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SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM N-8B-2
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUST
WHICH ARE CURRENTLY ISSUING SECURITIES
DATED JUNE 4, 1996
Pursuant to Section 8(b) of the Investment Company Act of 1940
GROUP VEL ACCOUNT OF FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
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(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. ORGANIZATION AND GENERAL INFORMATION
1. (a) FURNISH NAME OF THE TRUST AND THE INTERNAL REVENUE SERVICE EMPLOYER
IDENTIFICATION NUMBER.
The trust is the Group VEL Account of First Allmerica Financial
Life Insurance Company ("Group VEL Account"). The Group VEL
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 group flexible payment variable life insurance
policies ("Policies") and certificates issued thereunder
("Certificates").
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 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
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 Group VEL Account was authorized under Massachusetts law
pursuant to a resolution of the Board of Directors of the Company
on August 20, 1991. The resolution authorizing the Group VEL
Account will continue until amended by the Board of Directors of
the Company. The Policies
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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 Group VEL 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 Group VEL Account, the Company, or Allmerica Investments Inc.
is a party and which are material with respect to the security holders of
the Group VEL 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.
(a) WHETHER THE SECURITIES ARE OF THE REGISTERED OR BEARER TYPE.
The Policies are group variable life insurance policies and, as such, are
"registered" in the name of the Policyowner, usually an employer or
sponsor of a non-qualified benefits plan. Certificates are issued under
the Policy to eligible applicants ("Certificate Owners") who are members
of the plan. The records concerning the Policyowner and Certificate
Owners are maintained by or on behalf of the Company.
(b) WHETHER THE SECURITIES ARE OF THE CUMULATIVE OR DISTRIBUTIVE TYPE.
The Certificates 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, or in connection with
the payment of death benefits.
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(c) THE RIGHTS OF SECURITY HOLDERS WITH RESPECT TO WITHDRAWAL OR REDEMPTION.
A Certificate 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 Certificate year, partial withdrawals in a minimum amount
of $500 may be made from the Certificate 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 Certificates permit net premiums to be allocated either to
the Company's General Account or to the Sub-Accounts of the Group VEL
Account. Each Sub-Account invests exclusively in a corresponding
investment portfolio ("Underlying Fund") of the Allmerica Investment
Trust ("AIT"), managed by Allmerica Investment Management Company, Inc.
("Allmerica Investment"); of the Variable Insurance Products Fund
("VIP"), managed by Fidelity Management and Research Company ("Fidelity
Management"); of the Variable Insurance Products Fund II ("VIP II"),
managed by Fidelity Management and Research Company ("Fidelity
Management"); of the Delaware Group Premium Fund, Inc. ("DGPF"), managed
by Delaware International Advisers Ltd. ("Delaware International"); or of
the T. Rowe Price International Series, Inc. ("T. Rowe Price"), managed
by Rowe Price-Fleming International, Inc.; or INVESCO Variable
Investment Funds, Inc. ("INVESCO VIF"), managed by INVESCO Funds Group,
Inc. ("INVESCO"); the funds of INVESCO VIF are offered only to employees
of INVESCO. Subject to the consent of the Company, the Certificate Owner
may transfer amounts among all of the Sub-Accounts and between the
Sub-Accounts and the Group VEL Account, subject to certain restrictions,
but at no time may have allocations in more than seven Sub-Accounts.
CONVERSION PRIVILEGE - During the first 24 Certificate months after the
date of issue, subject to certain restrictions, the Certificate Owner may
convert a Certificate to a flexible premium fixed Certificate by
transferring all Certificate 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 Certificate months after the date of an increase in face amount, under
which the Certificate Owner may convert by transferring all or part of
Certificate 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.
FREE LOOK PRIVILEGE - The Certificates under the Policy provide for an
initial Free Look Period. The Certificate Owner generally may cancel the
Certificate until the latest of (a) 45 days after the enrollment form for
the Certificate is signed, (b) 10 days after the Certificate Owner
receives the Certificate, and (c) 10 days after the Company mails or
personally delivers a notice of withdrawal rights to the Certificate
Owner. Upon returning the Certificate, the Certificate Owner generally
will be sent within 7 days a refund equal to the sum of (1) the
difference between any payments made, including fees or other charges,
and any amounts allocated to the Group VEL Account; (2) the value of the
amounts allocated to the Group VEL Account on the date the returned
Certificate is received at the Company; and (3) any fees or charges
imposed on the amounts allocated to the Group VEL Account. Where
required by state insurance laws, the Company will refund the entire
premiums paid, in lieu of the above, including fees charged under
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the Certificate and Underlying Funds. The refund of any premium paid by
check, however, may be delayed until the check has cleared the
Certificate Owner's bank.
A free look privilege also applies following a requested increase in face
amount. The Certificate Owner generally has the right to cancel the
increase before the latest of (a) 45 days after the enrollment form 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 Certificate Owner will receive a credit to the
Certificate Value of charges which would not have been deducted but for
the increase. The amount to be credited will be refunded if the
Certificate Owner so requests. The Company will also waive any surrender
charge calculated for the increase.
The Certificate Owner 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 cause a Certificate to lapse unless: (1) the Surrender Value is
insufficient to cover the next Monthly Deduction plus loan interest
accrued, if any, or (2) Debt exceeds Certificate Value. 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.
If the Payor Provision is in force and the amount in the Monthly
Deduction Sub-Account attributable to premiums allocated thereto by Payor
is insufficient to cover the next Monthly Deduction, the Company will
send to the Payor a notice of the due date and amount of premium which is
due. The premium may be paid during a grace period of 62 days beginning
on the premium due date. If the premium payable is not received by the
Company within 31 days of the end of the grace period, a second notice
will be sent to the Payor. A 31-day grace period notice at this time
will also be sent to the Certificate Owner if Certificate Value is
insufficient to cover the Monthly Deductions then due.
If the amount in the Monthly Deduction Sub-Account attributable to
premiums allocated thereto by Payor is insufficient to cover the Monthly
Deductions due at the end of the grace period, the balance of such
Monthly Deductions will be withdrawn on a Pro-Rata Allocation from the
Certificate Value, if any, in the General Account and the Sub-Accounts.
A lapse occurs if the Certificate Value is insufficient, at the grace
period, to pay the Monthly Deductions which are due. The Certificate
terminates on the date of lapse. Any death benefit payable during the
grace period will be reduced by any overdue charges.
The above Payor Provisions, if applicable, are in lieu of the
grace-period notice and default provisions applicable when "(a) the
Surrender Value is insufficient to cover the next Monthly Deduction plus
loan interest accrued," but do not apply to "(b) if Debt exceeds the
Certificate Value."
(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
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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 persons having
voting interest 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 Group VEL Account that it owns and which are
not attributable to the Policies in the same proportion.
The number of votes which a person having a voting interest 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 such person is determined by dividing the 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, Certificate Owners 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 and Certificate Owners.
(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 Group VEL Account or that the
Sub-Accounts of the Group VEL 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 Group
VEL 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 Certificate 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 Group
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VEL 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
existing Certificate Owners 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 Certificate to reflect the
substitution or change and will notify Certificate Owners of all
such changes. If the Company deems it to be in the best interest
of Certificate Owners, and subject to any approvals that may be
required under applicable law, the Group VEL 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 or in the Certificates that affect the
Certificate Owner's rights will be made without notice to the
Policyowner and the Certificate Owner to the extent required by
law.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF THE TRUST.
No notice to or consent from Policyowners or Certificate Owners,
respectively, is required for any change in the Company's
resolution establishing the Group VEL Account.
(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR CUSTODIAN.
The depositor of the Group VEL Account cannot be changed.
The Group VEL Account has no Trustees.
Notice to Policyowners or Certificate Owners 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 or
Certificate Owners when changing the underlying securities of the
Group VEL 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 the securities cannot be changed
without the consent of the Security holders.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF THE TRUST.
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No consent is required.
(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR CUSTODIAN.
The depositor of the Group VEL Account cannot be changed.
The Group VEL 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
cash value for a Policy to qualify as life insurance. Under
current Federal tax law, either a Guideline Premium test or a Cash
Value Accumulation test can be used to determine if a Policy
complies with the definition of life insurance in Section 7702 of
the Internal Revenue Code ("Code"). Where approved by state
insurance departments, the Policy Owner may elect either of the
tests. If the Guideline Premium test is chosen, Certificate Owners
may choose between two death benefit options.
The Cash Value Accumulation test requires that the Death Benefit
must be sufficient so that the cash surrender value, as defined in
Section 7702, does not at any time exceed the net single premium
required to fund the future benefits under the policy. If the
Certificate Value is at any time greater than the net single
premium at the insured's age, sex, and underwriting classification
for the proposed Death Benefit, the Death Benefit will be increased
automatically by multiplying the Certificate Value by a "Death
Benefit Factor" computed in compliance with the Code. Death Benefit
Option 3 is used in conjunction with the Cash Value Accumulation
Test.
The Guideline Premium test limits the amount of premiums payable
under a Policy to a certain amount for an insured of a particular
age and sex. If the Employer chooses the Guideline Premium Test,
the Certificate Owner designates the desired option in the
enrollment form. The Certificate Owner may change the option once
per Certificate 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.
Under the Guideline Premium test, the Certificate Owner may choose
from two Death Benefit options. 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 Certificate
Value or the Guideline Minimum Death Benefit. A Minimum Death
benefit, equivalent to a percentage of the Certificate Value, will
apply if it is greater than the Death Benefit otherwise payable
under Option 1 or Option 2.
(3) DEATH PROCEEDS -. As long as a Certificate remains in force, the
Company will, upon due proof of the Insured's death, pay the Death
Proceeds to the named beneficiary. The Company will normally pay
the Death Proceeds within seven days of receiving due proof
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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
then offered by the Company.
The Death Proceeds are: (a) The death benefit provided under either
the Cash Accumulation Test (Option 3) or one of the two death
benefit options (Option 1 or Option 2) under the Guideline Premium
Test, whichever is elected and in effect on the date of death; plus
(b) any additional 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 Certificate 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.
The Minimum Death Benefit is equal to a percentage of the
Certificate Value as set forth in the Certificate. The Minimum
Death Benefit is determined in accordance with the Internal Revenue
Code regulations to ensure that the Certificate qualifies as a life
insurance contract and that the insurance proceeds will be excluded
from the gross income of the beneficiary.
(4) CALCULATION OF CASH VALUE - SEE Items 44(a), 44(c), and 46(a).
(5) LOAN PROVISIONS. SEE Item 21.
(6) 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 Certificate Owner
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.
(7) OPTIONAL INSURANCE BENEFIT - Subject to certain requirements, one
or more of the following additional insurance benefits may be added
by rider, depending on the group to which the Policy is issued:
Waiver of Premium Rider, Other Insured Rider, Children's Insurance
Rider, Accidental Death Benefit Rider, and Option to Accelerate
Benefits Rider. The cost of these optional insurance benefits will
be deducted from Certificate Value as part of the Monthly
Deduction.
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.
Net premiums may be allocated either to the Company's General Account or
to the Group VEL Account. Eighteen investment divisions ("Sub-Accounts")
are currently offered under the Policies. Each Sub-Account invests
exclusively in a corresponding Underlying Fund of AIT, VIP, VIP II, DGPF,
T. Rowe Price, or INVESCO which are no-load, open-end, diversified series
management investment companies. Each of the Underlying Funds operates
pursuant to different investment
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objectives, which are summarized below:
SUB-ACCOUNT 1 - invests solely in shares of the Growth Fund of the Trust.
The Growth Fund is invested in common stocks and securities convertible
into common stocks that are believed to represent significant underlying
value in relation to current market prices. The objective of the Growth
Fund is to achieve long-term growth of capital. Realization of current
investment income, if any, is incidental to this objective.
SUB-ACCOUNT 2 - invests solely in shares of the Investment Grade Income
Fund of the Trust. The Investment Grade Income Fund is invested in a
diversified portfolio of fixed income securities with the objective of
seeking as high a level of total return (including both income and
realized and unrealized capital gains) as is consistent with prudent
investment management.
SUB-ACCOUNT 3 - invests solely in shares of the Money Market Fund of the
Trust. The Money Market Fund is invested in a diversified portfolio of
high-quality, short-term debt instruments with the objective of obtaining
maximum current income consistent with the preservation of capital and
liquidity.
SUB-ACCOUNT 4 - invests solely in shares of the Equity Index Fund of the
Trust. The Equity Index Fund seeks to provide investment results that
correspond generally to the composite price and yield performance of
United States publicly traded common stocks. The Equity Index Fund seeks
to achieve its objective by attempting to replicate the composite price
and yield performance of the Standard & Poor's 500 Composite Stock Price
Index.
SUB-ACCOUNT 5 - invests solely in the shares of the Government Bond Fund
of the Trust. The Government Bond Fund has the investment objectives of
seeking high income, preservation of capital and maintenance of
liquidity, primarily through investments in debt instruments issued or
guaranteed by the U.S. Government or its agencies or instrumentalities
and in related options, futures and repurchase agreements.
SUB-ACCOUNT 6 - invests solely in shares of the Select Aggressive Growth
Fund of the Trust. The 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.
SUB-ACCOUNT 7 - invests solely in shares of the Select Growth Fund of the
Trust. The Select Growth Fund seeks to achieve growth of capital by
investing in a diversified portfolio consisting primarily of common
stocks selected on the basis of their long-term growth potential.
SUB-ACCOUNT 8 - invests solely in shares of the Select Growth and Income
Fund of the Trust. The 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.
SUB-ACCOUNT 9 - invests solely in shares of the Small Cap Value Fund of
the Trust. The Small Cap Value Fund seeks long-term growth by investing
principally in a diversified portfolio of common stocks of smaller,
faster-growing companies considered to be attractively valued in the
smaller company sector of the market.
SUB-ACCOUNT 11 - invests solely in shares of the Select International
Equity Fund of the Trust. The 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.
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SUB-ACCOUNT 102 - invests solely in shares of the High Income Portfolio
of VIP. The High Income Portfolio seeks to obtain a high level of
current income by investing primarily in high-yielding, lower-rated
fixed-income securities (commonly referred to as "junk bonds"), while
also considering growth of capital. These securities are often
considered to be speculative and involve greater risk of default or price
changes than securities assigned a high quality rating. For more
information about these lower-rated securities, see "Risks of Lower-Rated
Debt Securities" in the VIP prospectus.
SUB-ACCOUNT 103 - invests solely in shares of the Equity-Income Portfolio
of VIP. The Equity-Income Portfolio seeks reasonable income by investing
primarily in income-producing equity securities. In choosing these
securities, the Portfolio will also consider the potential for capital
appreciation. The Portfolio's goal is to achieve a yield which exceeds
the composite yield on the securities comprising the Standard & Poor's
Daily Stock Price Index of 500 Common Stocks. The Portfolio may invest
in high yielding, lower-rated securities (commonly referred to as "junk
bonds") which are subject to greater risk than investments in
higher-rated securities. For a further discussion of lower-rated
securities, please see "Risks of Lower-Rated Debt Securities" in the VIP
prospectus.
SUB-ACCOUNT 104 - invests solely in shares of the Growth Portfolio of
VIP. The 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.
SUB-ACCOUNT 105 - invests solely in shares of the Overseas Portfolio of
VIP. The Overseas Portfolio seeks long-term growth of capital primarily
through investments in foreign securities and provides a means for
aggressive investors to diversify their own portfolios by participating
in companies and economies outside of the United States.
SUB-ACCOUNT 106 - invests solely in shares of the Asset Manager Portfolio
of VIP II. The Asset Manager Portfolio seeks high total return with
reduced risk over the long-term by allocating its assets among stocks,
bonds and short-term fixed-income instruments.
SUB-ACCOUNT 150 -invests solely in shares of the International Stock
Portfolio of T. Rowe Price. The International Stock Portfolio seeks long-
term growth of capital through investments primarily in common stocks of
established, non-U.S. companies.
SUB-ACCOUNT 207 - invests solely in shares of the International Equity
Series of DGPF. The International Equity Series seeks long-term growth
without undue risk to principal by investing primarily in equity
securities of foreign issuers providing the potential for capital
appreciation and income.
SUB-ACCOUNT 301 - invests solely in shares of the Industrial Income Fund
of INVESCO VIF. The Industrial Income Fund seeks the best possible
current income while following sound investment practices. Capital
growth potential is an additional but secondary consideration in the
selection of portfolio securities. The Industrial Income Fund Seeks to
achieve its objective by investing in securities which will provide a
relatively high yield and stable return and which, over a period of
years, may also provide capital appreciation. THIS SUB-ACCOUNT IS
AVAILABLE ONLY TO EMPLOYEES OF INVESCO AND ITS AFFILIATES.
-11-
<PAGE>
Sub-Account 302 - invests solely in shares of the Total Return Fund of
INVESCO VIF. The Total Return Fund seeks a high total return on
investment through capital appreciation and current income by investing
in a combination of equity securities (consisting of common stocks and,
to a lesser degree, securities convertible into common stock) and fixed
income securities. THIS SUB-ACCOUNT IS AVAILABLE ONLY TO EMPLOYEES OF
INVESCO AND ITS AFFILIATES.
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:
(a) NAME OF COMPANY.
The Sub-Accounts of the Group VEL Account invest in corresponding
Underlying Funds of AIT (managed by Allmerica Investment);
VIP(managed by Fidelity Management); VIP II (managed by Fidelity
Management); DGPF(managed by Delaware International); T. Rowe Price
(managed by Price-Fleming); or INVESCO (managed by INVESCO
Management).
(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 VIP and VIP II.
Delaware Management Company, Inc., 1818 Market Street,
Philadelphia, PA 19103, is the depositor of DGPF.
T. Rowe Price Associates, Inc. 100 East Pratt Street, Baltimore,
Maryland, 21202, is the depositor of T. Rowe Price.
INVESCO, 7800 E. Union Avenue, Denver, Colorado is the depositor of
INVESCO VIF.
(c) NAME AND PRINCIPAL BUSINESS ADDRESS OF TRUSTEE OR CUSTODIAN:
Chase Manhattan Bank, N.A., 1211 Avenue of the Americas, 39th
Floor, New York, New York is the Custodian of the assets of AIT.
Shawmut Bank of Boston, N.A., One Federal Street, Boston, MA is the
Custodian of the assets of VIP and VIP II.
J.P. Morgan, 60 Wall Street, New York, New York is the Custodian of
the assets of the International Equity Series of DGPF.
(d) NAME AND PRINCIPAL BUSINESS ADDRESS OF PRINCIPAL-UNDERWRITER
AIT does not have a principal underwriter, as its shares are sold
only to the separate accounts of the Company and its affiliated
insurance companies.
-12-
<PAGE>
The principal underwriter of VIP and VIP II is Fidelity
Distributors Corporation, 82 Devonshire Street, Boston, MA.
The principal underwriter of DGPF is Delaware Distributors, Inc.,
1818 Market St., Philadelphia, PA.
The principal underwriter of T. Rowe Price is T. Rowe Price
Investment Services, Inc. 100 East Pratt Street, Baltimore,
Maryland, 21202.
The principal underwriter of Invesco VIF is INVESCO Funds Group,
Inc., 7800 E. Union Avenue, Denver, Colorado 80237.
(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 Group VEL
Account only after the effective dates of the Group VEL 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
PREMIUM EXPENSE CHARGE - A premium expense charge may be
deducted from each premium, the amount of which depends on
the group to which the Policy is issued, for premium taxes
imposed by various states and local jurisdictions (ranging
form zero to 10% of premiums), for federal taxes ("DAC
taxes") imposed for deferred acquisition costs (ranging from
zero to 1%), and for sales expenses (ranging from zero to
5%).
MONTHLY DEDUCTIONS FROM CERTIFICATE VALUE - On the Date of
Issue and each Monthly Payment Date thereafter prior to the
Final Premium Payment Date, certain charges ("Monthly
Deductions") will be deducted from the Certificate Value.
The Monthly Deduction includes a charge for cost of
insurance, a charge for the cost of any additional benefits
provided by rider and a charge for Certificate
administrative expenses that may be up to $10, depending on
the group to which the Policy is issued. The Monthly
Deduction may also include a charge for Group VEL
administrative expenses and a charge for mortality and
expense risks. The Group VEL administrative charge may
continue for up to 10 Certificate years and may be up to
0.25% of Certificate
-13-
<PAGE>
Value in each Sub-Account, depending on the group to which
the Policy was issued. The mortality and expense risk
charge may be up to 0.90% of Certificate Value in each Sub-
Account. Monthly Deductions will be made from a particular
Sub-Account in accordance with instructions received from
the Certificate Owner. If no allocation is made by the
Certificate Owner, charges will be deducted pro rata
according to the Certificate Value in the accounts.
The monthly cost of insurance 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 Minimum Death benefit is in effect, the monthly cost
of insurance charge will also be calculated for that portion
of the Death Benefit which exceeds the current face amount.
The monthly cost of insurance charge will also be adjusted
for any decreases in face amount.
Cost of insurance charges for the Certificates will not be
the same for all Certificate Owners. The insurance
principals of pooling and distribution of mortality risks is
based on the assumption that each Certificate Owner pays a
cost of insurance charge commensurate with the Insured's
mortality risk.
Cost of insurance rates are actually based on the sex (male,
female, or unisex), 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 Certificate 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 will 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 Certificate. 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 Certificates
have been in force for the same length of time.
The premium class of an Insured affects the cost of
insurance rate. If the Company places an Insured into a
standard premium class, the cost of insurance will be higher
than that of a premium class with a lower mortality risk,
and lower than that of a premium class with a higher
mortality risk.
TRANSFER CHARGES - The Company guarantees that the first
twelve transfers in a Certificate year will be free of
charge. Thereafter, a transfer charge of $10 may be imposed
by the Company for each transfer request. The Company
reserves the right to increase the charge, but it will never
exceed $25.00.
CHARGE FOR CHANGE IN FACE AMOUNT - For each increase or
decrease in face amount, a transaction charge of $2.50 per
$1,000 of increase or decrease, to a maximum of $40, will be
deducted from Certificate Value by the Company for
administrative costs. This charge is guaranteed not to
increase and the Company does not expect to make a profit on
this charge.
-14-
<PAGE>
SURRENDER CHARGE - This charge applies only on a full
surrender or decrease in face amount within 15 years of the
date of issue or an increase in face amount. The maximum
surrender charge has two parts: A deferred administrative
charge of $8.50 per thousand dollars of the initial FACE
AMOUNT or increase, and a deferred sales charge of 50% (less
any premium expense charge not associated with state and
local premium taxes) of payments received or associated with
the increase up to the guideline annual premium.
The maximum surrender charge is level for the first 24
Certificate months, then reduces uniformly each month for
the balance of the surrender charge period, and is zero
thereafter. The maximum surrender charge may be higher than
the surrender charge during the first two years following
the date of issue or increase.
CHARGES ON PARTIAL WITHDRAWAL - Partial withdrawals in a
minimum amount of $500 may be made from the Certificate
Value. 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
Certificate Owner may withdraw an amount equal to 10% of the
Certificate Value on the date the written withdrawal request
is received by the Company less the total of any prior
withdrawals in that Certificate 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 Certificate'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:
1. The surrender charge for the most recent increase in
face amount;
2. The surrender charges for the next most recent
increases successively; and
3. Last, the surrender charge for the initial face amount.
CHARGES AGAINST OR REFLECTED IN THE GROUP VEL ACCOUNT -
Management fee and operating expenses are deducted from the
assets of the Underlying Funds. The levels of fees and
expenses vary among the Underlying Funds.
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 Certificate
Value in the Sub-Accounts.
-15-
<PAGE>
(2) UNDERLYING SECURITIES
AIT:
The overall responsibility for the supervision of the
affairs of the Trust vests in the Trustees. The Trustees
have entered into a Management Agreement with Allmerica
Investment, an indirect wholly-owned subsidiary of State
Mutual, to handle the day-to-day affairs of the Trust.
Allmerica Investment, subject to review by the Trustees, is
responsible for the general management of the Funds.
Allmerica Investment also performs certain administrative
and management services for the Trust, furnishes to the
Trust all necessary office space, facilities, and equipment,
and pays the compensation, if any, of officers and Trustees
who are affiliated with Allmerica Investment.
Other than the expenses specifically assumed by Allmerica
Investment under the Management Agreement, all expenses
incurred in the operation of the Trust are borne by it,
including fees and expenses associated with the registration
and qualification of the Trust's shares under the Securities
Act of 1933, other fees payable to the Commission,
independent public accountant, legal and custodian fees,
association membership dues, taxes, interest, insurance
premiums, brokerage commission, fees and expenses of the
Trustees who are not affiliated with Allmerica Investment,
expenses for proxies, prospectuses, and reports to
shareholders, and other expenses.
Pursuant to the Management Agreement with the Trust,
Allmerica Investment 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. 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.
The Sub-Advisers of each of the Funds are as follows:
GROWTH FUND
Miller, Anderson & Sherrerd
INVESTMENT GRADE INCOME
Allmerica Asset Management, Inc.
MONEY MARKET FUND
Allmerica Asset Management, Inc.
EQUITY INDEX FUND
Allmerica Asset Management, Inc.
GOVERNMENT BOND FUND
Allmerica Asset Management, Inc.
SELECT INTERNATIONAL EQUITY FUND
Bank of Ireland Asset Management Limited
SELECT AGGRESSIVE GROWTH FUND
Nicholas-Applegate Capital Management
SELECT GROWTH FUND
Provident Investment Counsel
-16-
<PAGE>
SELECT GROWTH AND INCOME FUND
John A. Levin & Co., Inc
SMALL CAP VALUE FUND
David L. Babson & Co. Inc.
Allmerica Asset Management, Inc. is an indirect wholly owned
subsidiary of the Company.
For providing its services under the Management Agreement,
Allmerica Investment will receive a fee, computed daily at
an annual rate based on the average daily net asset value of
each Fund as follows:
Fund Net Asset Value Rate
---- --------------- ----
Growth First $50 million 0.60%
$50 - 250 million 0.50%
Over $250 million 0.35%
Investment Grade First $50 million 0.50%
Income $50 - 250 million 0.35%
Over $250 million 0.25%
Money Market First $50 million 0.35%
$50 - 250 million 0.25%
Over $250 million 0.20%
Equity Index First $50 million 0.35%
$50 - 250 million 0.30%
Over $250 million 0.25%
Government Bond * 0.50%
Select International * 1.00%
Equity
Select Aggressive * 1.00%
Growth
Select Capital Appreciation * 1.00%
Select Growth * 0.85%
Select Growth and * 0.75%
Income
Small Cap Value * 0.85%
*For the Government Bond Fund, Select International Equity Fund, Select
Aggressive Growth Fund, elect Capital Appreciation Fund, Select Growth Fund,
Select Growth and Income Fund and Small Cap Value Fund, each rate applicable to
Allmerica Investment does not vary according to the level of assets in the Fund.
-17-
<PAGE>
Allmerica Investment's fee computed for each Fund will be paid from the assets
of such Fund. Allmerica Investment is solely responsible for the payment of all
fees for investment management services to the Sub-Advisers, who will receive
from Allmerica Investment a fee, computed daily at an annual rate based on the
average daily net asset value of each Fund as follows:
<TABLE>
<CAPTION>
Sub-Adviser Fund Net Asset Value Rate
----------- ---- --------------- ----
<S> <C> <C> <C>
Miller, Anderson Growth * *
& Sherrerd
Allmerica Asset Investment Grade Income ** 0.20%
Management, Inc.
Allmerica Asset Money Market ** 0.10%
Management, Inc.
Allmerica Asset Equity Index ** 0.10%
Management, Inc.
Allmerica Asset Government Bond ** 0.20%
Management, Inc.
Bank of Ireland Asset Select Int'l Growth First $50 million 0.45%
Management Limited Next $50 million 0.40%
Over $100 million 0.30%
Nicholas-Applegate Select Aggressive Growth ** 0.60%
Capital Management
Janus Capital Management Select Capital First $100 million 0.60%
Appreciation Over $100 million 0.55%
Provident Investment Select Growth First $50 million 0.50%
Counsel $50 - 150 million 0.45%
$150 - 250 million 0.35%
$250 - 350 million 0.30%
Over $350 million 0.25%
John A. Levin & Co., Inc.. Select Growth and Income First $100 million 0.40%
Next $200 million 0.25%
Over $300 million 0.30%
David L. Babson & Co. Small Cap Value ** 0.50%
</TABLE>
*Allmerica Investment will pay a fee to Miller, Anderson & Sherrerd based on the
aggregate assets of the Growth Fund and certain other accounts of State Mutual
and its affiliates (collectively, the "Affiliated Accounts") which are managed
by Miller, Anderson & Sherrerd, under the following schedule:
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<PAGE>
Aggregate Average Net Assets Rate
---------------------------- ----
First $50 million 0.500%
$50 - 100 million 0.375%
$100 - 500 million 0.250%
$500 - 850 million 0.200%
Over $850 million 0.150%
** For the Investment Grade Income Fund, Money Market Fund, Equity Index
Fund, Government Bond Fund, Select Aggressive Growth Fund and Small Cap
Value Fund, each rate applicable to the Sub-Advisers does not vary
according to the level of assets in the Fund.
The Prospectus of the Trust contains additional information concerning the
Funds, including information concerning additional expenses paid by the
Funds, and should be read in conjunction with this Prospectus.
VIP AND VIP II:
For managing investments and business affairs, each Portfolio pays a
monthly fee to Fidelity Management. 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 High Income Portfolio pays a monthly fee to Fidelity Management at an
annual fee rate made up of the sum of two components:
1. A group fee rate based on the monthly average net assets of all
the mutual funds advised by Fidelity Management. On an annual
basis this rate cannot rise above 0.37%, and it drops to as low
as 0.14% as total assets in all these funds rise.
2. An individual fund fee rate of 0.45% of the High Income
Portfolio's average net assets throughout the month. One-twelfth
of the annual management fee rate is applied to net assets
averaged over the most recent month, resulting in a dollar amount
which is the management fee for that month.
The Equity-Income, Growth, Asset Manager, and Overseas 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 Fidelity Management. 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 0.20% for the Equity-Income
Portfolio, 0.30% for the Growth Portfolio, 0.40% for the Asset
Manager Portfolio and 0.45% for the Overseas Portfolio.
Thus, the High Income Portfolio may have a monthly fee of as high as 0.82%
of its average net assets. The Equity-Income Portfolio may have a monthly
fee of as high as 0.72% of its average net assets. The Growth Portfolio
may have a monthly fee of as high as 0.82% of its average net assets. The
Asset Manager Portfolio may have a fee of as high as 0.92% of its average
net assets. The Overseas Portfolio may have a monthly fee of as high as
0.97% of its average net assets. The actual fee rate may be less depending
on the total assets in each Portfolio and in the other funds advised by
Fidelity Management.
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<PAGE>
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.
DGPF:
Each Series of DGPF pays an investment adviser an annual fee for managing
the portfolios and making the investment decisions for the Series. The
investment adviser for the International Equity Series is Delaware
International Advisers Ltd. ("Delaware International"). The annual fee
paid by the International Equity Series to Delaware International is equal
to 0.75% of the average daily net assets of the Series.
T. ROWE PRICE:
To cover investment 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.
INVESCO:
The Industrial Income Fund and the Total Return Fund each pay INVESCO a monthly
fee equal to 0.75% annually of the first $500 million of the Fund's average
daily net assets; 0.65% of the next $500 million of the Fund's average net
assets and 0.55% of the Fund's average net assets in excess of $1 billion. The
Prospectus of INVESCO VIF contains additional information concerning other
expenses paid by the Funds.
(3) DISTRIBUTIONS
No distributions are made to Certificate Owners 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 Group VEL 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 INFORMATION WITH RESPECT TO
SALES LOAD AND OTHER DEDUCTIONS FROM PRINCIPAL PAYMENTS.
A premium expense charge may be deducted from each premium, the
amount of which depends on the group to which the Policy is
issued, for premium taxes imposed by various states and local
jurisdictions (ranging form zero to 10%), for federal taxes
("DAC taxes") imposed for deferred acquisition costs (ranging
from zero to 1%), and for sales expenses (ranging from zero to
5%). No other deductions are made from premiums prior to
allocation to the Group VEL Account or the Group VEL Account.
All other charges and deductions are made from Certificate Value
or upon certain surrenders, partial withdrawals, and decreases in
face amount.
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<PAGE>
(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 premium expense charge as
described in (b), above. A contingent deferred sales load is
calculated at issuance of the Certificate and for increases in
face amounts, but is deducted if at all, only upon surrender or
decreases in face amount within 15 Certificate years or less,
depending upon issue age. 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 the 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
Group VEL 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 Group VEL Account; and (4) the
investment advisers of the respective Underlying Funds will receive an
advisory fee, as described in Item 13(a)(2).
(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 Group VEL 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 a front-end sales load of from zero to 5%, depending of
the group to which the Policy is issued,
-21-
<PAGE>
surrender and partial withdrawal charges, and the investment earnings
in excess of the interest credited on amounts allocated to the Group
VEL Account.
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
enrollment form to an authorized registered agent or to the Company's
Principal Office. The Company will issue a Policy only on the lives
of Insureds age 80 and under, who are members of a non-qualified
benefit plan having 10 or more members. Applicants may be required to
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 enrollment form 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 enrollment form, and there has been no
material misrepresentation on the enrollment form, fixed, conditional
insurance of up to the amount applied for but not to exceed $500,000,
will start as of the date of the enrollment form 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.
If the enrollment form is approved, the date of issue will be the date
the terms of the conditional insurance agreement were met. If
payments are made before the date of issuance and acceptance, the
payments will be allocated to the Money Market Fund. 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 enrollment form 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 applicant will receive the greater of the payments made or
the net value of the amount allocated to the Money Market Fund. 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.
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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 Group VEL Account or
General Account as of date of receipt at the Principal Office.
The Certificate Owner 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.
They 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.
If the enrollment form is approved and the Certificate is issued and
accepted, the Company will allocate the Certificate Value on issuance
and acceptance according to the Policyowner's instructions. However,
if the Policy provides for a full refund of the initial purchase
payment under its "Right to Examine Certificate" provision as required
in the Certificate Owner's state, the Company will initially allocate
the fund investments to the Money Market Fund. This allocation to the
Money Market Fund will be for 14 days from issuance and acceptance (or
longer in those states which require an extended right to examine for
replacements). After the required allocation period, the Company will
allocate all amounts according to the Certificate Owner's investment
choices.
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.
Each Sub-Account of the Group VEL 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
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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 Certificate Owner may at any time surrender the
Certificate and receive its surrender value (i.e., Certificate
Value, less Debt and applicable surrender charges) upon written
request signed by the Certificate Owner and return of the
Certificate to the Principal Office. The surrender value will be
based on the Certificate Value as of the valuation date on which
the request and Certificate are received at the Principal Office.
A surrender charge may be deducted when a Certificate 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 Group VEL Account
for a period not to exceed six months.
PARTIAL WITHDRAWAL - At any time after the first Certificate
year, a Certificate Owner may redeem a portion of the Certificate
Value of his or her Certificate, subject to the limits stated
below, upon written request signed by the Certificate Owner 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 Certificate Owner wishes to
receive and the account from which such amount is to be redeemed.
The Certificate Owner may allocate the amount withdrawn among the
Sub-Accounts and the Group VEL 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 valuation date
that the request is received at the Company's Principal Office.
The amount withdrawn equals the amount requested by the
Certificate Owner 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." Each partial withdrawal must be in a
minimum amount of $500, or the entire amount in a Sub-Account, if
less. 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.
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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
CANCELED OR MAY BE RESOLD.
If a Certificate is surrendered, the Certificate will be
cancelled and may not be reissued.
If a Certificate terminates due to lapse or foreclosure, the
Certificate may be reinstated as provided below.
TERMINATION - The failure to make premium payments will not cause
the Certificate 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 Certificate Value.
If one of these situations occurs, the Certificate will be in
default. The Certificate Owner 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 Certificate Owner and to any
assignee of record. The notice will state the amount of premium
due and the date on which it is due.
Failure to make a sufficient payment within the grace period will
result in termination of the Certificate. If the Insured dies
during the grace period, the Death Proceeds will still be
payable, but any Monthly Deductions due and unpaid through the
Certificate month in which the Insured dies and any other overdue
charges will be deducted from the Death Proceeds.
PAYOR PROVISIONS - Subject to approval in the state in which the
Certificate was issued, if a "Payor" is named in the enrollment
form supplement, then the following "Payor Provisions" will
apply:
An amount sufficient to pay the Monthly Deductions for the first
three Certificate months will be transferred to the Monthly
Deduction Sub-Account not later than three days after
underwriting approval of the Certificate.
Upon each payment of a premium by the Payor, the Payor may
designate what portion of the premium, if any, is "excess
premium" to be allocated to the General Account and Sub-Accounts
according to the Certificate Owner's allocation instructions then
in effect. Except for excess premium, the Payor's premium will
automatically be allocated to the Monthly Deduction Sub-Account,
from which the Monthly Deductions will be made. No Certificate
loans, partial withdrawals or transfers may be made from the
amount in the Monthly Deduction Sub-Account attributable to
premiums allocated thereto by Payor.
If the amount in the Monthly Deduction Sub-Account attributable
to premiums allocated thereto by Payor is insufficient to cover
the next Monthly Deduction, the Company will send to the Payor a
notice of the due date and amount of premium which is due. The
premium may be paid during a grace period of 62 days beginning on
the premium due date. If the premium payable is not received by
the Company within 31 days of the end of the grace period, a
second notice will be sent to the Payor. A 31-day grace period
notice at this time will also be sent to the Certificate Owner if
Certificate Value is insufficient to cover the Monthly Deductions
then due.
If the amount in Monthly Deduction Sub-Account attributable to
premiums allocated thereto by Payor is insufficient to cover the
Monthly Deductions due at the end of the grace period, the
balance of such Monthly Deductions will be withdrawn on a Pro-
Rata Allocation from the Certificate Value, if any, in the
General Account and the Sub-Accounts.
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A lapse occurs if the Certificate Value is insufficient, at the
grace period, to pay the Monthly Deductions which are due. The
Certificate terminates on the date of lapse. Any death benefit
payable during the grace period will be reduced by any overdue
charges.
The above Payor Provisions, if applicable, are in lieu of the
grace-period notice and default provisions applicable when "(a)
the Surrender Value is insufficient to cover the next Monthly
Deduction plus loan interest accrued," but do not apply to "(b)
if Debt exceeds the Certificate Value." See the first paragraph
of this section captioned "TERMINATION." The Certificate Owner
or the Payor may upon written request discontinue the above Payor
Provisions. If the Payor makes written request to discontinue
the Payor Provisions, we will send the Certificate Owner a notice
of the discontinuance to their last known address.
REINSTATEMENT - If the Certificate has not been surrendered and
the Insured is alive, the terminated Certificate may be
reinstated anytime within 3 years after the date of default and
before the Final Premium Payment Date. The reinstatement will be
effective on the Monthly Processing Date following the date the
Certificate Owner submits the following to the Company: (1) a
written enrollment form for reinstatement; (2) Evidence of
Insurability showing that the Insured is insurable according to
the Company's underwriting rules; and (3) a premium that, after
the deduction of the premium expense charge, is large enough to
cover the Monthly Deductions for the three-month period beginning
on the date of reinstatement.
SURRENDER CHARGE - The surrender charge on the date of
reinstatement is the surrender charge which should have been in
effect had the Certificate remained in force from the Date of
Issue.
CERTIFICATE VALUE ON REINSTATEMENT - The Certificate Value on the
date of reinstatement is:
. the Net Premium paid to reinstate the Certificate increased
by interest from the date the payment was received at the
Company's Principal Office; plus
. an amount equal to the Certificate Value less Debt on the
date of default; minus
. the Monthly Deduction due on the date of reinstatement. The
Certificate Owner may 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 Certificate Owners other than in
connection with a death benefit or with a Certificate
Owner-initiated loan, partial withdrawal or surrender of the
Certificate. 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.
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Net premiums placed in the Group VEL Account constitute certain
reserves for benefits under the Certificate.
(d) SUBMIT A SCHEDULE SHOWING THE PERIODIC AND SPECIAL DISTRIBUTIONS
WHICH HAVE BEEN MADE TO 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 Group VEL 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 Group VEL
Account. The Company will also maintain records for each Certificate,
including the number and value of accumulation units of each
Sub-Account credited to each Certificate and the value of
accumulations in the Group VEL Account.
Issuance and transfer of Underlying Fund shares will be by book entry
only. Stock certificates will not be issued to the Company or Group
VEL Account. Shares ordered from the Underlying Funds will be
recorded in an appropriate title for the Group VEL Account or
appropriate Sub-Account.
Certificate Owners 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 Group VEL Account, partial withdrawals,
increases in loan amount by the Certificate Owner, loan repayments,
lapse, termination for any reason, and reinstatement. An annual
statement will also be sent to the Certificate Owner. The annual
statement will summarize all of the above transactions and deductions
of charges during the Certificate year. It will also set forth the
status of the death benefit, Certificate value, surrender value,
amounts in the Sub-Accounts and Group VEL Account, and any Certificate
loan(s).
In addition, the Certificate Owner will be sent semi-annual reports
containing financial statements and other information for the Group
VEL Account, AIT, Fidelity VIP, Fidelity VIP II, DGPF, T. Rowe Price,
and INVESCO 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.
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The Company will act as custodian of assets of the Group VEL
Account. The Company may appoint another custodian. In such
event, the custodial agreement will provide that the assets owned
by the Group VEL 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 Certificate. The total amount which may be
borrowed is the loan value. In the first Certificate year, the
loan value is 75% of an amount equal to the Certificate Value
less surrender charges, unpaid Monthly Deductions, and interest
on Debt to the end of the Certificate year. The loan value in
the second Certificate year and thereafter is 90% of an amount
equal to Certificate Value minus surrender charges.
A loan may be allocated among the fixed account and one or more
Sub-Accounts. If the Certificate Owner does not make an
allocation, the Company will allocate the loan among the accounts
in the same proportion that the Certificate Value in the General
Account and the Certificate Value in each Sub-Account bear to the
total Certificate Value on the date the Company receives the loan
request. Certificate Value in each Sub-Account equal to the
Certificate loan allocated to such Sub-Account will be
transferred to the General Account, and the number of
accumulation Units equal to Certificate Value so transferred will
be canceled. 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 Certificate Value in the General Account,
the Company will transfer Certificate 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 Certificate Value in each Sub-Account bears to the total
Certificate Value in all Sub-Accounts.
PREFERRED LOAN OPTION - This option is available to you upon
written request after the first Certificate year. It may be
revoked by the Certificate Owner at any time. The preferred
loan option is available during Certificate years 2-10 only if
Certificate value, minus the surrender charge, is $50,000 or
more. The option applies to up to 10% of this amount. After the
10th Certificate year, the preferred loan option is available on
all loans or on all or part of the loan
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value, as you request. The guaranteed annual interest rate
credited to the Certificate 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 Certificate 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 Certificate. Upon repayment of Debt, the portion of
the Certificate Value that is in the General Account securing
Debt will be transferred to the various Sub-Accounts and increase
the Certificate Value in such accounts in accordance with the
Certificate Owner's instructions. If the Certificate Owner does
not make a repayment allocation, the Company will allocate
Certificate Value in accordance with the Certificate Owner's most
recent premium allocation instructions; provided, however, that
loan repayments allocated to the Group VEL Account cannot exceed
Certificate Value previously transferred from the General Account
to secure the Debt.
FORECLOSURE - If Debt exceeds the surrender value of the
Certificate, the Certificate will terminate. A notice of such
pending termination will be mailed to the last known address of
the Certificate Owner and any assignee. If the excess Debt is
not paid within 62 days after this notice is mailed, the
Certificate will terminate with no value. A Certificate 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 Certificates provide that the Company shall not be charged with
notice of any assignment of the Certificate 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 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 the Company.
AIT maintains a fidelity bond pursuant to the requirements of Rule
17(g) under the 1940 Act, issued by
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Lloyds of London. The bond covers directors and officers of AIT, who
may also be director or officers of the depositor and principle
underwriter, and employees of the Company 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 the Group VEL Account have
entered into Participation Agreements with AIT, Fidelity VIP, Fidelity
VIP II, DGPF, T. Rowe Price and INVESCO which define the terms under
which the Sub-Accounts of the Group VEL Account invest in the
Underlying Funds.
CERTIFICATE OWNER - The Certificate Owner is the Insured unless
another Insured has been named in the enrollment form for the
Certificate. The Certificate Owner is generally entitled to exercise
all rights under a Certificate 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 Certificate, the beneficiary has no rights in
the Certificate before the death of the Insured. While the Insured is
alive, the Certificate Owner may change any beneficiary unless they
have 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
Certificate Owner has chosen otherwise. Where there is more than one
beneficiary, the interest of a beneficiary who dies before Insured
will pass to surviving beneficiaries proportionally.
INCONTESTABILITY - The Company will not contest the validity of a
Certificate 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 Certificate, 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 enrollment
form for a Certificate is not correct, benefits under a Certificate
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. In the case of a Certificate issued on a unisex basis, this
provision as it relates to misstatement of sex does not apply.
ASSIGNMENT - The Certificate Owner may assign a Certificate as
collateral or make an absolute assignment of the Certificate. All
rights under the Certificate will be transferred to the extent of the
assignee's interest. The consent of the assignee may be required in
order to make changes in premium allocations, to make transfers or to
exercise other rights under the Certificate. 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. When recorded, the
assignment will take effect as of the date the written request was
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signed. 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 1844. The Company was previously known as
"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 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.
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
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CIRCUMSTANCES SURROUNDING SUCH CESSATION.
The Company is licensed to write life insurance, health insurance, and
variable contracts in all states, the District of Columbia, Puerto
Rico, and the Virgin Islands.
The Company offers variable life and annuity policies through other of
its Separate Accounts, 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, 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.
The principal occupations and business experience for the last five
years of Directors and Executive Officers of the Company (the business
addresses of which are all 440 Lincoln Street, Worcester,
Massachusetts, 01653) are as follows:
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DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY
Name Position with the Company and Principal
Occupation(s) During Past Five Years
- ------------------------------ --------------------------------------------
Bruce C. Anderson Director of First Allmerica since 1996;
Vice President, First Allmerica
Abigail M. Armstrong Secretary of First Allmerica since 1996;
Counsel, First Allmerica
Mark R. Colborn Vice President and Controller, First
Allmerica
Kruno Huitzingh Director of First Allmerica since 1996;
Vice President & Chief Information Officer,
First Allmerica since 1993; Executive Vice
President, Chicago Board Options Exchange,
1985 to 1993
John F. Kelly Director of First Allmerica since 1996;
Senior Vice President and General Counsel,
First Allmerica
James R. McAuliffe Director of First Allmerica since 1996;
President and CEO, Citizens Insurance
Company of America since 1995; Vice
President and Chief Investment Officer,
First Allmerica, 1986 to 1994
John F. O'Brien Director, Chairman of the Board, President
and Chief Executive Officer of First
Allmerica
Edward J. Parry, III Vice President and Treasurer, First
Allmerica since 1993; Assistant Vice
President to 1992 to 1993; Manager, Price
Waterhouse, 1987 to 1992
Richard M. Reilly Director of First Allmerica since 1996;
Vice President, First Allmerica; Director
and President, Allmerica Investments, Inc.;
Director and President, Allmerica
Investment Management Company, Inc. since
1992.
Larry C. Renfro Director of First Allmerica since 1996;
Vice President of First Allmerica
Theodore J. Rupley Director of First Allmerica since 1996;
Director, President, and CEO, The Hanover
Insurance Company since 1992; President,
Fountain Powerboats, 1992; President,
Metropolitan Property & Casualty Company,
1986-1992.
Phillip E. Soule Director of First Allmerica since 1996;
Vice President of First Allmerica
Eric A. Simonsen Director of First Allmerica since 1996;
Vice President and Chief Financial Officer,
First Allmerica
Diane E. Wood Director of First Allmerica since 1996;
Vice President and Chief Investment
Officer, First Allmerica
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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 OR THE DEPOSITOR
DIRECTLY RECEIVING THE THREE HIGHEST AMOUNTS OF REMUNERATION;
The remuneration of theDirectors and Oficers of the Company is
set forth in the proxy statement for the Annual Meeting of
Shareholders's of the Company's parent, Allmerica Financial
Corporation, dated , File No. , 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;
Not Applicable
(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
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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 definitive proxy statement
for the May 21, 1996 Annual Meeting of Shareholders's of the
Company's parent, Allmerica Financial Corporation, which was
filed with the SEC on April 15, 1996 and which is hereby
incorporated herein by reference.
(b) FURNISH THE FOLLOWING 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.
(b) Following the effectiveness of the Group VEL Account's
registration statement under the Securities Act of 1933, and
obtaining required approvals under state law, the Company
proposes issuing the Policies 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.
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<PAGE>
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 ofthe
Company, will act as principal underwriter of the Policies
pursuant to a Sales and Administrative Agreement with the Company
and the Group VEL 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 independent broker-dealers.
(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 Group VEL Account will execute a Sales 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,
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<PAGE>
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. and
independent broker-dealers who are also agents of the Company
will sell the Policies. Such agents will be required to pass
applicable NASD examinations, and qualify under applicable state
insurance licensing requirements. Agents who sell the
Certificate will receive commissions based on a commission
schedule, and Managers who supervise the agents will receive
overriding commissions. After issue of the Certificate or an
increase in face amount, commissions will equal up to 25% of the
first-year premiums up to a maximum target premium amount
established by the Company. Thereafter, commissions will equal
up to 4% of any additional premiums. Certain registered
representatives may receive additional commissions and may be
eligible for bonuses and other benefits.
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 broker-dealers which are
members 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 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.
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<PAGE>
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 and variable life contracts issued by separate accounts
of the Company and of it s subsidiary, Allmerica Fiancial lIfe
Insurance and Annuity Company,which are registered as unit
investment trusts under the 1940 Act, and of Allmerica Investment
Trust and Allmerica Funds, management investment companies under
the 1940 Act. The variable contracts issued by the Company are
sold through registered representatives of independent 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.
Not Applicable. The Group VEL 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.
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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 premium expense
charge. Each net premium is allocated to the General Account of
the Company or to the Sub-Account(s) selected by the Certificate
Owner. Allocations to the Sub-Accounts are credited to the
Certificate 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
Certificate 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 Monthly Deductions or other charges from
Certificate Value in a Sub-Account (as a result of Certificate
Owner instructions or the pro rata allocation of charges if the
Certificate Owner 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 Group VEL Account
during the valuation period just ended. The net investment
factor for each Sub-Account is equal to 1.0000 plus the number
arrived at by dividing (a) by (b), 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; and
(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 Certificate Owner 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.
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<PAGE>
At any time, the "price" of an accumulation Unit of a Sub-Account
will be the same for all Certificate Owners. However, the cost
of insurance charges for the Certificates will not be the same
for all Certificate Owners. The insurance principles of pooling
and distribution of mortality risks is based upon the assumption
that each Certificate Owner 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 Certificate
Owners because different cost of insurance rates will apply. The
"price" will also vary based on net amount at risk. The Policies
and Certificates 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 Certificate.
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.
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.
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<PAGE>
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).
CERTIFICATE VALUE AND SURRENDER VALUE - The Certificate
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 Certificate Value is used in determining the surrender
value (the Certificate Value less any Debt and applicable
surrender charges). There is no guaranteed minimum
Certificate Value. Because Certificate Value on any date
depends upon a number of variables, it cannot be
predetermined. Certificate 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
Group VEL Account, any partial withdrawals, any loans, any
loan repayments, any loan interest paid or credited, and any
charges assessed in connection with the Certificate.
CALCULATION OF CERTIFICATE VALUE - The Certificate Value is
determined first on the date of issue and thereafter on each
valuation date. On the date of issue, the Certificate 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 Group VEL Account)
less any Monthly Deductions due. On each valuation date
after the date of issue the Certificate 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
accumulation Units allocated to the Certificate; PLUS
(b) the value in the General Account (including any amounts
transferred to the General Account with respect to a
loan).
Thus, the Certificate 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 Group VEL 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 Group VEL 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"
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(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 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 INTERESTS 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 Life Insurance and Annuity Company and may issue
shares to separate accounts of other affiliated 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 Certificate.
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:
Stock 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
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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 Group VEL Account.
The contingent surrender charge (See 13(a)) includes a component for
administrative services, which may be deemed to include custodial
services.
As the Group VEL 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 Certificate
reserves in the Group VEL 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 Group VEL Account are sold only to fund the Policies
and Certificates. Other than the Policies and Certificates
themselves, no insurance is sold to Policyowners and Certificate
Owners 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 group flexible premium variable life insurance
policies.
(c) THE TYPES OF RISKS INSURED AND EXCLUDED.
The Certificates are issued under group flexible premium variable
life insurance policies to eligible applicants who are age 80 and
under. The Company assumes the risk that the charge made for
mortality and expense risks will prove inadequate to cover actual
insurance costs and expenses.
(d) THE COVERAGE OF THE POLICIES.
The Policies and Certificates thereunder provide insurance
coverage on the life of the Insured. The minimum death benefit
is stated in each Certificate. Death Proceeds will be reduced by
any outstanding Certificate 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.
The beneficiary is named by the Certificate Owner to receive the
death proceeds. The interest of any beneficiary will be subject
to any assignment made by the Certificate Owner. The Certificate
Owner 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
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before the Insured, the death proceeds will pass to the
Certificate Owner.
(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. In calendar
year 1995, the aggregate premiums paid to the Company under all
other life, accident and health insurance policies and annuity
contracts was approximately $1.5 billion.
(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
charged 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. CERTIFICATE 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 Group VEL
Account is to invest in a particular Underlying Fund.
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 Group VEL Account
or that the Sub-Accounts of the Group VEL 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 Group VEL 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 Certificate interest in a Sub-Account without notice and
prior
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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 Group VEL 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 Certificate
Owners on a basis to be determined by the Company. If the
Company deems it to be in the best interest of Policyowners and
Certificate Owners, 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 and Certificate
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 CERTIFICATE 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 CERTIFICATE 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 COMPANY; AND
See 52(a), above.
(5) THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT WHICH AUTHORIZE OR RESTRICT THE CERTIFICATE 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 CERTIFICATE AND WHICH IS ELECTED TO BE
TREATED AS SUCH.
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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 Group VEL 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 Group VEL 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 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.
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59. FINANCIAL STATEMENTS:
FINANCIAL STATEMENTS OF THE GROUP VEL ACCOUNT
None
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) Indenture -- Certified Copy of vote of Board of Directors of the
Company dated August 20 , 1991 authorizing the establishment of
the Group VEL Account.
(2) Not Applicable.
(3) (a) Sales and Administrative Services Agreement with Allmerica
Investments, Inc. was previously filed by the Company on
11/1/93 in Registration Statement 33-44830 and is
incorporated herein by reference.
(b) Registered Representative Agreement and Resident Sponsor
Agreement of Allmerica Investments, Inc. were previously
filed by the Company on 11/1/93 in Registration Statement
33-44830 and are incorporated herein by reference.
(4) Not Applicable.
(5) Form of Policy, Certificate and Certificate riders.
(6) Organizational documents of the Company
-- Articles of Organization, as amended, were filed on
October 16, 1995, in RegistrationNo. 33-71056 and are
incorporated herein by reference .
-- Bylaws of the Company, as amended, were filed on April
30, 1996 in Registration No. 33-71056 and are
incorporated herein by reference.
(7) Not applicable.
(8) (a) Participation Agreement with Allmerica Investment Trust
(b) Participation Agreement with Variable Insurance Products
Fund and Service Agreement with Fidelity Investments
Instituitional Operations Company
(c) Participation Agreement with Delaware Group Premium Fund,
Inc.
(d) Participation Agreement with T. Rowe Price International
Series, Inc.
(e) Participation Agreement with INVESCO Variable
Investment Funds, Inc.
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(9) Not applicable.
(10) Form of Enrollment Form for Certificate.
(11) None.
B. (1) None.
(2) None.
C. None.
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SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, First
Allmerica Financial Life Insurance Company, depositor of the Registrant, has
caused this registration statement to be duly signed on behalf of the Registrant
in the City of Worcester and Commonwealth of Massachusetts on June 4, 1996.
GROUP VEL ACCOUNT OF FIRST ALLMERICA FINANCIAL
LIFE INSURANCE COMPANY
(Name of Registrant)
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(Name of Depositor)
BY: /s/ Abigail M. Armstrong
_______________________________________
Abigail M. Armstrong
Secretray and Counsel
ATTEST: /s/ Sheila B. St. Hilaire
_________________________
Sheila B. St. Hilaire
Counsel
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EXHIBIT TABLE
Exhibit 1(1) -- Resolution of the Board of Directors of the Company establishing
the Group VEL Account
Exhibit 1(3)(a) -- Sales and Administration Services Agreement between the
Company and Allmerica Investments, Inc.
Exhibit 1(5) -- Proposed Form of Policy, Certificate and Certificate Riders
Exhibit 1 (8)(a) -- Participation Agreement with Allmerica Investment Trust
(b) --Participation Agreement with Variable Insurance Products Fund
and Service Agreement with Fidelity Investments Instituitional
Operations Company
(c) -- Participation Agreement with Delaware Group Premium Fund, Inc.
(d) -- Participation Agreement with T. Rowe Price International
Series, Inc.
(e) -- Participation Agreement with INVESCO Variable Investment
Funds, Inc.
Exhibit 1(10) -- Form of Enrollment (applicatlion) form
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