Registration No.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. BMA Variable Life Account A
(Exact Name of Trust)
B. Business Men's Assurance Company of America
(Name of Depositor)
C. BMA Tower, P.O. Box 412879
Kansas City, MO 84141
(Complete address of depositor's principal executive offices)
D. Name and complete address of agent for service:
David A. Gates
Business Men's Assurance Company of America
700 Karnes Blvd.
Kansas City, Missouri 64108
(800) 423-9398
Copies to:
Judith A. Hasenauer
Blazzard, Grodd & Hasenauer, P.C.
P.O. Box 5108
Westport, CT 06881
(203) 226-7866
E. Last Survivor Flexible Premium Adjustable Variable Life Insurance Policies
(Title and amount of securities being registered)
F. Proposed maximum aggregate offering price to the public of the securities
being registered:
Continuous offering
G. Amount of Filing Fee: Not Applicable
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this filing.
- ------------------------------------------------------------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- ------------------------------------------------------------------------------
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
N-8B-2 Item Caption in Prospectus
- ----------- ---------------------
1(a) Other Information
(b) The Variable Insurance Policy
2 Other Information
3 Not Applicable
4 Other Information
5 Other Information
6(a) Not Applicable
(b) Not Applicable
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 Purchases; Investment Choices; Access to Your Money
11 Investment Choices
12 Investment Choices
13 Expenses
14 Purchases
15 Purchases
16 Purchases; Investment Choices
17 Access to Your Money
18 Access to Your Money
19 Reports to Owners
20 Not Applicable
21 Access to Your Money
22 Not Applicable
23 Not Applicable
24 Not Applicable
25 Other Information
26 Expenses
27 Other Information
28 Executive Officers and Directors of BMA
29 Other Information
30 Other Information
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Other Information
36 Not Applicable
37 Not Applicable
38 Other Information
39 Other Information
40 Not Applicable
41 Not Applicable
42 Not Applicable
43 Not Applicable
44 Purchases
45 Investment Choices; Other Information
46 Purchases; Access to Your Money
47 Not Applicable
48 Not Applicable
49 Not Applicable
50 Not Applicable
51 Other Information; Purchases
52 Investment Choices
53 Other Information
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
LAST SURVIVOR FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
ISSUED BY
BMA VARIABLE LIFE ACCOUNT A
AND
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
This Prospectus describes the Last Survivor Flexible Premium Adjustable Variable
Life Insurance Policy (Policy) offered by Business Men's Assurance Company of
America (BMA).
The Policy has been designed to be used for creation or conservation of one's
estate, retirement planning and other insurance needs of individuals and
businesses.
The Policy has 24 investment choices--a Fixed Account and 23 Investment Options
listed below.
When You buy a Policy, to the extent You have selected the Investment Options,
You bear the complete investment risk. Your Accumulation Value and, under
certain circumstances, the Death Benefit under the Policy may increase or
decrease or the duration of the Policy may vary depending on the investment
experience of the Investment Option(s) You select.
You can put Your money in the Fixed Account and/or any of the following
Investment Options:
INVESTORS MARK SERIES FUND, INC.
Managed By Standish, Ayer & Wood, Inc.
Intermediate Fixed Income
Mid Cap Equity
Money Market
Managed By Standish International Management Company, L.P.
Global Fixed Income
Managed By Stein Roe & Farnham Incorporated
Small Cap Equity
Large Cap Growth
Managed By David L. Babson & Co. Inc.
Large Cap Value
Managed By Lord, Abbett & Co.
Growth & Income
Managed By Kornitzer Capital Management, Inc.
Balanced
BERGER INSTITUTIONAL PRODUCTS TRUST
Managed By Berger LLC
Berger IPT--International
THE ALGER AMERICAN FUND
Managed By Fred Alger Management, Inc.
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Managed By American Century Investment Management, Inc.
VP Income & Growth
VP Value
DREYFUS STOCK INDEX FUND
Managed By the Dreyfus Corporation (Index Fund Manager: Mellon Equity
Associates)
DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS VIF")
Managed By the Dreyfus Corporation
Dreyfus VIF Disciplined Stock
VARIABLE INSURANCE PRODUCTS FUND ("VIP") AND VARIABLE INSURANCE
PRODUCTS FUND II ("VIP II")
Managed By Fidelity Management & Research Company
Fidelity VIP Overseas Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP II Contrafund Portfolio
INVESCO VARIABLE INVESTMENT FUNDS, INC.
Managed By INVESCO Funds Group, Inc.
INVESCO VIF--High Yield
INVESCO VIF--Equity Income
LAZARD RETIREMENT SERIES, INC.
Managed By Lazard Asset Management
Lazard Retirement Small Cap
Please read this Prospectus before investing and keep it on file for future
reference. It contains important information about the BMA Last Survivor
Flexible Premium Adjustable Variable Life Insurance Policy. The Securities and
Exchange Commission maintains a Web site (http://www.sec.gov) that contains
information regarding companies that file electronically with the Commission.
The Policies:
o are not bank deposits
o are not federally insured
o are not endorsed by any bank or government agency
o are not guaranteed and may be subject to loss of principal
Date: _______, 2000
TABLE OF CONTENTS
PAGE
DEFINITIONS
SUMMARY
1. The Variable Life Insurance Policy
2. Purchases
3. Investment Choices
4. Expenses
5. Death Benefit
6. Taxes
7. Access To Your Money
8. Other Information.
9. Inquiries
PART I
1. THE VARIABLE LIFE INSURANCE POLICY
2. PURCHASES
Premiums
Waiver of Planned Premiums
Application for a Policy
Issue Ages
Application of Premiums
Grace Period.
Accumulation Unit Values
Right to Refund
Exchange of a Policy for a BMA Policy
3. INVESTMENT CHOICES
Transfers
Dollar Cost Averaging
Asset Rebalancing Option
Asset Allocation Option
Substitution
4. EXPENSES
Premium Charge
Monthly Deduction
Surrender Charge
Partial Surrender Fee
Waiver of Surrender Charges
Reduction or Elimination of the Surrender Charge
Transfer Fee
Taxes
Investment Option Expenses
5. DEATH BENEFIT
Change in Death Benefit Option
Change in Specified Amount
Guaranteed Minimum Death Benefit
Accelerated Death Benefit
6. TAXES
Life Insurance in General
Taking Money Out of Your Policy
Diversification
7. ACCESS TO YOUR MONEY
Loans
Surrenders
8. OTHER INFORMATION
BMA
The Separate Account
Distributors
Administration
Suspension of Payments or Transfers
Ownership
PART II
Executive Officers and Directors of BMA
Officers and Directors of Jones & Babson, Inc.
Voting
Legal Opinions
Reduction or Elimination of Surrender Charge
Net Amount at Risk
Maturity Date
Misstatement of Age or Sex.
Our Right to Contest
Payment Options
Federal Tax Status
Reports to Owners
Legal Proceedings
Experts
Financial Statements
APPENDIX A--Illustration of Policy Values
APPENDIX B--Rates of Return
DEFINITIONS
Accumulation Value: The sum of Your Policy values in the Subaccounts, the Fixed
Account and the Loan Account.
Accumulation Unit: A unit of measure used to calculate Your Accumulation Value
in the Subaccounts.
Age: Issue Age is age last birthday on the Policy Date. Attained Age is the
Issue Age plus the number of completed Policy Years.
Authorized Request: A request, in a form satisfactory to Us, which is received
by the BMA Service Center.
Beneficiary: The person who is named in the application or at a later date to
receive the Death Proceeds of the Policy or any rider(s).
BMA: Business Men's Assurance Company of America.
Business Day: Each day that the New York Stock Exchange is open for business.
The Separate Account will be valued each Business Day.
Cash Surrender Value: The Accumulation Value less the surrender charge, if any,
and less any Indebtedness.
Death Benefit: The amount used to determine the Death Proceeds payable upon the
death of the last surviving Insured while the Policy is in force. The Death
Benefit can be either Level or Adjustable.
Death Proceeds: The Death Proceeds equal the Death Benefit less any
Indebtedness.
Fixed Account: A portion of the General Account into which You can allocate Net
Premiums or transfer Accumulation Values. It does not share in the investment
experience of any Subaccount of the Separate Account.
General Account: Our general investment account which contains all of Our assets
with the exception of the Separate Account and other segregated asset accounts.
Grace Period: The 61 days that follow the date We mail a notice to You for
payment if the Cash Surrender Value is not sufficient to cover the Monthly
Deduction.
Indebtedness: Unpaid Policy loans plus unpaid Policy loan interest.
Initial Base Policy Specified Amount: The amount of coverage selected by You at
the time of application and which will be used to determine the Death Benefit.
Insureds: The two persons whose lives are insured under the Policy.
Investment Option(s): Those investment options available through the Separate
Account.
Loan Account: An account established within Our General Account for any amounts
transferred from the Fixed Account and the Separate Account as a result of
loans. The Loan Account is credited with interest and is not based on the
experience of any Separate Account.
Maturity Date: The date the Accumulation Value, less any Indebtedness, becomes
payable to You if at least one of the Insureds is living on the Maturity Date
and the Policy is in force.. Insurance may terminate prior to the Maturity Date
if no Premiums are paid after the initial Premium or if additional Premiums are
not sufficient to continue insurance to such date. Insurance is also affected by
any changes in monthly deductions, the investment performance of the selected
Subaccounts and the amount of interest We credit to the Fixed Account depending
upon Your selections.
Monthly Anniversary Day: The same day of each month as the Policy Date for each
succeeding month the Policy remains in force. If the Monthly Anniversary falls
on a day that is not a Business Day, any Policy transaction due as of that day
will be processed the first Business Day following such date.
Monthly Deduction: On the Policy Date and each Monthly Anniversary Day
thereafter We deduct certain charges from Your Policy.
Net Premium: We deduct a Premium Charge from each Premium paid. The Net Premium
is the Premium paid less the Premium Charge.
Owner: The Insureds are the Owner unless otherwise designated. If the Policy has
joint Owners, then all reference to Owner includes the joint Owner.
Policy Anniversary: The same month and day as the Policy Date for each
succeeding year the Policy remains in force.
Policy Date: The date by which Policy months, years and anniversaries are
measured.
Policy Month: The one month period from the Policy Date to the same date of the
next month, or from one Monthly Anniversary Day to the next.
Policy Year: The one year period from the Policy Date to the first Policy
Anniversary or from one Policy Anniversary to the next.
Premium: A payment You make towards the Policy that does not re-pay any
Indebtedness.
Rate Class: This is anything that would affect the level of Your Premium, such
as health status and tobacco use.
Reinstatement: To restore coverage after the Policy has terminated.
Separate Account: A segregated asset account maintained by Us in which a portion
of Our assets has been allocated for this and certain other policies.
Service Center: The office indicated in the Summary to which notices, requests
and Premiums must be sent. All sums payable to Us under the Policy are payable
only at the Service Center.
Specified Amount: The Initial Base Policy Specified Amount plus each increase to
the Specified Amount and less each decrease to the Specified Amount.
Underwriting Process: The underwriting process begins the day We receive Your
application at the Service Center and ends the day We receive and approve all
required documents, including the initial Premium, necessary to put the Policy
in force.
Us, We, Our: Business Men's Assurance Company of America.
You, Your, Yours: The Owner of the Policy.
SUMMARY
The prospectus is divided into three sections: Summary, Part I and Part II. The
sections in this summary correspond to sections in Part I of this prospectus
which discuss the topics in more detail. Even more detailed information is
contained in Part II.
1. THE VARIABLE LIFE INSURANCE POLICY: The variable life insurance policy
offered by BMA is a contract between You, the Owner, and BMA, an insurance
company.
The Policy provides for life insurance coverage on the lives of two persons who
are referred to as the Insureds. Upon the death of the last surviving Insured
the payment of the Death Proceeds will be made to your selected Beneficiary,
which should be excludable from the gross income of the Beneficiary. The Policy
can be used to create or conserve one's estate or to save for retirement. The
Policy can also be used for certain business purposes, such as keyman insurance.
The Insureds are the Owner of the Policy unless you tell us otherwise.
Under the Policy, You may, subject to certain limitations, make Premium
payments, in any amount and at any frequency. The Policy provides an
Accumulation Value, surrender rights, loan privileges and other features
traditionally associated with life insurance.
The Policy has a no-lapse guarantee in the first five years providing the
no-lapse Monthly Minimum Premiums are paid. The Policy can lapse (terminate
without value) when the Cash Surrender Value is insufficient to cover the
Monthly Deduction and a Grace Period of 61 days has expired without an adequate
payment being made.
You should consult Your Policy for further understanding of its terms and
conditions and for any state-specific provisions and variances that may apply to
Your Policy.
2. PURCHASES: You can buy the Policy by completing the proper forms. Your
registered representative can help You. The minimum initial Premium We will
accept will be computed for You with respect to the Specified Amount You have
requested. In some circumstances We may contact You for additional information
regarding the Insureds and may require the Insureds to provide Us with medical
records, a physician's statement or a complete paramedical examination.
The Policy is a flexible premium policy and unlike traditional insurance
policies, there is no fixed schedule for Premium payments after the initial
Premium. Although you may establish a schedule of Premium payments (Planned
Premium), if you fail to make the Planned Premium payments it will not
necessarily cause the Policy to lapse nor will paying the Planned Premium
payments guarantee that a Policy will remain in force until maturity. Under most
circumstances it is anticipated that You will need to make additional Premium
payments, after the initial Premium, to keep the Policy in force.
3. INVESTMENT CHOICES: You can put Your money in the Fixed Account or in any or
all of the Investment Options which are briefly described in Section
3--Investment Choices and are more fully described in the prospectuses for the
funds.
4. EXPENSES: The Policy has both insurance and investment features, and there
are costs related to each that reduce the return on Your investment.
We deduct a Premium Charge from each Premium payment made. The Premium Charge is
as follows:
Policy Years 1-10: 8.0% of all Premiums.
Policy Years 11 and later: 4.0% of all Premiums.
We deduct a Policy Charge each month from the unloaned Accumulation Value of the
Policy. The Policy Charge is as follows:
Policy Year 1: $35 each month
Policy Years 2 and later: Currently, $7.50 each month. This charge is
not guaranteed and may be increased, but
it will not exceed $10.
We deduct a Per $1,000 of Specified Amount Charge each month from the unloaned
Accumulation Value of the Policy. The Per $1,000 of Specified Amount Charge is
equal to $.08 per month per $1,000 of Initial Base Policy Specified Amount for
the first Policy Year. This charge will also be assessed during the 12 months
following an increase to the Specified Amount.
We deduct a Risk Charge each month from the unloaned Accumulation Value of the
Policy. The Risk Charge is calculated as follows:
Policy Years 1-15: Each month, 0.07%, on a monthly
basis, of the Accumulation Value
in the Separate Account.
Policy Years 16 and later: Each month, 0.03%, on a monthly
basis, of the Accumulation Value
in the Separate Account.
Each month We will make a deduction from the unloaned Accumulation Value of the
Policy for the cost of insurance. This charge will depend upon the Specified
Amount, Your Accumulation Value, the sex, age and Rate Class of each Insured and
the Policy Year. We may also charge for any riders attached to the Policy.
There are also daily investment charges which apply to the average daily value
of the Investment Options. These charges are deducted from the Investment
Options and range on an annual basis from .26% to 1.25%, depending on the
Investment Option.
We may assess a surrender charge which depends upon Your Initial Base Policy
Specified Amount, the year of surrender, issue Age, sex and Rate Class. The
maximum surrender charge that will be deducted is $40.00 per $1,000 specified
amount. The maximum charge varies by issue Age, sex and tobacco use and ranges
from $1.50 to $40.00 per $1,000. See "Expenses--Surrender Charge" in Part I for
more information. The surrender charge for total surrenders is level for the
first three Policy Years then grades down (pursuant to a set formula) each month
beginning in the forth Policy Year and is zero in Policy Years 16 and later.
Your Policy is issued with a surrender charge schedule which shows the surrender
charge at the end of the Policy Year. The charge is not affected by the addition
of riders.
When You make a partial surrender, We assess a pro-rata portion of the surrender
charge. In the event that You increase Your Specified Amount, a new surrender
charge schedule will be imposed on the increased amount.
There is a partial surrender fee of $25 assessed for any partial surrender in
addition to any surrender charge that may be assessed. The partial surrender fee
is deducted from the unloaned Accumulation Value of the Policy.
Each transfer after 12 in any calendar year, unless the transfer is
pre-scheduled, will incur a transfer fee of $25.
5. DEATH BENEFIT: The amount of the Death Benefit depends on:
o the Specified Amount of Your Policy,
o the Death Benefit option in effect at the time of the last surviving
Insured's death, and
o under some circumstances, Your Policy's Accumulation Value.
There are two Death Benefit options: Level Death Benefit and Adjustable Death
Benefit. Under certain circumstances, You can change Death Benefit options. You
can also change the Specified Amount under certain circumstances.
The actual amount payable to Your Beneficiary is the Death Proceeds which is
equal to the Death Benefit less any Indebtedness. At the time of application for
a Policy, You designate a Beneficiary who is the person or persons who will
receive the Death Proceeds. You can change Your Beneficiary unless You have
designated an irrevocable Beneficiary. The Beneficiary does not have to be a
natural person.
All or part of the Death Proceeds may be paid in a lump sum or applied under one
of the Payment Options contained in the Policy.
6. TAXES: Your Policy has been designed to comply with the definition of life
insurance in the Internal Revenue Code. As a result, the Death Proceeds paid
under the Policy should be excludable from the gross income of the Beneficiary.
Your earnings in the Policy are not taxed until You take them out. The tax
treatment of the loan proceeds and surrender proceeds will depend on whether the
Policy is considered a Modified Endowment Contract (MEC). Proceeds taken out of
a MEC are considered to come from earnings first and are includible in taxable
income. If You are younger than 59 1/2 when You take money out of a MEC, You may
also be subject to a 10% federal tax penalty on the earnings withdrawn.
7. ACCESS TO YOUR MONEY: You can terminate the Policy at any time and We will
pay You the Cash Surrender Value. After the first Policy Year, You may surrender
a part of the Cash Surrender Value subject to the requirements of the Policy.
When You terminate Your Policy or make a partial surrender, a surrender charge
(or a portion thereof in the case of a partial surrender) may be assessed.
You can also borrow some of Your Accumulation Value.
8. OTHER INFORMATION:
Free Look.
You can cancel the Policy within ten days after You receive it (or whatever
period is required in Your state) and We will refund all Premiums paid less any
Indebtedness. Upon completion of the Underwriting Process, We will allocate the
initial Net Premium to the Money Market Portfolio for fifteen days (or the Free
Look period required in Your state plus five days). After that, We will invest
Your Accumulation Value as You requested.
Who Should Purchase the Policy?
The Policy is designed for individuals and businesses that have a need for death
protection but who also desire to potentially increase the values in their
Policies through investment in the Investment Options.
The Policy offers the following to individuals:
o create or conserve one's estate.
o supplement retirement income.
o access to funds through loans and surrenders.
The Policy offers the following to businesses:
o protection for the business in the event a key employee dies.
o provide debt protection for business loans.
o create a fund for employee benefits, buy-outs and future business
needs.
If You currently own a variable life insurance policy on the life of any of the
Insureds, You should consider whether the purchase of the Policy is appropriate.
Also, You should carefully consider whether the Policy should be used to replace
an existing Policy on the life of either of the Insureds.
Additional Features
o You can arrange to have a regular amount of money automatically
transferred from the Money Market Portfolio to the Investment Options
each month, theoretically giving You a lower average cost per unit
over time than a single one time purchase. We call this feature the
Dollar Cost Averaging Option.
o We will automatically readjust Your money between Investment Options
periodically to keep the blend You select. We call this feature the
Asset Rebalancing Option.
o If the Insureds get a divorce or, under certain circumstances, if
there is a significant change to the Federal Tax Law, We will exchange
the Policy for two individual Policies. We call this feature the
Exchange Option Rider.
o If You pay a certain required Premium, We guarantee that the Policy
will not lapse even if Your Accumulation Value is not sufficient to
cover the Monthly Deductions. We call this feature the Guaranteed
Minimum Death Benefit Rider.
o We also offer a number of additional riders that are common for
universal life policies.
These features and riders may not be available in Your state and may not be
suitable for Your particular situation.
9. INQUIRIES: If You need more information about buying a Policy, or, if
You need policy owner service (such as changes in Policy information,
inquiry into Policy values, or to make a loan), please contact Us at
our service center:
BMA
9735 Landmark Parkway Drive
St. Louis, Missouri 64141-2879
1-800-423-9398
PART I
1. THE VARIABLE LIFE INSURANCE POLICY
The variable life insurance policy is a contract between You, the Owner, and
BMA, an insurance company. The Policy can be used to create or conserve one's
estate and for retirement planning for individuals. It can also be used for
certain business purposes.
The Policy provides for life insurance coverage on the lives of two persons (the
"Insureds") and has Accumulation Values, a Death Benefit, surrender rights, loan
privileges and other characteristics associated with traditional and universal
life insurance. However, since the Policy is a variable life insurance policy,
the Accumulation Value, to the extent invested in the Investment Options, will
increase or decrease depending upon the investment experience of those
Investment Options. The duration or amount of the Death Benefit may also vary
based on the investment performance of the underlying Investment Options. To the
extent you allocated premium or accumulation value to the separate account, you
bear the investment risk. If the Cash Surrender Value is insufficient to pay the
Monthly Deductions, the Policy may terminate.
Because the Policy is like traditional and universal life insurance, it provides
a Death Benefit which will be paid to Your named Beneficiary. Upon the death of
the last surviving Insured, the Death Proceeds are paid to Your Beneficiary
which should be excludable from the gross income of the Beneficiary. The
tax-free Death Proceeds makes this an excellent way to accumulate money You
don't think you'll use in Your lifetime and is a tax-efficient way to provide
for those You leave behind. If You need access to Your money, You can borrow
from the Policy or make a total or partial surrender.
You should consult Your Policy for further understanding of its terms and
conditions and for any state-specific provisions and variances that may apply to
Your Policy.
2. PURCHASES
PREMIUMS
Premiums are the monies You give Us to buy the Policy. The Policy is a Flexible
Premium Policy which allows You to make Premium payments in any amount and at
any time, subject of course to making sufficient Premium payments to keep the
Policy in force. Even though the Policy is flexible, when You apply for coverage
You can establish a schedule of Premium payments (Planned Premium). The Planned
Premium is selected by You. Thus they will differ from Policy to Policy. You
should consult Your Registered Representative about Your Planned Premium.
We guarantee that the Policy will stay in force for the first five years after
issue if total Premiums paid are at least as great as:
1. the cumulative five year No-Lapse Monthly Minimum Premium; plus
2. the total of all partial surrenders made; plus
3. Indebtedness.
We will establish a No-Lapse Monthly Minimum Premium at the time you apply for
coverage which is the smallest level of Planned Premium.
The Policy will remain in force if the Cash Surrender Value is greater than the
next Monthly Deduction regardless of how long it has been in force.
Additional Premiums may be paid at any time. However, We reserve the right to
limit the number and amount of additional Premiums. Under some circumstances, We
may require evidence that the Insureds are still insurable. All Premiums are
payable at the Service Center.
APPLICATION FOR A POLICY
In order to purchase a Policy, You must submit an application to Us that
requests information about the proposed Insureds. In some cases, We will ask for
additional information. We may request that the Insureds provide Us with medical
records, a physician's statement or possibly require other medical tests.
ISSUE AGES
We currently issue to Insureds whose ages are 20-90. The older Insured must be
no older than 90 and the younger Insured must be no older than 85. Standard
rates are issued to ages 20-90 and Preferred rates are issued to ages 20-85.
We will review all the information We are provided about the Insureds and
determine whether or not the Insureds meet Our standards for issuing the Policy.
This process is called underwriting. If the Insureds meet all of Our
underwriting requirements, We will issue a Policy. There are several
underwriting classes under which the Policy may be issued.
The underwriting period could be up to 60 days or longer from the time the
application is signed. If We receive the initial Premium with the application,
Your Registered Representative will give you a conditional receipt. If You
receive a conditional receipt, you will be eligible for conditional coverage.
The conditional coverage, if You meet the conditions specified on the
conditional receipt, will be effective from the later date of the application, a
medical exam, if required, or a date You request (it must be within 60 days of
the date of the application). It will expire 60 days from the effective date.
The conditional insurance is subject to a number of restrictions and is only
applicable if the proposed Insureds were an acceptable risk for the insurance
applied for.
APPLICATION OF PREMIUMS
When You purchase a Policy and We receive money with Your application, We will
initially put Your money in Our General Account. Your money will remain in Our
General Account during the Underwriting Process. Upon completion of the
Underwriting Process, Your money will be moved to the Money Market Portfolio
where it will remain for 15 days (or the period required in Your state plus five
days). After the 15 days, We will allocate Your money less any charges, plus
interest earned to the Investment Option(s) You requested in the application.
All allocation directions must be in whole percentages. If You pay additional
Premiums, We will allocate them in the same way as Your first Premium unless You
tell Us otherwise.
If You change Your mind about owning a Policy, You can cancel it within 10 days
after receiving it (or the period required in Your state) (Free Look Period).
(If the Owner is a resident of California and is age 60 or older, the period is
30 days.) When You cancel the Policy within this time period, We will not assess
a Surrender Charge and will give You back Your Premium payment less any
Indebtedness.
When Your application for the Policy is in good order, We will invest Your first
Premium in the Money Market Portfolio within two days after We have completed
Our underwriting. Subsequent Premiums will be allocated in accordance with the
selections in Your application.
If as a result of Our underwriting review, We do not issue You a Policy, We will
return Your Premium, and interest, if any, required by Your state. If We do
issue a Policy, on the Policy Date We will deduct the first Monthly Deduction
and credit interest. The maximum first Monthly Deduction is 100% of the first
net Premium paid. The maximum deduction that We will take from the Premium is
8.0% of the Premium paid.
EXCHANGE OPTION
We will exchange this Policy for two individual Policies on the life of each
Insured, subject to the following occurrences:
1. A final divorce decree on the Insureds' marriage is issued and in
effect for 6 months. The Insureds must have been married to each other
on the Policy Date.
2. A significant change to the Federal Tax Law of the Internal Revenue
Code that results in (1) or (2) below:
a) The repeal of the unlimited marital deduction provision; or
b) The tax rate in the maximum federal estate bracket is reduced to
25% or less.
GRACE PERIOD
Your Policy will stay in effect as long as Your Cash Surrender Value is
sufficient to cover Monthly Deductions. If the Cash Surrender Value of Your
Policy is not enough to cover these deductions, We will mail You a notice. You
will have 61 days from the time the notice is mailed to You to send Us the
required payment. This is called the Grace Period. During the first five Policy
Years, the Policy will not terminate if the cumulative Premiums paid equal the
No-Lapse Monthly Premium shown in the Policy times the number of monthly
Anniversary Days that have occurred plus one. The cumulative Premiums paid are
equal to:
o the total Premiums paid; less
o any Indebtedness; less
o any partial surrenders, Partial Surrender Fees assessed and any
pro-rata charge assessed for the partial surrenders.
If the last surviving Insured dies during the Grace Period, the Premiums
required to provide coverage to the date of the last surviving Insureds' death
will be deducted from any amounts payable under the policy.
ACCUMULATION UNIT VALUES
The value of Your Policy that is invested in the Investment Option(s) will go up
or down depending upon the investment performance of the Investment Option(s)
You choose. In order to keep track of the value of Your Policy, We use a unit of
measure We call an Accumulation Unit. (An Accumulation Unit works like a share
of a mutual fund.)
Every Business Day We determine the value of an Accumulation Unit for each of
the Investment Options. The value of an Accumulation Unit for any given Business
Day is determined by multiplying a factor We call the net investment factor
times the value of the Accumulation Unit for the previous Business Day. We do
this for each Investment Option. The net investment factor is a number that
reflects the change (up or down) in an underlying Investment Option share. Our
Business Days are each day that the New York Stock Exchange is open for
business. Our Business Day closes when the New York Stock Exchange closes,
usually 4:00 P.M. Eastern time.
When You make a Premium payment, We credit Your Policy with Accumulation Units.
The number of Accumulation Units credited is determined by dividing the amount
of Net Premium allocated to an Investment Option by the value of the
Accumulation Unit for the Investment Option for the Business Day when the
Premium payment is applied to Your Policy.
We calculate the value of an Accumulation Unit for each Investment Option after
the New York Stock Exchange closes each Business Day and then apply it to Your
Policy.
When We assess the Monthly Deductions, We do so by deducting Accumulation Units
from Your Policy. When You have selected more than one Investment Option and/or
the Fixed Account, We make the deductions pro-rata from all the Investment
Options and the Fixed Account.
When You make a surrender We determine the number of Accumulation Units to be
deducted by dividing the amount of the surrender from an Investment Option by
the value of an Accumulation Unit for the Investment Option. The resulting
number of Accumulation Units is deducted from Your Policy. When You make a
transfer from one Investment Option to another We treat the transaction by its
component parts, i.e. a surrender and a purchase.
EXAMPLE:
On Monday We receive a Premium payment from You. You have told Us You
want $700 of this payment to go to the Large Cap Value Portfolio. When
the New York Stock Exchange closes on that Monday, We determine that
the value of an Accumulation Unit for the Large Cap Value Portfolio is
$12.70. We then divide $700 by $12.70 and credit Your Policy on Monday
night with 55.12 Accumulation Units for the Large Cap Value Portfolio.
RIGHT TO REFUND
To receive the tax treatment accorded life insurance under Federal laws,
insurance under the Policy must initially qualify and continue to qualify as
life insurance under the Internal Revenue Code. To maintain qualification to the
maximum extent permitted by law, We reserve the right to return Premiums you
have paid which We determine will cause any coverage under the Policy to fail to
qualify as life insurance under applicable tax law and any changes in applicable
tax laws or will cause it to become a Modified Endowment Contract (MEC).
Additionally, We reserve the right to make changes in the Policy or to make
distributions to the extent We determine necessary to continue to qualify the
Policy as life insurance and to comply with applicable laws. We will provide You
advance written notice of any change.
If subsequent Premium payments will cause Your Policy to become a MEC We will
contact You prior to applying the Premium. If You elect to have the Premium
applied, We require that You acknowledge in writing that You understand the tax
consequences of a MEC before We will apply the Premiums. Section 6 contains a
discussion of certain tax considerations, including MECs.
EXCHANGE OF A POLICY FOR A BMA POLICY
Under federal tax law a life insurance policy may be exchanged tax-free for
another life insurance policy. However, a policy received in exchange for a MEC
will also be treated as a MEC. Any exchange of a policy for a BMA Policy must
meet Our policy exchange rules in effect at that time.
3. INVESTMENT CHOICES
The Policy offers 24 investment choices--a Fixed Account and 23 Investment
Options. Additional Investment Options may be available in the future.
You should read the prospectuses for these funds carefully. Copies of these
prospectuses will be sent to you with your Policy. Certain portfolios contained
in the fund prospectuses may not be available with Your Policy. Below is a
summary of the investment objectives and strategies of each Investment Option.
There can be no assurance that the investment objectives will be achieved. The
fund prospectuses contain more complete information, including a description of
the investment objectives, policies, restrictions and risks of each Investment
Option.
Shares of the funds are offered in connection with certain variable annuity
contracts and variable life insurance policies of various life insurance
companies which may or may not be affiliated with BMA. Certain portfolios are
also sold directly to qualified plans. The funds believe that offering their
shares in this manner will not be disadvantageous to you.
BMA may enter into certain arrangements under which it is reimbursed by the
Investment Options' advisers, distributors and/or affiliates for the
administrative services which it provides to the Investment Options.
The investment objectives and policies of certain of the Investment Options are
similar to the investment objectives and policies of other mutual funds that
certain of the investment advisers manage. Although the objectives and policies
may be similar, the investment results of the Investment Options may be higher
or lower than the results of such other mutual funds. The investment advisers
cannot guarantee, and make no representation, that the investment results of
similar funds will be comparable even though the Investment Options have the
same investment advisers.
An Investment Option's performance may be affected by risks specific to certain
types of investments, such as foreign securities, derivative investments,
non-investment grade debt securities, initial public offerings (IPOs) or
companies with relatively small market capitalizations. IPOs and other
investment techniques may have a magnified performance impact on an Investment
Option with a small asset base. An Investment Option may not experience similar
performance as its assets grow.
INVESTORS MARK SERIES FUND, INC.
Investors Mark Series Fund, Inc. is managed by Investors Mark Advisors, LLC
(Adviser), which is an affiliate of BMA. Investors Mark Series Fund, Inc. is a
mutual fund with multiple portfolios. Each Investment Option has a different
investment objective. The Adviser has engaged sub-advisers to provide investment
advice for the individual Investment Options. The following Investment Options
are available under the Policy:
Standish, Ayer & Wood, Inc. is the Sub-Adviser to the following Portfolios:
Intermediate Fixed Income Portfolio
The goal of this Portfolio is a high level of current income with stability of
principal and liquidity. The Portfolio seeks to accomplish this by investing in
intermediate term, high-quality corporate and mortgage-backed fixed income
investments. The average maturity of the investments in the Portfolio is five to
thirteen years. The Portfolio also looks for other opportunities to invest in
securities that have the potential for capital appreciation, but are not likely
to add risk to the Portfolio.
Mid Cap Equity Portfolio
The goal of the Portfolio is to achieve long-term growth by investing in the
common stock of mid-sized U.S. companies.
Stocks must meet two criteria in order to be included in the Portfolio:
o they must have above-average growth potential and momentum, and
o they must be undervalued, or "cheap," relative to other stocks and the
market as a whole.
The Portfolio's Adviser uses both mathematical models and years of experience in
individual judgment to make the stock buy and sell decisions for the Portfolio.
Money Market Portfolio
The goal of this Portfolio is to earn the highest possible level of current
income while preserving capital and maintaining liquidity. It invests in
carefully selected short-term fixed income securities issued by the U.S.
government and its agencies and by other stable financial institutions.
Standish International Management Company, L.P. is the Sub-Adviser to the
following Portfolio:
Global Fixed Income Portfolio
The Portfolio's objective is to maximize total return and to generate a market
level return while preserving both liquidity and principal. Typically, assets
are diversified across ten or more countries.
Stein Roe & Farnham Incorporated is the Sub-Adviser to the following Portfolios:
Small Cap Equity Portfolio
This Portfolio seeks long-term growth by investing in small and medium-sized
entrepreneurially managed companies that the Portfolio's Adviser believes are
selling at attractive prices and that enjoy good management.
Large Cap Growth Portfolio
The goal of this Portfolio is long-term capital appreciation. The Portfolio
invests, under normal circumstances, at least 65 percent of its total assets in
common stocks and other equity type securities believed to have the ability to
appreciate in value over time. The Portfolio's Adviser seeks to invest in
companies that it believes have the potential to maintain their competitive
advantages and to create wealth over a long period of time.
David L. Babson & Co., Inc. is the Sub-Adviser to the following Portfolio:
Large Cap Value Portfolio
The goal of this Portfolio is long-term capital growth. It invests in common
stocks that are seen as undervalued, or "cheap," relative to corporate earnings,
dividends, and/or assets-striving to achieve above-average return with below
average risk.
Lord, Abbett & Co. is the Sub-Adviser to the following Portfolio:
Growth & Income Portfolio
This Portfolio is value driven, seeking long-term growth of capital and income
without a lot of fluctuation in market value. It invests in large, seasoned
companies in sound financial condition that are expected to show above average
price appreciation.
Kornitzer Capital Management, Inc. is the Sub-Adviser to the following
Portfolio:
Balanced Portfolio
The goal of this Portfolio is both long-term capital growth and high current
income. It invests in both stocks and fixed income securities. The balance of
stocks and bonds in the Portfolio can change based on the Portfolio Adviser's
view of economic conditions, interest rates, and stock prices. The fund also
invests in convertible bonds and convertible preferred stocks. Convertible
securities offer current income like a corporate bond, but can also provide
capital appreciation through their conversion feature (the right to convert to
common stock).
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust is a mutual fund with multiple portfolios.
Berger LLC is the investment adviser to all portfolios. Berger LLC has retained
Bank of Ireland Asset Management (U.S.) Limited ("BIAM") as the subadviser to
the Berger IPT--International Fund. The following Investment Option is available
under the Policy:
Berger IPT-International Fund
The goal of this Fund is long-term capital appreciation through investments in
non-U.S. equity securities of well-established companies. The primary focus of
the fund is on undervalued, or "cheap," stocks of mid-sized to large companies.
THE ALGER AMERICAN FUND
The Alger American Fund is a mutual fund with multiple portfolios. Fred Alger
Management, Inc. serves as the investment adviser. The following Investment
Options are available under the Policy:
Alger American Growth Portfolio
This Portfolio seeks long-term capital appreciation. It focuses on growing
companies that generally have broad product lines, markets, financial resources
and depth of management. Under normal circumstances, the portfolio invests
primarily in the equity securities of large companies.
Alger American Leveraged AllCap Portfolio
This Portfolio seeks long-term capital appreciation. Under normal circumstances,
the portfolio invests in the equity securities of companies of any size which
demonstrate promising growth potential. The portfolio can leverage, that is,
borrow money in amounts up to one-third of its total assets to buy additional
securities.
Alger American MidCap Growth Portfolio
This Portfolio seeks long-term capital appreciation. It focuses on midsize
companies with promising growth potential that generally have broad product
lines, markets, financial resources and depth of management. Under normal
circumstances, the Portfolio invests primarily in the equity securities of
companies having a market capitalization within the range of companies in the
S&P MidCap 400 Index(R).
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
American Century Variable Portfolios, Inc. is a series of funds managed by
American Century Investment Management, Inc. The following Investment Options
are available under the Policy:
VP Income & Growth
This Portfolio seeks dividend growth, current income, and capital appreciation
by investing in common stocks. The Portfolio invests in mainly large company
stocks, such as those in the Standard & Poor's 500 Composite Stock Price Index,
but it also may invest in the stocks of small and medium-size companies. The
management team strives to outperform the Standard & Poor's 500 Composite Stock
Price Index over time while matching its risk characteristics.
VP Value
This Portfolio seeks long-term capital growth as a primary objective and income
as a secondary objective. It invests in well-established companies that the
Portfolio's Adviser believes are undervalued at the time of purchase.
DREYFUS STOCK INDEX FUND
The Dreyfus Corporation serves as the Fund's manager. Dreyfus has hired its
affiliate, Mellon Equity Associates, to serve as the Fund's index fund manager
and provide day-to-day management of the Fund's investments.
The objective of this Portfolio is to match, as closely as possible, the
performance of the Standard & Poor's 500 Composite Price Index (S&P 500). To
pursue this goal, the fund generally invests in all 500 stocks in the S&P 500 in
proportion to their weighting in the index.
DREYFUS VARIABLE INVESTMENT FUND
The Dreyfus Variable Investment Fund is a mutual fund with multiple portfolios.
The Dreyfus Corporation serves as the investment adviser. The following
Investment Option is available under the Policy:
Dreyfus VIF Disciplined Stock Portfolio
This Portfolio seeks investment returns (consisting of capital appreciation and
income) that are greater than the total return performance of stocks represented
by the Standard & Poor's 500 Composite Stock Price Index. To pursue this goal,
the portfolio invests in a blended portfolio of growth and value stocks chosen
through a disciplined investment process.
VARIABLE INSURANCE PRODUCTS FUND AND VARIABLE INSURANCE PRODUCTS FUND II
Variable Insurance Products Fund and Variable Insurance Products Fund II are
each mutual funds managed by Fidelity Management & Research Company. The
following Investment Options are available under the Policy:
Fidelity VIP Overseas Portfolio
This Portfolio seeks long-term growth of capital by investing at least 65% of
total assets in foreign securities and allocating investments across countries
and regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
Fidelity VIP Growth Portfolio
This Portfolio seeks to achieve capital appreciation by investing primarily in
common stocks of companies that the Adviser believes have above-average growth
potential (stocks of these companies are often called "growth" stocks).
Fidelity VIP II Contrafund Portfolio
This Portfolio seeks long-term capital appreciation by investing primarily in
common stocks of companies whose value the Adviser believes is not fully
recognized by the public.
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO Variable Investment Funds, Inc. is a mutual fund with multiple
portfolios. INVESCO Funds Group, Inc. is the investment adviser. The following
Investment Options are available under the Policy:
INVESCO VIF--High Yield Fund
The objective of this Portfolio is to seek a high level of current income by
investing substantially all of its assets in lower-rated debt bonds and other
debt securities as well as preferred stock. A secondary goal is long-term
capital appreciation.
INVESCO VIF--Equity Income Fund
This Portfolio seeks capital appreciation with high current income as a
secondary goal. The Portfolio normally invests at least 65% of its assets in
dividend paying common and preferred stocks. The remaining assets are generally
invested in income producing securities such as corporate bonds; however, in
order to take advantage of strong equity markets, there are no limits on the
amount of equity securities in which the Portfolio may invest. The Portfolio may
invest up to 30 percent of its total assets in non-dividend paying common
stocks.
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Series, Inc. is a mutual fund with multiple portfolios. Lazard
Asset Management, a division of Lazard Freres & Co. LLC, a New York limited
liability company, is the investment manager for each portfolio. The following
Investment Option is available under the Policy:
Lazard Retirement Small Cap Portfolio
This Portfolio seeks long-term capital appreciation. It invests primarily in
equity securities, principally common stocks, of relatively small U.S. companies
in the range of the Russell 2000 Index that the manager believes are undervalued
based on their earnings, cash flow or asset values.
TRANSFERS
You can transfer money among the Fixed Account and the Investment Options. You
can make 12 free transfers each calendar year. You can make a transfer to or
from the Fixed Account and to or from any Investment Option. If You make more
than 12 transfers in a calendar year, there is a transfer fee deducted. The fee
is $25 per transfer. The following apply to any transfer:
1. The minimum amount which You can transfer from the Fixed Account or
any Investment Option is $250 or Your entire interest in the
Investment Option or the Fixed Account, if the remaining balance is
less than $250.
2. The maximum amount which can be transferred from the Fixed Account is
limited to 25% of the Accumulation Value in the Fixed Account. Only
one transfer out of the Fixed Account is allowed each Calendar Year.
These requirements are waived if the transfer is pursuant to a
pre-scheduled transfer.
3. The minimum amount which must remain in any Investment Option or Fixed
Account after a transfer is $250.
4. A transfer will be effective as of the end of the Business Day when We
receive an Authorized Request at the Service Center.
5. Neither We nor Our Service Center is liable for a transfer made in
accordance with Your instructions.
6. We reserve the right to restrict the number of transfers per year and
to restrict transfers from being made on consecutive Business Days.
7. Your right to make transfers is subject to modification if We
determine, in Our sole opinion, that the exercise of the right by one
or more Owners is, or would be, to the disadvantage of other Owners.
Restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right which is considered by Us to be
to the disadvantage of other Owners. A modification could be applied
to transfers to or from one or more of the Investment Options and
could include but not be limited to:
o a requirement of a minimum time period between each transfer;
o not accepting transfer requests of an agent acting under a power
of attorney on behalf of more than one Owner; or
o limiting the dollar amount that may be transferred by an Owner at
any one time.
TELEPHONE TRANSFERS
You may elect to make transfers by telephone. To elect this option You must do
so in an Authorized Request. If there are Joint Owners, unless We are instructed
to the contrary, instructions will be accepted from either one of the Joint
Owners. We will use reasonable procedures to confirm that instructions
communicated by telephone are genuine. If We do not, We may be liable for any
losses due to unauthorized or fraudulent instructions. The Service Center tape
records all telephone instructions. Transfers do not change the allocation
instructions for future Premiums.
DOLLAR COST AVERAGING
The Dollar Cost Averaging Option allows You to systematically transfer a set
amount each month from the Money Market Portfolio to any of the other Investment
Option(s). By allocating amounts on a regular schedule as opposed to allocating
the total amount at one particular time, You may be less susceptible to the
impact of market fluctuations.
The minimum amount which can be transferred each month is $250. You must have an
unloaned Accumulation Value of at least $5,000. The amount required to complete
Your program must be in the source account in order to participate in dollar
cost averaging.
All dollar cost averaging transfers will be made on the 15th day of the month
unless that day is not a Business Day. If it is not, then the transfer will be
made the next Business Day. You must participate in dollar cost averaging for at
least 6 months.
If You participate in dollar cost averaging, the transfers made under this
option are not taken into account in determining any transfer fee. Currently,
there is no charge for participating in Dollar Cost Averaging.
ASSET REBALANCING OPTION
Once Your money has been allocated among the Investment Options, the performance
of the Accumulation Value of each option may cause Your allocation to shift. If
the unloaned Accumulation Value of Your Policy is at least $5,000, You can
direct Us to automatically rebalance Your Policy each quarter to return to Your
original percentage allocations by selecting Our asset rebalancing option. The
program will terminate if You make any transfer outside of the Investment
Options You have selected under the asset rebalancing option. The minimum period
to participate in this program is 6 months. The transfer date will be the 15th
of the month unless that day is not a Business Day. If it is not, then the
transfer will be made the next Business Day. The Fixed Account is not part of
asset rebalancing.
If You participate in the asset rebalancing option, the transfers made under the
program are not taken into account in determining any transfer fee. Currently,
there is no charge for participating in the asset rebalancing option.
ASSET REBALANCING EXAMPLE:
Assume that You want the Accumulation Value split between two Investment
Options. You want 40% to be in the Intermediate Fixed Income Portfolio and 60%
to be in the Mid Cap Equity Portfolio. Over the next 2 1/2 months the bond
market does very well while the stock market performs poorly. At the end of the
first quarter, the Intermediate Fixed Income Portfolio now represents 50% of
Your holdings because of its increase in value. If You had chosen to have Your
holdings rebalanced quarterly, on the first day of the next quarter, We would
sell some of Your units in the Intermediate Fixed Income Portfolio to bring its
value back to 40% and use the money to buy more units in the Mid Cap Equity
Portfolio to increase those holdings to 60%.
SUBSTITUTION
We may be required to substitute one of the Investment Options You have selected
with another Investment Option. We would not do this without the prior approval
of the Securities and Exchange Commission. We will give You notice of Our intent
to do this.
4. EXPENSES
There are charges and other expenses associated with the Policy that reduce the
return on Your investment in the Policy. The charges and expenses are:
PREMIUM CHARGE
We deduct a Premium Charge from each Premium payment You make. We consider a
portion of the Premium Charge a sales load. The sales load portion is 5.0% of
Premiums paid during the first ten Policy Years and 2.0% of Premiums paid
thereafter. The portion of the Surrender Charge that does not recover issue and
underwriting expenses is assessed as a sales load but only if the Policy is
surrendered during the first fifteen Policy Years. The Premium Charge is as
follows:
Policy Years 1-10: 8.0% of all Premiums.
Policy Years 11 and later: 4.0% of all Premiums.
The Premium Charge is to cover some of Our costs incurred in selling the Policy
and in issuing it, such as commissions, premium tax, DAC tax (Deferred
Acquisition Costs) and administrative costs.
MONTHLY DEDUCTION
The initial Monthly Deduction is made on the Policy Date. On each Monthly
Anniversary Day We make a Monthly Deduction from the Accumulation Value of Your
Policy. The Monthly Deduction will be taken on a pro-rata basis from the
Investment Options and the Fixed Account, exclusive of the Loan Account. The
Monthly Deduction equals:
o the Cost of Insurance for the Policy; plus
o the monthly rider charges, if any; plus
o the Per $1,000 of Specified Amount Charge; plus
o the Risk Charge; plus
o the monthly Policy Charge.
Cost of Insurance. This charge compensates Us for insurance coverage provided
for the month. The cost of insurance charge for a Policy month equals the
appropriate current cost of insurance rate per $1,000, including any special
Rate Classes, times the net amount at risk. The net amount at risk is different
for the Level Death Benefit Option and the Adjustable Death Benefit Option. Part
II contains a more detailed description of the net amount at risk.
The monthly cost of insurance rate, per $1,000 of net amount at risk, is based
on:
o issue Age of each of the Insureds;
o sex of each of the Insureds;
o Rate Class of each of the Insureds; and
o the Policy Year.
We will determine the monthly cost of insurance rates based on the expectations
as to future experience. We may charge less than the maximum cost of insurance
rates as shown in the Table of Cost of Insurance Rates contained in Your Policy.
Any change in the cost of insurance rates will apply to Insureds of the same
Age, sex, Rate Class and Policy Year. The cost of insurance rates are greater
for Insureds in special Rate Classes.
Monthly Rider Charges. We charge separately for any riders attached to the
Policy. We deduct the cost of the riders for a Policy Month as part of the
Monthly Deduction on each Monthly Anniversary Day.
Per $1,000 of Specified Amount Charge. We assess a Per $1,000 of Specified
Amount Charge which is equal to $0.08 per month per $1,000 of Initial Base
Policy Specified Amount for the first Policy Year. It is also deducted each
month for the next 12 months following an increase to the Specified Amount.
Risk Charge. We assess a Risk Charge which is deducted as part of the Monthly
Deduction. The Risk Charge is calculated as follows:
Policy Years 1-15: Each month, 0.07%, on a monthly basis,
of the Accumulation Value in the Separate
Account.
Policy Years 16 and later: Each month, 0.03%, on a monthly basis,
of the Accumulation Value in the
Separate Account.
The Risk Charge compensates Us for some of the mortality risks We assume, and
the risk that We will experience costs above that for which We are compensated.
It also compensates Us for some of the administrative costs in administering the
Policy. We expect to profit from the charge.
Policy Charge. We assess a Policy Charge which is deducted each Monthly
Anniversary Day. The Policy Charge is:
Policy Year 1: $35 each month
Policy Years 2 and later: Currently, $7.50 each month. This charge is
not guaranteed and may be increased, but
it will not exceed $10.
The Policy Charge compensates Us for some of the administrative costs of the
Policy and the Separate Account.
SURRENDER CHARGE
If the Policy is surrendered before the 15th Policy Anniversary or within 15
years following the effective date of any increase in Specified Amount, a
Surrender Charge may be deducted. The Surrender Charge specific to Your Policy
is shown on Your Policy Schedule.
The maximum Surrender Charge that will be assessed ranges from $1.50 to $40.00
per $1,000 of Specified Amount.
The charge is not affected by the addition of riders. After the third Policy
Year, or after three years following the effective date of an increase, the
Surrender Charge for subsequent Policy Years decreases annually on the policy
Anniversary or the anniversary of any Specified Amount increase (pursuant to a
formula). When there is a partial surrender of Cash Surrender Value, a pro-rata
portion of the Surrender Charge is assessed for any amount that the Specified
Amount is reduced. The pro-rata Surrender Charge is calculated in the same
manner as for a requested decrease.
The Surrender Charge and the pro-rata Surrender Charge compensates Us for the
costs associated with selling the Policy and for issue and underwriting
expenses.
PARTIAL SURRENDER FEE
When there is a partial surrender of the Cash Surrender Value, in addition to
any Surrender Charge that may be assessed, We will charge a Partial Surrender
Fee of $25. This charge compensates Us for administrative expenses associated
with a surrender.
The Surrender Charge and Partial Surrender Fee are deducted from the unloaned
Accumulation Value of the Policy. The Partial Surrender Fee is deducted pro-rata
from the Investment Option(s) and/or the Fixed Account from which the withdrawal
is made.
REDUCTION OR ELIMINATION OF THE SURRENDER CHARGE
We may reduce or eliminate the amount of the Surrender Charge when the Policy is
sold under circumstances which reduce its sales expense. Some examples are: if
there is a large group of individuals that will be purchasing the Policy or a
prospective purchaser already had a relationship with Us. We will not deduct a
Surrender Charge under a Policy issued to an officer, director or employee of
BMA or any of its affiliates.
TRANSFER FEE
You can make 12 free transfers every calendar year. If You make more than 12
transfers in a calendar year, We will deduct a transfer fee of $25. If We do
assess a transfer fee, it will be deducted from the amount transferred.
If the transfer is part of the Dollar Cost Averaging Option or the Asset
Rebalancing Option, it will not count in determining the transfer fee.
TAXES
We do not currently assess any charge for income taxes which We incur as a
result of the operation of the Separate Account. We reserve the right to assess
a charge for such taxes against the Separate Account or your Accumulation Value
if we determine that such taxes will be incurred.
INVESTMENT OPTION EXPENSES
There are deductions from and expenses paid out of the assets of the various
Investment Options, which are summarized below. See the fund prospectuses for
more information.
INVESTMENT OPTION EXPENSES
(as a percentage of the average daily net assets of an Investment Option for
the most recent fiscal year, except as noted)
Total Annual
Other Portfolio
Expenses Expenses
(after (after
reimbursement reimbursement
Management 12b-1 for certain for certain
Fees Fees Portfolios) Portfolios)
------------- ------- --------------- -----------------
INVESTORS MARK SERIES FUND,
INC.(1)
Intermediate Fixed Income Portfolio .60% -- .20% .80%
Mid Cap Equity Portfolio .80% -- .10% .90%
Money Market Portfolio .40% -- .10% .50%
Global Fixed Income Portfolio .75% -- .25% 1.00%
Small Cap Equity Portfolio .95% -- .10% 1.05%
Large Cap Growth Portfolio .80% -- .10% .90%
Large Cap Value Portfolio .80% -- .10% .90%
Growth & Income Portfolio .80% -- .10% .90%
Balanced Portfolio .80% -- .10% .90%
BERGER INSTITUTIONAL PRODUCTS
TRUST(2)
Berger IPT--International Fund .85% -- .35% 1.20%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio .75% -- .04% .79%
Alger American Leveraged AllCap Portfolio(3) .85% -- .08% .93%
Alger American MidCap Growth Portfolio .80% -- .05% .85%
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC.
VP Value 1.00% -- .00% 1.00%
VP Income & Growth .70% -- .00% .70%
DREYFUS STOCK INDEX FUND .25% -- .01% .26%
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus VIF Disciplined Stock Portfolio .75% -- .06% .81%
VARIABLE INSURANCE PRODUCTS FUND,
VARIABLE INSURANCE PRODUCTS FUND
II, SERVICE CLASS II
Fidelity VIP Overseas Portfolio .73% .25% .18% 1.16%
Fidelity VIP Growth Portfolio .58% .25% .10% .93%
Fidelity VIP II Contrafund Portfolio .58% .25% .12% .95%
INVESCO VARIABLE INVESTMENT
FUNDS, INC.(4)
INVESCO VIF--High Yield Fund .60% -- .47% 1.07%
INVESCO VIF--Equity Income Fund .75% -- .42% 1.17%
LAZARD RETIREMENT SERIES, INC.(5)
Lazard Retirement Small Cap Portfolio .75% .25% .25% 1.25%
(1) Investors Mark Advisors, LLC voluntarily agreed to reimburse expenses
of each Portfolio of Investors Mark Series Fund, Inc. for the year
ended December 31, 1999 and will continue this arrangement until April
30, 2001 so that the annual expenses do not exceed the amounts set
forth above under "Total Annual Portfolio Expenses" for each Portfolio.
Absent such expense reimbursement, the Total Annual Portfolio Expenses
for the year ended December 31, 1999 were: 2.72% for the Money Market
Portfolio; 2.25% for the Intermediate Fixed Income Portfolio; 1.67% for
the Global Fixed Income Portfolio; 2.33% for the Mid Cap Growth
Portfolio; 1.72% for the Balanced Portfolio; 1.67% for the Growth &
Income Portfolio; 2.53% for the Small Cap Equity Portfolio; 1.49% for
the Large Cap Growth Portfolio; and 1.49% for the Large Cap Value
Portfolio.
(2) Berger LLC has agreed to waive its advisory fee and reimburse the
Berger IPT--International Fund for additional expenses to the extent
that normal operating expenses in any fiscal year exceed 1.20% of the
Fund's average daily net assets. Absent the voluntary waiver and
reimbursement for the year ended December 31, 1999, the Management Fee
would have been .85% and Total Annual Portfolio Expenses would have
been 2.40%.
(3) The Alger American Leveraged AllCap Portfolio's "Other Expenses"
include .01% of interest expense.
(4) The Fund's actual Total Annual Fund Operating Expenses were lower than
the figures shown because its custodian fees were reduced under expense
offset arrangements. The expense information presented has been
restated from the financials to reflect a change in the administrative
services fee.
Certain expenses of the Fund were absorbed voluntarily by INVESCO in
order to ensure that expenses did not exceed 1.05% of the High Yield
Fund's average net assets and 1.15% of the Equity Income Fund's average
net assets pursuant to a commitment between the Fund and INVESCO. This
commitment may be changed at any time following consultation with the
board of directors. Without such absorption, but excluding any expense
offset arrangements, Other Expenses and Total Annual Operating Expenses
for the fiscal year ended December 31, 1999 were 0.48% and 1.08%
respectively of the High Yield Fund's average net assets and 0.44% and
1.19% respectively of the Equity Income Fund's average net assets.
(5) Lazard Asset Management, Inc., the fund's investment adviser, has
voluntarily agreed to reimburse all expenses through December 31, 2000
to the extent total annual portfolio expenses exceed in any fiscal year
1.25% of the Portfolio's average daily net assets. Absent this expense
reimbursement, Total Portfolio Expenses for the year ended December 31,
1999 would have been 7.31% for the Lazard Retirement Small Cap
Portfolio.
5. DEATH BENEFIT
The primary purpose of the Policy is to provide Death Benefit protection on the
lives of the Insureds. While the Policy is in force, upon the death of the last
surviving Insured, the Beneficiary(ies) will receive the Death Proceeds. The
Death Proceeds equal the Death Benefit under the Policy less any Indebtedness.
The amount of the Death Benefit depends upon:
o the Specified Amount;
o Your Policy's Accumulation Value on the date of the last surviving
Insured's death; and
o the Death Benefit Option in effect at the time of death.
The Policy provides two Death Benefit options:
o a Level Death Benefit; and
o an Adjustable Death Benefit.
So long as the Policy remains in force, the Death Benefit under either option
will never be less than the Specified Amount.
Level Death Benefit Option. The amount of the Death Benefit under the Level
Death Benefit Option is the greater of:
1. the Specified Amount on the date of death of the last surviving
Insured; or
2. the Accumulation Value on the date of death of the last surviving
Insured multiplied by the applicable factor from the Table of Minimum
Death Benefit Corridor Percentages shown below.
Adjustable Death Benefit Option. The amount of the Death Benefit under the
Adjustable Death Benefit Option is the greater of:
1. the Specified Amount on the date of death of the last surviving
Insured plus the Accumulation Value on the date of death of the last
surviving Insured; or
2. the Accumulation Value on the date of death of the last surviving
Insured multiplied by the applicable factor from the Table of Minimum
Death Benefit Corridor Percentages shown below.
The applicable percentage is a percentage that is based on the attained Age of
the younger of the Insureds on the Policy Date plus the number of completed
Policy Years on the date that the Death Benefit is to be determined and is equal
to the following:
Attained Corridor Attained Corridor
Age Percentage Age Percentage
-------------- ------------ ------------- ---------------
0-40 250% 60 130%
41 243% 61 128%
42 236% 62 126%
43 229% 63 124%
44 222% 64 122%
45 215% 65 120%
46 209% 66 119%
47 203% 67 118%
48 197% 68 117%
49 191% 69 116%
50 185% 70 115%
51 178% 71 113%
52 171% 72 111%
53 164% 73 109%
54 157% 74 107%
55 150% 75-90 105%
56 146% 91 104%
57 142% 92 103%
58 138% 93 102%
59 134% 94 101%
95-100 100%
CHANGE IN DEATH BENEFIT OPTION
You may change the Death Benefit option after the Policy has been in force for
at least one year, subject to the following:
1. You must submit an Authorized Request;
2. once the Death Benefit option has been changed, it cannot be changed
again until the next policy Year;
3. if the Level Death Benefit Option is to be changed to the Adjustable
Death Benefit Option, You must submit proof satisfactory to Us that
both Insureds are still living;
4. if the Level Death Benefit Option is changed to the Adjustable Death
Benefit Option, the resulting Specified Amount can never be less than
the Minimum Base Policy Specified Amount. The Specified Amount will be
reduced to equal the Specified Amount less the Accumulation Value on
the date of change. This decrease will not result in any decrease in
Premiums or Surrender Charges; and
5. if the Adjustable Death Benefit Option is changed to the Level Death
Benefit Option, the Specified Amount will be increased by an amount
equal to the Accumulation Value on the date of the change. This
increase will not result in any increase in Premiums or Surrender
Charges.
Any change in a Death Benefit option will take effect on the Monthly Anniversary
Day on or following the date We approve the request for the change.
CHANGE IN SPECIFIED AMOUNT
You may change the Specified Amount of the Policy effective on any Monthly
Anniversary Day after the Policy has been in force at least one year, subject to
the following requirements. Once the Specified Amount has been changed, it
cannot be changed again until the next Policy Year.
Specified Amount Increase. To increase the Specified Amount You must:
1. submit an application for the increase;
2. submit proof satisfactory to Us that each Insured is an insurable
risk; and
3. pay any additional Premium which is required.
The Specified Amount can only be increased while the older Insured is age 90 or
less and the younger Insured is age 85 or less. A Specified Amount increase will
take effect on the Monthly Anniversary Day on or following the day We approve
the application for the increase provided both Insureds are alive on that day.
The Specified Amount increase must be for at least $100,000. Each increase will
have its own Surrender Charge schedule based on the increased issue Age, sex and
Rate Class of each Insured. The Rate Class that applies to any Specified Amount
increase may be different from the Rate Class that applies to the Initial Base
Policy Specified Amount. Each increase will have its own cost of insurance
schedule.
The following changes will be made to reflect the increase in Specified Amount:
1. the No-Lapse Monthly Minimum Premium will be increased;
2. an additional Surrender Charge for the increase in Specified Amount
will apply.
We will furnish You with documentation showing You the Rate Classes for the
Specified Amount increase, the amount of the increase and the additional
Surrender Charges.
Specified Amount Decrease. You must request by Authorized Request any decrease
in the Specified Amount. The decrease will take effect on the later of:
1. the Monthly Anniversary Day on or following the day We receive Your
request for the decrease; or
2. the Monthly Anniversary Day one year after the last change in
Specified Amount was made.
A Specified Amount decrease will be used to reduce any previous increases to the
Specified Amount which are then in effect starting with the latest increase and
continuing in the reverse order in which the increases were made. If any portion
of the decrease is left over after all Specified Amount increases have been
reduced to zero, it will be used to reduce the Initial Base Policy Specified
Amount. We will not permit a Specified Amount decrease that would reduce the
Specified Amount below the Minimum Base Policy Specified Amount. The applicable
Surrender Charge for the amount of decrease will be deducted from the
Accumulation Value.
The No-Lapse Monthly Minimum Premium will be reduced to reflect the Specified
Amount decrease.
GUARANTEED MINIMUM DEATH BENEFIT RIDER
You can elect to have a Guaranteed Minimum Death Benefit Rider added to Your
Policy. This rider guarantees that the Death Benefit under Your Policy will
never be less than the Specified Amount during the Guaranteed Minimum Death
Benefit (GMDB) period provided that the GMDB payment requirement has been met.
By meeting the Premium requirement, the Policy and any Riders will not lapse
even if the Policy's Cash Surrender Value is not sufficient to cover the Monthly
Deduction on a Monthly Anniversary Day during the Guarantee Period.
The GMDB Period is the longer of:
X from issue to the younger Insured's attained age;
X ten years from issue.
There is no separate charge for this rider but in order to have the GMDB
provided by the rider You must pay a certain level of Premiums each month which
is greater than the No-Lapse Monthly Minimum Premium. The GMDB Premium payment
requirement is met if the total Premiums paid during the Guarantee Period are at
least as large as the sum of cumulative GMDB Premiums paid less any partial
surrenders and less any Indebtedness are at least as large as the sum of the
GMDB monthly Premiums since the Policy Date. The GMDB Premiums equal the
Guarantee Minimum Death Benefit Premium times the number of Monthly Anniversary
Days that have occurred plus one. The initial monthly GMDB Premium is shown on
the Policy. The payment requirement for the GMDB rider must be met on each
Monthly Anniversary Day. Ask Your registered representative for the particulars
to Your own situation.
6. TAXES
NOTE: BMA has prepared the following information on federal income taxes as a
general discussion of the subject. It is not intended as tax advice to any
person. You should consult your own tax adviser about your own circumstances.
BMA has included an additional discussion regarding taxes in Part II.
LIFE INSURANCE IN GENERAL
Life insurance, such as this Policy, is a means of providing for death
protection and setting aside money for future needs. Congress recognized the
importance of such planning and provided special rules in the Internal Revenue
Code (Code) for life insurance.
Simply stated, these rules provide that You will not be taxed on the earnings on
the money held in Your life insurance policy until You take the money out.
Beneficiaries generally are not taxed when they receive the Death Proceeds upon
the death of the last Insured. Estate taxes may apply.
TAKING MONEY OUT OF YOUR POLICY
You, as the Owner, will not be taxed on increases in the value of Your Policy
until a distribution occurs either as a surrender or as a loan. If Your Policy
is a Modified Endowment Contract (MEC) any loans or withdrawals from the Policy
will be treated as first coming from earnings and then from Your investment in
the Policy. Consequently, these earnings are included in taxable income.
The Code also provides that any amount received from a MEC which is included in
income may be subject to a 10% penalty. The penalty will not apply if the income
received is:
(1) paid on or after the taxpayer reaches age 59 1/2;
(2) paid if the taxpayer becomes totally disabled (as that term is defined
in the Code); or
(3) in a series of substantially equal payments made annually (or more
frequently) for the life or life expectancy of the taxpayer.
If Your Policy is not a MEC, any surrender proceeds will be treated as first a
recovery of the investment in the Policy and to that extent will not be included
in taxable income. Furthermore, any loan will be treated as indebtedness under
the Policy and not as a taxable distribution. See "Federal Tax Status" in Part
II for more details.
DIVERSIFICATION
The Code provides that the underlying investments for a variable life policy
must satisfy certain diversification requirements in order to be treated as a
life insurance contract. We believe that the Investment Options are being
managed so as to comply with such requirements.
Under current Federal tax law, it is unclear as to the circumstances under which
You, because of the degree of control You exercise over the underlying
investments, and not Us would be considered the Owner of the shares of the
Investment Options. If You are considered the Owner of the investments, it will
result in the loss of the favorable tax treatment for the Policy. It is unknown
to what extent Owners are permitted to select Investment Options, to make
transfers among the Investment Options or the number and type of Investment
Options Owners may select from. If guidance from the Internal Revenue Service is
provided which is considered a new position, then the guidance would generally
be applied prospectively. However, if such guidance is considered not to be a
new position, it may be applied retroactively. This would mean that You, as the
Owner of the Policy, could be treated as the Owner of the Investment Options.
Due to the uncertainty in this area, BMA reserves the right to modify the Policy
in an attempt to maintain favorable tax treatment.
7. ACCESS TO YOUR MONEY
LOANS
We will loan You money while the Policy is in force and not in a Grace Period.
The Policy will be the sole security for the loan. We will advance a loan amount
not to exceed the Loan Value. The loan must be secured by proper assignment of
the Policy. We may defer granting loans but not for more than six months, or the
time period required by your state.
The Accumulation Value securing the loan is transferred to the Loan Account on a
pro-rata basis. The amount transferred from each Investment Option and the Fixed
Account will equal the ratio of the value each bears to the total unloaned
Accumulation Value. If You desire other than the above, You may specify the
specific Investment Option from which the transfer is to be made.
Any Indebtedness will be deducted from any amount payable under the Policy.
No new loan may be taken which, in combination with existing loans and accrued
interest, is greater than the Loan Value.
Effect of a Loan. A Policy loan will result in Accumulation Value being
transferred from the Investment Options or the Fixed Account to the Loan
Account. A Policy loan, whether or not repaid, will have a permanent effect on
the death benefits and Policy values, because the amount of the Policy loan
transferred to the Loan Account will not share in the investment results of the
Investment Options while the Policy loan is outstanding. If the Loan Account
earnings rate is less than the investment performance of the selected Investment
Options and/or the Fixed Account, the values and benefits under the Policy will
be reduced (and the Policy may even terminate) as a result of the Policy loan.
Furthermore, if not repaid, the Policy loan will reduce the amount of Death
Benefit and Cash Surrender Value.
Loan Value. The loan value is equal to 90% of the Accumulation Value as of the
date the Authorized Request for the loan is received at the Service Center less:
(a) an amount equal to the Surrender Charge, if any, that applies if the
Policy is surrendered in full;
(b) any existing Indebtedness;
(c) interest on all Indebtedness on the Policy to the next Policy
Anniversary; and
(d) prior to the ninth Policy Month, an amount equal to the balance of the
Monthly Deductions for the first Policy Year; or on or after the ninth
Policy Month, an amount equal to the sum of the next three Monthly
Deductions.
Loan Interest (Charged). You must pay interest on each Policy Anniversary at the
loan interest rate which is shown on Your Policy Schedule. The interest rate
applies to the unpaid balance of the loan. The first interest payment is due on
the first Policy Anniversary following the date the loan was made.
If you do not pay loan interest, we will transfer the difference between the
value of the Loan Account and the Indebtedness from the Investment Options and
the Fixed Account on a pro-rata basis to the Loan Account.
Interest Credited. The Accumulation Value in the Loan Account will earn interest
at a rate not less than 5% for Policy Years 1-20 and 5.5% for Policy Years 21
and later.
Loan Repayment. You may repay loans at any time while the Policy is in force.
There is no minimum loan repayment amount. Any loan repayment received will be
repaid according to Your current allocation of Premiums.
Amounts received by us will be applied as Premiums unless we are otherwise
instructed to apply such amounts as repayment of the loan.
Termination for Maximum Indebtedness. The Policy will terminate when
Indebtedness equals or exceeds the Accumulation Value less the Surrender Charge,
if any, that applies if the Policy is surrendered in full. Termination will be
effective 61 days after We send notice of the termination to Your last known
address and the last known address of any assignee of record. A termination of
the Policy with a loan outstanding may have Federal income tax consequences.
(See Part II--"Federal Tax Status--Tax Treatment of Loans and Surrenders").
SURRENDERS
Total Surrender. You may terminate the Policy at any time by submitting an
Authorized Request to the Service Center. We will pay the Cash Surrender Value
to You as of the Business Day the Authorized Request is received in good order
and Our liability under the Policy will cease. We may assess a Surrender Charge.
Partial Surrender. After the first Policy Year, You may surrender a part of the
Cash Surrender Value by submitting an Authorized Request to the Service Center.
All partial surrenders are subject to the following:
1. A partial surrender must be for at least $500.
2. Unless You specify otherwise, the partial surrender will be deducted
on a pro-rata basis from the Fixed Account and the Investment Options.
The Surrender Charge and the Partial Surrender Fee are also deducted
from the Accumulation Value. You may specify if a different allocation
method is to be used. However the proportion to be taken from the
Fixed Account may never be greater than the Fixed Account's proportion
of the total unloaned Accumulation Value.
3. You cannot replace the surrendered Cash Surrender Value. Unlike a loan
repayment, all additional deposits will be considered Premium and
subject to the Premium charge.
4. Upon a partial surrender, the Specified Amount may be reduced if the
Level Death Benefit Option is in effect. The Specified Amount will not
be reduced if the Adjustable Death Benefit Option is in effect. The
Specified Amount will be reduced by the amount of the partial
surrender if the Policy is not in corridor. (A Policy is in corridor
if the Accumulation Value exceeds certain specified percentages as set
forth in the Internal Revenue Code.)
5. You can make a partial surrender twice each Policy Year. The partial
surrender will be limited to such amounts so that the partial
surrender will not reduce the Specified Amount below the Minimum Base
Policy Specified Amount, or reduce the remaining Cash Surrender Value
below $500.
6. We may assess a pro-rata portion of the Surrender Charge for any
amount by which the Specified Amount is reduced. We may also assess a
Partial Surrender Fee.
8. OTHER INFORMATION
BMA
Business Men's Assurance Company of America ("BMA" or the "Company"), BMA Tower,
700 Karnes Blvd., Kansas City, Missouri 64108 was incorporated on July 1, 1909
under the laws of the state of Missouri. BMA is licensed to do business in the
District of Columbia, Puerto Rico and all states except New York. BMA operates
as a reinsurer in the state of New York. BMA is a wholly owned subsidiary of
Assicurazioni Generali S.p.A., which is the largest insurance organization in
Italy.
THE SEPARATE ACCOUNT
We have established a separate account, BMA Variable Life Account A (Separate
Account), to hold the assets that underlie the Policies.
The assets of the Separate Account are being held in Our name on behalf of the
Separate Account and legally belong to Us. However, those assets that underlie
the Policies, are not chargeable with liabilities arising out of any other
business We may conduct. All the income, gains and losses (realized and
unrealized) resulting from those assets are credited to or charged against the
Policies and not against any other Policies We may issue.
DISTRIBUTORS
Jones & Babson, Inc., 700 Karnes Boulevard, Kansas City, Missouri 64108, acts as
a distributor of the Policies. Jones & Babson, Inc. was organized under the laws
of the state of Missouri on February 23, 1959. Jones & Babson, Inc., is a member
of the National Association of Securities Dealers, Inc., and is a wholly owned
subsidiary of BMA.
The Policy will be sold by individuals who, in addition to being licensed as
life insurance agents for BMA, are also National Association of Securities
Dealers (NASD) registered representatives. These persons will receive
compensation for this sale.
ADMINISTRATION
We have hired GENELCO, Incorporated, 9735 Landmark Parkway Drive, St. Louis,
Missouri to perform certain administrative services regarding the Policies. The
administrative services include issuance of the Policy and maintenance of Policy
records. Claims are handled jointly between BMA and GENELCO, Incorporated.
SUSPENSION OF PAYMENTS OR TRANSFERS
We may be required to suspend or postpone any payments or transfers involving an
Investment Option for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the
Investment Options is not reasonably practicable or BMA cannot
reasonably value the shares of the Investment Options;
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of owners.
We may defer the portion of any transfer, amount payable or surrender, or Policy
Loan from the Fixed Account for not more than six months, or the time period
required by your state.
OWNERSHIP
Owner. You, as the Owner of the Policy, have all of the rights under the Policy.
If You die while the Policy is still in force and both of the Insureds are
living, ownership passes to a contingent Owner or if none, then Your estate
becomes the Owner.
Joint Owner. The Policy can be owned by Joint Owners. Authorization of both
Joint Owners is required for all Policy changes except for telephone transfers.
Beneficiary. The Beneficiary is the person(s) or entity You name to receive any
Death Proceeds. The Beneficiary is named at the time the Policy is issued unless
changed at a later date. Unless an irrevocable Beneficiary has been named, You
can change the Beneficiary at any time before the last insured dies. If there is
an irrevocable Beneficiary, all Policy changes except Premium allocations and
transfers require the consent of the Beneficiary.
Assignment. You can assign the Policy.
PART II
EXECUTIVE OFFICERS AND DIRECTORS OF BMA
As of May 1, 2000 the directors and executive officers of BMA and their business
experience for the past five years are as follows:
Name and Principal Positions and Offices With Depositor and
Business Address* Business Experience for the Past Five Years
Giorgio Balzer Director, Chairman of the Board and Chief Executive
Officer of BMA; U.S. Representative--Generali--US Branch.
Robert Thomas Rakich Director, President and Chief Operating Officer of BMA
from 1995 to present; President and Chief Executive
Officer, Laurentian Capital Corp., 1988 to October, 1995.
Dennis Keith Cisler Senior Vice President--Information Systems of BMA from
1991--present.
David Lee Higley Senior Vice President and Chief Financial Officer of BMA
from 1989--present.
Stephen Stanley Soden Senior Vice President--Financial Group of BMA from 1994
to present; President & Executive Vice President from
1985 to 1996, BMA Financial Services, Inc.
Michael Kent Deardorff Senior Vice President--Marketing BMA Financial Group from
1996--present; Vice President Annuity from 1994 to 1996;
Vice President--Advance Markets from 1990 to 1994.
Edward Scott Ritter Senior Vice President--Insurance Services, Corporate
Development & Communications of BMA from 1998 to present;
Vice President from 1990 to 1998.
David Allen Gates Vice President and General Counsel of BMA from 1998 to
present; Regulatory Affairs Vice President from 1991 to
1998.
Robert Noel Sawyer Director since 1997, Senior Vice President and Chief
Investment Officer of BMA from 1990 to present.
Vernon Wirt Voorhees II Director since 1995, Senior Vice President--Corporate
Services and Secretary of BMA 1990 to present; Senior
Vice President--Finance 1983-1990.
Margaret Mary Heidkamp Vice President--Operations, Variable and Asset
Accumulation Products of BMA from 1998 to present; Vice
President, Management Services from 1986 to 1998.
Jay Brian Kinnamon Vice President and Corporate Actuary of BMA from 1991 to
present.
Susan Annette Sweeney Vice President--Treasurer & Controller of BMA from 1995
to present; Chief Financial Officer--Dean Machinery
1995; Manager of Finance--Jackson County, Missouri from
1991 to 1995.
Gerald Wayne Selig Vice President and Actuary--Accumulation Products of BMA
from 1998 to present; Actuary--Accumulation Products from
1996 to 1998; Actuary--Qualified Plan Services from 1989
to 1996.
Thomas Morton Bloch Director of BMA since 1993; Teacher, St. Francis Xavier
School from August 1995 to present; President and Chief
Executive Officer--H&R Block, Inc. until 1995.
Mel G. Carvill Director of BMA since March 9, 2000; Managing Director,
Generali Worldwide Insurance Company, Ltd., Channel
Islands--GUERNSEY since 1993.
William Thomas Grant II Director of BMA since 1990; President and Chief Executive
Officer, Chairman of the Board--LabOne, from 1997 to
present; Chairman and Chief Executive Officer Seafield
Capital Corporation from 1993 to 1997.
Donald Joyce Hall, Jr. Director of BMA since 1990; Hallmark Vice President--
Creative--Hallmark Cards, Inc.; Hallmark Vice
President--Product Development--Hallmark; Hallmark Vice
President--Creative--Hallmark; General Manager--
Keepsakes--Hallmark; Executive Assistant to Executive
Vice President--Hallmark; Director, Specialty Store
Development--Hallmark.
Renzo Isler Director of BMA since December 31, 1999; Joint- Manager
Life Division, Assicurazioni Generali, S.p.A., Trieste,
Italy from 1991 to 1998; Head of Life
Branch--Assicurazioni Generali, S.p.A., Trieste, Italy
since 1998.
Allan Drue Jenning Director of BMA since 1990; Chairman of the Board,
President and Chief Executive Officer--Kansas City Power
& Light Company.
David Woods Kemper Director of BMA since 1991; Chairman of the Board
President and Chief Executive Officer--Commerce
Bancshares, Inc. John Kessander Lundberg. Director of BMA
since 1990; Retired.
John Pierre Mascotte Director of BMA since 1990; President and Chief Executive
Officer--Blue Cross/Blue Shield of Kansa City,
Chairman--Johnson & Higgins of Missouri, Inc.; Chairman
and Chief Executive Officer--The Continental Corporation.
Andrea Rabusin Director of BMA since December 31, 1999; Manager, Pension
Fund Investments Assicurazioni Generali, S.p.A., Trieste,
Italy since 1999; Portfolio Manager--Assicurazioni
Generali, S.p.A., Trieste, Italy 1993-1999.
* Principal business address is BMA Tower, 700 Karnes Blvd., Kansas City,
Missouri 64108-3306.
OFFICERS AND DIRECTORS OF JONES & BABSON, INC.
As of May 1, 2000, the following are the officers and directors of Jones &
Babson, Inc. and their position with Jones & Babson, Inc.
Name and Principal
Business Address* Position with Jones & Babson, Inc.
Stephen S. Soden President, Chairman and Chief
Executive Officer
P. Bradley Adams Vice President, Chief Financial Officer
and Treasurer
William G. Cooke Chief Compliance Officer
Martin A. Cramer Legal and Regulatory Affairs-Vice
President and Secretary
Constance B. Martin Assistant Vice President
Giorgio Balzer Director
Robert T. Rakich Director
Edward S. Ritter Director
Robert N. Sawyer Director
Vernon W. Voorhees II Director
* Principal business address is 700 Karnes Boulevard,
Kansas City, Missouri 64108-3306.
VOTING
In accordance with Our view of present applicable law, We will vote the shares
of the Investment Options at special meetings of shareholders in accordance with
instructions received from Owners having a voting interest. We will vote shares
for which We have not received instructions in the same proportion as We vote
shares for which We have received instructions. We will vote shares We own in
the same proportion as We vote shares for which We have received instructions.
The funds do not hold regular meetings of shareholders.
If the Investment Company Act of 1940 or any regulation thereunder is amended or
if the present interpretation of these laws should change, and as a result We
determine that We are permitted to vote the shares of the funds in Our own
right, We may elect to do so.
The voting interests of the Owner in the Investment Options will be determined
as follows: Owners may cast one vote for each $100 of Accumulation Value of a
Policy which is allocated to an Investment Option on the record date. Fractional
votes are counted.
We will determine the number of shares which a person has a right to vote as of
the date to be chosen by Us not more than sixty (60) days prior to the meeting
of the fund. Voting instructions will be solicited by written communication at
least fourteen (14) days prior to such meeting.
Each Owner having such a voting interest will receive periodic reports relating
to the Investment Options in which he or she has an interest, proxy material and
a form with which to give such voting instructions.
Disregard of Voting Instructions. We may, when required to do so by state
insurance authorities, vote shares of the funds without regard to instructions
from Owners if such instructions would require the shares to be voted to cause
an Investment Option to make, or refrain from making, investments which would
result in changes in the sub-classification or investment objectives of the
Investment Option.
We may also disapprove changes in the investment policy initiated by Owners or
trustees of the funds, if such disapproval is reasonable and is based on a good
faith determination by Us that the change would violate state or federal law or
the change would not be consistent with the investment objectives of the
Investment Options or which varies from the general quality and nature of
investments and investment techniques used by other funds with similar
investment objectives underlying other variable contracts offered by Us or of an
affiliated company. In the event We disregard voting instructions, a summary of
this action and the reasons for such action will be included in the next
semi-annual report to Owners.
LEGAL OPINIONS
Blazzard, Grodd & Hasenauer, P.C., Westport, Connecticut has provided advice on
certain matters relating to the Federal securities and income tax laws in
connection with the Policies.
REDUCTION OR ELIMINATION OF SURRENDER CHARGE
We may reduce or eliminate the amount of the Surrender Charge on the Policies
when sales of the Policies are made to individuals or to a group of individuals
in a manner that results in savings of sales expenses. We will determine whether
the Surrender Charge will be reduced after We examine all the relevant factors
such as:
1. We will consider the size and type of group to which sales are to be
made. Generally, the sales expenses for a larger group are less than
for a smaller group because of the ability to implement large numbers
of Policies with fewer sales contacts.
2. We will consider the total amount of Premiums to be received. Per
Policy sales expenses are likely to be less on larger Premium payments
than on smaller ones.
3. We will consider any prior or existing relationship with Us. Per
Policy sales expenses are likely to be less when there is a prior
existing relationship because of the likelihood of implementing the
Policy with fewer sales contacts.
4. There may be other circumstances, of which We are not presently aware,
which could result in reduced sales expenses.
If, after consideration of the foregoing factors, We determine that there will
be a reduction in sales expenses, We may provide for a reduction or elimination
of the Surrender Charge.
We may eliminate the Surrender Charge when the Policies are issued to an
officer, director or employee of BMA or any of Our affiliates. In no event will
any reduction or elimination of the Surrender Charge be permitted where the
reduction or elimination will be unfairly discriminatory to any person.
NET AMOUNT AT RISK
Level Death Benefit. For the Level Death Benefit Option, the Net Amount at Risk
is the greater of:
1. the Specified Amount divided by 1.0032737 less the Accumulation Value;
and
2. the Accumulation Value times the applicable Minimum Death Benefit
Corridor Percentage (shown in Part I-Section 5-Death Benefit) divided
by 1.0032737, less the Accumulation Value.
Adjustable Death Benefit Option. For the Adjustable Death Benefit Option, the
Net Amount at Risk is the greater of:
1. the Specified Amount plus the Accumulation Value divided by 1.0032737,
less the Accumulation Value, and
2. the Accumulation Value times the applicable Minimum Death Benefit
Corridor Percentage divided by 1.0032737, less the Accumulation Value.
MATURITY DATE
The Maturity Date is the date the Accumulation Value of the Policy, less
Indebtedness, is paid to You, if at least one of the Insureds is living and the
Policy is in force. The Maturity Date is the Policy Anniversary following the
younger Insureds 100th birthday. Your Policy will automatically be extended
beyond the Maturity Date unless You requested to have the Policy matured.
If all past due Monthly Deductions have been paid, the Policy will continue in
force beyond the Maturity Date until the earlier of the death of the last
Insured or the date that We receive Your request to surrender the Policy for its
Cash Surrender Value..
No rider will be extended past the original Policy Maturity Date.
Once the Maturity Date extension is in place, the Death Benefit will be the
Accumulation Value, less any Indebtedness. The Monthly Deduction will no longer
be deducted and no new Premiums will be accepted. Interest or loans, if any,
will continue to accrue and will be added to the total Indebtedness.
Loan repayments will be accepted. There is no charge for this rider.
MISSTATEMENT OF AGE OR SEX
The ages of the Insureds are the Ages as of their last birthday on the Policy
Date or Policy Anniversary. We determine this from the date of birth shown in
the application. If the age or sex shown on the Policy Schedule is not correct,
we will adjust the Death Benefit to that which would be purchased by the most
recent cost of insurance charge at the correct age and sex.
OUR RIGHT TO CONTEST
We cannot contest the validity of the Policy except in the case of fraud after
it has been in effect during the Insureds' lifetime for two years from the
Policy Date. If the Policy is reinstated, the two-year period is measured from
the date of reinstatement. In addition, if either of the Insureds commits
suicide in the two-year period, or such period as specified in state law, the
benefit payable will be limited to Premiums paid less loans and less any
surrenders.
PAYMENT OPTIONS
The Death Proceeds may be paid in a lump sum or may be applied to one of the
following Payment Options:
Option 1-- Life Annuity
Option 2-- Life Annuity with 120 or 240 Monthly Annuity Payments Guaranteed
Option 3-- Joint and Last Survivor Annuity
Option 4-- Joint and Last Survivor Annuity with 120 or 240 Monthly Annuity
Payments Guaranteed
You or the Beneficiary can select to have the Payment Options payable on either
a fixed or variable basis.
FEDERAL TAX STATUS
NOTE: The following description is based upon Our understanding of current
federal income tax law applicable to life insurance in general. We cannot
predict the probability that any changes in such laws will be made. Purchasers
are cautioned to seek competent tax advice regarding the possibility of such
changes. Section 7702 of the Internal Revenue Code of 1986, as amended ("Code"),
defines the term "life insurance contract" for purposes of the Code. We believe
that the Policies to be issued will qualify as "life insurance contracts" under
Section 7702. We do not guarantee the tax status of the Policies. Purchasers
bear the complete risk that the Policies may not be treated as "life insurance"
under federal income tax laws. Purchasers should consult their own tax advisers.
It should be further understood that the following discussion is not exhaustive
and that special rules not described in this prospectus may be applicable in
certain situations.
Introduction. The discussion in this prospectus is general in nature and is not
intended as tax advice. Each person concerned should consult a competent tax
adviser. No attempt is made to consider any applicable state or other tax laws.
Moreover, this discussion is based upon Our understanding of current Federal
income tax laws as they are currently interpreted. No representation is made
regarding the likelihood of continuation of those current Federal income tax
laws or of the current interpretations by the Internal Revenue Service.
BMA is taxed as a life insurance company under the Code. For Federal income tax
purposes, the Separate Account is not a separate entity from BMA and its
operations form a part of BMA.
Diversification. Section 817(h) of the Code imposes certain diversification
standards on the underlying assets of variable life insurance policies. The Code
provides that a variable life insurance policy will not be treated as life
insurance for any period (and any subsequent period) for which the investments
are not, in accordance with regulations prescribed by the United States Treasury
Department ("Treasury Department"), adequately diversified. Disqualification of
the Policy as a life insurance contract would result in imposition of federal
income tax to the Owner with respect to earnings allocable to the Policy prior
to the receipt of payments under the Policy. The Code contains a safe harbor
provision which provides that life insurance policies such as these Policies
meet the diversification requirements if, as of the close of each quarter, the
underlying assets meet the diversification standards for a regulated investment
company and no more than fifty-five (55%) percent of the total assets consist of
cash, cash items, U.S. Government securities and securities of other regulated
investment companies. There is an exception for securities issued by the U.S.
Treasury in connection with variable life insurance policies.
On March 2, 1989, the Treasury Department issued Regulations (Treas. Reg.
Section 1.817-5), which established diversification requirements for the
investment portfolios underlying variable contracts such as the Policies. The
Regulations amplify the diversification requirements for variable contracts set
forth in the Code and provide an alternative to the safe harbor provision
described above. Under the Regulations, an investment portfolio will be deemed
adequately diversified if:
(i) no more than 55% of the value of the total assets of the portfolio is
represented by any one investment;
(ii) no more than 70% of the value of the total assets of the portfolio is
represented by any two investments;
(iii) no more than 80% of the value of the total assets of the portfolio is
represented by any three investments; and
(iv) no more than 90% of the value of the total assets of the portfolio is
represented by any four investments.
For purposes of these Regulations, all securities of the same issuer are treated
as a single investment.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."
BMA intends that each Investment Option underlying the Policies will be managed
by the managers in such a manner as to comply with these diversification
requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of the
investments of the Separate Account will cause the Owner to be treated as the
Owner of the assets of the Separate Account, thereby resulting in the loss of
favorable tax treatment for the Policy. At this time it cannot be determined
whether additional guidance will be provided and what standards may be contained
in such guidance.
The amount of Owner control which may be exercised under the Policy is different
in some respects from the situations addressed in published rulings issued by
the Internal Revenue Service in which it was held that the policy owner was not
the owner of the assets of the separate account. It is unknown whether these
differences, such as the Owner's ability to transfer among investment choices or
the number and type of investment choices available, would cause the Owner to be
considered as the Owner of the assets of the Separate Account.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Owner being
retroactively determined to be the Owner of the assets of the Separate Account.
Due to the uncertainty in this area, BMA reserves the right to modify the Policy
in an attempt to maintain favorable tax treatment.
Tax Treatment of the Policy. The Policy has been designed to comply with the
definition of life insurance contained in Section 7702 of the Code. Although
some interim guidance has been provided and proposed regulations have been
issued, final regulations have not been adopted. Section 7702 of the Code
requires the use of reasonable mortality and other expense charges. In
establishing these charges, BMA has relied on the interim guidance provided in
IRS Notice 88-128 and proposed regulations issued on July 5, 1991. Currently,
there is even less guidance as to a Policy issued on a substandard risk basis
and thus it is even less clear whether a Policy issued on such basis would meet
the requirements of Section 7702 of the Code.
While BMA has attempted to comply with Section 7702, the law in this area is
very complex and unclear. There is a risk, therefore, that the Internal Revenue
Service will not concur with BMA's interpretations of Section 7702 that were
made in determining such compliance. In the event the Policy is determined not
to so comply, it would not qualify for the favorable tax treatment usually
accorded life insurance policies. Owners should consult their tax advisers with
respect to the tax consequences of purchasing the Policy.
Policy Proceeds. The tax treatment accorded to loan proceeds and/or surrender
payments from the Policies will depend on whether the Policy is considered to be
a MEC. (See "Tax Treatment of Loans and Surrenders.") Otherwise, BMA believes
that the Policy should receive the same federal income tax treatment as any
other type of life insurance. As such, the death benefit thereunder is
excludable from the gross income of the Beneficiary under Section 101(a) of the
Code. Also, the Owner is not deemed to be in constructive receipt of the Cash
Surrender Value, including increments thereon, under a Policy until there is a
distribution of such amounts.
Federal, state and local estate, inheritance and other tax consequences of
ownership, or receipt of Policy proceeds, depend on the circumstances of each
Owner or Beneficiary.
Tax Treatment of Loans and Surrenders. Section 7702A of the Code sets forth the
rules for determining when a life insurance policy will be deemed to be a MEC. A
MEC is a contract which is entered into or materially changed on or after June
21, 1988 and fails to meet the 7-pay test. A Policy fails to meet the 7-pay test
when the cumulative amount paid under the Policy at any time during the first 7
Policy Years exceeds the sum of the net level premiums which would have been
paid on or before such time if the Policy provided for paid-up future benefits
after the payment of seven (7) level annual premiums. A material change would
include any increase in the future benefits or addition of qualified additional
benefits provided under a policy unless the increase is attributable to: (1) the
payment of premiums necessary to fund the lowest death benefit and qualified
additional benefits payable in the first seven policy years; or (2) the
crediting of interest or other earnings (including policyholder dividends) with
respect to such premiums.
Furthermore, any Policy received in exchange for a Policy classified as a MEC
will be treated as a MEC regardless of whether it meets the 7-pay test. However,
an exchange under Section 1035 of the Code of a life insurance policy entered
into before June 21, 1988 for the Policy will not cause the Policy to be treated
as a MEC if no additional premiums are paid.
Due to the flexible premium nature of the Policy, the determination of whether
it qualifies for treatment as a MEC depends on the individual circumstances of
each Policy.
If the Policy is classified as a MEC, then surrenders and/or loan proceeds are
taxable to the extent of income in the Policy. Such distributions are deemed to
be on a last-in, first-out basis, which means the taxable income is distributed
first. Loan proceeds and/or surrender payments, including those resulting from
the termination of the Policy, may also be subject to an additional 10% federal
income tax penalty applied to the income portion of such distribution. The
penalty shall not apply, however, to any distributions:
(1) made on or after the date on which the taxpayer reaches age 59 1/2;
(2) which is attributable to the taxpayer becoming disabled (within the
meaning of Section 72(m)(7) of the Code); or
(3) which is part of a series of substantially equal periodic payments
made not less frequently than annually for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life
expectancies) of such taxpayer and his beneficiary.
If a Policy is not classified as a MEC, then any surrenders shall be treated
first as a recovery of the investment in the Policy which would not be received
as taxable income. However, if a distribution is the result of a reduction in
benefits under the Policy within the first fifteen years after the Policy is
issued in order to comply with Section 7702, such distribution will, under rules
set forth in Section 7702, be taxed as ordinary income to the extent of income
in the Policy.
Any loans from a Policy which is not classified as a MEC, will be treated as
indebtedness of the Owner and not a distribution. Upon complete surrender or
termination of the Policy, if the amount received plus loan indebtedness exceeds
the total premiums paid that are not treated as previously surrendered by the
Owner, the excess generally will be treated as ordinary income.
Personal interest payable on a loan under a Policy owned by an individual is
generally not deductible. Furthermore, no deduction will be allowed for interest
on loans under Policies covering the life of any employee or officer of the
taxpayer or any person financially interested in the business carried on by the
taxpayer to the extent the indebtedness for such employee, officer or
financially interested person exceeds $50,000. The deductibility of interest
payable on Policy loans may be subject to further rules and limitations under
Sections 163 and 264 of the Code.
You should seek competent tax advice on the tax consequences of taking loans,
distributions, exchanging or surrendering any Policy.
Tax Treatment of Payment Options. Under the Code, a portion of the Payment
Option payments which are in excess of the death benefit proceeds are included
in the Beneficiary's taxable income. Under a Payment Option payable for the
lifetime of the Beneficiary, the death benefit proceeds are divided by the
Beneficiary's life expectancy (or joint life expectancy in the case of a joint
and survivor option) and proceeds received in excess of these prorated amounts
are included in taxable income. The value of the death benefit proceeds is
reduced by the value of any period certain or refund guarantee. Under a fixed
payment or fixed period option, the death benefit proceeds are prorated by
dividing the proceeds over the payment period under the option. Any payments in
excess of the prorated amount will be included in taxable income.
Multiple Policies. The Code further provides that multiple MECs which are issued
within a calendar year period to the same Owner by one company or its affiliates
are treated as one MEC for purposes of determining the taxable portion of any
loans or distributions. Such treatment may result in adverse tax consequences
including more rapid taxation of the loans or distributed amounts from such
combination of contracts. You should consult a tax adviser prior to purchasing
more than one MEC in any calendar year period.
Tax Treatment of Assignments. An assignment of a Policy or the change of
ownership of a Policy may be a taxable event. You should therefore consult a
competent tax adviser should you wish to assign or change the Owner of Your
Policy.
Qualified Plans. The Policies may be used in conjunction with certain Qualified
Plans. Because the rules governing such use are complex, you should not do so
until you have consulted a competent Qualified Plans consultant.
Income Tax Withholding. All distributions or the portion thereof which is
includible in gross income of the Owner are subject to federal income tax
withholding. However, the Owner in most cases may elect not to have taxes
withheld. The Owner may be required to pay penalties under the estimated tax
rules, if the Owner's withholding and estimated tax payments are insufficient.
REPORTS TO OWNERS
At least once each calendar year We will furnish You with a report showing the
amount of Death Benefit, Accumulation Value, Premiums paid since the last
report, the amount of Debt and any other information as may be required by law.
Any reports will be sent to Your last known address.
Upon request You are entitled to a receipt of Premium payment.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account or the
Co-Distributors are a party or to which the assets of the Separate Account are
subject. We are not involved in any litigation that is of material importance in
relation to our total assets or that relates to the Separate Account.
EXPERTS
The financial statements of BMA Variable Life Account A at December 31, 1999 and
the related statements of operations and changes in net assets for the year
ended December 31, 1999, and for the period from December 1, 1998 (inception) to
December 31, 1998, and the consolidated financial statements of Business Men's
Assurance Company of America at December 31, 1999 and 1998, and for each of the
three years in the period ended December 31, 1999, have been audited by
___________, independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
FINANCIAL STATEMENTS
The financial statements of the Separate Account and BMA follow.
(to be filed by amendment).
APPENDIX A
ILLUSTRATION OF POLICY VALUES
In order to show You how the Policy works, We created some hypothetical
examples. We chose a male and female age 55, a male and female both age 65 and a
male and female both age 75. Our hypothetical insureds are in good health, do
not smoke and qualify for preferred non-tobacco rates. The initial and Planned
Premiums are shown in the upper portion of each illustration. The Death
Proceeds, Accumulation Vales and Cash Surrender Values would be lower if either
Insured was a standard non-tobacco, tobacco or special Rate Class since the cost
of the insurance charges would increase.
There are three illustrations - all of which are based on the above. We also
assumed that the underlying Investment Option had gross rates of return of 0%,
6%, 12%. This means that the underlying Investment Option would earn these rates
of return before the deduction of the operating expenses (including the
management fee). When these costs are taken into account, the net annual
investment return rates (net of an average of approximately .91% for these
charges) are approximately - .91%, 5.09%, and 11.09%.
It is important to be aware that the illustrations assume a level rate of return
for all years. If the actual rate of return moves up and down over the years
instead of remaining level, this may make a big difference in the long-term
investment results of Your Policy. In order to properly show You how the Policy
actually works, We calculated values for the Accumulation Value, Cash Surrender
Value and the Death Proceeds. The Death Proceeds are the Death Benefit minus any
outstanding loans and loan interest accrued.
We used the charges We described in the Expenses Section of the prospectus.
These charges are: (1) Premium Charge; (2) Policy Charge; (3) Per $1,000 of
Specified Amount Charge; and (4) Risk Charge. We also deducted for the cost of
the insurance based on both the current charges and the guaranteed charges. The
values also assume that each Investment Option will incur expenses annually
which are assumed to be approximately .91% of the average net assets of the
Investment Option. This is the average of the fees and expenses of the
Investment Options in 1999. The expenses of .91% reflect the voluntary waiver of
certain advisory fees and/or the reimbursement of operating expenses for certain
Investment Options (as noted under "Expenses - Investment Option Expenses" in
Part I of this prospectus). If the advisory fees had not been waived and/or if
expenses had not been reimbursed, the average expenses would have been
approximately 1.66%. The investment advisers currently anticipate that the
current waiver and/or reimbursement arrangements will continue through at least
May 1, 2001 to the extent necessary to maintain competitive total annual
portfolio expense levels as described under "Expenses - Investment Option
Expenses." However, certain advisers have the right to terminate waivers and/or
reimbursements at any time at their sole discretion. If the waiver and/or
reimbursement arrangements were not in effect, the Death Proceeds, Accumulation
Values and the Cash Surrender Values shown in the illustrations below would be
lower. The illustrations assume no loans were taken.
There is also a column labeled "Premiums Accumulated at 5% Interest Per Year."
This shows how the Premium grows if it was invested at 5% per year.
We will furnish You, upon request, a comparable personalized illustration
reflecting each proposed Insured's Age, Rate Class, Specified Amount, the
Planned Premiums, and reflecting both the current cost of insurance and the
guaranteed cost of insurance.
BMA
Clarity Survivorship Variable Universal Life
Male Age 55 Preferred Non-Tobacco
Female Age 55 Preferred Non-Tobacco
Initial Specified Amount: $500,000
Planned Premium: $4,339.92
Assuming Guaranteed Charges
Death Benefit Option: Level
Death Proceeds Accumulation Value Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
Accumulated Annual Investment Return of Annual Investment Return of Annual Investment Return of
End of at 5%
Policy Interest 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
Year Per Year (-0.91% Net) (5.09% Net) (11.09% Net)(-0.91% Net)(5.09% Net)(11.09% Net) (-0.91% Net)(5.09% Net) (11.09% Net)
1 4,557 500,000 500,000 500,000 3,006 3,213 3,422 0 0 0
2 9,342 500,000 500,000 500,000 6,673 7,299 7,951 2,333 2,959 3,611
3 14,366 500,000 500,000 500,000 10,205 11,484 12,866 5,865 7,144 8,526
4 19,641 500,000 500,000 500,000 13,592 15,758 18,190 9,686 11,852 14,284
5 25,180 500,000 500,000 500,000 16,817 20,108 23,950 13,345 16,636 20,478
6 30,996 500,000 500,000 500,000 19,864 24,516 30,169 16,826 21,478 27,131
7 37,102 500,000 500,000 500,000 22,707 28,958 36,868 20,103 26,354 34,264
8 43,514 500,000 500,000 500,000 25,314 33,400 44,061 23,144 31,230 41,891
9 50,247 500,000 500,000 500,000 27,643 37,796 51,758 25,907 36,060 50,022
10 57,316 500,000 500,000 500,000 29,646 42,095 59,963 28,344 40,793 58,661
11 64,739 500,000 500,000 500,000 31,440 46,418 68,874 30,355 45,333 67,789
12 72,533 500,000 500,000 500,000 32,797 50,527 78,326 31,929 49,659 77,458
13 80,717 500,000 500,000 500,000 33,656 54,354 88,328 33,005 53,703 87,677
14 89,309 500,000 500,000 500,000 33,949 57,817 98,892 33,515 57,383 98,458
15 98,332 500,000 500,000 500,000 33,583 60,812 110,016 33,366 60,595 109,799
16 107,805 500,000 500,000 500,000 32,602 63,513 122,281 32,602 63,513 122,281
17 117,752 500,000 500,000 500,000 30,660 65,444 135,179 30,660 65,444 135,179
18 128,197 500,000 500,000 500,000 27,524 66,353 148,660 27,524 66,353 148,660
19 139,164 500,000 500,000 500,000 22,909 65,930 162,664 22,909 65,930 162,664
20 150,679 500,000 500,000 500,000 16,488 63,811 177,136 16,488 63,811 177,136
BMA
Clarity Survivorship Variable Universal Life
Male Age 55 Preferred Non-Tobacco
Female Age 55 Preferred Non-Tobacco
Initial Specified Amount: $500,000
Planned Premium: $4,339.92
Assuming Current Charges
Death Benefit Option: Level
Death Proceeds Accumulation Value Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
Accumulated Annual Investment Return of Annual Investment Return of Annual Investment Return of
End of at 5%
Policy Interest 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
Year Per Year (-0.91% Net) (5.09% Net)(11.09% Net) (-0.91% Net)(5.09% Net)(11.09% Net)(-0.91% Net)(5.09% Net) (11.09% Net)
1 4,557 500,000 500,000 500,000 3,019 3,227 3,436 0 0 0
2 9,342 500,000 500,000 500,000 6,762 7,393 8,048 2,422 3,053 3,708
3 14,366 500,000 500,000 500,000 10,408 11,700 13,094 6,068 7,360 8,755
4 19,641 500,000 500,000 500,000 13,952 16,149 18,613 10,046 12,243 14,707
5 25,180 500,000 500,000 500,000 17,387 20,737 24,643 13,915 17,265 21,171
6 30,996 500,000 500,000 500,000 20,707 25,462 31,229 17,669 22,424 28,191
7 37,102 500,000 500,000 500,000 23,902 30,318 38,416 21,298 27,714 35,812
8 43,514 500,000 500,000 500,000 26,964 35,301 46,257 24,794 33,131 44,087
9 50,247 500,000 500,000 500,000 29,883 40,405 54,808 28,147 38,669 53,072
10 57,316 500,000 500,000 500,000 32,647 45,621 64,129 31,345 44,319 62,827
11 64,739 500,000 500,000 500,000 35,414 51,121 74,480 34,329 50,036 73,395
12 72,533 500,000 500,000 500,000 38,000 56,726 85,768 37,132 55,858 84,900
13 80,717 500,000 500,000 500,000 40,394 62,427 98,082 39,743 61,776 97,431
14 89,309 500,000 500,000 500,000 42,583 68,216 111,521 42,149 67,782 111,087
15 98,332 500,000 500,000 500,000 44,553 74,082 126,196 44,336 73,865 125,979
16 107,805 500,000 500,000 500,000 46,514 80,404 142,921 46,514 80,404 142,921
17 117,752 500,000 500,000 500,000 48,223 86,824 161,304 48,223 86,824 161,304
18 128,197 500,000 500,000 500,000 49,651 93,323 181,525 49,651 93,323 181,525
19 139,164 500,000 500,000 500,000 50,776 99,889 203,797 50,776 99,889 203,797
20 150,679 500,000 500,000 500,000 51,571 106,507 228,360 51,571 106,507 228,360
BMA
Clarity Survivorship Variable Universal Life
Male Age 65 Preferred Non-Tobacco
Female Age 65 Preferred Non-Tobacco
Initial Specified Amount: $500,000
Planned Premium: $7,737.12
Assuming Guaranteed Charges
Death Benefit Option: Level
Death Proceeds Accumulation Value Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
Accumulated Annual Investment Return of Annual Investment Return of Annual Investment Return of
End of at 5%
Policy Interest 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
Year Per Year (-0.91% Net)(5.09% Net) (11.09% Net) (-0.91% Net) (5.09% Net) (11.09% Net)(-0.91% Net)(5.09% Net)(11.09% Net)
1 8,124 500,000 500,000 500,000 5,948 6,337 6,727 0 0 0
2 16,654 500,000 500,000 500,000 12,209 13,373 14,584 4,472 5,636 6,847
3 25,611 500,000 500,000 500,000 17,933 20,265 22,789 10,196 12,528 15,052
4 35,015 500,000 500,000 500,000 23,050 26,929 31,300 16,087 19,966 24,337
5 44,890 500,000 500,000 500,000 27,475 33,264 40,062 21,286 27,075 33,872
6 55,259 500,000 500,000 500,000 31,100 39,139 48,991 25,684 33,723 43,575
7 66,145 500,000 500,000 500,000 33,777 44,382 57,965 29,135 39,739 53,323
8 77,577 500,000 500,000 500,000 35,309 48,762 66,810 31,440 44,894 62,942
9 89,580 500,000 500,000 500,000 35,449 51,996 75,299 32,354 48,901 72,204
10 102,182 500,000 500,000 500,000 33,911 53,748 83,163 31,590 51,427 80,842
11 115,416 500,000 500,000 500,000 30,684 53,965 90,444 28,750 52,031 88,509
12 129,310 500,000 500,000 500,000 25,105 51,909 96,494 23,557 50,362 94,946
13 143,900 500,000 500,000 500,000 16,769 47,083 100,925 15,608 45,922 99,765
14 159,219 500,000 500,000 500,000 5,181 38,873 103,261 4,407 38,099 102,487
15 175,304 * 500,000 500,000 * 26,463 102,857 * 26,077 102,470
16 192,193 * 500,000 500,000 * 8,852 99,372 * 8,852 99,372
17 209,927 * * 500,000 * * 91,080 * * 91,080
18 228,547 * * 500,000 * * 76,231 * * 76,231
19 248,098 * * 500,000 * * 52,411 * * 52,411
20 268,627 * * 500,000 * * 16,260 * * 16,260
* Additional premium is necessary to keep the policy from lapsing.
BMA
Clarity Survivorship Variable Universal Life
Male Age 65 Preferred Non-Tobacco
Female Age 65 Preferred Non-Tobacco
Initial Specified Amount: $500,000
Planned Premium: $7,737.12
Assuming Current Charges
Death Benefit Option: Level
Death Proceeds Accumulation Value Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
Accumulated Annual Investment Return of Annual Investment Return of Annual Investment Return of
End of at 5%
Policy Interest 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
Year Per Year (-0.91% Net)(5.09% Net) (11.09% Net) (-0.91% Net) (5.09% Net)(11.09% Net)(-0.91% Net)(5.09% Net) (11.09% Net)
1 8,124 500,000 500,000 500,000 6,047 6,440 6,834 0 0 0
2 16,654 500,000 500,000 500,000 12,673 13,857 15,089 4,936 6,120 7,352
3 25,611 500,000 500,000 500,000 19,047 21,447 24,040 11,309 13,709 16,303
4 35,015 500,000 500,000 500,000 25,157 29,200 33,743 18,193 22,237 26,779
5 44,890 500,000 500,000 500,000 30,991 37,108 44,259 24,801 30,918 38,069
6 55,259 500,000 500,000 500,000 36,534 45,160 55,656 31,118 39,744 50,240
7 66,145 500,000 500,000 500,000 41,769 53,342 68,010 37,127 48,700 63,368
8 77,577 500,000 500,000 500,000 46,673 61,637 81,401 42,805 57,768 77,532
9 89,580 500,000 500,000 500,000 51,228 70,029 95,924 48,133 66,934 92,829
10 102,182 500,000 500,000 500,000 55,412 78,502 111,689 53,091 76,181 109,368
11 115,416 500,000 500,000 500,000 59,510 87,367 129,164 57,576 85,433 127,230
12 129,310 500,000 500,000 500,000 63,163 96,272 148,165 61,615 94,725 146,617
13 143,900 500,000 500,000 500,000 66,326 105,185 168,847 65,166 104,024 167,686
14 159,219 500,000 500,000 500,000 68,963 114,076 191,400 68,189 113,303 190,626
15 175,304 500,000 500,000 500,000 71,035 122,924 216,050 70,648 122,537 215,663
16 192,193 500,000 500,000 500,000 72,876 132,362 244,259 72,876 132,362 244,259
17 209,927 500,000 500,000 500,000 74,109 141,820 275,458 74,109 141,820 275,458
18 228,547 500,000 500,000 500,000 74,703 151,298 310,086 74,703 151,298 310,086
19 248,098 500,000 500,000 500,000 74,622 160,797 348,658 74,622 160,797 348,658
20 268,627 500,000 500,000 500,000 73,836 170,326 391,784 73,836 170,326 391,784
BMA
Clarity Survivorship Variable Universal Life
Male Age 75 Preferred Non-Tobacco
Female Age 75 Preferred Non-Tobacco
Initial Specified Amount: $500,000
Planned Premium: $14,239.08
Assuming Guaranteed Charges
Death Benefit Option: Level
Death Proceeds Accumulation Value Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
Accumulated Annual Investment Return of Annual Investment Return of Annual Investment Return of
End of at 5%
Policy Interest 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
Year Per Year (-0.91% Net)(5.09% Net)(11.09% Net)(-0.91% Net)(5.09% Net) (11.09% Net) (-0.91% Net) (5.09% Net) (11.09% Net)
1 14,951 500,000 500,000 500,000 10,797 11,510 12,224 0 0 0
2 30,650 500,000 500,000 500,000 19,599 21,649 23,788 5,360 7,410 9,549
3 47,133 500,000 500,000 500,000 25,327 29,232 33,488 11,088 14,993 19,249
4 64,441 500,000 500,000 500,000 27,652 33,791 40,806 14,837 20,976 27,991
5 82,614 500,000 500,000 500,000 26,146 34,744 45,098 14,755 23,353 33,706
6 101,696 500,000 500,000 500,000 20,206 31,304 45,489 10,239 21,337 35,522
7 121,731 500,000 500,000 500,000 8,971 22,382 40,769 428 13,838 32,226
8 142,769 * * 500,000 * * 29,232 * * 22,113
9 164,859 * * 500,000 * * 8,523 * * 2,827
10 188,052 * * * * * * * * *
11 212,406 * * * * * * * * *
12 237,977 * * * * * * * * *
13 264,827 * * * * * * * * *
14 293,020 * * * * * * * * *
15 322,622 * * * * * * * * *
16 353,704 * * * * * * * * *
17 386,340 * * * * * * * * *
18 420,608 * * * * * * * * *
19 456,590 * * * * * * * * *
20 494,370 * * * * * * * * *
* Additional premium is necessary to keep the policy from lapsing.
BMA
Clarity Survivorship Variable Universal Life
Male Age 75 Preferred Non-Tobacco
Female Age 75 Preferred Non-Tobacco
Initial Specified Amount: $500,000
Planned Premium: $14,239.08
Assuming Current Charges
Death Benefit Option: Level
Death Proceeds Accumulation Value Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
Accumulated Annual Investment Return of Annual Investment Return of Annual Investment Return of
End of at 5%
Policy Interest 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
Year Per Year (-0.91% Net) (5.09% Net) (11.09% Net)(-0.91% Net) (5.09% Net)(11.09% Net)(-0.91% Net)(5.09% Net) (11.09% Net)
1 14,951 500,000 500,000 500,000 11,792 12,536 13,281 0 0 0
2 30,650 500,000 500,000 500,000 23,780 26,017 28,344 9,541 11,778 14,104
3 47,133 500,000 500,000 500,000 35,119 39,615 44,478 20,880 25,376 30,239
4 64,441 500,000 500,000 500,000 45,777 53,300 61,766 32,962 40,485 48,951
5 82,614 500,000 500,000 500,000 55,727 67,045 80,307 44,335 55,654 68,916
6 101,696 500,000 500,000 500,000 64,949 80,835 100,232 54,981 70,867 90,265
7 121,731 500,000 500,000 500,000 73,433 94,667 121,707 64,889 86,124 113,164
8 142,769 500,000 500,000 500,000 81,168 108,546 144,931 74,049 101,427 137,811
9 164,859 500,000 500,000 500,000 88,145 122,480 170,142 82,450 116,785 164,446
10 188,052 500,000 500,000 500,000 94,358 136,489 197,629 90,086 132,217 193,357
11 212,406 500,000 500,000 500,000 100,392 151,222 228,390 96,832 147,662 224,830
12 237,977 500,000 500,000 500,000 105,361 165,873 262,060 102,513 163,025 259,212
13 264,827 500,000 500,000 500,000 109,160 180,405 299,107 107,024 178,269 296,971
14 293,020 500,000 500,000 500,000 111,666 194,783 340,119 110,242 193,360 338,695
15 322,622 500,000 500,000 500,000 112,736 208,980 385,847 112,024 208,268 385,135
16 353,704 500,000 500,000 500,000 112,787 224,090 439,398 112,787 224,090 439,398
17 386,340 500,000 500,000 520,355 111,050 239,155 500,341 111,050 239,155 500,341
18 420,608 500,000 500,000 585,285 107,302 254,208 568,238 107,302 254,208 568,238
19 456,590 500,000 500,000 656,387 101,282 269,307 643,517 101,282 269,307 643,517
20 494,370 500,000 500,000 734,362 92,691 284,549 727,091 92,691 284,549 727,091
APPENDIX B - RATES OF RETURN
From time to time, We may report different types of historical performance for
the Investment Options available under the Policy. We may report the average
annual total returns of the funds over various time periods. Such returns will
reflect the operating expenses (including management fees) of the funds, but not
deductions at the Separate Account or Policy level for Risk Charges and Policy
expenses, which, if included, would reduce performance. See Section 4- Expenses
for a discussion of the charges and deductions from a Policy.
At the request of a purchaser, BMA will accompany the returns of the funds with
at least one of the following: (i) returns, for the same periods as shown for
the funds, which include deductions under the Separate Account for the Risk
Charge in addition to the deductions of fund expenses, but does not include
other charges under the Policy; or (ii) an illustration of Accumulation Values
and Cash Surrender Values as of the performance reporting date for a
hypothetical Insureds of given Age, gender, risk classification, Premium level
and Initial Specified Amount. The illustration will based either on actual
historic fund performance or on a hypothetical investment return between 0% and
12% as requested by the purchaser. The Cash Surrender Value figures will assume
all fund charges, the Risk Charge, and all other Policy charges are deducted.
The Accumulation Value figures will assume all charges except the surrender
Charges are deducted.
We may also distribute sales literature comparing the percentage change in the
net asset values of the funds or in the Accumulation Unit Values for any of the
Investment Options to established market indices, such as the Standard & Poor's
500 Composite Stock Price Index and the Dow Jones Industrial Average. We also
may make comparisons to the percentage change in values of other mutual funds
with investment objectives similar to those of the Investment Options being
compared.
The chart below shows the Effective Annual Rates of Return of the funds based on
the actual investment performance (after deduction of investment management fees
and direct operating expenses of the funds). These rates do not reflect the Risk
Charge assessed. The rates do not reflect deductions from Premiums or Monthly
Deductions assessed against the Accumulation Value of the Policy, nor do they
reflect the Policy's Surrender Charges. (For a discussion of these charges,
please see Section 4. Expenses.) Therefore, these rates are not illustrative of
how actual investment performance will affect the benefits under the Policy
(see, however, Appendix A - Illustration of Policy Values).
THE RATES OF RETURN SHOWN ARE NOT INDICATIVE OF FUTURE PERFORMANCE. These rates
of return may be considered, however, in assessing the competence and
performance of the investment advisers.
PORTFOLIO
INCEPTION 10 YEARS/
INVESTMENT OPTION DATE 1 YEAR 5 YEARS SINCE INCEPTION
- ----------------- ---- ------ ------- ---------------
INVESTORS MARK SERIES FUND, INC.
Intermediate Fixed Income . . . . . . . . . . . . . . . . . . . 11/13/97 -0.19% N/A 2.91%
Mid Cap Equity . . . . . . . . . . . . . . . . . . . . . . . . . 11/13/97 2.26% N/A 6.78%
Money Market . . . . . . . . . . . . . . . . . . . . . . . . . . 11/13/97 4.60% N/A 4.87%
Global Fixed Income . . . . . . . . . . . . . . . . . . . . . . 11/13/97 -0.27% N/A 4.02%
Small Cap Equity . . . . . . . . . . . . . . . . . . . . . . . . 11/13/97 62.16% N/A 13.94%
Large Cap Growth . . . . . . . . . . . . . . . . . . . . . . . . 11/13/97 35.46% N/A 31.90%
Large Cap Value . . . . . . . . . . . . . . . . . . . . . . . . 12/2/97 0.79% N/A 1.26%
Growth & Income . . . . . . . . . . . . . . . . . . . . . . . . 11/12/97 16.65% N/A 15.59%
Balanced . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11/17/97 8.21% N/A 0.88%
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT - International . . . . . . . . . . . . . . . . . . 8/1/97 31.24% N/A 16.17%
THE ALGER AMERICAN FUND
Alger American Growth . . . . . . . . . . . . . . . . . . . . . 1/9/89 33.74% 30.94% 23.05%
Alger American Leveraged AllCap . . . . . . . . . . . . . . . . 1/25/95 78.06% N/A 46.44%
Alger American MidCap Growth . . . . . . . . . . . . . . . . . 5/3/93 31.85% 24.58% 24.72%
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income & Growth . . . . . . . . . . . . . . . . . . . . . . . 10/30/97 18.02% N/A 24.69%
VP Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/1/96 -0.85% N/A 11.10%
DREYFUS STOCK INDEX FUND . . . . . . . . . . . . . . . . . . . . 9/29/89 20.60% 28.07% 17.70%
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus VIF Disciplined Stock . . . . . . . . . . . . . . . . . 5/1/96 18.45% N/A 26.61%
VARIABLE INSURANCE PRODUCTS FUND and
VARIABLE INSURANCE PRODUCTS FUND II
Fidelity VIP Overseas Portfolio . . . . . . . . . . . . . . . . 1/28/87 42.39% 17.32% 10.89%
Fidelity VIP Growth Portfolio . . . . . . . . . . . . . . . . . 10/09/86 37.29% 29.68% 18.74%
Fidelity VIP II Contrafund Portfolio . . . . . . . . . . . . . 1/03/95 24.15% N/A 27.69%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Trust . . . . . . . . . . . . . . . . . . . . 5/27/94 9.20% 12.65% 11.38%
INVESCO VIF - Equity Income . . . . . . . . . . . . . . . . . . 8/10/94 14.84% 21.81% 20.34%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Small Cap . . . . . . . . . . . . . . . . . . 11/4/97 5.13% N/A 0.13%
THE FIGURES SHOWN IN THIS CHART DO NOT REFLECT ANY CHARGES AT THE SEPARATE ACCOUNT OR THE POLICY LEVEL.
PART II
UNDERTAKING TO FILE REPORTS
a. Subject to the terms and conditions of Section 15(d) of the Securities and
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority confined in that section.
b. Pursuant to Investment Company Act Section 26(e), Business Men's Assurance
Company of America ("Company") hereby represents that the fees and charges
deducted under the Policy described in the Prospectus, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by the Company.
INDEMNIFICATION
The Bylaws of the Company (Article IV) provide that:
Section 1: Indemnification. Each person who is or was a Director, officer or
employee of the Corporation or is or was serving at the request of the
Corporation as a Director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise (including the heirs,
executors, administrators or estate of such person) shall be indemnified by the
Corporation as a right to the full extent permitted or authorized by the laws of
the State of Missouri, as now in effect and as hereafter amended, against any
liability, judgment, fine, amount paid in settlement, cost and expense
(including attorneys' fees) asserted or threatened against and incurred by such
person in his capacity as or arising out of his status as a Director, officer or
employee of the Corporation, or if serving at the request of the Corporation, as
a Director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise. The indemnification provided by this Bylaw
provision shall not be exclusive of any other rights to which those indemnified
may be entitled under any other bylaw or under any agreement, vote of
shareholders or disinterested directors or otherwise, and shall not limit in any
way any right which the Corporation may have to make different or further
indemnifications with respect to the same or different persons or classes of
persons.
Without limiting the foregoing, the Corporation is authorized to enter into an
agreement with any Director, officer or employee of the Corporation providing
indemnification for such person against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement that result from any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including any action by or in the right of the
Corporation, that arises by reason of the fact that such person is or was a
Director, officer or employee of the Corporation, or is or was serving at the
request of the Corporation as a Director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, to the full
extent allowed by law, whether or not such indemnification would otherwise be
provided for in this Bylaw, except that no such agreement shall indemnify any
person from or on account of such person's conduct which was finally adjudged to
have been knowingly fraudulent, deliberately dishonest or willful misconduct.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted for directors and officers or controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement comprises the papers and documents:
The facing sheet
The Prospectus consisting of 58 pages.
Undertakings to file reports.
The signatures.
The following exhibits.
A. Copies of all exhibits required by paragraph A of instructions for
Exhibits in Form N-8B-2.
1. Resolution of the Board of Directors of the Company*
2. Not Applicable
3.a. Form of Principal Underwriter Agreement
3.b. Form of Selling Agreements**
3.c. Schedule of Commissions**
4. Not Applicable
5.a. Last Survivor Flexible Premium Adjustable Variable Life
Insurance Policy
5.b. Extension of Maturity Date Rider
5.c. Guaranteed Minimum Death Benefit Rider
5.d. Exchange Option Rider I
5.e. Exchange Option Rider II
5.f. Survivorship Term Rider
6.a. Articles of Incorporation of the Company*
6.b. Bylaws of the Company*
7. Not Applicable
8.a. Form of Fund Participation Agreements**
8.b. Form of Fund Participation Agreement among Variable Insurance
Products Fund, Fidelity Distributors Corporation and the Company***
8.c. Form of Fund Participation Agreement among Variable Insurance
Products Fund II, Fidelity Distributors Corporation and
the Company***
9. Form of Reinsurance Agreement**
10. Application Form
11. Powers of Attorney*
B. Opinion and Consent of Counsel (to be filed by Amendment)
C. Consent of Actuary
D. Consent of Independent Auditors (to be filed by Amendment)
*Incorporated by reference to Form S-6 (File No. 333-52689) electronically
filed on May 14, 1998.
**Incorporated by reference to Pre-Effective Amendment No. 1 (File No. 333-
52689) electronically filed on August 28, 1998.
***Incorporated by reference to Post-Effective Amendment No. 3 (File No. 333-
52689) electronically filed on May 1, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Kansas City and State of
Missouri on this 7th day of September, 2000.
BMA VARIABLE LIFE ACCOUNT A
Registrant
By: BUSINESS MEN'S ASSURANCE
COMPANY OF AMERICA
By: /s/ DAVID A. GATES
------------------------------
BUSINESS MEN'S ASSURANCE
COMPANY OF AMERICA
By: /S/ MICHAEL K. DEARDORFF
----------------------------
Attest:
/S/MARGARET M. HEIDKAMP
- ----------------------------
(Name)
Vice President
- ----------------------------
Title
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
Giorgio Balzer* Director, Chairman of the Board 9/7/00
- ------------------------- ------
Giorgio Balzer and Chief Executive Officer Date
Thomas Morton Bloch* Director 9/7/00
- ------------------------------- ------
Thomas Morton Bloch Date
Mel G. Carvill* Director 9/7/00
- ------------------------- ------
Mel G. Carvill Date
William Thomas Grant II * Director 9/7/00
- ------------------------- -------
William Thomas Grant II Date
Donald Joyce Hall, Jr.* Director 9/7/00
- ------------------------- -------
Donald Joyce Hall, Jr. Date
Renzo Isler* Director 9/7/00
- ------------------------- -------
Renzo Isler Date
Allan Drue Jennings* Director 9/7/00
- ------------------------- -------
Allan Drue Jennings Date
David Woods Kemper* Director 9/7/00
- ------------------------- -------
David Woods Kemper Date
John Kessander Lundberg* Director 9/7/00
- ------------------------- -------
John Kessander Lundberg Date
John Pierre Mascotte* Director 9/7/00
- ------------------------- -------
John Pierre Mascotte Date
/S/ANDREA RABUSIN* Director 9/7/00
- ------------------------- -------
Andrea Rabusin Date
/S/ ROBERT T. RAKICH Director, President and Chief 9/7/00
- ------------------------- -------
Robert Thomas Rakich Operating Officer Date
/S/ VERNON W. VOORHEES II Director, Senior Vice President - 9/7/00
- --------------------------- -------
Vernon Wirt Voorhees II Corporate Services & Secretary Date
/S/ DAVID L. HIGLEY Senior Vice President & Chief 9/7/00
- ------------------------- -------
David Lee Higley Financial Officer Date
/S/ SUSAN A. SWEENEY Vice President - Treasurer & 9/7/00
- ------------------------- -------
Susan Annette Sweeney Controller Date
*By: /S/ROBERT T. RAKICH
--------------------
Attorney-in-Fact
*By: /S/ VERNON W. VOORHEES II
--------------------
Attorney-in-Fact
INDEX TO EXHIBITS
EX-99.A.3.a. Principal Underwriter Agreement
EX-99.A.5.a. Flexible Premium Variable Life Insurance Policy
EX-99.A.5.b. Extension of Maturity Date Rider
EX-99.A.5.c. Guaranteed Minimum Death Benefit Rider
EX-99.A.5.d. Exchange Option Rider I
EX-99.A.5.e. Exchange Option Rider II
EX-99.A.5.f. Survivorship Term Rider
EX-99.A.10. Application Form
EX-99.C Consent of Actuary