As filed with the Securities and Exchange Commission on April 1, 2002
Registration No. 333- _______
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
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT B
(Exact name of Registrant)
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
(Name of Depositor)
100 Summit Drive
Valhalla, New York 10595
(Address of Depositor's Principal Executive Offices)
James D. Gallagher Copy to:
President J. Sumner Jones, Esq.
The Manufacturers Life Insurance Jones & Blouch L.L.P.
Company of New York 1025 Thomas Jefferson Street, NW
100 Summit Drive Washington, DC 20007
Valhalla, NY 10595
(Name and Address of Agent for Service)
Title of Securities Being Registered: Variable Life Insurance Contracts
Approximate date of commencement of proposed public offering: As soon after the
effective date of this Registration Statement as is practicable.
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 the 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.
The Manufacturers Life Insurance Company of New York
Registration Statement on Form S-6
Cross-Reference Sheet
FORM
N-8B-2
ITEM NO. CAPTION IN PROSPECTUS
1 Cover Page; General Information About Manulife of New York, the
Separate Account and the Trust (The Separate Account)
2 Cover Page; General Information About Manulife of New York, the
Separate Account and the Trust (Manulife of New York)
3 *
4 Other Information (Distribution of the Policy)
5 General Information About Manulife of New York, the Separate Account
and the Trust (The Separate Account)
6 General Information About Manulife of New York, the Separate Account
and the Trust (The Separate Account)
7 *
8 *
9 Other Information (Litigation)
10 Death Benefits; Premium Payments; Charges and Deductions; Policy Value;
Policy Loans; Policy Surrender and Partial Withdrawals; Lapse and
Reinstatement; Other Provisions of the Policy; Other Information
11 General Information About Manulife of New York, the Separate Account
and the Trust (The Trust)
12 General Information About Manulife of New York, the Separate Account
and the Trust (The Trust)
13 Charges and Deductions
14 Issuing A Policy; Other Information (Responsibilities Assumed By
Manufacturers Life)
15 Issuing A Policy
16 **
17 Policy Surrender and Partial Withdrawals
18 General Information About Manulife of New York, the Separate Account
and the Trust
19 Other Information (Reports to Policyholders; Responsibilities Assumed
By Manufacturers Life)
20 *
21 Policy Loans
22 *
23 **
24 Other Provisions of the Policy
25 General Information About Manulife of New York, the Separate Account
and the Trust (Manulife of New York)
26 *
27 **
28 Other Information (Officers and Directors)
29 General Information About Manulife of New York, the Separate Account
and the Trust (Manulife of New York)
30 *
31 *
32 *
33 *
34 *
35 **
36 *
37 *
38 Other Information (Distribution of the Policies; Responsibilities of
Manufacturers Life)
39 Other Information (Distribution of the Policies)
40 *
41 **
42 *
43 *
44 Policy Values --Determination of Policy Value; Units and Unit
Values)
45 *
46 Policy Surrender and Partial Withdrawals; Other Information --
Payment of Proceeds)
47 General Information About Manulife of New York, the Separate Account
and the Trust (The Trust)
48 *
49 *
50 General Information About Manulife of New York, the Separate Account
and the Trust
51 Issuing a Policy; Death Benefits; Premium Payments; Charges and
Deductions; Policy Value; Policy Loans; Policy Surrender and Partial
Withdrawals; Lapse and Reinstatement; Other Policy Provisions
52 Other Information (Substitution of Portfolio Shares)
53 **
54 *
55 *
56 *
57 *
58 *
59 Financial Statements
* Omitted since answer is negative or item is not applicable.
** Omitted.
PART I
INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS
SEPARATE ACCOUNT B OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
VENTURE VUL EPVUL ACCUMULATOR
A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
This prospectus describes Venture VUL [EPVUL] Accumulator(SM), a
flexible
premium variable universal life insurance policy (the "Policy") offered by The
Manufacturers Life Insurance Company of New York (the "Company," "Manulife New
York," "we" or "us").
The Policy is designed to provide lifetime insurance protection together with
flexibility as to:
- - the timing and amount of premium payments,
- - the investment options underlying the Policy Value, and
- - the amount of insurance coverage.
This flexibility allows you, the policyowner, to pay premiums and adjust
insurance coverage in light of your current financial circumstances and
insurance needs.
Policy Value may be accumulated on a fixed basis or vary with the investment
performance of the sub-accounts of Manulife New York's Separate Account B (the
"Separate Account"). The assets of each sub-account will be used to purchase
shares of a particular investment portfolio (a "Portfolio") of Manufacturers
Investment Trust (the "Trust"). The accompanying prospectus for the Trust, and
the corresponding Statement of Additional Information, describe the investment
objectives of the Portfolios in which you may invest net premiums. Other
sub-accounts and Portfolios may be added in the future.
THE POLICY IS NOT SUITABLE FOR SHORT-TERM INVESTMENT PURPOSES. ALSO PROSPECTIVE
PURCHASERS SHOULD NOTE THAT IT MAY NOT BE ADVISABLE TO PURCHASE A POLICY AS A
REPLACEMENT FOR AN EXISTING INSURANCE POLICY.
The Securities and Exchange Commission (the "SEC") maintains a web site
(http://www.sec.gov) that contains material incorporated by reference and other
information regarding registrants that file electronically with the SEC.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. IT IS
VALID ONLY WHEN ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE TRUST.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
HOME OFFICE: SERVICE OFFICE MAILING ADDRESS:
The Manufacturers Life Insurance THE MANUFACTURERS LIFE INSURANCE
Company of New York COMPANY OF NEW YORK
100 Summit Lake Drive P.O. BOX 633, NIAGARA SQUARE STATION
SECOND FLOOR BUFFALO, NEW YORK 14201-0633
VALHALLA, NEW YORK 10595 TELEPHONE: 1-888-267-7781
THE DATE OF THIS PROSPECTUS IS ____________, 2002
TABLE OF CONTENTS TABLE OF CONTENTS
DEFINITIONS...................................................................................... 4
POLICY SUMMARY................................................................................... 6
General..................................................................................... 6
Death Benefits.............................................................................. 6
Optional Term Rider......................................................................... 6
Cash Value Enhancement Riders............................................................... 6
Return of Premium Rider.................................................................... 6
Premiums.................................................................................... 6
Policy Value................................................................................ 7
Policy Loans................................................................................ 7
Surrender and Partial Withdrawals........................................................... 7
Lapse and Reinstatement..................................................................... 7
Charges and Deductions...................................................................... 7
Investment Options and Investment Advisers ................................................ 8
Investment Management Fees and Expenses..................................................... 8
Table of Charges and Deductions............................................................. 8
Table of Investment Management Fees and Expenses............................................ 10
Table of Investment Options and Investment Subadvisers...................................... 12
GENERAL INFORMATION ABOUT MANULIFE NEW YORK, THE SEPARATE ACCOUNT AND THE TRUST.................. 14
Manulife New York........................................................................... 14
The Separate Account........................................................................ 14
The Trust................................................................................... 15
Investment Objectives of the Portfolios..................................................... 15
ISSUING A POLICY................................................................................. 20
Requirements................................................................................ 20
Temporary Insurance Agreement............................................................... 20
Right to Examine the Policy................................................................. 21
Life Insurance Qualification................................................................ 21
DEATH BENEFITS................................................................................... 22
Death Benefit Options....................................................................... 22
Changing the Death Benefit Option........................................................... 23
Changing the Face Amount.................................................................... 23
PREMIUM PAYMENTS................................................................................. 24
Initial Premiums............................................................................ 24
Subsequent Premiums......................................................................... 24
Maximum Premium Limitation.................................................................. 25
Premium Allocation.......................................................................... 25
CHARGES AND DEDUCTIONS........................................................................... 25
Premium Charge.............................................................................. 25
Surrender Charges........................................................................... 25
Monthly Deductions.......................................................................... 27
Charges for Transfers....................................................................... 28
Reduction in Charges........................................................................ 28
SPECIAL PROVISIONS FOR EXCHANGES................................................................. 29
COMPANY TAX CONSIDERATIONS....................................................................... 29
POLICY VALUE..................................................................................... 29
Determination of the Policy Value........................................................... 29
Units and Unit Values....................................................................... 29
Transfers of Policy Value................................................................... 30
POLICY LOANS..................................................................................... 31
Effect of Policy Loan....................................................................... 31
Interest Charged on Policy Loans............................................................ 31
Loan Account................................................................................ 31
POLICY SURRENDER AND PARTIAL WITHDRAWALS......................................................... 32
Policy Surrender............................................................................ 32
Partial Withdrawals......................................................................... 32
LAPSE AND REINSTATEMENT.......................................................................... 33
2
Lapse...................................................................................... 33
No-Lapse Guarantee......................................................................... 33
No-Lapse Guarantee Cumulative Premium Test................................................. 34
Reinstatement.............................................................................. 34
THE GENERAL ACCOUNT............................................................................. 34
Fixed Account.............................................................................. 35
OTHER PROVISIONS OF THE POLICY.................................................................. 35
Cash Value Enhancement Riders.............................................................. 35
RETURN OF PREMIUM RIDER.................................................................... 6
Policyowner Rights......................................................................... 36
Beneficiary................................................................................ 36
Validity................................................................................... 36
Misstatement of Age or Sex................................................................. 36
Suicide Exclusion.......................................................................... 37
Supplementary Benefits..................................................................... 37
TAX TREATMENT OF THE POLICY..................................................................... 37
Life Insurance Qualification............................................................... 37
Tax Treatment of Policy Benefits........................................................... 39
Alternate Minimum Tax...................................................................... 42
Income Tax Reporting....................................................................... 42
OTHER INFORMATION............................................................................... 42
Payment of Proceeds........................................................................ 42
Reports to Policyowners.................................................................... 42
Distribution of the Policies............................................................... 43
Responsibilities Assumed by Manulife New York and Manulife Financial Securities............ 43
Voting Rights.............................................................................. 43
Substitution of Portfolio Shares........................................................... 44
Records and Accounts....................................................................... 44
State Regulations.......................................................................... 44
Litigation................................................................................. 44
Independent Auditors....................................................................... 44
Further Information........................................................................ 44
Officers and Directors..................................................................... 45
Optional Term Rider........................................................................ 46
ILLUSTRATIONS................................................................................... 46
APPENDIX A - SAMPLE ILLUSTRATIONS OF POLICY VALUES, CASH SURRENDER VALUES AND DEATH BENEFITS.... A-1
APPENDIX B - AUDITED FINANCIAL STATEMENTS....................................................... B-1
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION WHERE IT
WOULD NOT BE LAWFUL. YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS, THE PROSPECTUS OF MANUFACTURERS INVESTMENT TRUST, OR THE STATEMENT
OF ADDITIONAL INFORMATION OF MANUFACTURERS INVESTMENT TRUST. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.
THE PURPOSE OF THIS VARIABLE LIFE INSURANCE POLICY IS TO PROVIDE INSURANCE
PROTECTION FOR THE BENEFICIARY NAMED THEREIN. NO CLAIM IS MADE THAT THIS
VARIABLE LIFE INSURANCE POLICY IS IN ANY WAY SIMILAR OR COMPARABLE TO A
SYSTEMATIC INVESTMENT PLAN OF A MUTUAL FUND.
Examine this prospectus carefully. The Policy Summary will briefly describe the
Policy. More detailed information will be found further in the prospectus.
MNY Cash Accum 5/2002 MNY P-B Cash Accum 5/2002 MNY EPVUL 5/2002
3
DEFINITIONS
Additional Rating
is an increase to the Cost of Insurance Rate for insureds who do not meet, at a
minimum, the Company's underwriting requirements for the standard Risk
Classification.
Age
on any date is the life insured's age on his or her nearest birthday to the
Policy Date. If no specific age is mentioned, age means the life insured's age
on the Policy Anniversary nearest to the birthday.
Attained Age
is the Age at issue plus the number of whole years that have elapsed since the
Policy Date.
Business Day
is any day that the New York Stock Exchange is open for business. A Business Day
ends at the close of regularly scheduled daytime trading of the New York Stock
Exchange on that day.
Cash Surrender Value
is the Policy Value less the Surrender Charge and any outstanding monthly
deductions due.
Gross Withdrawal
is the amount of partial Net Cash Surrender Value the policyowner requests plus
any Surrender Charge applicable to the withdrawal.
Effective Date
is the date the underwriters approve issuance of the Policy. If the Policy is
approved without the initial premium, the Effective Date will be the date the
Company receives at least the minimum initial premium at our Service Office. The
Company will take the first Monthly Deduction on the Effective Date.
Fixed Account
is that part of the Policy Value which reflects the value the policyowner has in
the general account of the Company.
Investment Account
is that part of the Policy Value which reflects the value the policyowner has in
one of the sub-accounts of the Separate Account.
Issue Date
is the date the Company issued the Policy. The Issue Date is also the date from
which the Suicide and Validity provisions of the Policy are measured.
Life Insured
is the person whose life is insured under this Policy.
Loan Account
is that part of the Policy Value which reflects the value transferred from the
Fixed Account or the Investment Accounts as collateral for a policy loan.
Loan Interest Credited Differential
is the difference between the rate of interest charged on a Policy Loan and the
rate of interest credited to amounts in the Loan Account.
Maximum Loanable Amount
is 100% of the Policy Net Cash Surrender Value less estimated charges to the
next Policy anniversary, including loan interest.
Minimum Death Benefit
is on any date the Policy Value on that date multiplied by the applicable
minimum death benefit percentage for the Attained Age of the life insured.
Monthly No-Lapse Guarantee Premium
4
is one-twelfth of the No-Lapse Guarantee Premium.
Net Cash Surrender Value
is the Cash Surrender Value less the Policy Debt.
Net Policy Value
is the Policy Value less the value in the Loan Account.
Net Premium
is the gross premium paid less the Premium Charge. It is the amount of premium
allocated to the Fixed Account and/or Investment Accounts.
No-Lapse Guarantee
is a provision of the Policy which occurs when the Policy is in the No-Lapse
Guarantee Period, and meets the No-Lapse Guarantee Cumulative Premium Test. If
such a condition is met the Policy will not lapse, even when the Net Cash
Surrender Value falls to or below zero.
No-Lapse Guarantee Period
is the period, set at issue, during which the No-Lapse Guarantee is provided.
The No-Lapse Guarantee period is fixed at the lesser of (a) twenty years or (b)
the number of years remaining until the life insured's age is 95.
No-Lapse Guarantee Premium
is the annual premium used to determine the Monthly No-Lapse Guarantee Premium.
It is set at issue and is recalculated, prospectively, whenever any of the
following changes occur under the Policy:
- - the Face Amount of insurance changes.
- - a Supplementary Benefit is added, changed or terminated.
- - the Risk Classification of the life insured changes.
- - a temporary Additional Rating is added (due to a face amount increase), or
terminated.
- - the death benefit option changes.
No-Lapse Guarantee Cumulative Premium
is the minimum amount due to satisfy the No-Lapse Guarantee Cumulative Premium
Test. This amount equals the sum, from issue to the date of the test, of the
Monthly No-Lapse Guarantee Premiums.
No-Lapse Guarantee Cumulative Premium Test
is a test that, if satisfied, during the No Lapse Guarantee Period will keep the
policy in force when the Net Cash Surrender Value is less than zero. The test is
satisfied if the sum of all premiums paid, less any Gross Withdrawals and less
any Policy Debt, is greater than or equal to the sum of the monthly No-Lapse
Guarantee Premiums due since the Policy Date.
Policy Date
is the date coverage takes effect under the Policy, provided the Company
receives the minimum initial premium at its Service Office, and is the date from
which charges for the first monthly deduction are calculated, and the date from
which Policy Years, Policy Months, and Policy Anniversaries are determined.
Policy Debt
as of any date equals (a) plus (b) plus (c) minus (d), where:
(a) is the total amount of loans borrowed as of such date;
(b) is the total amount of any unpaid loan interest charges which have been
borrowed against the Policy on a Policy Anniversary;
(c) is any interest charges accrued from the last Policy Anniversary to the
current date; and
(d) is the total amount of loan repayments as of such date.
Policy Value
is the sum of the values in the Loan Account, the Fixed Account, and the
Investment Accounts.
Service Office Address
Is P.O. Box 633, Niagara Square Station, Buffalo, New York 14201-0633.
5
Surrender Charge Period
is the period following the Policy Date or following any increase in Face Amount
during which the Company will assess Surrender Charges. Surrender Charges will
apply during this period if the policy terminates due to default, if the
policyowner surrenders the policy or makes a partial withdrawal.
Surrender Charge Premium Limit
is used to determine the Surrender Charge. The Surrender Charge Premium Limit
for the initial Face Amount is stated in the Policy. The Company will advise the
policyowner of the Surrender Charge Premium Limit for any increase in Face
Amount.
Written Request
is the policyowner's request to the Company which must be in a form satisfactory
to the Company, signed and dated by the policyowner, and received at the Service
Office.
POLICY SUMMARY
GENERAL
We have prepared the following summary as a general description of the most
important features of the Policy. It is not comprehensive and you should refer
to the more detailed information contained in this prospectus. Unless otherwise
indicated or required by the context, the discussion throughout this prospectus
assumes that the Policy has not gone into default, there is no outstanding
Policy Debt, and the death benefit is not determined by the minimum death
benefit percentage.
DEATH BENEFITS
There are two death benefit options. Under Option 1, the death benefit is the
FACE AMOUNT OF THE POLICY at the date of death. Under Option 2, the death
benefit is the FACE AMOUNT PLUS THE POLICY VALUE OF THE POLICY at the date of
death. If on the date of death of the insured, the Policy is being kept in force
under the No-Lapse Guarantee provision, the death benefit will be the Face
Amount of the Policy only. The actual death benefit will be the greater of the
death benefit under the applicable death benefit option or the Minimum Death
Benefit. The Minimum Death Benefit on any date is the Policy Value on that date
multiplied by the applicable minimum death benefit percentage for the Attained
Age of the life insured. A table of Minimum Death Benefit Percentages is located
under "Death Benefits - Minimum Death Benefit." You may change the death benefit
option and increase or decrease the Face Amount subject to the limitations
described in this Prospectus.
CASH VALUE ENHANCEMENT RIDERS
The Policy may be issued with one of two optional Cash Value Enhancement riders.
The benefit of either rider is that the Cash Surrender Value under the Policy
will be enhanced during the period for which Surrender Charges apply. The
decision to add one of these two riders must be made at issuance of the Policy
and, once made, is irrevocable. Adding either of these riders will result in
different premium and asset-based risk charges under the Policy.
Return of Premium Rider
The Policy may be issued with an optional Return of Premium Death Benefit rider
if death benefit Option 1 is elected. This rider provides an additional death
benefit payable upon the death of the life insured after the Company receives
due proof of death. The Return of Premium Death Benefit is calculated as
follows:
The return of premium rider death benefit is equal to the initial premium. Any
subsequent premiums will increase the death benefit at the time of the premium
payment by the amount of the premium. Any partial withdrawal will reduce the
death benefit at the time of withdrawal by an amount equal to the withdrawal
plus any applicable Surrender Charge (except that the rider death benefit will
not be reduced to less than zero).
PREMIUMS
You may pay premiums at any time and in any amount, subject to certain
limitations as described under "Premium Payments - Subsequent Premiums." Net
Premiums will be allocated, according to your instructions and at the Company's
discretion, to one or more of our general account and the sub-accounts of the
Separate Account. You may change your allocation instructions at any time. You
may also transfer amounts among the accounts.
6
POLICY VALUE
The Policy has a Policy Value reflecting premiums paid, certain charges for
expenses and cost of insurance, and the investment performance of the accounts
to which you have allocated premiums.
POLICY LOANS
You may borrow an amount not to exceed the Maximum Loanable Amount. Loan
interest at a rate of 5.25% during the first ten Policy Years and 4% thereafter
is due on each Policy Anniversary. We will deduct all outstanding Policy Debt
from proceeds payable at the insured's death or upon surrender.
SURRENDER AND PARTIAL WITHDRAWALS
You may make a partial withdrawal of your Policy Value. A partial withdrawal may
result in a reduction in the Face Amount of or the death benefit under the
Policy and an assessment of a portion of the Surrender Charges to which the
Policy is subject.
You may surrender your Policy for its Net Cash Surrender Value at any time while
the life insured is living. The Net Cash Surrender Value is equal to the Policy
Value less any Surrender Charge and outstanding monthly deductions due minus the
Policy Debt.
LAPSE AND REINSTATEMENT
Unless the No-Lapse Guarantee Cumulative Premium Test has been met, a Policy
will lapse (and terminate without value) when its Net Cash Surrender Value is
insufficient to pay the next monthly deduction and a grace period of 61 days
expires without your having made an adequate payment.
The Policies, therefore, differ in two important respects from conventional life
insurance policies. First, the failure to make planned premium payments will not
itself cause a Policy to lapse. Second, a Policy can lapse even if planned
premiums have been paid.
A policyowner may reinstate a lapsed Policy at any time within the five year
period following lapse provided the Policy was not surrendered for its Net Cash
Surrender Value. We will require evidence of insurability along with a certain
amount of premium as described under "Reinstatement."
CHARGES AND DEDUCTIONS
We assess certain charges and deductions in connection with the Policy. These
include:
- charges deducted from premiums paid,
- monthly deductions for administration, mortality and expense risks,
asset-based risk and cost of insurance charges,
- charges assessed on surrender or lapse, and
- if applicable, a charge for any supplementary benefits added to the
Policy.
The charges are summarized in the Table of Charges and Deductions. We may allow
you to request that the sum of the charges assessed monthly for the cost of
insurance and administrative expenses be deducted from the Fixed Account or one
or more of the sub-accounts of the Separate Account.
In addition, there are charges deducted from each Portfolio of the Trust. These
charges are summarized in the Table of Investment Management Fees and Expenses.
The Policy may be issued with either one of the two optional Cash Value
Enhancement riders which we offer. In the case of the Cash Value Enhancement
rider, the Surrender Charge is reduced. In the case of the Cash Value
Enhancement Plus rider, the Surrender Charge is eliminated. If a Policy is
issued with either of these riders, it will have different premium charges and
the same or higher asset-based risk charges as noted under the "Table of Charges
and Deductions."
7
INVESTMENT OPTIONS AND INVESTMENT ADVISERS
You may allocate Net Premiums to the Fixed Account or to one or more of the
sub-accounts of the Separate Account. Each of the sub-accounts invests in the
shares of one of the Portfolios of the Trust.
The Trust receives investment advisory services from Manufacturers Securities
Services, LLC ("MSS"). MSS is a registered investment adviser under the
Investment Advisers Act of 1940, as amended.
The Trust also employs subadvisers. The Table of Investment Options and
Investment Subadvisers shows the subadvisers that provide investment subadvisory
services to the indicated Portfolios.
Allocating net premiums only to one or a small number of the investment options
(other than the Lifestyle Trusts) should not be considered a balanced investment
strategy. In particular, allocating net premiums to a small number of investment
options that concentrate their investments in a particular business or market
sector will increase the risk that the value of your Policy will be more
volatile since these investment options may react similarly to business or
market specific events. Examples of business or market sectors where this risk
historically has been and may continue to be particularly high include: (a)
technology related businesses, including internet related businesses, (b) small
cap securities and (c) foreign securities. The Company does not provide advice
regarding appropriate investment allocations. Please discuss this matter with
your financial adviser.
INVESTMENT MANAGEMENT FEES AND EXPENSES
Each sub-account of the Separate Account purchases shares of one of the
Portfolios at net asset value. The net asset value of those shares reflects
investment management fees and certain expenses of the Portfolios. The fees and
expenses for each Portfolio for the Trust's last fiscal year are shown in the
Table of Investment Management Fees and Expenses below. These fees and expenses
are described in detail in the accompanying Trust prospectus to which reference
should be made.
TABLE OF CHARGES AND DEDUCTIONS
The table below sets forth the charges and deductions for the Policy. The Policy
may be issued with either one of two optional riders, the Cash Value Enhancement
Rider and the Cash Value Enhancement Plus Rider. Adding either one of these
riders to the Policy will alter certain charges under the Policy. The charges
associated with these riders are discussed below.
Premium Charges: The Policy provides for a deduction of
[____%] of the premium paid during the first
10 Policy Years and [___%] of each premium
paid thereafter. Where the Cash Value
Enhancement Rider is used, the premium
charges are increased to [___%] of the
premium paid during the first 10 Policy
Years and [____%] thereafter. Where the Cash
Value Enhancement Plus Rider is used, the
premium charges are [____%] for the first 10
Policy Years and [___%] thereafter.
Monthly Deductions: An ADMINISTRATION CHARGE of [$___] per
Policy Month is deducted in the first five
Policy Years. In subsequent years, the
administration charge is [$___ PER POLICY
MONTH. ]The monthly administration charge
does not vary with the Cash Value
Enhancement options.
A monthly ASSET-BASED RISK CHARGE is
assessed against the Policy value in the
Investment Accounts at an annual rate of
[____%]. This rate is guaranteed not to
exceed [____%]. Where the Cash Value
Enhancement Rider is used, the asset-based
risk charges are the same as those provided
in the Policy - an annual rate of [___%]
guaranteed not to exceed [___%]. Where the
Cash Value Enhancement Plus Rider is used,
the current asset-based risk charges are at
an annual rate of [___%] for the first 15
Policy Years and [____%] thereafter. The
guaranteed rates are [___%] for the first 15
Policy Years and [____% thereafter.
There is a monthly per $1000 Face Amount
charge for mortality and expense risks. The
monthly charge per $1000 of face amount
varies by the Age of the life insured at
issuance (or the Attained Age of the life
insured at the time of an increase) and the
death benefit option in effect. (See the
chart under "Charges and Deductions -
Mortality and Expense Risks Charge" for the
exact per $1000 Face Amount Charge.)]
A COST OF INSURANCE CHARGE is assessed
monthly based on the amount at risk under
the
8
Policy. The rate of this charge does not
vary with the Cash Value Enhancement
options.
Surrender Charges: A Surrender Charge is assessed upon
surrender of the Policy, a partial
withdrawal of Net Cash Surrender Value or
lapse of the Policy occurring during the
first 10 years following the Policy Date or
the effective date of a Face Amount
increase. The Surrender Charge is calculated
separately for the initial Face Amount and
each Face Amount increase.
The Surrender Charge is the sum of (i) plus
(ii), multiplied by (iii), multiplied by the
Grading Percentage, where:
(i) is the Rate per $1000 of initial Face
Amount (or Face Amount increase);
(ii) is [___%] of the lesser of (a) the
premiums paid per $1000 of Face Amount
during the first [___] Policy Years (or
premiums attributable to each $1000 of Face
Amount increase for the [___] years
following the increase) or (b) the Surrender
Charge Premium Limit set out in the Policy
for the initial Face Amount (or furnished by
the Company with respect to a Face Amount
increase); and
(iii) is the initial Face Amount (or Face
Amount increase) divided by 1000.
The Rate per $1000 of initial Face Amount is
based on the life insured's Age at issuance
of the Policy. The Rate per $1000 of Face
Amount increase is based on the life
insured's Attained Age at the time of the
increase. (See the chart under "Charges and
Deductions - Surrender Charges" for the
exact Rate per $1000 of initial Face
Amount.)
The Grading Percentage starts at 100% for
the first Policy Month and grades down by
[____%] each subsequent Policy Month
reaching zero at the end of [___] years.
If the Policy is issued with a Cash Value
Enhancement Rider, the Surrender Charge
calculated as described above is reduced by
[___%] for a surrender, withdrawal or lapse
occurring in the first two Policy Years,
[___%] in the third policy Year, [__%] in
the fourth policy Year and [___%] in the
fifth Policy Year.
If the Policy is issued with a Cash Value
Enhancement Plus Rider, there is no
Surrender Charge.
Loan Charges: A fixed loan interest rate of 5.25% is
charged during the first 10 Policy Years and
4% thereafter. Interest is credited to
amounts in the Loan Account at a rate of 4%.
This rate is guaranteed not to be less than
4.00% during the first 10 policy years and
3.50% thereafter.
Transfer Charge: A charge of $25 per transfer is assessed for
each transfer in excess of 12 in a Policy
Year.
Dollar Cost The charge for a transfer made under the
Dollar Cost Averaging program will not
exceed $5.
Averaging Charge:
Asset Allocation The charge for a transfer made under the
Balancer Charge: Asset Allocation Balancer program will not
exceed $15.
9
TABLE OF INVESTMENT MANAGEMENT FEES AND EXPENSES
TRUST ANNUAL EXPENSES (Series I Shares)
(as a percentage of Trust average net assets for the fiscal
year ended December 31, 2001)A
TOTAL TRUST
SERIES I OTHER EXPENSES ANNUAL EXPENSES
MANAGEMENT RULE 12B-1 (AFTER EXPENSE (AFTER EXPENSE
TRUST PORTFOLIO FEES FEES REIMBURSEMENT) REIMBURSEMENT)
- --------------- ---- ------ -------------- ---------------
INTERNET TECHNOLOGIES 1.000% 0.150% 0.110% 1.26%
PACIFIC RIM EMERGING MARKETS 0.700% 0.150% 0.380% 1.23%
TELECOMMUNICATIONS 0.950% 0.150% 0.340% 1.44%(B)
SCIENCE & TECHNOLOGY 0.916%(E) 0.150% 0.060% 1.13%
INTERNATIONAL SMALL CAP 0.950% 0.150% 0.500% 1.60%
HEALTH SCIENCES 0.942%(E) 0.150% 0.350% 1.44%(B)
AGGRESSIVE GROWTH 0.850% 0.150% 0.070% 1.07%
EMERGING SMALL COMPANY 0.900% 0.150% 0.070% 1.12%
SMALL COMPANY BLEND 0.900% 0.150% 0.120% 1.17%
DYNAMIC GROWTH 0.850% 0.150% 0.080% 1.08%
MID CAP GROWTH 0.850% 0.150% 0.390% 1.39%(B)
MID CAP OPPORTUNITIES 0.850% 0.150% 0.440% 1.44%(B)
MID CAP STOCK 0.775% 0.150% 0.080% 1.00%
ALL CAP GROWTH 0.785% 0.150% 0.060% 0.99%
FINANCIAL SERVICES 0.800% 0.150% 0.260% 1.21%(B)
OVERSEAS 0.800% 0.150% 0.150% 1.10%
INTERNATIONAL STOCK 0.838%(E) 0.150% 0.170% 1.16%
INTERNATIONAL VALUE 0.850% 0.150% 0.150% 1.15%
CAPITAL APPRECIATION 0.750% 0.150% 0.300% 1.20%
STRATEGIC OPPORTUNITIES 0.700% 0.150% 0.060% 0.91%
QUANTITATIVE MID CAP 0.650% 0.150% 0.100% 0.90%(B)
GLOBAL EQUITY 0.750% 0.150% 0.110% 1.01%
STRATEGIC GROWTH 0.750% 0.150% 0.200% 1.10%(B)
GROWTH 0.697% 0.150% 0.060% 0.91%
LARGE CAP GROWTH 0.750% 0.150% 0.080% 0.98%
ALL CAP VALUE 0.800% 0.150% 0.470% 1.42%(B)
CAPITAL OPPORTUNITIES 0.750% 0.150% 0.500%(G) 1.40%(B)(G)
QUANTITATIVE EQUITY 0.599% 0.150% 0.060% 0.81%
BLUE CHIP GROWTH 0.702%(E) 0.150% 0.060% 0.91%
UTILITIES 0.750% 0.150% 0.500%(G) 1.40%(B)(G)
REAL ESTATE SECURITIES 0.645% 0.150% 0.070% 0.87%
SMALL COMPANY VALUE 0.891%(E) 0.150% 0.110% 1.15%
MID CAP VALUE 0.800% 0.150% 0.200% 1.15%(B)
VALUE 0.642% 0.150% 0.060% 0.85%
TACTICAL ALLOCATION 0.750% 0.150% 0.400% 1.30%
FUNDAMENTAL VALUE 0.798% 0.150% 0.120% 1.07%(B)
GROWTH & INCOME 0.529% 0.150% 0.050% 0.73%
U.S. LARGE CAP VALUE 0.725% 0.150% 0.050% 0.93%
EQUITY-INCOME 0.711%(E) 0.150% 0.050% 0.91%
INCOME & VALUE 0.650% 0.150% 0.070% 0.87%
BALANCED 0.563% 0.150% 0.100% 0.81%
HIGH YIELD 0.625% 0.150% 0.060% 0.84%
STRATEGIC BOND 0.625% 0.150% 0.080% 0.86%
GLOBAL BOND 0.600% 0.150% 0.220% 0.97%
10
TOTAL TRUST
SERIES I OTHER EXPENSES ANNUAL EXPENSES
MANAGEMENT RULE 12B-1 (AFTER EXPENSE (AFTER EXPENSE
TRUST PORTFOLIO FEES FEES REIMBURSEMENT) REIMBURSEMENT)
- --------------- ---- ------ -------------- ---------------
TOTAL RETURN 0.600% 0.150% 0.060% 0.81%
INVESTMENT QUALITY BOND 0.500% 0.150% 0.090% 0.74%
DIVERSIFIED BOND 0.600% 0.150% 0.070% 0.82%
U.S. GOVERNMENT SECURITIES 0.550% 0.150% 0.060% 0.76%
MONEY MARKET 0.350% 0.150% 0.050% 0.55%
SMALL CAP INDEX 0.375% 0.150% 0.075% 0.60%
INTERNATIONAL INDEX 0.400% 0.150% 0.050% 0.60%
MID CAP INDEX 0.375% 0.150% 0.075% 0.60%
TOTAL STOCK MARKET INDEX 0.375% 0.150% 0.060% 0.59%
500 INDEX 0.375% 0.150% 0.050% 0.57%
LIFESTYLE AGGRESSIVE 1000 0.065% 0.000% 0.010% 0.075%(C),(D)
LIFESTYLE GROWTH 820 0.054% 0.000% 0.021% 0.075%(C),(D)
LIFESTYLE BALANCED 640 0.054% 0.000% 0.021% 0.075%(C),(D)
LIFESTYLE MODERATE 460 0.062% 0.000% 0.013% 0.075%C,(D)
LIFESTYLE CONSERVATIVE 280 0.069% 0.000% 0.006% 0.075%(C),(D)
(A) EFFECTIVE JANUARY 1, 2002, THE TRUST IMPLEMENTED A SERIES I RULE 12b-1
PLAN WHILE SIMULTANEOUSLY REDUCING ITS ADVISORY FEES AND IMPLEMENTING
ADVISORY FEE BREAKPOINTS. THE TRUST ANNUAL EXPENSE CHART REFLECTS THESE
CHANGES.
(B) ANNUALIZED; FOR THE PERIOD APRIL 30, 2001 (COMMENCEMENT OF OPERATIONS) TO
DECEMBER 31, 2001.
(C) THE INVESTMENT ADVISER TO THE TRUST, MANUFACTURERS SECURITIES SERVICES,
LLC ("MSS" OR THE "ADVISER") HAS VOLUNTARILY AGREED TO PAY CERTAIN
EXPENSES OF EACH LIFESTYLE TRUST AS NOTED BELOW. (FOR PURPOSES OF THE
EXPENSE REIMBURSEMENT, TOTAL EXPENSES OF A LIFESTYLE TRUST INCLUDES THE
ADVISORY FEE BUT EXCLUDES (A) THE EXPENSES OF THE UNDERLYING PORTFOLIOS,
(B) TAXES, (C) PORTFOLIO BROKERAGE, (D) INTEREST, (E) LITIGATION AND (F)
INDEMNIFICATION EXPENSES AND OTHER EXTRAORDINARY EXPENSES NOT INCURRED IN
THE ORDINARY COURSE OF THE TRUST'S BUSINESS.)
IF TOTAL EXPENSES OF A LIFESTYLE TRUST (ABSENT REIMBURSEMENT) EXCEED
0.075%, THE ADVISER WILL REDUCE THE ADVISORY FEE OR REIMBURSE EXPENSES OF
THAT LIFESTYLE TRUST BY AN AMOUNT SUCH THAT TOTAL EXPENSES OF THE
LIFESTYLE TRUST EQUAL 0.075%. IF THE TOTAL EXPENSES OF THE LIFESTYLE TRUST
(ABSENT REIMBURSEMENT) ARE EQUAL TO OR LESS THAN 0.075%, THEN NO EXPENSES
WILL BE REIMBURSED BY THE ADVISER.
THIS VOLUNTARY EXPENSE REIMBURSEMENT MAY BE TERMINATED AT ANY TIME. IF
SUCH EXPENSE REIMBURSEMENT WAS NOT IN EFFECT, TOTAL TRUST ANNUAL EXPENSES
WOULD BE HIGHER (BASED ON CURRENT ADVISORY FEES AND THE OTHER EXPENSES OF
THE LIFESTYLE TRUSTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001) AS NOTED
IN THE CHART BELOW:
TOTAL TRUST
MANAGEMENT RULE OTHER ANNUAL
TRUST PORTFOLIO FEES 12B-1 FEES EXPENSES EXPENSES
- --------------- ---- ---------- -------- --------
LIFESTYLE AGGRESSIVE 1000 0.065% 0.000% 1.081% 1.146%
LIFESTYLE GROWTH 820 0.054% 0.000% 0.998% 1.052%
LIFESTYLE BALANCED 640 0.054% 0.000% 0.914% 0.968%
LIFESTYLE MODERATE 460 0.062% 0.000% 0.823% 0.885%
LIFESTYLE CONSERVATIVE 280 0.069% 0.000% 0.790% 0.859%
(D) EACH LIFESTYLE TRUST WILL INVEST IN SHARES OF THE UNDERLYING PORTFOLIOS.
THEREFORE, EACH LIFESTYLE TRUST WILL BEAR ITS PRO RATA SHARE OF THE FEES
AND EXPENSES INCURRED BY THE UNDERLYING PORTFOLIOS IN WHICH IT INVESTS,
AND THE INVESTMENT RETURN OF EACH LIFESTYLE TRUST WILL BE NET OF THE
UNDERLYING PORTFOLIO EXPENSES. EACH LIFESTYLE PORTFOLIO MUST BEAR ITS OWN
EXPENSES. HOWEVER, THE ADVISER IS CURRENTLY PAYING CERTAIN OF THESE
EXPENSES AS DESCRIBED IN FOOTNOTE (C) ABOVE.
(E) EFFECTIVE JUNE 1, 2000, THE ADVISER VOLUNTARILY AGREED TO WAIVE A PORTION
OF ITS ADVISORY FEE FOR THE SCIENCE & TECHNOLOGY TRUST, HEALTH SCIENCES
TRUST, SMALL COMPANY VALUE TRUST, THE BLUE CHIP GROWTH TRUST, THE
EQUITY-INCOME TRUST AND THE INTERNATIONAL STOCK TRUST. ONCE THE COMBINED
ASSETS EXCEED SPECIFIED AMOUNTS, THE FEE REDUCTION IS INCREASED. THE
PERCENTAGE FEE REDUCTION FOR EACH ASSET LEVEL IS AS FOLLOWS:
FEE REDUCTION
COMBINED ASSET LEVELS (AS A PERCENTAGE OF THE ADVISORY FEE)
FIRST $750 MILLION 0.00%
BETWEEN $750 MILLION AND $1.5 BILLION 2.50%
BETWEEN $1.5 BILLION AND $3.0 BILLION 3.75%
OVER $3.0 BILLION 5.00%
11
THE FEE REDUCTIONS ARE APPLIED TO THE ADVISORY FEES OF EACH OF THE SIX
PORTFOLIOS. THIS VOLUNTARY FEE WAIVER MAY BE TERMINATED AT ANY TIME BY THE
ADVISER. AS OF DECEMBER 31, 2001, THE COMBINED ASSET LEVEL FOR ALL SIX
PORTFOLIOS WAS APPROXIMATELY $4.097 BILLION RESULTING IN A FEE REDUCTION
OF 5.00%. THERE IS NO GUARANTEE THAT THE COMBINED ASSET LEVEL WILL REMAIN
AT THIS AMOUNT. IF THE COMBINED ASSET LEVEL WERE TO DECREASE TO A LOWER
BREAKPOINT, THE FEE REDUCTION WOULD DECREASE AS WELL.
(F) MSS HAS VOLUNTARILY AGREED TO PAY EXPENSES OF EACH INDEX TRUST (EXCLUDING
THE ADVISORY FEE) THAT EXCEED THE FOLLOWING AMOUNTS: 0.050% IN THE CASE OF
THE INTERNATIONAL INDEX TRUST AND 500 INDEX TRUST AND 0.075% IN THE CASE
OF THE SMALL CAP INDEX TRUST, THE MID CAP INDEX TRUST AND TOTAL STOCK
MARKET INDEX TRUST. FOR SERIES I SHARES, IF SUCH EXPENSE REIMBURSEMENT
WERE NOT IN EFFECT, IT IS ESTIMATED THAT "OTHER EXPENSES" AND "TOTAL TRUST
ANNUAL EXPENSES" WOULD BE 0.07% AND 0.62%, RESPECTIVELY, FOR THE
INTERNATIONAL INDEX TRUST, 0.075% AND 0.60%, RESPECTIVELY, FOR THE SMALL
CAP INDEX TRUST, AND 0.075% AND 0.60%, RESPECTIVELY, FOR THE MID CAP INDEX
TRUST AND 0.060% AND 0.59%, RESPECTIVELY, FOR THE TOTAL STOCK MARKET INDEX
TRUST. FOR CLASS B SHARES, IF SUCH EXPENSE REIMBURSEMENT WERE NOT IN
EFFECT, IT IS ESTIMATED THAT "OTHER EXPENSES" AND "TOTAL TRUST ANNUAL
EXPENSES" WOULD BE 0.07% AND 0.82%, RESPECTIVELY, FOR THE INTERNATIONAL
INDEX TRUST, 0.075% AND 0.80%, RESPECTIVELY, FOR THE SMALL CAP INDEX
TRUST, AND 0.075% AND 0.80%, RESPECTIVELY, FOR THE MID CAP INDEX TRUST AND
0.06% AND 0.79%, RESPECTIVELY, FOR THE TOTAL STOCK MARKET INDEX TRUST. IT
IS ESTIMATED THAT THE EXPENSE REIMBURSEMENT WILL NOT BE EFFECTIVE DURING
THE YEAR END DECEMBER 31, 2002 FOR THE 500 INDEX TRUST. THE EXPENSE
REIMBURSEMENT MAY BE TERMINATED AT ANY TIME BY MSS.
(G) FOR ALL PORTFOLIOS EXCEPT THE LIFESTYLE TRUSTS, THE ADVISER REDUCES ITS
ADVISORY FEE OR REIMBURSES THE PORTFOLIO IF THE TOTAL OF ALL EXPENSES
(EXCLUDING ADVISORY FEES, TAXES, PORTFOLIO BROKERAGE COMMISSIONS,
INTEREST, LITIGATION AND INDEMNIFICATION EXPENSES AND OTHER EXTRAORDINARY
EXPENSES NOT INCURRED IN THE ORDINARY COURSE OF THE PORTFOLIO'S BUSINESS)
EXCEED CERTAIN ANNUAL RATES. IN THE CASE OF THE CAPITAL OPPORTUNITIES AND
UTILITIES TRUSTS, THE ADVISER REIMBURSED THE PORTFOLIOS FOR CERTAIN
EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2001. FOR SERIES I SHARES, IF
SUCH EXPENSE REIMBURSEMENT WERE NOT IN EFFECT, IT IS ESTIMATED THAT "OTHER
EXPENSES" AND "TOTAL TRUST ANNUAL EXPENSES" WOULD BE 0.560% AND 1.46%,
RESPECTIVELY, FOR THE CAPITAL OPPORTUNITIES TRUST AND 0.610% AND 1.51%,
RESPECTIVELY FOR THE UTILITIES TRUST. THESE VOLUNTARY EXPENSE
REIMBURSEMENTS MAY BE TERMINATED AT ANY TIME.
- -----------------------------------------------------------------------------------------------------------------------
Total Trust
Other Expenses Annual Expenses
MANAGEMENT SERIES I (After Expense (After Expense
TRUST PORTFOLIO FEES Rule 12b-1 Fee Reimbursement) REIMBURSEMENT)
- -----------------------------------------------------------------------------------------------------------------------
Small Mid-Cap Growth 0.850% 0.150% 0.100%(H) 1.100% A
Small-Mid Cap 0.950% 0.150% 0.100%(H) 1.200% A
International Equity Select 0.900% 0.150% 0.150%(H) 1.200% A
Select Growth 0.800% 0.150% 0.100%(H) 1.050% A
Global Equity Select 0.900% 0.150% 0.150%(H) 1.200% A
Core Value 0.850% 0.150% 0.100%(H) 1.100% A
High Grade Bond 0.600% 0.150% 0.100%(H) 0.850% A
(H) MSS has voluntarily agreed to pay expense of each portfolio that exceed
the following amounts: .15% for the International Equity Select Trust and
Global Equity Select Trust and .10% for the Small-Mid Cap Growth Trust,
Small-Mid Cap Trust, Select Growth Trust, Core Value Trust and High Grade
Bond Trust. If such expense reimbursement were not in effect, it is
estimated that "Other Expenses" and "Total Trust Annual Expenses" would be
2.22% and 3.27%, respectively, for the International Equity Select Trust,
2.14% and 3.19%, respectively, for the Global Equity Select Trust, 2.19%
and 3.18%, respectively, for the Small-Mid Cap Growth Trust, 1.99% and
3.09%, respectively, for the Small-Mid Cap Trust, 2.10% and 3.05%,
respectively, for the Select Growth Trust, 2.10% and 3.10%, respectively,
for the Core Value Trust and 1.97% and 2.72%, respectively, for the High
Grade Bond Trust. It is estimated that the expense reimbursement will
remain in effect during the year end December 31, 2002. The expense
reimbursement may be terminated at any time by MSS.
12
TABLE OF INVESTMENT OPTIONS AND INVESTMENT SUBADVISERS
The Trust currently has the following subadvisers who manage the portfolios of
the Trust which are investment options for this Policy, one of which is
Manufacturers Adviser Corporation ("MAC"). Both MSS and MAC are affiliates of
ours.
SUBADVISER PORTFOLIO
A I M Capital Management, Inc. All Cap Growth Trust
Aggressive Growth Trust
Capital Guardian Trust Company Small Company Blend Trust
U.S. Large Cap Value Trust
Income & Value Trust
Diversified Bond Trust
Cohen & Steers Capital Management, Inc. Real Estate Securities Trust
Davis Advisors Financial Services Trust
Fundamental Value Trust
The Dreyfus Corporation All Cap Value Trust
Fidelity Management & Research Company Strategic Opportunities Trust
Large Cap Growth Trust
Overseas Trust
Founders Asset Management LLC International Small Cap Trust
Franklin Advisers, Inc. Emerging Small Company Trust
INVESCO Funds Group, Inc. Telecommunications Trust
Mid Cap Growth Trust
Janus Capital Corporation Dynamic Growth Trust
Jennison Associates LLC Capital Appreciation Trust
Lord, Abbett & Co. Mid Cap Value Trust
Manufacturers Adviser Corporation Pacific Rim Emerging Markets Trust
Quantitative Equity Trust
Quantitative Mid Cap Trust
Money Market Trust
Index Trusts
Lifestyle Trusts(A)
Balanced Trust
Massachusetts Financial Services Company Strategic Growth Trust
Capital Opportunities Trust
Utilities Trust
Miller Anderson & Sherrerd, LLP Value Trust
High Yield Trust
Munder Capital Management Internet Technologies Trust
Pacific Investment Management Company Global Bond Trust
Total Return Trust
Putnam Investment Management, L.L.C. Mid Cap Opportunities Trust
13
Global Equity Trust
Salomon Brothers Asset Management Inc U.S. Government Securities Trust
Strategic Bond Trust
SSgA Funds Management, Inc. Growth Trust
Lifestyle Trusts(B)
T. Rowe Price Associates, Inc. Science & Technology Trust
Small Company Value Trust
Health Sciences Trust
Blue Chip Growth Trust
Equity-Income Trust
T. Rowe Price International, Inc. International Stock Trust
Templeton Investment Counsel, Inc. International Value Trust
UBS GLOBAL ASSET MANAGEMENT TACTICAL ALLOCATION TRUST
(FORMERLY, BRINSON ADVISORS, INC.)
Wellington Management Company, LLP Growth & Income Trust
Investment Quality Bond Trust
Mid Cap Stock Trust
14
Allegiance Capital, Inc High Grade Bond Trust
Kayne Anderson Rudnick Investment Management, LLC Small-Mid Cap Trust
Lazard Asset Management Global Equity Select Trust
International Equity Select Trust
Navellier Management Inc. Small-Mid Cap Growth Trust
Rorer Asset Management, LLC Core Value Trust
Roxbury Capital Management, LLC Select Growth Trust
- ----------
A)SSgA Funds Management, Inc. provides subadvisory consulting services to
Manufacturers Adviser Corporation regarding management of the Lifestyle Trusts.
GENERAL INFORMATION ABOUT MANULIFE New York, THE SEPARATE ACCOUNT AND THE TRUST
MANULIFE NEW YORK
We are a stock life insurance company organized under the laws of New York on
February 10, 1992. Our principal office is located at 100 Summit Lake Drive,
Second Floor Valhalla, New York 10595. We are a wholly-owned subsidiary of The
Manufacturers Life Insurance Company (U.S.A.) ("Manulife USA"), a stock life
insurance company incorporated in Maine on August 20, 1955 by a special act of
the Maine legislature and redomesticated under the laws of Michigan with its
principal office located at 73 Tremont Street, Boston, Massachusetts 02108. Our
ultimate parent is Manulife Financial Corporation ("MFC"), a publicly traded
company, based in Toronto, Canada. MFC is the holding company of The
Manufacturers Life Insurance Company and its subsidiaries, collectively known as
Manulife Financial.
RATINGS
The Manufacturers Life Insurance Company of New York has received the following
ratings from independent ratings agencies:
Standard and Poor's Insurance Ratings Service: AA+ (for financial strength)
A.M. Best Company: A++ (for financial strength)
Fitch: AAA (for insurer financial strength)
These ratings, which are current as of the date of this prospectus and are
subject to change, are assigned to Manulife New York as a measure of the
Company's ability to honor the death benefit and no lapse guarantees but not
specifically to its products, the performance (return) of these products, the
value of any investment in these products upon withdrawal or to individual
securities held in any portfolio.
THE SEPARATE ACCOUNT
The Company established The Manufacturers Life Insurance Company of New York
Separate Account B ("Separate Account") on May 6, 1997, subject to approval by
the Superintendent of Insurance of New York. The Separate Account holds assets
that are segregated from all of Manulife New York's other assets. The Separate
Account is currently used only to support variable life insurance policies.
ASSETS OF THE SEPARATE ACCOUNT
Manulife New York is the legal owner of the assets in the Separate Account. The
income, gains, and losses of the Separate Account, whether or not realized, are,
in accordance with applicable contracts, credited to or charged against the
Account without regard to the other income, gains, or losses of Manulife New
York. Manulife New York will at
15
all times maintain assets in the Separate Account with a total market value at
least equal to the reserves and other liabilities relating to variable benefits
under all policies participating in the Separate Account. These assets may not
be charged with liabilities which arise from any other business Manulife New
York conducts. However, all obligations under the variable life insurance
policies are general corporate obligations of Manulife New York.
REGISTRATION
The Separate Account is registered with the SEC under the Investment Company Act
of 1940, as amended (the"1940 Act") as a unit investment trust. A unit
investment trust is a type of investment company which invests its assets in
specified securities, such as the shares of one or more investment companies,
rather than in a portfolio of unspecified securities. Registration under the
1940 Act does not involve any supervision by the SEC of the management or
investment policies or practices of the Separate Account. For state law purposes
the Separate Account is treated as a part or division of Manulife New York.
THE TRUST
Each sub-account of the Separate Account will purchase Series I shares only of a
particular Portfolio. The Trust is registered under the 1940 Act as an open-end
management investment company. Each of the Trust portfolios, except the
Lifestyle Trusts, are subject to a Rule 12b-1 fee of .15% of a portfolio's
Series I net assets. The Separate Account will purchase and redeem shares of the
Portfolios at net asset value. Shares will be redeemed to the extent necessary
for Manulife New York to provide benefits under the Policies, to transfer assets
from one sub-account to another or to the general account as requested by
policyowners, and for other purposes not inconsistent with the Policies. Any
dividend or capital gain distribution received from a Portfolio with respect to
the Policies will be reinvested immediately at net asset value in shares of that
Portfolio and retained as assets of the corresponding sub-account.
The Trust shares are issued to fund benefits under both variable annuity
contracts and variable life insurance policies issued by the Company or life
insurance companies affiliated with the Company. Manulife New York may also
purchase shares through its general account for certain limited purposes
including initial portfolio seed money. For a description of the procedures for
handling potential conflicts of interest arising from the funding of such
benefits see the accompanying Trust prospectus.
INVESTMENT OBJECTIVES OF THE PORTFOLIOS
The investment objectives and certain policies of the Portfolios currently
available to policyowners through corresponding sub-accounts are set forth
below. There is, of course, no assurance that these objectives will be met. A
full description of the Trust, its investment objectives, policies and
restrictions, the risks associated therewith, its expenses, and other aspects of
its operation is contained in the accompanying Trust prospectus, which should be
read together with this prospectus.
ELIGIBLE PORTFOLIOS
The Portfolios of the Trust available under the Policies are as follows:
The INTERNET TECHNOLOGIES TRUST seeks long-term capital appreciation by
investing the portfolio's assets primarily in companies engaged in
Internet-related business (such businesses also include Intranet-related
businesses).
The PACIFIC RIM EMERGING MARKETS TRUST seeks long-term growth of capital by
investing in a diversified portfolio that is comprised primarily of common
stocks and equity-related securities of corporations domiciled in countries in
the Pacific Rim region.
The TELECOMMUNICATIONS TRUST seeks capital appreciation (with earning income as
a secondary objective) by investing, under normal market conditions, primarily
in equity securities of companies engaged in the telecommunications sector, that
is, in the design, development, manufacture, distribution or sale of
communications services and equipment and companies that are involved in
supplying equipment or services to such companies.
The SCIENCE & TECHNOLOGY TRUST seeks long-term growth of capital by investing,
under normal market condition, at least 80% of its net assets (plus any
borrowings for investment purposes) in common stocks of companies expected to
benefit from the development, advancement, and use of science and technology.
Current income is incidental to the portfolio's objective.
The INTERNATIONAL SMALL CAP TRUST seeks capital appreciation by investing
primarily in securities issued by foreign companies which have total market
capitalization or annual revenues of $1.5 billion or less. These securities may
represent companies in both established and emerging economies throughout the
world.
16
The HEALTH SCIENCES TRUST seeks long-term capital appreciation by investing,
under normal market conditions, at least 80% of its net assets (plus any
borrowings for investment purposes) in common stocks of companies engaged in the
research, development, production, or distribution of products or services
related to health care, medicine, or the life sciences (collectively termed
"health sciences").
The AGGRESSIVE GROWTH TRUST seeks long-term capital appreciation by investing
the portfolio's asset principally in common stocks, convertible bonds,
convertible preferred stocks and warrants of companies which in the opinion of
the subadviser are expected to achieve earnings growth over time at a rate in
excess of 15% per year. Many of these companies are in the small and
medium-sized category.
The EMERGING SMALL COMPANY TRUST seeks long-term growth of capital by investing,
under normal market conditions, at least 80% of its net assets (plus any
borrowings for investment purposes) in common stock equity securities of
companies with market capitalizations that approximately match the range of
capitalization of the Russell 2000 Growth Index* ("small cap stocks") at the
time of purchase.
The SMALL COMPANY BLEND TRUST seeks long-term growth of capital and income by
investing the portfolio's assets, under normal market conditions, primarily in
equity and equity-related securities of companies with market capitalizations
that approximately match the range of capitalization of the Russell 2000 Index
at the time of purchase.
The DYNAMIC GROWTH TRUST seeks long-term growth of capital by investing the
portfolio's assets primarily in equity securities selected for their growth
potential. Normally at least 50% of its equity assets are invested in
medium-sized companies.
The MID CAP GROWTH TRUST seeks capital appreciation by investing primarily in
common stocks of mid-sized companies - those with market capitalizations between
$2.5 billion and $15 billion at the time of purchase.
The MID CAP OPPORTUNITIES TRUST seeks capital appreciation by investing, under
normal market conditions, primarily in common stocks and other equity securities
of U.S. mid-size companies.
The MID CAP STOCK TRUST seeks long-term growth of capital by investing primarily
in equity securities of mid-size companies with significant capital appreciation
potential .
The ALL CAP GROWTH TRUST seeks long-term capital appreciation by investing the
portfolio's asset,s under normal market conditions, principally in common stocks
of companies that are likely to benefit from new or innovative products,
services or processes, as well as those that have experienced above average,
long-term growth in earnings and have excellent prospects for future growth.
The FINANCIAL SERVICES TRUST seeks growth of capital by investing primarily in
common stocks of financial companies. During normal market conditions, at least
65% (80% after July 31, 2002) of the portfolio's net assets (plus any borrowings
for investment purposes) are invested in companies that are principally engaged
in financial services. A company is "principally engaged" in financial services
if it owns financial services-related assets constituting at least 50% of the
value of its total assets, or if at least 50% of its revenues are derived from
its provision of financial services.
The OVERSEAS TRUST seeks growth of capital by investing, under normal market
conditions, at least 80% of its net assets (plus any borrowings for investment
purposes) in foreign securities (including American Depositary Receipts (ADRs)
and European Depositary Receipts (EDRs)). The portfolio expects to invest
primarily in equity securities.
The INTERNATIONAL STOCK TRUST seeks long-term growth of capital by investing
primarily in common stocks of established, non-U.S. companies.
The INTERNATIONAL VALUE TRUST seeks long-term growth of capital by investing,
under normal market conditions, primarily in equity securities of companies
located outside the U.S., including emerging markets.
The CAPITAL APPRECIATION TRUST seeks long-term capital growth by investing at
least 65% of its total assets in equity-related securities of companies that
exceed $1 billion in market capitalization and that the subadviser believes have
above-average growth prospectus. These companies are generally medium-to-large
capitalization companies.
The STRATEGIC OPPORTUNITIES TRUST (formerly, Mid Cap Blend Trust) seeks growth
of capital by investing primarily in common stocks of U.S. issuers and
securities convertible into or carrying the right to buy common stocks.
17
The QUANTITATIVE MID CAP TRUST seeks long-term growth of capital by investing,
under normal market conditions, at least 80% of its total assets (plus any
borrowings for investment purposes) in U.S. mid-cap stocks, convertible
preferred stocks, convertible bonds and warrants.
The GLOBAL EQUITY TRUST seeks long-term capital appreciation by investing, under
normal market conditions, at least 80% of its net assets (plus any borrowings
for investment purposes) in equity securities of companies in at least three
different countries, including the U.S. The portfolio may invest in companies of
any size but emphasizes mid- and large-capitalization companies that the
subadviser believes are undervalued.
The STRATEGIC GROWTH TRUST seeks capital appreciation by investing, under normal
market conditions, at least 65% of the portfolio's total assets in common stocks
and related securities (such as preferred stocks, bonds, warrants or rights
convertible into stock and depositary receipts for these securities) of
companies which the subadviser believes offer superior prospects for growth.
The GROWTH TRUST seeks long-term growth of capital by investing primarily in
large capitalization growth securities (market capitalizations of approximately
$1 billion or greater).
The LARGE CAP GROWTH TRUST seeks long-term growth of capital by investing, under
normal market conditions, at least 80% of its net assets (plus any borrowings
for investment purposes) in equity securities of companies with large market
capitalizations.
The ALL CAP VALUE TRUST seeks capital appreciation by investing, under normal
market conditions, at least 65% of the portfolio's total assets in the stocks of
value companies of any size.
The CAPITAL OPPORTUNITIES TRUST seeks capital appreciation by investing, under
normal market conditions, at least 65% of the portfolio's total assets in common
stocks and related securities, such as preferred stock, convertible securities
and depositary receipts. The portfolio focuses on companies which the subadviser
believes have favorable growth prospects and attractive valuations based on
current and expected earnings or cash flow.
The QUANTITATIVE EQUITY TRUST seeks to achieve intermediate and long-term growth
through capital appreciation and current income by investing in common stocks
and other equity securities of well established companies with promising
prospects for providing an above average rate of return.
The BLUE CHIP GROWTH TRUST seeks to achieve long-term growth of capital (current
income is a secondary objective) by investing, under normal market conditions,
at least 80% of the portfolio's total assets in the common stocks of large and
medium-sized blue chip growth companies. Many of the stocks in the portfolio are
expected to pay dividends.
The UTILITIES TRUST seeks capital growth and current income (income above that
available from a portfolio invested entirely in equity securities) by investing,
under normal market conditions, at least 80% of the portfolio's net assets (plus
any borrowings for investment purposes) in equity and debt securities of
domestic and foreign companies in the utilities industry.
The REAL ESTATE SECURITIES TRUST seeks to achieve a combination of long-term
capital appreciation and current income by investing, under normal market
conditions, at least 80% of its net assets (plus any borrowings for investment
purposes) in securities of real estate companies .
The SMALL COMPANY VALUE TRUST seeks long-term growth of capital by investing,
under normal market conditions, primarily in small companies whose common stocks
are believed to be undervalued. Under normal market conditions, the portfolio
will invest at least 80% of its net assets (plus any borrowings for investment
purposes) in companies with a market capitalization that do not exceed the
maximum market capitalization of any security in the Russell 2000 Index at the
time of purchase.
The MID CAP VALUE TRUST seeks capital appreciation by investing, under normal
market conditions, at least 80% of the portfolio's net assets (plus any
borrowings for investment purposes) will consist of investments in mid-sized
companies, with market capitalizations of roughly $500 million to $10 billion.
The VALUE TRUST seeks to realize an above-average total return over a market
cycle of three to five years, consistent with reasonable risk, by investing
primarily in common and preferred stocks, convertible securities, rights and
warrants to purchase common stocks, ADRs and other equity securities of
companies with equity capitalizations usually greater than $300 million.
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The TACTICAL ALLOCATION TRUST seeks total return, consisting of long-term
capital appreciation and current income, by allocating the portfolio's assets
between (i) a stock portion that is designed to track the performance of the S&P
500 Composite Stock Price Index, and (ii) a fixed income portion that consists
of either five-year U.S. Treasury notes or U.S. Treasury bills with remaining
maturities of 30 days.
The FUNDAMENTAL VALUE TRUST seeks growth of capital by investing, under normal
market conditions, primarily in common stocks of U.S. companies with market
capitalizations of at least $5 billion that the subadviser believes are
undervalued. The portfolio may also invest in U.S. companies with smaller
capitalizations.
The GROWTH & INCOME TRUST seeks long-term growth of capital and income,
consistent with prudent investment risk, by investing primarily in a diversified
portfolio of common stocks of U.S. issuers which the subadviser believes are of
high quality.
The U.S. LARGE CAP VALUE TRUST seeks long-term growth of capital and income by
investing the portfolio's assets, under normal market conditions, primarily in
equity and equity-related securities of companies with market capitalization
greater than $500 million.
The EQUITY-INCOME TRUST seeks to provide substantial dividend income and also
long-term capital appreciation by investing primarily in dividend-paying common
stocks, particularly of established companies with favorable prospects for both
increasing dividends and capital appreciation.
The INCOME & VALUE TRUST seeks the balanced accomplishment of (a) conservation
of principal and (b) long-term growth of capital and income by investing the
portfolio's assets in both equity and fixed-income securities. The subadviser
has full discretion to determine the allocation between equity and fixed income
securities.
The BALANCED TRUST seeks current income and capital appreciation by investing
the portfolio's assets in a balanced portfolio of (i) equity securities and (ii)
fixed income securities.
The HIGH YIELD TRUST seeks to realize an above-average total return over a
market cycle of three to five years, consistent with reasonable risk, by
investing primarily in high yield debt securities, including corporate bonds and
other fixed-income securities.
The STRATEGIC BOND TRUST seeks a high level of total return consistent with
preservation of capital by giving its subadviser broad discretion to deploy the
portfolio's assets among certain segments of the fixed income market as the
subadviser believes will best contribute to achievement of the portfolio's
investment objective.
The GLOBAL BOND TRUST seeks to realize maximum total return, consistent with
preservation of capital and prudent investment management by investing the
portfolio's asset primarily in fixed income securities denominated in major
foreign currencies, baskets of foreign currencies (such as the ECU), and the
U.S. dollar.
The TOTAL RETURN TRUST seeks to realize maximum total return, consistent with
preservation of capital and prudent investment management by investing, under
normal market conditions, at least 65% of the portfolio's assets in a
diversified portfolio of fixed income securities of varying maturities. The
average portfolio duration will normally vary within a three- to six-year time
frame based on the subadviser's forecast for interest rates.
The INVESTMENT QUALITY BOND TRUST seeks a high level of current income
consistent with the maintenance of principal and liquidity, by investing in a
diversified portfolio of investment grade bonds and tends to focus its
investment on corporate bonds and U.S. Government bonds with intermediate to
longer term maturities. The portfolio may also invest up to 20% of its assets in
non-investment grade fixed income securities.
The DIVERSIFIED BOND TRUST seeks high total return consistent with the
conservation of capital by investing, under normal market conditions, at least
80% of the portfolio's net assets (plus any borrowings for investment purposes)
in fixed income securities.
The U.S. GOVERNMENT SECURITIES TRUST seeks a high level of current income
consistent with preservation of capital and maintenance of liquidity, by
investing in debt obligations and mortgage-backed securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
derivative securities such as collateralized mortgage obligations backed by such
securities.
The MONEY MARKET TRUST seeks maximum current income consistent with preservation
of principal and liquidity by
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investing in high quality money market instruments with maturities of 397 days
or less issued primarily by U.S. entities.
The SMALL CAP INDEX TRUST seeks to approximate the aggregate total return of a
small cap U.S. domestic equity market index by attempting to track the
performance of the Russell 2000 Index.*
The INTERNATIONAL INDEX TRUST seeks to approximate the aggregate total return of
a foreign equity market index by attempting to track the performance of the
Morgan Stanley European Australian Far East Free Index (the "MSCI EAFE Index").*
The MID CAP INDEX TRUST seeks to approximate the aggregate total return of a mid
cap U.S. domestic equity market index by attempting to track the performance of
the S&P Mid Cap 400 Index.*
The TOTAL STOCK MARKET INDEX seeks to approximate the aggregate total return of
a broad U.S. domestic equity market index by attempting to track the performance
of the Wilshire 5000 Equity Index.*
The 500 INDEX TRUST seeks to approximate the aggregate total return of a broad
U.S. domestic equity market index by attempting to track the performance of the
S&P 500 Composite Stock Price Index.*
The LIFESTYLE AGGRESSIVE 1000 TRUST seeks to provide long-term growth of capital
(current income is not a consideration) by investing 100% of the Lifestyle
Trust's assets in other portfolios of the Trust ("Underlying Portfolios") which
invest primarily in equity securities.
The LIFESTYLE GROWTH 820 TRUST seeks to provide long-term growth of capital with
consideration also given to current income by investing approximately 20% of the
Lifestyle Trust's assets in Underlying Portfolios which invest primarily in
fixed income securities and approximately 80% of its assets in Underlying
Portfolios which invest primarily in equity securities.
The LIFESTYLE BALANCED 640 TRUST seeks to provide a balance between a high level
of current income and growth of capital with a greater emphasis given to capital
growth by investing approximately 40% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income securities and
approximately 60% of its assets in Underlying Portfolios which invest primarily
in equity securities.
The LIFESTYLE MODERATE 460 TRUST seeks to provide a balance between a high level
of current income and growth of capital with a greater emphasis given to current
income by investing approximately 60% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income securities and
approximately 40% of its assets in Underlying Portfolios which invest primarily
in equity securities.
The LIFESTYLE CONSERVATIVE 280 TRUST seeks to provide a high level of current
income with some consideration also given to growth of capital by investing
approximately 80% of the Lifestyle Trust's assets in Underlying Portfolios which
invest primarily in fixed income securities and approximately 20% of its assets
in Underlying Portfolios which invest primarily in equity securities.
The SMALL-MID CAP GROWTH TRUST seeks long-term growth of capital by investing
principally in equity securities issued of fast growing companies that offer
innovative products, services, or technologies to a rapidly expanding
marketplace.
The SMALL-MID CAP TRUST seeks to achieve long-term capital appreciation, with
dividend income as a secondary consideration, by investing principally in common
stocks of small and mid cap companies that the subadviser believes are of high
quality.
The INTERNATIONAL EQUITY SELECT TRUST seeks long-term capital appreciation by
investing primarily in equity securities, principal American Depository Receipts
and common stocks, of relatively large non-U.S. companies with market
capitalizations in the range of the Morgan Stanley Capital International (MSCI)
Europe, Australia and Far East Index that the subadviser believes are
undervalued based on their earnings, cash flow or asset values.
The SELECT GROWTH TRUST seeks long-term growth of capital by investing primarily
large-cap equity securities.
The GLOBAL EQUITY SELECT TRUST seeks long-term capital by investing primarily in
equity securities, including
20
American and Global Depository Receipts and common stocks, of relatively large
U.S. and non-U.S. companies with market capitalizations in the range of the
Morgan Stanley Capital International (MSCI) World Index that the subadviser
believes are undervalued based on their earnings, cash flow or asset values.
The CORE VALUE TRUST seeks long-term capital appreciation by investing, under
normal market conditions, primarily in equity and equity-related securities of
companies with market capitalization greater than $1 billion at the time of
purchase.
The HIGH GRADE BOND TRUST seeks to maximize total return, consistent with the
preservation of capital and prudent investment management, by investing
primarily (at least 80% under normal market conditions) in investment grade,
fixed income securities of varying maturities.
*"Standard & Poor's(R)," "S&P 500(R)," "Standard and Poor's 500(R)" and
"Standard and Poor's 400" are trademarks of The McGraw-Hill Companies, Inc.
"Russell 2000(R)" is a trademark of Frank Russell Company. "Wilshire 5000(R)" is
a trademark of Wilshire Associates. "Morgan Stanley European Australian Far East
Free" and "EAFE(R)" are trademarks of Morgan Stanley & Co. Incorporated. None of
the Index Trusts are sponsored, endorsed, managed, advised, sold or promoted by
any of these companies, and none of these companies make any representation
regarding the advisability of investing in the Trust.
ISSUING A POLICY
REQUIREMENTS
To purchase a Policy, an applicant must submit a completed application. A Policy
will not be issued until the underwriting process has been completed to the
Company's satisfaction.
Policies may be issued on a basis which does not distinguish between the
insured's sex, with prior approval from the Company. A Policy will generally be
issued only on the lives of insureds from ages 0 through 90.
Each Policy has a Policy Date, an Effective Date and an Issue Date (See
"Definitions" above).
The Policy Date is the date from which the first monthly deductions are
calculated and from which Policy Years, Policy Months and Policy Anniversaries
are determined. The Effective Date is the date the Company becomes obligated
under the Policy and when the first monthly deductions are deducted from the
Policy Value. The Issue Date is the date from which Suicide and Validity are
measured.
If an application accepted by the Company is not accompanied by a check for the
initial premium and no request to backdate the Policy has been made:
(i) the Policy Date and the Effective Date will be the date the Company
receives the check at its Service Office, and
(ii) the Issue Date will be the date the Company issues the Policy.
The initial premium must be received within 60 days after the Issue Date, and
the life insured must be in good health on the date the initial premium is
received. If the premium is not paid or if the application is rejected, we will
cancel the Policy and return any partial premiums paid to the applicant.
MINIMUM INITIAL FACE AMOUNT
We will generally issue a Policy only if it has a Face Amount of at least
$100,000 [$500,000].
BACKDATING A POLICY
Under limited circumstances, the Company may backdate a Policy, upon request, by
assigning a Policy Date earlier than the date the application is signed.
However, in no event will a Policy be backdated more than six months before the
date of the application for the Policy. Monthly deductions will be made for the
period the Policy Date is backdated. Regardless of whether or not a Policy is
backdated, we will credit Net Premiums received prior to the Effective Date of a
Policy with interest from the date of receipt at the rate of return then being
earned on amounts allocated to the Money Market Trust.
As of the Effective Date, the premiums paid plus interest credited, net of the
premium charge, will be allocated among the Investment Accounts and/or Fixed
Account in accordance with the policyowner's instructions unless such amount is
first allocated to the Money Market Trust for the duration of the Right to
Examine period.
21
TEMPORARY INSURANCE AGREEMENT
In accordance with the Company's underwriting practices, temporary insurance
coverage may be provided under the terms of a Temporary Insurance Agreement.
Generally, temporary life insurance may not exceed $1,000,000 and may not be in
effect for more than 90 days. This temporary insurance coverage will be issued
on a conditional receipt basis, which means that any benefits under such
temporary coverage will only be paid if the life insured meets the Company's
usual and customary underwriting standards for the coverage applied for.
The acceptance of an application is subject to the Company's underwriting rules,
and we reserve the right to request additional information or to reject an
application for any reason.
Persons failing to meet standard underwriting classification may be eligible for
a Policy with an Additional Rating assigned to it.
RIGHT TO EXAMINE THE POLICY
A Policy may be returned for a refund of the premium within 10 days after the
policy is received. The Policy can be mailed or delivered to the Manulife New
York agent who sold it or to the Manulife New York Service Office. Immediately
on such delivery or mailing, the Policy shall be deemed void from the beginning.
Within seven days after receipt of the returned Policy at its Service Office,
Manulife New York will refund any premium paid.
If the Policy is purchased in connection with a replacement of an existing
policy (as defined below), the policyowner may also cancel the Policy by
returning it to the Service Office or the Manulife New York agent who sold it at
any time within 60 days after receipt of the Policy. Within 10 days of receipt
of the Policy by the Company, the Company will refund the premium to the
policyowner. In the case of a replacement of a policy issued by a New York
insurance company, the policyowner may have the right to reinstate the prior
policy. The policyowner should consult with his or her attorney or the Manulife
New York agent regarding this matter prior to purchasing the new Policy.
Replacement of an existing life insurance policy generally is defined as the
purchase of a new life insurance policy in connection with (a) the lapse,
surrender or change of, or borrowing from, an existing life insurance policy or
(b) the assignment to a new issuer or an existing life insurance policy. This
description, however, does not necessarily cover all situations which could be
considered a replacement of existing life insurance policy. Therefore, a
policyowner should consult with his or her Manulife New York agent or attorney
regarding whether the purchase of a new life insurance policy is a replacement
of an existing life insurance policy.
Manulife New York reserves the right to delay the refund of any premium paid by
check until the check has cleared.
LIFE INSURANCE QUALIFICATION
A Policy must satisfy either one of two tests to qualify as a life insurance
contract for purposes of Section 7702 of the Internal Revenue Code of 1986, as
amended (the "Code"). At the time of application, the policyowner must choose
either the Cash Value Accumulation Test or the Guideline Premium Test. The test
cannot be changed once the Policy is issued.
CASH VALUE ACCUMULATION TEST
Under the Cash Value Accumulation Test ("CVAT"), the Policy Value may not at any
time exceed the Net Single Premium. The Net Single Premium is the one payment
that would be needed on a specific date to fund future Policy benefits, assuming
guaranteed charges and 4% net interest. To ensure that a Policy meets the CVAT,
the Company will generally increase the death benefit, temporarily, to the
required minimum amount. However, we reserve the right to require evidence of
insurability should a premium payment cause the death benefit to increase by
more than the premium payment amount. Any excess premiums will be refunded.
GUIDELINE PREMIUM TEST
Under the Guideline Premium Test, the sum of premiums paid into the Policy may
not at any time exceed the Guideline Premium Limitation as of such time. The
Guideline Premium Limitation is, as of any date, the greater of:
(a) the Guideline Single Premium, or
(b) the sum of the Guideline Level Premiums to such date.
If you elected this test, the Guideline Single Premium and the Guideline Level
Premium are as set forth in the Policy.
22
The Guideline Premium Test requires a life insurance policy to meet minimum
ratios of life insurance coverage to policy value. This is achieved by ensuring
that the death benefit is at all times at least equal to the Minimum Death
Benefit. The Minimum Death Benefit on any date is defined as the Policy Value on
that date times the applicable minimum death benefit percentage for the Attained
Age of the life insured. See "Death Benefits - Minimum Death Benefit."
The Guideline Premium Test restricts the maximum premiums that may be paid into
a life insurance policy for a given death benefit. The policy's death benefit
must also be at least equal to the Minimum Death Benefit.
Changes to the Policy may affect the maximum amount of premiums, such as:
- - a change in the Policy's Face Amount.
- - a change in the death benefit option.
- - partial withdrawals.
- - addition or deletion of Supplementary Benefits.
Any of the above changes could cause the total premiums paid to exceed the new
maximum limit. In this situation, the Company may refund any excess premiums
paid. In addition, these changes could reduce the future premium limitations.
DEATH BENEFITS
If the Policy is in force at the time of the death of the life insured, the
Company will pay an insurance benefit. The amount payable will be the death
benefit under the selected death benefit option, plus any amounts payable under
any Supplementary Benefits added to the Policy, less the Policy Debt and less
any outstanding monthly deductions due. The insurance benefit will be paid in
one lump sum unless another form of settlement option is agreed to by the
beneficiary and the Company. If the insurance benefit is paid in one sum, the
Company will pay interest from the date of death to the date of payment. If the
life insured should die after we receive a request for surrender, no insurance
benefit will be payable, and we will pay only the Net Cash Surrender Value.
DEATH BENEFIT OPTIONS
There are two death benefit options, described below. The actual death benefit
is the amount shown below under the applicable death benefit option or, if
greater, the Minimum Death Benefit as described below.
DEATH BENEFIT OPTION 1
Under Option 1, the death benefit is the Face Amount of the Policy at the date
of death.
DEATH BENEFIT OPTION 2
Under Option 2, the death benefit is the Face Amount plus the Policy Value of
the Policy at the date of death.
If on the date of death of the insured, the Policy is being kept in force under
the No-Lapse Guarantee provision, the death benefit will be the Face Amount of
the Policy only.
If any partial withdrawals are made, the death benefit, whether it is Option 1
or 2, will be less than it would be if no withdrawals were made. Making a
partial withdrawal will result in a reduction in the Face Amount of insurance
for Death Benefit Option 1 . See "Policy Surrender and Partial Withdrawals -
Reduction in Face Amount due to a Partial Withdrawal."
If the life insured should die during a grace period, the death benefit will be
reduced by the amount of any monthly deductions due, and the Policy Value will
be calculated as of the date of the default giving rise to the grace period.
MINIMUM DEATH BENEFIT.
The Minimum Death Benefit depends on whether the policyowner elected the
Guideline Premium Test or the Cash Value Accumulation Test for qualification of
the Policy as life insurance under the Code. See "Issuing a Policy - Life
Insurance Qualification."
If you elected the Guideline Premium Test, the sum of the death benefit as
described above and the benefit payable under any Supplementary Term Insurance
on the life insured will never be less than the Policy Value at the date of
death multiplied by the applicable minimum death benefit percentage in the table
below.
23
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
-------------------------------------------------------
ATTAINED AGE APPLICABLE PERCENTAGE
40 and under 250%
45 215%
50 185%
55 150%
60 130%
65 120%
70 115%
75 105%
90 105%
95 and above 100%
For ages not shown, the applicable percentage can be found by reducing the above
applicable percentages proportionately.
If you elected the Cash Value Accumulation Test, on any date the sum of the
death benefit as described above, plus the benefit payable under any
Supplementary Term Insurance on the life insured, will always be equal to the
amount required on such date to produce a Policy Value that does not exceed the
Net Single Premium required to fund future benefits under the policy.
CHANGING THE DEATH BENEFIT OPTION
You may change the death benefit option as described below once each Policy Year
after the first Policy Year. The change will occur on the first day of the next
Policy Month after we receive a written request for a change at our Service
Office. The Company reserves the right to limit a request for a change if the
change would cause the Policy to fail to qualify as life insurance for tax
purposes. We will not allow a change in death benefit option if it would cause
the Face Amount to decrease below $100,000 [$500,000].
A change in the death benefit option will result in a change in the Policy's
Face Amount in order to avoid any change in the amount of the death benefit, as
follows:
CHANGE FROM OPTION 1 TO OPTION 2
The new Face Amount will be equal to the Face Amount prior to the change minus
the Policy Value as of the date of the change.
CHANGE FROM OPTION 2 TO OPTION 1
The new Face Amount will be equal to the Face Amount prior to the change plus
the Policy Value as of the date of the change.
No new Surrender Charges will apply to an increase in Face Amount solely due to
a change in the death benefit option.
CHANGING THE FACE AMOUNT
Subject to the limitations stated in this prospectus, you may, upon written
request, increase or decrease the Face Amount of the Policy. The Company
reserves the right to limit a change in Face Amount so as to prevent the Policy
from failing to qualify as life insurance for tax purposes.
INCREASE IN FACE AMOUNT
You may increase the Face Amount once each Policy Year after the first Policy
Year. Any increase in Face Amount must be at least $50,000 or such other Minimum
Face Amount Increase as the Company may establish on 90 days written notice to
you. An increase will become effective at the beginning of the Policy Month
following the date we approve the requested increase. Increases in Face Amount
are subject to satisfactory evidence of insurability. We reserve the right to
refuse a requested increase if the life insured's Attained Age at the effective
date of the increase would be greater than the maximum issue age for new
Policies at that time.
24
NEW SURRENDER CHARGES FOR AN INCREASE
An increase in Face Amount will usually result in the Policy being subject to
new Surrender Charges. The new Surrender Charges will be computed as if a new
Policy were being purchased for the increase in Face Amount. The premiums
attributable to the new Face Amount will not exceed the Surrender Charge Premium
Limit associated with that increase. There will be no new Surrender Charges
associated with restoration of a prior decrease in Face Amount. As with the
purchase of a Policy, a policyowner will have a right to examine with respect to
any increase resulting in new Surrender Charges.
An additional premium may be required for a Face Amount increase, and a new
No-Lapse Guarantee Premium will be determined, if the No-Lapse Guarantee is in
effect at the time of the face amount increase.
INCREASE WITH PRIOR DECREASES
If, at the time of the increase, there have been prior decreases in Face Amount,
these prior decreases will be restored first. The insurance coverage eliminated
by the decrease of the oldest Face Amount will be deemed to be restored first.
CHANGING BOTH THE FACE AMOUNT AND THE DEATH BENEFIT OPTION
If you request to change both the Face Amount and the death benefit option in
the same month, the death benefit option change shall be deemed to occur first.
DECREASE IN FACE AMOUNT
Decreases in Face Amount may be made once each Policy Year after the first
Policy Year. Any decrease in Face Amount must be at least $50,000 or such other
Minimum Face Amount Decrease as the Company may establish on 90 days written
notice to you. A written request from a policyowner for a decrease in the Face
Amount will be effective at the beginning of the Policy Month following the date
we approve the requested decrease. If there have been previous increases in Face
Amount, the decrease will be applied to the most recent increase first and
thereafter to the next most recent increases successively. Under no
circumstances should the sum of all decreases cause the Policy to fall below the
minimum Face Amount of $100,000. For information on Surrender Charges on a
decrease in Face Amount, see "Charges and Deductions - Surrender Charges."
PREMIUM PAYMENTS
INITIAL PREMIUMS
No premiums will be accepted prior to receipt of a completed application by the
Company. All premiums received prior to the Effective Date of the Policy will be
held in the general account and credited with interest from the date of receipt
at the rate of return then being earned on amounts allocated to the Money Market
Trust.
The minimum initial premium is one-twelfth of the No-Lapse Guarantee Premium.
On the later of the Effective Date or the date a premium is received, the Net
Premiums paid plus interest credited will be allocated among the Investment
Accounts or the Fixed Account in accordance with the policyowner's instructions
unless such amount is first allocated to the Money Market Trust for the duration
of the Right to Examine period.
SUBSEQUENT PREMIUMS
After the payment of the initial premium, premiums may be paid at any time and
in any amount until the life insured's Attained Age 100, subject to the
limitations on premium amount described below.
A Policy will be issued with a planned premium, which is based on the amount of
premium the policyowner wishes to pay. We will send notices to the policyowner
setting forth the planned premium at the payment interval selected by the
policyowner. However, the policyowner is under no obligation to make the
indicated payment.
The Company may refuse any premium payment that would cause the Policy to fail
to qualify as life insurance under the Code. We also reserve the right to
request evidence of insurability if a premium payment would result in an
increase in the death benefit that is greater than the increase in Policy Value.
Payment of premiums will not guarantee that the Policy will stay in force.
Conversely, failure to pay premiums will not necessarily cause the Policy to
lapse.
25
All Net Premiums received on or after the Effective Date will be allocated among
Investment Accounts or the Fixed Account as of the Business Day we receive the
premiums at our Service Office unless such amount is first allocated to the
Money Market Trust for the duration of the Right to Examine period. Monthly
deductions are due on the Policy Date and at the beginning of each Policy Month
thereafter. However, if due prior to the Effective Date, they will be taken on
the Effective Date instead of the dates they were due.
MAXIMUM PREMIUM LIMITATION
If the Policy is issued under the Guideline Premium Test, in no event may the
total of all premiums paid exceed the then current maximum premium limitations
established by federal income tax law for a Policy to qualify as life insurance.
If, at any time, a premium is paid which would result in total premiums
exceeding the above maximum premium limitation, the Company will only accept
that portion of the premium which will make the total premiums equal to the
maximum. Any part of the premium in excess of that amount will be returned and
no further premiums will be accepted until allowed by the then current maximum
premium limitation.
PREMIUM ALLOCATION
Premiums may be allocated to the Fixed Account for accumulation at a rate of
interest equal to at least 3% or to one or more of the Investment Accounts for
investment in the Portfolio shares held by the corresponding sub-account of the
Separate Account. Allocations among the Investment Accounts and the Fixed
Account are made as a percentage of the premium. The percentage allocation to
any account may be any whole number between zero and 100, provided the total
allocation equals 100. You may change the way in which premiums are allocated at
any time without charge. The change will take effect on the date a written
request for change satisfactory to the Company is received at the Service
Office. Changes may also be made by telephone if a valid authorization form is
on file with us.
CHARGES AND DEDUCTIONS
The Company makes various charges under the Policy. Charges are deducted from
premiums, monthly from Policy Values and upon surrender of a Policy, a partial
withdrawal or lapse of a Policy. These charges are discussed below.
The Policy may be issued with either one of two optional riders, the Cash Value
Enhancement Rider and the Cash Value Enhancement Plus Rider. Adding either rider
to the Policy will alter certain charges under the Policy. The charges
associated with these riders are discussed under "Other Provisions of the Policy
- - Cash Value Enhancement Riders."
PREMIUM CHARGES
During the first ___ Policy Years, Manulife New York deducts a premium charge
from each premium payment equal to ___% of the premium. Thereafter, the premium
charge is equal to ___% of the premium. The premium charge is designed to cover
a portion of the Company's acquisition and sales expenses and premium taxes.
Premium taxes vary from state to state, ranging from 0% to 3.5%.
SURRENDER CHARGES
The Company will deduct a Surrender Charge if, during the first ___ years
following the Policy Date or the effective date of a Face Amount increase:
- the Policy is surrendered for its Net Cash Surrender Value,
- a partial withdrawal is made,
- the Face Amount is decreased in excess of the Surrender Charge
Decrease Exemption, and
- the Policy lapses.
The Surrender Charge, together with a portion of the premium charge, is designed
to compensate the Company for some of the expenses it incurs in selling and
distributing the Policies, including agents' commissions, advertising, agent
training and the printing of prospectuses and sales literature. The Surrender
Charge is calculated separately for the initial Face Amount and each Face Amount
increase.
The Surrender Charge is the sum of (i) plus (ii), multiplied by (iii),
multiplied by the applicable Grading Percentage, where:
(i) is the Rate per $1000 of initial Face Amount (or Face Amount increase);
(ii) is ___% of the lesser of (a) the premiums paid in the first two Policy
Years per $1000 of initial Face Amount (or the premiums attributable to
each $1000 of Face Amount increase in the two years following the
increase) or
26
(b) the Surrender Charge Premium Limit set out in the Policy for the
initial Face Amount (or furnished by the Company with respect to a Face
Amount increase); and
(iii) is the initial Face Amount (or the Face Amount increase) divided by 1000.
The Rate per $1000 of initial Face Amount is based on the life insured's Age at
issuance of the Policy. The Rate per $1000 of Face Amount increase is based on
the life insured's Attained Age at the time of an increase. The Rates per $1000
are set forth in the following table.
TABLE OF GUARANTEED SURRENDER CHARGE RATES PER $ 1000
OF FACE AMOUNT OR FACE AMOUNT INCREASE
AGE AT ISSUANCE OR DEATH BENEFIT DEATH BENEFIT
ATTAINED AGE AT INCREASE Option 1 OPTION 2
- ------------------------ -------- --------
25 or less $ $
26 - 35 $ $
36 - 45 $ $
46 - 55 $ $
56 - 65 $ $
66 or greater $ $
The Grading Percentage varies with the Policy Month in which the transaction
causing the assessment of the Surrender Charge occurs. As indicated in the
following table, the Grading Percentage starts at 100% for the first Policy
Month and grades down ____% each Policy Year (or .____% each Policy Month)
reaching zero at the end of____ years.
GRADING PERCENTAGES DURING THE SURRENDER CHARGE PERIOD
(Applicable to the Initial Face Amount and Subsequent Increases)
The Grading Percentages Will Not Exceed The Following:
Surrender Charge Period Grading
(Policy Year) Percentage*
1 %
* The Grading Percentages shown are at the beginning of each Policy Year.
Proportionate Grading Percentages apply for other Policy Months.
ILLUSTRATION OF SURRENDER CHARGE CALCULATION
ASSUMPTIONS
- - ___ year old male (standard risk and nonsmoker status)
- - Death Benefit Option 1
- - $________ in premiums have been paid on the Policy in the first ___ Policy
Year
- - Surrender Charge Premium Limit for the Policy is $_____
- - Face Amount of the Policy at issue is $______ and no increases have
occurred
- - Policy is surrendered during the first month of the first policy year.
27
SURRENDER CHARGE
The Surrender Charge to be assessed would be $_________ determined as follows:
(1) First, the applicable Rate per $1000 of initial Face Amount as set forth in
the table above ($____) is added to ___% of the lesser of the premiums paid per
$1000 of initial Face Amount or the Surrender Charge Premium Limit.
$____ plus (____%) x [the lesser of $_____/(______/______) or $______ = $_____].
(2) Next, this figure is multiplied by the initial Face Amount divided by 1000.
$_____ x [______/_____ or ____ = $_____].
(3) Finally, the figure obtained in step 2 is multiplied by the applicable
Grading Percentage for the first month of the first Policy Year (100%).
$_____ x ____% = $______.
Depending upon the Face Amount of the Policy, the Age of the life insured at
issuance, premiums paid under the Policy and the performance of the underlying
investment options, the Policy may have no Cash Surrender Value and, therefore,
the policyowner may receive no surrender proceeds upon surrendering the Policy.
SURRENDER CHARGES ON A PARTIAL WITHDRAWAL
A partial withdrawal made during the Surrender Charge Period will result in the
assessment of a pro-rata portion of the Surrender Charges to which the Policy is
subject. The portion of the Surrender Charges assessed will be based on the
ratio of the amount of the withdrawal to the Net Cash Surrender Value of the
Policy as of the date of the withdrawal. It will equal (a) divided by (b),
multiplied by (c), where:
(a) is the amount of the partial Net Cash Surrender Value withdrawal;
(b) is the Net Cash Surrender Value prior to the withdrawal; and
(c) is the current total Surrender Charge prior to the withdrawal.
The Surrender Charges will be deducted from the Policy Value at the time of the
partial withdrawal on a pro-rata basis from each of the Investment Accounts and
the Fixed Account unless you direct that the Surrender Charges be deducted from
one or more Investment Accounts or the Fixed Account. If the amount in the
accounts is not sufficient to pay the Surrender Charges assessed, then the
amount of the withdrawal will be reduced.
Whenever a portion of the Surrender Charges is deducted as a result of a partial
withdrawal, the Policy's remaining Surrender Charges will be reduced in the same
proportion that the Surrender Charge deducted bears to the total Surrender
Charge immediately before the partial withdrawal.
SURRENDER CHARGE ON DECREASE IN FACE AMOUNT
If the Face Amount of insurance is decreased, a pro-rata Surrender Charge will
be deducted from the Policy Value for decreases in excess of the Surrender
Charge Decrease Exemption. A decrease in Face Amount caused by a change from
Death Benefit Option 1 to Option 2 will not incur a pro-rata Surrender Charge.
Each time a pro-rata Surrender Charge is deducted for a Face Amount decrease,
the remaining Surrender Charge will be reduced in the same proportion that the
Surrender Charge deducted bears to the total Surrender Charge immediately before
the Face Amount decrease.
The Surrender Charge Decrease Exemption is 10% of the initial Face Amount and
may be used to decrease any Surrender Charge incurred during a calendar year.
The exemption is not cumulative and any exemption not used during a calendar
year may not be carried over to the next calendar year. This amount is set at
issuance of the Policy and applies to decreases in the initial Face Amount of
insurance. This exemption does not apply to a full surrender of the Policy or a
partial withdrawal of Net Cash Surrender Value.
MONTHLY DEDUCTIONS
On the Policy Date and at the beginning of each Policy Month, a deduction is
taken from the Net Policy Value to cover certain charges in connection with the
Policy until the Policy Anniversary when the life insured reaches Attained Age
100, unless certain riders are in effect in which case such charges may
continue. If there is a Policy Debt under the Policy, loan
28
interest and principal will continue to be payable at the beginning of each
Policy Month. Monthly deductions due prior to the Effective Date will be taken
on the Effective Date instead of the dates they were due. These monthly
deductions consist of:
- - an administration charge;
- - a mortality and expense risks charge;
- - an asset-based risk charge; and
- - a cost of insurance charge.
If applicable, there may be additional monthly charges for any Supplementary
Benefits added to the Policy.
All of the monthly deductions, except for the asset-based risk charge, may be
allocated among the Investment Accounts and the Fixed Account as specified by
the policyowner and approved by us. Absent such specification, the monthly
deductions, except the asset-based risk charge, will be allocated among the
Investment Accounts and the Fixed Account in the same proportion as the Policy
value in each bears to the Net Policy Value. The asset-based risk charge will be
allocated among the Investment Accounts in the same proportion as the value in
each Investment Account bears to the total value of all Investment Accounts.
ADMINISTRATION CHARGE
The administration charge is designed to cover certain administrative expenses
associated with the Policy, including maintaining policy records, collecting
premiums and processing death claims, surrender and withdrawal requests and
various changes permitted under the Policy. During the first ____ Policy Years,
this monthly charge will be $___ . For all subsequent Policy Years, the monthly
administration charge will be $___ .
MORTALITY AND EXPENSE RISKS CHARGE
There is a monthly per $1000 face amount charge for mortality and expense risks.
The monthly charge per $1000 of face amount varies by the Age of the life
insured at issuance (or the Attained Age of the life insured at the time of an
increase) and the death benefit option in effect as set forth in the following
table. This charge applies to the initial Face Amount for the first __ Policy
Years and thereafter to the initial Face Amount less any Face Amount decreases.
This charge is to compensate us for the mortality and expense risks we assume
under the policy. The mortality risk assumed is that the life insured may live
for a shorter period of time than we estimated. The expense risk assumed is that
expenses incurred in issuing and administering the policy will be greater than
we estimated. We will realize a gain from this charge to the extent it is not
needed to provide benefits and pay expenses under the policy.
DEATH BENEFIT DEATH BENEFIT
OPTION 1 OPTION 2
-------- --------
AGE*/ First Five Subsequent First Five Subsequent
ATTAINED AGE* Policy Years Policy Years Policy Years Policy Years
- ------------- ------------ ------------ ------------ ------------
25-
35
45
55
65
75
85+
*
ASSET-BASED RISK CHARGE
A charge is assessed against the Investment Accounts monthly at an annual rate
of ____%. This rate is guaranteed not to exceed ____%. This charge is to
compensate the Company for the sales, administrative and other expenses it may
incur. The Company will realize a gain from this charge to the extent it is not
needed to provide benefits and pay expenses under the Policy.
COST OF INSURANCE CHARGE
The monthly cost of insurance charge is determined as the rate of the cost of
insurance for a specific Policy Month, as described below, multiplied by the net
amount at risk.
For Death Benefit Option 1, the net amount at risk is equal to the greater of
zero or the result of (a) minus (b), where:
29
(a) is the death benefit as of the first day of the Policy Month, divided by
________; and
(b) is the Policy Value as of the first day of the Policy Month after the
deduction of the monthly cost of insurance.
For Death Benefit Option 2, the net amount at risk is equal to the Face Amount
of insurance.
The rates for the cost of insurance, as of the Policy Date and subsequently for
each Face Amount increase, are based on the life insured's Age, sex and Risk
Classification, the duration that coverage has been in force and the net amount
at risk.
The Company applies unisex rates where appropriate under the law. This currently
includes the state of Montana and policies purchased by employers and employee
organizations in connection with employment-related insurance or benefit
programs.
The cost of insurance rates reflect the Company's expectations as to future
mortality experience. The rates may be re-determined from time to time on a
basis which does not unfairly discriminate within any class of life insured. In
no event will the cost of insurance rates exceed the guaranteed rates set forth
in the Policy except to the extent that an extra charge is imposed because of an
additional rating applicable to the life insured. After the first Policy Year,
the cost of insurance will generally increase on each Policy Anniversary. The
guaranteed rates are based on a unismoker version of the 1980 Commissioners ,
Age Nearest Birthday, Mortality tables.
CHARGES FOR TRANSFERS
A charge of $25 will be imposed on each transfer in excess of twelve in a Policy
Year. The charge will be deducted from the Investment Account or the Fixed
Account to which the transfer is being made. All transfer requests received by
the Company on the same Business Day are treated as a single transfer request.
REDUCTION IN CHARGES
The Policy is available for purchase by corporations and other groups or
sponsoring organizations. Group or sponsored arrangements may include reduction
or elimination of withdrawal charges and deductions for employees, officers,
directors, agents and immediate family members of the foregoing. The Company
reserves the right to reduce any of the Policy's charges in certain cases where
it is expected that the amount or nature of such cases will result in savings of
sales, underwriting, administrative, commission or other costs. Eligibility for
these reductions and the amount of reductions will be determined by a number of
factors, including the number of lives to be insured, the total premiums
expected to be paid, total assets under management for the policyowner, the
nature of the relationship among the insured individuals, the purpose for which
the Policies are being purchased, expected persistency of the individual
Policies, and any other circumstances which the Company believes to be relevant
to the expected reduction of its expenses. Some of these reductions may be
guaranteed and others may be subject to withdrawal or modification, on a uniform
case basis. Reductions in charges will not be unfairly discriminatory to any
policyowners. The Company may modify from time to time, on a uniform basis, both
the amounts of reductions and the criteria for qualification.
SPECIAL PROVISIONS FOR EXCHANGES
The Company will permit owners of certain fixed life insurance contracts issued
by the Company to exchange their contracts for the Policies described in this
prospectus (and likewise, owners of Policies described in this prospectus may
also exchange their Policies for certain fixed life insurance contracts issued
by the Company). Policyowners considering an exchange should consult their tax
advisor as to the tax consequences of an exchange.
COMPANY TAX CONSIDERATIONS
At the present time, the Company makes no specific charge to the Separate
Account for any federal, state, or local taxes that the Company incurs that may
be attributable to the Separate Account or to the Policies. The Company,
however, reserves the right in the future to make a charge for any such tax or
other economic burden resulting from the application of the tax laws that it
determines to be properly attributable to the Separate Account or to the
Policies.
POLICY VALUE
DETERMINATION OF THE POLICY VALUE
A Policy has a Policy Value, a portion of which is available to the policyowner
by making a policy loan or partial withdrawal, or upon surrender of the Policy.
The Policy Value may also affect the amount of the death benefit. The Policy
Value at any time is equal to the sum of the values in the Investment Accounts,
the Fixed Account, and the Loan Account.
30
INVESTMENT ACCOUNTS
An Investment Account is established under each Policy for each sub-account of
the Separate Account to which net premiums or transfer amounts have been
allocated. Each Investment Account under a Policy measures the interest of the
Policy in the corresponding sub-account. The value of the Investment Account
established for a particular sub-account is equal to the number of units of that
sub-account credited to the Policy times the value of such units.
FIXED ACCOUNT
Amounts in the Fixed Account do not vary with the investment performance of any
sub-account. Instead, these amounts are credited with interest at a rate
determined by Manulife New York. For a detailed description of the Fixed
Account, see "The General Account - Fixed Account."
LOAN ACCOUNT
Amounts borrowed from the Policy are transferred to the Loan Account. Amounts in
the Loan Account do not vary with the investment performance of any sub-account.
Instead, these amounts are credited with interest at a rate which is equal to
the amount charged on the outstanding Policy Debt less the Loan Interest
Credited Differential. For a detailed description of the Loan Account, see
"Policy Loans - Loan Account".
UNITS AND UNIT VALUES
CREDITING AND CANCELING UNITS
Units of a particular sub-account are credited to a Policy when net premiums are
allocated to that sub-account or amounts are transferred to that sub-account.
Units of a sub-account are canceled whenever amounts are deducted, transferred
or withdrawn from the sub-account. The number of units credited or canceled for
a specific transaction is based on the dollar amount of the transaction divided
by the value of the unit on the Business Day on which the transaction occurs.
The number of units credited with respect to a premium payment will be based on
the applicable unit values for the Business Day on which the premium is received
at the Service Office, except for any premiums received before the Effective
Date. For premiums received before the Effective Date, the values will be
determined on the Effective Date.
A Business Day is any day that the New York Stock Exchange is open for business.
A Business Day ends at the close of regularly scheduled day-time trading of the
New York Stock Exchange (currently 4:00 p.m. Eastern Time) on that day.
Units are valued at the end of each Business Day. When an order involving the
crediting or canceling of units is received after the end of a Business Day, or
on a day which is not a Business Day, the order will be processed on the basis
of unit values determined on the next Business Day. Similarly, any determination
of Policy Value, Investment Account value or death benefit to be made on a day
which is not a Business Day will be made on the next Business Day.
UNIT VALUES
The value of a unit of each sub-account was initially fixed at $10.00 or $12.00.
For each subsequent Business Day the unit value for that sub-account is
determined by multiplying the unit value for the immediately preceding Business
Day by the net investment factor for the sub-account on such subsequent Business
Day.
The net investment factor for a sub-account on any Business Day is equal to (a)
divided by (b) where:
(a) is the net asset value of the underlying Portfolio shares held by that
sub-account as of the end of such Business Day before any policy
transactions are made on that day; and
(b) is the net asset value of the underlying Portfolio shares held by that
sub-account as of the end of the immediately preceding Business Day after
all policy transactions were made for that day.
The value of a unit may increase, decrease, or remain the same, depending on the
investment performance of a sub-account from one Business Day to the next.
TRANSFERS OF POLICY VALUE
At any time, the policyowner may transfer Policy Value from one sub-account to
another or to the Fixed Account. Transfers involving the Fixed Account are
subject to certain limitations noted below under "Transfers Involving Fixed
Accounts." Transfer requests must be in writing in a form satisfactory to the
Company, or by telephone if a currently valid telephone transfer authorization
for is on file..
We reserve the right to impose limitations on transfers, including the maximum
amount that may be transferred. We reserve
31
the right to modify or terminate the transfer privilege at any time in
accordance with applicable law. Transfers may also be delayed when any of the
events described under items (i) through (iii) in "Payment of Proceeds" occurs.
Transfer privileges are also subject to any restrictions that may be imposed by
the Trust. In addition, we reserve the right to defer the transfer privilege at
any time when we are unable to purchase or redeem shares of the Trust.
While the Policy is in force, you may transfer the Policy Value from any of the
Investment Accounts to the Fixed Account without incurring transfer charges:
(a) within eighteen months after the Issue Date; or
(b) within 60 days of the effective date of a material change in the
investment objectives of any of the sub-accounts or within 60 days of the
date of notification of such change, whichever is later.
Such transfers will not count against the twelve transfers that may be made
without assessment of a fee in any Policy Year.
TRANSFERS INVOLVING FIXED ACCOUNT
The maximum amount that you may transfer from the Fixed Account in any one
Policy Year is the greater of $500 or 15% of the Fixed Account Value at the
previous Policy Anniversary. Any transfer which involves a transfer out of the
Fixed Account may not involve a transfer to the Investment Account for the Money
Market Trust.
TELEPHONE TRANSFERS
Although failure to follow reasonable procedures may result in the Company being
liable for any losses resulting from unauthorized or fraudulent telephone
transfers, the Company will not be liable for following instructions
communicated by telephone that the Company reasonably believes to be genuine.
The Company will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures shall consist of
confirming that a valid telephone authorization form is on file, tape recording
of all telephone transactions and providing written confirmation thereof.
DOLLAR COST AVERAGING
The Company offers policyowners an optional Dollar Cost Averaging ("DCA")
program. Under the DCA program, the policyowner will designate an amount which
will be transferred monthly from one Investment Account into any other
Investment Account(s) or the Fixed Account. The charge for a transfer made under
the DCA program will not exceed $5. The Company will provide you with 90 days'
written notice of any change in the current charge. If insufficient funds exist
to effect a DCA transfer, the transfer will not be effected and the policyowner
will be so notified.
The Company reserves the right to cease to offer this program as of 90 days
after written notice of termination is sent to the policyowner.
ASSET ALLOCATION BALANCER TRANSFERS
Under the optional Asset Allocation Balancer program, the policyowner will
designate an allocation of Policy Value among Investment Accounts. At six-month
intervals beginning six months after the Policy Date, the Company will transfer
amounts among the Investment Accounts as necessary to maintain the policyowner's
chosen allocation. A change to the policyowner's premium allocation instructions
will automatically result in a change in Asset Allocation Balancer instructions
so that the two are identical unless the policyowner either instructs the
Company otherwise or has elected the DCA program. The charge for a transfer made
under the Asset Allocation Balancer program will not exceed $15. The Company
will provide you with 90 days' written notice of any change in the current
charge.
The Company reserves the right to cease to offer this program as of 90 days
after written notice is sent to the policyowner.
POLICY LOANS
While a Policy is in force and has an available loan value, a policyowner may
borrow against the Policy Value in an amount not to exceed the Maximum Loanable
Amount. The Policy serves as the only security for the loan. Policy loans may
have tax consequences. See "Tax Treatment of Policy Benefits - Interest on
Policy Loans After Year 10" and "Tax Treatment of Policy Benefits - Policy Loan
Interest."
EFFECT OF POLICY LOAN
A Policy loan will have an effect on future Policy Values, since that portion of
the Policy Value in the Loan Account will increase in value at the crediting
interest rate rather than varying with the performance of the underlying
Portfolios or increasing in value at the rate of interest credited for amounts
allocated to the Fixed Account. A Policy loan may cause a
32
Policy to be more susceptible to going into default since a policy loan will be
reflected in the Net Cash Surrender Value. See "Lapse and Reinstatement." In
addition, a Policy loan may result in a Policy failing to satisfy the No-Lapse
Guarantee Cumulative Premium Test since the Policy Debt is subtracted from the
sum of the premiums paid in determining whether this test is satisfied. Finally,
a Policy loan will affect the amount payable on the death of the life insured,
since the death benefit is reduced by the Policy Debt at the date of death in
arriving at the insurance benefit.
INTEREST CHARGED ON POLICY LOANS
Interest on the Policy Debt will accrue daily and be payable annually on the
Policy Anniversary. During the first 10 Policy Years, the rate of interest
charged will be an effective annual rate of 5.25%. Thereafter, the rate of
interest charged will be an effective annual rate of 4%. If the interest due on
a Policy Anniversary is not paid by the policyowner, the interest will be
borrowed against the Policy and added to the Policy Debt.
Interest on the Policy Debt will continue to accrue daily if there is an
outstanding loan when monthly deductions and premium payments cease at the life
insured's Attained Age 100. The Policy will go into default at any time the
Policy Debt exceeds the Policy Value. At least 61 days prior to termination, the
Company will send you a notice of the pending termination. Payment of interest
on the Policy Debt during the 61 day grace period will bring the Policy out of
default.
LOAN ACCOUNT
When a loan is made, an amount equal to the loan principal, plus interest to the
next Policy Anniversary, will be deducted from the Investment Accounts or the
Fixed Account and transferred to the Loan Account. Amounts transferred into the
Loan Account cover the loan principal plus loan interest due to the next Policy
Anniversary. The policyowner may designate how the amount to be transferred to
the Loan Account is allocated among the accounts from which the transfer is to
be made. In the absence of instructions, the amount to be transferred will be
allocated to each account in the same proportion as the value in each Investment
Account and the Fixed Account bears to the Net Policy Value. A transfer from an
Investment Account will result in the cancellation of units of the underlying
sub-account equal in value to the amount transferred from the Investment
Account. However, since the Loan Account is part of the Policy Value, transfers
made in connection with a loan will not change the Policy Value.
INTEREST CREDITED TO THE LOAN ACCOUNT
Interest will be credited to amounts in the Loan Account at an effective annual
rate of __%. This rate is guaranteed not to be less than ____% during the first
10 policy years and ___% thereafter. The actual rate credited is equal to the
rate of interest charged on the policy loan less the Loan Interest Credited
Differential, which is currently ___% during the first ten policy years and __%
thereafter, and is guaranteed not to exceed ___% during the first ten policy
years and ___% thereafter. The Company may change the Loan Interest Credited
Differential as of 90 days after sending you written notice of such change.
For a Policy that is not a Modified Endowment Contract ("MEC"), the tax
consequences associated with a loan interest credited differential of 0% are
unclear. A tax advisor should be consulted before effecting a loan to evaluate
the tax consequences that may arise in such a situation. If we determine, in our
sole discretion, that there is a substantial risk that a loan will be treated as
a taxable distribution under federal tax law as a result of the differential
between the credited interest rate and the loan interest rate, we retain the
right to increase the loan interest rate to an amount that would result in the
transaction being treated as a loan under federal tax law.
LOAN ACCOUNT ADJUSTMENTS
On the first day of each Policy Anniversary the difference between the Loan
Account and the Policy Debt is transferred to the Loan Account from the
Investment Accounts or the Fixed Account. Amounts transferred to the Loan
Account will be taken from the Investment Accounts and the Fixed Account in the
same proportion as the value in each Investment Account and the Fixed Account
bears to the Net Policy Value.
LOAN REPAYMENTS
You may repay the Policy Debt in whole or in part at any time prior to the death
of the life insured, provided that the Policy is in force. When a repayment is
made, the amount is credited to the Loan Account and transferred to the Fixed
Account or the Investment Accounts. We will allocate loan repayments first to
the Fixed Account until the associated Loan Sub-Account is reduced to zero and
then to each Investment Account in the same proportion as the value in the
corresponding Loan Sub-Account bears to the value of the Loan Account.
Amounts paid to the Company not specifically designated in writing as loan
repayments will be treated as premiums. Where permitted by applicable state law,
when a portion of the Loan Account amount is allocated to the Fixed Account, the
Company may require that any amounts paid to it be applied to outstanding loan
balances.
33
POLICY SURRENDER AND PARTIAL WITHDRAWALS
POLICY SURRENDER
You may surrender a Policy for its Net Cash Surrender Value at any time while
the life insured is living. The Net Cash Surrender Value is equal to the Policy
Value less any Surrender Charges and outstanding monthly deductions due (the
"Cash Surrender Value") minus the Policy Debt. If there have been any prior Face
Amount increases, the Surrender Charge will be the sum of the Surrender Charge
for the Initial Face Amount plus the Surrender Charge for each increase. The Net
Cash Surrender Value will be determined as of the end of the Business Day on
which we receive the Policy and your written request for surrender at our
Service Office. After a Policy is surrendered, the insurance coverage and all
other benefits under the Policy will terminate.
PARTIAL WITHDRAWALS
You may make a partial withdrawal of the Net Cash Surrender Value once each
Policy Month after the first Policy Anniversary. You may specify the portion of
the withdrawal to be taken from each Investment Account and the Fixed Account.
In the absence of instructions, the withdrawal will be allocated among such
accounts in the same proportion as the Policy Value in each account bears to the
Net Policy Value. For information on Surrender Charges on a partial withdrawal,
see "Charges and Deductions - Surrender Charges."
Withdrawals will be limited if they would otherwise cause the Face Amount to
fall below $100,000.
REDUCTION IN FACE AMOUNT DUE TO A PARTIAL WITHDRAWAL
If Death Benefit Option 1 is in effect when a partial withdrawal is made and the
death benefit equals the Face Amount, the Face Amount of the Policy will be
reduced by the amount of the withdrawal plus any applicable Surrender Charge.
Otherwise, if the death benefit is the Minimum Death Benefit as described under
"Death Benefit - Minimum Death Benefit," the Face Amount will be reduced by the
amount, if any, by which the withdrawal plus the pro-rata Surrender Charge
exceeds the difference between the death benefit and the Face Amount plus the
Premium Death Benefit Account.
If Death Benefit Option 2 is in effect, partial withdrawals do not affect the
Face Amount of a Policy.
LAPSE AND REINSTATEMENT
LAPSE
Unless the No-Lapse Guarantee is in effect, a Policy will go into default if at
the beginning of any Policy Month the Policy's Net Cash Surrender Value would be
zero or below after deducting the monthly deduction then due. Therefore, a
Policy could lapse eventually if increases in Policy Value (prior to deduction
of Policy charges) are not sufficient to cover Policy charges. A lapse could
have adverse tax consequences as described under "Tax Treatment of the Policy -
Tax Treatment of Policy Benefits - Surrender or Lapse." The Company will notify
the policyowner of the default and will allow a 61 day grace period in which you
may make a premium payment sufficient to bring the Policy out of default. The
required payment will be equal to the amount necessary to bring the Net Cash
Surrender Value to zero, if it was less than zero on the date of default, plus
the monthly deductions due at the date of default and payable at the beginning
of each of the two Policy Months thereafter, plus any applicable premium charge.
If we do not receive the required payment by the end of the grace period, the
Policy will terminate with no value.
NO-LAPSE GUARANTEE
As long as the No-Lapse Guarantee Cumulative Premium Test is satisfied during
the No-Lapse Guarantee Period, as described below, the Company will guarantee
that the Policy will not go into default even if adverse investment experience
or other factors should cause the Policy's Net Cash Surrender Value to fall to
zero or below during such period.
The Monthly No-Lapse Guarantee Premium is one-twelfth of the No-Lapse Guarantee
Premium.
The No-Lapse Guarantee Premium is set at issuance of the Policy and reflects any
Additional Rating and Supplementary Benefits, if applicable. It is subject to
change if there is (i) a change in the Face Amount of the Policy, (ii) a change
of the
34
death benefit option , (iii) a decrease in the Face Amount of insurance due to a
partial withdrawal, or (iv) any change in the Supplementary Benefits added to
the Policy or the Risk Classification of the life insured.
The No-Lapse Guarantee Period is described under "Definitions."
While the No-Lapse Guarantee is in effect, the Company will determine, at the
beginning of any Policy Month that a Policy would otherwise be in default,
whether the No-Lapse Guarantee Cumulative Premium Test, described below, has
been met. If the test has not been satisfied, the Company will notify the
policyowner of that fact and allow a 61-day grace period in which you may make a
premium payment sufficient to keep the policy from going into default. This
required payment, as described in the notification, will be equal to the lesser
of:
(a) the outstanding premium requirement to satisfy the No-Lapse Guarantee
Cumulative Premium Test at the date of default plus the Monthly No-Lapse
Guarantee Premium due for the next two Policy Months, or
(b) the amount necessary to bring the Net Cash Surrender Value to zero plus
the monthly deductions due, plus the next two monthly deductions plus the
applicable premium charge.
If we do not receive the required payment by the end of the grace period, the
No-Lapse Guarantee and the Policy will terminate.
NO-LAPSE GUARANTEE CUMULATIVE PREMIUM TEST
The No-Lapse Guarantee Cumulative Premium Test is satisfied if, as of the
beginning of the Policy Month that your Policy would otherwise be in default,
the sum of all premiums paid to date, less any Policy Debt and less any gross
withdrawals taken on or before the date of the test, is equal to or exceeds the
sum of the Monthly No-Lapse Guarantee Premiums due from the Policy Date to the
date of the test.
DEATH DURING GRACE PERIOD
If the life insured should die during the grace period, the Policy Value used in
the calculation of the death benefit will be the Policy Value as of the date of
default and the insurance benefit will be reduced by any outstanding monthly
deductions due at the time of death.
REINSTATEMENT
A policyowner may, by making a written request, reinstate a Policy which has
terminated after going into default at any time within the five-year period
following the date of termination subject to the following conditions:
(a) Evidence of the life insured's insurability, satisfactory to the Company,
is provided to the Company; and
(b) A premium equal to the amount that was required to bring the Policy out of
default immediately prior to termination, plus the amount needed to keep
the Policy in force to the next scheduled date for payment of the Planned
Premium, must be paid to the Company.
If the reinstatement is approved, the date of reinstatement will be the later of
the date we approve the policyowner's request or the date we receive the
required payment at our Service Office. In addition, any Surrender Charges will
be reinstated to the amount they were at the date of default. The Policy Value
on the date of reinstatement, prior to the crediting of any Net Premium paid on
the reinstatement, will be equal to the Policy Value on the date the Policy
terminated.
THE GENERAL ACCOUNT
The general account of Manulife New York consists of all assets owned by the
Company other than those in the Separate Account and other separate accounts of
the Company. Subject to applicable law, Manulife New York has sole discretion
over the investment of the assets of the general account.
By virtue of exclusionary provisions, interests in the general account of
Manulife New York have not been registered under the Securities Act of 1933 and
the general account has not been registered as an investment company under the
1940 Act. Accordingly, neither the general account nor any interests therein are
subject to the provisions of these acts, and as a result the staff of the SEC
has not reviewed the disclosures in this prospectus relating to the general
account. Disclosures regarding the general account may, however, be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in a prospectus.
35
FIXED ACCOUNT
A policyowner may elect to allocate net premiums to the Fixed Account or to
transfer all or a portion of the Policy Value to the Fixed Account from the
Investment Accounts. The Company will hold the reserves required for any portion
of the Policy Value allocated to the Fixed Account in its general account.
Transfers from the Fixed Account to the Investment Accounts are subject to
restrictions.
POLICY VALUE IN THE FIXED ACCOUNT
The Policy Value in the Fixed Account is equal to:
(a) the portion of the net premiums allocated to it; plus
(b) any amounts transferred to it; plus
(c) interest credited to it; less
(d) any charges deducted from it; less
(e) any partial withdrawals from it; less
(f) any amounts transferred from it.
INTEREST ON THE FIXED ACCOUNT
An allocation of Policy Value to the Fixed Account does not entitle the
policyowner to share in the investment experience of the general account.
Instead, we guarantee that the Policy Value in the Fixed Account will accrue
interest daily at an effective annual rate of at least 3%, without regard to the
actual investment experience of the general account. Consequently, if you pay
the planned premiums, allocate all net premiums only to the general account and
make no transfers, partial withdrawals, or policy loans, the minimum amount and
duration of the death benefit of the Policy will be determinable and guaranteed.
OTHER PROVISIONS OF THE POLICY
CASH VALUE ENHANCEMENT RIDERS
The Policy may be issued with one of two optional Cash Value Enhancement riders:
(1) the Cash Value Enhancement Rider or (2) the Cash Value Enhancement Plus
Rider. The decision to add either one of these two riders to a Policy must be
made at issuance of the Policy and, once made, is irrevocable. The benefit of
these riders is that the Cash Surrender Value of a Policy is enhanced during the
period for which Surrender Charges are applicable. The enhancement is provided
by deducting a Surrender Charge that is less than the Surrender Charge that
would otherwise have applied. Under the Cash Value Enhancement Plus Rider, there
will be no Surrender Charge.
Under each of the riders, the enhancement in Cash Surrender Value is equal to
the Surrender Charge multiplied by the applicable Cash Value Enhancement Factor.
The applicable Cash Value Enhancement Factors under the two riders during the 10
years of the Surrender Charge Period are set forth below:
CASH VALUE ENHANCEMENT FACTORS
(Applicable to Initial Face Amount and Subsequent Increases)
Cash Value Enhancement Cash Value Enhancement
Policy Year Rider Plus Rider
----------- ----- ----------
Adding either of the Cash Value Enhancement riders to a Policy will alter
certain of the charges under the Policy, as illustrated in the following table.
There will be no change in the monthly administration and cost of insurance
charges under the Policy.
36
COMPARATIVE MONTHLY CHARGES WITH ADDITION OF
CASH VALUE ENHANCEMENT RIDERS
CHARGES THE POLICY
Premium Charge ___% for first __ Policy Years and ___% thereafter
Asset-Based Risk Charge ____% per Policy Year (guaranteed not to exceed ____%)
THE POLICY WITH CASH VALUE ENHANCEMENT RIDER
Premium Charge ____% for first ___ Policy Years and ____% thereafter
Asset-Based Risk Charge ____% per Policy Year (guaranteed not to exceed ____%)
THE POLICY WITH CASH VALUE ENHANCEMENT PLUS RIDER
Premium Charge ____% for first __ Policy Years and ____% thereafter
Asset-Based Risk Charge ____% per Policy Year for the first ___ Policy Years (guaranteed not to exceed
____%) and ____% thereafter (guaranteed not to exceed [____%)
RETURN OF PREMIUM RIDER DEATH BENEFIT
The policy may be issued with an optional return of premium death benefit rider
if death benefit option 1 is elected. This rider provides an additional death
benefit payable upon the death of the life insured after the company receives
due proof of death. The return of premium death benefit is calculated as
follows:
the return of premium rider death benefit is equal to the initial premium. Any
subsequent premiums will increase the rider death benefit at the time of the
premium payment by the amount of the premium. Any partial withdrawal will reduce
the death benefit at the time of withdrawal by an amount equal to the withdrawal
plus any applicable surrender charge (except that the rider death benefit will
not be reduce to less than zero).
After increases cease, the company will not take into account any more premiums
paid in determining the amount of the return of premium death benefit.
Decreases in coverage. The return of premium death benefit may be
decreased if requested by the policyowner. The decrease will take effect at the
beginning of the policy month on or next following the date the company approves
the request. The return of premium rider death benefit coverage will be reduced
by the amount of the requested decreased. Decreases in the death benefit are not
subject to pro-rata surrender charges.
Partial withdrawals. If the policyowner makes a written request for a
partial withdrawal of net cash surrender value while this rider is inforce, the
company will process the withdrawal so that it first reduces the amount of the
return of premium death benefit coverage. Any withdrawals will be subject to a
pro-rata surrender charge as described under "charges and deductions - surrender
charges." In addition, the face amount will be reduced by the amount by which
the withdrawal plus the surrender charge exceeds the amount of the return of
premium rider death benefit.
No lapse guarantee. The no lapse guarantee provisions of the policy apply
to the return of premium rider death benefit for the first two policy years
only.
POLICYOWNER RIGHTS
Unless otherwise restricted by a separate agreement, the policyowner may, until
the life insured's death:
- Vary the premiums paid under the Policy.
- Change the death benefit option.
- Change the premium allocation for future premiums.
- Transfer amounts between sub-accounts.
- Take loans and/or partial withdrawals.
- Surrender the contract.
- Transfer ownership to a new owner.
- Name a contingent owner that will automatically become owner if the
policyowner dies before the insured.
- Change or revoke a contingent owner.
- Change or revoke a beneficiary.
ASSIGNMENT OF RIGHTS
Manulife New York will not be bound by an assignment until it receives a copy of
the assignment at its Service Office. We assume no responsibility for the
validity or effects of any assignment.
37
BENEFICIARY
One or more beneficiaries of the Policy may be appointed by the policyowner by
naming them in the application. Beneficiaries may be appointed in three classes
- - primary, secondary, and final. Beneficiaries in the same class will share
equally in the insurance benefit payable to them. Beneficiaries may be revocable
or irrevocable. Unless an irrevocable designation has been elected, you may
change the beneficiary during the life insured's lifetime by giving written
notice to the Company in a form satisfactory to us. The change will take effect
as of the date such notice is signed. If the life insured dies and there is no
surviving beneficiary, the policyowner, or the policyowner's estate if the
policyowner is the life insured, will be the beneficiary. If a beneficiary dies
before the seventh day after the death of the life insured, we will pay the
insurance benefit as if the beneficiary had died before the life insured.
VALIDITY
The Company will not contest the validity of a Policy after it has been in force
during any life insured's lifetime for two years from the Issue Date. We will
not contest the validity of an increase in Face Amount, after such increase or
addition has been in force during the lifetime of the life insured for two
years. If a Policy has been reinstated and been in force during the lifetime of
the life insured for less than two years from the reinstatement date, the
Company can contest any misrepresentation of a fact material to the
reinstatement.
MISSTATEMENT OF AGE OR SEX
If the stated age or sex, or both, of the life insured in the Policy are
incorrect, we will change the Face Amount so that the death benefit will be that
which the most recent monthly charge for the cost of insurance would have
purchased for the correct age and sex.
38
SUICIDE EXCLUSION
If the life insured dies by suicide within two years after the Issue Date, the
Policy will terminate and the Company will pay only the premiums paid less any
partial Net Cash Surrender Value withdrawal and less any Policy Debt.
If the life insured dies by suicide within two years after the effective date of
an increase in Face Amount, the death benefit for that increase will be limited
to the Monthly Deductions taken for the increase.
The Company reserves the right to obtain evidence of the manner and cause of
death of the life insured.
SUPPLEMENTARY BENEFITS
Subject to certain requirements, one or more Supplementary Benefits may be added
to a Policy, including those providing a death benefit guarantee, term insurance
for an additional insured, providing accidental death coverage, waiving monthly
deductions upon disability, accelerating benefits in the event of a terminal
illness, and, in the case of corporate-owned policies, permitting a change of
the life insured (a taxable event). More detailed information concerning these
supplementary benefits may be obtained from an authorized agent of the Company.
The cost, if any, for supplementary benefits will be deducted as part of the
monthly deductions.
TAX TREATMENT OF THE POLICY
The following summary provides a general description of the federal income tax
considerations associated with the Policy and does not purport to be complete or
to cover all situations. This discussion is not intended as tax advice. Counsel
or other competent tax advisors should be consulted for more complete
information. This discussion is based upon the Company's understanding of the
present federal income tax laws as they are currently interpreted by the
Internal Revenue Service (the "IRS"). No representation is made as to the
likelihood of continuation of the present federal income tax laws nor of the
current interpretations by the IRS. MANULIFE New York DOES NOT MAKE ANY
GUARANTEE REGARDING THE TAX STATUS OF ANY POLICY OR ANY TRANSACTION REGARDING
THE POLICY.
The Policies may be used in various arrangements, including non-qualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans, retiree medical benefit plans and others. The tax
consequences of such plans may vary depending on the particular facts and
circumstances of each individual arrangement. Therefore, if the use of such
Policies in any such arrangement, the value of which depends in part on the tax
consequences, is contemplated, a qualified tax advisor should be consulted for
advice on the tax attributes of the particular arrangement.
The Company is taxed as a life insurance company. Because the operations of the
Separate Account are a part of, and are taxed with, the Company's operations,
the Separate Account is not separately taxed as a "regulated investment company"
under the Code. Under existing Federal income tax laws, the Company is not taxed
on the investment income and capital gains of the Separate Account, but the
operations of the Separate Account may reduce the Company's Federal income
taxes. For example, the Company may be eligible for certain tax credits or
deductions relating to foreign taxes paid and dividends received by Trust
portfolios. The Company's use of these tax credits and deductions will not
adversely affect or benefit the Separate Account. The Company does not
anticipate that it will be taxed on the income and gains of the Separate Account
in the future, but if the Company is, it may impose a corresponding charge
against the Separate Account.
LIFE INSURANCE QUALIFICATION
There are several requirements that must be met for a Policy to be considered a
Life Insurance Contract under the Code, and thereby to enjoy the tax benefits of
such a contract:
- - The Policy must satisfy the definition of life insurance under Section
7702 of the Code.
- - The investments of the Separate Account must be "adequately diversified"
in accordance with Section 817(h) of the [ ] Code and Treasury
Regulations.
- - The Policy must be a valid life insurance contract under applicable state
law.
- - The policyowner must not possess "incidents of ownership" in the assets of
the Separate Account.
These four items are discussed in detail below.
DEFINITION OF LIFE INSURANCE
Section 7702 of the Code sets forth a definition of a life insurance contract
for federal tax purposes. For a Policy to be a life insurance contract, it must
satisfy either the Cash Value Accumulation Test or the Guideline Premium and the
Cash Value Corridor Tests. By limiting cash value at any time to the net single
premium that would be required in order to fund future benefits under the
Policy, the Cash Value Accumulation Test in effect requires a minimum death
benefit for a given Policy Value. The Guideline Premium Test also requires a
minimum death benefit, but in addition limits the total premiums that can
39
be paid into a Policy for a given amount of death benefit.
With respect to a Policy that is issued on the basis of a standard rate class,
the Company believes (largely in reliance on IRS Notice 88-128 and the proposed
mortality charge regulations under Section 7702, issued on July 5, 1991) that
such a Policy should meet the Section 7702 definition of a life insurance
contract.
With respect to a Policy that is issued on a substandard basis (i.e., a rate
class involving higher-than-standard mortality risk), there is less guidance, in
particular as to how mortality and other expense requirements of Section 7702
are to be applied in determining whether such a Policy meets the Section 7702
definition of a life insurance contract. Thus it is not clear whether or not
such a Policy would satisfy Section 7702, particularly if the policyowner pays
the full amount of premiums permitted under the Policy.
The Secretary of the Treasury (the "Treasury") is authorized to prescribe
regulations implementing Section 7702. However, while proposed regulations and
other interim guidance have been issued, final regulations have not been adopted
and guidance as to how Section 7702 is to be applied is limited. If a Policy
were determined not to be a life insurance contract for purposes of Section
7702, such a Policy would not provide the tax advantages normally provided by a
life insurance policy.
If it is subsequently determined that a Policy does not satisfy Section 7702,
the Company may take whatever steps are appropriate and reasonable to attempt to
cause such a Policy to comply with Section 7702. For these reasons, the Company
reserves the right to restrict Policy transactions as necessary to attempt to
qualify it as a life insurance contract under Section 7702.
DIVERSIFICATION
Section 817(h) of the Code requires that the investments of the Separate Account
be "adequately diversified" in accordance with Treasury regulations in order for
the Policy to qualify as a life insurance contract under Section 7702 of the
Code (discussed above). The Separate Account, through the Trust, intends to
comply with the diversification requirements prescribed in Treas. Reg. Sec.
1.817-5, which affect how the Trust's assets are to be invested. The Company
believes that the Separate Account will thus meet the diversification
requirement, and the Company will monitor continued compliance with the
requirement.
STATE LAW
A policy must qualify as a valid life insurance contract under applicable state
laws. State regulations require that the policyowner have appropriate insurable
interest in the life insured. Failure to establish an insurable interest may
result in the Policy not qualifying as a life insurance contract for federal tax
purposes.
INVESTOR CONTROL
In certain circumstances, owners of variable life insurance policies may be
considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their Policies. In those circumstances, income
and gains from the separate account assets would be includible in the variable
policyowner's gross income. The IRS has stated in published rulings that a
variable policyowner will be considered the owner of separate account assets if
the policyowner possesses incidents of ownership in those assets, such as the
ability to exercise investment control over the assets. The Treasury Department
has also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor (i.e., the policyowner), rather than the
insurance company, to be treated as the owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyowners may direct their
investments to particular sub-accounts without being treated as owners of the
underlying assets." As of the date of this prospectus, no such guidance has been
issued.
The ownership rights under the Policy are similar to, but different in certain
respects from, those described by the IRS in rulings in which it was determined
that policyowners were not owners of separate account assets. For example, the
Policy has many more portfolios to which policyowners may allocate premium
payments and Policy Values than were available in the policies described in the
rulings. These differences could result in an owner being treated as the owner
of a pro-rata portion of the assets of the Separate Account. In addition, the
Company does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. The Company therefore reserves the right to modify the Policy as
necessary to attempt to prevent an owner from being considered the owner of a
pro rata share of the assets of the Separate Account.
40
TAX TREATMENT OF POLICY BENEFITS
The following discussion assumes that the Policy will qualify as a life
insurance contract for federal income tax purposes.
The Company believes that the proceeds and cash value increases of a Policy
should be treated in a manner consistent with a fixed-benefit life insurance
policy for federal income tax purposes. Depending on the circumstances, the
exchange of a Policy, a change in the Policy's death benefit option, a Policy
loan, partial withdrawal, surrender, change in ownership, the addition of an
accelerated death benefit rider, or an assignment of the Policy may have federal
income tax consequences. In addition, federal, state and local transfer, and
other tax consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each policyowner or beneficiary.
DEATH BENEFIT
The death benefit under the Policy should be excludable from the gross income of
the beneficiary under Section 101(a)(1) of the Code.
In general, at the insured's death, an estate tax is imposed on assets that are
treated as part of the insured's estate. Death benefits are included in the
insured's estate if the estate is the beneficiary under the policy, if the
insured owned the policy at death, or if the insured had retained certain
incidents of ownership in the policy. In addition, if within three years of the
insured's death, the insured made a gift of the policy or relinquished those
incidents of ownership which would have otherwise caused the policy to be
treated as part of the insured's estate, the death benefit will be included in
the insured's estate.
CASH VALUES
Generally, the policyowner will not be deemed to be in constructive receipt of
the Policy Value, including increments thereof, until there is a distribution.
This includes additions attributable to interest, dividends, appreciation or
gains realized on transfers among sub-accounts.
INVESTMENT IN THE POLICY
Investment in the Policy means:
- - the aggregate amount of any premiums or other consideration paid for a
Policy; minus
- - the aggregate amount, other than loan amounts, received under the Policy
which has been excluded from the gross income of the policyowner (except
that the amount of any loan from, or secured by, a Policy that is a
modified enfowment contract ("MEC"), to the extent such amount has been
excluded from gross income, will be disregarded); plus
- - the amount of any loan from, or secured by a Policy that is a MEC to the
extent that such amount has been included in the gross income of the
policyowner.
The repayment of a policy loan, or the payment of interest on a loan, does not
affect the Investment in the Policy.
SURRENDER OR LAPSE
Upon a complete surrender or lapse of a Policy or when benefits are paid at a
Policy's maturity date, if the amount received plus the amount of Policy Debt
exceeds the total Investment in the Policy, the excess will generally be treated
as ordinary income subject to tax.
If, at the time of lapse or surrender, a Policy has a loan, the loan is
extinguished and the amount of the loan is a deemed payment to the policyholder.
If the amount of this deemed payment exceeds the investment in the contract, the
excess is taxable income and is subject to Internal Revenue Service reporting
requirements.
DISTRIBUTIONS
The tax consequences of distributions from, and loans taken from or secured by,
a Policy depend on whether the Policy is classified as a MEC.
DISTRIBUTIONS FROM NON-MEC'S
A distribution from a non-MEC is generally treated as a tax-free recovery by the
policyowner of the Investment in the Policy to the extent of such Investment in
the Policy, and as a distribution of taxable income only to the extent the
distribution exceeds the Investment in the Policy. In general, loans from, or
secured by, a non-MEC are not treated as distributions. Instead, such loans are
treated as indebtedness of the policyowner. (But see the discussion of the tax
treatment of loans made after year ten in the section "Interest on Policy Loans
After Year 10").
41
FORCE OUTS
An exception to this general rule occurs in the case of a decrease in the
Policy's death benefit or any other change that reduces benefits under the
Policy in the first 15 years after the Policy is issued and that results in a
cash distribution to the policyowner in order for the Policy to continue to
comply with the Section 7702 definitional limits. Such a cash distribution will
be taxed in whole or in part as ordinary income (to the extent of any gain in
the Policy) under rules prescribed in Section 7702. Changes include partial
withdrawals and death benefit option changes.
DISTRIBUTIONS FROM MEC'S
Policies classified as MEC's will be subject to the following tax rules:
- - First, all partial withdrawals from such a Policy are treated as ordinary
income subject to tax up to the amount equal to the excess (if any) of the
Policy Value immediately before the distribution over the Investment in
the Policy at such time.
- - Second, loans taken from or secured by such a Policy and assignments or
pledges of any part of its value are treated as partial withdrawals from
the Policy and taxed accordingly. Past-due loan interest that is added to
the loan amount is treated as a loan.
- - Third, a 10% additional income tax is imposed on the portion of any
distribution (including distributions on surrender) from, or loan taken
from or secured by, such a policy that is included in income except where
the distribution or loan:
- - is made on or after the policyowner attains age 59 1/2;
- - is attributable to the policyowner becoming disabled; or
- - is part of a series of substantially equal periodic payments for the life
(or life expectancy) of the policyowner or the joint lives (or joint life
expectancies) of the policyowner and the policyowner's beneficiary.
These exceptions are not likely to apply in situations where the Policy is not
owned by an individual.
Definition of Modified Endowment Contracts
Section 7702A establishes a class of life insurance contracts designated as
"Modified Endowment Contracts" or "MECs," which applies to Policies entered into
or materially changed after June 20, 1988.
In general, a Policy will be a MEC if the accumulated premiums paid at any time
during the first seven Policy Years exceed the "seven-pay premium limit". The
seven-pay premium limit on any date is equal to the sum of the net level
premiums that would have been paid on or before such date if the policy provided
for paid-up future benefits after the payment of seven level annual premiums
(the "seven-pay premium").
The rules relating to whether a Policy will be treated as a MEC are extremely
complex and cannot be adequately described in the limited confines of this
summary. Therefore, a current or prospective policyowner should consult with a
competent adviser to determine whether a transaction will cause the Policy to be
treated as a MEC.
Material Changes
A Policy that is not a MEC may become a MEC if it is "materially changed." If
there is a material change to the Policy, the seven year testing period for MEC
status is restarted. The material change rules for determining whether a Policy
is a MEC are complex. In general, however, the determination of whether a Policy
will be a MEC after a material change generally depends upon the relationship
among the death benefit of the Policy at the time of such change, the Policy
Value at the time of the change, and the additional premiums paid into the
Policy during the seven years starting with the date on which the material
change occurs.
Reductions in Face Amount
If there is a reduction in benefits during the first seven Policy Years, the
seven-pay premium limit is recalculated as if the policy had been originally
issued at the reduced benefit level. Failure to comply would result in
classification as a MEC regardless of any efforts by the Company to provide a
payment schedule that will not violate the seven pay test.
Exchanges
A life insurance contract received in exchange for a MEC will also be treated as
a MEC.
Processing of Premiums
If a premium is received which would cause the Policy to become a MEC within 23
days of the next Policy Anniversary, the Company will not apply the portion of
the premium which would cause MEC status ("excess premium") to the Policy when
received. The excess premium will be placed in a suspense account until the next
anniversary date, at which point the excess premium, along with interest, earned
on the excess premium at a rate of 3.5% from the date the premium was received,
will be applied to the Policy. (Any amount that would still be excess premium on
the next anniversary will be refunded to the policyowner.) The policyowner will
be advised of this action and will be offered the opportunity to have the
premium
42
credited as of the original date received or to have the premium returned. If
the policyowner does not respond, the premium and interest will be applied to
the Policy as of the first day of the next anniversary. The interest credited
will be taxable to the owner in the year earned.
If a premium is received which would cause the Policy to become a MEC more than
23 days prior to the next Policy Anniversary, the Company will refund any excess
premium to the policyowner. The portion of the premium which is not excess will
be applied as of the date received. The policyowner will be advised of this
action and will be offered the opportunity to return the premium and have it
credited to the account as of the original date received.
If, in connection with the application or issue of the Policy, the policyowner
acknowledges that the policy is or will become a MEC, excess premiums that would
cause MEC status will be credited to the account as of the original date
received.
Multiple Policies
All MEC's that are issued by a company (or its affiliates) to the same
policyowner during any calendar year are treated as one MEC for purposes of
determining the amount includible in gross income under Section 72(e) of the
Code.
POLICY LOAN INTEREST
Generally, personal interest paid on any loan under a Policy which is owned by
an individual is not deductible. For policies purchased on or after January 1,
1996, interest on any loan under a Policy owned by a taxpayer and covering the
life of any individual who is an officer or employee of or is financially
interested in the business carried on by the taxpayer will not be tax deductible
unless the employee is a key person within the meaning of Section 264 of the
Code. A deduction will not be permitted for interest on a loan under a Policy
held on the life of a key person to the extent the aggregate of such loans with
respect to contracts covering the key person exceed $50,000. The number of
employees who can qualify as key persons depends in part on the size of the
employer but cannot exceed 20 individuals.
Furthermore, if a non-natural person owns a Policy, or is the direct or indirect
beneficiary under a Policy, section 264(f) of the Code disallows a pro-rata
portion of the taxpayer's interest expense allocable to unborrowed Policy cash
values attributable to insurance held on the lives of individuals who are not
20% (or more) owners of the taxpayer-entity, officers, employees, or former
employees of the taxpayer.
The portion of the interest expense that is allocable to unborrowed Policy cash
values is an amount that bears the same ratio to that interest expense as the
taxpayer's average unborrowed Policy cash values under such life insurance
policies bear to the average adjusted bases for all assets of the taxpayer.
If the policyowner is an individual, and if the taxpayer is a business and is
not the policyowner, but is the direct or indirect beneficiary under the Policy,
then the amount of unborrowed cash value of the Policy taken into account in
computing the portion of the taxpayer's interest expense allocable to unborrowed
Policy cash values cannot exceed the benefit to which the taxpayer is directly
or indirectly entitled under the Policy.
INTEREST ON POLICY LOANS AFTER YEAR 10
Interest is credited to amounts in the Loan Account at an effective annual rate
of 4.00%. This rate is guaranteed not to be less than 4.00% during the first 10
policy years and 3.50% thereafter. The actual rate credited is equal to the rate
of interest charged on the policy loan, less the Loan Interest Credited
Differential, which is currently 1.25% during the first ten policy years and 0%
thereafter, and is guaranteed not to exceed 1.25% during the first ten policy
years and 0.50% thereafter. The tax consequences associated with a loan interest
credited differential of 0% are unclear. A tax adviser should be consulted
before effecting a loan to evaluate the tax consequences that may arise in such
a situation. If we determine, in our sole discretion, that there is a
substantial risk that a loan will be treated as a taxable distribution under
Federal tax law as a result of no differential between the credited interest
rate and the loan interest rate, the Company retains the right to decrease the
crediting rate under the loan to an amount that would result in the transaction
being treated as a loan under Federal tax law. If this amount is not prescribed
by any IRS ruling or regulation or any court decision, the amount of increase
will be that which the Company considers to be most likely to result in the
transaction being treated as a loan under Federal tax law.
POLICY EXCHANGES
A policyowner generally will not recognize gain upon the exchange of a Policy
for another life insurance policy covering the same life insured and issued by
the Company or another insurance company, except to the extent that the
policyowner receives cash in the exchange or is relieved of Policy indebtedness
as a result of the exchange. The receipt of cash or forgiveness of indebtedness
is treated as "boot" which is taxable up to the amount of the gain in the
policy. In no event will the gain recognized exceed the amount by which the
Policy Value (including any unpaid loans) exceeds the policyowner's Investment
in the Policy.
43
OTHER TRANSACTIONS
A transfer of the Policy, a change in the owner, a change in the life insured, a
change in the beneficiary, and certain other changes to the Policy, as well as
particular uses of the Policy (including use in a so called "split-dollar"
arrangement) may have tax consequences depending upon the particular
circumstances and should not be undertaken prior to consulting with a qualified
tax adviser. For instance, if the owner transfers the Policy or designates a new
owner in return for valuable consideration (or, in some cases, if the transferor
is relieved of a liability as a result of the transfer), then the death benefit
payable upon the death of the life insured may in certain circumstances be
includible in taxable income to the extent that the death benefit exceeds the
prior consideration paid for the transfer and any premiums or other amounts
subsequently paid by the transferee. Further, in such a case, if the
consideration received exceeds the transferor's Investment in the Policy, the
difference will be taxed to the transferor as ordinary income.
Federal estate and state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the individual
circumstances of each policyowner and beneficiary.
ALTERNATE MINIMUM TAX
Corporate owners may be subject to Alternate Minimum Tax on the annual increases
in Cash Surrender Values and on the death benefit proceeds.
INCOME TAX REPORTING
In certain employer-sponsored life insurance arrangements, including equity
split dollar arrangements, participants may be required to report for income tax
purposes, one or more of the following:
- - the value each year of the life insurance protection provided;
- - an amount equal to any employer-paid premiums; or
- - some or all of the amount by which the current value exceeds the
employer's interest in the Policy.
Participants should consult with their tax adviser to determine the tax
consequences of these arrangements.
OTHER INFORMATION
PAYMENT OF PROCEEDS
As long as the Policy is in force, Manulife New York will ordinarily pay any
policy loans, surrenders, partial withdrawals or insurance benefit within seven
days after receipt at its Service Office of all the documents required for such
a payment. The Company may delay for up to six months the payment from the Fixed
Account of any policy loans, surrenders, partial withdrawals, or insurance
benefit. In the case of any such payments from any Investment Account, the
Company may delay payment during any period during which (i) the New York Stock
Exchange is closed for trading (except for normal weekend and holiday closings),
(ii) trading on the New York Stock Exchange is restricted, and (iii) an
emergency exists as a result of which disposal of securities held in the
Separate Account is not reasonably practicable or it is not reasonably
practicable to determine the value of the Separate Account's net assets;
provided that applicable rules and regulations of the SEC shall govern as to
whether the conditions described in (ii) and (iii) exist.
REPORTS TO POLICYOWNERS
Within 30 days after each Policy Anniversary, Manulife New York will send the
policyowner a statement showing, among other things:
- - the amount of death benefit;
- - the Policy Value and its allocation among the Investment Accounts, the
Fixed Account and the Loan Account;
- - the value of the units in each Investment Account to which the Policy
Value is allocated;
- - the Policy Debt and any loan interest charged since the last report;
- - the premiums paid and other Policy transactions made during the period
since the last report; and
- - any other information required by law.
Each policyowner will also be sent an annual and a semi-annual report for the
Trust which will include a list of the securities held in each Portfolio as
required by the 1940 Act.
44
DISTRIBUTION OF THE POLICIES
Manulife Financial Securities LLC ("Manulife Financial Securities"), whose
principal office is located at 73 Tremont Street, Boston, Massachusetts 02108,
acts as the principal underwriter of, and continuously offers, the Policies
pursuant to an Underwriting and Distribution Agreement with Manulife New York.
Manulife Financial Securities is an indirect wholly-owned subsidiary of MFC.
Manulife Financial Securities is registered as a broker-dealer under the
Securities Exchange Act of 1934, is a member of the National Association of
Securities Dealers and is duly appointed and licensed as an insurance agent of
Manulife New York. Manulife Financial Securities is a Delaware limited liability
company, the managing member of which is Manulife USA. Manulife USA in its
capacity as managing member is authorized to act on behalf of Manulife Financial
Securities. The Policies will be sold by registered representatives of
broker-dealers having distribution agreements with Manulife Financial Securities
who are also licensed by the New York State Insurance Department and appointed
with Manulife New York.
The commissions payable to a registered representative on sales of the Policy
will not exceed: (a) _____% of premiums paid in the first year of the Policy
plus (b) ___% of all premiums paid in years after the first year plus (c) ____%
of the Net Policy Value per year. Commissions relating to a particular premium
payment are generally paid in the year that the premium payment is made.
However, these commissions may also, under certain circumstances, be paid over a
period of time. Representatives who meet certain productivity standards with
regard to the sale of the Policies and certain other policies issued by Manulife
New York will be eligible for additional compensation.
RESPONSIBILITIES ASSUMED BY MANULIFE NEW YORK, MANULIFE FINANCIAL SECURITIES AND
MANULIFE USA
The Underwriting and Distribution Agreement between Manulife Financial
Securities and Manulife New York provides that will pay selling broker dealers
commission and expense allowance payments subject to limitations imposed by New
York Insurance Law. The Company will prepare and maintain all books and records
required to be prepared and maintained by Manulife Financial Securities with
respect to the Policies, and send all confirmations required to be sent by
Manulife Securities with respect to the Policies. The Company will pay Manulife
Financial Securities for expenses incurred and services performed under the
terms of the agreement in such amounts and at such times as agreed to by the
parties.
Manulife USA has entered into an Administrative Service Agreement with us
pursuant to which Manulife USA or its designee will provide to us all issue,
administrative, general services and recordkeeping functions on our behalf with
respect to all of our insurance policies including the Policies.
The Company may, from time to time in its sole discretion, enter into one or
more reinsurance agreements with other life insurance companies under which
policies issued by it may be reinsured, such that its total amount at risk under
a policy would be limited for the life of an insured.
VOTING RIGHTS
As stated previously, all of the assets held in each sub-account of the Separate
Account will be invested in shares of a particular Portfolio of the Trust.
Manulife New York is the legal owner of those shares and as such has the right
to vote upon certain matters that are required by the 1940 Act to be approved or
ratified by the shareholders of a mutual fund and to vote upon any other matters
that may be voted upon at a shareholders' meeting. However, Manulife New York
will vote shares held in the sub-accounts in accordance with instructions
received from policyowners having an interest in such sub-accounts. Shares held
in each sub-account for which no timely instructions from policyowners are
received, including shares not attributable to the Policies, will be voted by
Manulife New York in the same proportion as those shares in that sub-account for
which instructions are received. Should the applicable federal securities laws
or regulations change so as to permit Manulife New York to vote shares held in
the Separate Account in its own right, it may elect to do so.
The number of shares in each sub-account for which instructions may be given by
a policyowner is determined by dividing the portion of the Policy Value derived
from participation in that sub-account, if any, by the value of one share of the
corresponding Portfolio. The number will be determined as of a date chosen by
Manulife New York, but not more than 90 days before the shareholders' meeting.
Fractional votes are counted. Voting instructions will be solicited in writing
at least 14 days prior to the meeting.
Manulife New York may, if required by state officials, disregard voting
instructions if such instructions would require shares to be voted so as to
cause a change in the sub-classification or investment policies of one or more
of the Portfolios, or to approve or disapprove an investment management
contract. In addition, the Company itself may disregard voting
45
instructions that would require changes in the investment policies or investment
adviser, provided that Manulife New York reasonably disapproves such changes in
accordance with applicable federal regulations. If Manulife New York does
disregard voting instructions, it will advise policyowners of that action and
its reasons for such action in the next communication to policyowners.
SUBSTITUTION OF PORTFOLIO SHARES
Although we believe it to be unlikely, it is possible that in the judgment of
the management of Manulife New York, one or more of the Portfolios may become
unsuitable for investment by the Separate Account because of a change in
investment policy or a change in the applicable laws or regulations, because the
shares are no longer available for investment, or for some other reason. In that
event, Manulife New York may seek to substitute the shares of another Portfolio
or of an entirely different mutual fund. Before this can be done, the approval
of the SEC and the New York Insurance Department may be required.
Manulife New York also reserves the right (i) to combine other separate accounts
with the Separate Account, (ii) to create new separate accounts, (iii) to
establish additional sub-accounts within the Separate Account to invest in
additional portfolios of the Trust or another management investment company,
(iv) to eliminate existing sub-accounts and to stop accepting new allocations
and transfers into the corresponding portfolio, (v) to combine sub-accounts or
to transfer assets in one sub-account to another sub-account or (vi) to transfer
assets from the Separate Account to another separate account and from another
separate account to the Separate Account. The Company also reserves the right to
operate the Separate Account as a management investment company or other form
permitted by law, and to de-register the Separate Account under the 1940 Act.
Any such change would be made only if permissible under applicable federal and
state law.
RECORDS AND ACCOUNTS
The Service Office will perform administrative functions, such as decreases,
increases, surrenders and partial withdrawals, and fund transfers on behalf of
the Company.
All records and accounts relating to the Separate Account and the Portfolios
will be maintained by the Company. All financial transactions will be handled by
the Company. All reports required to be made and information required to be
given will be provided by the Company.
STATE REGULATIONS
The Company is subject to the regulation and supervision by the New York
Department of Insurance, which periodically examines its financial condition and
operations. Regulation by the New York Insurance Department includes periodic
examination of our financial position and operations, including contract
liabilities and reserves. Regulation by supervisory agencies includes licensing
to transact business, overseeing trade practices, licensing agents, approving
policy forms, establishing reserve requirements, fixing maximum interest rates
on policy loans and minimum rates for accumulation of surrender values,
prescribing the form and content of required financial statements and regulation
of the type and amounts of permitted investments. Our books and accounts are
subject to review by the New York Insurance Department and other supervisory
agencies at all times, and we file annual statements with these agencies.
LITIGATION
No litigation is pending that would have a material effect upon the Separate
Account or the Trust.
INDEPENDENT AUDITORS
The consolidated financial statements of The Manufacturers Life Insurance
Company of New York and The Manufacturers Life Insurance Company of New York
Separate Account B at December 31, 2001 and 2000, and for each of the three
years in the period ended December 31, 2001, appearing in this Prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere herein, and
are included in reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
FURTHER INFORMATION
A registration statement under the Securities Act of 1933 has been filed with
the SEC relating to the offering described in this prospectus. This prospectus
does not include all the information set forth in the registration statement.
The omitted information may be obtained from the SEC's principal office in
Washington D.C. upon payment of the prescribed fee. The
46
SEC also maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC which is located at http://www.sec.gov.
For further information you may also contact Manulife New York's Home Office,
the address and telephone number of which are on the first page of the
prospectus.
OFFICERS AND DIRECTORS
Name, Age and Position
Principal with
Business the
Address Company Principal Occupation
- ------- ------- --------------------
Bruce Avedon Director* Director, Manulife New York, March 1992 to present;
Age: 73 Consultant (self-employed) September 1983 to present.
6601 Hitching Post Lane
Cincinnati, OH 45230
Thomas Director* Director, Manulife New York, February 1999 to Present;
Borshoff Self-employed, Real Estate Owner/manager; Chief
Age: 55 Executive Officer and Chairman, First Federal Savings
536 Stone Road and Loan of Rochester, 1983 to 1997.
Pittsford, NY 14534
James R. Boyle Director* Director, Manulife New York, August 1999 to Present;
Age: 43 President, U.S. Annuities, Manulife Financial, July
500 Boylston Street 1999 to Present; President, Manulife North America, July
Boston, MA 02116 1999 to present; Treasurer, Manufacturers Investment
Trust, June 1998 to present; Vice President,
Institutional Markets, Manulife Financial, May 1998 to
July 1999; Vice President, Administration and Chief
Administrative Officer, Manulife North America,
September 1996 to May 1998; Vice President, Chief
Financial Officer and Chief Administrative Officer,
Manulife North America, August 1994 to September 1996.
Robert A. Cook Director* Director, Manulife New York, February 1999 to Present;
Age: 47 President, U.S. Insurance, Manulife Financial, January
73 Tremont Street 1999 to Present; Vice President, U.S. Insurance,
Boston, MA 02108 Manulife Financial, 1995 to December 1998.
47
NAME, AGE AND Position
PRINCIPAL with Principal Occupation
BUSINESS the ---------------------
ADDRESS Company
- ------- -------
John D. DesPrez III DIRECTOR* President, Manulife Usa, January 1999 to present;
Age: 45 AND Director, Manulife Wood Logan, October 1996 to present;
73 Tremont Street CHAIRMAN Director, September 1996 to present and Chairman of The
Boston, Ma 02108 OF THE Board, January 1999 to present, of Manulife North
BOARD OF America; President, Manulife North America, September
DIRECTORS 1996 to December 1998; President , MIT September 1996 to
present; Senior Vice President, U.S. Annuities, Manulife
USA, September 1996 to December 1998; Vice President,
Mutual Funds, Manulife Financial, January 1995 to
September 1996; Director, MWL, December 1995 to
Present; Director, Wood Logan Distributors, March 1993
to Present; President, North American Funds, March 1993
to September 1996; Director, Manulife New York, March
1992 to Present;
Ruth Ann Fleming DIRECTOR* Director, Manulife New York, March 1992 to Present;
Age: 43 Attorney, consulting services and pro bono activities.
205 Highland Avenue
Short Hills, Nj 07078
James D. Gallagher DIRECTOR* President, Manufacturers Investment Trust, February 2001
AGE: 47 AND to Present, President, The Manufacturers Life Insurance
Boston, Ma 02108 PRESIDENT Company of New York, August 1999 to Present, Executive
Vice President, Secretary and Chief Legal Counsel, The
Manufacturers Life Insurance Company (USA), January 1997
to present; Secretary and General Counsel, Manufacturers
Adviser Corporation, January 1997 to present; Vice
President, Chief Legal Officer and Government
Relations-U.S. Operations, The Manufacturers Life 73
TREMONT STREET Insurance Company, January 1996 to
present; Vice President, Secretary and General Counsel,
The Manufacturers Life Insurance Company of North
America, 1994 to present.
David W. Libbey TREASURER Senior Vice President, Treasurer and Chief Financial
AGE: 55 Officer, U.S. Annuites, Manulife USA, December 1997 to
500 BOYLSTON STREET present; Treasurer, Manulife New York, November 1997 to
BOSTON, MA 02116 present; Vice President, Finance, Manulife North
America, June 1997 to December 1997; Vice President,
Finance, Annuities, Manulife Financial, June 1997 to
present; Vice President & Actuary, Paul Revere Insurance
Group, June 1970 to March 1997.
48
NAME, AGE AND Position
PRINCIPAL with Principal Occupation
BUSINESS the ---------------------
ADDRESS Company
- ------- -------
Neil M. Merkl, Esq. DIRECTOR* Director, Manulife New York, December 1995 to present;
Age: 71 Attorney (Self-employed), April 1994 to Present;
35-35 161ST STREET Attorney, Wilson Elser, 1979 to 1994.
Flushing, NY 11358
James P. O'malley DIRECTOR* Senior Vice President, U.S. Pensions, Manulife
Age:56 Financial, January 1999 to present; Director, Manulife
200 Bloor Street East New York, November 1998 to present; Director,
Toronto, Ontario ManAmerica, November 1998 to present; Vice President,
Canada M4w 1E5 Systems New Business Pensions, Manulife Financial, 1984
to December 1998.
Bradford J. Race Jr. DIRECTOR* Director, Manulife New York, February 2002 to present;
Age: 57 Secretary to the Governor, Chief of Staff and Senior
136 East 64Th Street Policy Advisor to the Governor of the State of New York,
New York, Ny 10021 George E. Pataki, 1995-February 2002; Partner, Seward &
Kissel - Law Firm, 1981-1994, Attorney, Dewey
Ballantine, 1970-1981.
Kim Ciccarell SECRETARY Secretary and Counsel, Manulife New York, November 2001
Age: 32 AND COUNSEL To present; Assistant Counsel, Manulife U.S.A., November
73 Tremont Street 2001 to present; Paralegal, Manulife U.S.A., March 1995
Boston, Ma 02108 - October 1999.
John Ostler APPOINTED Appointed Actuary, Manulife New York, November 2000 to
Age: 48 ACTUARY present; Executive Vice President and Chief Financial
200 Bloor Street East Officer , Manulife USA, October 1, 2000 to present; Vice
Toronto, Ontario President and Corporate Actuary, The Manufacturers Life
Canada M4W 1E5 Insurance Company, March 1998 to September 2000; Vice
President & CFO U.S. Individual Insurance, The
Manufacturers Life Insurance Company, 1992 to March
1998; Vice President, U.S. Insurance Products, The
Manufacturers Life Insurance Company, 1990-1992;
Assistant Vice President & Pricing Actuary , U.S.
Insurance, The Manufacturers Life Insurance Company,
1988-1990.
*Each Director is elected to serve until the next annual meeting of shareholders
or until his or her successor is elected and qualified.
ILLUSTRATIONS
The tables set forth in Appendix A illustrate the way in which a Policy's Death
Benefit, Policy Value, and Cash Surrender Value could vary over an extended
period of time.
49
PART II
OTHER INFORMATION
UNDERTAKINGS
Undertaking to File Reports.
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
Representation of Insurer Pursuant to Section 26 of the Investment Company Act
of 1940, as amended.
The Manufacturers Life Insurance Company of New York (the "Company") hereby
represents that the fees and charges deducted under the contracts issued
pursuant to this registration statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the Company.
Rule 484 Undertaking.
Article 10 of the Charter of the Company provides as follows:
TENTH: No director of the Corporation shall be personally liable to the
Corporation or any of its shareholders for damages for any breach of duty as a
director; provided, however, the foregoing provision shall not eliminate or
limit (i) the liability of a director if a judgment or other final adjudication
adverse to such director established his or her such acts or omissions were in
bad faith or involved intentional misconduct or were acts or omissions (a) which
he or she knew or reasonably should have known violated the New York Insurance
Law or (b) which violated a specific standard of care imposed on directors
directly, and not by reference, by a provision of the New York Insurance Law (or
any regulations promulgated thereunder) or (c) which constituted a knowing
violation of any other law, or establishes that the director personally gained
in fact a financial profit or other advantage to which the director was not
legally entitled or (ii) the liability of a director for any act or omission
prior to the adoption of this Article by the shareholders of the Corporation.
Any repeal or modification of this Article by the shareholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation existing
at the time of such repeal or modification.
Article VII of the By-laws of the Company provides as follows:
Section VII.1. Indemnification of Directors and Officers. The Corporation may
indemnify any person made, or threatened to be made, a party to an action by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he or she, his or her testator, testatrix or intestate, is or was
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him or her in connection with the defense or settlement of such
action, or in connection with an appeal therein, if such director or officer
acted, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interests of the Corporation, except that no indemnification under this
Section shall be made in respect of (1) a threatened action, or a pending action
which is settled or is otherwise disposed of, or (2) any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
Corporation, unless and only to the extent that the court in which the action
was brought, or, if no action was brought, any court of competent jurisdiction,
determines upon application that, in view of
all the circumstances of the case, the person is fairly and reasonably entitled
to indemnity for such portion of the settlement amount and expenses as the court
deems proper.
The Corporation may indemnify any person made, or threatened to be made, a party
to an action or proceeding (other than one by or in the right of the Corporation
to procure a judgment in its favor), whether civil or criminal, including an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the Corporation served in any
capacity at the request of the Corporation, by reason of the fact that he or
she, his or her testator, testatrix or intestate, was a director or officer of
the Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he or she reasonably believed to be in, or, in the
case of service for any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise, not opposed to, the best
interests of the Corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his or her conduct was
unlawful.
The termination of any such civil or criminal action or proceeding by judgment,
settlement, conviction or upon a plea of nolo contendere, of its equivalent,
shall not in itself create a presumption that any such director or officer did
not act, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interest of the Corporation or that he or she had reasonable cause to
believe that his or her conduct was unlawful.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant 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 is, therefore, unenforceable. In the event a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant 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
registrant 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
This registration statement comprises the following papers and documents:
The facing sheet;
The Prospectus, consisting of 80 pages;
Undertaking to file reports;
Representation pursuant to Section 26 of the Investment Company Act of
1940;
Rule 484 Undertaking;
The signatures;
Written consents of the following persons:
A. Opinion and Consent of Actuary To Be Filed by Amendment
B. Ernst & Young LLP (Philadelphia, PA) To Be Filed by Amendment Ernst
& Young LLP (Boston, MA) To Be Filed by Amendment
The following exhibits are filed as part of this Registration Statement:
1. Copies of all exhibits required by paragraph A of the instructions
as to exhibits in Form N-8B-2 are set forth below under designations
based on such instructions:
A(1) Resolutions of Board of Directors of First North
American Life Assurance Company establishing FNAL
Variable Life Account I were previously filed in the
Registrant's initial registration statement on Form
S-6 (File No. 333-33351) as filed with the Commission
on August 8, 1997.
A(2) Not applicable.
A(3)(a) Underwriting and Distribution Agreement between The
Manufacturers Life Insurance Company of New York
(Depositor) and Manufacturers Financial Securities LLC
(Underwriter) - Filed Herewith
A(3)(b) Selling Agreement between The Manufacturers Life
Insurance Company of New York, Manufactures Financial
Securities LLC (Underwriter), Selling Broker Dealers,
and General Agent - Filed Herewith
A(3)(c) Not applicable.
A(4) Not applicable.
A(5) Form of Flexible Premium Variable Life Insurance
Policy - To be Filed by Amendment
A(6)(a)(i) Declaration of Intention and Charter of First North
American Life Assurance Company is incorporated by
reference to Exhibit (b)(6)(i) to post-effective
amendment No. 7 to the Registration Statement on Form
N-4, file number 33-46217 , filed February 25, 1998 on
behalf of The Manufacturers Life Insurance Company of
New York Separate Account A.
A(6)(a)(ii) Certificate of amendment of the Declaration of
Intention and Charter of First North American Life
Assurance Company is incorporated by reference to
Exhibit (b)(6)(i) to post-effective amendment No. 7 to
the Registration Statement on Form N-4, file number
33-46217, filed February 25, 1998 on behalf of The
Manufacturers Life Insurance Company of New York
Separate Account A.
A(6)(a)(iii) Certificate of amendment of the Declaration of
Intention and Charter of The Manufacturers Life
Insurance Company of New York is incorporated by
reference to Exhibit (b)(6)(i) to post-effective
amendment No. 7 to the Registration Statement on Form
N-4, file number 33-46217, filed February 25, 1998 on
behalf of The Manufacturers Life Insurance Company of
New York Separate Account A.
(A)(6)(b) By-laws of The Manufacturers Life Insurance Company of
New York are incorporated by reference to Exhibit
(b)(6)(i) to post-effective amendment No. 7 to the
Registration Statement on Form N-4, file number
33-46217, filed February 25, 1998 on behalf of The
Manufacturers Life Insurance Company of New York
Separate Account A.
A(7) Not applicable.
A(8)(a) Form of Reinsurance Agreement between The
Manufacturers Life
Insurance Company of New York and The Manufacturers
Life Insurance Company (USA) is incorporated by
reference to Exhibit A(8)(a) to pre-effective
amendment No. 1 to a Registration Statement on Form
S-6, file number 333-33351, filed on March 16, 1998 on
behalf of The Manufacturers Life Insurance Company of
New York Separate Account B.
A(8)(b) Administrative Services Agreement between The
Manufacturers Life Insurance Company (U.S.A.) and The
Manufacturers Life Insurance Company of New York -
Filed Herewith
A(8)(c) Investment Services Agreement between The
Manufacturers Life Insurance Company of New York and
The Manufacturers Life Insurance Company is
incorporated by reference to Exhibit A(8)(a) to
pre-effective amendment No. 1 to a Registration
Statement on Form S-6, file number 333-33351, filed on
March 16, 1998 on behalf of The Manufacturers Life
Insurance Company of New York Separate Account B.
A(9) Not applicable.
A(10)(a) Form of Application for Flexible Premium Variable Life
Insurance Policy is incorporated by reference to
Exhibit A(8)(a) to pre-effective amendment No. 1 to a
Registration Statement on Form S-6, file number
333-33351, filed on March 16, 1998 on behalf of The
Manufacturers Life Insurance Company of New York
Separate Account B.
2. Consents of the following:
A Opinion and consent of Kim Ciccarelli, Esq., Secretary and
Counsel of The Manufacturers Life Insurance Company of New
York - To Be Filed by Amendment
B Consent of Brian Koop, Actuary of The Manufacturers Life
Insurance Company of New York - To Be Filed by Amendment C
Consents of Ernst & Young LLP (Philadelphia, PA) and Ernst &
Young LLP (Boston, MA)- To Be Filed by Amendment
3. No financial statements are omitted from the prospectus pursuant to
instruction 1(b) or (c) of Part I.
4. Not applicable.
5. Not applicable.
6. Memorandum Regarding Purchase, Transfer and Redemption Procedures
for the Policies - To be Filed by Amendment
7.(i) Powers of Attorney are incorporated by reference to Exhibit A(7) to
pre-effective amendment No. 1 to a Registration Statement on Form
S-6, file number 333-33351, filed on March 17, 1998 on behalf of The
Manufacturers Life Insurance Company of New York Separate Account B.
7.(ii) Power of Attorney, James O'Malley and Thomas Borshoff - previously
filed as Exhibit (b)(14)(b) to post-effective amendment no. 6 to
Registrant's Registration Statement on Form N-4 File, No. 33-79112,
filed March 2, 1999.
7.(iii) Power of Attorney, James D. Gallagher and James R. Boyle are
incorporated by reference to Exhibit 7(iii) to pre-effective
amendment No. 1 to a Registration Statement on Form S-6, file number
333-83023, filed on November 1, 1999 on behalf of The Manufacturers
Life Insurance Company of New York Separate Account B.
7.(iv) Power of Attorney, Robert Cook - previously filed as Exhibit
(b)(14)(d) to post-effective amendment no. 8 to Registration
Statement on Form N-4, File, No. 33-79112, filed February 25, 2000.
7(v) Power of Attorney, Bradford J. Race Jr. - FILED HEREWITH
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT B, has caused this Registration Statement to be signed on its
behalf, in the City of Boston, and Commonwealth of Massachusetts on this
1st day of April, 2002.
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK SEPARATE ACCOUNT B
(Registrant)
By: THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ JAMES D. GALLAGHER
--------------------------
James D. Gallagher
President
Attest
/s/ KIM CICCARELLI
- -------------------------
Kim Ciccarelli
Secretary
Pursuant to the requirements of the Securities Act of 1933, the Depositor has
duly caused this Registration Statement to be signed on its behalf by the
undersigned on the 1st day of April, 2002 in the City of Boston, and
Commonwealth of Massachusetts.
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ JAMES D. GALLAGHER
-----------------------------
James D. Gallagher
President
Attest
/s/ KIM CICCARELLI
- -------------------------
Kim Ciccarelli
Secretary
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities with the Depositor on the
1st day of April, 2002.
SIGNATURE TITLE
/s/ JAMES D. GALLAGHER Director and President
- --------------------------- (Principal Executive
James D. Gallagher Officer)
* Director and Chairman
- ---------------------------
John D. DesPrez, III
* Director
- ---------------------------
Ruth Ann Fleming
* Director
- ---------------------------
Neil M. Merkl
* Director
- ---------------------------
Thomas Borshoff
* Director
- ---------------------------
Bradford J. Race Jr.
* Director
- ---------------------------
James R. Boyle
* Director
- ---------------------------
Bruce Avedon
* Director
- ---------------------------
James P. O'Malley
* Director
- ---------------------------
Robert Cook
/s/ DAVID W. LIBBEY Treasurer (Principal
- --------------------------- Financial and Accounting
David W. Libbey Officer)
*By: /s/ DAVID W. LIBBEY
---------------------------
David W. Libbey
Attorney-in-Fact Pursuant
to Powers of Attorney
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
A(3)(a) Underwriting and Distribution Agreement
A(3)(b) Selling Agreement
A(8)(b) Administrative Services Agreement
POA - Bradford J. Race Jr.