Option 2, whichever is elected and in effect on
the date of death; plus (b) any additional
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insurance on the Insured's life that is provided by
rider; minus (c) any outstanding Debt, any partial
withdrawals and partial withdrawal charges, and any
Monthly Deductions due and unpaid through the Policy
month in which the Insured dies. The amount of Death
Proceeds payable will be determined as of the date of the
Company's receipt of due proof of the Insured's death.
Under Option 1, the Death Benefit is equal to the greater of
the face amount of insurance or the Guideline Minimum Death
Benefit.
Under Option 2, the Death Benefit is equal to the greater of
the face amount of insurance plus the Policy value or the
Guideline Minimum Death Benefit.
The Guideline Minimum Death Benefit is equal to a percentage
of the Policy value as set forth in the Policy. The
Guideline Minimum Death Benefit is determined in accordance
with the Internal Revenue Code regulations to ensure that
the Policy qualifies as a life insurance contract and that
the insurance proceeds will be excluded from the gross
income of the beneficiary.
(4) GUARANTEED DEATH BENEFIT RIDER
An optional Guaranteed Death Benefit Rider is available ONLY
AT ISSUE OF THE POLICY. IF THIS RIDER IS IN EFFECT, THE
COMPANY:
- guarantees that your Policy will not lapse regardless
of the investment performance of the Variable Account
and
- provides a guaranteed net death benefit.
In order to maintain the Guaranteed Death Benefit rider,
certain minimum premium payment tests must be met on each
policy anniversary and within 48 months following the Date
of Issue and/or the date of any increase in Face Amount, as
described below. In addition, a one-time administrative
charge of $25 will be deducted from Policy Value when the
rider is elected. Certain transactions, including policy
loans, partial withdrawals, and changes in Death Benefit
Options, can result in the termination of the rider. If
this rider is terminated, it cannot be reinstated.
GUARANTEED DEATH BENEFIT TESTS
While the Guaranteed Death Benefit Rider is in effect, the
Policy will not lapse if the following two tests are met:
1. Within 48 months following the Date of Issue of
the Policy or of any increase in the Face Amount, the
sum of the premiums paid, less any debt, partial
withdrawals and withdrawal charges, must be greater
than the Minimum Monthly Factors (if any) multiplied by
the number of months which have elapsed since the
relevant Date of Issue; and
2. On each policy anniversary, (a) must exceed (b),
where, since the Date of Issue:
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(a) is the sum of your premiums, less any
withdrawals, partial withdrawal charges and debt which is
classified as a preferred loan; and
(b) is the sum of the minimum guaranteed
death benefit premiums, as shown on the specifications page
of the Policy.
GUARANTEED DEATH BENEFIT
If the Guaranteed Death Benefit Rider is in effect on the
Final Premium Payment Date, guaranteed Death Proceeds will
be provided as long as the rider is in force. The Death
Proceeds will be the greater of:
- the Face Amount as of the Final Premium Payment Date; or
- the Policy Value as of the date due proof of death is
received by the Company.
TERMINATION OF THE GUARANTEED DEATH BENEFIT RIDER
The Guaranteed Death Benefit rider will end AND MAY NOT BE
REINSTATED on the first to occur of the following:
- foreclosure of a Policy Loan; or
- the date on which the sum of your payments does not meet
or exceed the applicable Guaranteed Death Benefit test
(above); or
- any Policy change that results in a negative guideline
level premium; or
- the effective date of a change from Death Benefit
Option 2 to Death Benefit Option I, if such changes
occurs within 5 policy years of the Final Premium
Payment Date; or
- a request for a partial withdrawal or preferred loan is
made after the Final Premium Payment Date.
It is possible that the Policy Value will not be sufficient
to keep the Policy in force on the first Monthly Payment
Date following the date the rider terminates. The net
amount payable to keep the Policy in force will never exceed
the surrender charge plus three Monthly Deductions.
(5) CALCULATION OF CASH VALUE - SEE Items 44(a), 44(c), and
46(a).
(6) LOAN PROVISIONS. SEE Item 21.
(7) PAYMENT OPTIONS - Upon written request, the surrender
value or part of the Death Proceeds may be placed under
one or more of the payment options offered by the Company.
If the Policyowner does not make an election, the Company
will pay the benefits in a single sum. A certificate will
be provided to the payee describing the payment option
selected.
If a payment option is selected, the beneficiary may pay to
the Company an amount that would otherwise be deducted from
the Death Benefit.
The amount applied under any one payment option for any one
payee must be at least $5,000. The periodic payments for
any one payee must be at least $50.
(8) OPTIONAL INSURANCE BENEFIT - Subject to certain
requirements, one or more of the
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following additional insurance benefits may be added by
rider: Waiver of Premium Rider, Accidental Death Benefit
Rider, Guaranteed Insurability Rider, Other Insured Rider,
Children's Insurance Rider, Exchange Option Rider, Base
Insured Rider, Living Benefits Rider, or Guaranteed Death
Benefit Rider. The cost of these optional insurance
benefits will be deducted from Policy value as part
of the monthly deduction, except that a one-time charge
not to exceed $25 is made when the Guaranteed Death
Benefit Rider is elected upon issue of the Policy.
INFORMATION CONCERNING THE SECURITIES UNDERLYING THE TRUST'S SECURITIES
11. DESCRIBE BRIEFLY THE KIND OR TYPE OF SECURITIES COMPRISING THE
UNIT OF SPECIFIED SECURITIES IN WHICH SECURITY HOLDERS HAVE AN
INTEREST.
The Policies permit net premiums to be allocated either to the
Company's General Account or to the Separate Account. The
Separate Account is currently comprised of 14 investment
divisions ("Sub-Accounts"). Each Sub-Account invests exclusively
in a corresponding Underlying Fund of AIT, VIPF and T. Rowe
Price, which are no-load, open-end, diversified series management
investment companies. AIT currently offers to the Policies nine
different investment portfolios (each a "Fund"). VIPF currently
offers to the Policies four different investment portfolios
(each a "Portfolio"). T. Rowe Price currently offers to the
Policies one investment portfolio ("Series").
Each of the Underlying Funds operates pursuant to different
investment objectives, which are summarized below:
Select Emerging Markets Fund -- seeks long-term growth of
capital by investing in the world's emerging markets.
Select International Equity Fund -- seeks maximum long-term total
return (capital appreciation and income) primarily by investing
in common stocks of established non-U.S. companies.
T. Rowe Price International Stock Portfolio -- seeks long-term
growth of capital through investments primarily in common
stocks of established, non-U.S. companies. The fund expects
to invest substantially all of its assets outside the U.S. and
to diversify broadly among countries throughout the world -
developed and emerging.
Select Aggressive Growth Fund -- seeks above-average capital
appreciation by investing primarily in common stocks of companies
which are believed to have significant potential for capital
appreciation.
Select Capital Appreciation Fund -- seeks long-term growth of
capital in a manner consistent with the preservation of
capital. Realization of income is not a significant investment
consideration and any income realized on the Fund's investments
will be incidental to its primary objective. The Fund will invest
primarily in common stock of industries and companies which are
experiencing favorable demand for their products and services,
and which operate in a favorable competitive environment and
regulatory climate.
Select Value Opportunity Fund - seeks long-term growth of
capital by investing primarily in a diversified portfolio of
common stocks of small and mid-size companies, whose
securities at the time of purchase are considered by the
Sub-Adviser to be undervalued.
Select Growth Fund -- seeks to achieve long-term growth of
capital by investing in a diversified portfolio consisting
primarily of common stocks selected on the basis of their
long-term growth potential.
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Select Strategic Growth Fund -- seeks long-term growth of
capital by investing primarily in common stocks of established
companies.
Fidelity VIPF Growth Portfolio -- seeks to achieve capital
appreciation. The Portfolio normally purchases common stocks,
although its investments are not restricted to any one type of
security. Capital appreciation may also be found in other
types of securities, including bonds and preferred stocks.
Select Growth and Income Fund -- seeks a combination of
long-term growth of capital and current income. The fund will
invest primarily in dividend-paying common stocks and
securities convertible into common stocks.
Fidelity VIPF Equity-Income Portfolio -- seeks reasonable
income by investing primarily in income-producing equity
securities. In choosing these securities, the Fund will also
consider the potential for capital appreciation. The Fund's
goal is to achieve a yield which exceeds the composite yield
on the securities comprising S&P 500.
Fidelity VIPF High Income Portfolio -- seeks to obtain a high
level of current income by investing primarily in
high-yielding, fixed-income securities, while also considering
growth of capital. These securities are often considered to be
speculative and involve greater risk of default or price
changes than securities assigned a high quality rating. For
more information about these lower-rated securities, see the
VIPF prospectus.
Select Income Fund -- seeks a high level of current income.
The fund will invest primarily in investment grade,
fixed-income securities.
Money Market Fund -- seeks to obtain maximum current income
consistent with the preservation of capital and
liquidity.
12. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES AND IF ANY UNDERLYING SECURITIES
WERE ISSUED BY ANOTHER INVESTMENT COMPANY,
FURNISH INFORMATION FOR EACH SUCH COMPANY:
(b) NAME AND PRINCIPAL ADDRESS OF DEPOSITOR.
First Allmerica Financial Life Insurance Company
(formerly State Mutual Life Assurance Company of America,
until October 16, 1995), 440 Lincoln Street, Worcester, MA
01653 is the depositor of AIT.
Fidelity Investments, 82 Devonshire Street, Boston, MA is
the depositor of VIPF.
T. Rowe Price Associates, Inc. 100 East Pratt Street,
Baltimore, Maryland, 21202, is the depositor of T. Rowe
Price.
(c) NAME AND PRINCIPAL BUSINESS ADDRESS OF TRUSTEE OR CUSTODIAN:
Chase Manhattan Bank, N.A., Avenue of the Americas, 39th
Floor, New York, New York is the Custodian of the assets
of AIT.
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<PAGE>
Shawmut Bank of Boston, N.A., One Federal Street, Boston, MA
is the Custodian of the assets of VIPF.
(d) NAME AND PRINCIPAL BUSINESS ADDRESS OF PRINCIPAL-UNDERWRITER
The principal underwriter of AIT is Allmerica Investments,
Inc., 440 Lincoln Street, Worcester, Massachusetts, 01653.
The principal underwriter of VIP is Fidelity Distributors
Corporation, 82 Devonshire Street, Boston, MA.
The principal underwriter of T. Rowe Price is T. Rowe Price
Investment Services, Inc. 100 East Pratt Street, Baltimore,
Maryland, 21202.
(e) THE PERIOD DURING WHICH THE SECURITIES OF SUCH COMPANY HAVE
BEEN THE UNDERLYING SECURITIES.
Shares of the Underlying Funds will be purchased by the
Separate Account only after the effective date of the
Separate Account's registration statement under the
Securities Act of 1933.
INFORMATION CONCERNING LOADS, FEES, CHARGES AND EXPENSES
13. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH
LOAD, FEE, EXPENSE OR CHARGE TO WHICH (1) PRINCIPAL
PAYMENTS; (2) UNDERLYING SECURITIES; (3) DISTRIBUTIONS;
(4) CUMULATED OR REINVESTED DISTRIBUTIONS OR INCOME; AND
(5) REDEEMED OR LIQUIDATED ASSETS OF THE TRUST'S SECURITIES
ARE SUBJECT:
(A) THE NATURE OF SUCH LOAD, FEE, EXPENSE OR CHARGE;
(B) THE AMOUNT THEREOF:
(C) THE NAME OF THE PERSON TO WHOM SUCH AMOUNTS ARE PAID
AND HIS RELATIONSHIP TO THE TRUST:
(D) THE NATURE OF THE SERVICES PERFORMED BY SUCH PERSON IN
CONSIDERATION FOR SUCH LOAD, FEE, EXPENSE OR CHARGE.
(1) UNDER THE POLICIES
PAYMENT EXPENSE CHARGE - A charge of 2.75% of each
premium will be deducted to compensate the Company
for premium taxes imposed by various state and local
jurisdictions, and for federal taxes imposed for
deferred acquisition costs ("DAC taxes"), and a
front-end sales load of 0.5% is deducted to compensate
the company for Policy sales expenses.
MONTHLY DEDUCTIONS FROM POLICY VALUE - On the date of
issue and each monthly payment date thereafter, certain
charges will be deducted from the Policy value of each
Policy ("Monthly Deduction"). The Monthly Deduction
from Policy value consists of a charge retained by the
Company for cost of insurance, a charge for the cost of
any additional benefits provided by rider, and a charge
for administrative expenses. Monthly charges will be
deducted from a particular Sub-Account in accordance
with instructions received from the Policyowner.
If no allocation is made by the Policyowner, charges
will be deducted pro rata according to the Policy
value in the accounts.
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<PAGE>
The monthly cost of insurance charge will be affected by
any changes in the face amount and will be calculated
separately for the initial face amount, for any
increases in face amount, and for any benefits provided
by rider.
If the Policyowner selected Death Benefit Option 2, the
monthly cost of insurance charge for the initial face
amount will be equal to the applicable cost of insurance
rate multiplied by the initial face amount. If the
Policyowner selected Death Benefit Option 1, however,
the applicable cost of insurance rate will be multiplied
by the initial face amount less the Policy value (minus
charges for rider benefits) at the beginning of the
Policy month.
If Death Benefit Option 2 is selected, the monthly
insurance charge for each increase in face amount
(other than an increase caused by a change in Death
Benefit Option) will be equal to the cost of insurance
rate applicable to that increase multiplied by the
increase in face amount. If Death Benefit Option I
is selected, the applicable cost of insurance rate will
be multiplied by the increase in the face amount
reduced by any Policy value (minus rider charge) in
excess of the initial face amount at the beginning of
the Policy month.
If the Guideline Minimum Death Benefit is in effect under
either Option, monthly cost of insurance charge will also
be calculated for that portion of the Death Benefit which
exceeds the current face amount. This charge will be
calculated by multiplying the cost of insurance rate
applicable to the initial face amount times the Guideline
Minimum Death Benefit (Policy value times the applicable
percentage) less the greater of the face amount or the
Policy value if the Policyowner selected Death Benefit
Option 1, or less the face amount plus the Policy value
if the Policyowner selected Death Benefit Option 2. When
the Guideline Minimum Death Benefit is in effect, the
cost of insurance charge for the initial face amount and
for any increases will be calculated as set forth in the
preceding two paragraphs.
The monthly cost of insurance charge will also be
adjusted for any decreases in face amount.
Cost of insurance charges for the Policies will not be
the same for all Policyowners. The insurance principals
of pooling and distribution of mortality risks is based
on the assumption that each Policyowner pays a cost of
insurance charge commensurate with the Insured's
mortality risk. Cost of insurance rates are actually
based on the sex (male and female), age and premium
class of the Insured at the date of issue, the effective
date of an increase or date of rider, as applicable. The
cost of insurance rates are determined at the beginning
of each Policy year for the initial face amount and for
each increase in the face amount. The cost of insurance
rates generally increase as the Insured's age increases.
The actual monthly cost of insurance rates wil be based
on the Company's expectations as to future mortality
experience. They will not, however, be greater than the
guaranteed cost of insurance rates set forth in the
Policy. These guaranteed rates are based on the 1980
Commissioners Standard Ordinary Mortality Tables and the
Insured's sex and age. The Tables used for this purpose
set forth different mortality estimates for males and
females and for smokers and non-smokers. Any change in
the cost of insurance rates will apply to all persons of
the same insuring age, sex, and premium class whose
Policies have been in force for the same length of time.
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<PAGE>
In the event of a decrease, the surrender charge deducted is
a fraction of the charge that would apply to a full
surrender of the Policy. The fraction will be determined by
dividing the amount of the decrease by the current face
amount and multiplying the result by the surrender charge.
If more than one surrender charge is in effect (i.e.,
pursuant to one or more increases in the face amount of a
Policy), the surrender charge will be applied in the
following order: (1) the most recent increase, followed by
(2) the next most recent increases successively, and (3) the
initial face amount. Where a decrease causes a partial
reduction in an increase or in the initial face amount, a
proportionate share of the surrender charge for that
increase or for the initial face amount will be deducted.
CHARGES ON PARTIAL WITHDRAWAL - A transaction charge which
is the smaller of 2% of the amount withdrawn or $25.00 will
be assessed in all cases.
A partial withdrawal charge may also be imposed upon a
partial withdrawal. For each partial withdrawal the
Policyowner may withdraw an amount equal to 10% of the
Policy value on the date the written withdrawal request is
received by the Company less the total of any prior
withdrawals in that Policy year which were not subject to
the partial withdrawal charge, without incurring a partial
withdrawal charge. Any partial withdrawal in excess of this
amount ("excess withdrawal") will be subject to the partial
withdrawal charge. The partial withdrawal charge is equal
to 5% of the excess withdrawal up to the amount of the
surrender charge(s) on the date of withdrawal. There will
be no partial withdrawal charge if there is no surrender
charge on the date of withdrawal (I.E., 10 years have passed
from the date of issue and from the effective date of any
increase in the face amount).
The Policy's outstanding surrender charge will be reduced by
the amount of the partial withdrawal charge deducted. The
partial withdrawal charge deducted will decrease existing
surrender charges in the following order:
- first, the surrender charge for the most recent
increase in face amount;
- second, the surrender charges for the next most recent
increases successively; and
- last, the surrender charge for the initial face amount.
CHARGES AGAINST THE SEPARATE ACCOUNT - A daily charge
equivalent to an annual rate of .80% of the average daily
net asset value of each Sub-Account of the Separate Account
is imposed to compensate the Company for its assumption of
certain mortality and expense risks and for administrative
costs associated with the Separate Account. The rate is
0.65% for the mortality and expense risk charge (guaranteed
not to exceed 0.80%) and 0.15% for the administrative
charge, which administrative charge is eliminated after the
tenth Policy year.
No charges are currently made against the Sub-Accounts for
federal or state income taxes. Should the Company determine
that taxes will be imposed, the Company may make deductions
from the Sub-Account to pay such taxes. The imposition of
such taxes would result in a reduction of the Policy value
in the Sub-Accounts.
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<PAGE>
(2) UNDERLYING SECURITIES
AIT
The Trustees of AIT have entered into a Management Agreement
with Allmerica Financial Investment Management Services,
Inc. ("AFIMS"), an indirect wholly owned subsidiary of the
Company, to handle the day-to-day affairs of the Trust.
Pursuant to the Management Agreement with the Trust, AFIMS
has entered into agreements ("Sub-Adviser Agreements") with
other investment advisers ("Sub-Advisers") under which each
Sub-Adviser manages the investments of one or more of the
Funds. Under the Sub-Adviser Agreement, the Sub-Adviser is
authorized to engage in portfolio transactions on behalf of
the applicable Fund, subject to such general or specific
instructions as may be given by the Trustees.
For providing its services under the management agreement,
AFIMS receives a fee, computed daily at an annual rate
based on the average daily net asset value of each fund
as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Select Emerging Markets Fund * 1.35%
Select International Equity Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%
Select Aggressive Growth Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%
Select Capital Appreciation Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%
Select Value Opportunity Fund First $100 million 1.00%
Next $150 million 0.85%
Next $250 million 0.80%
Next $250 million 0.75%
Over $750 million 0.70%
Select Growth Fund First $250 million 0.85%
Next $250 million 0.80%
Next $250 million 0.70%
Over $750 million 0.70%
Select Strategic Growth Fund * 0.85%
</TABLE>
16
<PAGE>
<TABLE>
<S> <C> <C>
Select Growth and Income Fund First $100 million 0.75%
Next $150 million 0.70%
Over $250 million 0.65%
Select Income Fund First $50 million 0.60%
Next $50 million 0.55%
Over $100 million 0.45%
Money Market Fund First $50 million 0.35%
Next $200 million 0.25%
Over $250 million 0.20%
</TABLE>
*For the Select Emerging Markets Fund, and the Select Strategic
Growth Fund, the investment management fee does not vary
according to the level of assets in the Fund. AFIM's fee computed
for each Fund will be paid from the assets of such Fund.
Pursuant to the Management Agreement with the Trust, AFIM's has
entered into agreements ("Sub-Adviser Agreements") with other
investment advisers ("Sub-Advisers") under which each Sub-Adviser
manages the investments of one or more of the Funds. Under the
Sub-Adviser Agreements, the Sub-Advisers are authorized to engage
in portfolio transactions on behalf of the applicable Fund,
subject to such general or specific instructions as may be given
by the Trustees. The terms of a Sub-Adviser Agreement cannot be
materially changed without the approval of a majority in interest
of the shareholders of the affected Fund. AFIM's is solely
responsible for the payment of all fees for investment management
services to the Sub-Advisers.
AFIM's is solely responsible for the payment of all fees to
Sub-Advisers for their investment management services.
Sub-Adviser fees, described in the Trust's prospectus, in no way
increase the costs that the funds, variable account and Policy
owners bear.
VIP
For managing investments and business affairs, each Portfolio
pays a monthly fee to FMR. The prospectus of VIP contains
additional information concerning the Portfolios, including
information concerning additional expenses paid by the
Portfolios, and should be read in conjunction with this
Prospectus.
The Fidelity VIP High Income Portfolio pays a monthly fee to FMR
at an annual fee rate made up of the sum of two components:
1. A group fee rate based on the monthly average net assets of
all the mutual funds advised by FMR. On an annual basis this rate
cannot rise above 0.37%, and drops as total assets in all these
funds rise.
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<PAGE>
2. An individual fund fee rate of 0.45% of the Fidelity VIP
High Income Portfolio's average net assets throughout the month.
One-twelfth of the annual management fee rate is applied to net
assets averaged over the most recent month, resulting in a dollar
amount which is the management fee for that month.
The Fidelity VIP Growth and the Fidelity VIP Equity-Income
Portfolios' fee rates are each made of two components:
1. A group fee rate based on the monthly average net assets of
all of the mutual funds advised by FMR. On an annual basis, this
rate cannot rise above 0.52%, and drops as total assets in all
these mutual funds rise.
2. An individual Portfolio fee rate of 0.30% for the Fidelity
VIP Growth Portfolio and 0.20% for the Fidelity VIP Equity-Income
Portfolio.
One-twelfth of the sum of these two rates is applied to the
respective Portfolio's net assets averaged over the most recent
month, giving a dollar amount which is the fee for that month.
Thus, the Fidelity VIP High Income Portfolio may have a fee as
high as 0.82%. The Fidelity VIP Growth Portfolio may have a fee
of as high as 0.82% of its average net assets. The Fidelity VIP
Equity-Income Portfolio may have a fee as high as 0.72% of its
average net assets.
T. ROWE PRICE
To cover investment management and operating expenses, the T.
Rowe Price International Stock Portfolio pays Price-Fleming a
single, all-inclusive fee of 1.05% of its average daily net
assets.
(3) DISTRIBUTIONS
No distributions are made to Policyowners except voluntary
surrenders or partial withdrawals, and upon payment of death
proceeds. Surrenders and partial withdrawals may be subject to
the surrender and partial withdrawal charges described in
13(a)(1), above. Also SEE Item 21.
(4) CUMULATED OR REINVESTED DISTRIBUTIONS OR INCOME
Distributions from the Underlying Funds are reinvested by
Sub-Accounts of the Separate Account in additional shares of the
respective Underlying Fund, without charge, at net asset value.
(5) REDEEMED OR LIQUIDATED ASSETS OF THE TRUST'S SECURITIES
See "Surrender Charge" and "Charges on Partial Withdrawals" under
Item 13(a)(1) above.
(b) FOR EACH INSTALLMENT PAYMENT TYPE OF PERIODIC PAYMENT PLAN
CERTIFICATE OF THE TRUST, FURNISH
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<PAGE>
INFORMATION WITH RESPECT TO SALES LOAD AND OTHER
DEDUCTIONS FROM PRINCIPAL PAYMENTS.
A deduction of 2.75% is made from each premium payment under a
Policy to compensate the Company for premium taxes paid to the
states and local jurisdictions (1.25%), for DAC taxes (1.00%),
and for front-end sales load (0.50%). No other deductions are
made from premiums prior to allocation to the Company's General
Account or the Separate Account. All other charges and
deductions are made from Policy value, net assets of the Separate
Account, or upon certain surrenders, partial withdrawals, and
decreases in face amount.
(c) STATE (1) THE AMOUNT OF SALES LOAD AS A PERCENTAGE OF THE NET
AMOUNT INVESTED, AND (2) THE AMOUNT OF TOTAL DEDUCTIONS AS A
PERCENTAGE OF THE NET AMOUNT INVESTED FOR EACH TYPE OF SECURITY
ISSUED BY THE TRUST.
The only deduction from premiums is the 4.0 % deduction for
premium taxes, DAC taxes, and 0.5% sales load, as described in
(b), above. A contingent deferred sales load is calculated at
issuance of the Policy and for increases in face amounts, but is
deducted if at all, only upon surrender or decreases in face
amount within 10 Policy years or less. Also, a transaction
charge and partial withdrawal charge may be deducted on partial
withdrawals.
(d) EXPLAIN FULLY THE REASONS FOR ANY DIFFERENCE IN THE PRICE AT
WHICH SECURITIES ARE OFFERED FOR ANY CLASS OF TRANSACTIONS TO ANY
CLASS OR GROUP OF OFFICERS, INCLUDING OFFICERS, DIRECTORS OR
EMPLOYEES OF THE DEPOSITION TRUSTEE, CUSTODIAN OR PRINCIPAL
UNDERWRITER.
Not Applicable.
(e) FURNISH A BRIEF DESCRIPTION OF ANY LOADS, FEES, EXPENSES OR
CHARGES NOT COVERED IN ITEM 13(A) WHICH MAY BE PAID BY SECURITY
HOLDERS IN CONNECTION WITH THE TRUST OR ITS SECURITIES.
The Company reserves the right to impose a charge for changing
the net premium allocation instructions, for changing the
allocation of any monthly deductions, or for a projection of
values. No such charges are currently imposed and any such
charge is guaranteed not to exceed $25.00.
(f) STATE WHETHER THE DEPOSITOR, PRINCIPAL UNDERWRITER, CUSTODIAN OR
TRUSTEE, OR ANY AFFILIATED PERSON OF THE FOREGOING, MAY RECEIVE
PROFITS OR OTHER BENEFITS NOT INCLUDED IN ANSWER TO ITEM 13(A) OR
13(D) THROUGH THE SALE OR PURCHASE OF THE TRUST'S SECURITIES OR
INTERESTS IN SUCH SECURITIES, OR UNDERLYING SECURITIES OR
INTERESTS IN UNDERLYING SECURITIES, AND DESCRIBE FULLY THE NATURE
AND EXTENT OF SUCH PROFITS OR BENEFITS.
Neither the Company, Allmerica Investments, Inc. nor any
affiliated person of the foregoing may receive any profit or any
other benefit from premium payments under the Policy or tie
investments held in the Separate Account not included in the
answer to Item 13(a) or (d) through the sale of purchase of the
Policy or shares of the Underlying Funds, except that (1) the
Company may receive a profit to the extent that the cost of
insurance built into the Policy exceeds the actual cost of
insurance needed to pay benefits; (2) favorable mortality or
expense experience may cause the insurance provided to be
profitable to the Company; (3) the Company will compensate
certain others including the company agents, for services
rendered in connection with the distribution of the Policy, as
described in Item 38, but such payments will be made from the
Company's General Account; and (4) the investment advisers of the
respective Underlying Funds will receive an advisory fee, as
described in Item 13(a)(2).
19
<PAGE>
(g) STATE THE PERCENTAGE THAT THE AGGREGATE ANNUAL CHARGES AND
DEDUCTIONS FOR MAINTENANCE AND OTHER EXPENSES OF THE TRUST BEAR
TO THE DIVIDEND AND INTEREST INCOME FROM THE TRUST PROPERTY
DURING THE PERIOD COVERED BY THE FINANCIAL STATEMENTS FILED
HEREWITH.
Not Applicable. The Separate Account has no assets as of the
date of this filing.
(h) OTHER
The Company will recoup commission and other sales expense
through a combination of surrender and partial withdrawal
charges, and the investment earnings in excess of the interest
credited on amounts allocated to the General Account.
The deduction of the charge for mortality and expense risks
assumed by the Company under the Policies is within the range of
industry practice for comparable flexible premium variable life
insurance contracts. If the charge for mortality and expense
risks is not sufficient to cover actual mortality experience and
expenses, the Company will absorb the losses. If expenses are
less than the amounts provided, the difference will be a profit
to the Company. To the extent this charge results in a profit to
the Company, such profit will be available for use by the Company
for the payment of its general expenses, including distribution
and sales expense.
INFORMATION CONCERNING THE OPERATIONS OF THE TRUST
14. DESCRIBE THE PROCEDURE WITH RESPECT TO THE APPLICATIONS (IF ANY) AND
THE ISSUANCE AND AUTHENTICATION OF THE TRUST'S SECURITIES, AND STATE
THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
PERTAINING THERETO.
Individuals wishing to purchase a Policy must submit a completed
application to an authorized registered agent or to the Company's
Principal Office. The Company generally will issue a Policy only on
the lives of Insureds age 80 and under, who supply evidence of
insurability satisfactory to the Company. Acceptance is subject to
the Company's underwriting rules, and the Company reserves the right
to reject an application for any reason.
Within limits, applicants may choose the amount of the initial premium
desired and the initial face amount of the Policy. Currently, the
minimum specified face amount of insurance for which a Policy may be
issued is $50,000.
The Policy will be effective on the date of issue only after all
outstanding delivery requirements are satisfied and the Company has
received sufficient premium. The date of issue is the date used to
determine all future periodic transactions under the Policy, e.g.,
monthly payment date, Policy months and Policy years. Within limits,
the Company may establish an earlier date of issue.
If a premium payment equivalent to at least one minimum monthly
payment is received with the application, and there has been no
material misrepresentation on the application, fixed, conditional
insurance of up to the amount applied for but not to exceed $500,000,
will start as of the date of the application and will generally
continue for a maximum of 90 days. If a medical examination of a
person to be Insured is required by the Company's underwriting rules,
coverage on that person will not start until completion of the
examination. In no event will a death benefit be provided under the
conditional insurance agreement if death is by suicide.
20
<PAGE>
If the Applicant does not wish to make any payment until the Policy is
issued, or if the amount of money paid on a prepaid application is not
sufficient to place the Policy in force, the Company will require
payment upon delivery of the Policy of sufficient premium to place the
Policy in force upon delivery of the Policy. If the Policy is not
issued, the premiums will be returned to the Applicant, WITHOUT
INTEREST. No Policy will be in force until sufficient premium is
paid.
15. DESCRIBE THE PROCEDURE WITH RESPECT TO THE RECEIPT OF PAYMENTS FROM
PURCHASERS OF THE TRUST'S SECURITIES AND THE HANDLING OF THE PROCEEDS
THEREOF, AND STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT PERTAINING THERETO.
PREMIUM PAYMENTS - Premium Payments are payable only to the Company,
and may be mailed to the Principal Office or paid through an
authorized agent of the Company. All premium payments after the
initial premium payment are credited to the Separate Account or
General Account as of date of receipt at the Principal Office.
The Policyowner may establish a schedule of planned premiums which
will be billed by the Company at regular intervals. Failure to pay
planned premiums, however, will not itself cause the Policy to lapse.
The Policyowner may also make unscheduled premium payments at any time
or skip planned premium payments subject to the maximum and minimum
premium limitations described below.
The Policyowner may also elect to pay premiums by means of a monthly
automatic payment ("MAP") procedure. Under a MAP procedure, amounts
will be deducted each month, generally on the Monthly Payment Date,
from the Policyowner's checking account and applied as a premium under
a Policy. The minimum payment permitted under MAP is $50.
Premiums are not limited as to frequency and number. However, no
premium payment may be less than $100 without the Company's consent.
Moreover, premium payments must be sufficient to provide a positive
surrender value at the end of each Policy month, or the Policy may
lapse.
The total of all premiums paid can never exceed the then-current
maximum premium limitation determined by Internal Revenue Service
rules. Thus, the Company may limit the premiums received in any
Policy year to an amount not less than the "guideline level premium"
determined by the Company with respect to the Policy. In addition,
the sum of the premiums paid, less any partial withdrawals, may not
exceed the greater of the guideline single premium or the sum of the
guideline level premiums to the date of payment. The guideline
premium amounts will change whenever there is any change in the face
amount, the addition or deletion of a rider, or a change in the Death
Benefit option. These premium limitations do not apply to the extent
necessary to prevent lapse of the Policy during a Policy year.
If at any time a premium is paid that would result in total premiums
exceeding the then current maximum premium limitation, the Company
will accept only that portion of the premium that would make total
premiums equal the maximum limitation. Premiums in excess of that
amount will be refunded to the Policyowner, and no further premiums
will be accepted until allowed by the current maximum premium
limitation prescribed by Internal Revenue Service rules.
16. DESCRIBE THE PROCEDURE WITH RESPECT TO THE ACQUISITION OF UNDERLYING
SECURITIES AND THE DISPOSITION THEREOF, AND STATE THE SUBSTANCE OF THE
PROVISIONS OF ANY INDENTURE OR AGREEMENT PERTAINING THERETO.
21
<PAGE>
Each Sub-Account of the Separate Account invests its assets in shares
of a corresponding Underlying Fund. Purchases and redemptions of such
shares are made at net asset value, with no deduction for sales load.
Amounts of net purchase payments allocated to a Sub-Account, transfers
to that Sub-Account, and reserve adjustment transfers, if any, will be
netted as of each valuation date against amounts withdrawn from the
Sub-Account in connection with Policy surrenders, partial withdrawals,
transfers, and death benefits, as well as the asset charge and amounts
paid to the Company in lieu of taxes, if any. A net purchase or sale
of Underlying Fund shares will be made for a Sub-Account at net asset
value. All income, dividends and realized gain distributions of a
Underlying Fund will be reinvested in shares of the respective
Underlying Fund at net asset value. Valuation dates currently occur
on each day on which the New York Stock Exchange is open for trading,
and on such other days where there is a sufficient degree of trading
in a Underlying Fund's securities such that the current net asset
value of the Sub-Accounts may be materially affected.
17. (a) DESCRIBE THE PROCEDURE WITH RESPECT TO WITHDRAWAL OR REDEMPTION
BY SECURITY HOLDERS.
SURRENDER - A Policyowner may at any time surrender the Policy
and receive its surrender value (i.e., Policy value, less Debt
and applicable surrender charges and any first-year monthly
administrative charges not yet deducted) upon written request
signed by the Policyowner and return of the Policy to the
Principal Office. The surrender value will be based on the
Policy value as of the valuation date on which the request and
Policy are received at the Principal Office. A surrender charge
may be deducted when a Policy is surrendered. See Item 13(a),
"Surrender."
The surrender value is normally payable within seven days
following the Company's receipt of the surrender request. The
Company reserves the right to defer surrenders and partial
withdrawals of amounts funded by each Sub-Account during any
period when (1) trading on the New York Stock Exchange is
restricted as determined by the SEC or such Exchange is closed
for other than weekends and holidays, (2) the SEC has by order
permitted such suspension, or (3) an emergency, as determined by
the SEC, exists such that disposal of portfolio securities or
valuation of assets of each Sub-Account is not reasonably
practicable.
The right is reserved by the Company to defer surrenders and
partial withdrawal of amounts allocated to the Company's General
Account for a period not to exceed six months.
PARTIAL WITHDRAWAL - At any time after the first Policy year, a
Policyowner may redeem a portion of the Policy value of his or
her Policy, subject to the limits stated below, upon written
request signed by the Policyowner and filed at the Principal
Office. Where allocations have been made to more than one
account, a percentage of the partial withdrawal may be allocated
to each such account. The written request must indicate the
dollar amount the Policyowner wishes to receive and the account
from which such amount is to be redeemed.
The Policyowner may allocate the amount withdrawn among the
Sub-Accounts and the General Account. If no allocation
instructions are provided, the Company will make a pro rata
allocation.
A partial withdrawal from a Sub-Account will result in
cancellation of a number of Accumulation Units equivalent in
value to the amount withdrawn, computed as of the
22
<PAGE>
valuation date that the request is received at
the Company's Principal Office. The amount withdrawn equals
the amount requested by the Policyowner plus any applicable
charges. The Company will normally pay the amount of the
partial withdrawal within seven days, but may delay payment
under certain circumstances described above under "Surrender."
See Item 13(a), "Partial Withdrawals."
(b) FURNISH THE NAMES OF ANY PERSONS WHO MAY REDEEM OR REPURCHASE, OR
ARE REQUIRED TO REDEEM OR REPURCHASE, THE TRUST'S SECURITIES OR
UNDERLYING SECURITIES FROM SECURITY HOLDERS, AND THE SUBSTANCE
OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT PERTAINING
THERETO.
The Company is required to process all surrender and partial
withdrawal requests as described in Item 17(a). The Underlying
Funds will redeem their shares upon the Company's request in
accordance with the Investment Company Act of 1940. Redeemed
shares may later be reissued.
(c) INDICATE WHETHER REPURCHASED OR REDEEMED SECURITIES WILL BE
CANCELLED OR MAY BE RESOLD.
If a Policy is surrendered, the Policy will be cancelled and may
not be reissued.
If a Policy terminates due to lapse or foreclosure, the Policy
may be reinstated as provided below.
Unless the Guaranteed Death Benefit rider is in effect, the
Policy will terminate if:
- Surrender value is insufficient to cover the next monthly
insurance protection charge plus loan interest accrued; or
- Outstanding loan exceeds the policy value less surrender
charges.
If one of these situations occurs, the Policy will be in default.
The Policy owner will then have a grace period of 62 days,
measured from the date of default, to pay a premium sufficient
to prevent termination. On the date of default, the Company will
send a notice to the Policyowner and to any assignee of record.
The notice will state the premium due and the date by which it
must be paid.
Failure to pay a sufficient premium within the grace period will
result in Policy termination. If the Insured dies during the
grace period, the Company will deduct from the net death benefit
any monthly insurance protection charges due and unpaid through
the Policy month in which the Insured dies and any other overdue
charge.
During the first 48 Policy months following the date of
issue or an increase in the face amount, a guarantee
may apply to prevent the Policy from terminating because of
insufficient surrender value. This guarantee applies if,
during this period, the Policy owner pays premiums that, when
reduced by partial withdrawals and partial withdrawal costs,
equal or exceed specified minimum monthly payments. The
specified minimum monthly payments are based on the number of
months the Policy, increase in face amount or policy change
that causes a change in the minimum monthly payment has been
in force. A policy change that causes a change in the minimum
monthly payment is a change in the face amount or the addition
or deletion of a rider. Except for the first 48 months after
the date of issue or the effective date of an increase, payments
equal to the
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<PAGE>
minimum monthly payment do not guarantee that the Policy will
remain in force.
If the optional Guaranteed Death Benefit rider is in effect,
the Policy will not lapse regardless of the investment
performance of the Variable Account. See "Guaranteed Death
Benefit Rider."
A terminated Policy may be reinstated within three
years of the date of default and before the final
payment date. The reinstatement takes effect on the
monthly processing date following the dates the
Policyowner submits to us:
- Written application for reinstatement
- Evidence of insurability showing that the Insured
is insurable according to our underwriting
rules and
- A payment that, after the deduction of the payment
expense charge, is large enough to cover the minimum
amount payable
Policies that have been surrendered may not be
reinstated.
Minimum Amount Payable -- If reinstatement is requested
when less than 48 monthly insurance protection charges
have been paid since the date of issue or increase in
the face amount, the Policyowner must pay the lesser
of:
-The minimum monthly payment for the three months
beginning on the date of reinstatement or
-the sum of:
- The amount by which the surrender charge on the
date of reinstatement exceeds the policy value on
the date of default plus
- Monthly insurance protection charges for the three
months beginning on the date of reinstatement
If the Policy owner requests reinstatement more than 48
monthly processing dates from the date of issue or
increase in the face amount, the Policy owner must pay
the sum shown above without regard to the three months
of minimum monthly payments.
Surrender Charge -- The surrender charge on the date of
reinstatement is the surrender charge that would have
been in effect had the Policy remained in force from
the date of issue.
Policy Value on Reinstatement -- The policy value on
the date of reinstatement is:
- The net payment made to reinstate the Policy and
interest earned from the date the payment was
received at our principal office plus
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<PAGE>
- The policy value less any outstanding loan on the
date of default (not to exceed the surrender
charge on the date of reinstatement) minus
- The monthly insurance protection charges due on the
date of reinstatement
You may reinstate any outstanding loan.
TERMINATION - The failure to make premium payments will not cause
the Policy to lapse unless: (a) the surrender value is
insufficient to cover the next Monthly Deduction plus loan
interest accrued; or (b) if Debt exceeds the Policy value less
surrender charges. If one of these situations occurs, the Policy
will be in default. The Policyowner will then have a grace
period of 62 days, measured from the date of default, to make
sufficient payments to prevent termination. On the date of
default, the Company will send a notice to the Policyowner and to
any assignee on record. The notice will state the amount of
premium due and the date on which it is due. Failure to make a
sufficient payment within the grace period will result in
termination of the Policy without any Policy value. If the
Insured dies during the grace period, the Death Proceeds will
still be payable, but any Monthly Deductions due and unpaid
through the Policy month in which the Insured dies and any other
overdue charge will be deducted from the Death Proceeds. Except
for the situation described in (b) above, if, during the first 48
months after the date of issue or the effective date of an
increase in face amount, the Policyowner makes premium payments,
less Debt, partial withdrawal charges, at least equal to the sum
of the minimum monthly factors for the number of months the
Policy, increase or Policy change which causes a change in the
minimum monthly factor has been in force, the Policy is
guaranteed not to lapse during that period. A Policy change
which causes a change in the minimum monthly factor is a change
in the face amount or the addition or deletion of a rider.
Except for the first 48 months after the date of issue or the
effective date of an increase, payments equal to the minimum
monthly factor do not guarantee that the Policy will remain in
force.
REINSTATEMENT - If the Policy has not been surrendered and the
Insured is alive, the terminated Policy may be reinstated anytime
within three years after the date of default by submitting the
following to the Company: (1) a written application for
reinstatement; (2) evidence of insurability showing the Insured
is insurable according to the Company's underwriting rules; and
(3) a premium that, after the deduction of the tax expense
charges, is large enough to cover the minimum amount payable, as
described below.
MINIMUM AMOUNT PAYABLE - If reinstatement is requested less than
48 months either after the date of issue of the Policy or the
effective date of an increase in the face amount, the Policyowner
must pay the lesser of the amount shown in A or B:
Under A, the minimum amount payable is the monthly factor for the
three-month period beginning on the date of reinstatement.
Under B, the minimum amount payable is the sum of
- the amount by which the surrender charge as of the date of
reinstatement exceeds the Policy value on the date
of default; plus
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<PAGE>
- Monthly Deductions for the three-month period beginning on
the date of reinstatement.
If reinstatement is requested after 48 Monthly Deductions have
been made since the date of issue of the Policy or an increase in
the face amount, the Policyowner must pay the amount shown in B
above.
SURRENDER CHARGE - The surrender charge on the date of
reinstatement is the surrender charge which would have been in
effect had the Policy remained in force from the date of issue.
The Policy value less Debt on the date of default will be
restored to the Policy to the extent it does not exceed the
surrender charge on the date of reinstatement. Any Policy value
less Debt as of the date of default which exceeds the surrender
charge on the date of reinstatement will not be restored.
POLICY VALUE ON REINSTATEMENT - The Policy value on the date of
reinstatement is:
- the net premium paid to reinstate the Policy increased by
interest from the date the payment was received at the
Company's Principal Office;
- plus an amount equal to the Policy value less Debt on the
date of default to the extent it does not exceed the
surrender charge on the date of reinstatement;
- minus the Monthly Deduction due on the date of
reinstatement.
The Policyowner may not reinstate any Debt outstanding on the
date of default or foreclosure.
18. (a) DESCRIBE THE PROCEDURE WITH RESPECT TO THE RECEIPT, CUSTODY AND
DISPOSITION OF THE INCOME AND OTHER DISTRIBUTABLE FUNDS OF THE
TRUST AND STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENT PERTAINING THERETO.
Distributions with respect to the shares of a Underlying Fund
held by a Sub-Account are reinvested in shares of that Underlying
Fund at net asset value. Such shares are added to the assets of
the respective Sub-Account.
(b) DESCRIBE THE PROCEDURE, IF ANY, WITH RESPECT TO THE REINVESTMENT
OF DISTRIBUTIONS TO SECURITY HOLDERS AND STATE THE SUBSTANCE OF
THE PROVISIONS OF ANY INDENTURE OR AGREEMENT PERTAINING THERETO.
No distributions are made to Policyowners other than in
connection with a death benefit or with a Policyowner-initiated
loan, partial withdrawal or surrender of the Policy. See Items
13(a) and 21.
(c) IF ANY RESERVES OR SPECIAL FUNDS ARE CREATED OUT OF INCOME OR
PRINCIPAL, STATE WITH RESPECT TO EACH SUCH RESERVE OR FUND THE
PURPOSE AND ULTIMATE DISPOSITION THEREOF, AND DESCRIBE THE MANNER
OF HANDLING SAME.
Net premiums placed in the Separate Account constitute certain
reserves for benefits under the Policy.
(d) SUBMIT A SCHEDULE SHOWING THE PERIODIC AND SPECIAL DISTRIBUTIONS
WHICH HAVE BEEN MADE TO
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<PAGE>
SECURITY HOLDERS DURING THE THREE YEARS COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH. STATE FOR EACH SUCH
DISTRIBUTION THE AGGREGATE AMOUNT AND AMOUNT PER SHARE. IF
DISTRIBUTIONS FROM SOURCES OTHER THAN CURRENT INCOME HAVE
BEEN MADE, IDENTIFY EACH SUCH OTHER SOURCE AND INDICATE WHETHER
SUCH DISTRIBUTION REPRESENTS THE RETURN OF PRINCIPAL PAYMENTS TO
SECURITY HOLDERS. IF PAYMENTS OTHER THAN CASH WERE MADE, DESCRIBE
THE NATURE THEREOF, THE ACCOUNT CHARGED AND THE BASIS OF
DETERMINING THE AMOUNT OF SUCH CHARGE.
Not Applicable. The Separate Account has not begun business
operations.
19. DESCRIBE THE PROCEDURE WITH RESPECT TO THE KEEPING OF RECORDS AND
ACCOUNTS OF THE TRUST, THE MAKING OF REPORTS AND THE FURNISHING OF
INFORMATION TO SECURITY HOLDERS, AND THE SUBSTANCE OF THE PROVISIONS
OF ANY INDENTURE OR AGREEMENT PERTAINING THERETO.
The Company will maintain the records and books of the Separate
Account. The Company will also maintain records for each Policy,
including the number and value of accumulation units of each
Sub-Account credited to each Policy and the value of accumulations in
the General Account.
Issuance and transfer of Underlying Fund shares will be by book entry
only. Stock certificates will not be issued to the Company or
Separate Account. Shares ordered from the Underlying Funds will be
recorded in an appropriate title for the Separate Account or
appropriate Sub-Account.
Policyowners will be sent promptly statements of significant
transactions such as premium payments (other than payments made
pursuant to the Monthly Automatic Premium payment procedure), changes
in specified face amount, change in Death Benefit Option, transfers
among Sub-Accounts and the General Account, partial withdrawals,
increases in loan amount by the Policyowner, loan repayments, lapse,
termination for any reason, and reinstatement. An annual statement
will also be sent to the Policyowner within 30 days after a Policy
year. The annual statement will summarize all of the above
transactions and deductions of charges during the Policy year. It
will also set forth the status of the death benefit, Policy value,
surrender value, amounts in the Sub-Accounts and General Account, and
any Policy loan(s).
In addition, the Policyowner will be sent semi-annual reports
containing financial statements and other information for the Separate
Account, AIT, VIP and T. Rowe Price, as required by the 1940 Act.
20. STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
CONCERNING THE TRUST WITH RESPECT TO THE FOLLOWING:
(a) AMENDMENTS TO SUCH INDENTURE OR AGREEMENT.
Not Applicable.
(b) THE EXTENSION OR TERMINATION OF SUCH INDENTURE OR AGREEMENT.
Not Applicable.
(c) THE REMOVAL OR RESIGNATION OF THE TRUSTEE OR CUSTODIAN, OR THE
FAILURE OF THE TRUSTEE OR CUSTODIAN TO PERFORM ITS DUTIES,
OBLIGATIONS AND FUNCTIONS.
The Company will act as custodian of assets of the Separate
Account. The Company may
27
<PAGE>
appoint another custodian. In such event, the custodial
agreement will provide that the assets owned by the Separate
Account shall be delivered directly by the Company to a
successor custodian.
(d) THE APPOINTMENT OF A SUCCESSOR TRUSTEE AND THE PROCEDURE IF A
SUCCESSOR TRUSTEE IS NOT APPOINTED.
Not Applicable.
(e) THE REMOVAL OR RESIGNATION OF THE DEPOSITOR, OR THE FAILURE OF
THE DEPOSITOR TO PERFORM ITS DUTIES, OBLIGATIONS AND FUNCTIONS.
There is no such provision in an indenture or agreement. Under
Delaware law, the Company may not abrogate its obligation under
the Policies.
(f) THE APPOINTMENT OF A SUCCESSOR DEPOSITOR AND THE PROCEDURE IF A
SUCCESSOR DEPOSITOR IS NOT APPOINTED.
There is no such provision in any indenture or agreement.
21. (a) STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT WITH RESPECT TO LOANS TO SECURITY HOLDERS.
Loans may be obtained by request to the Company on the sole
security of the Policy. The total amount which may be borrowed
is the loan value. In the first Policy year, the loan value is
75% of an amount equal to the Policy value less surrender
charges, Monthly Deductions, and interest on Debt to the end of
the Policy year. The loan value in the second Policy year and
thereafter is 90% of an amount equal to Policy value minus
surrender charges.
A Policy loan may be allocated among the General Account and one
or more Sub-Accounts. If the Policy owner does not make an
allocation, the Company will allocate the loan among the accounts
in the same proportion that the Policy value in the General
Account, less Debt, and the Policy value in each Sub-Account bear
to the total Policy value, less Debt, on the date the Company
receives the loan request. Policy value in each Sub-Account
equal to the Policy loan allocated to such Sub-Account will be
transferred to the General Account, and the number of
Accumulation Units equal to Policy value so transferred will be
cancelled. Amounts transferred to or held in the General Account
to secure Debt will earn interest at a rate equal to an effective
annual yield of at least 6% (8% for preferred loans)
After due and unpaid interest is added to loan amount, if the new
loan amount exceeds the Policy value in the General Account, the
Company will transfer Policy value equal to that excess Debt from
each Sub-Account to the General Account as security for the
excess Debt. The Company will allocate the amount transferred
among the Sub-Accounts in the same proportion that the Policy
value in each Sub-Account bears to the total Policy value in all
Sub-Accounts.
PREFERRED LOAN OPTION. The option is available upon written
request after the first Policy year. It may be revoked at any
time. The preferred loan option is available during Policy years
2-10 only if Policy Value, minus the Surrender charge, is $50,000
or
28
<PAGE>
more. The option applies up to 10% of this amount. After the
10th Policy year, the preferred loan option is available on all
loans or on all or a part of the loan value. The guaranteed
annual interest rate credited to the Policy value securing a
preferred loan will be 8%.
LOAN INTEREST CHARGED - Interest accrues daily and is payable in
arrears at the annual rate of 8%. Interest is payable at the end
of each Policy year or on a pro rata basis for such shorter
period as the loan may exist. Interest not paid when due will be
added to the loan principal and bear interest at the same rate of
interest.
REPAYMENT OF DEBT - Loans may be repaid at any time prior to the
lapse of the Policy. Upon repayment of Debt, the portion of the
Policy value that is in the General Account securing Debt will be
transferred to the various Sub-Accounts and increase the Policy
value in such accounts in accordance with the Policyowner's
instructions. If the Policyowner does not make a repayment
allocation, the Company will allocate Policy value in accordance
with the Policyowner's most recent premium allocation
instructions; provided, however, that loan repayments allocated
to the Separate Account cannot exceed Policy value previously
transferred from the Separate Account to secure the Debt.
FORECLOSURE - If Debt exceeds the surrender value of the Policy,
the Policy will terminate. A notice of such pending termination
will be mailed to the last known address of the Policyowner and
any assignee. If the excess Debt is not paid within 62 days
after this notice is mailed, the Policy will terminate with no
value. A Policy may be reinstated following loan foreclosure.
(b) FURNISH A BRIEF DESCRIPTION OF ANY PROCEDURE OR ARRANGEMENT BY
WHICH LOANS ARE MADE AVAILABLE TO SECURITY HOLDERS BY THE
DEPOSITOR, PRINCIPAL UNDERWRITER, TRUSTEE OR CUSTODIAN, OR
ANY AFFILIATED PERSON OF THE FOREGOING.
See Items 10(i) and 21(a), above. No other loans are made,
except under the terms of life insurance policies which may be
issued by the depositor or affiliated insurance companies.
(c) IF SUCH LOANS ARE MADE, FURNISH THE AGGREGATE AMOUNT OF LOANS
OUTSTANDING AT THE END OF THE LAST FISCAL YEAR, THE AMOUNT OF
INTEREST COLLECTED DURING THE LAST FISCAL YEAR ALLOCATED TO THE
DEPOSITOR, PRINCIPAL UNDERWRITER, TRUSTEE OR CUSTODIAN OR
AFFILIATED PERSON OF THE FOREGOING, AGGREGATE AMOUNT OF LOANS IN
DEFAULT AT THE END OF THE LAST FISCAL YEAR COVERED BY FINANCIAL
STATEMENTS FILED HEREWITH.
Not Applicable.
22. STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
WITH RESPECT TO LIMITATIONS ON THE LIABILITIES OF THE DEPOSITOR,
TRUSTEE OR CUSTODIAN, OR ANY OTHER PARTY TO SUCH INDENTURE OR
AGREEMENT.
The Policies provide that the Company shall not be charged with notice
of any assignment of the Policy unless it is in writing and filed at
the Company's Principal Office. The Company assumes no liability for
the validity of any assignment.
23. DESCRIBE ANY BONDING ARRANGEMENT FOR OFFICERS, DIRECTORS, PARTNERS
OR EMPLOYEES OF THE DEPOSITOR OR PRINCIPAL UNDERWRITER OF THE TRUST,
INCLUDING THE AMOUNT OF COVERAGE AND THE TYPE OF BOND.
The Company and Allmerica Investments, Inc. are named Insureds under a
blanket bond in the
29
<PAGE>
amount of $20 million, issued by Lloyds of London. The bond covers
officers, directors, and employees of the Company and Allmerica
Investments, Inc., all of whom are employees of State Mutual.
AIT maintains a fidelity bond pursuant to Rule 17(g) under the 1940
Act, in the amount of $2.7 million, issued by Underwriters at Lloyds
and other London Companies. The bond covers directors and officers of
AIT, who may also be director or officers of the depositor and
principle underwriter, and employees of First Allmerica who are
"access persons" of AIT.
24. STATE THE SUBSTANCE OF ANY OTHER MATERIAL PROVISIONS OF ANY
INDENTURE OR AGREEMENT CONCERNING THE TRUST OR ITS SECURITIES AND A
DESCRIPTION OF ANY OTHER MATERIAL FUNCTIONS OR DUTIES OF THE
DEPOSITOR, TRUSTEE OR CUSTODIAN NOT STATED IN ITEM 10 OR ITEMS 14 TO
23 INCLUSIVE.
PARTICIPATION AGREEMENT. The Company and Separate Account will enter
into Participation Agreements with AIT, VIP and T. Rowe Price, which
define the terms under which the Sub-Accounts of Separate Account
invest in the Underlying Funds.
POLICYOWNER - The Policyowner is the Insured unless another
Policyowner has been named in the application for the Policy. The
Policyowner is generally entitled to exercise all rights under a
Policy while the Insured is alive, subject to the consent of any
irrevocable beneficiary (the consent of a revocable beneficiary is not
required). The consent of the Insured is required whenever the face
amount of insurance is increased.
BENEFICIARY - The beneficiary is the person or persons to whom the
insurance proceeds are payable upon the Insured's death. Unless
otherwise stated in the Policy, the beneficiary has no rights in the
Policy before the death of the Insured. While the Insured is alive,
the Policyowner may change any beneficiary unless the Policyowner has
declared a beneficiary to be irrevocable. If no beneficiary is alive
when the Insured dies, the owner (or the owner's estate) will be the
beneficiary. If more than one beneficiary is alive when the Insured
dies, they will be paid in equal shares, unless the Policyowner has
chosen otherwise. Where there is more than one beneficiary, the
interest of a beneficiary who dies before Insured will pass to
surviving beneficiaries proportionately.
INCONTESTABILITY - The Company will not contest the validity of a
Policy after it has been in force during the Insured's lifetime for
two years from the date of issue. The Company will not contest the
validity of any increase in the face amount after such increase or
rider has been in force during the Insured's lifetime for two years
from its effective date.
SUICIDE - The Death Proceeds will not be paid if the Insured commits
suicide, while sane or insane, generally within two years from the
date of issue. Instead, the Company will pay the beneficiary an
amount equal to all premiums paid for the Policy, without interest,
less any outstanding Debt and less any partial withdrawals. If the
Insured commits suicide, while sane or insane, generally within two
years from the effective date of any increase in the Death Benefit,
the Company's liability with respect to such increase will be limited
to a refund of the cost thereof. The beneficiary will receive the
administrative charges and insurance charges paid for such increase.
AGE AND SEX - If the Insured's age or sex as-stated in the application
for a Policy is not correct, benefits under a Policy will be adjusted
to reflect the correct age and sex. The adjusted benefit will be that
which the most recent cost of insurance charge would have purchased
for the correct age and sex. In no event will the Death Benefit be
reduced to less than the guideline minimum Death Benefit.
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<PAGE>
ASSIGNMENT - The Policyowner may assign a Policy as collateral or make
an absolute assignment of the Policy. All rights under the Policy
will be transferred to the extent of the assignee's interest. When
recorded, the assignment will take effect as of the date the written
request was signed. The Company is not bound by an assignment or
release thereof, unless it is in writing and is recorded at the
Company's Principal Office. Any rights created by the assignment will
be subject to any payments made or actions taken by the Company before
the assignment is recorded. The Company is not responsible for the
validity of any assignment or release.
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
ORGANIZATION AND OPERATIONS OF DEPOSITOR
25. STATE THE FORM OF ORGANIZATION OF THE DEPOSITOR OF THE
TRUST, THE NAME OF THE STATE OR OTHER SOVEREIGN POWER UNDER THE
LAWS OF WHICH THE DEPOSITOR WAS ORGANIZED AND THE DATE OF
ORGANIZATION.
The Company is an insurance company originally organized as a mutual
life insurance company under the laws of the Commonwealth of
Massachusetts in 1844, under the name of "State Mutual Life Assurance
Company of America." Effective October 16, 1995, the Company
converted to a stock life insurance company and adopted its present
name. The company is a wholly-owned subsidiary of Allmerica Financial
Corporation, 440 Lincoln Street, Worcester, Massachusetts 01653.
26. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ALL FEES
RECEIVED BY THE DEPOSITOR OF THE TRUST IN CONNECTION WITH
THE EXERCISE OF ANY FUNCTIONS OR DUTIES CONCERNING SECURITIES
OF THE TRUST DURING THE PERIOD COVERED BY THE FINANCIAL
STATEMENTS FILED HEREWITH:
Not Applicable.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY FEE OR ANY
PARTICIPATION IN FEES RECEIVED BY THE DEPOSITOR FROM ANY
UNDERLYING INVESTMENT COMPANY OR ANY AFFILIATED PERSON OR
INVESTMENT ADVISER OF INVESTMENT ADVISER OF SUCH COMPANY:
The Company has not received any such fee or participation.
(1) THE NATURE OF SUCH FEE OR PARTICIPATION. Not
Applicable.
(2) THE NAME OF THE PERSON MAKING PAYMENTS.
Not Applicable.
(3) THE NATURE OF THE SERVICES RENDERED IN CONSIDERATION
FOR SUCH FEE OR PARTICIPATION.
Not Applicable.
(4) THE AGGREGATE AMOUNT RECEIVED DURING THE LAST FISCAL
YEAR COVERED BY THE FINANCIAL STATEMENTS FILED
HEREWITH.
Not Applicable.
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<PAGE>
27. DESCRIBE THE GENERAL CHARACTER OF THE BUSINESS ENGAGED IN BY THE
DEPOSITOR INCLUDING A STATEMENT AS TO ANY BUSINESS OTHER THAN THAT OF
DEPOSITOR OF THE TRUST. IF THE DEPOSITOR ACTS OR HAS ACTED IN ANY
CAPACITY WITH RESPECT TO ANY INVESTMENT COMPANY OR COMPANIES OTHER
THAN THE TRUST, STATE THE NAME OR NAMES OF SUCH COMPANY OR COMPANIES,
THEIR RELATIONSHIP, IF ANY, TO THE TRUST, AND THE NATURE OF THE
DEPOSITOR'S ACTIVITIES THEREWITH. IF THE DEPOSITOR HAS CEASED TO
ACT IN SUCH NAMED CAPACITY, STATE THE DATE OF AND CIRCUMSTANCES
SURROUNDING SUCH CESSATION.
The Company is licensed to write life insurance, health insurance, and
variable contracts in the District of Columbia, Puerto Rico, the
Virgin Islands and all states.
The Company offers variable life and annuity policies through other of
its Separate Accounts, all of which are registered as unit investment
trusts under the Investment Company Act of 1940 or which are exempt
from such registration.
OFFICIALS AND AFFILIATED PERSONS OF DEPOSITOR
28. (a) FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING
INFORMATION WITH RESPECT TO THE DEPOSITOR OF THE TRUST, WITH
RESPECT TO EACH OFFICER, DIRECTOR, OR PARTNER OF THE
DEPOSITOR, AND WITH RESPECT TO EACH NATURAL PERSON DIRECTLY OR
INDIRECTLY OWING OR HOLDING WITH POWER TO VOTE 5% OR MORE OF
THE OUTSTANDING VOTING SECURITIES OF THE DEPOSITOR.
(i) NAME AND PRINCIPAL BUSINESS ADDRESS.
(ii) NATURE OF RELATIONSHIP OR AFFILIATION WITH DEPOSITOR
OF THE TRUST;
(iii) OWNERSHIP OF ALL SECURITIES OF THE DEPOSITOR;
(iv) OWNERSHIP OF ALL SECURITIES OF THE TRUST;
(v) OTHER COMPANIES OF WHICH EACH PERSON NAMED ABOVE IS
PRESENTLY OFFICER, PRESENTLY OFFICER, DIRECTOR OR
PARTNER.
See 28(b) and 29, below.
(b) FURNISH A BRIEF STATEMENT OF THE BUSINESS EXPERIENCE DURING
THE LAST FIVE YEARS OF EACH OFFICER, DIRECTOR OR PARTNER OF THE
DEPOSITOR.
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<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH COMPANY PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- -------------------------------- ---------------------------------------------------------
<S> <C>
Bruce C. Anderson Director of First Allmerica since 1996; Vice President,
Director First Allmerica since 1984
Abigail M. Armstrong Secretary of First Allmerica since 1996; Counsel, First
Secretary and Counsel Allmerica since 1991
Robert E. Bruce Director and Chief Information Officer of First Allmerica
Director since 1997; Vice President of First Allmerica since 1995;
Corporate Manager, Digital Equipment Corporation 1979 to
1995
John P. Kavanaugh Director and Chief Investment Officer of First Allmerica
Director, Vice President and since 1996; Vice President, First Allmerica since 1991
Chief Investment Officer
John F. Kelly Director of First Allmerica since 1996; Senior Vice
Director, Vice President President, General Counsel and Assistant Secretary,
and General Counsel First Allmerica since 1991
J. Barry May Director of First Allmerica since 1996; Director
Director and President, The Hanover Insurance Company since
1996; Vice President, The Hanover Insurance Company,
1993 to 1996; General Manager, The Hanover Insurance
Company, 1989 to 1993
James R. McAuliffe Director of First Allmerica since 1996; President
Director and CEO, Citizens Insurance Company of America since
1994; Vice President 1982 to 1994, and Chief Investment
Officer, First Allmerica 1986 to 1994
John F. O'Brien Director, Chairman of the Board, President and Chief
Director, Chairman of the Executive Officer, First Allmerica since 1989
Board, President and CEO
Edward J. Parry, III Director and Chief Financial Officer of First Allmerica
Director, Vice President since 1996; Vice President and Treasurer, First Allmerica
and Chief Financial Officer since 1993
Richard M. Reilly Director of First Allmerica since 1996; Vice President,
Director and Vice President First Allmerica since 1990; Director, Allmerica
Investments, Inc. since 1990; Director and President,
Allmerica Investment Management Company, Inc.
since 1990
Robert P. Restrepo, Jr. Director and Vice President of First Allmerica since May,
Director and Vice President 1998; Chief Executive Officer, Travelers Property &
Casualty Group, 1996 to 1998; Senior Vice President,
Aetna Life & Casualty Company, 1993 to 1996
Eric A. Simonsen Director of First Allmerica since 1996; Vice President,
Director and Vice President First Allmerica since 1990; Chief Financial Officer,
First Allmerica 1990 to 1996
Phillip E. Soule Director of First Allmerica since 1996; Vice President,
Director First Allmerica since 1987
</TABLE>
33
<PAGE>
COMPANIES OWNING SECURITIES OF DEPOSITOR
29. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION WITH
RESPECT TO EACH COMPANY WHICH DIRECTLY OR INDIRECTLY OWNS, CONTROLS OR
HOLDS WITH POWER TO VOTE 5% OR MORE OF THE OUTSTANDING VOTING
SECURITIES OF DEPOSITOR.
The Company is a wholly-owned subsidiary of Allmerica Financial
Corporation, 440 Lincoln Street, Worcester, Massachusetts. Both
are organized under the laws of the Commonwealth of Massachusetts.
CONTROLLING PERSONS
30. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION WITH
RESPECT TO ANY PERSON OTHER THAN THOSE COVERED BY ITEMS 28, 29, AND
42 WHO DIRECTLY OR INDIRECTLY CONTROLS THE DEPOSITOR.
None.
Compensation of Officers of Depositor
31. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE REMUNERATION FOR
SERVICES PAID BY THE DEPOSITOR DURING THE LAST FISCAL YEAR COVERED
FINANCIAL STATEMENTS FILED HEREWITH;
(a) DIRECTLY TO EACH OF THE OFFICERS OR PARTNERS OF THE DEPOSITOR
DIRECTLY RECEIVING THE THREE HIGHEST AMOUNTS OF REMUNERATION;
The remuneration of the Officers of the Company is set forth in
the proxy statement for the Annual Meeting of Shareholders of the
Company's parent, Allmerica Financial Corporation, which is
incorporated herein by reference.
(b) DIRECTLY TO ALL OFFICERS OR PARTNERS OF THE DEPOSITOR AS A GROUP
EXCLUSIVE OF PERSONS WHOSE REMUNERATION IS INCLUDED UNDER
ITEM 31(A), STATING SEPARATELY THE AGGREGATE AMOUNT PAID BY
THE DEPOSITOR ITSELF AND THE AGGREGATE AMOUNT PAID BY ALL THE
SUBSIDIARIES;
See item 31 (a)
(c) INDIRECTLY OR THROUGH SUBSIDIARIES TO EACH OF THE OFFICERS OR
PARTNERS OF THE DEPOSITOR;
Not applicable.
COMPENSATION OF DIRECTORS
32. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE REMUNERATION FOR
SERVICES, EXCLUSIVE OF REMUNERATION REPORTED UNDER ITEM 31, PAID BY
THE DEPOSITOR DURING THE LAST FISCAL YEAR COVERED BY FINANCIAL
STATEMENTS FILED HEREWITH:
(a) THE AGGREGATE DIRECT REMUNERATION TO DIRECTORS;
The remuneration of the Directors of the Company is set forth in
the proxy statement for the Annual Meeting of Shareholders of the
Company's parent, Allmerica Financial Corporation,
which is incorporated herein by reference.
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(b) INDIRECTLY OR THROUGH SUBSIDIARIES TO DIRECTORS.
Not applicable.
COMPENSATION TO EMPLOYEES
33. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE AGGREGATE
AMOUNT OF REMUNERATION FOR SERVICES OF ALL EMPLOYEES OF THE
DEPOSITOR (EXCLUSIVE OF PERSONS WHOSE REMUNERATION IS REPORTED
IN ITEMS 31 AND 32) WHO RECEIVED REMUNERATION IN EXCESS OF
$10,000 DURING THE LAST FISCAL YEAR COVERED BY FINANCIAL
STATEMENTS FILED HEREWITH FROM THE DEPOSITOR AND ANY OF ITS
SUBSIDIARIES.
The remuneration of certain directors/executive officers of the
Company is set forth in the proxy statement for the Annual
Meeting of Shareholders of the Company's parent, Allmerica
Financial Corporation, which is incorporated herein by reference.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
REMUNERATION FOR SERVICES PAID DIRECTLY DURING THE LAST FISCAL
YEAR COVERED BY FINANCIAL STATEMENTS FILED HEREWITH TO THE
FOLLOWING CLASSES OF PERSONS (EXCLUSIVE OF THOSE PERSONS COVERED
BY ITEM 33(A)): (1) SALES MANAGERS, BRANCH MANAGERS, DISTRICT
MANAGERS AND OTHER PERSONS SUPERVISING THE SALE OF REGISTRANT'S
SECURITIES; (2) SALESMEN, SALES AGENTS, CANVASSERS AND OTHER
PERSONS MAKING SOLICITATIONS BUT NOT IN SUPERVISORY CAPACITY; (3)
ADMINISTRATIVE AND CLERICAL EMPLOYEES; AND (4) OTHERS (SPECIFY).
IF A PERSON IS EMPLOYED IN MORE THAN ONE CAPACITY, CLASSIFY
ACCORDING TO PREDOMINANT TYPE OF WORK.
Not applicable.
COMPENSATION TO OTHER PERSONS
34. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE AGGREGATE AMOUNT
OF COMPENSATION FOR SERVICES PAID ANY PERSON (EXCLUSIVE OF PERSONS
WHOSE REMUNERATION IS REPORTED IN ITEMS 31, 32 AND 33), WHOSE
AGGREGATE COMPENSATION IN CONNECTION WITH SERVICES RENDERED WITH
RESPECT TO THE TRUST IN ALL CAPACITIES EXCEED $10,000 DURING THE LAST
FISCAL YEAR COVERED BY FINANCIAL STATEMENTS FILED HEREWITH FROM THE
DEPOSITOR AND ANY OF ITS SUBSIDIARIES.
Not applicable.
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
DISTRIBUTION OF SECURITIES
35. FURNISH THE NAMES OF THE STATES IN WHICH SALES OF THE TRUST'S
SECURITIES (A) ARE CURRENTLY BEING MADE, (B) ARE PRESENTLY PROPOSED TO
MADE, AND (C) HAVE BEEN DISCONTINUED, INDICATING BY APPROPRIATE LETTER
THE STATUS WITH RESPECT TO EACH STATE.
(a) Sale of the Policies has not commenced in any state.
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(b) Following the effectiveness of the Separate Account's
registration statement under the Securities Act of 1933, and
obtaining required approvals under state law, the Company
proposes issuing the Policies initially in New York and Hawaii.
(c) Not Applicable.
36. IF SALES OF THE TRUST'S SECURITIES HAVE AT ANY TIME SINCE JANUARY 1,
1936 BEEN SUSPENDED FOR MORE THAN A MONTH, DESCRIBE BRIEFLY THE
REASONS FOR SUCH SUSPENSION.
Not Applicable.
37. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH INSTANCE
WHERE SUBSEQUENT TO JANUARY 1, 1937, ANY FEDERAL OR STATE
GOVERNMENTAL OFFICER, AGENCY, OR REGULATORY BODY DENIED AUTHORITY
TO DISTRIBUTE SECURITIES OF THE TRUST, EXCLUDING A DENIAL WHICH
WAS MERELY A PROCEDURAL STEP PRIOR TO ANY DETERMINATION BY SUCH
OFFICER, ETC., AND WHICH DENIAL WAS SUBSEQUENTLY RESCINDED.
(1) NAME OF OFFICER, AGENCY OR BODY
None.
(2) DATE OF DENIAL
Not Applicable.
(3) BRIEF STATEMENT OF REASONS GIVEN FOR DENIAL
Not Applicable.
(b) FURNISH THE FOLLOWING INFORMATION WITH REGARD TO EACH INSTANCE
WHERE, SUBSEQUENT TO JANUARY 1, 1937, THE AUTHORITY TO DISTRIBUTE
SECURITIES OF THE TRUST HAS BEEN REVOKED BY ANY FEDERAL OR STATE
GOVERNMENTAL OFFICER, AGENCY OR REGULATORY BODY.
(1) NAME OF OFFICER, AGENCY OR BODY
None.
(2) DATE OF REVOCATION
Not Applicable.
(3) BRIEF STATEMENT OF REASONS GIVEN FOR REVOCATION
Not Applicable.
38. (a) FURNISH A GENERAL DESCRIPTION OF THE METHOD OF DISTRIBUTION OF
SECURITIES OF THE TRUST.
Allmerica Investments, Inc., an indirect subsidiary of the
Company, will act as principal underwriter of the Policies
pursuant to an Underwriting and Administrative Services
36
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Agreement with the Company and the Separate Account. Allmerica
Investments, Inc. is a broker-dealer and a member of the National
Association of Securities Dealers, Inc. The policies will be
sold by agents of the Company who are registered representatives
of Allmerica Investments, Inc. or of other unaffiliated
broker-dealers which have selling agreements with Allmerica
Investments, Inc.
(b) STATE THE SUBSTANCE OF ANY CURRENT SELLING AGREEMENT BETWEEN EACH
PRINCIPAL UNDERWRITER AND THE TRUST OR THE DEPOSITOR, INCLUDING A
STATEMENT AS TO THE INCEPTION AND TERMINATION DATES OF THE
AGREEMENT, ANY RENEWAL AND TERMINATION PROVISIONS, AND MY
ASSIGNMENT PROVISIONS.
The Company and Separate Account will execute an Underwriting and
Administrative Services Agreement ("Agreement") with Allmerica
Investments, Inc., its principal underwriter. Unless otherwise
terminated, the Agreement shall continue in effect from year to
year. The Agreement may be terminated by any party at any time
upon giving 60 days' written notice to the other parties, and
terminates automatically in the event of its assignment.
(c) STATE THE SUBSTANCE OF ANY CURRENT AGREEMENTS OR ARRANGEMENTS OF
EACH PRINCIPAL UNDERWRITER WITH DEALERS, AGENTS, SALESMEN, ETC.,
WITH RESPECT TO COMMISSIONS AND OVERRIDING COMMISSIONS,
TERRITORIES, FRANCHISES, QUALIFICATIONS, AND REVOCATIONS. IF THE
TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES,
FURNISH SCHEDULES OF COMMISSIONS AND THE BASES THEREOF. IN LIEU
OF A STATEMENT CONCERNING SCHEDULES OF COMMISSIONS, SUCH
SCHEDULES OF COMMISSIONS MAY BE FILED AS EXHIBIT A(3)(C).
Registered representatives of Allmerica Investments, Inc. who are
also agents of the Company will sell the Policy. Such agents will
be required to pass applicable NASD examinations, and qualify
under applicable state insurance licensing requirements. Agents
who sell the Policy will receive commissions based on a
commission schedule, and Managers who supervise the agents will
receive overriding commissions. After issue of the Policy or an
increase in face amount, commissions generally will be up to 90%
of the first-year premiums up to a maximum target premium amount
established by the Company. Thereafter, commissions will
generally be up to 4% of any additional premiums.
INFORMATION CONCERNING PRINCIPAL UNDERWRITER
39. (a) STATE THE FORM OF ORGANIZATION OF EACH PRINCIPAL UNDERWRITER OF
SECURITIES OF THE TRUST, THE NAME OF THE STATE OR OTHER SOVEREIGN
POWER UNDER THE LAWS OF WHICH EACH UNDERWRITER WAS ORGANIZED AND
THE DATE OF ORGANIZATION.
The principal underwriter of the policies, Allmerica Investments,
Inc. was incorporated under the laws of the Commonwealth of
Massachusetts on March 27, 1969.
(b) STATE WHETHER ANY PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING
SECURITIES OF THE TRUST IS A MEMBER OF THE NATIONAL ASSOCIATION
OF SECURITIES DEALERS, INC. (NASD).
The Policies will be distributed only by Allmerica Investments,
Inc., which is a member of the NASD. The Company is also
registered as a broker-dealer, and is also a member of the NASD.
40. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ALL FEES
RECEIVED BY EACH PRINCIPAL UNDERWRITER OF THE TRUST FROM THE SALE
OF SECURITIES OF THE TRUST AND ANY OTHER FUNCTIONS IN
37
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CONNECTION THEREWITH EXERCISED BY SUCH UNDERWRITER IN SUCH
CAPACITY OR OTHERWISE DURING THE PERIOD COVERED BY THE FINANCIAL
STATEMENT FILED HEREWITH.
None.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY FEE OR ANY
PARTICIPATION IN FEES RECEIVED BY EACH PRINCIPAL UNDERWRITER FROM
ANY UNDERLYING INVESTMENT COMPANY OR ANY AFFILIATED PERSON OR
INVESTMENT ADVISER OF SUCH COMPANY:
None.
(1) THE NATURE OF SUCH FEE OR PARTICIPATION.
None.
(2) THE NAME OF THE PERSON MAKING PAYMENT.
None.
(3) THE NATURE OF THE SERVICES RENDERED IN CONSIDERATION FOR
SUCH FEE OR PARTICIPATION.
None.
(4) THE AGGREGATE AMOUNT RECEIVED DURING THE LAST FISCAL YEAR
COVERED BY THE FINANCIAL STATEMENTS FILED HEREWITH.
None.
41. (a) DESCRIBE THE GENERAL CHARACTER OF THE BUSINESS PRINCIPAL
UNDERWRITER, INCLUDING A STATEMENT AS TO ANY BUSINESS OTHER THAN
THE DISTRIBUTION OF SECURITIES OF THE TRUST. IF A PRINCIPAL
UNDERWRITER ACTS OR HAS ACTED IN ANY CAPACITY WITH RESPECT TO ANY
INVESTMENT COMPANY OR COMPANIES OTHER THAN THE TRUST, STATE THE
NAME OR NAMES OF SUCH COMPANY OR COMPANIES, THEIR RELATIONSHIP,
IF ANY, TO THE TRUST AND THE NATURE OF SUCH ACTIVITIES. IF A
PRINCIPAL UNDERWRITER HAS CEASED TO ACT IN SUCH NAMED CAPACITY,
STATE THE DATE OF AND CIRCUMSTANCES SURROUNDING SUCH CESSATION.
Allmerica Investments, Inc. is a registered broker-dealer and a
member of the NASD. Allmerica Investments, Inc. is a retail
broker-dealer of variable contracts (including life and
annuities) issued by the Company, of unaffiliated mutual funds,
of investment partnerships, and of precious metals. Allmerica
Investments, Inc. acts as principal underwriter of variable
annuity contracts issued by separate accounts(which are
registered as unit investment trusts under the 1940 Act) of the
Company and of its subsidiary, Allmerica Financial Life Insurance
and Annuity Company, and of AIT and Allmerica Funds (which are
registered as management investment companies under the 1940
Act). The variable contracts issued by the Company are sold
through registered representatives of Allmerica Investments, Inc.
or of unaffiliated broker-dealers, who are also licensed as
insurance agents of the Company.
(b) FURNISH AS AT LATEST PRACTICABLE DATE THE ADDRESS OF EACH BRANCH
OFFICE OF EACH PRINCIPAL UNDERWRITER CURRENTLY SELLING SECURITIES
OF THE TRUST AND FURNISH THE NAME AND RESIDENCE ADDRESS OF THE
PERSON IN CHARGE OF SUCH OFFICE.
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<PAGE>
Not Applicable. The Separate Account is not yet issuing
securities.
(c) FURNISH THE NUMBER OF INDIVIDUAL SALESMEN OF EACH PRINCIPAL
UNDERWRITER THROUGH WHOM ANY OF THE SECURITIES OF THE TRUST WERE
DISTRIBUTED FOR THE LAST FISCAL YEAR OF THE TRUST COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH AND FURNISH THE AGGREGATE
AMOUNT OF COMPENSATION RECEIVED BY SUCH SALESMEN IN SUCH YEAR.
Not Applicable. The Policies have not yet been issued.
42. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION WITH
RESPECT TO EACH PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING
SECURITIES OF THE TRUST AND WITH RESPECT TO EACH OF THE OFFICERS,
DIRECTORS OR PARTNERS OF SUCH UNDERWRITER (OWNERSHIP OF SECURITIES OF
THE TRUST).
Not Applicable. The Policies have not yet been issued.
43. FURNISH, FOR THE LAST FISCAL YEAR COVERED BY THE FINANCIAL STATEMENTS
FILED HEREWITH, THE AMOUNT OF BROKERAGE COMMISSIONS RECEIVED BY ANY
PRINCIPAL UNDERWRITER WHO IS A MEMBER OF A NATIONAL SECURITIES
EXCHANGE AND WHO IS CURRENTLY DISTRIBUTING THE SECURITIES OF THE TRUST
OR EFFECTING TRANSACTIONS FOR THE TRUST IN THE PORTFOLIO SECURITIES
OF THE TRUST.
Not Applicable.
OFFERING PRICE OR ACQUISITION VALUATION OF SECURITIES OF THE TRUST
44. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE METHOD OF
VALUATION USED BY THE TRUST FOR THE PURPOSES OF DETERMINING THE
OFFERING PRICE TO THE PUBLIC OF SECURITIES ISSUED THE TRUST OR
THE VALUATION OF SHARES OR INTERESTS IN THE UNDERLYING SECURITIES
ACQUIRED BY THE HOLDER OF A PERIODIC PAYMENT PLAN CERTIFICATE.
The net premium equals the premium paid less the 4.00% tax
expense charge. Each net premium is allocated to the General
Account of the Company or to the Sub-Account(s) selected by the
Policyowner. Allocations to the Sub-Accounts are credited to the
Policy in the form of Accumulation Units. Accumulation Units are
credited separately for each Sub-Account. The number of
Accumulation Units of each Sub-Account credited to the Policy is
equal to the portion of the net premium allocated to the
Sub-Account, divided by the dollar value of the applicable
Accumulation Unit as of the valuation date the payment is
received at the Company's Principal Office. The number of
Accumulation Units resulting from each net premium will remain
fixed unless changed by a subsequent split of Accumulation Unit
value, transfer, partial withdrawal or surrender. In addition,
if the Company deducts the Monthly Deduction or other charges
from a Sub-Account (as a result of Policyowner instructions or
the pro rata allocation of charges if the Policyowner has given
no instruction), each such deduction will result in cancellation
of a number of Accumulation Units equal in value to the charge
allocated to the Sub-Account. The dollar value of an
Accumulation Unit of each Sub-Account varies from valuation date
to valuation date based on the investment experience of that
Sub-Account. That experience, in turn, will reflect the
investment performance, expenses and charges of the respective
underlying Funds. The value of an Accumulation Unit is set at
$1.00 on the first Valuation Date of each Sub-Account.
NET INVESTMENT FACTOR - The net investment factor measures the
investment performance of a Sub-Account of the Separate Account
during the valuation period just ended. The net
39
<PAGE>
investment factor for each Sub-Account is equal to 1.0000 plus
the number arrived at by dividing (a) by (b) and subtracting
(c) and (d) from the result, where
(a) is the investment income of that Sub-Account for the
valuation period, plus capital gains, realized or
unrealized, credited during the valuation period; minus
capital losses, realized or unrealized, charged during the
valuation period; adjusted for provisions made for taxes,
if any;
(b) is the value of that Sub-Account's assets at the beginning
of the valuation period;
The net investment factor may be greater or less than one.
Therefore, the value of an Accumulation Unit may increase or
decrease. The Policyowner bears the investment risk.
Allocations to the General Account are not converted into
Accumulation Units, but are credited interest at a rate
periodically set by the Company.
(b) FURNISH A SPECIMEN SCHEDULE SHOWING THE COMPONENTS OF THE
OFFERING PRICE OF THE TRUST'S SECURITIES AS OF THE LATEST
PRACTICABLE DATE.
No Policies have been issued or offered for sale to the public.
(c) IF THERE IS ANY VARIATION IN OFFERING PRICE OF THE TRUST'S
SECURITIES TO ANY PERSON OR CLASSES OF PERSONS OTHER THAN
UNDERWRITERS, STATE THE NATURE AND AMOUNT OF SUCH VARIATION AND
INDICATE THE PERSON OR CLASSES OF PERSONS TO WHOM SUCH OFFERING
IS MADE.
At any time, the "price" of an Accumulation Unit of a Sub-Account
will be the same for all Policyowners. However, the cost of
insurance charges for the Policies will not be the same for all
Policyowners. The insurance principles of pooling and
distribution of mortality risks is based upon the assumption that
each Policyowner pays a cost of insurance charge commensurate
with the Insured's mortality risk, which is actuarially
determined based upon factors such as age, sex, health and
occupation. In the context of life insurance, a uniform
mortality charge (the "cost of insurance charge") for all
Insureds would discriminate unfairly in favor of those Insureds
representing greater mortality risks to the disadvantage of those
representing lesser risks. Accordingly, there will be a
different "price" for each actuarial category of Policyowners
because different cost of insurance rates will apply. The
"price" will also vary based on net amount at risk. The Policies
will be offered and sold pursuant to this cost of insurance
schedule, the Company's underwriting standards, and in accordance
with state insurance laws. Such laws prohibit unfair
discrimination among Insureds, but recognize that premiums must
be based upon factors such as age, health and occupation. Tables
showing the maximum cost of insurance charges will be delivered
as part of the Policy.
45. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY SUSPENSION OF
THE REDEMPTION RIGHTS OF THE SECURITIES ISSUED BY THE TRUST DURING THE
THREE FISCAL YEARS COVERED BY THE FINANCIAL STATEMENTS FILED HEREWITH:
Not Applicable.
(a) BY WHOSE ACTION REDEMPTION RIGHTS WERE SUSPENDED.
40
<PAGE>
Not Applicable.
(b) THE NUMBER OF DAYS' WRITTEN NOTICE GIVEN TO SECURITY HOLDERS
PRIOR TO SUSPENSION OF REDEMPTION RIGHTS.
Not Applicable.
(c) REASON FOR SUSPENSION.
Not Applicable.
(d) PERIOD DURING WHICH SUSPENSION WAS IN EFFECT.
Not Applicable.
46. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE METHOD OF
DETERMINING THE REDEMPTION OR WITHDRAWAL VALUATION OF SECURITIES
ISSUED BY THE TRUST:
(1) THE SOURCE OF QUOTATIONS USED TO DETERMINE THE VALUE OF
PORTFOLIO SECURITIES.
The Sub-Accounts invest only in shares of the Underlying
Funds. Shares of each are sold and redeemed at their net
asset value as next computed after receipt of the purchase
or redemption order. Each purchase or redemption is
confirmed in a written statement of the number of shares
purchased or redeemed and the aggregate number of shares
currently held by the respective-Sub-Accounts. See Item
44(a).
(2) WHETHER OPENING, CLOSING, BID, ASKED OR ANY OTHER PRICE IS
USED.
See 44(a) and 46(a)(1), above.
(3) WHETHER PRICE IS AS OF THE DAY OF SALE OR AS OF ANY OTHER
TIME.
See 44(a) and 46(a)(1), above.
(4) A BRIEF DESCRIPTION OF THE METHODS USED BY REGISTRANT FOR
DETERMINING OTHER ASSETS AND LIABILITIES INCLUDING ACCRUAL
FOR EXPENSES AND TAXES (INCLUDING TAXES ON UNREALIZED
APPRECIATION).
POLICY VALUE AND SURRENDER VALUE - The Policy value is the
total amount available for investment and is equal to the
sum of the accumulation in the General Account and the value
of the Accumulation Units in the Sub-Accounts. The Policy
value is used in determining the surrender value (the Policy
value less any Debt and applicable surrender charges).
There is no guaranteed minimum Policy value. Because Policy
value on any date depends upon a number of variables, it
cannot be predetermined. Policy value and surrender value
will reflect frequency and amount of net premiums paid,
interest credited to accumulations in the General Account,
the investment performance of the chosen Sub-Accounts of the
Separate Account, any partial withdrawals, any loans, any
loan repayments, any loan interest paid or credited, and any
charges assessed in connection with the Policy.
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CALCULATION OF POLICY VALUE - The Policy value is determined
first on the date of issue and thereafter on each valuation
date. On the date of issue, the Policy value will be the
net premiums received, plus any interest earned during the
period when premiums are held in the General Account (before
being transferred to the Separate Account) less any Monthly
Deductions due. On each valuation date after the date of
issue the Policy value will be:
(a) the aggregate of the values in each of the Sub-Accounts
on the valuation date, determined for each Sub-Account
by multiplying the value of an Accumulation Unit in
that Sub-Account on that date by the number of such
Accumulations Units allocated to the Policy; PLUS
(b) the value in the General Account (including any amounts
transferred to the General Account with respect to a
loan).
Thus, the Policy value is determined by multiplying the
number of Accumulation Units in each Sub-Account by the
value of the applicable Accumulation Units on the particular
valuation date, adding the products, and adding the amount
of the accumulations in the General Account, if any. Also
see Item 44(a), above.
Because of its current tax status, the Company does not
expect to incur any federal income tax liabilities that
would be charged to the Separate Account, and the company
does not intend to make a charge for federal income taxes.
The Company may, however, incur state and local taxes (in
addition to premium taxes) in several states. At present,
these taxes are not significant. If there is a material
change in state or local tax laws, charges for such taxes,
if any, attributable to the Separate Account may be made.
(5) OTHER ITEMS WHICH REGISTRANT DEDUCTS FROM THE NET ASSET
VALUE IN COMPUTING REDEMPTION VALUE OF ITS SECURITIES.
Accumulation Units of the Sub-Accounts will be redeemed at
net asset value. However, under the Policies, a surrender
or partial redemption may be subject to Surrender charges.
See 13(a), "SURRENDER CHARGES" and "PARTIAL WITHDRAWAL."
(6) WHETHER ADJUSTMENTS ARE MADE FOR FRACTIONS.
No adjustments are made for fractions.
(b) FURNISH A SPECIMEN SCHEDULE SHOWING THE COMPONENTS OF THE
REDEMPTION PRICE TO THE HOLDERS OF THE TRUST'S SECURITIES AS OF
THE LATEST PRACTICABLE DATE.
No policies have been issued or offered for sale to the public.
PURCHASE AND SALE OF INTERESTS IN UNDERLYING SECURITIES FROM AND TO
SECURITY HOLDERS
47. FURNISH A STATEMENT AS TO THE PROCEDURE WITH RESPECT TO THE
MAINTENANCE OF A POSITION IN THE UNDERLYING SECURITIES OR INTERESTS
IN THE UNDERLYING SECURITIES, THE EXTENT AND NATURE THEREOF AND THE
PERSON WHO MAINTAINS SUCH A POSITION. INCLUDE A DESCRIPTION OF THE
PROCEDURE WITH RESPECT TO THE PURCHASE OF
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UNDERLYING SECURITIES OR INTERESTS IN THE UNDERLYING SECURITIES
FROM SECURITY HOLDERS WHO EXERCISE REDEMPTION OR WITHDRAWAL RIGHTS
AND THE SALE OF SUCH UNDERLYING SECURITIES AND INTERESTS IN THE
UNDERLYING SECURITIES TO OTHER SECURITY HOLDERS. STATE WHETHER
THE METHOD OF VALUATION OF SUCH UNDERLYING SECURITIES OR INTEREST
IN UNDERLYING SECURITIES DIFFERS FROM THAT SET FORTH IN ITEMS 44
AND 46. IF ANY ITEM OF EXPENDITURE INCLUDED IN THE DETERMINATION
OF THE VALUATION IS NOT OR MAY NOT ACTUALLY BE INCURRED OR EXPENDED,
EXPLAIN THE NATURE OF SUCH ITEM AND WHO MAY BENEFIT FROM THE
TRANSACTION.
All purchases and redemptions of shares of the Underlying Funds are at
net asset value. Other Separate Accounts of the Company currently
invest in shares of AIT, and AIT issues shares to Separate Accounts of
Allmerica Financial and may issue shares to Separate Accounts of other
unaffiliated insurance companies. VIP and T. Rowe Price may issue
shares to unaffiliated insurance companies. All transactions are at
net asset value. The Company will redeem sufficient shares of the
Underlying Funds to pay certain life insurance proceeds, benefits at
maturity, or surrender proceeds, or for other purposes contemplated by
the Policy.
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. FURNISH THE FOLLOWING INFORMATION AS TO EACH TRUSTEE OR CUSTODIAN OF
THE TRUST.
(a) NAME AND PRINCIPAL ADDRESS:
First Allmerica Financial Life Insurance Company
440 Lincoln Street
Worcester, MA 01653
(b) FORM OF ORGANIZATION:
Mutual life insurance company.
(c) STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH THE
TRUSTEE OR CUSTODIAN WAS ORGANIZED.
Incorporated under the laws of Massachusetts.
(d) NAME OF GOVERNMENTAL SUPERVISING OR EXAMINING AUTHORITY.
Massachusetts Insurance Department. The Company is also subject
to examination by the insurance departments of each state in
which it does business.
49. STATE THE BASIS FOR PAYMENT OF FEES OR EXPENSES OF THE TRUSTEE OR
CUSTODIAN FOR SERVICES RENDERED WITH RESPECT TO THE TRUST AND ITS
SECURITIES, AND THE AMOUNT THEREOF FOR THE LAST FISCAL YEAR.
INDICATE THE PERSON PAYING SUCH FEES OR EXPENSES. IF ANY FEES OR
EXPENSES ARE PREPAID, STATE THE UNEARNED AMOUNTS.
The Company is not paid a Separate fee for expenses or services
rendered as custodian of the Separate Account.
A daily charge equivalent to an effective annual rate of 0.65% of the
average daily net asset value of each Sub-Account is imposed to
compensate the Company for its assumption of certain mortality and
expense risks. Such expense risks include the risks of increased
costs associated with the custodian function. Additionally, during
the first ten Policy years, the Company assesses a charge on an annual
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basis of 0.15% of the daily net asset value in each Sub-Account for
administrative costs associated with the Separate Account.
The contingent surrender charge (See 13(a)) includes a component for
administrative services, which may be deemed to include custodial
services.
As the Separate Account has not begun business operations, no fees
have been paid.
50. STATE WHETHER THE TRUSTEE OR CUSTODIAN OR ANY OTHER PERSON HAS OR MAY
CREATE A LIEN ON THE ASSETS OF THE TRUST, AND, IF SO, GIVE FULL
PARTICULARS, OUTLINING THE SUBSTANCE OF THE PROVISIONS OF ANY
INDENTURE OR AGREEMENT WITH RESPECT THERETO.
None. Under Massachusetts law, the assets supporting Policy reserves
in the Separate Account may not be charged with any liabilities
arising out of any other business of the Company.
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO INSURANCE OF HOLDERS
OF SECURITIES:
Interests in the Separate Account are sold only to fund the Policies.
Other than the Policies themselves, no insurance is sold to
Policyowners with interests in the Sub-Accounts, in connection with
such interests.
(a) THE NAME AND ADDRESS OF THE INSURANCE COMPANY.
First Allmerica Financial Life Insurance Company
440 Lincoln Street
Worcester, MA 01653
(b) THE TYPES OF POLICIES AND WHETHER INDIVIDUAL OR GROUP POLICIES.
The Policies are individual or group flexible premium variable
life insurance policies.
(c) THE TYPES OF RISKS INSURED AND EXCLUDED.
The Policies are offered either on a group basis
or as individual policies, to individuals and businesses in
connection with employer-sponsored insurance. Participation
in a group contract will be accounted for by the issuance of a
certificate describing the individual's interest under the
group contract. Individual policies may be issued
in circumstances where a group contract is not issued. The
terms of a certificate and an individual policy, whether or
not the individual policy is issued under a group
contract, are substantially the same .
(d) THE COVERAGE OF THE POLICIES.
The Policies provide insurance coverage on the life of the
Insured. The minimum Death Benefit is stated in each Policy.
Death Proceeds will be reduced by any outstanding Policy Debt and
any due and unpaid monthly deductions.
(e) THE BENEFICIARIES OF SUCH POLICIES AND THE USES TO WHICH THE
PROCEEDS OF POLICIES MUST BE PUT.
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The beneficiary is named by the Policyowner to receive the death
proceeds. The interest of any beneficiary will be subject to any
assignment made by the Policyowner. The Policyowner may declare
a beneficiary to be revocable (changed any time by written
request) or irrevocable (may be changed only with the written
consent of the beneficiary). The interest of a beneficiary who
dies before the Insured will pass to surviving beneficiaries. If
all beneficiaries die before the Insured, the death proceeds will
pass to the Policyowner.
(f) THE TERMS AND MANNER OF CANCELLATION AND OF REINSTATEMENT.
See Item 17(a) for the manner of cancellation and reinstatement.
(g) THE METHOD OF DETERMINING THE AMOUNT OF PREMIUMS TO BE PAID BY
HOLDERS OF SECURITIES.
See answers to Item 13(a) for amount of charges imposed and 44(a)
and 44(c) for the manner in which the premium is determined.
(h) THE AMOUNT OF AGGREGATE PREMIUMS PAID TO THE INSURANCE COMPANY
DURING THE LAST FISCAL YEAR.
The Company has not yet begun issuing the Policies.
(i) WHETHER ANY PERSON OTHER THAN THE INSURANCE COMPANY RECEIVES ANY
PART OF SUCH PREMIUMS, THE NAME OF EACH SUCH PERSON AND THE
AMOUNTS INVOLVED, AND THE NATURE OF THE SERVICES RENDERED
THEREFOR.
No person other than the Company receives any part of the amounts
deducted for assumption of mortality and expense risks. However,
the Company may from time to time enter into reinsurance
agreements with other insurance companies under which certain
insurance risks, premium income and related expenses are assumed
by such other insurance companies.
(j) THE SUBSTANCE OF ANY OTHER MATERIAL PROVISIONS OF ANY INDENTURE
OR AGREEMENT OF THE TRUST RELATING TO INSURANCE.
None.
VII. POLICY OF REGISTRANT
52. (a) FURNISH THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT WITH RESPECT TO THE CONDITIONS UPON WHICH AND THE
METHOD OF SELECTION BY WHICH PARTICULAR PORTFOLIO SECURITIES
MUST OR MAY BE ELIMINATED FROM THE ASSETS OF THE TRUST OR MUST
OR MAY BE REPLACED BY OTHER PORTFOLIO SECURITIES. IF AN
INVESTMENT ADVISER OR OTHER PERSON IS TO BE EMPLOYED IN
CONNECTION WITH SUCH SELECTION, ELIMINATION OR SUBSTITUTION,
STATE THE NAME OF SUCH PERSON, THE NATURE OF ANY AFFILIATION TO
THE DEPOSITOR, TRUSTEE OR CUSTODIAN, AND ANY PRINCIPAL
UNDERWRITER, AND THE AMOUNT OF REMUNERATION TO BE RECEIVED FOR
SUCH SERVICES. IF ANY PARTICULAR PERSON IS NOT DESIGNATED IN THE
INDENTURE OR AGREEMENT, DESCRIBE BRIEFLY THE METHOD OF SELECTION
OF SUCH PERSON.
The investment Policy of each Sub-Account of the Separate Account
is to invest in a particular Underlying Fund.
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The Company reserves the right, subject to applicable law, to
make additions to, deletions from, or substitutions for the
shares that are held in the Sub-Accounts of the Separate Account
or that the Sub-Accounts of the Separate Account may purchase.
If the shares of an Underlying Fund are no longer available for
investment or if in the Company's judgment further investment in
any Underlying Fund should become inappropriate in view of the
purposes of the Separate Account or the affected Sub-Account, the
Company may redeem the shares of that Underlying Fund and
substitute shares of another registered open-end management
company. The Company will not substitute any shares attributable
to a Policy interest in a Sub-Account without notice and prior
approval of the SEC and state insurance authorities, to the
extent required by the 1940 Act or other applicable law.
The Company also reserves the right to establish additional
Sub-Accounts of the Separate Account, each of which would invest
in shares corresponding to a new Underlying Fund or in shares of
another investment company having a specified investment
objective. Subject to applicable law and any required SEC
approval, the Company may, in its sole discretion, establish new
Sub-Accounts or eliminate one or more Sub-Accounts if marketing
needs, tax considerations or investment conditions warrant. Any
new Sub-Accounts may be deemed available to existing Policyowners
on a basis to be determined by the Company. If the Company deems
it to be in the best interest of Policyowners, and subject to any
approvals that may be required under applicable law, the Variable
Account or Sub-Account may be operated as a management company
under the 1940 Act, may be deregistered if registration is no
longer required, or may be combined with other Separate Accounts
of the company.
If any of these substitutions or changes are made, the Company
way by appropriate endorsement change the Policy to reflect the
substitution or change.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH
TRANSACTION INVOLVING THE ELIMINATION OF ANY UNDERLYING SECURITY
DURING THE PERIOD COVERED BY THE FINANCIAL STATEMENTS FILED
HEREWITH.
Not Applicable.
(c) DESCRIBE THE POLICY OF THE TRUST WITH RESPECT TO THE SUBSTITUTION
AND ELIMINATION OF THE UNDERLYING SECURITIES OF THE TRUST WITH
RESPECT TO:
(1) THE GROUNDS FOR ELIMINATION AND SUBSTITUTION;
See 52(a), above.
(2) THE TYPE OF SECURITIES WHICH MAY BE SUBSTITUTED FOR ANY
UNDERLYING SECURITY;
See 52(a), above.
(3) WHETHER THE ACQUISITION OF SUCH SUBSTITUTED SECURITY OR
SECURITIES WOULD CONSTITUTE THE CONCENTRATION OF INVESTMENT
IN A PARTICULAR INDUSTRY OR GROUP OF INDUSTRIES OR WOULD
CONFORM TO A POLICY OF CONCENTRATION OF INVESTMENT IN A
PARTICULAR; INDUSTRY OR GROUP OF INDUSTRIES;
Not Applicable.
(4) WHETHER SUCH SUBSTITUTED SECURITIES MAY BE THE SECURITIES OF
ANY OTHER INVESTMENT
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COMPANY; AND
See 52(a), above.
(5) THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
WHICH AUTHORIZE OR RESTRICT THE POLICY OF THE REGISTRANT IN
THIS REGARD.
See 52(a) above.
(d) FURNISH A DESCRIPTION OF ANY (EXCLUSIVE OF POLICIES COVERED BY
PARAGRAPH (A) AND (B) HEREIN) OF THE TRUST WHICH IS DEEMED A
MATTER OF FUNDAMENTAL POLICY AND WHICH IS ELECTED TO BE TREATED
AS SUCH.
None.
REGULATED INVESTMENT COMPANY
53. (a) STATE THE TAXABLE STATUS OF THE TRUST.
Because of its current tax status, the Company does not
expect to incur any federal income tax liabilities that
would be charged to the Separate Account, and the Company
does not intend to make a charge for federal income taxes.
The Company may, however, incur state and local taxes (in
addition to premium taxes) in several states. At present,
these taxes are not significant. If there is a material
change in state or local tax laws, charges for such taxes,
if any, attributable to the Separate Account may be made.
See also 46(a), above.
(b) STATE WHETHER THE TRUST QUALIFIED FOR THE LAST TAXABLE AS A
REGULATED INVESTMENT COMPANY AS DEFINED IN SECTION 851 OF THE
INTERNAL REVENUE CODE OF 1954, AND STATE ITS PRESENT INTENTION
WITH RESPECT TO SUCH QUALIFICATION DURING THE CURRENT TAXABLE
YEAR.
Not Applicable.
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. IF THE TRUST IS NOT THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO
EACH CLASS OR SERIES OF ITS SECURITIES.
Not Applicable.
55. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES,
A TRANSCRIPT OF A HYPOTHETICAL ACCOUNT SHALL BE FILED IN
APPROXIMATELY THE FOLLOWING FORM ON THE BASIS OF THE CERTIFICATE
CALLING FOR THE SMALLEST AMOUNT OF PAYMENTS. THE SCHEDULE SHALL
COVER A CERTIFICATE OF THE TYPE CURRENTLY BEING SOLD ASSUMING
THAT SUCH CERTIFICATE HAD BEEN SOLD AT A DATE APPROXIMATELY
TEN YEARS PRIOR TO THE DATE OF REGISTRATION OR TO THE
APPROXIMATE DATE OF ORGANIZATION OF THE TRUST.
Not Applicable.
56. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES,
FURNISH BY YEARS FOR THE PERIOD COVERED BY THE FINANCIAL
STATEMENTS FILED HEREWITH IN RESPECT OF CERTIFICATES SOLD DURING
SUCH PERIOD, THE FOLLOWING INFORMATION FOR EACH FULLY PAID TYPE
AND EACH INSTALLMENT PAYMENT TYPE OF PERIODIC PAYMENT
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PLAN CERTIFICATE CURRENTLY BEING ISSUED BY THE TRUST.
Not Applicable.
57. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES,
FURNISH BY YEARS FOR THE PERIOD COVERED BY FINANCIAL STATEMENTS
FILED HEREWITH THE FOLLOWING INFORMATION FOR EACH INSTALLMENT
PAYMENT TYPE OF PERIODIC PAYMENT PLAN CERTIFICATE CURRENTLY BEING
ISSUED BY THE TRUST.
Not Applicable.
58. IF THE TRUST IS THE ISSUER OF PERIODIC PLAN CERTIFICATES FURNISH
THE FOLLOWING INFORMATION FOR EACH INSTALLMENT PERIODIC PAYMENT
PLAN CERTIFICATE OUTSTANDING AS AT THE LATEST PRACTICABLE DATE.
Not Applicable.
59. FINANCIAL STATEMENTS:
FINANCIAL STATEMENTS OF THE SEPARATE ACCOUNT
Financial statements, if any, will be contained in the
registration statement for the Policy on Form S-6 filed
under the Securities Act of 1933. They are incorporated herein
by reference.
FINANCIAL STATEMENTS OF THE DEPOSITOR
The Financial Statements of the Company will be contained in the
registration statement on Form S-6 filed by the Registrant
pursuant the Securities Act of 1933. They are incorporated
herein by reference.
IX. EXHIBITS
A. Furnish the most recent form of the following:
(1) Certified copy of Resolutions of the Board of Directors of the
Company dated June 13, 1996 establishing the Allmerica Select
Separate Account II was previously filed in the Initial
Registration Statement, Registration No. 333-15569 and is
incorporated by reference herein.
(2) Not Applicable
(3) (a) Underwriting and Administrative Services Agreement between
the Company and Allmerica Investments, Inc. was previously
filed in Post-Effective Amendment No. 8, Registration
No. 33-74184 on April 16, 1998 and is incorporated by
reference herein.
(b) Registered Representatives/Agents Agreement was previously
filed in Post-Effective Amendment No. 8, Registration
No. 33-74184 on April 16, 1998 and is incorporated by
reference herein.
(c) Sales Agreements (Select) were previously filed in
Post-Effective Amendment No. 8, Registration No. 33-74184 on
April 16, 1998 and is incorporated by reference herein.
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(d) Commission Schedule was previously filed in Post-Effective
Amendment No. 8, Registration No. 33-74184 on April 16, 1998
and is incorporated by reference herein.
(e) General Agent's Agreement was previously filed in
Post-Effective Amendment No. 8, Registration No. 33-74184 on
April 16, 1998 and is incorporated by reference herein.
(f) Career Agent Agreement was previously filed in Post-Effective
Amendment No. 8, Registration No. 33-74184 on April 16, 1998
and is incorporated by reference herein.
(4) Not Applicable.
(5) Policy and Policy Riders are being filed concurrently with the
Initial Registration Statement on Form S-6.
(6) Articles of Incorporation and Bylaws of the Company were
previously filed in Post Effective Amendment No 3, Registration
No. 33-74184 on October 1, 1995 and are incorporated by reference
herein.
(7) Not Applicable.
(8) (a) Participation Agreement with Allmerica Investment Trust was
previously filed in Post-Effective Amendment No. 8,
Registration No. 33-74184 on April 16, 1998 and is
incorporated by reference herein.
(b) Participation Agreement with T. Rowe Price International
Series, Inc. was previously filed in Post-Effective
Amendment No. 8, Registration No. 33-74184 on April 16,
1998 and is incorporated by reference herein.
(c) Participation Agreement with Variable Insurance Products
Fund, as amended was previously filed in Post-Effective
Amendment No. 8, Registration No. 33-74184 on April 16, 1998
and is incorporated by reference herein.
(d) Fidelity Service Agreement was previously filed on April
30, 1996, in Post-Effective Amendment No. 4, Registration No.
33-74184 and is incorporated by reference herein.
(e) An Amendment to the Fidelity Service Agreement was
previously filed on May 1, 1997 in Post-Effective Amendment
No. 6, Registration No. 33-74184 and is incorporated by
reference herein.
(f) Service Agreement with Rowe Price-Fleming International,
Inc. was previously filed on April 16, 1998 in Post-Effective
Amendment No. 8, Registration No. 33-74184 and is incorporated
by reference herein.
(g) Fidelity Service Contract was previously filed on May 1,
1997 in Post-Effective Amendment No. 6, Registration No.
33-74184 and is incorporated by reference herein.
(h) BFDS Agreements for lockbox and mailroom services were
previously filed in Post-Effective Amendment No. 8,
Registration No. 33-74184 on April 16, 1998 and is
incorporated by reference herein.
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(9) Not Applicable
(10) Application is being filed concurrently with the Initial
Registration Statement on Form S-6.
1. Policy and Policy riders are as set forth in Exhibit 1(5) above.
2. Opinion of Counsel is being filed concurrently with the Initial
Registration Statement on Form S-6.
3. Not Applicable
4. Not Applicable
5. Actuarial Consent is being filed concurrently with the Initial
Registration Statement on Form S-6.
6. Procedures Memorandum dated______pursuant to Rule 63-3(T)(b)(12)(iii) under
the 1940 Act which includes conversion procedures pursuant to Rule
63-3(T)(b)(13)(v)(B) is being filed concurrently with the Initial
Registration Statement on Form S-6.
7. Consent of Independent Accountants is being filed concurrently with the
Initial Registration Statement on Form S-6.
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, First
Allmerica Financial Life Insurance Company, the depositor of the Registrant,
has caused this initial registration statement to be duly signed on behalf of
the Registrant in the City of Worcester and Commonwealth of Massachusetts on
the 20th day of August, 1998.
ALLMERICA SELECT SEPARATE ACCOUNT II
OF FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(Name of Registrant)
BY: FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(Name of Depositor)
By /S/ SHEILA B. ST. HILAIRE
-------------------------
Sheila B. St. Hilaire
Assistant Vice President and Counsel
Attest /S/ ABIGAIL M. ARMSTRONG
------------------------
Abigail M. Armstrong
Secretary and Counsel
50