-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VhuFO+3HVk+CAe6qgweqgHPk5Kq8NIvv7Zq1dLIfpHr4SEMRA4gP9OoNpgn2K9L8 aj+jql5y2AusgebijKdGtA== 0000950109-96-002224.txt : 19960419 0000950109-96-002224.hdr.sgml : 19960419 ACCESSION NUMBER: 0000950109-96-002224 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 25 FILED AS OF DATE: 19960418 EFFECTIVENESS DATE: 19960501 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE CO OF AMERI CENTRAL INDEX KEY: 0000757552 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-07734 FILM NUMBER: 96548140 BUSINESS ADDRESS: STREET 1: ONE GRANITE PL CITY: CONCORD STATE: NH ZIP: 03301 BUSINESS PHONE: 6032265656 MAIL ADDRESS: STREET 1: ONE GRANITE PLACE CITY: CONCORD STATE: NH ZIP: 03301 FORMER COMPANY: FORMER CONFORMED NAME: CHUBB SEPARATE ACCOUNT A DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CHUBB VOLUNTEER SEPARATE ACCOUNT A DATE OF NAME CHANGE: 19920305 485BPOS 1 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on April 17, 1996 FILE NO. 33-7734 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 12 TO FORM S-6 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 --------------- A. Exact name of trust: CHUBB SEPARATE ACCOUNT A (FORMERLY THE CHUBB/VOLUNTEER SEPARATE ACCOUNT A) B. Name of depositor: CHUBB LIFE INSURANCE COMPANY OF AMERICA (FORMERLY THE VOLUNTEER STATE LIFE INSURANCE COMPANY) C. Complete address of depositor's principal executive offices: One Granite Place Concord, NH 03301 D. Name and complete address of agent for service: Ronald R. Angarella President Chubb Securities Corporation One Granite Place Concord, NH 03301 Copies to: Charlene Grant, Esq. Joan E. Boros, Esq. Chubb Life Insurance Company of America Katten Muchin & Zavis One Granite Place 1025 Thomas Jefferson Street, N.W. Concord, NH 03301 East Lobby, Suite 700 Washington, D.C. 20007 --------------- It is proposed that this filing will become effective (check appropriate box) [_] immediately upon filing pursuant to paragraph (b) [X] on May 1, 1996 pursuant to paragraph (b) [_] 60 days after filing pursuant to paragraph (a)(i) [_] on (date) pursuant to paragraph (a)(i) of rule (485) [_] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. E. Title and amount of Securities being registered: Units of Interest in the Separate Account Under Individual Flexible Premium Variable Life Insurance Policies. F. Proposed maximum aggregate offering prices to the public of the securities being registered: Registration of Indefinite Amount of Securities under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940. G. Amount of filing Fee: An indefinite amount of the Registrant's securities has been registered pursuant to a declaration, under Rule 24f-2 under the Investment Company Act of 1940, set out in the Form S-6 Registration Statement contained in File No. 2-94478. Registrant filed a Rule 24f-2 Notice for the fiscal year ending December 31, 1995 on February 27, 1996. H. Approximate date of proposed public offering: As soon as practicable after the effective date. Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the Investment Company Act of 1940, with respect to the policy described in the Prospectus. ================================================================================ ENSEMBLE II CHUBB SEPARATE ACCOUNT A INDIVIDUAL FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ISSUED BY CHUBB LIFE INSURANCE COMPANY OF AMERICA ONE GRANITE PLACE CONCORD, NEW HAMPSHIRE 03301 (603) 226-5000 The Flexible Premium Variable Life Insurance Policy ("Policy") currently offered by Chubb Life Insurance Company of America ("Chubb Life") and described in this Prospectus is designed to provide a policyowner with both lifetime insurance protection and maximum flexibility in connection with premium payments and death benefits. Although each Policy contains a schedule of intended premium payments ("Planned Periodic Premiums"), and an intended frequency of premium payments ("Premium Frequency"), a policyowner may, subject to certain restrictions, vary the frequency and amount of the premium payments and increase or decrease the level of life insurance benefits payable under the Policy. This flexibility allows a policyowner to provide for changing insurance needs within the framework of a single insurance policy. Unlike traditional lifetime insurance protection, the policyowner participates in the investment experience of Chubb Separate Account A ("Separate Account A"). Accumulation value under the Policy will increase with positive investment experience and decrease with negative investment experience. Accumulation value in Separate Account A is not guaranteed and could decline to zero. The Policy provides for a death benefit payable at the Insured's death. If net premiums are allocated to Separate Account A, the amount of the death benefit may reflect the investment experience of the chosen division of Separate Account A, as well as the frequency and amount of premiums, any withdrawals of cash value ("withdrawal"), and the charges assessed in connection with the Policy. As long as the Policy remains in force, the death benefit will not be less than the current Specified Amount of the Policy, reduced by any outstanding indebtedness and any due and unpaid charges. The minimum initial Specified Amount of a Policy is $25,000. The Specified Amount may not be reduced to less than $25,000, except when required by a withdrawal. The Specified Amount may not be reduced to less than $10,000 after a withdrawal. The Policy provides two death benefit options which may be chosen by the policyowner. Under Option I, the death benefit payable under the Policy is equal to the greater of (i) the Specified Amount or (ii) the Policy's accumulation value on the date of death multiplied by the "corridor percentage". The corridor percentage is a tax law concept pertaining to the relationship between accumulation value and death benefit, based on the Insured's attained age. Under Option II, the death benefit equals the Specified Amount plus the accumulation value of the Policy on the date of death, but not less than the Policy's accumulation value multiplied by the corridor percentage. The policyowner may, subject to certain restrictions, change from one death benefit option to the other after the Policy has been issued. The initial premium payment must be sufficient to keep the Policy in force for at least three months. No premium payment may be less than $25. The total of all premiums paid may never exceed the current maximum premium limitations set forth in the Internal Revenue Code of 1986 (the "Code"). The limitation on total premiums paid is imposed in order to comply with present requirements for the definition of life insurance to obtain favorable federal income tax treatment of the Policy and its death benefit. The Policy will remain in force so long as cash value exceeds indebtedness and cash value less indebtedness is sufficient to pay certain monthly charges imposed in connection with the Policy. The cash value equals the accumulation value less any surrender charge. Accumulation value in Separate Account A will reflect the investment experience of the chosen divisions of Separate Account A, the amount and frequency of premium payments, any withdrawals, and charges imposed in connection with the Policy. Adherence to the schedule of Planned Periodic Premiums will not assure the Policy will remain in force. The policyowner bears the entire investment risk for all amounts allocated to Separate Account A; no minimum accumulation value is guaranteed and the accumulation value could decline to zero. So long as cash value exceeds indebtedness and subject to certain conditions described in this Prospectus, a policyowner may obtain policy loans at any time after the first policy anniversary and may make withdrawals at any time. Both withdrawals and policy loans must be made prior to the Policy's maturity date. The policyowner may allocate net premiums to one or more of the divisions of Separate Account A or to Chubb Life's General Account on the allocation date. Each division of Separate Account A will invest solely in a corresponding portfolio (a "Portfolio") of Chubb America Fund, Inc., Templeton Variable Products Series Funds, Fidelity Variable Insurance Products Fund or Fidelity Variable Insurance Products Fund II (collectively, the "Funds"). Prior to the allocation date the net premiums paid will be deposited in Chubb Life's General Account. There is a period during which the policyowner may cancel the Policy. If the policyowner elects during this "free look" period to cancel the Policy, Chubb Life will reimburse, within seven days from the date the Policy is surrendered to Chubb Life, the full amount of premium paid. The accompanying Prospectuses for the Funds and the Statements of Additional Information, available on request, describe the investment objectives and risks of the thirteen Portfolios. Prospective purchasers of this Policy are advised that replacement of existing insurance coverage may not be financially advantageous and should consult with their financial advisers with respect to the Policy. It may also not be advantageous to purchase this Policy, if the prospective purchaser already owns a flexible premium variable life insurance policy. This Prospectus generally describes only the portion of the Policy involving Separate Account A. For a brief summary of Chubb Life's General Account, see "THE GENERAL ACCOUNT." THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS FOR THE FUNDS THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES DIVISION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES DIVISION, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE. THE DATE OF THIS PROSPECTUS IS MAY 1, 1996 TABLE OF CONTENTS
PAGE ---- DEFINITIONS.......................................................... 3 SUMMARY.............................................................. 4 CHUBB LIFE INSURANCE COMPANY OF AMERICA.............................. 9 CHUBB SEPARATE ACCOUNT A............................................. 9 THE FUNDS............................................................ 9 THE POLICY........................................................... 13 General............................................................ 13 Payment of Premiums................................................ 13 Premium Limitations................................................ 13 Allocation of Premiums............................................. 13 Transfers.......................................................... 14 Telephone Transfers, Loans and Reallocations....................... 15 Policy Lapse....................................................... 15 Reinstatement...................................................... 16 Policy "Free Look"................................................. 16 CHARGES AND DEDUCTIONS............................................... 16 Premium Charges.................................................... 16 Monthly Deduction.................................................. 16 Risk Charge........................................................ 17 Surrender Charge................................................... 17 Administrative Fees................................................ 18 Other Charges...................................................... 18 POLICY BENEFITS AND RIGHTS........................................... 18 Death Benefits..................................................... 18 Guaranteed Death Benefit........................................... 20 Combined Requests.................................................. 20 Maturity of the Policy............................................. 20 Optional Insurance Benefits........................................ 20 Settlement Options................................................. 21 CALCULATION OF ACCUMULATION VALUE.................................... 22 Unit Values........................................................ 22 Net Investment Factor.............................................. 23 CASH VALUE BENEFITS.................................................. 23 Surrender Privileges............................................... 23 Policy Loans....................................................... 24 PAGE ---- OTHER MATTERS........................................................ 25 Voting Rights...................................................... 25 Additions, Deletions or Substitutions of Investments............... 26 Annual Summary..................................................... 26 Confirmation....................................................... 26 Limitation on Right to Contest..................................... 26 Misstatements...................................................... 27 Suicide............................................................ 27 Beneficiaries...................................................... 27 Postponement of Payments........................................... 27 Assignment......................................................... 27 Illustration of Benefits and Values................................ 27 Non-Participating Policy........................................... 27 THE GENERAL ACCOUNT.................................................. 27 General Description................................................ 27 The Policy......................................................... 28 General Account Benefits........................................... 28 General Account Accumulation Value................................. 28 Determination of Charges........................................... 28 Premium Deposit Fund............................................... 28 DISTRIBUTION OF THE POLICY........................................... 29 Group or Sponsored Arrangements.................................... 29 MANAGEMENT OF CHUBB LIFE............................................. 31 Executive Officers and Directors of Chubb Life..................... 31 STATE REGULATION OF CHUBB LIFE....................................... 33 FEDERAL TAX MATTERS Tax Considerations................................................. 33 Policy Proceeds.................................................... 33 Charge for Chubb Life Income Taxes................................. 36 EMPLOYEE BENEFIT PLANS............................................... 36 LEGAL PROCEEDINGS.................................................... 36 EXPERTS.............................................................. 36 REGISTRATION STATEMENT............................................... 37 FINANCIAL STATEMENTS................................................. F-1 ILLUSTRATIONS........................................................ Appendix A
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. CHUBB LIFE DOES NOT AUTHORIZE ANY IN- FORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS PROSPEC- TUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS, THE PROSPECTUSES OF THE FUNDS OR THE STATEMENTS OF ADDITIONAL INFORMATION OF THE FUNDS. 2 DEFINITIONS In addition to the capitalized terms which are defined elsewhere in this Pro- spectus, the following words and phrases shall have the indicated meanings: Accumulation value--The total amount that a Policy provides for investment at any time plus the amount held as collateral for policy debt. Age--The Insured's age at his nearest birthday. Allocation date--The date when the initial premium is placed in divisions of Separate Account A and the General Account in accordance with the policyowner's allocation instructions in the application. The allocation date is 25 days from the date Chubb Life mails the Policy to the agent for delivery to the policyowner. However, if the insured is in a substandard risk class, the Allocation Date will be the date of receipt by Chubb Life of all items necessary under its administrative and underwriting procedures to release the Policy to active status in its processing system. Attained Age--The age of the Insured at the last policy anniversary. Beneficiary---The beneficiary designated by the policyowner in the applica- tion. If changed, the beneficiary is as shown in the latest change filed with Chubb Life. If no beneficiary survives the Insured, the policyowner or the policyowner's estate will be the beneficiary. The interest of any beneficiary is subject to that of any assignee. Cash value--The accumulation value less the surrender charge. This amount less the amount of policy debt is payable to the policyowner on the earlier of sur- render of the Policy or the maturity date. Date of Receipt--Any business day of Chubb Life, prior to 4:00 P.M. New York City time, on which a notice or premium payment is received at Chubb Life's service center or home office. Death benefit--The amount, less the amount of policy debt, which is payable to the beneficiary under the Policy upon the death of the Insured. Division--A division of Separate Account A which invests exclusively in the shares of a specified Portfolio of the Funds. Ensemble II--The name of the Flexible Premium Variable Life Insurance Policy described in this Prospectus. Funds--Chubb America Fund, Inc., Templeton Variable Products Series Fund, Fidelity Variable Insurance Products Fund and Fidelity Variable Insurance Products Fund II, series mutual funds. General Account--The assets of Chubb Life other than those allocated to Sepa- rate Account A or any other separate account. Insured--The person upon whose life the Policy is issued. Issue Age--The Insured's age at his nearest birthday on the Policy Date. Loan value--Generally, 90% of a Policy's cash value on the date of a loan. Maturity date--Unless otherwise specified, the maturity date will be the pol- icy anniversary nearest to the Insured's 95th birthday. Monthly anniversary date--The same date in each month as the policy date. Minimum Initial Premium--The minimum payment which is due and payable on the Policy Date. The Minimum Initial Premium must be sufficient to cover monthly deductions and keep the Policy in force for at least three months. Net premium--The gross premium less a 2.5% premium tax charge. Owner (Policyowner)--The person so designated in the application or as subse- quently changed. Policy date--The date set forth in the Policy, which is the date requested by the Owner. If no date is requested, it is the later of the date of application or the date of any required medical examination. The policy date is the date from which policy years, policy months, and policy anniversaries will be deter- mined. If the policy date should fall on the 29th, 30th or 31st of a month, the policy date will be the 28th of such month. Policy debt--The sum of all unpaid policy loans and accrued interest thereon. Portfolio--A separate investment Portfolio of the Funds. Proof of death--One or more of the following: (a) A copy of a certified death certificate. (b) A copy of a certified decree of a court of competent jurisdiction as to the finding of death. (c) A written statement by a medical doctor who attended the Insured. (d) Any other proof satisfactory to Chubb Life. Separate Account A--Chubb Separate Account A, a separate investment account created by Chubb Life to receive and invest net premiums paid under the Policy and other flexible premium variable life insurance policies offered by Chubb Life. Specified Amount--The face amount of the Policy which is the minimum death benefit payable under the Policy. Surrender Charge--A sales charge assessed only upon surrender or withdrawal. Valuation date--Each day, as of the close of regular trading on the New York Stock Exchange, which is currently 4:00 P.M. New York City time. Valuation period--The period between two successive valuation dates, commenc- ing at the close of regular trading on the New York Stock Exchange on each val- uation date and ending at the close of regular trading on the New York Stock Exchange on the next succeeding valuation date. 3 SUMMARY THE FOLLOWING SUMMARY OF PROSPECTUS INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. ANY SIGNIFICANT VARIATIONS FROM THE INFORMATION APPEARING IN THIS PROSPECTUS WHICH MAY BE REQUIRED DUE TO INDIVIDUAL STATE REQUIREMENTS ARE CONTAINED IN SUPPLEMENTS WHICH ARE ATTACHED TO THIS PROSPECTUS, OR IN ENDORSEMENTS TO THE POLICY, AS APPROPRIATE. UNLESS OTHERWISE INDICATED, THE DESCRIPTION OF THE POLICY CONTAINED IN THIS PROSPECTUS ASSUMES THE POLICY IS IN EFFECT, THERE IS NO OUTSTANDING POLICY DEBT AND THE DEATH BENEFIT IS NOT SUBJECT TO ADJUSTMENT BY THE CORRIDOR PERCENTAGE. The Policy. Under the flexible premium variable life insurance policy (the "Policy") issued by Chubb Life Insurance Company of America ("Chubb Life"), the policyowner may, subject to certain limitations, make premium payments in any amount at any frequency. The Policy is a life insurance contract with death benefits, cash values, and other features traditionally associated with life insurance. It is called "flexible premium" because, unlike many insurance contracts, there is no fixed schedule for premium payments, although each policyowner may establish a schedule of premium payments ("Planned Periodic Premiums"). This flexibility permits a policyowner to provide for evolving insurance needs within a single insurance product. The minimum initial Specified Amount is $25,000. A policyowner under attained age 85 may increase or decrease coverage. Increasing coverage under the Policy, rather than purchasing another policy, may save additional administrative costs. Increasing coverage under the Policy or purchasing another policy may require new evidence of insurability. Increasing coverage may have certain tax consequences. See "Federal Tax Matters." The Policy is called "variable" because, unlike the fixed benefits of an ordinary whole life insurance contract, the accumulation value, the cash value and, under certain circumstances, the death benefit of the Policy may increase or decrease depending upon the investment experience of the divisions of Chubb Separate Account A ("Separate Account A") to which premium payments have been allocated. So long as the Policy's cash value continues to be sufficient to pay the monthly deduction, all policyowners are guaranteed a minimum death benefit equal to the face amount of the Policy (the "Specified Amount"), less any outstanding policy debt. The death benefit is payable under two options. Under Option I, the death benefit is equal to the greater of the Specified Amount or the accumulation value of the Policy on the date of death multiplied by the corridor percentage. Under Option II, the death benefit is equal to the sum of the Specified Amount and the Policy's accumulation value on the date of death, subject to adjustment by the corridor percentage. The corridor percentage is a tax law concept pertaining to the relationship between accumulation value and the death benefit, based on the Insured's attained age. Prospective policyowners should be aware that there is no guarantee of accumulation value in Separate Account A. See "POLICY BENEFITS AND RIGHTS--Death Benefits." Chubb Separate Account A. Separate Account A is a separate account established by Chubb Life pursuant to the insurance laws of the State of New Hampshire and organized as a registered unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). Such registration does not involve any supervision by the Securities and Exchange Commission (the "Commission") of the management or investment practices or policies of Separate Account A. Separate Account A is presently comprised of thirteen divisions, each of which buys shares at net asset value of the corresponding portfolio (a "Portfolio") of Chubb America Fund, Inc., Templeton Variable Products Series Fund, Fidelity Variable Insurance Products Fund or Fidelity Variable Insurance Products Fund II (the "Funds"). Separate Account A is administered and accounted for as part of the general business of Chubb Life, but the income, capital gains, or capital losses of Separate Account A are credited to or charged against the assets held in the account in accordance with the terms of the Policy, without regard to other income or capital gains or losses of any other account arising out of any other business Chubb Life conducts. The assets of Separate Account A are not chargeable with liabilities arising out of any other business conducted by Chubb Life. The income and both realized and unrealized gains or losses on the assets of each division are separate and are credited or charged against each division without regard to income, gains or losses from any other division. See "CALCULATION OF ACCUMULATION VALUE--Unit Values." A policyowner may allocate net premium payments among the General Account and the divisions of Separate Account A which invest in Portfolios of the Funds. If the Date of Receipt of the initial premium is prior to the date Chubb Life either issues the Policy or offers to issue the Policy on a basis other than as applied for, and that initial premium exceeds $500, the net premium, less any monthly deductions, will be credited with interest at the rate currently being credited to the General Account. This amount will be credited with interest for the period between the Date of Receipt of the premium (or the policy date, whichever is 4 later) and the date Chubb Life issues the Policy or the applicant refuses Chubb Life's offer to issue the Policy on a basis other than as applied for. In those instances when Chubb Life declines to issue a Policy, the entire premium paid, if greater than $500, will be returned with interest; interest will be credited from the Date of Receipt to the date the application is rejected. If the Policy issued as applied for is not accepted or the "free look" is exercised, no interest will be credited. Chubb Life will retain any interest earned on the initial net premium. Prior to the allocation date the initial net premium will be deposited in Chubb Life's General Account. The Funds. Chubb America Fund, Inc. is registered as an open-end diversified management company under the 1940 Act. Its shares are offered only to divisions of separate accounts, whether now in existence or to be established by Chubb Life or its affiliated insurance companies to fund variable life insurance policies and variable annuity contracts. Chubb America Fund, Inc. presently has nine classes of stock, each representing a Portfolio having a specific investment objective. The present Portfolios of Chubb America Fund, Inc. are the World Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock Portfolio, the Bond Portfolio, the Domestic Growth Stock Portfolio, the Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio. In the future, Chubb America Fund, Inc. may add or delete Portfolios. The investment adviser to Chubb America Fund, Inc. is Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a subsidiary of Chubb Life. Templeton Variable Products Series Fund is an open-end, diversified management investment company currently consisting of five separate series, one of which (Templeton International Fund) offers its shares to a corresponding division of Separate Account A. Templeton Variable Series Fund offers its shares solely to separate accounts of insurance companies, including companies not affiliated with Chubb Life, as an investment vehicle for variable life insurance policies and variable annuity contracts. The investment manager of Templeton International Fund is Templeton Investment Counsel, Inc. ("TICI"). Fidelity Variable Insurance Products Fund (Fidelity VIP) and Fidelity Variable Insurance Products Fund II (Fidelity VIPII) are open-end, diversified management investment companies. Fidelity VIP currently consists of four separate series, one of which (High Income Portfolio) offers its shares to a corresponding division of Separate Account A. Fidelity VIPII currently consists of five separate series, two of which (Contrafund Portfolio and Index 500 Portfolio) offer their shares to corresponding divisions of Separate Account A. Fidelity VIP and Fidelity VIPII offer their shares solely to separate accounts of insurance companies, including companies not affiliated with Chubb Life, as investment vehicles for variable life insurance policies and variable annuity contracts. Fidelity Management & Research Company is the investment manager of Fidelity VIP and Fidelity VIPII. Policyowners should be aware that there can be no assurance that any Portfolio will in fact achieve its stated objectives. Policyowners should read and retain the prospectuses for the Funds which accompanies this Prospectus for detailed information. See "THE FUNDS." Premiums. The first premium is due on the policy date. Premiums are paid in advance, generally one year at a time; however, Chubb Life permits semi-annual, quarterly and monthly premium payments. Changes in frequency and increases or decreases in the amount of Planned Periodic Premiums may be made by the policyowner provided that the total of all premiums, scheduled and unscheduled, cannot exceed the current maximum premium limitations for the definition of life insurance, set forth in the Code. Chubb Life will return any excess premiums if the total of all premiums, scheduled and unscheduled, will exceed these limits. Chubb Life will notify policyowners annually if any premiums would cause the Policy to be deemed a modified endowment contract and allow for a refund of the excess premium. See "FEDERAL TAX MATTERS--Policy Proceeds". Chubb Life reserves the right to limit the amount of any increase in premium payment. Subject to the foregoing limitations, a policyowner may make additional premium payments at any time prior to the maturity date of the Policy. See "THE POLICY--Payment of Premiums". Failure to pay premiums in accordance with the schedule of Planned Periodic Premiums will not automatically cause the Policy to lapse. It will lapse only when the cash value less outstanding policy debt is insufficient to pay the monthly deduction and a grace period expires without a sufficient payment by the policyowner. Conversely, payment of premiums in accordance with the schedule of Planned Periodic Premiums does not necessarily mean that the Policy will remain in force. See "THE POLICY--Policy Lapse". Death Benefit. The death benefit under the Policy is the amount payable to the named beneficiary when the person insured under the Policy dies. All or part of the death benefit may be paid in cash or applied under one or more of the payment options available under the Policy. See "POLICY BENEFITS AND RIGHTS-- Settlement Options". The death benefit will be reduced by the amount of any outstanding policy debt or unpaid monthly deduction. 5 Under Option I, the death benefit will be equal to the greater of the Specified Amount or the accumulation value of the Policy on the date of death multiplied by the corridor percentage. Under Option II, the death benefit is equal to the Specified Amount plus the accumulation value of the Policy on the date of death; provided, however, that under Option II, the death benefit can never be less than the accumulation value on the date of death multiplied by the corridor percentage. See "POLICY BENEFITS AND RIGHTS--Death Benefits". A policyowner may, by written request, change the Specified Amount at any time after the first policy anniversary. Any change is subject to the following conditions: 1. Any requested decrease in Specified Amount will become effective on the monthly anniversary date that coincides with, or next follows, receipt of such request. The minimum decrease in Specified Amount is $25,000. No decrease may reduce the Specified Amount below $25,000. 2. Any request for an increase in Specified Amount must be applied for, by a supplemental application, prior to attained age 85, and shall be subject to evidence of insurability satisfactory to Chubb Life. The minimum increase in Specified Amount is $25,000. 3. Any change approved by Chubb Life will become effective on the date shown in the Supplemental Policy Specification Page of the Policy, subject to deduction of the first month's cost of insurance from the accumulation value of the Policy. By written request, a policyowner may also change the death benefit option. If the request is to change from Option I to Option II, the Specified Amount will be decreased by the amount of the accumulation value of the Policy on the effective date of the change. Evidence of insurability satisfactory to Chubb Life will be required for change from Option I to Option II. If the request is to change from Option II to Option I, the Specified Amount will be increased by the amount of the accumulation value of the Policy on the effective date of the change. No evidence of insurability is required for a change from Option II to Option I. The effective date of either change shall be the monthly anniversary date that coincides with or next follows the Date of Receipt of the request for change. See "POLICY BENEFITS AND RIGHTS--Death Benefits". Policyowners may combine a request for a change in the Specified Amount with a request for a change in the death benefit option. Combined requests will be subject to the requirements and limitations of each of the requests. See "POLICY BENEFITS AND RIGHTS--Combined Requests." Value of Policy. The Policy provides for accumulation value equal to the total of accumulation value in the General Account and the Policy's accumulation value in divisions of Separate Account A. The Policy's accumulation value will reflect the amount and frequency of premium payments, the value of net premiums (net premiums plus credited interest), if any, allocated to the General Account, the investment experience of Separate Account A, policy loans, any withdrawals, and any charges imposed in connection with the Policy. There is no minimum guaranteed accumulation value. The accumulation value of each division in Separate Account A on the allocation date is equal to the net premiums, plus interest earned prior to the allocation date, which have been paid and allocated to that division less the portion of the first monthly deduction allocated to the Policy's accumulation value in that division. Thereafter, at the end of each valuation period after the initial allocation, the Policy's accumulation value in a division is equal to the sum of (a) the accumulation value in the division on the preceding valuation date multiplied by the net investment factor (See "CALCULATION OF ACCUMULATION VALUE--Net Investment Factor") for the current valuation period, plus (b) any net premium received during the current valuation period which is allocated to the division, plus (c) all accumulation values transferred to the division from another division or the General Account, including loan repayments, during the current valuation period, minus (d) accumulation values transferred from the division to another division or the General Account and accumulation values transferred to secure a policy debt during the current valuation period, and minus (e) all withdrawals from the division during the current valuation period, and minus (f) a pro-rata portion of monthly deductions, whenever a valuation period includes the monthly anniversary date. The Policy's total accumulation value in Separate Account A equals the sum of the Policy's accumulation value in each division. The Policy's accumulation value in Separate Account A is expressed in terms of the number of units and unit values of each division. See "CALCULATION OF ACCUMULATION VALUE--Unit Values." 6 Charges and Deductions. (a) Chubb Life deducts 2.5% of each premium payment received to cover state premium taxes imposed. This premium tax charge represents an average of state premium taxes. This charge may not be increased. (b) There is a monthly deduction from each Policy's accumulation value in the General Account and/or the divisions of Separate Account A equal to the sum of (i) the cost of insurance, described below, and the cost of additional benefits provided by rider attached to the Policy; and (ii) a monthly administrative charge of $6.00. The cost of insurance charge is calculated on each monthly anniversary date. It is based on the sex, issue age, policy year, rating class of the Insured, and Specified Amount of the Policy. Monthly cost of insurance rates will be determined by Chubb Life based upon its expectations as to future mortality experience. Cost of insurance rates are guaranteed not to exceed or be increased above the maximum charge based upon the Commissioner's 1980 Standard Ordinary Mortality Table. (c) A mortality and expense risk charge, not to exceed .0024657% on a daily basis (.90% on an annual basis) will be imposed on the assets of each division. Chubb Life will realize a gain from this charge to the extent it is not needed to provide benefits and pay expenses under the Policy. (d) Upon surrender or withdrawal, Chubb Life will assess a surrender charge. The surrender charge for the initial Specified Amount is determined by multiplying a surrender factor by the lesser of (1) the premiums actually received in policy year one, or (2) the "Guideline Annual Premium" as defined in the rules under the 1940 Act. Subject to other considerations, the surrender charges may be reduced by paying less premium in policy year one. The surrender factor depends on the length of time the Policy has been in force and ranges between 0% and 30% of the premium paid in policy year one. The surrender charge for increases in the Specified Amount is determined in a similar manner. The surrender charge is more fully described under "CHARGES AND DEDUCTIONS-- Surrender Charge". (e) Chubb Life charges an administrative fee equal to the lesser of $25 or 2% of the amount of the withdrawal for each withdrawal and the lesser of $25 or 10% of the amount of a transfer for each transfer between divisions of Separate Account A or the General Account. Chubb Life reserves the right to assess a charge, not to exceed $25, for each request by a policyowner for an illustration of benefits and values after the policy date. (f) Chubb Life reserves the right to charge the assets of each division of Separate Account A to provide for any income taxes payable by Chubb Life on the assets of such divisions. In addition, an investment advisory fee is imposed against the assets of each Portfolio to compensate the Funds' investment manager and sub-investment managers. See "THE FUNDS". Policy Loans. After the first policy anniversary, a policyowner may borrow against the cash value of his Policy. Generally, the maximum loan amount is 90% of the cash value of the Policy on the date of the loan. Loan interest is payable at the end of each policy year and all policy debt outstanding will be deducted from proceeds payable at the Insured's death, upon maturity, or upon surrender. A policyowner may allocate a policy loan among the General Account and the various divisions of Separate Account A. Accumulation value in each division equal to the policy debt so allocated will be transferred to the General Account. If loan interest is not paid when due, it becomes loan principal. An amount equal to the unpaid loan interest will be transferred to the General Account pro-rata from the accumulation value of the General Account and the divisions of Separate Account A. If no accumulation value is available in any of the divisions of Separate Account A, accumulation value held in the General Account will be set aside as loan collateral. Accumulation value held in the General Account for loan collateral earns interest daily at the lesser of an effective rate of 6% or the interest rate currently credited to the General Account. As an administrative practice and in Chubb Life's sole discretion, if the interest rate currently credited to the General Account falls below 6%, the accumulation value held in the General Account for loan collateral may continue to earn interest at 6%. A policy loan accrues interest at a maximum rate of 8% compounded annually, or at any lower rate established by Chubb Life for any period during which the loan is outstanding. There are two types of loans available. A Type A loan is charged the same interest rate as the interest credited to the amount of accumulation value which is held in the General Account to secure loans. The amount available at any time for a Type A loan equals the maximum loan amount less the DEFRA Guideline Single Premium, as set forth in the Code, less any outstanding Type A loans. All other loans are 7 Type B loans; a Type B loan is charged the prevailing interest rate, but not more than the maximum. It is possible for one loan request to result in both a Type A and Type B loan. Interest accrues on a daily basis from the date of the loan and is compounded annually. A policy loan may be prepaid in whole or in part at any time while the Policy is in force. When a loan repayment is made, accumulation value securing the policy debt in the General Account equal to the loan repayment will be allocated among the General Account and divisions of Separate Account A using the same percentages as used to allocate net premiums. See "CASH VALUE BENEFITS--Policy Loans". Policy Cancellation, Surrender and Lapse. The policyowner has the limited right to return a Policy for cancellation and full refund of all premiums paid. Chubb Life will cancel the Policy if it is returned by mail or personal delivery to Chubb Life or to the agent who sold the Policy, within 10 days after the delivery of the Policy to the policyowner, within 45 days of the date of the execution of the application for insurance, or within 10 days after mailing or personal delivery of a Notice of the Right of Withdrawal, whichever is later. Chubb Life will return to the policyowner, within seven days, all payments received on the Policy. Prior to the allocation date, the initial net premium will be deposited in Chubb Life's General Account; Chubb Life will retain any interest earned if the "free look" right is exercised. So long as the Policy is in force, a policyowner may elect, subject to the consent of any irrevocable beneficiary or assignee of the Policy, to surrender the Policy and receive its cash value, i.e., the cash value of the Policy determined as of the day Chubb Life receives the policyowner's written request, less any outstanding policy debt secured by the Policy. A policyowner may also request a withdrawal, subject to the consent of any irrevocable beneficiary, of the cash value of the Policy. Normally, a withdrawal reduces the death benefit payable under the Policy by an amount equal to the reduction in the Policy's accumulation value plus a pro-rata portion of the surrender charge. Failure to make any premium payment on a Policy will not necessarily cause the Policy to lapse. The duration of a Policy depends upon the cash value. The Pol- icy will remain in force so long as the cash value less any outstanding policy debt is sufficient to pay the monthly deduction. In the event the cash value, less any outstanding policy debt, is insufficient to pay the monthly deduction and a sixty-one day grace period expires without an adequate payment by the policyowner, the Policy will lapse and terminate without value. See "THE POLI- CY--Policy Lapse." Once a Policy has lapsed, the policyowner may request reinstatement of the Policy anytime within five years of lapse. Satisfactory proof of insurability and payment of a reinstatement premium are required for reinstatement. See "THE POLICY--Reinstatement." Distribution of the Policy. Chubb Life will offer the Policy in all jurisdictions where it is licensed to sell this type of insurance product. The Policy will be sold by agents who represent Chubb Life and are registered representatives of Chubb Securities Corporation or other registered broker- dealers. Tax Consequences of the Policy. All death benefits paid under the Policy will generally be fully excludable from the gross income of the policy beneficiary for federal income tax purposes. Treasury regulations require that investments underlying the Policy be adequately diversified. Chubb Life believes it is presently in compliance with the regulations and intends to remain in compliance with such regulations and other federal tax law requirements. Chubb Life may charge each division in Separate Account A for its portion of any income tax charged to Chubb Life on the division or its assets. The charge, if imposed, will reduce the investment return of Separate Account A. If a policyowner elects to make certain transactions, including a partial withdrawal, surrender or exchange of the Policy, or receipt of accelerated ben- efits pursuant to the Terminal Illness Accelerated Benefit Rider, the policyowner may be taxed on a portion of any amounts paid to the policyowner (which may include any prior policy loans cancelled in the transaction). Also, if premiums paid by a policyowner exceed certain limits and the Policy is deemed a modified endowment contract, then any pre-death distributions, includ- ing loans, surrenders and partial withdrawals, may be treated as income taxable to the policyowner and may also cause the policyowner to incur a penalty tax of 10%. Policyowners are advised to consult with their own tax advisers with re- gard to the tax consequences of the Policy. See "FEDERAL TAX MATTERS". 8 CHUBB LIFE INSURANCE COMPANY OF AMERICA Chubb Life is a stock life insurance company chartered in 1903 in Tennessee and has been continuously engaged in the insurance business since that time. Prior to July 1, 1991, Chubb Life was known as The Volunteer State Life Insurance Company. Chubb Life redomesticated from the State of Tennessee to the State of New Hampshire on July 1, 1991 and is now a New Hampshire life insurance company. It is licensed to do life insurance business in forty-nine states of the United States, Puerto Rico, the U.S. Virgin Islands, Guam and in the District of Columbia. Chubb Life is a wholly-owned subsidiary of The Chubb Corporation, a New Jersey corporation. The principal offices of The Chubb Corporation are located at 15 Mountain View Road, Warren, New Jersey. Its telephone number is 908/903-2000. Chubb Life's service center is located at 832 Georgia Avenue, Chattanooga, Tennessee 37402, telephone number 615/756-2887 and its home office and service center is located at One Granite Place, Concord, New Hampshire 03301, telephone number 800-258-3648. Chubb Life and its subsidiaries had total assets, at December 31, 1995, of $4,275,365,000 and had over $66 billion of insurance in force, while total assets of The Chubb Corporation, as of the same date, were $22,996,525,000. Chubb Life writes individual life and disability insurance and annuities. It is subject to New Hampshire law governing insurance, and is regulated and supervised by the New Hampshire Insurance Commissioner. Chubb Life is currently rated AAA (Superior) by Standard & Poors's Corporation and A+(Superior) by A.M. Best and Company. These ratings merely reflect the opinion of the rating company as to the relative financial strength of Chubb Life and Chubb Life's ability to meet its contractual obligations to its policyowners. Even though assets in Separate Account A are held separately from Chubb Life's other assets, ratings of Chubb Life may still be relevant to policyowners since not all of Chubb Life's contractual obligations relate to payments based on those segregated assets. CHUBB SEPARATE ACCOUNT A Separate Account A is a separate account of Chubb Life established on August 20, 1984 and now governed by the insurance laws of the State of New Hampshire. Separate Account A is organized as a unit investment trust registered with the Commission under the 1940 Act and is subject to that Act's requirements. Such registration does not involve supervision of the management or investment policies of Separate Account A or Chubb Life by the Commission. Chubb Life is the depositor of Separate Account A. Under New Hampshire law, the assets of Separate Account A are held exclusively for the benefit of policyowners and persons entitled to payments under this Policy and other variable life insurance policies funded by Separate Account A. The assets of Separate Account A are not chargeable with liabilities arising out of any other business which Chubb Life may conduct. Chubb Life holds the assets of Separate Account A. These assets are kept physically segregated and held separate and apart from the General Account. Chubb Life maintains records of all purchases and redemptions of Funds shares by each of the divisions. Divisions. Separate Account A presently has thirteen investment divisions but may, in the future, add or delete investment divisions. Each investment division will invest exclusively in shares representing an interest in a Portfolio of the Funds. Investment income and other distributions to each division of Separate Account A arising from the applicable underlying Portfolio of the Funds increases the assets of the corresponding division of Separate Account A. The income and both realized and unrealized gains or losses on the assets of each division of Separate Account A are credited to or charged against that division without regard to income, gains or losses from any other division. Under certain unusual circumstances, the liabilities of one division, arising from claims against that division, could be attributed to another division. THE FUNDS Separate Account A invests in shares of Chubb America Fund, Inc., the Templeton International Fund of Templeton Variable Products Series Fund, the High Income Portfolio of the Fidelity Variable Insurance Products Fund, the Contrafund Portfolio of the Fidelity Variable Insurance Products Fund II or the Index 500 Portfolio of the Fidelity Variable Insurance Products Fund II. Chubb America Fund, Inc. Chubb America Fund, Inc. is organized as a Maryland corporation and is registered as an open-end diversified management company under the 1940 Act. Chubb America Fund, Inc. currently has nine 9 Portfolios each of which has different objectives. The shares of each series of Chubb America Fund, Inc. stock are offered only to the divisions of separate accounts, whether now in existence or to be established by Chubb Life or any of its affiliated insurance companies. The assets of each Portfolio are maintained separately from the assets of the other Portfolios and each Portfolio has investment objectives and policies which are different from those of the other Portfolios. Thus, each Portfolio operates as a separate investment fund, and the income, gains or losses of one Portfolio generally has no effect on the investment performance of any other Portfolio. Under certain unusual circumstances, the liabilities of one Portfolio, arising from claims against that Portfolio, could be attributed to another Portfolio. The investment adviser to Chubb America Fund, Inc. is Chubb Investment Advisory Corporation ("Chubb Investment Advisory") which is a subsidiary of Chubb Life. Chubb Investment Advisory has in turn retained Templeton Global Advisors, Inc. ("Templeton") to provide investment advisory service for the World Growth Stock Portfolio, Chubb Asset Managers, Inc. ("Chubb Asset") to provide investment advisory services for the Money Market, Bond and Growth and Income Portfolios, Van Eck Associates Corporation ("Van Eck Associates") to provide investment advisory services for the Gold Stock Portfolio, Pioneering Management Corporation ("Pioneer") to provide investment advisory services for the Domestic Growth Stock Portfolio, Janus Capital Corporation ("Janus") to provide investment advisory services for the Capital Growth Portfolio, Phoenix Investment Counsel, Inc. ("Phoenix") to provide investment advisory services for the Balanced Portfolio, and Massachusetts Financial Services Company ("MFS") to provide investment advisory services for the Emerging Growth Portfolio. Investment management fees are paid to Chubb Investment Advisory monthly at an annual rate based on a percentage of the average daily net assets of each Portfolio of Chubb America Fund, Inc. as shown below:
WORLD GROWTH STOCK, GOLD STOCK, DOMESTIC GROWTH STOCK, MONEY MARKET GROWTH AND INCOME, CAPITAL EMERGING AVERAGE DAILY NET ASSETS AND BOND AND BALANCED GROWTH GROWTH - ------------------------ ------------ ------------------- ------- -------- First $200 Million...... .50% .75% 1.00% .80% Next $1.1 Billion....... .45% .70% .95% .75% Over $1.3 Billion....... .40% .65% .90% .70%
The compensation of the Sub-Investment Managers is paid directly from the investment management fees of Chubb Investment Advisory and is set forth in the table below as an annual percentage of the average daily net assets of the Portfolio managed:
SUB-INVESTMENT MANAGER ----------------------------------------------------------------------------- CHUBB ASSET CHUBB ASSET FOR THE FOR THE BOND AND GROWTH AND MONEY MARKET VAN ECK AVERAGE DAILY NET ASSETS INCOME PORTFOLIO JANUS PHOENIX TEMPLETON PORTFOLIOS ASSOCIATES PIONEER MFS - ------------------------ ---------------- ----- ------- --------- ------------ ---------- ------- ---- First $200 Million...... .50% .75% .50% .50% .35% .50% .50% .50% Next $1.1 Billion....... .45% .70% .45% .45% .30% .45% .45% .45% Over $1.3 Billion....... .40% .65% .40% .40% .25% .40% .40% .40%
The investment objectives of each Portfolio of Chubb America Fund, Inc. are set forth below. World Growth Stock Portfolio: to achieve long-term capital growth through a policy of investing primarily in stocks of companies organized in the United States or in any foreign nation. A portion of the Portfolio may also be invested in debt obligations of companies and governments of any nation. Any income realized from such investments will be incidental. Such companies will be those considered by the sub-investment manager to be undervalued or which are well-managed and have good growth potential. Money Market Portfolio: to achieve the highest possible current income, consistent with preservation of capital and maintenance of liquidity, by investing primarily in short-term money market instruments other than commercial paper. An investment in the Money Market Portfolio is neither insured nor guaranteed by the U.S. Government. Gold Stock Portfolio: to realize long-term capital appreciation, while retaining the option to take current income into account, by investing primarily, and sometimes exclusively, in common stocks of gold mining companies. 10 Bond Portfolio: to provide a stable level of income, consistent with limiting risk to principal, by investing primarily in high quality corporate debt securities and U.S. Government debt obligations. Domestic Growth Stock Portfolio: to achieve reasonable income and growth of capital by investing primarily in a diversified portfolio of equity securities issued by companies organized in the U.S. and considered by the sub-investment manager to be undervalued in light of the company's earning power and growth potential. Growth and Income Portfolio: to seek long-term growth of capital by investing primarily in a wide range of equity issues that may offer capital appreciation and, secondarily, to seek a reasonable level of current income. Capital Growth Portfolio: to seek capital growth. Realization of income is not a significant investment consideration and any income realized will be incidental. Balanced Portfolio: to seek reasonable current income and long-term capital growth, consistent with conservation of capital, by investing primarily in common stocks and fixed income securities. Emerging Growth Portfolio: to seek long-term growth of capital by investing primarily in common stocks of small and medium-sized companies. THE PORTFOLIO IS INTENDED FOR INVESTORS WHO UNDERSTAND AND ARE WILLING TO ACCEPT RISKS ENTAILED IN SEEKING LONG-TERM GROWTH OF CAPITAL. Chubb America Fund, Inc. may find it necessary to take action to assure that the Portfolios are diversified so that the Policy is treated as a life insurance policy under federal tax laws. Chubb America Fund, Inc., for example, may alter the investment objectives of any Portfolio or take other appropriate actions. See "OTHER MATTERS--Additions, Deletions or Substitutions of Investments" and "FEDERAL TAX MATTERS". Templeton Variable Products Series Fund. Templeton Variable Products Series Fund is an open-end, diversified management investment company organized under the laws of Massachusetts. Templeton Variable Products Series Fund currently consists of five separate series; however, only one of the series, the Templeton International Fund, offers its shares to a corresponding division of Separate Account A. Templeton Variable Products Series Fund offers its shares solely to separate accounts of insurance companies, including companies not affiliated with Chubb Life, as an investment vehicle for variable life insurance policies and variable annuity contracts. The investment manager of Templeton International Fund is Templeton Investment Counsel, Inc. ("TICI"). TICI is an indirect wholly owned subsidiary of Franklin Resources, Inc. ("Franklin"). Through its subsidiaries, Franklin is engaged in various aspects of the financial services industry. As compensation for its services, TICI is paid a fee which, during the most recent fiscal year, represented .50% of the average daily net assets of the Templeton International Fund. The investment objective of the Templeton International Fund is set forth below. Templeton International Fund: to seek long-term capital growth through a flexible policy of investing in stocks and debt obligations of companies and governments outside the United States. Any income realized will be incidental. Although the Templeton International Fund generally invests in common stock, it may also invest in preferred stocks and certain debt securities such as convertible bonds which are rated in any category by Standard & Poor's Corporation or Moody's Investors Service, Inc. or which are unrated by any rating agency. Although Chubb Life does not currently foresee any disadvantages to the policyowners arising out of variable life insurance separate accounts and variable annuity separate accounts investing in the Templeton Variable Products Series Fund simultaneously, there is a possibility that a material conflict may arise between the interest of Separate Account A and one or more of the other separate accounts investing in the Templeton Variable Products Series Fund. The Trustees of the Templeton Variable Products Series Fund intend to monitor events in order to identify any material conflicts and to determine what action, if any, should be taken in response thereto. Material conflicts could result from, for example, (i) changes in state insurance laws, (ii) changes in Federal income tax laws, (iii) changes in the investment management of any portfolio of Templeton Variable Products Series Fund, or (iv) differences in voting instructions between those given by variable life insurance policyowners and those given by variable annuity contract owners. CHUBB Fidelity Variable Insurance Products Fund and Fidelity Variable Insurance Products Fund II. Fidelity Variable Insurance Products Fund ("Fidelity VIP") and Fidelity Variable Insurance Products Fund II ("Fidelity VIPII") are open-end, diversified management investment companies organized as Massachusetts business trusts on November 13, 1981 and March 21, 1988, respectively. Fidelity VIP currently consists of four separate series; however, only one of the series, High Income Portfolio, offers its shares to a corresponding division of Separate Account A. Fidelity VIPII currently consists of five separate series; however, only two of the series, Contrafund Portfolio and Index 500 Portfolio, offer their shares to corresponding divisions of Separate Account A. Fidelity VIP and Fidelity VIPII offer their shares solely to separate accounts of insurance companies, including companies not affiliated with Chubb Life, as investment vehicles for variable life insurance policies and variable annuity contracts. Fidelity Management & Research Company ("FMR") is the investment manager of Fidelity VIP and Fidelity VIPII. FMR is the management arm of Fidelity Investments, a Massachusetts corporation established in 1946. FMR is a wholly-owned subsidiary of FMR Corp. Through its subsidiaries, FMR is engaged in various aspects of the financial services industry. Each fund pays a management fee to FMR for managing its investments and business affairs. Each fund's management fee is calculated and paid to FMR every month. The fee for each fund (excluding Money Market and Index 500 Portfolios) is calculated by adding a group fee rate to an individual fund fee rate, and multiplying the result by each fund's average net assets. The group fee rate is based on the average net assets of all the mutual funds advised by FMR. This rate cannot rise above 0.52% for the Contrafund Portfolio and 0.37% for the High Income Portfolio, and it drops as total assets under management increase. Index 500 Portfolio pays a monthly management fee to FMR at the annual rate of 0.28% of the fund's average net assets. The investment objectives of each Portfolio of Fidelity VIP and Fidelity VIPII in which Separate Account A invests are set forth below: High Income Portfolio: seeks a high level of current income by investing primarily in high yielding, lower-quality fixed income securities, while also considering growth of capital. Contrafund Portfolio: seeks long term capital appreciation. Index 500 Portfolio: seeks investment results that correspond to the total return of common stocks publicly traded in the United States, as represented by the S&P 500. Although Chubb Life does not currently foresee any disadvantages to its policyowners arising out of variable life insurance separate accounts and variable annuity separate accounts investing in the Fidelity VIP and Fidelity VIPII Funds simultaneously, there is a possibility that a material conflict may arise between the interest of Separate Account A and one or more of the other separate accounts investing in the Fidelity VIP and Fidelity VIPII Funds. The Trustees of the Fidelity VIP and Fidelity VIPII Funds intend to monitor events in order to identify any material conflicts and to determine what action, if any, should be taken in response thereto. Material conflicts could result from, for example, (i) changes instate insurance laws, (ii) changes in Federal income tax laws, (iii) changes in the investment management of any portfolio of Fidelity VIP and Fidelity VIPII Funds, or (iv) differences in voting instructions between those given by variable life insurance policyowners and those given by variable annuity contract owners. There can be no assurance that any of the Portfolios will achieve its stated objectives. The specialized nature of each Portfolio gives rise to significant differences in the relative investment potential and market and financial risks of each Portfolio. Policyowners should consider the unique features of each Portfolio before investing in any Portfolio. For more 11 detailed information concerning each Portfolio, including a description of the investment risks, reference is made to the prospectuses for the Funds which accompanies this Prospectus, or the Statements of Additional Information for the Funds, available on request. Separate Account A will purchase shares of the Funds at net asset value in connection with premium payments allocated to the divisions in accordance with the policyowner's directions and will redeem shares of the Funds to process transfers, policy loans, surrenders or withdrawals and generally to meet contract obligations or make adjustments in reserves. The Funds will sell and redeem its shares at net asset value as of the Date of Receipt by Separate Account A of premium payments or notifications by a policyowner. 12 THE POLICY General. The Policy is designed to provide the policyowner with lifetime in- surance protection and flexibility in connection with the amount and frequency of premium payments and the level of life insurance proceeds payable under the Policy. The policyowner is not required to pay scheduled premiums to keep the Policy in force but may, subject to certain limitations, vary the frequency and amount of premium payments. Moreover, subject to certain limitations, the Pol- icy allows a policyowner to adjust the level of life insurance payable under the Policy without having to purchase a new Policy by increasing or decreasing the Specified Amount. Thus, as insurance needs or financial conditions change, the policyowner has the flexibility to adjust life insurance proceeds and vary the premium payments. Death benefits are payable under two options as described in "POLICY BENEFITS AND RIGHTS--Death Benefits". To purchase a Policy, a completed application must be submitted to Chubb Life through the agent selling the Policy. Chubb Life will generally not issue Poli- cies to insure persons older than age 80. Applicants for insurance must furnish satisfactory evidence of insurability. Distinctions between smokers and nonsmokers are only made for Insureds age 15 and over. The minimum Specified Amount for a Policy at issue is $25,000. Chubb Life reserves the right to re- vise its rules from time to time to specify a different minimum Specified Amount at issue. If the Specified Amount applied for plus all other insurance in force which is underwritten by Chubb Life or its affiliates exceeds $1,250,000, Chubb Life will reinsure all or a portion of the Policy. Acceptance of an application or revocation of a Policy during the contestable period is subject to Chubb Life's insurance underwriting rules and Chubb Life may, in its sole discretion, reject any application or related premium for any good reason or contest a Policy. Payment of Premiums. Premiums must be paid to Chubb Life or through an authorized agent of Chubb Life for forwarding to Chubb Life. In addition, Chubb Life has instituted administrative procedures whereby premium payments in response to billing notices are sent directly to Chubb Life's bank. Unlike traditional insurance contracts, there is no fixed schedule of premium payments on a Policy either as to the amount or the timing of the payment. A policyowner may determine, within specified limits, his or her own premium payment schedule. These limits will be set forth by Chubb Life and will include a minimum initial premium payment sufficient to keep the policy in force for three months and may also include limits on the total amount and frequency of payments in each policy year. No premium payment may be less than $25. In order to help the policyowner obtain the insurance benefits desired, a Planned Periodic Premium and Premium Frequency will be stated in each Policy. This premium will usually be based upon the policyowner's insurance needs, the policyowner's financial abilities and the current financial climate, in general, as well as on the Specified Amount of the Policy and the Insured's age, sex and risk class. The policyowner is not required to pay such premiums and failure to make any premium payment will not necessarily result in lapse of the Policy, provided the Policy's cash value, less policy debt, if any, is sufficient to pay monthly deductions. Conversely, adherence to the schedule of Planned Periodic Premiums will not assure that the Policy will remain in force. See "THE POLICY--Policy Lapse." Premium Limitations. In no event can the total of all premiums paid, both scheduled and unscheduled, exceed the current maximum premium limitations re- quired by the Code. The premium limitations under the Policy are imposed in or- der to comply with present requirements to obtain favorable federal income tax treatment of the Policy and its death benefit. If at any time a premium is paid which would result in total premiums exceeding the current maximum premium lim- itation, Chubb Life will only accept that portion of the premium which will make total premiums equal the maximum. Any part of the premium in excess of that amount will be returned and no further premiums will be accepted until al-lowed by the current maximum premium limitations required by the Code. Also, if, at any time during the year, a premium has been paid which would result in the Policy being deemed a modified endowment contract, Chubb Life will so notify the policyowner and allow the policyowner to request a refund of the excess premium, or other action, in order to avoid having the Policy be deemed a modified endowment contract. A policyowner, how-ever, may choose to have the Policy be deemed a modified endowment contract, and, in that case, Chubb Life will not refund the premiums. See "FEDERAL TAX MATTERS--Policy Proceeds." Premium payments less than the minimum amount of $25 will be returned to the policyowner. Allocation of Premiums. Premium payments, net of the premium tax charge, plus interest earned prior to the Allocation Date, will be allocated on the Alloca- tion Date among the General Account and the divisions of Separate Account A in accordance with the directions of the policyowner, as contained in the applica- tion. Prior to the Allocation Date the initial net premium will be deposited in Chubb Life's General Account. Any other premiums received prior to the Alloca- tion Date will also be deposited in the General Account. The minimum percentage of any net premium payment allocated to any division or the General Account is 10%. Allocation percentages must be in whole numbers only. No fractional percentages will be accepted. The policyowner may change his or her allocation of future premium payments among the General Account and the divisions of Separate Account A by written notice to Chubb Life or by telephone provided that the proper telephone authorization is on file with Chubb Life, without payment of any fee or penalty. 13 The allocation of each net premium payment to a division will be determined first by multiplying the net premium payment by the fraction to be allocated to each division as the policyowner directs to determine the portion to be invested in the division. Each portion to be invested in each division is then divided by the unit value of that particular division. The unit value of each division will vary to reflect the investment performance of the applicable underlying Portfolio shares. The unit value will be determined on each valuation date by multiplying the net asset value of the shares of the underlying Portfolio held by the division on the preceding valuation date by the net investment factor for that division for the valuation period then ended. The net investment factor for each of the divisions is equal to (i) the asset value per share of the corresponding Portfolio at the end of the preceding valuation period plus the per share amount of any investment income and capital gains, realized or unrealized, credited to such assets in the valuation period for which the net investment factor is being determined, less capital losses, realized or unrealized, charged against such assets during such valuation period and less any amount set aside by Chubb Life during the period as a reserve for taxes attributable to the operation or maintenance of each division, (ii) divided by the asset value per share of the corresponding Portfolio at the end of the preceding valuation period and (iii) less a charge not to exceed .0024657% on a daily basis (.90% on an annual basis) of the value of the division to compensate Chubb Life for assumption of certain mortality and expense risks. See "CALCULATION OF ACCUMULATION VALUE--Unit Values". Applicants should refer to the prospectuses for the Funds which accompany this Prospectus for a description of how the assets of each Portfolio are valued since that determination directly affects the unit value of a division and, therefore, the accumulation value of a Policy. All valuations in connection with the Policy, e.g., with respect to determining cash value in connection with policy loans or withdrawals, with respect to determining accumulation value in connection with transfers or payment of death benefits, and with respect to determining the value of a division to be credited to a Policy with each net premium payment, will be made on the Date of Receipt of the premium or the request for payment, loan, withdrawal or transfer if such date is a valuation date; otherwise, such determination will be made on the next succeeding day which is a valuation date. The date of receipt of a premium payment sent directly to Chubb Life's bank pursuant to a billing notice will be the date the payment is received at the bank and the value of any division to which the payment is allocated will be determined as of such date provided such date is a valuation date; otherwise, such determination will be made on the next succeeding day which is a valuation date. Transfers. Accumulation value may be transferred between the General Account and the divisions of Separate Account A and among the divisions of Separate Account A. Transfer requests may be made in writing or by telephone with appropriate telephone authorization on file at Chubb Life. The total amount transferred each time must be at least $250 unless a lesser amount constitutes the entire accumulation value in the General Account or in a division. Accumulation value transferred from one division or from the General Account into more than one division, and/or into the General Account, counts as one transfer. Similarly, transferring accumulation value from more than one division, and/or the General Account, into one other division or the General Account, counts as one transfer. A transfer charge to cover administrative costs will be imposed each time amounts are transferred and will be deducted on a pro-rata basis from the division or divisions of Separate Account A or the General Account into which the amount is transferred. However, no transfer charge will be imposed on the transfer of the initial net premium payments, plus interest earned, from the General Account to the divisions of Separate Account A on the allocation date or on loan repayments. In addition, Chubb Life currently permits 12 transfers per policy year without imposing a transfer charge. The charge will be the lesser of $25 or 10% of the amount transferred. Currently, a policyowner may make up to 20 transfers per policy year; however, Chubb Life reserves the right to revoke or modify transfer privileges and charges. As long as any portion of the Policy's accumulation value is allocated to a division of Separate Account A, the Policy's accumulation value and cash value will reflect the investment experience of the chosen division(s) of Separate Account A. The death benefit may also reflect the experience of the chosen division(s) of Separate Account A. At any time the policyowner may transfer 100% of the Policy's accumulation value to the General Account and elect to have all future premium payments allocated to the General Account. While 100% of the Policy's accumulation value and all future premium payments are allocated to the General Account, the minimum period the Policy will be in force will be fixed and guaranteed. The minimum period will depend on the amount of accumulation value, the Specified Amount, the sex, the attained age, and rating class of the Insured. The minimum period will decrease if the policyowner subsequently elects to increase the Specified Amount, elects to surrender the Policy, or elects to make a withdrawal. The minimum period will increase if the policyowner elects to decrease the Specified Amount, additional premium payments are received, or the Company credits a higher interest rate or charges a lower cost of insurance rate than those guaranteed for the General Account. 14 No transfer charge will be imposed for a transfer of all accumulation value in Separate Account A to the General Account. However, any transfer from the General Account to the division(s) of Separate Account A will be subject to the transfer charge, unless it is one of the first 4 transfers in a policy year and except for the transfer of the initial net premium payments, plus interest earned, from the General Account and loan repayments. Chubb Life reserves the right to refuse to accept or to place certain restrictions on transfers made by third-party agents acting on behalf of multiple policyowners or made pursuant to market timing services when Chubb Life determines, in its sole discretion, that such transfers will be detrimental to the Portfolios and the policyowners as a whole. Such transfers may cause increased trading and transaction costs, disruption of planned investment strategies, forced and unplanned portfolio turnover, and lost opportunity costs, and may subject the Portfolio to large asset swings that diminishes the Portfolio's ability to provide maximum investment return to all policyowners. A feature called Dollar Cost Averaging is available to policyowners under which a policyowner deposits an amount, subject to a minimum of $3,000, in the Money Market Division or the General Account and elects to have a specified dollar amount (the "Periodic Transfer Amount") automatically transferred to one or more of the divisions on a monthly, quarterly, or semi-annual basis. This feature allows policyowners to systematically invest in the divisions at various prices which may be higher or lower than the price a policyowner would pay when investing the entire amount at one time and at one price. Each Periodic Transfer Amount is subject to a minimum of $250. A minimum of 10% of the Periodic Transfer Amount must be transferred to any specified division. These amounts are subject to change at Chubb Life's discretion. If a transfer would reduce accumulation value in the Money Market Division or the General Account to less than the Periodic Transfer Amount, Chubb Life reserves the right to include such remaining accumulation value in the amount transferred. At the time a policy owner elects the Dollar Cost Averaging feature, an election is made between Fixed Amount Dollar Cost Averaging or Continuous Mode Dollar Cost Averaging. Under Fixed Amount Dollar Cost Averaging, the feature will continue until the designated Amount has been transferred or the policyowner gives notification of cancellation of the feature prior to transfer of the entire Designated Amount. Once the Designated Amount has been transferred, a new Dollar Cost Averaging election form must be completed if the Policyowner wishes to have additional money dollar cost averaged. Under Continuous Mode Dollar Cost Averaging, the feature will continue until the policyowner gives notification of cancellation of the feature. If the policyowner elects Continuous Mode Dollar cost Averaging, any amounts deposited into the Repository Account, and not just the Designated Amount, will be transferred. Dollar Cost Averaging is currently available at no charge to policyowners. Although Chubb Life reserves the right to assess a charge, no greater than cost and with 30 days advance notice to policyowners, it has no present intention to do so. An Automatic Portfolio Re-Balancing feature is also available to policyowners. This feature provides a method for re-establishing fixed proportions between various types of investments on a systematic basis. Under this feature, the allocation between divisions and the General Account will be automatically re- adjusted to the desired allocation, subject to a minimum of 5% per division or General Account, on a quarterly, semi-annual or annual basis. A policyowner may not elect to have Dollar Cost Averaging and Automatic Portfolio Re-Balancing at the same time. Transfers and adjustments pursuant to these features will occur on a Policy's monthly anniversary date in the month in which the transaction is to take place or the next succeeding business day if the monthly anniversary date falls on a holiday or a weekend. The applicable authorization form must be on file at Chubb Life before either feature may begin. Neither feature guarantees profits nor protects against losses. Transfers under these features do not count towards the four free transfers or the twenty transfers currently allowed per year. Chubb Life reserves the right to modify the terms and conditions of these features upon 30 days advance notice to policyowners. Telephone Transfers, Loans and Reallocations. Policyowners and their authorized representatives may request by telephone transfers of accumulation value or reallocation of premiums (including allocation changes pursuant to existing Dollar Cost Averaging and Automatic Portfolio Re-Balancing programs), provided that the appropriate authorization form is on file with Chubb Life. Chubb Life may also, in its discretion, permit loans to be made by telephone, provided that the proper authorization form is on file with Chubb Life. Only the Policyowner may request loans by telephone. A policyowner must provide Chubb Life with personal identification information, such as social security number and date of birth, at the time of such request for verification purposes. Although procedures have been established that are reasonably designed to reduce the risk of unauthorized telephone transfers, loan requests or allocation changes, there still exists some risk. Neither Chubb Life, Chubb Securities Corporation, nor any of their affiliates are liable for any loss resulting from unauthorized telephone transfers, loan requests or premium allocation changes if its procedures have been followed, and a policyowner bears the risk of loss in such situation. Policy Lapse. Failure to make a premium payment on a Policy will not necessarily cause the Policy to lapse. The duration of a Policy depends upon its cash value. The Policy will remain in force so long as the cash value, less any outstanding policy debt, is sufficient to pay the monthly deduction. In the event the cash value, less any outstanding policy debt, is insufficient to pay the monthly deduction, the policyowner will be given a sixty-one day period ("grace period") within which to make a premium payment to avoid lapse. The premium required to avoid lapse must be sufficient in amount, after the deduction of the premium tax charge, to cover the monthly deductions for at least three policy months. This required premium will be set forth in a written notice which Chubb Life will send to the policyowner at the beginning of the grace period. The Policy will continue in force through the grace period, but if no payment is 15 forthcoming, the Policy will terminate without value at the end of the grace period. If the Insured under the Policy dies during the grace period, the death benefit payable under the Policy will be reduced by the amount of the monthly deduction due and unpaid and the amount of any outstanding policy debt. In addition, if the cash value of the Policy at any time should decrease so the aggregate amount of an outstanding policy debt secured by the Policy exceeds the cash value shown in the Policy and an additional payment is not made within sixty-one days of notification by Chubb Life, the Policy will lapse. Reinstatement. If the Policy lapses, the policyowner may reinstate the Policy. The terms of the original contract will apply upon reinstatement. The accumulation value, before payment of the required reinstatement premium, will equal the accumulation value on the date of termination. The policy year on reinstatement will be measured from the policy date. An application for reinstatement may be made any time within five years of lapse, but satisfactory proof of insurability and payment of a reinstatement premium is required. The reinstatement premium, after deduction of the premium tax charge, must be sufficient to cover monthly deductions for three policy months following the effective date of reinstatement. If a loan was outstanding at the time of lapse, Chubb Life will require, at the election of the policyowner, repayment or reinstatement of the loan before permitting reinstatement of the Policy. The effective date will be the date of approval of the reinstatement application. Policy "Free Look". The policyowner has a limited right to return a Policy for cancellation and a full refund of all premiums paid. Chubb Life will cancel the Policy if it is returned by mail or personal delivery to Chubb Life or to the agent who sold the Policy, within 10 days after the delivery of the Policy to the policyowner, within 45 days of the date of the execution of the application for insurance, or within 10 days after mailing or personal delivery of a Notice of the Right of Withdrawal, whichever is later. Chubb Life will return to the policyowner within seven days all payments received on the Policy. Prior to the allocation date the initial net premium will be deposited in Chubb Life's General Account; Chubb Life will retain any interest earned if the "free look" right is exercised. CHARGES AND DEDUCTIONS Premium Charges. Upon receipt of each premium payment and before allocation of the payment among the General Account and divisions of Separate Account A, Chubb Life will deduct a premium tax charge of 2.5% (which represents an average of actual premium taxes imposed), unless otherwise required by state law. This charge may not be increased. Monthly Deduction. On the first day of each policy month beginning on the policy date, Chubb Life will deduct from the accumulation value of a Policy an amount to cover certain charges and expenses incurred in connection with the Policy. The monthly deduction is intended to compensate Chubb Life for underwriting and start-up expenses incurred in connection with the issuance of a Policy, certain administrative expenses, the cost of insurance for the Policy and any optional benefits added by rider. The amount deducted will be deducted pro-rata from each of the divisions and the General Account. The amount of the monthly deduction is equal to (i) the cost of insurance for the Policy, as described below, and the cost of additional benefits provided by rider, plus (ii) a monthly administrative charge of $6.00. The monthly administrative charge may not be increased. The cost of insurance for the Insured is determined on a monthly basis, and is determined separately for the initial Specified Amount and each subsequent increase in the Specified Amount. The monthly current cost of insurance rate is based on the sex, issue age, policy year, rating class of the Insured, and the Specified Amount of the Policy. If we assume two Insureds differ only with regard to one of the above bases, the effect of each of these bases on their monthly cost of insurance rates would be as follows: Sex: The cost of insurance rates for males will be greater than or equal to those for females. Issue Age: The cost of insurance rate for the younger Insured will be less than or equal to that for the older Insured. Policy Year: The current cost of insurance rate will increase as the policy year increases. For two Insureds with the same sex, rating class, and attained age the cost of insurance rate for the Insured with the younger issue age will never exceed, and in some cases will be less than that for the Insured with the older issue age. Rating Class: The cost of insurance rates for nonsmokers will be less than or equal to those for smokers. Cost of insurance rates may also differ due to the Insured's medical condition, occupation, or avocation. Specified Amount: The current cost of insurance rates will vary by Specified Amount, with different rates applying to Specified Amounts under $100,000, between $100,000 and $249,999, between $250,000 and $999,999 16 and $1,000,000 and over. Current cost of insurance rates are highest for Specified Amounts under $100,000, decreasing for each successive Specified Amount range as noted above. The cost of insurance is calculated as (i) multiplied by the result of (ii) minus (iii) where: (i) is the cost of insurance rate as described in the Cost of Insurance Rates provision contained in the Policy. (ii) is the death benefit at the beginning of the policy month divided by 1.0036748, to arrive at the proper values for the beginning of the month assuming the guaranteed interest rate of 4.5% that is applicable to the General Account portion of the Policy; and (iii) is the accumulation value at the beginning of the policy month. If the corridor percentage is applicable, the death benefit used in the foregoing calculation will reflect the corridor percentage. A guaranteed monthly deduction adjustment will be calculated on the first policy anniversary for the second policy year, and on each policy anniversary thereafter for each respective policy year that follows. The monthly deduction adjustment will not apply to the first policy year. The adjustment will be an amount that is added to the accumulation value for each month of the policy year during which the adjustment is in effect. The adjustment results from a reduction in Colonial's margin for profit and expenses. The adjustment is calculated as (i) multiplied by the result of (ii) plus (iii) minus (iv), but not less than zero, where: (i) is .000375; (ii) is the sum of the Policy's accumulation value in each division of Separate Account A at the beginning of the policy year; (iii) is the outstanding Type B loan balance at the beginning of the policy year, and; (iv) is the Guideline Single Premium at issue, under Section 7702 of the Internal Revenue Code of 1986, as amended, entitled "Life Insurance Contract Defined", increased on a pro rata basis for any increase in Specified Amount. The adjustment will be allocated among the general account and divisions of Separate Account A using the same percentages used to allocate net premiums. The monthly cost of the insurance rate will be determined by Chubb Life based upon expectations as to future mortality experience, but can never exceed the rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set forth in the Policy. Such guaranteed maximum rates are based on the Commissioner's 1980 Standard Ordinary Mortality Table. Risk Charge. Chubb Life will also assess a charge on a daily basis against each division of Separate Account A equal to .90% (on an annual basis) of the value of the division to compensate Chubb Life for its assumption of certain mortality and expense risks in connection with the Policy. Specifically, Chubb Life bears the risk that the total amount of death benefit payable under the Policy will be greater than anticipated and Chubb Life also assumes the risk that the actual cost incurred by it to administer the Policy will not be covered by charges assessed under the Policy. Surrender Charge. Upon surrender or withdrawal, Chubb Life will assess a surrender charge. The surrender charge for the initial Specified Amount is determined by multiplying a surrender factor by the lesser of (1) the premiums actually received in policy year one; or (2) the "Guideline Annual Premium" as defined in the rules and regulations under the 1940 Act. The surrender factor depends on the length of time the policy has been in force, as follows:
POLICY YEAR SURRENDER FACTOR ----------- ---------------- 1-5 .30 6 .25 7 .20 8 .15 9 .10 10 .05 11 and after 0
Paying less premium in policy year one generally will have the effect of reducing the surrender charge. However, depending on investment experience, paying less premium in policy year one may result in an increase in cost of insurance charges, a reduction in accumulation value and an increased risk that the Policy will lapse. 17 An additional surrender charge will be assessed for any increase in the Specified Amount, other than an increase caused by a change from death benefit Option I to death benefit Option II. The additional surrender charge is determined by multiplying a surrender factor by the lesser of (1) or (2), where: (1) is A times B divided by C, where: A is the amount of the increase in the Specified Amount B is the sum of the cash value just prior to the increase in the Specified Amount and the total premiums received in the twelve months just following the increase in the Specified Amount C is the Specified Amount in effect after the increase in the Specified Amount (2) is the "Guideline Annual Premium" for the increase at the attained age of the Insured on the effective date of the increase in the Specified Amount. The surrender factor depends on the length of time the increase has been in force, as follows:
INCREASE YEAR SURRENDER FACTOR ------------- ---------------- 1-5 .15 6 .125 7 .10 8 .075 9 .05 10 .025 11 and after 0
The surrender charge in effect at any time is the sum of the surrender charge for the initial Specified Amount plus the surrender charge for any increase in the Specified Amount. If the Specified Amount is decreased, the surrender charge will not decrease. For a withdrawal, the charge will be proportionately the same as for surrenders. The charge will be calculated by dividing (a) by (b) and multiplying the result by (c) where: (a) is the amount of the cash value withdrawn (b) is the cash value; and (c) is the amount of the surrender charge on a surrender. The surrender charge helps to compensate Chubb Life for the cost of selling the Policy. The cost includes advertising and the printing of the Prospectus and sales literature. Also, Chubb Life reimburses Chubb Securities Corporation for all commissions Chubb Securities Corporation pays to agents. Chubb Life expects to recover total sales expenses of the Policy over the life of the Policy. To the extent sales expenses in any one policy year are not recovered by the sales charge, Chubb Life will cover such expenses from its surplus, which may include profits, if any, from the mortality and expense risk charge. Administrative Fees. An administrative fee equal to the lesser of $25 or 10% of the amount of the transfer is imposed for each transfer among the divisions of Separate Account A or the General Account, after the first 4 transfers in a policy year and except for the transfer of the initial net premium payments, plus interest, from the General Account on the allocation date and loan repayments. For withdrawals, an administrative fee equal to the lesser of $25 or 2% of the amount withdrawn will be charged. After the policy date, a policy- owner may request illustrations of benefits and values. Such illustrations are currently available to policyowners at no charge. Although Chubb Life reserves the right to assess a charge, no greater than $25 and with advance notice to policyowners, it has no present intention to do so. All administrative fees, including those which are part of the monthly deduction, are no greater than the anticipated expenses of providing such services. Other Charges. Chubb Life also reserves the right to charge the assets of each division to provide for any income taxes or other taxes payable by Chubb Life on the assets attributable to that division. An investment advisory fee is also imposed against the assets of each Portfolio for services provided by the Fund's investment manager and sub-investment managers. POLICY BENEFITS AND RIGHTS Death Benefits. So long as it remains in force, the Policy provides for the payment of life insurance proceeds upon the death of the Insured. Proceeds will be paid to a named beneficiary or contingent beneficiary. One or more beneficiaries or contingent beneficiaries may be named. Life insurance proceeds may be paid in a lump sum or under an optional 18 payment plan. (See "Settlement Options" below.) Proceeds of the Policy will be reduced by any outstanding policy debt and any due and unpaid charges and increased by any benefits added by rider. Proceeds that are payable in a lump sum at the death of the Insured will be increased to include interest as required by applicable state law. Proceeds will ordinarily be paid within seven days after Chubb Life receives due proof of death. Also see "Optional Insurance Benefits--Terminal Illness Accelerated Benefit Rider." Policyowners designate in the initial application one of two death benefit options offered under the Policy. The amount of life insurance proceeds payable under a Policy will depend upon the option in effect at the time of the Insured's death. Option I emphasizes the impact of investment experience on accumulation value rather than insurance coverage because the Specified Amount and the death benefit, generally, remain stable. Under Option I, as accumulation value increases and the death benefit does not increase, the amount at risk decreases. Thus, the cost of insurance charges are imposed on a decreasing amount. Option II emphasizes insurance coverage because favorable investment experience adds to the accumulation value that provides an addition to the total death benefit. Under Option II, favorable investment experience does not reduce the amount at risk upon which cost of insurance charges are based. Under Option I, life insurance proceeds will be equal to the greater of the Specified Amount, or the accumulation value of the Policy at the date of death multiplied by the corridor percentage, as described below. Under Option II, life insurance proceeds will be the Specified Amount plus the accumulation value of the Policy on the date of death. Under Option II, the death benefit can never be less than the accumulation value on the date of death multiplied by the corridor percentage. The corridor percentage depends upon the attained age of the Insured on the date of death. The corridor percentage for each age is set forth in the following table:
ATTAINED CORRIDOR ATTAINED CORRIDOR ATTAINED CORRIDOR ATTAINED CORRIDOR AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE -------- ---------- -------- ---------- -------- ---------- -------- ---------- 40 & below 250% 52 171% 64 122% 91 104% 41 243 53 164 65 120 92 103 42 236 54 157 66 119 93 102 43 229 55 150 67 118 94 101 44 222 56 146 68 117 95 100 45 215 57 142 69 116 46 209 58 138 70 115 47 203 59 134 71 113 48 197 60 130 72 111 49 191 61 128 73 109 50 185 62 126 74 107 51 178 63 124 75-90 105
The death benefit option in effect may be changed by sending Chubb Life a written request for change. If the death benefit option is changed from Option II to Option I, the Specified Amount will be increased by the Policy's accumulation value; the effective date of the change will be the date of Chubb Life's receipt of such request for change. Conversely, if the death benefit option is changed from Option I to Option II, the Specified Amount will be decreased by the Policy's accumulation value; the effective date of the change will be the date of Chubb Life's approval of such request for change. Evidence of insurability satisfactory to Chubb Life will be required on a change from Option I to Option II. A change in the benefit option may not be made if it would result in a Specified Amount which is less than the minimum Specified Amount of $25,000. A change in benefit options will affect the cost of insurance. After a Policy has been in force for one year, the policyowner, under attained age 85, may adjust the existing insurance coverage by increasing or decreasing the Specified Amount. The increase or decrease must be at least $25,000. To make a change, the policyowner must send a written request and the Policy to Chubb Life. Any change in the Specified Amount will affect a policyowner's cost of insurance charge. An increase in the Specified Amount will affect the determination of the amount available for a Type A loan; decreases in the Specified Amount will not have any such effect. Any increase in the Specified Amount will become effective on the monthly anniversary date after the Date of Receipt for the request. Any decrease in Specified Amount will first apply to coverage provided by the most recent Specified Amount increase, then to the next most recent increases successively and finally to the coverage under the original application. By applying decreases in this manner, savings, generally, may be realized by a policyowner since 19 additional costs and limitations associated with increases in Specified Amounts would be eliminated first. To apply for an increase in the Specified Amount, a supplemental application must be completed and evidence satisfactory to Chubb Life that the Insured is insurable must be submitted. Any approved increase in the Specified Amount will become effective on the date shown in the Supplemental Policy Specifications Page. Such increase will not become effective, however, if the Policy's cash value is insufficient to cover the deduction for the cost of the increased insurance for the policy month following the increase. Such an increase may require a payment or future increased Planned Periodic Premiums. Policyowners should consult their insurance advisers regarding the availability of the Primary Insured Term Rider described below as an alternative way of increasing coverage. See "CHARGES AND DEDUCTIONS." Guaranteed Death Benefit. The policyowner may add a Guaranteed Death Benefit Rider to the Policy under which the death benefit is guaranteed to never be less than the Specified Amount provided that a cumulative minimum premium requirement is met. The premium requirement is based on issue age, sex, smoking status, underwriting class, Specified Amount and death benefit option. If the Specified Amount is increased, an additional premium, based on attained age, will be required for such increase. There is a monthly charge for this rider. See "Optional Insurance Benefits." Combined Requests. Policyowners may combine requests for changes in the Specified Amount and the death benefit option and requests for withdrawals. The requirements and limitations that apply to each change will apply to the combined transactions, including any required evidence of insurability, Specified Amount and premium limitations, effectiveness on the monthly anniversary date following the Date of Receipt of the request, and the sufficiency of cash value to keep the Policy in force for the month following the transaction. The effect of a combined transaction on the cost of insurance, the amount of the death benefit proceeds and the premium limitations will be the net result of such effects for each such transaction considered separately. For example, combining a request for a withdrawal under Option I with a request for an increase in the Specified Amount will result in a greater amount at risk, an increase in the cost of insurance and a requirement of evidence of insurability. Policyowners should consider the net result of a combined transaction in light of insurance needs, financial circumstances and tax consequences. Maturity of the Policy. As long as the Policy remains in force, Chubb Life will pay the Policy's cash value, less outstanding policy debt, if any, on the maturity date. Benefits at maturity may be paid in a lump sum or under an optional payment plan. The maturity date is the date shown in the Policy. To change the maturity date, a written request and the Policy must be sent to Chubb Life. The Date of Receipt for any request must be before the maturity date then in effect. The requested maturity date must be (i) on a policy anniversary, (ii) at least one year from the Date of Receipt of the request, (iii) after the tenth policy year and (iv) on or before the policy anniversary nearest to the Insured's 95th birthday. Optional Insurance Benefits. Subject to certain requirements, one or more of the following optional insurance benefits may be added to a Policy by rider. More detailed information concerning such riders may be obtained from the agent selling the Policy. Additional riders, developed after the effective date of this Prospectus, may also be available as optional insurance benefits to the Policy. The agent selling the Policy should be consulted regarding the availability of any such additional riders. The cost of any optional insurance benefits will be deducted as part of the monthly deduction. See "CHARGES AND DEDUCTIONS." (a) Children's Term Insurance Rider. This benefit provides increments of level term insurance on the Insured's children, as defined in the rider. Under the terms of this rider, Chubb Life will pay the death benefit set forth in the rider to the proper beneficiary upon receipt of proof of death of the insured child. Upon receipt of proof of death of the Insured, the Children's Term Insurance Rider will continue in force under its terms without additional monthly charges. (b) Guaranteed Insurability Rider. This benefit provides that the Insured can purchase additional insurance at certain future dates without evidence of insurability. Under the terms of the rider, the Insured may, without evidence of insurability, increase the Specified Amount of the Policy on an option date, as defined in the rider. (c) Accidental Death Benefit Rider. This benefit provides additional insurance if the Insured's death results from an accident, as defined in the rider. (d) Waiver of Premium Disability Rider. This benefit provides for the waiver of monthly deductions while the Insured is totally disabled, as defined in the rider. 20 (e) Exchange of Insured Rider. This benefit provides that the Policy may be exchanged for a reissued policy on the life of a substitute insured, subject to the conditions stated in the rider. See "FEDERAL TAX MATTERS." (f) Terminal Illness Accelerated Benefit Rider. This benefit advances up to 50% of a policy's eligible death benefit, subject to a $250,000 maximum per insured, if it is medically determined that the insured is terminally ill and has a life expectancy of six months or less, as defined in the rider. Upon the payment of the accelerated benefit payment, the amount of the death benefit, the Specified Amount, the cash value and the accumulation value are reduced by the same ratio as the requested portion of the death benefit bears to the original death benefit. Such reduction will be allocated among the General Account and the divisions of Separate Account A on a pro rata basis. While this benefit is offered at no additional premium cost or surrender charge, an actuarial discount as described in the rider, which reflects the early payment of amounts held under the Policy, will be deducted from the requested portion of the death benefit. In addition, Chubb Life imposes an administrative expense charge not to exceed the lesser of the actual cost of administering the exercise of the rider or $300. Chubb Life will deduct from the requested portion of the death benefit a prorated portion of any outstanding policy loans and any premiums which are unpaid within the grace period. Cost of insurance charges are adjusted to reflect the reduction in the death benefit. Future charges under the Policy will depend on whether a Waiver of Premium Disability Rider is in force. The addition of this Rider, or receipt of benefits under it, may result in certain tax consequences to a Policyowner. See "FEDERAL TAX MATTERS." (g) Extension of Maturity Date Rider. This benefit allows the policyowner to extend the original Maturity Date of the Policy under the terms set forth in the rider. (h) Other Insured Term Rider. This benefit provides increments of level term insurance on the life of an insured other than the Insured under the Policy. (i) Primary Insured Term Rider. This benefit provides increments of level term insurance on the life of the Insured under the terms set forth in the rider. See "FEDERAL TAX MATTERS". (j) Waiver of Specified Premium Rider. This benefit provides for the payment by Chubb Life of a specified monthly premium into the Policy while the Insured is totally disabled, as defined in the rider. (k) Guaranteed Death Benefit Rider. This benefit guarantees that the Policy will stay in force with a death benefit equal to the Specified Amount, even if the cash value less policy debt is not sufficient to pay the monthly deduction, provided that cumulative premiums paid, less loans and withdrawals, are greater than or equal to the guaranteed death benefit premium multiplied by the number of months the policy has been in force. This cumulative premium requirement must be met at all times for the rider to stay in force. A monthly charge of $.01 per $1,000 of Specified Amount will be deducted from the Policy's accumulation value. (l) Automatic Increase Rider. This rider allows for scheduled annual increases in Specified Amount of from 1% to 7%, subject to certain limitations set forth in the rider. Settlement Options. In addition to a lump sum payment of benefits under the Policy, any proceeds to be paid under the Policy may be paid in any of four methods. A settlement option may be designated by notifying Chubb Life in writing. A lump sum payment of proceeds under the Policy will be made if a settlement option is not designated. Any amount left with Chubb Life for payment under an optional payment plan will be transferred to the account of the beneficiary in the General Account on the date Chubb Life receives written instructions. During the life of the Insured, the policyowner may select a plan. If a payment plan has not been chosen at the Insured's death, a beneficiary can choose a plan. If a beneficiary is changed, the payment plan selection will no longer be in effect unless the policyowner requests that it continue. An option may be elected only if the amount of the proceeds is $2,000 or more. Chubb Life reserves the right to change the interval of payments to 3, 6 or 12 months, if necessary, to increase the guaranteed payments to at least $20 each. OPTION A. Installments of a specified amount. Payments of an agreed amount to be made each month until the proceeds and interest are exhausted. OPTION B. Installments for a specified period. Payments to be made each month for an agreed number of years. OPTION C. Life income. Payments to be made each month for the lifetime of the payee. It is guaranteed that payments will be made for a minimum of 10, 15 or 20 years, as agreed upon. 21 OPTION D. Interest. Payment of interest on the proceeds held by Chubb Life calculated at the compound rate of 3% per year. Interest payments will be made at 12, 6, 3 or 1 month intervals, as agreed upon. The interest rate for Options A, B, and D will not be less than 3% per year. The interest rate for Option C will not be less than 2 1/2% per year. Interest in addition to that stated may be paid or credited from time to time under any option, but only in the sole discretion of Chubb Life. Unless otherwise stated in the election of an option, the payee of policy benefits shall have the right to receive the withdrawal value under that option. For Options A and D, the withdrawal value shall be any unpaid balance of proceeds plus accrued interest. For Option B, the withdrawal value shall be the commuted value of the remaining payments. Such value will be calculated on the same basis as the original payments. For Option C, the withdrawal value will be the commuted value of the remaining payments. Such value will be calculated on the same basis as the original payments. To receive this value, the payee must submit evidence of insurability acceptable to Chubb Life. Otherwise, the withdrawal value shall be the commuted value of any remaining guaranteed payments. If the payee should be alive at the end of the guaranteed period, the payment will be resumed on that date. The payment will then continue for the lifetime of the payee. If a payee of policy benefits dies before the proceeds are exhausted or the prescribed payments made, a final payment will be made in one sum to the estate of the last surviving payee. The amount to be paid will be calculated as described for the applicable option in the Withdrawal Value provision of the Policy. CALCULATION OF ACCUMULATION VALUE The Policy provides for an accumulation value, which will be determined on a daily basis. Accumulation value is the sum of the values in the divisions of Separate Account A plus the value in the General Account. The Policy's accumulation value in the divisions of Separate Account A is calculated by units and unit values under the Policies, as described below. The Policy's accumulation value will reflect a number of factors, including the investment experience of the divisions of Separate Account A that are invested in the Portfolios, any additional net premiums paid, any withdrawals, any policy loans, and any charges assessed in connection with the Policy. Accumulation values in Separate Account A are not guaranteed as to dollar amount. On the allocation date, the accumulation value in Separate Account A is the initial premium payments, reduced by the premium tax charge, plus interest earned prior to the allocation date, and less the monthly deduction for the first policy month. On the allocation date, the initial number of units credited to Separate Account A for the Policy will be established. At the end of each valuation period thereafter, the accumulation value in a division of Separate Account A is (i) plus (ii) plus (iii) minus (iv) minus (v) where: (i) is the accumulation value in the division on the preceding valuation date multiplied by the net investment factor, as described below, for the current valuation period, (ii) is any net premium received during the current valuation period which is allocated to the division, (iii) is all accumulation values transferred to the division from another division or the General Account during the current valuation period, (iv) is all accumulation values transferred from the division to another divison or the General Account and accumulation values transferred to secure a policy debt during the current valuation period, and (v) is all withdrawals from the division during the current valuation period. In addition, whenever a valuation period includes the monthly anniversary date, the accumulation value at the end of such period is reduced by the portion of the monthly deduction allocated to the division. The Policy's total accumulation value in Separate Account A equals the sum of the Policy's accumulation value in each divison thereof. Unit Values. Units are credited to a policyowner upon allocation of net premiums to a division. Each net premium payment allocated to a division will increase the number of units in that division. Both full and fractional units are credited. The number of units and fractional units is determined by dividing the net premium payment by the unit value 22 of the division to which the payment has been allocated. The unit value of each division is determined on each valuation date. The number of units credited will not change because of subsequent changes in unit value. The dollar value of each division's units will vary depending upon the investment performance of the corresponding Portfolio of the Fund. Certain transactions affect the number of units in a division under a Policy. Loans, surrenders and withdrawals, withdrawal and transfer fees and charges, the surrender charge, and monthly deductions involve the redemption of units and will decrease the number of units. Transfers of accumulation value among divisions will reduce or increase the number of units in a division, as appropriate. The unit value of each division's units initially under the Policies was $10.00. Thereafter, the unit value of a division on any valuation date is calculated by multiplying (1) by (2) where: (1) is the division's unit value on the previous valuation date; and (2) is the net investment factor for the valuation period then ended. The unit value of each division's units on any day other than a valuation date is the unit value as of the next valuation date and is used for the purpose of processing transactions. Net Investment Factor. The net investment factor measures the investment experience of each division of Separate Account A and is used to determine changes in unit value from one valuation period to the next valuation period. The net investment factor for a valuation period is (i) divided by (ii) minus (iii) where: (i) is (a) the value of the assets of the division at the end of the preceding valuation period, plus (b) the investment income and capital gains, realized or unrealized, credited to the assets of the division during the valuation period for which the net investment factor is being determined, minus (c) capital losses, realized or unrealized, charged against those assets during the valuation period, minus (d) any amount charged against the division for taxes or any amount set aside during the valuation period by Chubb Life to provide for taxes attributable to the operation or maintenance of that division, and (ii) is the value of the assets of the division at the end of the preceding valuation period, and (iii) is a charge no greater than .0024657% on a daily basis. This corresponds to .90% on an annual basis for mortality and expense risks. CASH VALUE BENEFITS So long as it remains in force, the Policy provides for certain benefits prior to the maturity date. Subject to certain limitations, the policyowner may at any time obtain cash value by surrendering the Policy or making withdrawals from the Policy. The cash value equals the accumulation value less any surren- der charge. In addition, the policyowner has certain policy loan privileges un- der the Policy. Surrender Privileges. As long as the Policy is in force, a policyowner may surrender the Policy or make a withdrawal from the Policy at any time by send- ing a written request to Chubb Life. See "FEDERAL TAX MATTERS--Policy Proceeds." The surrender value of the Policy equals the cash value less any outstanding policy debt. The surrender value will be determined at the end of the valuation period during which the request for a surrender or withdrawal is received. Pro- ceeds will generally be paid within seven days of the Date of Receipt of a re- quest for surrender or withdrawal. The amount payable upon surrender of the Policy is the surrender value at the end of the valuation period during which the request is received. The surrender value may be paid in a lump sum, within seven days of the Date of Receipt of the request, or under one of the optional payment plans specified in the Poli- cy. See "POLICY BENEFITS AND RIGHTS--Settlement Options." A policyowner can obtain a portion of the Policy's cash value by withdrawal of cash value from the Policy. A withdrawal from a Policy is subject to the following conditions: A. The amount withdrawn may not exceed the cash value less any outstanding debt. B. The minimum amount that may be withdrawn is $750. 23 C. A charge equal to the lesser of $25 or 2% of the amount of the withdrawal will be deducted from the amount of each withdrawal. Withdrawals generally will affect the Policy's accumulation value, cash value and the life insurance proceeds payable under the Policy. The Policy's cash value will be reduced by the amount of the withdrawal. The Policy's accumula- tion value will be reduced by the amount of the withdrawal plus a pro-rata sur- render charge. Life insurance proceeds payable under the Policy will generally be reduced by the amount of the withdrawal plus a pro-rata surrender charge, unless the withdrawal is combined with a request to maintain or increase the Specified Amount. See "POLICY BENEFITS AND RIGHTS--Combined Requests." Under Option I, which provides for life insurance proceeds equal to the greater of the Specified Amount or the accumulation value of the Policy at the date of death multiplied by the corridor percentage provided by the Code, the Specified Amount will be reduced by the amount of the withdrawal plus the pro- rata surrender charge. The Specified Amount remaining after a withdrawal may not be less than $10,000. As a result, Chubb Life will not effectuate any withdrawal that would reduce the Specified Amount below this minimum. If increases in Specified Amount previously have occurred, a withdrawal will first reduce the Specified Amount of the most recent increase, then the most recent increases successively, then the coverage under the original application. If the life insurance proceeds payable under either death benefit option, both before and after the withdrawal, is the accumulation value multiplied by the corridor percentage, a withdrawal generally will result in a reduction in life insurance proceeds equal to the amount paid upon withdrawal, multiplied by the corridor percentage then in effect. Under Option II, which provides for life insurance proceeds equal to the Specified Amount plus accumulation value, a reduction in accumulation value as a result of a withdrawal will typically result in a dollar per dollar reduction in the life insurance proceeds payable under the Policy. A policyowner may allocate a withdrawal among the General Account and the divisions of Separate Account A. If no such allocation is made, a withdrawal will be allocated among the General Account and the divisions of Separate Account A in the same proportion that the accumulation value in the General Account, less any policy debt, and the accumulation value in each division bears to the total accumulation value of the Policy, less any policy debt, on the date of withdrawal. See "FEDERAL TAX MATTERS--Policy Proceeds." Policy Loans. So long as the Policy remains in force, a policyowner may borrow money from Chubb Life at any time after the first policy anniversary using the Policy as the only security for the loan. Loans have priority over the claims of any assignee or any other person. Generally, the maximum loan amount is 90% of the cash value at the end of the valuation period during which the loan request is received. The maximum amount which may be borrowed at any given time is the maximum loan amount reduced by any outstanding policy debt. Proceeds of policy loans ordinarily will be disbursed within seven days from the Date of Receipt of a request for a loan by Chubb Life, although payments may be postponed under certain circumstances. See "OTHER MATTERS--Postponement of Payments". Chubb Life may, in its discretion, permit loans to be made by telephone if the proper authorization form is on file with Chubb Life. So long as the Policy remains in force, the loan may be repaid in whole or in part without penalty at any time while the Insured is living. When a policy loan is made, a portion of the Policy's accumulation value sufficient to secure the loan will be transferred to the General Account. A policy loan removes the proceeds from the investment experience of Separate Account A which will have a permanent effect on the accumulation value and death benefit even if the loan is repaid. Any loan interest that is due and unpaid will also be so transferred. Accumulation value equal to policy debt in the General Account will accrue interest daily at the lesser of an annual rate of 6% or the interest rate currently credited to the General Account. As an administrative practice and in Chubb Life's sole discretion, if the interest rate currently credited to the General Account falls below 6%, the accumulation value held in the General Account for loan collateral may continue to earn interest at 6%. The policyowner may allocate a policy loan among the General Account and the divisions of Separate Account A. If no such allocation is made the loan will be allocated among the General Account and divisions of Separate Account A in the same proportion that the accumulation value in the General Account less policy debt and the accumulation value in each division bears to the total accumulation value of the Policy, less policy debt, on the date of the loan. Chubb Life will charge interest on any outstanding policy loan. The maximum interest rate on policy loans is 8%, compounded annually. There are two types of loans available. A Type A loan is charged the same interest rate as the 24 interest credited to the amount of accumulation value held in the General Account to secure loans. The amount available at any time for a Type A loan equals the maximum loan amount less the DEFRA Guideline Single Premium ("DGSP"), as set forth in the Code, less any outstanding Type A loans. Any other loans are Type B loans; a Type B loan is charged the prevailing interest rate, but not more than the maximum. It is possible for one loan request to result in both a Type A and a Type B loan. A request for a loan will be granted first as a Type A loan, to the extent available, and then as a Type B loan. Once a policy loan is granted, it remains a Type A or Type B until it is repaid. Increases in the Specified Amount will affect the determination of the amount available for a Type A loan; however, decreases in the Specified Amount will not have any such effect. Chubb Life may, in its sole discretion, charge lower interest rates in the future. If the loan interest rate is ever less than 8%, Chubb Life can increase the rate once each policy year but by not more than 1% per year. With respect to outstanding policy loans, Chubb Life will send notice of any change in the interest rate to the policyowner and any assignee of record at Chubb Life at least 30 days before the effective date of the increase. The effective date of any increase in such interest rate shall not be less than twelve months after the effective date of the establishment of the previous rate. Interest is due and payable at the end of each policy year, and any interest not paid when due becomes loan principal. Where applicable, loans are subject to conditions and requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"), as well as the terms of any retirement plan in connection with which the Policy has been purchased. The ERISA rules relating to loans are complex and vary depending on the individual circumstances of each Policy. Employers and policyowners should consult with qualified advisers before exercising the loan privileges. Policy debt equals the total of all outstanding policy loans and accrued interest on policy loans. If policy debt exceeds cash value, Chubb Life will notify the policyowner and any assignee of record. A payment at least equal to the amount of excess policy debt above the cash value must be made to Chubb Life within 61 days from the date the notice is mailed, otherwise, the Policy will lapse and terminate without value. The Policy may, however, later be reinstated, subject to satisfactory proof of insurability and the payment of a reinstatement premium. See "THE POLICY--Reinstatement". So long as the Policy remains in force, policy debt may be repaid in whole or in part at any time during the Insured's life. If there is any existing policy debt, premium payments in the amount of the Planned Periodic Premium, received at the Premium Frequency, will be applied as premium. Premium payments in excess of the Planned Periodic Premium or premium payments received other than at the Premium Frequency, will first be applied as policy loan repayments, then as premium when the policy debt is repaid. For policyowners with both Type A and Type B loans, repayments of the loan will be applied first to Type B loans and then to Type A loans. Upon repayment, the Policy's accumulation value securing the repaid portion of the debt in the General Account will be transferred to the General Account and the divisions of Separate Account A using the same percentages used to allocate net premiums. A policyowner may make loan prepayments on a pre-authorized check basis. Any outstanding policy debt is subtracted from life insurance proceeds payable at the Insured's death, from accumulation value upon surrender, and from cash value payable at maturity. In the event that the Policy lapses due to insufficient cash value resulting from loans, the policyowner may be taxed on the total appreciation under the Policy. OTHER MATTERS Voting Rights. To the extent required by law, Chubb Life will vote the Funds' shares held in the various divisions of Separate Account A at regular and special shareholder meetings of the Funds in accordance with instructions received from persons having voting interests in Separate Account A. If, however, the 1940 Act or any regulation thereunder should be amended or if the present interpretation thereof should change and, as a result, Chubb Life determines that it is permissible to vote the Funds' shares in its own right, it may elect to do so. The number of votes on which each policyowner has the right to instruct will be determined by dividing the Policy's accumulation value in a division of Separate Account A by the net asset value per share of the corresponding Portfolio in which the division invests, or as otherwise required by law. Fractional shares will be counted. The number of votes on which the policyowner has the right to instruct will be determined as of the date coincident with the date established by the Funds for determining shareholders eligible to vote at the meeting of the Funds. Voting instructions will be solicited by written communications prior to such meeting in accordance with procedures established by the Funds. Chubb Life will vote the Funds' shares as to which no instructions are received in proportion to the voting instructions which are received with respect to all Policies participating in the Funds in accordance with applicable law. Each person having a voting interest will receive proxy material, reports and other materials relating to the Funds. The shares held by Chubb Life, including shares for 25 which no voting instructions have been received, shares held in Separate Account A representing charges imposed by Chubb Life against Separate Account A under the Policies and shares held by Chubb Life that are not otherwise attributable to Policies, will also be voted by Chubb Life in proportion to instructions received from the owners of variable life insurance policies funded through Separate Account A. Chubb Life reserves the right to vote any or all such shares at its discretion to the extent consistent with then current interpretations of the 1940 Act and rules thereunder. Chubb Life may, when required by state insurance regulatory authorities, disregard voting instructions if the instructions require that shares be voted so as to cause a change in subclassification or investment objective of the Funds or disapprove an investment advisory contract of the Funds. In addition, Chubb Life may disregard voting instructions in favor of changes initiated by a policyowner in the investment policy or the investment adviser of the Funds if Chubb Life reasonably disapproves of such changes. A change would be disapproved only if the proposed change is contrary to state law or prohibited by state regulatory authorities or Chubb Life determined that the change would be inconsistent with the investment objectives of Separate Account A or would result in the purchase of securities for Separate Account A which vary from the general quality and nature of investments and investment techniques utilized by other separate accounts created by Chubb Life or any affiliate of Chubb Life which have similar investment objectives. In the event that Chubb Life does disregard voting instructions, a summary of that action and the reason for such actions will be included in the next semi-annual report to the policyowner. Additions, Deletions or Substitutions of Investments. Chubb Life reserves the right, subject to compliance with applicable law, to make additions to, deletions from, or substitutions for the shares held by any division or which any division may purchase. If shares of the Funds should no longer be available for investment or if, in the judgment of Chubb Life's management, further investment in shares of the Funds should become inappropriate in view of the purposes of the Policy, Chubb Life may substitute shares of any other investment company for shares already purchased, or to be purchased in the future under the Policies. No substitution of securities will take place without notice to and consent of policyowners and without prior approval of the Commission, all to the extent required by the 1940 Act. Any surrender due to a change in the Portfolio's investment policy will incur any applicable surrender charges. Each class of the Funds' stock is subject to certain investment restrictions which may not be changed without the approval of the majority of the holders of such series. See the accompanying prospectuses for the Funds. Annual Summary. Each year a summary will be sent to the policyowner which shows the current accumulation value, cash value, premiums paid and all charges since the last annual summary as well as the balance of outstanding policy loans. Chubb Life will also send to the policyowner the reports required by the 1940 Act. Confirmation. Confirmation notices (or other appropriate notification) will be mailed promptly at the time of the following transactions: (1) policy issue; (2) receipt of premium payments; (3) initial allocation among divisions on the allocation date; (4) transfers among divisions; (5) change of premium allocation; (6) change between Option I and Option II; (7) increases or decreases in Specified Amount; (8) withdrawals; (9) receipt of loan repayments; and (10) reinstatements. Limitation on Right to Contest. Chubb Life will not contest or revoke the insurance coverage provided under the Policy, except for any subsequent increase in Specified Amount, after the Policy has been in force during the lifetime of the Insured for a period of two years from the policy date. This provision does not apply to any benefits provided by a rider which grants disability benefits or an added benefit in the event that death results from an accident. Any increase in the Specified Amount will not be contested after such increase has been in force during the lifetime of the Insured for two years following the effective date of the increase. Any increase will be contestable within the two year period only with regard to statements concerning the increase. 26 Misstatements. If the age or sex of the Insured has been misstated in an application, including a reinstatement application, the amount payable under the Policy by reason of the death of the Insured will be equal to the sum of the following: 1. The accumulation value on the date of death less any policy debt; and 2. The death benefit, less the accumulation value on the date of death, multiplied by the ratio of (a) the cost of insurance actually deducted at the beginning of the policy month in which the death occurs to (b) the cost of insurance that should have been deducted at the Insured's true age or sex. Suicide. The Policy does not cover the risk of suicide within two years from the policy date or two years from the date of any increase in Specified Amount with respect to such increase, whether the Insured is sane or insane, unless otherwise specified by state law. In the event of suicide within two years of the policy date, the only liability of Chubb Life will be a refund of premiums paid, without interest, less any policy debt and less any withdrawal. In the event of suicide within two years of an increase in Specified Amount, the only liability of Chubb Life will be a refund of the cost of insurance for such increase, plus death benefits payable without regard to suicide, if any. Beneficiaries. The original beneficiaries and contingent beneficiaries are designated by the policyowner on the application. If changed, the primary beneficiary or contingent beneficiary is as shown in the latest change filed with Chubb Life. One or more primary or contingent beneficiaries may be named in the application. In such case, the proceeds of the Policy will be paid in equal shares to the survivors in the appropriate beneficiary class unless requested otherwise by the policyowner. Postponement of Payments. Payment of any amount upon surrender, withdrawal, policy loan, or benefits payable at death or maturity may be postponed whenever: (i) the New York Stock Exchange is closed other than customary week- end and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Commission; (ii) the Commission by order permits postponement for the protection of policyowners; or (iii) an emergency exists, as determined by the Commission, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of net assets in Separate Account A. Assignment. The Policy can be assigned as collateral security. Chubb Life must be notified in writing if the Policy has been assigned. Each assignment will be subject to any payments made or action taken by Chubb Life prior to its notification of such assignment. Chubb Life is not responsible for the validity of an assignment. A policyowner's rights and the rights of the beneficiary may be affected by an assignment. Illustration of Benefits and Values. The policyowner may request illustrations of death benefits, accumulation values and cash values at any time after the policy date. Illustrations will be based on the existing accumulation value and cash value at the time of the request and both the maximum and the then current costs of insurance rates. After the policy date, a policyowner may request illustrations of benefits and values. Such illustrations are currently available to policyowners at no charge. Although Chubb Life reserves the right to assess a charge, no greater than $25 and with advance notice to policyowners, it has no present intention to do so. See "CHARGES AND DEDUCTIONS--Administrative Fees." Non-Participating Policy. The Policy does not share in any surplus distributions of Chubb Life. No dividends are payable with respect to the Policy. THE GENERAL ACCOUNT POLICYOWNERS MAY ALLOCATE NET PREMIUMS AND TRANSFER ACCUMULATION VALUE TO THE GENERAL ACCOUNT. BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE GENERAL ACCOUNT 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 CHUBB LIFE HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION 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 PROSPECTUSES. General Description. The General Account consists of all assets owned by Chubb Life other than those in Separate Account A and other separate accounts which may be established by Chubb Life. Subject to applicable law, Chubb Life has sole discretion over the investment of the assets of the General Account. 27 A policyowner may elect to allocate net premiums to the General Account or to transfer accumulation value to or from the divisions of Separate Account A and the General Account. The allocation or transfer of funds to the General Account does not entitle a policyowner to share in the investment experience of the General Account. Instead, Chubb Life guarantees that accumulation value in the General Account will accrue interest daily at an effective annual rate of at least 4 1/2%, independent of the actual investment experience of the General Account. Chubb Life is not obligated to credit interest at any higher rate, although Chubb Life may, in its sole discretion, do so. If the Date of Receipt of the initial premium is prior to the date Chubb Life either issues the Policy or offers to issue the Policy on a basis other than as applied for, that initial net premium, less any monthly deductions, will be credited with interest at the rate currently being credited to the General Account. This amount will be credited with interest for the period be- tween the date the premium is received (or the policy date, whichever is lat- er) and the date Chubb Life issues the Policy or the applicant refuses Chubb Life's offer to issue the Policy on a basis other than as applied for. No in- terest will be credited for the above period if the initial premium is less than $500. In those instances when Chubb Life declines to issue a Policy, the entire premium paid, if greater than $500, will be returned with interest; in- terest will be credited from the Date of Receipt to the date the application is rejected. No interest will be credited for such initial premiums if the Policy issued as applied for is not accepted or the "free look" is exercised; Chubb Life will retain any interest earned. The Policy. This Prospectus describes a flexible premium variable life in- surance policy. Net premiums may be allocated to the General Account or to Separate Account A or to both. This Prospectus is generally intended to serve as a disclosure document for the aspects of the Policy involving Separate Ac- count A. For more information regarding the General Account, see the Policy itself, or discuss the Policy with your insurance agent. General Account Benefits. If the policyowner pays the same premiums as scheduled, allocates all net premiums only to the General Account and makes no transfers, withdrawals, or policy loans, the minimum amount and duration of the death benefit will be fixed and guaranteed. The policyowner may select ei- ther death benefit Option I or II under the Policy and may change the Policy's Specified Amount subject to satisfactory evidence of insurability, if re- quired. General Account Accumulation Value. Net premiums allocated to the General Account are credited to the Policy. Prior to the allocation date, the initial net premium is deposited in the General Account, and those net premiums are credited to the Policy. On the allocation date the initial net premium pay- ments deposited in the General Account, plus interest earned, will be allo- cated among the divisions of Separate Account A and the General Account as in- structed by the policyowner in the application. The accumulation value in the General Account on the allocation date is equal to the portion of the net pre- mium payments, plus interest earned, which have been paid and allocated to the General Account, less the portion of the first monthly deduction allocated to the General Account. Chubb Life guarantees that interest credited to each policyowner's accumula- tion value in the General Account will not be less than an effective annual rate of at least 4 1/2% per year. Chubb Life may, IN ITS SOLE DISCRETION, credit a higher rate of interest, although it is not obligated to credit in- terest in excess of 4 1/2% per year, and might not do so. ANY INTEREST CRED- ITED ON THE POLICY'S ACCUMULATION VALUE IN THE GENERAL ACCOUNT IN EXCESS OF THE GUARANTEED RATE OF 4 1/2% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRE- TION OF CHUBB LIFE. THE POLICYOWNER ASSUMES THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE GUARANTEED MINIMUM RATE OF 4 1/2% PER YEAR. Accumulation value in the General Account that equals indebtedness will be credited inter- est daily at the lesser of an effective annual rate of 6% per year or the in- terest rate currently credited to the General Account. The accumulation value in the General Account will be calculated on each monthly anniversary date of the Policy, or on any other date with consistent adjustments. Chubb Life guarantees that, at any time prior to the maturity date, the ac- cumulation value in the General Account will not be less than the amount of the net premiums allocated or accumulation value transferred to the General Account, plus interest at the rate of 4 1/2% per year, plus any excess inter- est which Chubb Life credits and any amounts transferred into the General Ac- count, less the sum of all charges allocable to the General Account and any amounts deducted from the General Account in connection with withdrawals or transfers to Separate Account A. Determination of Charges. The portion of the monthly deduction attributable to the General Account will be determined as of the actual monthly anniversary date, even if the monthly anniversary date does not fall on a valuation date. Premium Deposit Fund. As a convenience to policyowners, Chubb Life permits policyowners to deposit funds in a premium deposit fund ("PDF"), subject to the terms and conditions of the appropriate agreement. Funds deposited in 28 the PDF earn interest at a minimum annual rate of 4%, with interest credited on each monthly anniversary date. Interest on these funds is not tax deferred and will be annually reported on Form 1099 to the policyowner. An amount equal to the Planned Periodic Premium will be transferred on the policy date to pay premiums on the policy. Policyowners may withdraw all or part of the funds from the PDF at any time. No commissions are earned or paid until premium payments are made pursuant to transfers from the PDF. DISTRIBUTION OF THE POLICY The Policy will be sold by individuals who, in addition to being licensed as life insurance agents for Chubb Life, are also registered representatives of Chubb Securities Corporation, the principal underwriter of the policies, or of broker-dealers who have entered into written sales agreements with the princi- pal underwriter. Chubb Securities Corporation is a New Hampshire corporation organized in 1969. Chubb Securities Corporation is registered with the Securi- ties and Exchange Commission under the Securities and Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Deal- ers, Inc. Commissions are payable under two alternate commission schedules. Un- der the first schedule, commissions, including bonuses, can range up to 80% of first year gross premiums, 19% of second year gross premiums, 14% of gross pre- miums for the third through the fifth policy years, 10% of gross premiums for the sixth through the tenth policy years and 4% of gross premiums for the elev- enth through the fifteenth policy years. Under this schedule no commissions are paid after the fifteenth policy year. Under the second schedule, commissions, including bonuses, can range up to 80% of first year gross premiums, 18% of second year gross premiums, 13% of gross premiums for the third through the fifth policy years, 9% of gross premiums for the sixth through the tenth policy years and .25% of accumulation value for the eleventh policy year and thereaf- ter. These commissions include amounts paid to agents writing the Policy and district managers. The Distribution Agreement with Chubb Securities Corporation took effect on February 27, 1985, was amended for technical reasons on January 24, 1989, and continues until terminated by either party on 60 days notice. Chubb Securities Corporation is not obligated to sell any specified amount of Policies and may not assign its responsibilities under the Distribution Agreement. The aggregate amounts paid to Chubb Securities Corporation under the Distribution Agreement were $15,333,468 in 1995, $15,190,893 in 1994 and $8,838,510 in 1993. Chubb Life reimburses Chubb Securities Corporation for its expenses under the Distribution Agreement. Chubb Securities Corporation is engaged in the sale and distribution of vari- ous other securities, including other flexible premium variable life policies. It acts as principal underwriter for other flexible premium variable life poli- cies and variable annuity contracts issued by Chubb Life (and its affiliated insurance companies), and for the Chubb America Fund, Inc. and the Chubb In- vestment Funds, Inc. mutual funds. It sells a number of mutual fund shares as well as shares of other securities and limited partnership interests in both public and private limited partnerships. Mutual fund shares available for sale by Chubb Securities Corporation are sold pursuant to non-exclusive selling agreements with the distributors of the mutual funds. The Policies may also be sold through other broker-dealers that enter into agreements with Chubb Securities Corporation for this purpose. Any such broker- dealers will be registered under the Securities Exchange Act of 1934 and their representatives selling the Policies will be authorized under applicable insur- ance laws and regulations to sell insurance products of this type. It is not expected that the compensation paid by Chubb Life in connection with such sales will exceed that described above for sales by Chubb Securities Corporation's registered representatives. Group or Sponsored Arrangements. Policies may be purchased under group or sponsored arrangements, as well as on an individual basis. A "group arrange- ment" includes a program under which a trustee, employer or similar entity pur- chases individual Policies covering a group of individuals on a group basis. Examples of such arrangements are employer-sponsored benefit plans and deferred compensation plans. A "sponsored arrangement" includes a program under which an employer permits group solicitation of its employees or an association permits group solicitation of its members for the purchase of Policies on an individual basis. A group or sponsored arrangement may also include certain programs under which Policies are issued to current and retired employees (and certain members of their families) of Chubb Life and its affiliates. 29 Chubb Life may reduce the following types of charges for Policies issued in connection with group or sponsored arrangements: the cost of insurance charge, surrender or withdrawal charges, administrative charges, charges for withdrawal or transfer, the guaranteed death benefit charge and charges for optional rider benefits. Chubb Life may also issue Policies in connection with group or sponsored arrangements on a "non-medical" or guaranteed issue basis. Due to the underwriting criteria established for Policies issued on a non-medical, guaranteed issue basis, actual monthly cost of insurance charges may be higher than the current cost of insurance charges under otherwise identical Policies that are medically underwritten. In addition, Chubb Life may also specify different minimum Specified Amounts at issue for Policies issued in connection with group or sponsored arrangements. Certain charges or underwriting requirements set forth in this Prospectus may also be reduced or eliminated for Policies issued in connection with an exchange of another Chubb Life policy or contract or policies or contracts of any affiliates of Chubb Life. The amounts of any reduction, the charges to be reduced, the elimination or modification of underwriting requirements, and the criteria for applying a reduction or modification will generally reflect the reduced sales and administrative effort, costs and differing mortality experience appropriate to the circumstances giving rise to the reduction or modification. The charges will be reduced in accordance with Chubb Life's company practice in effect when the Policy is issued. The elimination or modification of underwriting requirements will be done in accordance with Chubb Life's administrative procedures with respect to underwriting when the Policy is issued. Reductions and modifications will not be made where prohibited by applicable law and will not be unfairly discriminatory against any person including the purchasers to whom the reduction or modification applies and all other Owners of the Policy. 30 MANAGEMENT OF CHUBB LIFE Executive Officers and Directors of Chubb Life DIRECTORS
PRINCIPAL OCCUPATION AND NAME BUSINESS ADDRESS - ---- ------------------------ John C. Beck........... Managing Partner Beck, Mack & Oliver 330 Madison Avenue--31st Floor New York, NY 10017-5001 *Percy Chubb, III....... Vice Chairman The Chubb Corporation (also serves as Vice Chairman of Chubb Life Insurance Company of America) 15 Mountain View Road P.O. Box 1615 Warren, New Jersey 07061-1615 Joel J. Cohen.......... Managing Director Donaldson, Lufkin & Jenrette Securities Corporation 140 Broadway, 49th Floor New York, NY 10005 Henry U. Harder........ Retired. Former Chairman The Chubb Corporation 15 Mountain View Road P.O. Box 1615 Warren, NJ 07061-1615 David H. Hoag.......... Chairman, President & CEO The LTV Corporation 25 West Prospect Avenue Cleveland, OH 44115 Robert V. Lindsay...... Former President J.P. Morgan & Co., Inc. Altamont Road Millbrook, NY 12545 Thomas C. MacAvoy...... Professor Darden Graduate School of Business Administration University of Virginia Box 6550 Charlottesville, VA 22906-6550 Gertrude G. Michelson.. R.H. Macy & Co., Inc. Herald Square--13th Floor New York, NY 10001 *Dean R. O'Hare......... Chairman and President The Chubb Corporation (also serves as Chairman of Chubb Life Insurance Company of America) 15 Mountain View Road P.O. Box 1615 Warren, NJ 07061-1615 Warren B. Rudman....... Partner Paul, Weiss, Rifkind, Wharton & Garrison 1615 L Street, N.W., Suite 1300 Washington, D.C. 20036
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PRINCIPAL OCCUPATION AND NAME BUSINESS ADDRESS - ---- ------------------------ Sir David G. Scholey, CBE... Chairman S.G. Warburg Group plc One Finsbury Avenue London EC2M 2PA England Raymond G.H. Seitz.......... Former Ambassador of the United States of America 10 Trevor Square London SW7 1DT, England Lawrence M. Small........... President and Chief Operating Officer Federal National Mortgage Association 3900 Wisconsin Avenue, NW Washington, DC 20016 Richard D. Wood............. Former Chairman Eli Lilly and Company Lilly Corporate Center Indianapolis, IN 46285
- ------- * Executive Officer of Chubb Life EXECUTIVE OFFICERS (OTHER THAN DIRECTORS)
NAME POSITION - ---- -------- Theresa M. Stone.......... President and Chief Executive Officer David S. Fowler........... Vice Chairman Randell G. Craig.......... Executive Vice President and Chief Operating Officer Richard V. Werner......... Executive Vice President and Chief Financial Officer Ronald R. Angarella....... Senior Vice President Frederick H. Condon....... Senior Vice President, General Counsel and Secretary Charles C. Cornelio....... Senior Vice President, Assistant Secretary and Chief Administrative Officer Ronald H. Emery........... Senior Vice President and Controller Gregory W. Johnson........ Senior Vice President Vincent G. Mace, Jr. ..... Senior Vice President and Group Actuary Warren L. Reynolds........ Senior Vice President Arthur V. Anderson........ Vice President and Corporate Actuary Douglas H. Blampied....... Vice President Thomas M. Bodrogi......... Vice President Mark Connolly............. Vice President Edwin E. Creter........... Vice President Ned I. Gerstman........... Vice President Glenn Hilsinger........... Vice President Donald M. Kane............ Vice President Patrick A. Lang........... Vice President Deborah A. Leitch......... Vice President Justin J. Manjorin........ Vice President Donna L. Metcalf.......... Vice President
32
NAME POSITION - ---- -------- Thomas E. Murphy, Jr., M.D. ..... Vice President and Associate Medical Director Herbert B. Olson................. Vice President and Group Actuary Robert R. Rodgers................ Vice President Russell C. Simpson............... Vice President and Treasurer James S. Smith................... Vice President William A. Spencer............... Vice President John A. Thomas................... Vice President Ernest J. Tsouros................ Vice President David G. Underwood, MD........... Vice President and Medical Director John W. Wells.................... Vice President
The officers and employees of Chubb Life who have access to the assets of Separate Account A are covered by a fidelity bond issued by Aetna Casualty and Surety Company in the amount of $35,000,000. 33 STATE REGULATION OF CHUBB LIFE Chubb Life Insurance Company of America is governed under the laws of the state of New Hampshire and is subject to regulation by the Insurance Commissioner of New Hampshire. An annual statement is filed with the New Hampshire Insurance Commissioner on or before March 1 of each year covering the operations and reporting on the financial condition of Chubb Life as of December 31 of the preceding year. Periodically, the Commissioner examines the assets and liabilities of Chubb Life and Separate Account A and verifies their adequacy and a full examination of Chubb Life's operations is conducted by the Commissioner at least every five years. In addition, Chubb Life is subject to the insurance laws and regulations of other states within which it is licensed to operate. Generally, the insurance department of any other state applies the laws of the state of domicile in determining permissible investments. FEDERAL TAX MATTERS Tax Considerations. The following description is a brief summary of some of the tax rules, primarily related to federal income taxes under the Code, which, in the opinion of Chubb Life, are currently in effect. Policy Proceeds. The Policy contains provisions not found in traditional life insurance policies providing only for fixed benefits. However, under the Code, the Policy should qualify as a life insurance contract for federal income tax purposes, with the result that all death benefits paid under the Policy will generally be fully excludable from the gross income of the Policy's beneficiary for federal income tax purposes. Policyowners should consult with their own tax advisers in this regard. The federal income tax treatment of a distribution from the Policy will depend on whether a Policy is a life insurance policy and also if it is determined to be a "modified endowment contract," as defined by the Code. Chubb Life will notify a policyowner if the amount of premiums paid in would cause a Policy to be a modified endowment contract and will allow a refund of the excess premium. Thus, the policyowner may choose to have the Policy treated as a modified endowment contract. A modified endowment contract is a life insurance policy which fails to meet a "seven-pay" test. In general, a policy will fail the seven-pay test if the cumulative amount of premiums paid under the policy at any time during the first seven policy years exceeds a calculated premium level. The calculated seven-pay premium level is based on a hypothetical policy issued on the same insured persons and for the same initial death benefit which, under specified conditions (which include the absence of expense and administratative charges), would be fully paid for after seven years. Your policy will be treated as a modified endowment unless the cumulative premiums paid under your policy, at all times during the first seven policy years, are less than or equal to the cumulative seven-pay premiums which would have been paid under the hypothetical policy on or before such times. Whenever there is a "material change" under a policy, it will generally be treated as a new contract for purposes of determining whether the policy is a modified endowment, and subject to a new seven-pay premium period and a new seven-pay limit. The new seven-pay limit would be determined taking into account, under a downward adjustment formula, the Policy Account Value of the policy at the time of such change. A materially changed policy would be considered a modified endowment if it failed to satisfy the new seven-pay limit. A material change could occur as a result of a change in death benefit option, the selection of additional benefits, the restoration of a terminated policy and certain other changes. If the benefits under your policy are reduced, for example, by requesting a decrease in Face Amount, or in some cases by making partial withdrawals, terminating additional benefits under a rider changing the death benefit option, or as a result of policy termination, the calculated seven-pay premium level will be redetermined based on the reduced level of benefits and applied retroactively for purposes of the seven-pay test. If the premiums previously paid are greater than the recalculated seven-pay premium level limit, the policy will become a modified endowment. Generally, a life insurance policy which is received in exchange for a modified endowment or a modified endowment which terminates and is restored, will also be considered a modified endowment. 34 If a policy is deemed to be a modified endowment contract, any distribution from the policy will be taxed in a manner comparable to distributions from annuities (i.e., on an "income-first" basis); distributions for this purpose include a loan or partial withdrawal. Any such distributions will be considered taxable income to the extent accumulated value under the policy exceeds investment in the policy. A 10% penalty tax will apply to the taxable portion of such a distribution. No penalty will apply to distributions (i) to taxpayers 59 1/2 years of age or older, (ii) in the case of a disability which can be expected to result in death or to be of indefinite duration or (iii) received as part of a series of substantially equal periodic annuity payments for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his beneficiary. To the extent a policy becomes a modified endowment contract, any distribution, including any loan, which occurs in the policy year it becomes a modified endowment contract and in any year thereafter will be taxable income to the policyowner. Also, any distributions within two years before a policy becomes a modified endowment contract will also be income taxable to the policyowner. The Secretary of the Treasury has been authorized to prescribe rules which would similarly treat other distributions made in anticipation of a policy becoming a modified endowment contract. For purposes of determining the amount of any distribution includible in income, all modified endowment contract policies that fail the above-described tests which are issued by the same insurer, or its affiliates, to the same policyowner during any calendar year are treated as one contract. The Secretary of the Treasury is also authorized to issue regulations in this connection. In addition to the distribution rules for modified endowment contracts, the Code and proposed regulations thereunder require that, for policies entered into on or after October 21, 1988, reasonable mortality and other charges be used in satisfying the definition of life insurance. The death benefit under a policy which meets this definition will continue to be excluded from the beneficiary's gross income. Chubb Life believes that the Policies meet this definition. As long as a Policy does not violate the tests described above, it will not fail to meet the tests of the Code and the general tax provisions described herein still apply. The foregoing summary does not purport to be complete or to cover all situations, and, as always, there is some degree of uncertainty with respect to the application of the current tax laws. In addition to the provisions discussed above, the United States Congress may consider other legislation which, if enacted, could adversely affect the tax treatment of life insurance policies. Also, the Treasury Department may amend current regulations or adopt new regulations with respect to this and other Code provisions. Therefore, policyowners are advised to consult a tax adviser or attorney for more complete tax information, specifically regarding the applicability of the Code provisions to an individual policyowner's situation. Under normal circumstances, if the Policy is not a modified endowment contract, loans received under the Policy will be construed as indebtedness of the policyowner. Policyholders are advised to consult a tax adviser or attorney regarding the deduction of interest paid on loans. Even if the Policy is not a modified endowment contract, a partial withdrawal together with a reduction in death benefits during the first 15 policy years may create taxable income for the policyowner. The amount of that taxable income is determined under a complex formula and it may be equal to part or all of, but not greater than, the income on the contract. A partial withdrawal made after the first 15 policy years will be taxed on a recovery of premium-first basis, 35 and will only be subject to federal income tax to the extent such proceeds exceed the total amount of premiums the policyowner has paid that have not been previously withdrawn. If a policyowner makes a partial withdrawal, surrender, loan or exchange of the Policy, Chubb Life may be required to withhold federal income tax from the portion of the money received by the policyowner that is includible in the policyowner's federal gross income. A policyowner who is not a corporation may elect not to have such tax withheld; however, such election must be made before Chubb Life makes the payment. In addition, if a policyowner fails to provide Chubb Life with a correct taxpayer identification number (usually a social security number) or if the Treasury notifies Chubb Life that the taxpayer identification number which has been provided is not correct, the election not to have such taxes withheld will not be effective. In any case, a policyowner is liable for payment of the federal income tax on the taxable portion of money received, whether or not an election to have federal income tax withheld is made. If a policyowner elects not to have federal income tax withheld, or if the amount withheld is insufficient, then the policyowner may be responsible for payment of estimated tax. A policyowner may also incur penalties under the estimated tax rules if the withholding and estimated tax payments are insufficient. Chubb Life suggests that policyowners consult with a tax adviser or attorney as to the tax implications of these matters. In the event that a Policy is owned by the trustee under a pension or profit sharing plan, or similar deferred compensation arrangement, the tax consequences of ownership or receipt of proceeds under the Policy could differ from those stated herein. However, if ownership of such a Policy is transferred from the plan to a plan participant (upon termination of employment, for example), the Policy will be subject to all of the federal tax rules described above. A Policy owned by a trustee under such a plan may be subject to restrictions under ERISA and a tax adviser should be consulted regarding any applicable ERISA requirements. The Policy may also be used in various arrangements, including nonqualified deferred compensation or salary continuation plans, split dollar insurance plans, executive bonus plans and others, where the tax consequences may vary depending on the particular facts and circumstances of each individual arrangement. A tax adviser should be consulted regarding the tax attributes of any particular arrangement where the value of it depends in part on its tax consequences. Federal estate and local estate, inheritance and other tax consequences of ownership or receipt of policy proceeds depend upon the circumstances of each policyowner and beneficiary. Current Treasury regulations set standards for diversification of the investments underlying variable life insurance policies in order for such policies to be treated as life insurance. Chubb Life believes it presently is in compliance with the diversification requirements as set forth in the regulations and intends to remain in compliance with such diversification requirements. If the diversification requirements are not satisfied, the Policy would not be treated as a life insurance contract. As a consequence to the policyowner, income earned on a Policy would be taxable to the policyowner for any calendar quarter in which the diversification requirements were not satisfied, and for all subsequent calendar quarters. The Secretary of the Treasury may issue a regulation or a ruling which will prescribe the circumstances in which a policyowner's control of the investments of a segregated asset account may cause the policyowner, rather than the insurance company, to be treated as the owner of the assets of the account. The regulation or ruling could impose requirements that are not reflected in the Policy, relating, for example, to such elements of policyowner control as premium allocation, transfer privileges and investment in a division focusing on a particular investment sector. Failure to comply with any such regulation or ruling presumably would cause earnings on a policyowner's interest in Separate Account A to be includible in the policyowner's gross income in the year earned. Chubb Life, however, has reserved certain rights to alter the Policy and investment alternatives so as to comply with such regulation or ruling. Chubb Life believes that any such regulation or ruling would apply prospectively. Since the regulation or ruling has not been issued, there can be no assurance as to the content of such regulation or ruling or even whether application of the regulation or ruling will be prospective. For these reasons, policyowners are urged to consult with their own tax advisers. Policyowners are advised that the exercise of an Exchange of Insured Rider will give rise to tax consequences and are urged to consult with a tax adviser prior to exercising such rider. Policyowners are advised that the federal income tax status of the Terminal Illness Accelerated Benefit Rider is uncertain at this time. Benefit proceeds are not specifically excluded from taxable income under Section 101 of the Code. Under regulations proposed by the Internal Revenue Service on December 14, 1992, terminal illness benefit proceeds 36 will be treated as excludable from taxable income under Section 101 of the Code. As currently proposed, tax-free treatment will only be accorded to benefit proceeds received on or after the date that these regulations become final. In addition, while only important for a premium paid rider, rider benefits are not expressly included as "Qualified Additional Benefits" in Section 7702(f)(5) of the Code. Also, there is a question as to whether or not the addition of an accelerated benefit rider constitutes a Section 7702A(c)(3)(A) "material change" in benefit, thereby causing the contract to be treated as a new contract and subjected to a new seven-pay test, with appropriate adjustments to take into account the cash surrender values under the contract. It is likely, but not entirely certain, that the final regulations, when adopted, will not produce a different tax result. Policyowners are also advised that there is some uncertainty as to whether the Primary Insured Term Rider will be treated as a "Qualified Additional Benefit" under Section 7702(f)(5)(A)(iii) of the Code rather than as a death benefit under the Policy. However, Chubb Life believes that this rider, as structured and implemented by Chubb Life, would be considered as part of the death benefit under the Policy and therefore not give rise to any adverse tax consequences. The policyowner should consult a tax adviser before adding the Primary Insured Term Rider to the Policy. The foregoing summary does not purport to be complete or to cover all situations, including the possible tax consequences of changes in ownership. Counsel and other competent advisers should be consulted for more complete information. Charge for Chubb Life Income Taxes. Chubb Life is presently taxed as a life insurance company under the provisions of the Code. The Code specifically provides for adjustments in reserves for variable policies, and Chubb Life will include flexible premium life insurance operations in its tax return in accordance with these rules. Currently, no charge is made against Separate Account A for Chubb Life's federal income taxes, or provisions for such taxes, that may be attributable to Separate Account A. Chubb Life may charge each division in Separate Account A for its portion of any income tax charged to Chubb Life on the division or its assets. Under present laws, Chubb Life may incur state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not significant. If they increase, however, Chubb Life may decide to make charges for such taxes or provisions for such taxes against Separate Account A. Chubb Life would retain any investment earnings on any tax charges accumulated in a division. Any such charges against Separate Account A or its divisions could have an adverse effect on the investment experience of such division. EMPLOYEE BENEFIT PLANS Employers and employee organizations should consider, in consultation with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the purchase of a Policy in connection with an employment-related insurance or benefit plan. The United States Supreme Court held, in a 1983 decision, that, under Title VII, optional annuity benefits under a deferred compensation plan could not vary on the basis of sex. LEGAL PROCEEDINGS There are no legal proceedings to which Separate Account A is a party or to which the assets of any of the divisions thereof are subject. Chubb Life is not involved in any litigation that is of material importance in relation to its total assets or that relate to Separate Account A. EXPERTS The financial statements of Chubb Life and the financial statements of Separate Account A at December 31, 1995 and for the related periods then ended, 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 in the Registration Statement, and are included in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. Actuarial matters included in this Prospectus have been examined by Michael J. LeBoeuf, FSA, MAAA as stated in the opinion filed as an exhibit to the registration statement. 37 REGISTRATION STATEMENT A registration statement has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to the Policy offered hereby. This Prospectus does not contain all the information set forth in the registration statement and the amendments and exhibits to the registration statement to all of which reference is made for further information concerning Separate Account A, Chubb Life and the Policy offered hereby. Statements contained in this Prospectus as to the contents of the Policy and other legal instruments are summaries. For a complete statement of the terms thereof reference is made to such instruments as filed. FINANCIAL STATEMENTS The financial statements of Chubb Life which are included in this Prospectus should be considered only as bearing on the ability of Chubb Life to meet its obligations under the Policy. They should not be considered as bearing on the investment experience of the assets held in Separate Account A. 38 FOR USE IN ARKANSAS ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A of CHUBB LIFE INSURANCE COMPANY OF AMERICA The section Postponement of Payments on page 27 of the Prospectus is deleted and ------------------------ amended to read as follow: Postponement of Payments. Payment of any amount upon surrender, withdrawal, policy loan, or benefits payable at death or maturity may be postponed whenever: (i) the New York Stock Exchange is closed other than customary week-end and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Commission; (ii) the Commission by order permits postponement for the protection of policyowners; or (iii) an emergency exists, as determined by the Commission, as a result of which disposal of securities is not reasonably practicable or it is not reasonable practicable to determine the value of net assets in Separate Account A. If payment of any death benefit is delayed for over 30 days, after the Company receives due proof of death, proceeds that are payable in one sum will be increased to include interest at a yearly rate of 8%. EnII Form 3-8511 Ed. 4/96 FOR USE IN CALIFORNIA ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The Division investing in the Gold Stock Portfolio is not available for Policies issued in California. The definition of Net Premium on page 3 of the Prospectus is hereby deleted and amended to read as follows: Net Premium - The Gross premium less a 2.35% premium tax charge. Section (a) under Charges and Deductions on page 7 of the Prospectus is hereby deleted and amended to read as follows: (a) Chubb Life deducts 2.35% of each premium payment received to cover state premium taxes imposed. The section Premium Charges on page 16 of the Prospectus is hereby deleted and amended to read as follows: Premium Charges. Upon receipt of each premium payment and before allocation of payment among the General Account and divisions of Separate Account A, Chubb Life will deduct a premium tax charge of 2.35%. FOR POLICYOWNERS AGE 60 AND OVER ONLY, the first paragraph of the Section Policy ------ Cancellation, Surrender and Lapse on page 8 and of the Prospectus is deleted and - --------------------------------- amended to read as follows, and the section Policy "Free Look" on page 16 of the ----------------- Prospectus is deleted and amended to read as follows: The policyowner has the limited right to return a Policy for cancellation and full refund of all premiums paid. Chubb Life will cancel the Policy if it is returned by mail or personal delivery to Chubb Life or to the agent who sold the Policy, within 30 days after delivery of the Policy to the policyowner, within 45 days of the date of the execution of the application for insurance, or within 30 days after mailing or personal delivery of a Notice of the Right of Withdrawal, whichever is later. Chubb Life will return to the policyowner, within seven days, the Accumulation value of the Policy, plus any amounts deducted as a premium charge, as of the day the Policy is returned. Prior to the allocation date, the initial net premium will be deposited in Chubb Life's General Account. Form 3-00698 Ed. 4/96 FOR USE IN COLORADO ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The first paragraph of the section Policy Cancellation, Surrender and Lapse on ---------------------------------------- page 8 and of the Prospectus is deleted and amended to read as follows, and the section Policy "Free Look" on page 16 of the Prospectus is deleted and amended ------------------ to read as follows: The policyowner has the limited right to return a Policy for cancellation and full refund of all premiums paid. Chubb Life will cancel the Policy if it is returned by mail or personal delivery to Chubb Life or to the agent who said the Policy, within 20 days after delivery of the Policy to the policyowner, within 45 days of the date of the execution of the application for insurance, or within 20 days after mailing or personal delivery of a Notice of the Right of Withdrawal, whichever is later. Chubb Life will return to the policyowner, within seven days, all payments received on the Policy. Prior to the allocation date, the initial net premium will be deposited in Chubb Life's General Account; Chubb Life will retain any interest earned if the "free look" right is exercised. The section Suicide on page 27 of the Prospectus is deleted and amended to read ------- as follows: Suicide. The Policy does not cover the risk of suicide within one year from the - ------- Policy date or one year from the date of any increase in Specified Amount with respect to such increase, whether the Insured is sane or insane. In the event of suicide within one year of the policy date, the only liability of Chubb Life will be a refund of premiums paid, without interest, less any policy debt and less any withdrawal. In the event of suicide within one year of an increase in Specified Amount, the only liability of Chubb Life with respect to the increase will be a refund of the cost of insurance for such increase. ENII Form 3-8506 Ed. 4/96 FOR USE IN CONNECTICUT ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The third paragraph of the section Policy Loans on page 7 of the Prospectus is ------------ deleted and amended to read as follows: Interest is payable on policy loans at the rate of 8% compounded annually. Interest accrues on a daily basis from the date of the loan and is compounded annually. A policy loan may be prepaid in whole or in part at any time while the Policy is in force. When a loan repayment is made, accumulation value securing the policy debt in the General Account equal to the loan repayment will be allocated among the General Account and divisions of Separate Account A using the same percentages as used to allocate net premiums. See "CASH VALUE BENEFITS - Policy Loans". The fourth paragraph of the section Policy Loans on page 24 of the Prospectus is ------------ deleted and amended to read as follows: Chubb Life will charge interest on any outstanding policy loan. The rate on policy loans is 8%, compounded annually. Interest is due and payable at the end of each policy year, and any interest not paid when due becomes loan principal. The section Limitation on Right to Contest on page 26 of the Prospectus is ------------------------------ deleted and amended to read as follows: Limitation on Right to Contest. Chubb Life will not contest the insurance ------------------------------ coverage provided under the Policy, except for any subsequent increase in Specified Amount, after the Policy has been in force during the lifetime of the insured for a period of two years from the policy date. Any increase in the Specified Amount will not be contested after such increase has been in force during the lifetime of the insured for two years following the effective date of the increase. Any increase will be contestable within the two year period only with regard to statements concerning the increase. ENII Form 3-8544 Ed. 4/96 FOR USE IN IDAHO ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The section Reinstatement on Page 16 of the Prospectus is deleted and amended to ------------- read as follows: Reinstatement. If the Policy lapses, the policyowner may reinstate the ------------- Policy. The terms of the original contract will apply upon reinstatement. The accumulation value, before payment of the required reinstatement premium, will equal the accumulation value on the date of termination. The policy year on reinstatement will be measured from the policy date. An application for reinstatement may be made any time within five years of laps, but satisfactory proof of insurability and payment of a reinstatement premium is required. The reinstatement premium, after deduction of the premium tax charge, must be sufficient to cover monthly deductions for three policy months following the effective date of reinstatement. If a loan was outstanding at the time of lapse, Chubb Life will require, at the election of the policyowner, repayment or reinstatement of the loan, with interest at a rate of 8% per year, before permitting reinstatement of the Policy. The effective date will be the date of approval of the reinstatement application, which will be as of a monthly anniversary date. ENII Form 3-8510 Ed. 4/96 FOR USE IN INDIANA ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The first paragraph of the section Policy Loans on Page 7 of the Prospectus ------------ is deleted and amended to read as follows: Policy Loans - After this policy has a cash value, a policyowner may borrow ------------ against the cash value of his Policy. Generally, the maximum loan amount is 90% of the cash value of the Policy on the date of the loan. Loan interest is payable at the end of each policy year and all policy debt outstanding will be deducted from proceeds payable at the insured's death, upon maturity or upon surrender. The last paragraph of the section Monthly Deduction on Page 17 of the Prospectus ----------------- is deleted and amended to read as follows: The monthly cost of insurance will be determined by Chubb Life based upon expectations as to future mortality experience, but can never exceed the rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set forth in the Policy. Such guaranteed maximum rates are based on the Commissioner's 1980 Standard Ordinary Mortality Table for attained ages 14 and below, and are based on the Commissioner's 1980 Standard Ordinary Smoker and Non-Smoker Mortality Table for attained ages 15 and above. The first paragraph of the section Policy Loans on Page 24 of the Prospectus ------------ is deleted and amended to read as follows: Policy Loans - So long as the Policy remains in force, a policyowner may ------------ borrow money from Chubb Life at any time after the policy has a cash value using the Policy as the only security for the loan. Loans have priority over the claims of any assignee or any other person. Generally, the maximum loan amount is 90% of the cash value at the end of the valuation period during which the loan request is received. The maximum amount which may be borrowed at any given time is the maximum loan amount reduced by any outstanding debt. ENII Form 3-8542 Ed. 4/96 FOR USE IN MARYLAND ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The first paragraph of the section Allocation of Premiums on page 13 of the ---------------------- Prospectus is deleted and amended to read as follows: Allocation of Premiums: Premium payments, net of the premium tax charge, ----------------------- will be allocated on the Date of Receipt, among the General Account and the divisions of Separate Account A in accordance with the directions of the policyowner. The minimum percentage of any net premium payment allocated to any division or the General Account is 10%. The policyowner may change his or her allocation of future premium payments among the General Account and the divisions of Separate Account A by written notice to Chubb Life or by telephone without payment of any fee or penalties. The section Guaranteed Death Benefit on page 20 of the Prospectus is deleted ------------------------ and amended to read as follows: Guaranteed Continuation Benefit Rider. The policyowner may add a -------------------------------------- Guaranteed Continuation Benefit Rider to the Policy under which the death benefit is guaranteed to never be less than the Specified Amount provided that a cumulative minimum premium requirement is met. The premium requirement is based on issue age, sex, smoking status, underwriting class. Specified Amount and death benefit option. If the Specified Amount is increased, an additional premium, based on attained age, will be required for such increase. There is a monthly charge for this rider. See "Optional Insurance Benefits." ENII Form 3-8539 Ed. 4/96 FOR USE IN MASSACHUSETTS ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A of CHUBB LIFE INSURANCE COMPANY OF AMERICA All references in this prospectus to the insured's sex should be disregarded for policies issued in Massachusetts, and the maximum cost of insurance rates allowable will be based on the 1980 Commissioner's Standard Ordinary B Smoker/Nonsmoker Mortality Table. The third paragraph of the section Summary on page 4 of the Prospectus is ------- deleted and amended to read as follows: The Policy is called "variable" because, unlike the fixed benefits of an ordinary whole life insurance contract, the accumulation value, the cash value and, under certain circumstances, the death benefit of the Policy may increase or decrease depending upon the Investment experience of the divisions of Chubb Separate Account A ("Separate Account A") to which premium payments have been allocated. So long as the Policy's cash value continues to be sufficient to pay the monthly deduction, all policyowners are guaranteed a minimum death benefit equal to the face amount of the Policy (the "Specified Amount"), less any outstanding policy debt. The applicant could lose his or her entire Investment, depending on the performance of the divisions of Separate Account A, and as a result there could be no death benefit absent additional payments made to keep the policy in force. ENII Form 3-6258 Ed.4/96 FOR USE IN MINNESOTA ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A of CHUBB LIFE INSURANCE COMPANY OF AMERICA The third paragraph of the section Policy Loans on page 7 of the Prospectus is ------------ deleted and amended to read as follows: Interest is payable on policy loans at the rate of 8% compounded annually. Interest accrues on a daily basis from the date of the loan and is compounded annually. A policy loan may be prepaid in whole or in part at any time while the Policy is in force. When a loan repayment is made, accumulation value securing the policy debt in the General Account equal to the loan repayment will be allocated among the General Account and divisions of Separate Account A using the same percentages as used to allocate net premiums. See "CASH VALUE BENEFITS - Policy Loans". The fourth paragraph of the section Policy Loans on page 24 of the Prospectus is ------------ deleted and amended to read as follows: Chubb Life will charge interest on any outstanding policy loan. The rate on policy loans is 8%, compounded annually. Interest is due and payable at the end of each policy year, and any interest not paid when due becomes loan principal. ENII Form 3-8507 Ed. 4/96 FOR USE IN MISSOURI ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The section Suicide on page 27 of the Prospectus is deleted and amended to read ------- as follows: Suicide - The Policy does not cover the risk of suicide within two years ------- from the policy date, whether the Insured is sane or insane. In such event, the only liability of Chubb Life will be a refund of premiums paid without interest less any policy loan and less any withdrawal. The Policy does not cover the risk of suicide, whether sane or insane, within two years from the effective date of any increase in the Specified Amount with respect to such increase. In such event, the only liability of Chubb Life with respect to the increase will be to refund the cost of insurance for such increase. Suicide is no defense to payment of life insurance benefits nor is suicide while insane a defense to payment of accidental death benefits, if any, under this policy where the policy is issued to a Missouri citizen unless the Company can show that the insured intended suicide when he applied for the policy, regardless of any language to the contrary in this policy. ENII Form 3-8504 Ed. 4/96 FOR USE IN MONTANA ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1986 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA Paragraph (b) of the section Charges and Deductions on page 7 of the Prospectus ---------------------- is deleted and amended to read as follows: (b) There is a monthly deduction from each Policy's accumulation value in the General Account and/or the divisions of Separate Account A equal to the sum of (i) the cost of insurance, described below, and the cost of additional benefits provided by rider attached to the Policy; and (ii) a monthly administrative charge of $8.00. The cost of insurance charge is calculated on each monthly anniversary date. It is based on the issue age, policy year, and rating class of the insured. Monthly cost of insurance rates will be determined by Chubb Life based upon its expectations as to future mortality experience. Cost of insurance rates are guaranteed not to exceed or be increased above the maximum charge based upon the Commissioner's 1980 Standard Ordinary Mortality Table. The Payment of Premiums, section on page 13 of the Prospectus is deleted and -------------------- amended to read as follows: Payment of Premiums. Premiums must be paid to Chubb Life at its service center -------------------- in Chattanooga, Tennessee or through an authorized agent of Chubb Life for forwarding to Chubb Life's service center in Chattanooga, Tennessee. In addition, Chubb Life has instituted administrative procedures whereby premium payments in response to billing notices are sent directly to Chubb Life's bank. Unlike traditional insurance contracts, there is no fixed schedule of premium payments on a Policy either as to the amount or the timing of the payment. A policyowner may determine within specified limits, his or her own premium payment schedule. These limits will be set forth by Chubb Life and will include a minimum initial premium payment sufficient to keep the policy in force for two months and may also include limits on the total amount and frequency of payments in each policy year. No premium payment may be less than $25. In order to help the policyowner obtain the insurance benefits desired, a Planned Periodic Premium and Premium Frequency will be stated in each Policy. This premium will usually be based upon the policyowner's insurance need, his financial abilities and the current financial climate, in general, as well as on the Specified Amount of the Policy and the Insured's age and risk class. The policyowner is not required to pay such premiums and failure to make any premium payment will not necessarily result in lapse of the Policy; provided that the Policy's cash value, less policy debt, if any, is sufficient to pay monthly deductions. Conversely, adherence to the schedule of Planned Periodic Premiums will not assure that the Policy will remain in force. See "THE POLICY-Policy Lapse." The fourth paragraph of the section Transfers on page 14 of the Prospectus is --------- deleted and amended to read as follows: At any time the policyowner may transfer 100% of the Policy's accumulation value to the General Account and elect to have all future premium payments allocated to the General Account. While 100% of the Policy's accumulation value and all future premium payments are allocated to the General Account, the minimum period the Policy will be in force will be fixed and guaranteed. The minimum period will depend on the amount of accumulation value, the Specified Amount, the attained age, and rating class of the insured. The minimum period will decrease if the policyowner subsequently elects to increase the Specified Amount, elects to surrender the Policy, or elects to make a withdrawal. The minimum period will increase if the policyowner elects to decrease the Specified Amount, additional premium payments are received, or the Company credits a higher interest rate or charges a lower cost of insurance rate than those guaranteed for the General Account. The third paragraph of the section Monthly Deduction of page 18 of the ----------------- Prospectus if deleted and amended to read ad follows: The cost of insurance for the insured is determined on a monthly basis, and is determined separately for the initial Specified Amount and each subsequent increase in the Specified Amount. The monthly cost of insurance rate is based on the issue age, policy year, and rating class of the insured under the Policy. If we assume two insured's differ only with regard to on of the above bases, the effect of each of these bases on their monthly cost of insurance rates would be as follows: Issue Age: The cost of insurance rate for the younger insured will be less --------- than or equal to that for the older insured. Policy Year: The cost of insurance rate will increase as the policy year ----------- increases. For two Insureds with the same rating class and attained age the cost of insurance rate for the Insured with the younger issue age will never exceed, and in some cases will be less than that for the Insured with the older issue age. Rating Class: The cost of insurance rates for nonsmokers will be less than or ------------ equal to those for smokers. Cost of insurance rates may also differ due to the insured's medical condition, occupation, or avocation. The section Misstatements on page 27 of the Prospectus is deleted and amended to ------------- read as follows: Misstatements. If the age of the insured has been misstated in an application, -------------- including a reinstatement application, the amount payable under the Policy by reason of the death of the insured will be equal to the sum of the following: 1. The accumulation value on the date of death less any policy debt: and 2. The death benefit, less the accumulation value on the date of death, multiplied by the ratio of (a) the cost of insurance actually deducted at the beginning of the policy month in which the death occurs to (b) the cost of insurance that should have been deducted at the insured's true age. ENII Form 3-8508 Ed. 4/96 FOR USE IN NORTH DAKOTA ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The section Suicide on page 27 of the Prospectus is deleted and amended to read ------- as follows: Suicide - The Policy does not cover the risk of suicide within one year from ------- the Policy date or one year from the date of any increase in Specified Amount with respect to such increase, whether the insured is sane or insane. In the event of suicide within one year of the policy date, the only liability of Chubb Life will be a refund of premiums paid, without interest, less any policy debt and less any withdrawal. In the event of suicide within one year of an increase in Specified Amount, the only liability of Chubb Life with respect to the increase will be a refund of the cost of insurance for such increase. ENII Form 3-8512 Ed. 4/96 FOR USE IN PENNSYLVANIA ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The section Misstatements on page 27 of the Prospectus is deleted and amended to ------------- read as follows: Misstatements - If the age or sex of the insured has been misstated, the ------------- death benefit payable under this policy by reason of death of the Insured or the cash value available on surrender by the Owner, will be adjusted by the difference between the monthly deductions made and the monthly deductions which should have been made based on the current age and/or sex of the Insured, accumulated at the interest rates that were credited to the cash value. The monthly deduction is described in the Nonforfeiture Values section. ENII Form 3-8543 Ed. 4/96 FOR USE IN WISCONSIN ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The section Limitation on Right to Contest on page 28 of the Prospectus is ------------------------------ deleted and amended to read as follows: Limitation on Right to Contest. Chubb Life will not contest the insurance - ------------------------------- coverage provided under the Policy, except for any subsequent increase in Specified Amount, after the Policy has been in force during the lifetime of the insured for a period of two years from the policy date. Any accidental death or disability benefits which are provided by a rider may be contested at any time for misrepresentation. Any increase in the Specified Amount will not be contested after such increase has been in force during the lifetime of the insured for two years following the effective date of the increase. Any increase will be contestable within the two year period only with regard to statements concerning the increase. ENII Form 3-8505 Ed. 4/96 FOR USE IN THE U.S. VIRGIN ISLANDS ONLY Supplement dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The second and third paragraphs of the section Policy Loans beginning on page 7 ------------ of the Prospectus are deleted and amended to read as follows: A policyowner may allocate a policy loan among the General Account and the various divisions of Separate Account A. Accumulation value in each division equal to the policy debt so allocated will be transferred to the General Account. If loan interest is not paid when due, it becomes loan principal. An amount equal to the unpaid loan interest will be transferred to the General Account pro-rata from the accumulation value of the General Account and the divisions of Separate Account A. If no accumulation value is available in any of the divisions of Separate Account A, accumulation value held in the General Account will be set aside as loan collateral. Accumulation value held in the General Account for loan collateral earns interest daily at an effective rate of 4 1/2%. A policy loan accrues interest at a maximum rate of 6% compounded annually, or at any lower rate established by Chubb Life for any period during which the loan is outstanding. There are two types of loans available. A Type A loan is charged the same interest rate as the interest credited to the amount of accumulation value which is held in the General Account to secure loans. The amount available at any time for a Type A loan equals the maximum loan amount less the DEFRA Guideline Single Premium, as set forth in the Code, less any outstanding Type A loans. All other loans are Type B Loans; a Type B loan is charged the prevailing interest rate, but not more than the maximum. It is possible for one loan request to result in both a Type A and Type B loan. Interest accrues on a daily basis from the date of the loan and is compounded annually. A policy loan may be prepaid in whole or in part at any time while the Policy is in force. When a loan repayment is made, accumulation value securing the policy debt in the General Account equal to the loan repayment will be allocated among the General Account and divisions of Separate Account A using the same percentages as used to allocate net premiums. See "CASH VALUE BENEFITS-Policy Loans". The third, fourth and fifth paragraphs of the section Policy Loans beginning ------------ on page 24 of the Prospectus are deleted and amended to read as follows: When a policy loan is made, a portion of the Policy's accumulation value sufficient to secure the loan will be transferred to the General Account. A policy loan removes the proceeds from the investment experience of Separate Account A which will have a permanent effect on the accumulation value and death benefit even if the loan is repaid. Any loan interest that is due and unpaid will also be so transferred. Accumulation value equal to policy debt in the General Account will accrue interest daily at an annual rate of 4 1/2%. The policyowner may allocate a policy loan among the General Account and the divisions of Separate Account A. If no such allocation is made the loan will be allocated among the General Account and divisions of Separate Account A in the same proportion that the accumulation value in the General Account less policy debt and the accumulation value in each division bears to the total accumulation value of the Policy, less policy debt, on the date of the loan. Chubb Life will charge interest on any outstanding policy loan. The maximum interest rate on policy loans is 6%, compounded annually. There are two types of loans available. A Type A loan is charged the same interest rate as the interest credited to the amount of accumulation value held in the General Account to secure loans. The amount available at any time for a Type A loan equals the maximum loan amount less the DEFRA Guideline Single Premium ("DGSP"), as set forth in the Code, less any outstanding Type A loans. Any other loans are Type B loans; a Type B loan is charged the prevailing interest rate, but not more than the maximum. It is possible for one loan request to result in both a Type A and a Type B loan. A request for a loan will be granted first as a Type A loan, to the extent available, and then as a Type B loan. Once a policy loan is granted, it remains a Type A or Type B until it is repaid. Increases in the Specified Amount will affect the determination of the amount available for a Type A loan; however, decreases in the Specified Amount will not have any such effect. Chubb Life may, in its sole discretion, charge lower interest rates in the future. If the loan interest rate is ever less than 6%, Chubb Life can increase the rate once each policy year but by not more than 1% per year. With respect to outstanding policy loans, Chubb Life will send notice of any change in the interest rate to the policyowner and any assignee of record at Chubb Life's service center in Chattanooga, Tennessee at least 30 days before the effective date of the increase. The effective date of any increase in such interest rate shall not be less than twelve months after the effective date of the establishment of the previous rate. Interest is due and payable at the end of each policy year, and any interest not paid when due becomes loan principal. ENII Form 3-6270 Ed. 4/96 FOR USE IN UTAH ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The second paragraph of the section Surrender Privileges on page 23 of the -------------------- Prospectus is deleted and amended to read as follows: The surrender value of the Policy equals the accumulation value less the surrender charge on the date the Company receives the request for surrender less any debt. Proceeds will generally be paid within seven days of the Date of Receipt of a request for surrender or withdrawal. The section Postponement of Payments on page 27 of the Prospectus is deleted and ------------------------ amended to read as follows: Postponement of Payments. Payment of any amount upon surrender, withdrawal, - ------------------------- policy loan, or benefits payable at death or maturity may be postponed whenever; (i) the New York Stock Exchange is closed other than customary week-end and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Commission; (ii) the Commission by order permits postponement for the protection of policyowners; or (iii) an emergency exists, as determined by the Commission, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of net assets in Separate Account A. If payment of any death benefit is delayed for over 30 days, after the Company receives due proof of death, proceeds that are payable in one sum will be increased to include interest at a yearly rate of 8%. ENII Form 3-8513 Ed. 4/96 FOR USE IN TEXAS ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The loan value section of the Definitions on page 3 of the Prospectus is deleted ----------- and amended to read as follows: Loan value - Generally, the Policy's cash value on the date of a loan. Net premium - the premium paid multiplied by 97.5% The first paragraph of the section Policy Loans on page 7 of the Prospectus is ------------ deleted and amended to read as follows: Policy Loans. After the first policy anniversary, a policyowner may borrow against the cash value of his Policy. The maximum loan amount is the cash value of the Policy on the date of the loan. Loan interest is payable at the end of each policy year and all policy debt outstanding will be deducted from proceeds payable at the insured's death, upon maturity, or upon surrender. The second paragraph of the section Transfers on page 14 of the Prospectus is --------- deleted and amended to read as follows: A transfer charge to cover administrative costs will be imposed each time amounts are transferred and will be deducted on a pro rata basis from the division or divisions of Separate Account A or the General Account into which the amount is transferred. However, no transfer charge will be imposed on the transfer of the initial net premium payments, plus interest earned, from the General Account to the divisions of Separate Account A on the allocation date or on loan repayments. In addition, Chubb Life currently permits 4 transfers per policy year without imposing a transfer charge. The charge will be lesser of $25 or 10% of the amount transferred. Currently, a policyowner may make an unlimited number of transfers; however, Chubb Life has reserved the right to revoke or modify transfer privileges and charges. The Owner will be notified 30 days in advance of any change. The minimum amount transferable will never exceed $1,000 and the transfer charge will never exceed $50. The first paragraph of the section Policy Loans on page 24 of the Prospectus is ------------ deleted and amended to read as follows: Policy Loans. So long as the Policy remains in effect, a policyowner may borrow money from Chubb Life at any time after the first policy anniversary using the policy as the only security for the loan. Loans have priority over the claims of any assignee or any other person. The maximum loan amount is the cash value at the end of the valuation period during which the loan request is received. The maximum amount which may be borrowed at any given time is the maximum loan amount reduced by any outstanding policy debt. ENII Form 3-8541 Ed. 4/96 FOR USE IN PUERTO RICO ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A OF CHUBB LIFE INSURANCE COMPANY OF AMERICA The section Reinstatement on Page 16 of the Prospectus is deleted and amended to ------------- read as follows: Reinstatement. If the Policy lapses, the policyowner may reinstate the -------------- Policy. The terms of the original contract will apply upon reinstatement. The accumulation value, before payment of the required reinstatement premium, will equal the accumulation value on the date of termination. The policy year on reinstatement will be measured from the policy date. An application for reinstatement may be made any time within five years of lapse, but satisfactory proof of insurability and payment of a reinstatement premium is required. The reinstatement premium, after deduction of the premium tax charge, must be sufficient to cover monthly deductions for three policy months following the effective date of reinstatement. If a loan was outstanding at the time of lapse, Chubb Life will require, at the election of the policyowner, repayment or reinstatement of the loan before permitting reinstatement of the Policy. The effective date will be the date of approval of the reinstatement application, which will be as of a monthly anniversary date. ENII Form 3-8540 Ed. 4/96 Report of Ernst & Young LLP, Independent Auditors The Board of Directors Chubb Life Insurance Company of America We have audited the accompanying consolidated balance sheet of Chubb Life Insurance Company of America and subsidiaries as of December 31, 1995 and the related consolidated statements of income, shareholder's equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chubb Life Insurance Company of America and subsidiaries at December 31, 1995 and the consolidated results of their operations and their cash flows for the year then ended, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Boston, Massachusetts February 5, 1996 F-1 Chubb Life Insurance Company of America and Subsidiaries Consolidated Balance Sheet December 31, 1995 (In thousands)
Assets Invested assets (Note 2) Fixed maturities, held-to-maturity, at amortized cost $ 403,539 Fixed maturities, available-for-sale, at market 2,255,951 Equity securities, at market 40,208 Short term investments, at cost 55,222 Policy loans 202,705 Mortgage loans on real estate 9,634 ---------------- Total invested assets 2,967,259 ---------------- Accrued investment income 46,091 Uncollected premiums 12,522 Reinsurance recoverable on life and health policy liabilities 193,925 Deferred policy acquisition costs (Note 3) 575,614 Value assigned purchased insurance in force (Note 3) 37,095 Goodwill, net of accumulated amortization of $22,067 65,382 Property and equipment, net of accumulated depreciation of $62,328 45,016 Separate account assets 261,764 Other assets 70,697 ---------------- 1,308,106 ---------------- Total assets $4,275,365 ================ Liabilities Policy liabilities Policy fund balances $2,129,327 Future policy benefits 622,802 Policy and contract claims 90,150 Premiums paid in advance 2,136 Other policyholders' funds 98,723 ---------------- 2,943,138 Mortgage loan payable (Note 11) 5,212 Short term debt (Note 11) 36,000 Federal income taxes payable (Note 4) 7,805 Deferred federal income taxes (Note 4) 70,484 Separate account liabilities 261,764 Accrued expenses and other liabilities (Note 5) 105,446 ---------------- Total liabilities 3,429,849 Commitments and contingent liabilities (Note 6, 9, 14) Minority interest in consolidated subsidiary (Note 1) 871 Shareholder's equity Common stock --$5 par value, 600,000 shares authorized, issued and outstanding 3,000 Paid in capital 249,872 Unrealized appreciation of investments, net (Note 2) 40,720 Retained earnings 551,053 ---------------- Total shareholder's equity 844,645 ---------------- Total liabilities and shareholder's equity $4,275,365 ================
See accompanying notes. F-2
Chubb Life Insurance Company of America and Subsidiaries Consolidated Statement of Income Year Ended December 31, 1995 (In thousands) Revenues Premiums and policy charges $622,937 Net investment income 230,090 Realized investment gains 21,808 Other income 4,055 ----------- Total Revenues 878,890 Benefits, Claims and Expenses Policy benefits and claims 526,689 Change in reserves for future policy benefits 22,530 ----------- 549,219 Expenses Commissions and other operating expenses 187,920 Amortization 79,643 ----------- 267,563 ----------- Total benefits, claims and expenses 816,782 ----------- Income before federal income tax 62,108 Federal income tax (benefit) Current 29,049 Deferred (8,192) ----------- 20,857 ----------- Income before minority interest 41,251 Minority interest in net loss of consolidated subsidiary (965) ----------- Net Income $ 42,216 ===========
See accompanying notes. F-3 Chubb Life Insurance Company of America and Subsidiaries Consolidated Statement of Shareholder's Equity Year Ended December 31, 1995 (In thousands)
Common stock Balance, beginning and end of year $ 3,000 ----------- Paid-in capital Balance, beginning and end of year 249,872 ----------- Unrealized appreciation (depreciation) of investments, net Balance, beginning of year (33,907) Change, net (Note 2) 74,627 ----------- Balance, end of year 40,720 ----------- Retained Earnings Balance, beginning of year 512,845 Net income 42,216 Dividends to parent (4,008) ----------- Balance, end of year 551,053 ----------- Total shareholder's equity $844,645 ===========
See accompanying notes. F-4 Chubb Life Insurance Company of America and Subsidiaries Consolidated Statement of Cash Flows Year Ended December 31, 1995 (In thousands)
Operating Activities Net income $ 42,216 Adjustments to reconcile net income to net cash used in operating activities: Decrease in future policy benefits, policy and contract claims and premiums paid in advance, net (25,269) Decrease in uncollected premiums 10,523 Increase in policy acquisition costs deferred, net of amortization (82,664) Net amortization of value assigned purchased insurance in force 4,218 Increase in accrued investment income (4,017) Realized investment gains (21,808) Accretion of investment discounts (6,383) Provision for depreciation 8,867 Provision for deferred income tax (8,192) Increase in federal income tax payable 2,593 Other, net 9,612 ------------- Net cash used for operating activities (70,304) Investing Activities Proceeds from sales of fixed maturities 599,100 Proceeds from maturities of fixed maturities 131,180 Proceeds from sales of equity securities 109,682 Purchases of fixed maturities (1,058,894) Purchases of equity securities (50,894) Decrease in short term investments, net 60,086 Policy loans issued, net of repayments (12,011) Mortgage loans, net 2,281 Other, net (6,061) ------------- Net cash used in investing activities (225,531) Financing Activities Deposits credited to policyholders' funds 444,040 Withdrawals from policyholders' funds (138,071) Mortgage debt principal payments (753) Dividends to Parent (4,008) Decrease in cash overdraft (5,373) ------------- Net cash provided by financing activities 295,835 Increase in cash 0 ------------- Cash, beginning and end of year (Note 1) $ 0 =============
See accompanying notes. F-5 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements December 31, 1995 1. Summary of Significant Accounting Policies Principles of Consolidation The accompanying financial statements reflect the consolidated life and health insurance operations of Chubb Life Insurance Company of America and its subsidiaries (the Company). Wholly-owned subsidiaries include Chubb America Service Corporation, The Colonial Life Insurance Company of America (Colonial), Chubb Investment Advisory Corporation, and Chubb Sovereign Life Insurance Company (Sovereign). Majority-owned subsidiaries include ChubbHealth Holdings, Inc. (ChubbHealth). Significant intercompany transactions have been eliminated in consolidation. Chubb Life Insurance Company of America is wholly-owned by The Chubb Corporation (the Parent). ChubbHealth is an insurance holding company which owns 100% of ChubbHealth, Inc. (CHI), a health maintenance organization (HMO). CHI commenced operations in the New York City metropolitan area on June 1, 1994. ChubbHealth is jointly owned by the Company and Healthsource, New York, Inc. (Healthsource). The Company owns 85% of the outstanding stock of ChubbHealth. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP). The consolidated financial statements reflect estimates and judgments made by management which affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recognition of Revenues, Benefits, Claims and Expenses: Universal Life Products Universal life products include universal life insurance, variable universal life insurance, and other interest-sensitive life insurance policies. Revenues for universal life products consist of policy charges for the cost of insurance, policy administration and surrenders that have been assessed against policy account balances during the period. F-6 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Policy fund liabilities for universal life and other interest- sensitive life insurance policies are computed in accordance with the retrospective deposit method and represent policy account balances before surrender charges. Policy fund assets and liabilities for variable universal life insurance are segregated and recorded as separate account assets and liabilities. Separate account assets are carried at market values as of the balance sheet date and are invested by the Company at the direction of the policyholder. Investments are made in one or more of fifteen portfolios in a series fund. Each of the portfolios has specific investment objectives and the investment income and investment gains and losses accrue directly to, and investment risk is borne by, the policyholders. Accordingly, operating results of the separate account are not included in the consolidated statements of income. Policy claims that are charged to expense include claims incurred in the period in excess of related policy account balances. Other policy benefits include interest credited to universal life and other interest-sensitive life insurance policies. Interest crediting rates ranged from 4 3/4% to 7 5/8%. Investment Products Investment products include flexible premium annuities, structured settlement annuities and other supplementary contracts without life contingencies. Revenues for investment products consist of policy charges for the cost of insurance, policy administration and surrenders that have been assessed against policy account balances during the period. Deposits for these products are recorded as policy fund liabilities, which are increased by interest credited to the liabilities and decreased by withdrawals and administrative charges assessed against the contract holders. Interest crediting rates ranged from 3 1/2% to 8%. Traditional Life Insurance Products Traditional life insurance products include those products with fixed and guaranteed premiums and benefits. Premium revenues for traditional life insurance are recognized as revenues when due. The liabilities for future policy benefits are computed by the net level premium method based on estimated future investment yield, mortality and withdrawal experience. Interest rate assumptions ranged from 3% to 9%. Mortality is calculated principally on an experience multiple applied to select and ultimate tables in common usage in the industry. Estimated withdrawals are determined principally based on industry tables. Policy benefits and claims are charged to expense as incurred. F-7 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Accident and Health Insurance Accident and health insurance premiums are earned on a monthly pro rata basis over the terms of the policies. Benefits include paid claims plus an estimate for known claims and claims incurred but not reported as of the balance sheet date. Reinsurance In the ordinary course of business, the Company and its insurance subsidiaries assume and cede reinsurance with other insurance companies. These arrangements minimize the maximum net loss potential arising from large risks. Reinsurance contracts do not relieve the Company and its insurance subsidiaries from their obligation to policyholders. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar activities or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Reinsurance recoverable on life and health policy liabilities represent estimates of the portion of such liabilities that will be recovered from reinsurers, determined in a manner consistent with the liabilities associated with the reinsured policies. Deferred Policy Acquisition Costs Certain costs of acquiring insurance contracts, principally commissions, underwriting costs and certain variable field office expenses are deferred. Deferred policy acquisition costs for universal life and investment contracts are amortized over the lives of the contracts in relation to the present value of estimated gross profits expected to be realized. Deferred policy acquisition costs related to universal life and investment contracts are also adjusted to reflect the effects that the unrealized gains or losses on investments classified as available-for-sale would have had on the present value of estimated gross profits had such gains or losses actually been realized. This adjustment is excluded from income and charged or credited directly to the unrealized appreciation or depreciation of the investments component of shareholder's equity, net of applicable deferred income tax. Traditional life insurance deferred policy acquisition costs are being amortized over the premium-payment period of the related policies using assumptions consistent with those used in computing policy benefit reserves. F-8 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Value Assigned Purchased Insurance In Force The value assigned purchased insurance in force is amortized principally over the estimated life of the insurance in force at the date of acquisition in proportion to the emergence of profit using assumptions consistent with those used in the amortization of the deferred policy acquisition costs. Interest accrues on the unamortized balance at rates ranging from 6% to 9 1/4%. Value assigned purchased insurance in force related to universal life and investment contracts is also adjusted to reflect the effects that the unrealized gains or losses on investments classified as available- for-sale would have had on the present value of estimated gross profits had such gains or losses actually been realized. This adjustment is excluded from income and charged or credited directly to the unrealized appreciation or depreciation of the investments component of shareholder's equity, net of applicable deferred income tax. Invested Assets Short term investments, which have an original maturity of one year or less, are carried at amortized cost. Fixed maturities, which include bonds and redeemable preferred stocks, are purchased to support the investment strategies of the Company. These strategies are developed based on many factors including rate of return, maturity, credit risk, tax considerations and regulatory requirements. Those fixed maturities which the Company has the ability and intent to hold to maturity are considered held-to-maturity and carried at amortized cost. Fixed maturities which may be sold prior to maturity to support the investment strategies of the Company are considered available-for-sale and carried at market value as of the balance sheet date. Equity securities, which include common stocks and non-redeemable preferred stocks, are carried at market values as of the balance sheet dates. Policy loans are carried at the unpaid balances. Mortgage loans on real estate are carried at the unpaid balances, adjusted for amortization of premium or discount. Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold and are credited or charged to income. Unrealized appreciation or depreciation on those investments which are carried at market value is excluded from income and credited or charged directly to a separate component of shareholder's equity. F-9 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Goodwill Goodwill, which represents the excess of the purchase price over the fair value of net assets of subsidiaries acquired, is amortized using the straight-line method over 40 years. Property and Equipment Property and equipment used in operations are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Federal Income Taxes The Company files a consolidated federal income tax return with its parent. Federal income tax is allocated as if the Company and its subsidiaries filed a separate consolidated income tax return. Deferred income tax assets and liabilities are recognized for the expected future tax effects attributable to temporary differences between the financial reporting and tax bases of assets and liabilities, based on enacted tax rates and other provisions of tax law. Deferred income taxes related to unrealized appreciation or depreciation of investments carried at market value are charged or credited directly to a separate component of shareholder's equity. Fair Values of Financial Instruments Fair values of financial instruments are based on quoted market prices where available. Fair values of financial instruments for which quoted market prices are not available are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and the estimates of future cash flows. Accordingly, the derived fair value estimates cannot be substantiated by comparison to independent markets and are not necessarily indicative of the amounts that could be realized in immediate settlement of the instrument. Certain financial instruments, particularly insurance contracts, are excluded from fair value disclosure requirements. The methods and assumptions used to estimate the fair value of financial instruments are as follows: . Fair values of fixed maturities with active markets are based on quoted market prices. For fixed maturities that trade in less active markets, fair values are obtained from independent pricing services. Fair values of fixed maturities are principally a function of current interest rates. Care should be used in evaluating the significance of these estimated market values. . Fair values of equity securities are based on quoted market prices. F-10 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) . The carrying value of short term investments approximates fair value due to the short maturities of these investments. . Fair values of policy loans and mortgage loans are estimated using discounted cash flow analyses and approximate carrying values. . The carrying value of short term debt approximates fair value due to the short maturities of the debt. The carrying value and fair value of financial instruments at December 31, 1995 are as follows:
Carrying Fair Value Value (In thousands) Assets Invested assets Fixed maturities Held-to-maturity $ 403,539 $ 434,972 Available-for-sale 2,255,951 2,255,951 Equity securities 40,208 40,208 Short term investments 55,222 55,222 Policy loans 202,705 202,705 Mortgage loans on real estate 9,634 9,634 Liabilities Short term debt 36,000 36,000
Cash Flow Information In the statement of cash flows, short term investments are not considered to be cash equivalents. Cash overdrafts are included in accrued expenses and other liabilities. The overdrafts at December 31, 1995 were $24,201,000. F-11 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 2. Invested Assets The sources of net investment income for the year ended December 31, 1995 were as follows:
(In thousands) Fixed maturities $208,598 Equity securities 3,544 Short term investments 4,536 Policy loans 14,219 Mortgage loans 1,014 Other 1,039 --------------- Gross investment income 232,950 Investment expenses 2,860 --------------- Net investment income $230,090 ===============
Realized investment gains and losses for the year ended December 31, 1995 were as follows:
(In thousands) Gross realized investment gains Fixed maturities $ 14,902 Equity securities 13,052 --------------- $ 27,954 =============== Gross realized investment losses Fixed maturities $ 4,409 Equity securities 1,737 --------------- $ 6,146 =============== Net realized investment gains Fixed maturities $ 10,493 Equity securities 11,315 --------------- $ 21,808 ===============
Proceeds from the sales of fixed maturities considered available-for-sale were $599,100,000. Gross gains of $14,902,000 and gross losses of $4,409,000 were realized on such sales in 1995. F-12 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 2. Invested Assets (continued) The components of unrealized appreciation (depreciation) of investments carried at market value at December 31, 1995 were as follows:
(In thousands) Equity securities Gross unrealized appreciation $ 6,014 Gross unrealized depreciation 135 -------------- 5,879 Fixed maturities Gross unrealized appreciation 111,324 Gross unrealized depreciation 9,276 -------------- 102,048 -------------- 107,927 Deferred policy acquisition costs adjustment (41,850) Value assigned purchased insurance in force adjustment (3,397) -------------- (45,247) Minority interest in unrealized appreciation (34) Deferred tax liability, net 21,926 -------------- $ 40,720 ==============
The changes in unrealized appreciation or depreciation of investments carried at market value for the year ended December 31, 1995 were as follows:
(In thousands) Change in unrealized appreciation of equity securities $ 913 Change in unrealized appreciation of fixed maturities 158,427 Change in deferred policy acquisition costs adjustment (65,395) Change in value assigned purchased insurance in force adjustment (6,835) -------------- 87,110 Deferred income tax 30,490 Decrease in valuation allowance (18,007) -------------- $ 74,627 ==============
The cost of equity securities was $34,329,000 at December 31, 1995. F-13 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 2. Invested Assets (continued) The amortized costs and estimated market value of fixed maturities at December 31, 1995 were as follows:
Gross Gross Estimated Amortized Unrealized Unrealized Market Cost Gains Losses Value ---------------------------------------------------- (In thousands) Held-to-maturity Tax exempt bonds $ 1,051 $ 38 $ 1,089 ---------------------------------------------------- Taxable U. S. Government and government agency and authority obligations 17,947 2,350 20,297 Corporate bonds 191,126 21,621 212,747 Foreign bonds 15,119 2,259 17,378 Mortgage-backed securities 178,296 5,211 $ 46 183,461 ---------------------------------------------------- Total taxable 402,488 31,441 46 433,883 ---------------------------------------------------- Total held-to-maturity 403,539 31,479 46 434,972 ---------------------------------------------------- Available-for-sale Taxable U. S. Government and government agency and authority obligations 191,984 6,746 3 198,727 Corporate bonds 805,768 49,752 6,794 848,726 Foreign bonds 134,224 6,847 70 141,001 Mortgage-backed securities 1,019,223 47,770 2,389 1,064,604 Redeemable preferred stocks 2,704 209 20 2,893 ---------------------------------------------------- Total available-for-sale 2,153,903 111,324 9,276 2,255,951 ---------------------------------------------------- Total fixed maturities $2,557,442 $142,803 $9,322 $2,690,923 ====================================================
At December 31, 1995, fixed maturities classified as held-to-maturity were carried at amortized cost while fixed maturities classified as available-for- sale were carried at market value. The unrealized appreciation or depreciation of fixed maturities carried at amortized cost is not reflected in the financial statements. The change in net unrealized appreciation of such fixed maturities was $46,406,000 for the year ended December 31, 1995. In December 1995, fixed maturities classified as held-to-maturity with an aggregate amortized cost of $182,820,000 and unrealized appreciation of $3,885,000 were reclassified as available-for-sale. Such reclassifications resulted from the Company's reassessment of its classifications of fixed maturities as permitted under Statement of Financial Accounting Standards (SFAS) No. 115 implementation guidance issued by the Financial Accounting Standards Board (FASB) in November 1995. F-14 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 2. Invested Assets (continued) The amortized cost and estimated market value of fixed maturities at December 31, 1995 by contractual maturity were as follows:
Held-to-Maturity Available-for-Sale --------------------------------------------------- Estimated Estimated Amortized Market Amortized Market Cost Value Cost Value --------------------------------------------------- (In thousands) Due in one year or less $ 10,765 $ 11,170 $ 17,371 $ 17,765 Due after one year through five years 54,445 60,569 231,010 243,106 Due after five years through ten years 70,736 80,249 325,537 347,544 Due after ten years 89,297 99,523 560,762 582,932 --------------------------------------------------- Subtotal 225,243 251,511 1,134,680 1,191,347 Mortgage-backed securities 178,296 183,461 1,019,223 1,064,604 --------------------------------------------------- $403,539 $434,972 $2,153,903 $2,255,951 ===================================================
Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. 3. Deferred Policy Acquisition Costs and Value Assigned Purchased Insurance In Force Policy acquisition costs deferred and the related amortization charged to income for the year ended December 31, 1995 were as follows:
(In thousands) Balance, beginning of year $558,345 Cost deferred during year 155,903 Amortization during year (73,239) Change in adjustment to reflect the effects of unrealized appreciation of investments (65,395) --------------- Balance, end of year $575,614 ===============
F-15 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 3. Deferred Policy Acquisition Costs and Value Assigned Purchased Insurance In Force (continued) Changes in the value assigned purchased insurance in force for the year ended December 31, 1995 were as follows:
(In thousands) Balance, beginning of year $48,148 Accrued interest 3,603 Amortization (7,821) Change in adjustment to reflect the effects of unrealized appreciation of investments (6,835) --------------- Balance, end of year $37,095 ===============
The estimated net amortization of the value assigned purchased insurance in force is as follows:
(In thousands) Year Ending December 31: 1996 $ 3,904 1997 3,664 1998 3,338 1999 2,865 2000 2,510 Subsequent to 2000 20,814 --------------- $37,095 ===============
4. Federal Income Taxes Federal income tax provisions for the year ended December 31, 1995 have been computed using the tax rates and regulations in effect during the year. The provision for federal income tax gives effect to permanent differences between financial and taxable income. Accordingly, the effective tax rate is less than the statutory federal corporate tax rate. The reasons for the lower effective tax rate were as follows:
(In thousands) Tax at statutory federal income tax rate (35%) $21,738 Dividends received deduction and tax exempt income (1,469) Amortization of goodwill 394 Foreign taxes (620) Other 814 --------------- Federal income tax expense $20,857 ===============
F-16 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 4. Federal Income Taxes (continued) The tax effects of temporary differences that gave rise to deferred income tax liabilities and assets at December 31, 1995 were as follows:
(In thousands) Deferred income tax liabilities: Deferred policy acquisition costs $155,594 Value assigned purchased insurance in force 19,365 Unrealized appreciation in investments 43,842 Other 7,113 --------------- Total 225,914 Deferred income tax assets: Future policy benefits and policy fund balances 147,284 Postretirement benefits 8,146 --------------- Total 155,430 --------------- Net deferred income tax liabilities $ 70,484 ===============
Prior to 1984, life insurance companies were allowed certain special deductions for federal income tax purposes which could become subject to tax at normal rates under certain circumstances, including distribution to shareholders. These special deductions were set aside in a Policyholders' Surplus Account. Under the 1984 Act, no further additions to this account are permitted. At December 31, 1995, approximately $13,464,000 of untaxed retained earnings remained. No income taxes have been provided since management does not anticipate any transaction that would cause this remaining amount to become taxable. The unrecognized deferred tax related to the Policyholders' Surplus Account is $4,712,000. Federal income taxes paid in 1995 were $26,456,000. 5. Pensions and Other Postretirement Benefits The Company has several noncontributory defined benefit pension plans covering substantially all employees. The benefits are generally based on an employee's years of service and average compensation during the last five years of employment. Pension costs are determined using the projected unit credit method. The Company's policy is to make annual contributions that meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974. Contributions are intended to provide not only for benefits attributed to service but also for those expected to be earned in the future. F-17 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 5. Pensions and Other Postretirement Benefits (continued) The components of net pension cost for the year ended December 31, 1995 were as follows:
(In thousands) Service cost of current period $ 3,510 Interest cost on projected benefit obligation 5,687 Actual return on plan assets (6,286) Net amortization and deferral (152) ----------------- Net pension cost $ 2,759 =================
During 1995, the Company recognized a net curtailment gain of $3,058,000 resulting from workforce reductions. This gain is primarily due to the reduction of the projected benefit obligation associated with severed employees' pension benefits offset by the recognition of the prior service costs related to those employees. The following table sets forth the plans' funded status and amounts recognized in the balance sheet at December 31, 1995:
(In thousands) Actuarial present value of benefit obligations for service rendered to date: Accumulated benefit obligations, including vested benefits of $61,983 $64,472 Additional amount related to projected future salary increases 16,303 ---------------- Projected benefit obligation for service rendered to date 80,775 Plan assets at fair value 80,694 ---------------- Projected benefit obligation in excess of plan assets 81 Unrecognized net gain from past experience different from that assumed 7,230 Unrecognized prior service cost (2,499) Unrecognized net obligation at January 1, 1986 being recognized over thirteen years 890 ---------------- Pension liability included in other liabilities $ 5,702 ================
The weighted average discount rate used in determining the actuarial present value of the projected benefit obligations at December 31, 1995 was 7 1/2% and the rate of increase in future compensation levels was 6%. The expected long- term rate of return on assets was 9%. Plan assets are principally invested in publicly traded stocks and bonds. The Company provides certain other postretirement benefits, principally health care and life insurance, to retired employees and their beneficiaries and covered dependents. Substantially all employees may become eligible for these benefits upon retirement if they meet minimum age and years of service requirements. F-18 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 5. Pensions and Other Postretirement Benefits (continued) The Company does not fund these benefits in advance. Benefits are paid as covered expenses are incurred. Health care coverage is contributory. Retiree contributions vary based upon a retiree's age, type of coverage and years of service with the Company. Life insurance coverage is noncontributory. The components of net postretirement benefit cost for the year ended December 31, 1995 were as follows:
(In thousands) Service cost of current period $1,095 Interest cost on projected benefit obligation 1,540 --------------- Net postretirement benefit cost $2,635 ===============
During 1995, the Company recognized a net curtailment gain of $1,243,000 resulting from workforce reductions. This gain is primarily due to the reduction of the accumulated postretirement benefit obligation associated with severed employees' other postretirement benefits. The components of the accumulated postretirement benefit obligation at December 31, 1995 were as follows:
(In thousands) Retirees $ 9,392 Fully eligible active plan participants 1,310 Other active plan participants 11,139 --------------- Accumulated postretirement benefit obligation 21,841 Unrecognized net gain from past experience different from that assumed 1,066 --------------- Postretirement benefit liability included in other liabilities $22,907 ===============
The weighted average discount rate used in determining the actuarial present value of the accumulated postretirement benefit obligation at December 31, 1995 was 7 1/2%. The health care cost trend rate used to measure the accumulated postretirement cost for medical benefits is 11 1/2% for 1996. The rate is assumed to decrease gradually to 7 1/2% for the year 2005 and remain at that level thereafter. The health care cost trend rate assumption has a significant effect on the amount of the accumulated postretirement benefit obligation and the net postretirement benefit cost reported. To illustrate, a one percent increase in the trend rate for each year would increase the accumulated postretirement benefit obligation at December 31, 1995 by $2,796,000 and the aggregate of the service and interest cost components of net postretirement benefit cost for the year ended December 31, 1995 by $377,000. F-19 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 6. Stock Ownership and Incentive Plans Substantially all of the Company's employees are eligible to participate in the stock ownership and incentive plans of the Parent. The aggregate costs associated with the plans were approximately $4,365,000 for the year ended December 31, 1995. 7. Rent Expense and Commitments The Company occupies office facilities under lease agreements which expire at various dates through 2009; such leases generally are renewed or replaced by other leases. In addition, the Company leases office and transportation equipment. Total rent expense charged to operations amounted to approximately $5,560,000 for 1995. All leases are operating leases and generally contain renewal options. At December 31, 1995, future minimum rental payments required under noncancellable operating leases were as follows:
(In thousands) Year Ending December 31: 1996 $ 4,016 1997 3,264 1998 2,510 1999 1,946 2000 1,592 Subsequent to 2000 7,817 ----------------- $21,145 =================
F-20 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 8. Reinsurance The Company is involved in both the cession and assumption of reinsurance with other insurance companies. Risks are reinsured with other companies to permit the recovery of a portion of the direct losses. Sovereign had a reinsurance recoverable resulting from a reinsurance agreement with a single reinsurer of $101,656,000 at December 31, 1995. Sovereign coinsured fifty percent of a block of single premium whole life policies under this agreement. Sovereign and the reinsurer are joint and equal owners in securities and short-term investments of $193,146,000 at December 31, 1995. The remaining reinsurance recoverables were associated with numerous other reinsurers. The maximum amount of individual life insurance retained on any one life, including accidental death benefits, is $1,400,000. The effect of reinsurance on the premiums and policy charges in the consolidated statement of income for the year ended December 31, 1995 was as follows:
Ceded to Assumed Direct Other from Other Net Amount Companies Companies Amount ------------------------------------------------- (In thousands) Premiums Earned and Policy Charges for the year: Life Insurance $332,968 $20,740 $1,766 $313,994 Accident and Health Insurance 319,067 10,124 308,943 ------------------------------------------------- Total Premiums and Policy Charges $652,035 $30,864 $1,766 $622,937 =================================================
Reinsurance recoveries which have been deducted from benefits, claims and expenses in the consolidated statement of income was $50,537,000 in 1995. F-21 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 9. Accident and Health Unpaid Claims The process of estimating loss reserves is an imprecise science and reflects significant judgmental factors. Management considers facts currently known and the present state of health care markets in which it operates when establishing accident and health claim reserves. Management believes that the aggregate claim liabilities at December 31, 1995 are adequate to cover claims for losses which have occurred, including both those known and those yet to be reported. However, changes in market conditions may require additional increases in claim reserves which may adversely affect results in future periods. This emergence cannot be precisely estimated. A reconciliation of the beginning and ending liability for accident and health unpaid claims, net of reinsurance recoverable, and a reconciliation of the net liability to the corresponding liability on a gross basis at December 31, 1995 is as follows:
(In thousands) Gross liability at beginning of year $105,075 Less: reinsurance recoverable 1,545 --------------- Net liability at beginning of year 103,530 Incurred: Current year 240,306 Prior years (11,773) --------------- Total incurred 228,533 Paid: Current year 190,760 Prior years 78,771 --------------- Total Paid 269,531 --------------- Net liability at end of year 62,532 Plus: reinsurance recoverable 1,650 --------------- Gross liability at end of year $ 64,182 ===============
During 1995, the accident and health business experienced overall favorable development of $11,773,000 on claim reserves established as of the previous year end. This difference has been reflected in operating results. Claims settlement costs are not developed as part of the claim liability and are reflected in operating results in the years the claims are paid. F-22 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 10. Dividend Restrictions The Company and its insurance subsidiaries are required to file annual statements with state insurance regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). For such subsidiaries, GAAP differs in certain respects from statutory accounting practices. A comparison of shareholder's equity on a GAAP basis and policyholders' surplus on a statutory basis at December 31, 1995 is as follows:
(In thousands) GAAP $844,645 Statutory 317,624
A comparison of GAAP and statutory net income for the year ended December 31, 1995 is as follows:
(In thousands) GAAP $ 42,216 Statutory 26,828
The amount of GAAP surplus in excess of statutory surplus is unavailable for distribution. In addition, various state insurance laws restrict the Company and its insurance subsidiaries as to the amount of dividends from statutory surplus they may pay without the prior approval of regulatory authorities. The restrictions generally are based on net gains from operations and on certain levels of policyholders' surplus as determined in accordance with statutory accounting practices. Dividends in excess of such thresholds are considered "extraordinary" and require prior regulatory approval. The maximum ordinary dividend distribution that may be made by the Company to the Parent during 1996 is approximately $31,700,000. F-23 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 11. Debt and Credit Arrangements (a) Short term debt at December 31, 1996 consisted of the following:
(In thousands) Commercial paper $26,000 Notes 10,000 --------------- $36,000 ===============
The short term commercial paper was issued by Chubb Capital Corporation, a subsidiary of the Parent. The interest rate is variable and is based on Chubb Capital Corporation's cost of funds. Interest paid on the borrowings in 1995 was $1,559,000. In addition, the Company has a loan agreement with a bank providing for a line of credit of $36,000,000 at a variable interest rate. There were $10,000,000 in borrowings against this line of credit at December 31, 1995. Interest paid on these borrowings was $683,000 in 1995. (b) Long term debt consisted of the following: A mortgage loan payable, which is secured by a portion of the Company's home office property in Concord, New Hampshire, bears interest at 11 3/8% and is payable monthly through December 2000. Debt maturities of the mortgage loan payable are as follows:
(In thousands) Year Ending December 31: 1996 $ 843 1997 944 1998 1,057 1999 1,184 2000 1,184 --------------- $5,212 ===============
Interest paid on the mortgage loan in 1995 was $640,000. F-24 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 12. Business Segments The Company is principally engaged in the sale of individual and group life and health insurance products. These products are marketed primarily through personal producing general agents and brokers throughout the United States. Insurance revenues, net investment income and earnings before federal income taxes for the year ended December 31, 1995 for each class of business were as follows:
(In thousands) Revenues: Individual insurance: Premiums and policy charges $311,275 Investment income 222,947 Group insurance: Premiums 311,662 Investment income 7,143 Earnings (loss) before federal income taxes and minority interest: Individual insurance 55,546 Group insurance (15,246) Realized gains 21,808 -------------- $ 62,108 ==============
It is not practicable to determine identifiable assets and capital expenditures applicable to the foregoing classes of business. Earnings before federal income taxes by class of business reflect allocations of investment income and significant expenses using allocation methods deemed to be reasonable. Other acceptable allocation methods could produce different results by groupings of classes of business. F-25 Chubb Life Insurance Company of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 13. Accounting Pronouncements Not Yet Adopted In March 1995, the FASB issued SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The Statement establishes accounting standards for the impairment of long-lived assets, certain identifiable intangibles, and goodwill related to those assets. Under SFAS No. 121, an impairment loss is recognized if the sum of the undiscounted expected future cash flows is less than the carrying amount of the asset. Measurement of impairment should be based on the fair value of the asset. SFAS No. 121 is effective for years beginning after December 15, 1995. Restatement of prior years' financial statements is not permitted. The company will adopt SFAS No. 121 in the first quarter of 1996. The adoption is not expected to have a significant impact on net income in 1996. 14. Litigation The Company is involved in pending or threatened lawsuits arising from the normal conduct of its insurance business. Several suits have been brought against the Company seeking both punitive and compensatory damages. Management is of the opinion that these suits are substantially without merit, that valid defenses exist, and that such litigation will not have a material effect on the consolidated financial statements. F-26 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Contractholders Chubb Separate Account A We have audited the accompanying statement of assets and liabilities of Chubb Separate Account A (the "Separate Account", comprising respectively, the World Growth Stock Division, Money Market Division, Gold Stock Division, Domestic Growth Stock Division, Bond Division, Growth and Income Division, Capital Growth Division, Balanced Division, Emerging Growth Division, and Templeton Division) as of December 31, 1995, and the related statements of operations and changes in net assets for each of the three years in the period then ended, except for the Emerging Growth Division and Templeton Division, for which the statement of operations and statement of changes in net assets are for the period from May 1, 1995 (Commencement of Operations) to December 31, 1995. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 1995, by correspondence with the applicable fund. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective divisions constituting the Chubb Separate Account A at December 31, 1995, the results of their operations and the changes in their net assets for each of the periods indicated above, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Boston, Massachusetts March 8, 1996 F-27
STATEMENT OF ASSETS AND LIABILITIES Chubb Separate Account A December 31, 1995 World Domestic Growth Money Gold Growth Stock Market Stock Stock Bond Division Division Division Division Division -------- -------- -------- -------- -------- ASSETS Investments at cost $ 64,572,886 $ 8,550,714 $ 6,331,508 $ 41,547,976 $ 9,070,739 ============== ============== ============== ============== ============== Investments at market value $ 73,692,356 $ 8,312,676 $ 6,867,645 $ 48,517,886 $ 9,230,090 Accrued investment income 3,151,912 401,686 37,521 6,058,448 644,900 Net premiums receivable (payable) 82,795 84,344 (13,694) 63,628 836 -------------- -------------- -------------- -------------- -------------- 76,927,063 8,798,706 6,891,472 54,639,962 9,875,826 Amounts receivable (payable) for units purchased/(redeemed) (75,619) 0 24,036 (116,093) 0 -------------- -------------- -------------- -------------- -------------- TOTAL NET ASSETS $ 76,851,444 $ 8,798,706 $ 6,915,508 $ 54,523,869 $ 9,875,826 ============== ============== ============== ============== ============== NET ASSET DISTRIBUTION Ensemble $ 1,822,626 $ 68,283 $ 185,468 $ 824,059 $ 26,004 Ensemble II 75,028,818 8,730,423 6,730,040 53,699,810 9,849,822 -------------- -------------- -------------- -------------- -------------- TOTAL NET ASSETS $ 76,851,444 $ 8,798,706 $ 6,915,508 $ 54,523,869 $ 9,875,826 ============== ============== ============== ============== ============== UNITS OUTSTANDING Ensemble 59,238 4,305 11,251 25,007 1,335 Ensemble II 2,501,941 565,033 418,966 1,673,054 518,907 NET ASSET VALUE PER UNIT Ensemble $ 30.77 $ 15.86 $ 16.48 $ 32.95 $ 19.48 Ensemble II 29.99 15.45 16.06 32.10 18.98 Growth Capital Emerging and Income Growth Balanced Growth Templeton Division Division Division Division Division -------- -------- -------- -------- -------- ASSETS Investments at cost $ 11,461,493 $ 40,073,244 $ 13,528,866 $ 6,984,520 $ 7,330,508 ============== ============== ============== ============== ============== Investments at market value $ 12,787,993 $ 49,618,795 $ 14,328,207 $ 7,443,430 $ 7,687,549 Accrued investment income 514,460 4,538,514 1,226,042 0 0 Net premiums receivable (payable) 54,085 109,930 6,939 253,069 9,253 -------------- -------------- -------------- -------------- -------------- 13,356,538 54,267,239 15,561,188 7,696,499 7,696,802 Amounts receivable (payable) for units purchased/(redeemed) (30,931) (131,600) 224 (109,157) 0 -------------- -------------- -------------- -------------- -------------- TOTAL NET ASSETS $ 13,325,607 $ 54,135,639 $ 15,561,412 $ 7,587,342 $ 7,696,802 ============== ============== ============== ============== ============== NET ASSET DISTRIBUTION Ensemble Ensemble II $ 13,325,607 $ 54,135,639 $ 15,561,412 $ 7,587,342 $ 7,696,802 -------------- -------------- -------------- -------------- -------------- TOTAL NET ASSETS $ 13,325,607 $ 54,135,639 $ 15,561,412 $ 7,587,342 $ 7,696,802 ============== ============== ============== ============== ============== UNITS OUTSTANDING Ensemble Ensemble II 841,523 2,588,397 1,113,152 575,117 691,356 NET ASSET VALUE PER UNIT Ensemble Ensemble II $ 15.84 $ 20.91 $ 13.98 $ 13.19 $ 11.13
See notes to financial statements. F-28
STATEMENTS OF OPERATIONS Chubb Separate Account A World Growth Stock Division --------------------------------------- Year Ended December 31, 1995 1994 1993 ------------------------------------------ Investment Income: Dividend income $ 1,504,890 $ 677,535 $ 445,539 Distributions of realized gains 1,647,022 2,617,290 2,339,067 -------------- -------------- ------------ 3,151,912 3,294,825 2,784,606 Expenses: Mortality and expense risk charge 607,380 432,600 274,208 -------------- -------------- ------------ Net Investment Income (Loss) 2,544,532 2,862,225 2,510,398 -------------- -------------- ------------ Gain (loss) on investments: Net realized gain (loss) on investments 1,175,160 920,083 115,190 Change in net unrealized gain (loss) on investments 6,318,978 (6,066,376) 6,509,695 -------------- -------------- ------------ Net gain (loss) on investments 7,494,138 (5,146,293) 6,624,885 -------------- -------------- ------------ Increase (Decrease) in Net Assets from Operations $ 10,038,670 $ (2,284,068) $ 9,135,283 ============== ============== ============ Money Market Division ------------------------------------------ Year Ended December 31, 1995 1994 1993 ------------------------------------------ Investment Income: Dividend Income $ 401,686 $ 227,166 $ 70,112 Distributions of realized gains 0 0 20 -------------- -------------- ------------ 401,686 227,166 70,132 Expenses: Mortality and expense risk charge 70,796 58,706 24,612 -------------- -------------- ------------ Net Investment Income (Loss) 330,890 168,460 45,520 -------------- -------------- ------------ Gain (loss) on investments: Net realized gain (loss) on investments 118,929 49,632 (11,509) Change in net unrealized gain (loss) on investments (132,246) (57,699) 5,734 -------------- -------------- ------------ Net gain (loss) on investments (13,317) (8,067) (5,775) -------------- -------------- ------------ Increase (Decrease) in Net Assets from Operations $ 317,573 $ 160,393 $ 39,745 ============== ============== ============ Gold Stock Division --------------------------------------- Year Ended December 31, 1995 1994 1993 --------------------------------------- Investment Income: Dividend Income $ 37,550 $ 9,726 $ 5,134 Distributions of realized gains 0 39,947 0 -------------- -------------- ------------ 37,550 49,673 5,134 Expenses: Mortality and expense risk charge 67,504 58,273 38,685 -------------- -------------- ------------ Net Investment Income (Loss) (29,954) (8,600) (33,551) -------------- -------------- ------------ Gain (loss) on investments: Net realized gain (loss) on investments 172,991 122,084 100,914 Change in net unrealized gain (loss) on investments 91,937 (1,174,863) 2,035,628 -------------- -------------- ------------ Net gain (loss) on investments 264,928 (1,052,779) 2,136,542 -------------- -------------- ------------ Increase (Decrease) in Net Assets from Operations $ 234,974 $ (1,061,379) $ 2,102,991 ============== ============== ============
See notes to financial statements. STATEMENTS OF OPERATIONS--(Continued) Chubb Separate Account A
Domestic Growth Stock Division --------------------------------------------------- Year Ended December 31, 1995 1994 1993 --------------------------------------------------- Investment Income: Dividend income $ 404,753 $ 180,735 $ 164,438 Distributions of realized gains 6,680,921 2,374,949 1,844,176 -------------- ------------ ------------ 7,085,674 2,555,684 2,008,614 Expenses: Mortality and expense risk charge 376,813 247,394 190,522 -------------- ------------ ------------ Net Investment Income (Loss) 6,708,861 2,308,290 1,818,092 -------------- ------------ ------------ Gain (loss) on investments: Net realized gain (loss) on investments 194,361 358,705 317,906 Change in net unrealized gain (loss) on investments 3,886,548 (753,758) 882,353 -------------- ------------ ------------ Net gain (loss) on investments 4,080,909 (395,053) 1,200,259 -------------- ------------ ------------ Increase (Decrease) in Net Assets from Operations $ 10,789,770 $ 1,913,237 $ 3,018,351 ============== ============ ============ Bond Division --------------------------------------------------- Year Ended December 31, 1995 1994 1993 --------------------------------------------------- Investment Income: Dividend income $ 644,900 $ 420,955 $ 272,047 Distributions of realized gains 0 0 23,455 ------------ ----------- ----------- 644,900 420,955 295,502 Expenses: Mortality and expense risk charge 85,025 54,890 30,664 ------------ ----------- ----------- Net Investment Income (Loss) 559,875 366,065 264,838 ------------ ----------- ----------- Gain (loss) on investments: Net realized gain (loss) on investments 129,555 (85,477) 12,556 Change in net unrealized gain (loss) on investments 722,365 (455,167) (40,630) ------------ ----------- ----------- Net gain (loss) on investments 851,920 (540,644) (28,074) ------------ ----------- ----------- Increase (Decrease) in Net Assets from Operations $ 1,411,795 $ (174,579) $ 236,764 ============ =========== ===========
See notes to financial statements. STATEMENTS OF OPERATIONS--(Continued) Chubb Separate Account A
Growth and Income Division Capital Growth Division ------------------------------------ ------------------------------------------ Year Ended December 31, Year Ended December 31, 1995 1994 1993 1995 1994 1993 ------------------------------------ ------------------------------------------ Investment Income: Dividend income $ 128,853 $ 51,623 $ 15,896 $ 82,406 $ 50,583 $ 0 Distributions of realized gains 385,608 142,202 36,065 4,456,108 617,006 1,071,775 ------------ ---------- ---------- ------------- ------------ ------------ 514,461 193,825 51,961 4,538,514 667,589 1,071,775 Expenses: Mortality and expense risk charge 72,581 27,333 7,723 343,782 180,001 80,813 ------------ ---------- ---------- ------------- ------------ ------------ Net Investment Income (Loss) 441,880 166,492 44,238 4,194,732 487,588 990,962 ------------ ---------- ---------- ------------- ------------ ------------ Gain (loss) on investments: Net realized gain (loss) on investments 43,900 15,866 11,603 331,997 88,882 71,362 Change in net unrealized gain (loss) on investments 1,598,713 (368,658) 73,548 9,191,593 (1,243,197) 1,148,856 ------------ ---------- ---------- ------------- ------------ ------------ Net gain (loss) on investments 1,642,613 (352,792) 85,151 9,523,590 (1,154,315) 1,220,218 ------------ ---------- ---------- ------------- ------------ ------------ Increase (Decrease) in Net Assets from Operations $ 2,084,493 $ (186,300) $ 129,389 $ 13,718,322 $ (666,727) $ 2,211,180 ============ ========== ========== ============= ============ ============ Balanced Division ------------------------------------------- Year Ended December 31, 1995 1994 1993 ------------------------------------------- Investment Income: Dividend income $ 448,590 $ 275,218 $ 134,116 Distributions of realized gains 831,663 93,822 98,843 ----------- ----------- ---------- 1,280,253 369,040 232,959 Expenses: Mortality and expense risk charge 110,589 67,423 33,205 ----------- ----------- ---------- Net Investment Income (Loss) 1,169,664 301,617 199,754 ----------- ----------- ---------- Gain (loss) on investments: Net realized gain (loss) on investments 56,294 (8,145) 7,374 Change in net unrealized gain (loss) on investments 1,204,925 (456,921) 28,107 ----------- ----------- ---------- Net gain (loss) on investments 1,261,219 (465,066) 35,481 ----------- ----------- ---------- Increase (Decrease) in Net Assets from Operations $ 2,430,883 $ (163,449) $ 235,235 =========== =========== ==========
See notes to financial statements F-31 STATEMENTS OF OPERATIONS--(Continued) Chubb Separate Account A
Emerging Growth Templeton Division Division ------------ ------------ Period from Period from May 1, 1995(a) May 1, 1995(a) to to December 31, December 31, 1995 1995 ------------ ------------ Investment Income: Dividend income $ 0 $ 0 Distributions of realized gains 0 0 ------------- ------------ 0 0 Expenses: Mortality and expense risk charge 11,735 28,459 ------------- ------------ Net Investment Income (Loss) (11,735) (28,459) ------------- ------------ Gain (loss) on investments: Net realized gain (loss) on investments 17,701 316,398 Change in net unrealized gain (loss) on investments 458,910 357,041 ------------- ------------ Net gain (loss) on investments 476,611 673,439 ------------- ------------ Increase (Decrease) in Net Assets from Operations $ 464,876 $ 644,980 ============ ============ (a) Commencement of Operations
See notes to financial statements STATEMENTS OF CHANGES IN NET ASSETS Chubb Separate Account A
World Growth Stock Division Money Market Division ------------------------------------------ ------------------------------------------ Year Ended December 31, Year Ended December 31, 1995 1994 1993 1995 1994 1993 ------------------------------------------ ------------------------------------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 2,544,532 $ 2,862,225 $ 2,510,398 $ 330,890 $ 168,460 $ 45,520 Net realized gain(loss) on investments 1,175,160 920,083 115,190 118,929 49,632 (11,509) Change in net unrealized gain (loss) on investments 6,318,978 (6,066,376) 6,509,695 (132,246) (57,699) 5,734 ------------- ------------ ------------ ------------ ------------ ------------ Increase (decrease) in net assets from operations 10,038,670 (2,284,068) 9,135,283 317,573 160,393 39,745 Contractholder transactions--Note D: Transfers of net premiums 22,926,705 20,141,970 10,534,248 4,965,203 6,850,296 2,446,574 Transfers from/to General Account and within Separate Account, net (1,635,218) 2,759,340 2,603,096 (2,593,015) (2,828,836) (959,494) Transfers of cost of insurance (6,834,515) (5,259,191) (3,317,866) (714,793) (694,325) (339,479) Transfers on account of death (79,684) (63,356) (111,354) (2,545) (2,492) (2,759) Transfers on account of other terminations (2,840,771) (2,139,221) (1,077,794) (126,066) (145,435) (126,541) ------------- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets derived from contractholder transactions 11,536,517 15,439,542 8,630,330 1,528,784 3,179,208 1,018,301 ------------- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 21,575,187 13,155,474 17,765,613 1,846,357 3,339,601 1,058,046 Balance at beginning of year 55,276,257 42,120,783 24,355,170 6,952,349 3,612,748 2,554,702 ------------- ------------ ------------ ------------ ------------ ------------ Balance at end of year $ 76,851,444 $ 55,276,257 $ 42,120,783 $ 8,798,706 $ 6,952,349 $ 3,612,748 ============= ============ ============ ============ ============ ============ Gold Stock Division ------------------------------------------- Year Ended December 31, 1995 1994 1993 ------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ (29,954) $ (8,600) $ (33,551) Net realized gain(loss) on investments 172,991 122,084 100,914 Change in net unrealized gain (loss) on investments 91,937 (1,174,863) 2,035,628 ------------ ------------ ----------- Increase (decrease) in net assets from operations 234,974 (1,061,379) 2,102,991 Contractholder transactions--Note D: Transfers of net premiums 2,002,953 1,974,134 972,208 Transfers from/to General Account and within Separate Account, net (360,212) 112,918 292,134 Transfers of cost of insurance (720,341) (635,612) (435,879) Transfers on account of death (10,951) (6,286) (10,117) Transfers on account of other terminations (324,994) (194,112) (168,171) ------------ ------------ ----------- Net increase (decrease) in net assets derived from contractholder transactions 586,455 1,251,042 650,175 ------------ ------------ ----------- Net increase (decrease) in net assets 821,429 189,663 2,753,166 Balance at beginning of year 6,094,079 5,904,416 3,151,250 ------------ ------------ ----------- Balance at end of year $ 6,915,508 $ 6,094,079 $ 5,904,416 ============ ============ ===========
See notes to financial statements. F-33 STATEMENTS OF CHANGES IN NET ASSETS--(Continued) Chubb Separate Account A
Domestic Growth Stock Division Bond Division ------------------------------------------ ------------------------------------------ Year Ended December 31, Year Ended December 31, 1995 1994 1993 1995 1994 1993 ------------------------------------------ ------------------------------------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 6,708,861 $ 2,308,290 $ 1,818,092 $ 559,875 $ 366,065 $ 264,838 Net realized gain(loss) on investments 194,361 358,705 317,906 129,555 (85,477) 12,556 Change in net unrealized gain (loss) on investments 3,886,548 (753,758) 882,353 722,365 (455,167) (40,630) ------------- ------------ ------------ ------------ ------------ ------------ Increase (decrease) in net assets from operations 10,789,770 1,913,237 3,018,351 1,411,795 (174,579) 236,764 Contractholder transactions--Note D: Transfers of net premiums 12,662,001 9,425,716 6,002,095 2,904,776 3,028,438 1,613,176 Transfers from/to General Account and within Separate Account, net 4,798,054 166,220 (342,435) (5,156,597) 6,076,841 29,095 Transfers of cost of insurance (4,118,433) (2,925,627) (2,247,238) (918,529) (704,857) (452,925) Transfers on account of death (63,789) (55,379) (66,057) (2,860) (21,087) (2,333) Transfers on account of other terminations (1,771,658) (1,059,998) (844,370) (436,792) (216,561) (191,483) ------------- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets derived from contractholder transactions 11,506,175 5,550,932 2,501,995 (3,610,002) 8,162,774 995,530 ------------- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 22,295,945 7,464,169 5,520,346 (2,198,207) 7,988,195 1,232,294 Balance at beginning of year 32,227,924 24,763,755 19,243,409 12,074,033 4,085,838 2,853,544 ------------- ------------ ------------ ------------ ------------ ------------ Balance at end of year $ 54,523,869 $ 32,227,924 $ 24,763,755 $ 9,875,826 $ 12,074,033 $ 4,085,838 ============= ============ ============ ============ ============ ============
See notes to financial statements. F-34 STATEMENTS OF CHANGES IN NET ASSETS--(Continued) Chubb Separate Account A
Growth and Income Division Capital Growth Division ----------------------------------------- ----------------------------------------- Year Ended December 31, Year Ended December 31, 1995 1994 1993 1995 1994 1993 ----------------------------------------- ----------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 441,880 $ 166,492 $ 44,238 $ 4,194,732 $ 487,588 $ 990,962 Net realized gain(loss) on investments 43,900 15,866 11,603 331,997 88,882 71,362 Change in net unrealized gain (loss) on investments 1,598,713 (368,658) 73,548 9,191,593 (1,243,197) 1,148,856 ------------- ------------ ------------ ------------ ------------ ------------ Increase (decrease) in net assets from operations 2,084,493 (186,300) 129,389 13,718,322 (666,727) 2,211,180 Contractholder transactions--Note D: Transfers of net premiums 3,961,606 2,429,810 1,048,058 16,405,660 12,963,387 6,951,258 Transfers from/to General Account and within Separate Account, net 3,929,594 1,285,556 263,574 3,400,177 2,594,799 2,870,910 Transfers of cost of insurance (1,064,970) (525,589) (164,878) (4,336,652) (2,783,710) (1,331,149) Transfers on account of death (3,375) (1,953) (17,451) (20,715) (8,862) Transfers on account of other terminations (161,477) (67,115) (10,981) (1,543,687) (441,447) (3,560) ------------- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets derived from contractholder transactions 6,661,378 3,120,709 1,135,773 13,908,047 12,312,314 8,478,597 ------------- ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 8,745,871 2,934,409 1,265,162 27,626,369 11,645,587 10,689,777 Balance at beginning of year 4,579,736 1,645,327 380,165 26,509,270 14,863,683 4,173,906 ------------- ------------ ------------ ------------ ------------ ------------ Balance at end of year $ 13,325,607 $ 4,579,736 $ 1,645,327 $ 54,135,639 $ 26,509,270 $ 14,863,683 ============= ============ ============ ============ ============ ============ Balanced Division ----------------------------------------- Year Ended December 31, 1995 1994 1993 ----------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ 1,169,664 $ 301,617 $ 199,754 Net realized gain(loss) on investments 56,294 (8,145) 7,374 Change in net unrealized gain (loss) on investments 1,204,925 (456,921) 28,107 ------------ ------------ ----------- Increase (decrease) in net assets from operations 2,430,883 (163,449) 235,235 Contractholder transactions--Note D: Transfers of net premiums 4,547,924 4,772,184 3,620,437 Transfers from/to General Account and within Separate Account, net 1,225,695 (49,149) 1,321,531 Transfers of cost of insurance (1,334,390) (1,065,410) (588,590) Transfers on account of death (11,992) (4,758) (6,004) Transfers on account of other terminations (684,107) (202,716) (67,106) ------------ ------------ ----------- Net increase (decrease) in net assets derived from contractholder transactions 3,743,130 3,450,151 4,280,268 ------------ ------------ ----------- Net increase (decrease) in net assets 6,174,013 3,286,702 4,515,503 Balance at beginning of year 9,387,399 6,100,697 1,585,194 ------------ ------------ ----------- Balance at end of year $ 15,561,412 $ 9,387,399 $ 6,100,697 ============ ============ ===========
See notes to financial statements. F-35 STATEMENTS OF CHANGES IN NET ASSETS--(Continued) Chubb Separate Account A
Emerging Growth Templeton Division Division --------------- --------------- Period from Period from May 1, 1995 (a) May 1, 1995 (a) to to December 31, December 31, 1995 1995 --------------- --------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss) $ (11,735) $ (28,459) Net realized gain (loss) on investments 17,701 316,398 Change in net unrealized gain (loss) on investments 458,910 357,041 ------------ ------------ Increase (decrease) in net assets from operations 464,876 644,980 Contractholder transactions--Note D: Transfers of net premiums 1,779,119 1,959,347 Transfers from/to General Account and within Separate Account, net 5,574,465 5,568,613 Transfers of cost of insurance (218,292) (361,292) Transfers on account of death 0 0 Transfers on account of other terminations (12,826) (114,846) ------------ ------------ Net increase (decrease) in net assets derived from contractholder transactions 7,122,466 7,051,822 ------------ ------------ Net increase (decrease) in net assets 7,587,342 7,696,802 Balance at beginning of period 0 0 ------------ ------------ Balance at end of period $ 7,587,342 $ 7,696,802 ============ ============ (a) Commencement of Operations
See notes to financial statements. NOTES TO FINANCIAL STATEMENTS Chubb Separate Account A December 31, 1995 NOTE A--ORGANIZATION OF ACCOUNT Chubb Separate Account A (the "Separate Account") is a separate account of Chubb Life Insurance Company of America ("Chubb Life"). The Separate Account is organized as a unit investment trust registered under the Investment Company Act of 1940 as amended. It was established for the purpose of funding flexible premium variable life insurance policies issued by Chubb Life and its predecessor and is presently comprised of ten investment divisions, nine of which invest exclusively in the corresponding portfolio of the Chubb America Fund, Inc., and one of which invests in the Templeton International Fund (individually, the "Fund",) both diversified Series Management Investment Companies. NOTE B--SIGNIFICANT ACCOUNTING POLICIES Valuation of Investments: Investments in shares of the Fund are valued at the net asset value per share which is calculated each day the New York Stock Exchange is open for trading. Investment Income: Dividend income and distributions of realized gains are recorded on the ex-dividend date. Investment Transactions: Purchases and sales of shares of the Fund are recorded as of the trade date, the date the transaction is executed. Federal Income Taxes: The operations of the Separate Account are included in the federal income tax return of Chubb Life, which is taxed as a life insurance company under the Internal Revenue Code. Under current law, no federal income taxes are payable with respect to the Separate Account. Expenses: Currently, the Separate Account contains the net assets of two variable insurance policies, Ensemble and Ensemble II. A mortality and expense risk charge payable to Chubb Life is accrued daily which will not exceed .6% and .9% of the average net asset value of each division of the Separate Account on an annual basis for Ensemble and Ensemble II, respectively. NOTE C--INVESTMENTS In determining the net realized gain or loss on sales of shares of the Fund, the cost of shares sold has been determined on an average cost basis. For federal income tax purposes, the cost of shares owned at December 31, 1995 is the same as for financial reporting purposes. Following is a summary of shares of each portfolio of the Fund owned by the respective divisions of the Separate Account and the related net asset values at December 31, 1995.
Net Asset Value Shares Per Share ------------ ------------ World Growth Stock Portfolio 3,475,276 $21.204748 Money Market Portfolio 809,271 10.271801 Gold Stock Portfolio 413,432 16.611311 Domestic Growth Stock Portfolio 2,715,671 17.865894 Bond Portfolio 871,579 10.590074 Growth and Income Portfolio 887,351 14.411428 Capital Growth Portfolio 2,855,717 17.375250 Balanced Portfolio 1,203,302 11.907408 Emerging Growth Portfolio 560,877 13.288207 Templeton Portfolio 508,081 15.130573
F-37 NOTES TO FINANCIAL STATEMENTS--Continued Chubb Separate Account A December 31, 1995 NOTE D--CONTRACTHOLDER TRANSACTIONS
Year Ended December 31, ------------------------------------------------------------------------------------- 1995 1994 1993 ----------------------- ----------------------- ----------------------- Units Amount Units Amount Units Amount -------- -------- -------- -------- -------- -------- World Growth Stock Division Issuance of units 1,715,142 $ 47,537,500 1,377,609 $ 37,060,168 773,239 $ 18,078,109 Redemptions of units 1,277,857 36,000,983 808,594 21,620,626 409,678 9,447,779 --------- ------------ --------- ------------ --------- ------------- Net Increase 437,285 $ 11,536,517 569,015 $ 15,439,542 363,561 $ 8,630,330 ========= ============ ========= ============ ========= ============= Money Market Division Issuance of units 1,688,778 $ 25,651,528 1,321,835 $ 19,333,534 386,091 $ 5,566,755 Redemptions of units 1,587,725 24,122,744 1,102,560 16,154,326 315,616 4,548,454 --------- ------------ --------- ------------ --------- ------------- Net Increase 101,053 $ 1,528,784 219,275 $ 3,179,208 70,475 $ 1,018,301 ========= ============ ========= ============ ========= ============= Gold Stock Division Issuance of units 371,551 $ 5,790,832 274,928 $ 4,678,197 157,652 $ 2,400,639 Redemptions of units 327,364 5,204,377 208,547 3,427,155 115,710 1,750,464 --------- ------------ --------- ------------ --------- ------------- Net Increase 44,187 $ 586,455 66,381 $ 1,251,042 41,942 $ 650,175 ========= ============ ========= ============ ========= ============= Domestic Growth Stock Division Issuance of units 917,824 $ 26,054,533 684,179 $ 16,392,246 446,316 $ 9,695,252 Redemptions of units 509,915 14,548,358 451,695 10,841,314 332,640 7,193,257 --------- ------------ --------- ------------ --------- ------------- Net Increase 407,909 $ 11,506,175 232,484 $ 5,550,932 113,676 $ 2,501,995 ========= ============ ========= ============ ========= ============= Bond Division Issuance of units 672,153 $ 11,914,386 923,962 $ 15,280,183 153,322 $ 2,540,124 Redemptions of units 887,866 15,524,388 429,173 7,117,409 93,569 1,544,594 --------- ------------ --------- ------------ --------- ------------- Net (Decrease)Increase (215,713) $ (3,610,002) 494,789 $ 8,162,774 59,753 $ 995,530 ========= ============ ========= ============ ========= ============= Growth and Income Division Issuance of units 730,636 $ 10,587,371 389,096 $ 4,814,715 143,727 $ 1,692,805 Redemptions of units 271,957 3,925,993 136,796 1,694,006 47,543 557,032 --------- ------------ --------- ------------ --------- ------------- Net Increase 458,679 $ 6,661,378 252,300 $ 3,120,709 96,184 $ 1,135,773 ========= ============ ========= ============ ========= ============= Capital Growth Division Issuance of units 1,825,698 $ 31,919,956 1,444,217 $ 21,619,453 946,298 $ 12,872,580 Redemptions of units 1,017,713 18,011,909 620,968 9,307,139 321,386 4,393,983 --------- ------------ --------- ------------ --------- ------------- Net Increase 807,985 $ 13,908,047 823,249 $ 12,312,314 624,912 $ 8,478,597 ========= ============ ========= ============ ========= ============= Balanced Division Issuance of units 763,616 $ 9,631,633 671,716 $ 7,809,794 522,202 $ 6,018,128 Redemptions of units 464,695 5,888,503 374,938 4,359,643 150,352 1,737,860 --------- ------------ --------- ------------ --------- ------------- Net Increase 298,921 $ 3,743,130 296,778 $ 3,450,151 371,850 $ 4,280,268 ========= ============ ========= ============ ========= =============
F-38 NOTES TO FINANCIAL STATEMENTS--Continued Chubb Separate Account A December 31, 1995 NOTE D--CONTRACTHOLDER TRANSACTIONS
For the period May 1, 1995(a) to December 31, 1995 -------------------------------------------------- ---------- ---------- Units Amount ---------- ---------- Emerging Growth Division Issuance of units 718,606 $ 8,905,329 Redemptions of units 143,489 1,782,863 --------- ------------ Net Increase 575,117 $ 7,122,466 ========= ============ Templeton Division Issuance of units 1,977,300 $ 20,880,595 Redemptions of units 1,285,944 13,828,773 --------- ------------ Net Increase 691,356 $ 7,051,822 ========= ============
(a) Commencement of Operations F-39 APPENDIX A ILLUSTRATIONS OF ACCUMULATION VALUES CASH VALUES AND DEATH BENEFITS Following are a series of tables that illustrate how the accumulation values, cash values and death benefits of a policy change with the investment performance of the Portfolios. The tables show how the accumulation values, cash values and death benefits of a Policy issued to an insured of a given age and given premium would vary over time if the return on the assets held in each Portfolio were a constant gross, after tax annual rate of 0%, 4%, and 12%. The tables on pages A-2 through A-7 illustrate a Policy issued to a male, age 40, under a standard rate non-smoker underwriting risk classification. The accumulation values, cash values and death benefits would be different from those shown if the returns averaged 0%, 4%, and 12% over a period of years, but fluctuated above and below those averages for individual policy years. The amount of the accumulation value exceeds the cash value during the first ten policy years due to the surrender charge. For policy years eleven and after, the accumulation value and cash value are equal, since the surrender charge has been reduced to zero. The second column shows the accumulation value of the premiums paid at the stated interest rate. The third and sixth columns illustrate the accumulation values and the fourth and seventh columns illustrate the cash values of the Policy over the designated period. The accumulation values shown in the third column and the cash values shown in the fourth column assume the monthly charge for cost of insurance is based upon the current cost of insurance rates as discounted. The current cost of insurance rates are based on the sex, issue age, policy year, rating class of the Insured, and the Specified Amount of the Policy. The accumulation values shown in the sixth column and the cash values shown in the seventh column assume the monthly charge for cost of insurance is based upon the maximum cost of insurance rates allowable, which are based on the Commissioner's 1980 Standard Ordinary Mortality Table. The current cost of insurance rates are different for Specified Amounts below $100,000 and above $249,999; therefore, the values shown would change for Specified Amounts below $100,000 and above $249,999. The fifth and eighth columns illustrate the death benefit of a Policy over the designated period. The illustrations of death benefits reflect the same assumptions as the accumulation values and cash values. The death benefit values also vary between tables, depending upon whether Option I or Option II death benefits are illustrated. The amounts shown for the death benefit, accumulation values, and cash values reflect the fact that the net investment return of the divisions of Separate Account A is lower than the gross return on the assets in the Portfolios, as a result of expenses paid by the Portfolios and charges levied against the divisions of Separate Account A. The policy values shown take into account a daily investment advisory fee equivalent to the maximum annual rate of .66% of the aggregate average daily net assets of the Portfolios plus a charge of .17% of the aggregate average daily net assets to cover estimated expenses to be incurred by the Emerging Growth Portfolio and actual expenses incurred by the remaining nine Portfolios for the twelve months ended December 31, 1995. The .66% investment advisory fee is the average of the individual investment advisory fees of the thirteen Portfolios. The .17% expense figure is based on a weighted average utilizing actual average net assets for the Chubb America Fund Portfolio and the Templeton International Fund and estimated average net assets for the VIP and VIP II Portfolio A anticipated for the period ending December 31, 1996. Expenses for the Templeton International Fund, High Income Portfolio, Index 500 Portfolio and Contrafund Portfolio, were provided by the investment manager for these portfolios and Chubb Life has not independently verified such information. The policy values also take into account a daily charge to each division of Separate Account A for assuming mortality and expense risks which is equivalent to a charge at an annual rate of .90% of the average net assets of the divisions of Separate Account B. After deduction of these amounts, the illustrated gross investment rates of 0%, 4%, and 12% correspond to approximate net annual rates of -1.75%, 2.27% and 10.27%, respectively. The hypothetical values shown in the tables do not reflect any charges for federal income taxes or other taxes against Separate Account A since Chubb Life is not currently making such charges. However, if, in the future, such charges are made, the gross annual investment rate of return would have to exceed the stated investment rates by a sufficient amount to cover the tax charges in order to produce the accumulation values, cash values and death benefits illustrated. The tables illustrate the policy values that would result based on hypothetical investment rates of return if premiums are paid in full at the beginning of each year, if all net premiums are allocated to Separate Account B, and if no policy loans have been made. The values would vary from those shown if the assumed annual premium payments were paid in installments during a year. The values would also vary if the policyowner varied the amount or frequency of premium payments. The tables also assume that the policyowner has not requested an increase or decrease in Specified Amount, that no withdrawals have been made and no surrender charges imposed, and that no transfers have been made and no transfer charges imposed. Upon request, Chubb Life will provide, without charge, a comparable illustration based upon the proposed insured's age, sex and rating class, the face amount requested, the proposed frequency and amount of premium payments and any available riders requested. Existing policyowners may request illustrations based on existing cash value at the time of request. Chubb Life has reserved the right to charge an administrative fee up to $25 for such illustrations. A-1 CHUBB LIFE INSURANCE COMPANY OF AMERICA FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Option I Assumed Hypothetical Gross Male Non-Smoker Issue Age 40 Annual rate of Return: 0% (-1.73% net) $100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425 Assuming Current Costs Assuming Guaranteed Costs PREMIUMS ---------------------------------------- ------------------------------------------- END ACCUMULATED OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2) ---- -------- -------- -------- ---------- -------- -------- ---------- 1 1,482 1,072 695 100,000 1,071 694 100,000 2 3,023 2,110 1,734 100,000 2,108 1,732 100,000 3 4,626 3,116 2,739 100,000 3,113 2,736 100,000 4 6,293 4,095 3,719 100,000 4,083 3,706 100,000 5 8,027 5,060 4,684 100,000 5,019 4,642 100,000 6 9,830 6,011 5,698 100,000 5,919 5,605 100,000 7 11,705 6,949 6,698 100,000 6,781 6,530 100,000 8 13,655 7,861 7,673 100,000 7,605 7,417 100,000 9 15,684 8,761 8,635 100,000 8,390 8,264 100,000 10 17,793 9,647 9,585 100,000 9,133 9,070 100,000 11 19,987 10,540 10,540 100,000 9,834 9,834 100,000 12 22,268 11,392 11,392 100,000 10,487 10,487 100,000 13 24,641 12,203 12,203 100,000 11,088 11,088 100,000 14 27,109 12,968 12,968 100,000 11,632 11,632 100,000 15 29,675 13,687 13,687 100,000 12,113 12,113 100,000 16 32,344 14,356 14,356 100,000 12,527 12,527 100,000 17 35,120 14,970 14,970 100,000 12,867 12,867 100,000 18 38,007 15,525 15,525 100,000 13,130 13,130 100,000 19 41,009 16,017 16,017 100,000 13,311 13,311 100,000 20 44,131 16,436 16,436 100,000 13,402 13,402 100,000 21 47,378 16,775 16,775 100,000 13,393 13,393 100,000 22 50,755 17,027 17,027 100,000 13,273 13,273 100,000 23 54,268 17,185 17,185 100,000 13,026 13,026 100,000 24 57,920 17,238 17,238 100,000 12,634 12,634 100,000 25 61,719 17,177 17,177 100,000 12,077 12,077 100,000 30 83,118 14,667 14,667 100,000 6,091 6,091 100,000 35 109,153 6,390 6,390 100,000 0 0 0 40 140,828 0 0 0 0 0 0 - -------------------------
(1) Assumes a $1,425 premium is paid at the beginning of each policy year. Values would be different if premiums are paid with a different frequency or in different amounts. (2) Assumes that no policy loans or withdrawals have been made. Zero values indicate lapse in the absence of an additional premium payment. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. A-2 CHUBB LIFE INSURANCE COMPANY OF AMERICA FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Option I Assumed Hypothetical Gross Male Non-Smoker Issue Age 40 Annual Rate of Return: 4% (-2.27% net) $100,000 Initial Specified Amount Assumed Annual Premiun (1): $1,425 Assuming Current Costs Assuming Guaranteed Costs PREMIUMS ----------------------------------------- --------------------------------------------- END ACCUMULATED OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2) ----- -------- -------- -------- ---------- -------- -------- ---------- 1 1,482 1,121 744 100,000 1,120 743 100,000 2 3,023 2,252 1,876 100,000 2,250 1,874 100,000 3 4,626 3,395 3,018 100,000 3,391 3,015 100,000 4 6,293 4,554 4,178 100,000 4,541 4,165 100,000 5 8,027 5,744 5,367 100,000 5,701 5,324 100,000 6 9,830 6,964 6,650 100,000 6,867 6,553 100,000 7 11,705 8,214 7,963 100,000 8,038 7,787 100,000 8 13,655 9,486 9,298 100,000 9,214 9,026 100,000 9 15,684 10,791 10,665 100,000 10,393 10,268 100,000 10 17,793 12,129 12,066 100,000 11,573 11,510 100,000 11 19,987 13,520 13,520 100,000 12,752 12,752 100,000 12 22,268 14,920 14,920 100,000 13,926 13,926 100,000 13 24,641 16,326 16,326 100,000 15,089 15,089 100,000 14 27,109 17,737 17,737 100,000 16,237 16,237 100,000 15 29,675 19,151 19,151 100,000 17,364 17,364 100,000 16 32,344 20,572 20,572 100,000 18,464 18,464 100,000 17 35,120 21,994 21,994 100,000 19,537 19,537 100,000 18 38,007 23,415 23,415 100,000 20,580 20,580 100,000 19 41,009 24,831 24,831 100,000 21,587 21,587 100,000 20 44,131 26,234 26,234 100,000 22,550 22,550 100,000 21 47,378 27,617 27,617 100,000 23,461 23,461 100,000 22 50,755 28,976 28,976 100,000 24,308 24,308 100,000 23 54,268 30,305 30,305 100,000 25,079 25,079 100,000 24 57,920 31,597 31,597 100,000 25,756 25,756 100,000 25 61,719 32,845 32,845 100,000 26,321 26,321 100,000 30 83,118 38,085 38,085 100,000 26,819 26,819 100,000 35 109,153 40,351 40,351 100,000 20,129 20,129 100,000 40 140,828 36,264 36,264 100,000 0 0 0 - ----------------------
(1) Assumes a $1,425 premium is paid at the beginning of each policy year. Values would be different if premiums are paid with a different frequency or in different amounts. (2) Assumes that no policy loans or withdrawals have been made. Zero values indicate lapse in the absence of an additional premium payment. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 4% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. A-3 CHUBB LIFE INSURANCE COMPANY OF AMERICA FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Option I Assumed Hypothetical Gross Male Non-Smoker Issue Age 40 Annual Rate of Return: 12% (10.27% net) $100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425 Assuming Current Costs Assuming Guaranteed Costs PREMIUMS ----------------------------------------- ----------------------------------------- END ACCUMULATED OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2) ---- -------- -------- -------- ---------- -------- -------- ----------- 1 1,496 1,220 843 100,000 1,219 842 100,000 2 3,067 2,549 2,173 100,000 2,547 2,170 100,000 3 4,717 4,001 3,624 100,000 3,997 3,621 100,000 4 6,449 5,594 5,217 100,000 5,580 5,203 100,000 5 8,268 7,355 6,978 100,000 7,309 6,933 100,000 6 10,177 9,302 8,989 100,000 9,198 8,884 100,000 7 12,182 11,456 11,205 100,000 11,263 11,012 100,000 8 14,288 13,826 13,638 100,000 13,521 13,333 100,000 9 16,498 16,447 16,322 100,000 15,993 15,868 100,000 10 18,820 19,346 19,284 100,000 18,700 18,638 100,000 11 21,257 22,579 22,579 100,000 21,674 21,674 100,000 12 23,816 26,143 26,143 100,000 24,948 24,948 100,000 13 26,503 30,076 30,076 100,000 28,555 28,555 100,000 14 29,324 34,419 34,419 100,000 32,530 32,530 100,000 15 32,287 39,218 39,218 100,000 36,917 36,917 100,000 16 35,398 44,526 44,526 100,000 41,763 41,763 100,000 17 38,664 50,401 50,401 100,000 47,125 47,125 100,000 18 42,093 56,911 56,911 100,000 53,069 53,069 100,000 19 45,694 64,134 64,134 100,000 59,672 59,672 100,000 20 49,475 72,158 72,158 100,000 67,021 67,021 100,000 21 53,445 81,076 81,076 105,399 (3) 75,219 75,219 100,000 22 57,613 90,929 90,929 116,389 (3) 84,345 84,345 107,962 (3) 23 61,990 101,802 101,802 128,270 (3) 94,408 94,408 118,954 (3) 24 66,586 113,800 113,800 141,112 (3) 105,499 105,499 130,819 (3) 25 71,412 127,043 127,043 154,993 (3) 117,724 117,724 143,623 (3) 30 99,409 216,691 216,691 251,362 (3) 200,092 200,092 232,107 (3) 35 35,142 363,657 363,657 389,113 (3) 334,425 334,425 357,835 (3) 40 80,747 606,979 606,979 637,328 (3) 556,278 556,278 584,092 (3) - ----------------------
(1) Assumes a $1,425 premium is paid at the beginning of each policy year. Values would be different if premiums are paid with a different frequency or in different amounts. (2) Assumes that no policy loans or withdrawals have been made. Zero values indicate lapse in the absence of an additional premium payment. (3) Increase is due to adjustment by the corridor percentage. See "Death Benefits". THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. A-4 CHUBB LIFE INSURANCE COMPANY OF AMERICA FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Option II Assumed Hypothetical Gross Male Non-Smoker Issue Age 40 Annual Rate of Return: 0% (-1.73% net) $100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425 Assuming Current Costs Assuming Guaranteed Costs --------------------------------------- ---------------------------------------- PREMIUMS END ACCUMULATED OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2) ---- -------- -------- -------- ---------- -------- -------- --------- 1 1,482 1,069 692 101,069 1,068 691 101,068 2 3,023 2,102 1,725 102,102 2,100 1,723 102,100 3 4,626 3,099 2,722 103,099 3,096 2,719 103,096 4 6,293 4,067 3,690 104,067 4,054 3,677 104,054 5 8,027 5,018 4,642 105,018 4,975 4,598 104,975 6 9,830 5,953 5,639 105,953 5,855 5,541 105,855 7 11,705 6,872 6,621 106,872 6,693 6,442 106,693 8 13,655 7,763 7,574 107,763 7,489 7,300 107,489 9 15,684 8,638 8,513 108,638 8,240 8,114 108,240 10 17,793 9,499 9,436 109,499 8,943 8,880 108,943 11 19,987 10,366 10,366 110,366 9,598 9,598 109,598 12 22,268 11,187 11,187 111,187 10,198 10,198 110,198 13 24,641 11,959 11,959 111,959 10,737 10,737 110,737 14 27,109 12,681 12,681 112,681 11,210 11,210 111,210 15 29,675 13,347 13,347 113,347 11,611 11,611 111,611 16 32,344 13,954 13,954 113,954 11,932 11,932 111,932 17 35,120 14,497 14,497 114,497 12,167 12,167 112,167 18 38,007 14,969 14,969 114,969 12,314 12,314 112,314 19 41,009 15,365 15,365 115,365 12,366 12,366 112,366 20 44,131 15,674 15,674 115,674 12,314 12,314 112,314 21 47,378 15,885 15,885 115,885 12,146 12,146 112,146 22 50,755 15,991 15,991 115,991 11,853 11,853 111,853 23 54,268 15,983 15,983 115,983 11,419 11,419 111,419 24 57,920 15,850 15,850 115,850 10,825 10,825 110,825 25 61,719 15,582 15,582 115,582 10,053 10,053 110,053 30 83,118 11,715 11,715 111,715 2,976 2,976 102,976 35 109,153 1,942 1,942 101,942 0 0 0 40 140,828 0 0 0 0 0 0 - ----------------------------
(1) Assumes a $1,425 premium is paid at the beginning of each policy year. Values would be different if premiums are paid with a different frequency or in different amounts. (2) Assumes that no policy loans or withdrawals have been made. Zero values indicate lapse in the absence of an additional premium payment. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. A-5 CHUBB LIFE INSURANCE COMPANY OF AMERICA FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Option II Assumed Hypothetical Gross Male Non-Smoker Issue Age 40 Annual Rate of Return: 4% (2.27% net) $100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425 Assuming Current Costs Assuming Guaranteed Costs ----------------------------------------- ----------------------------------------- PREMIUMS END ACCUMULATED OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2) ---- -------- -------- -------- --------- ------- ------- --------- 1 1,482 1,118 742 101,118 1,117 741 101,117 2 3,023 2,243 1,867 102,243 2,241 1,865 102,241 3 4,626 3,376 3,000 103,376 3,373 2,996 103,373 4 6,293 4,523 4,146 104,523 4,509 4,133 104,509 5 8,027 5,695 5,318 105,695 5,650 5,273 105,650 6 9,830 6,894 6,580 106,894 6,791 6,477 106,791 7 11,705 8,120 7,869 108,120 7,931 7,680 107,931 8 13,655 9,362 9,174 109,362 9,068 8,880 109,068 9 15,684 10,632 10,507 110,632 10,199 10,074 110,199 10 17,793 11,931 11,869 111,931 11,321 11,258 111,321 11 19,987 13,282 13,282 113,282 12,431 12,431 112,431 12 22,268 14,631 14,631 114,631 13,522 13,522 113,522 13 24,641 15,976 15,976 115,976 14,586 14,586 114,586 14 27,109 17,313 17,313 117,313 15,616 15,616 115,616 15 29,675 18,637 18,637 118,637 16,604 16,604 116,604 16 32,344 19,948 19,948 119,948 17,540 17,540 117,540 17 35,120 21,239 21,239 121,239 18,416 18,416 118,416 18 38,007 22,503 22,503 122,503 19,229 19,229 119,229 19 41,009 23,731 23,731 123,731 19,970 19,970 119,970 20 44,131 24,911 24,911 124,911 20,626 20,626 120,626 21 47,378 26,029 26,029 126,029 21,181 21,181 121,181 22 50,755 27,075 27,075 127,075 21,620 21,620 121,620 23 54,268 28,034 28,034 128,034 21,922 21,922 121,922 24 57,920 28,891 28,891 128,891 22,061 22,061 122,061 25 61,719 29,631 29,631 129,631 22,011 22,011 122,011 30 83,118 30,846 30,846 130,846 18,054 18,054 118,054 35 109,153 25,341 25,341 125,341 4,443 4,443 104,443 40 140,828 8,129 8,129 108,129 0 0 0 - --------------------------
(1) Assumes a $1,425 premium is paid at the beginning of each policy year. Values would be different if premiums are paid with a different frequency or in different amounts. (2) Assumes that no policy loans or withdrawals have been made. Zero values indicate lapse in the absence of an additional premium payment. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 4% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. A-6 CHUBB LIFE INSURANCE COMPANY OF AMERICA FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Option II Assumed Hypothetical Gross Male Non-Smoker Issue Age 40 Annual Rate of Return: 12% (10.27% net) $100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425 Assuming Current Costs Assuming Guaranteed Costs ------------------------------------ --------------------------------------- PREMIUMS END ACCUMULATED OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT (2) ---- -------- ------- ------- --------- ------- -------- --------- 1 1,496 1,217 840 101,217 1,215 839 101,215 2 3,067 2,539 2,163 102,539 2,537 2,160 102,537 3 4,717 3,979 3,602 103,979 3,975 3,598 103,975 4 6,449 5,553 5,177 105,553 5,539 5,162 105,539 5 8,268 7,290 6,913 107,290 7,241 6,864 107,241 6 10,177 9,205 8,891 109,205 9,092 8,778 109,092 7 12,182 11,316 11,065 111,316 11,104 10,853 111,104 8 14,288 13,632 13,443 113,632 13,293 13,105 113,293 9 16,498 16,185 16,060 116,185 15,674 15,549 115,674 10 18,820 19,001 18,938 119,001 18,263 18,200 118,263 11 21,257 22,136 22,136 122,136 21,083 21,083 121,083 12 23,816 25,575 25,575 125,575 24,159 24,159 124,159 13 26,503 29,347 29,347 129,347 27,512 27,512 127,512 14 29,324 33,484 33,484 133,484 31,166 31,166 131,166 15 32,287 38,020 38,020 138,020 35,143 35,143 135,143 16 35,398 42,994 42,994 142,994 39,471 39,471 139,471 17 38,664 48,444 48,444 148,444 44,178 44,178 144,178 18 42,093 54,415 54,415 154,415 49,302 49,302 149,302 19 45,694 60,955 60,955 160,955 54,878 54,878 154,878 20 49,475 68,113 68,113 168,113 60,944 60,944 160,944 21 53,445 75,941 75,941 175,941 67,538 67,538 167,538 22 57,613 84,504 84,504 184,504 74,705 74,705 174,705 23 61,990 93,868 93,868 193,868 82,487 82,487 182,487 24 66,586 104,106 104,106 204,106 90,928 90,928 190,928 25 71,412 115,298 115,298 215,298 100,076 100,076 200,076 30 99,409 188,896 188,896 288,896 158,624 158,624 258,624 35 135,142 303,283 303,283 403,283 245,244 245,244 345,244 40 180,747 480,932 480,932 580,932 371,318 371,318 471,318 - -------------------------
(1) Assumes a $1,425 premium is paid at the beginning of each policy year. Values would be different if premiums are paid with a different frequency or in different amounts. (2) Assumes that no policy loans or withdrawals have been made. Zero values indicate lapse in the absence of an additional premium payment. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. A-7 FOR USE IN NEW JERSEY ONLY Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996 CHUBB SEPARATE ACCOUNT A of CHUBB LIFE INSURANCE COMPANY OF AMERICA This supplement updates certain information contained in your Prospectus. Please read it and keep it with your Prospectus for future reference. The first sentence of the fourth paragraph on page 1 of the Prospectus is deleted in its entirety and replaced with the following: The initial minimum premium is due and payable on the policy date. The initial minimum premium is the greater of: (1) the initial minimum premium specified in the Policy or (2) the amount large enough, after the deduction of the premium tax charge, to cover monthly deductions for at least three months. The section Payment of Premiums on page 13 is deleted in its entirety and ------------------- replaced with the following: Payment of Premiums. Premiums must be paid in advance to Chubb Life or ------------------- through an authorized agent of Chubb Life for forwarding to Chubb Life. In addition, Chubb Life has instituted administrative procedures whereby premium payments in response to billing notices are sent directly to Chubb Life's bank. Unlike traditional insurance contracts, there is not a fixed schedule of premium payments on a Policy either as to the amount or the timing of the payment. A policyowner may determine, within specified limits, his or her own premium payment schedule. These limits will be set forth by Chubb Life and will include a minimum initial premium equal to the greater of: (1) the initial minimum premium specified in the Policy or (2) the amount large enough, after the deduction of the premium tax charge, to cover monthly deductions for at least three months. These limits may also include limits on the total amount and frequency of payments in each policy year. No premium payment may be less than $25. In order to help the policyowner obtain the insurance benefits desired, a Planned Periodic Premium and Premium Frequency will be stated in each Policy. This premium will usually be based upon the policyowner's insurance needs, the policyowner's financial abilities and the current financial climate, in general, as well as on the Specified Amount of the Policy and the Insured's age. sex and risk class. The policyowner is not required to pay such premiums and failure to make any premium will not necessarily result in lapse of the Policy, provided the Policy's cash value, less policy debt, if any, is sufficient to pay monthly deductions. Conversely, adherence to the schedule of Planned Period Premiums will not assure that the Policy will remain in force. The Policy will terminate only if the conditions described in the "THE POLICY - Policy Lapse" section on page 15 occur. The section Policy Lapse on page 16 is deleted in its entirety and replaced ------------ with the following: Policy Lapse. Failure to make a premium payment on a Policy will not ------------ necessarily cause the Policy to lapse. The duration of a Policy depends upon its cash value. The Policy will remain in force so long as the cash value, less any outstanding policy debt, is sufficient to pay the monthly deduction. In the event the cash value, less any outstanding policy debt, is sufficient to pay the monthly deduction, the policyowner will be given a sixty-one day period ("grace period) within which to make a premium payment to avoid lapse. If, however, during the grace period the cash value, less outstanding policy debt, increases due to positive performance of Separate Account A to a level sufficient to equal monthly deductions for at least three months, the Policy will no longer be in the grace period. The premium required to avoid lapse must be sufficient in amount, after the deduction of the premium tax charge, to cover the monthly deductions for at least three policy months. This required premium will be set forth in a written notice which Chubb Life will send to the policyowner at the beginning of the grace period. This Policy will continue in force through the grace period, but if no payment is forthcoming, the Policy will terminate without value at the end of the grace period. However, coverage under the Policy will not end sooner than 31 days after Chubb Life has mailed a premium notice to the policyowner, and any assignee of record, at the last known address. If the insured under the Policy dies during the grace period, the death benefit payable under the Policy will be reduced by the amount of the monthly deduction due and unpaid and the amount of any outstanding policy debt. In addition, if the cash value of the Policy at any time should decrease so the aggregate amount of an outstanding policy debt secured by the Policy exceeds the cash value shown in the Policy, the Policy will lapse. The sixth sentence in the section Reinstatement on page 18 is deleted in its ------------- entirety and replaced with the following: The reinstatement premium, after deduction of the premium tax charge, must be sufficient to cover monthly deductions for three policy months following the effective date of reinstatement, and monthly administrative charges during the grace period and the month of reinstatement. In addition, the following is added as the last sentence of the section Reinstatement: - ------------- If this Policy is reinstated, the right to contest provision will start over again beginning on the reinstatement date, but only for statements made in the application for reinstatement. The section Monthly Deduction on page 18 is deleted in its entirety and replaced ----------------- with the following: Monthly Deduction. On the first day of each policy month beginning on the - ----------------- policy date, Chubb Life will deduct from the accumulation value of a Policy an amount to cover certain charges and expenses incurred in connection with the Policy. The monthly deduction is intended to compensate Chubb Life for underwriting and start-up expenses incurred in connection with the issuance of a Policy, certain administrative expenses, the cost of insurance for the Policy and any optional benefits added by rider. The amount deducted will be deducted pro-rata from each of the divisions and the General Account net of any debt outstanding at the beginning of the month. The amount of the monthly deduction is equal to (i) the cost of insurance for the Policy, as described below, and the cost of additional benefits provided by rider, plus (ii) a monthly administrative charge of $8.00, which may not be increased, minus (iii) the monthly deduction adjustment. The cost of insurance for the insured is determined on a monthly basis, and is determined separately for the initial Specified Amount and each subsequent increase in the Specified Amount. The monthly current cost of insurance rate is based on the sex, issue age, policy year, rating class of the insured, and the Specified Amount of the Policy. If we assume two insureds differ only with regard to one of the above bases, the effect of these bases on their monthly cost of insurance rates would be as follows: Sex: The cost of insurance rate for males will be greater than or equal to those for females. Issue Age: The cost of insurance rate for the younger insured will be less than or equal to that for the older insured. Policy Year: The current cost of insurance rate will increase as the policy year increases. For two insureds with the same sex, rating class, and attained age the cost of insurance rate for the insured with the younger issue age will never exceed, and in some cases will be less than that for the insured with the older issue age. Rating Class: The cost of insurance rates for nonsmokers will be less than or equal to those for smokers. Cost of insurance rates may also differ due to the insured's medical condition, occupation, or avocation. Specified Amount: The current cost of insurance rates will vary by Specified Amount, with different rates applying to Specified Amounts under $100,000, between $100,000 and $249,999, between $250,000 and $999,999 and $1,000,000 and over. Current cost of insurance rates are highest for Specified Amounts under $100,000, decreasing for each successive Specified Amount range as noted above. The cost of insurance is calculated as (i) multiplied by the result of (ii) minus (iii) where: (i) is the cost of insurance rate as described in the Cost of Insurance Rates Provision contained in the Policy. (ii) is the death benefit at the beginning of the policy month divided by 1.0036748, to arrive at the proper values for the beginning values for the beginning of the month assuming the guaranteed interest rate of 4.5% that is applicable to the General Account portion of the Policy; and (iii) is the accumulation value at the beginning of the policy month prior to the monthly deduction for the cost of insurance. If the corridor percentage is applicable, the death benefit used in the foregoing calculation will reflect the corridor percentage. There will be a monthly deduction adjustment that will be calculated at the beginning of each policy year. The adjustment will be a monthly amount that is subtracted from the monthly cost of insurance charge that is normally calculated. This adjustment may be suspended at any time in accordance with procedures on file with the New Jersey Department of Insurance. The policyowner will be notified if the adjustment is suspended. The adjustment is calculated as (1) multiplied by the result of (2) minus (3) minus (4), but not less than zero, where: (1) is .000375. (2) is the Accumulation Value at the beginning of the policy year. (3) is the Guideline Single Premium at Issue, under Section 7702 of the Internal Revenue Code, increased on a pro-rata basis for any increase in Specified Amount. (4) is the outstanding Type A loan balance at the beginning of the policy year. The adjustment will be allocated amoung the General Account and divisions of Separate Account A using the same percentages used to allocate net premiums. Monthly cost of insurance rates will be determined by Chubb Life based upon future expectations, including charges for mortality experience, and a provision of amortization of sales charges and other administrative charges. The provision for amortization of sales charges and other administrative charges tends to decrease over time. Any change in cost of insurance rates will apply to all individuals of the same class as the insured. Changes in the monthly cost of insurance rates will be based upon changes in future expectations as to investment earning, mortality experience, persistency, expenses and federal income tax law. The rating class will be determined separately for the Initial Specified Amount and for any increase in Specified Amount that requires evidence of insurability. However, the cost of insurance rates can never be greater than those shown in the Table of Monthly Guaranteed Cost of Insurance Rates in the Policy. For issue ages 15 and above, such guaranteed maximum rates are based on the 1980 CSO, Male and Female, Smoker and Nonsmoker Mortality Tables. For issue ages 14 and below, such guaranteed maximum rates are based on the 1980 CSO Male and Female Mortality Table. The first three paragraphs in the section Surrender Charge on page 17 are ---------------- deleted and amended to read as follows: Surrender Charge. Upon surrender or withdrawal. Chubb Life will assess a ---------------- surrender charge. The surrender charge for the Initial Specified Amount is determined by multiplying a surrender factor by the lessor of (1) the premiums actually received to date in the policy year one; or (2) the "Maximum Surrender Premium" for Issue Age, as specified in the Policy, multiplied by the Initial Specified Amount, divided by 1.000. The surrender factor depends on the length of time the policy has been in force as follows: Policy Year Surrender Factor ----------- ---------------- 1-5 .30 6 .25 7 .20 8 .15 9 .10 10 .05 11 and after 0 If the policy lapses and is reinstated within 5 years of lapse, the Surrender Charge applicable on the date of reinstatement will be that which would have applied on the date of termination. Form 3-00706 Page 5 Paying less premium in policy year one generally will have the effect of reducing the surrender charge. However, depending on investment experience, paying less premium in policy year one may result in an increase in cost of insurance charges, a reduction if accumulation value and an increased risk that the Policy will lapse. An additional surrender charge will be assessed for any increase in the Specified Amount, other than an increase caused by a change from death benefit Option I to death benefit Option II. The additional surrender charge is determined by multiplying a surrender factor by the lessor of (1) or (2), where: (1) is A times B divided by C, where; A is the amount of the increase in the Specified Amount; B is the sum of the cash value just prior to the increase in the Specified Amount and the total premiums received in the twelve months just following the increase in the Specified Amount; and C is the Specified Amount in effect after the increase in the Specified Amount (2) is the "Maximum Surrender Premium" for the attained age of the insured on the effective date of the increase in the Specified Amount, as specified Amount, as specified in the Policy, multiplied by the increase in the Specified Amount, divided by 1,000. The first full paragraph on page 24 of the Prospectus, in the section Surrender --------- Privileges, is deleted in its entirety and replaced with the following: - ---------- Withdrawal generally will affect the Policy's accumulation value, cash value and the life insurance proceeds payable under the Policy. The Policy's cash value will be reduced by the amount of the withdrawal. The Policy's accumulation value will be reduced by the sum of the withdrawal and a pro-rata portion of the surrender charge in effect on the date of the withdrawal. The remaining Surrender Charge will equal the Surrender Charge prior to withdrawal less the pro-rata portion of the surrender charge that is assessed at the time of the withdrawal. The remaining Accumulation Value will equal the Accumulation Value prior to the withdrawal less the sum of the amount withdrawn and the pro-rata surrender charge assessed. The fourth and fifth paragraphs of the section Policy Loans on page 24 are ------------ deleted in their entirety and replaced with the following: There are two types of policy loans which Chubb Life will grant to a policyowner: a Type A loan and a Type B loan. The type of loan which Chubb Life will grant depends upon the amount of unloaned Type A balances available at the time the loan is taken. The unloaned Type A balance is 90% of the cash value, less the threshold, and less the sum of any outstanding Type A loans as defined below. Form 5-00706 Ed. 4/96 Page 6 The threshold is the Guideline Single Premium for the Policy at issue as defined in Section 7702 of the Internal Revenue Code of 1986 entitled "Life Insurance Contract Defined". If the Specified Amount of the Policy increases, the threshold will be increased to the threshold at issue times the ratio of the largest Specified Amount ever existing on the Policy to the initial Specified Amount. If the Specified Amount decreases, the threshold will not change. A Type A loan is a policy loan granted by Chubb Life when the unloaned Type A balance before the loan is taken exceeds the loan requested. A Type B loan is a policy granted by Chubb Life when the unloaded Type A balance before the loan is taken is less than or equal to zero. When the unloaned Type A balance before the loan is taken exceeds zero, but is less than the loan requested, a Type A loan equal to the unloaned Type A balance will be granted by Chubb Life. The remainder of the requested loan will be Type B loan. To the extent that an unloaned Type A balance exists, Chubb Life will grant a Type A loan first before a Type B loan. Once a policy loan is granted it remains a Type A or a Type B until it is repaid. The interest charged by Chubb Life on a policy loan depends upon the type of loan granted. On a Type A loan, Chubb Life will charge an effective interest rate of two percentage points lower than the effective interest rate charged at the time by Chubb Life for a Type B loan. On a Type B loan, Chubb Life will charge interest at the effective maximum rate of 8%, or at any lower rate established by Chubb Life for any period during which the loan is outstanding. Loan interest accrues on a daily basis from the date of the loan and is payable at the end of each policy year. Loan interest unpaid on a policy anniversary becomes loan principal. Chubb Life shall provide at least 30 days written notice to the policyowner or any other party designated by the policyowner to receive notice under the Policy and any assignee recorded at the Home Office of any increase in the interest rate on loans outstanding 40 or more days prior to the effective date of the increase. As to loans made during the 40 days before the effective date of the policy loan interest rate increase, Chubb Life shall notify the policyowner and any assignee at the time the loan is made. The effective date of any increase in such interest rate shall not be less than twelve months after the effective date of the establishment of the previous rate. If the interest rate is increased, the amount of such increase shall not exceed one percent per year. Interest accrues on a daily basis from the date of the loan and is compounded annually. Interest unpaid on a policy anniversary becomes loan principal. The section Non-Participating Policy on page 27 deleted in its entirety and ------------------------ replaced with the following: Non-Participating Policy. The Policy is a nonparticipating contract, which ------------------------- means the following: (1) cost of insurance rates and interest rates in excess of guaranteed are determined and redetermined on a prospective basis only; (2) Chubb Life will not recoup any prior losses by means or a change in either the cost of insurance or a change of interest rates; and (3) the Insured is not entitled to participate in the profits of Chubb Life. Form 5-00706 Ed. 4/96 Page 7 PART II 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. UNDERTAKINGS REGARDING INDEMNIFICATION Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, 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 that 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 of 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 cover sheet. The Prospectus consisting of pages. The undertaking to file reports. The undertaking pursuant to Rule 484(b) (1) under the Securities Act of 1933. The signatures. Written consents of the following persons: (a) Michael J. LeBoeuf, FSA, MAAA, contained in Exhibit 6 below. (b) Ernst & Young LLP, contained in Exhibit 7 below. The following exhibits: 1. The following exhibits correspond to those required by paragraph A of the instructions as to exhibits in Form N-8B-2: (a) Certified copy of Resolution of Board of Directors of The Volunteer State Life Insurance Company, adopted at a meeting held on August 20, 1984 (in lieu of indenture or trust creating unit investment trust). (b) Not applicable (c) (i) Underwriting Agreement between The Volunteer State Life Insurance Company and Chubb Securities Corporation. (ii) Amendment to Underwriting Agreement between The Volunteer State Life Insurance Company and Chubb Securities Corporation. (iii) Specimen District Manager's Agreement of Chubb Securities Corporation. (iv) Specimen Sales Representative's Agreement of Chubb Securities Corporation. (v) Schedule of Commissions. (d) Not applicable (e) Specimen Policy with form of riders. 1,2,3,6,7 (f) (i) Amended and Restated Charter (with all amendments) of Chubb Life Insurance Company of America. Incorporated by Reference to Exhibit 1(f) (i) of Post-Effective Amendment No. 2 on Form S-6 of Chubb Separate Account C, to the Registration Statement filed December 10, 1993, File No. 33-72830. (ii) By-Laws of Chubb Life Insurance Company of America. Incorporated by Reference to Exhibit 1(f) (ii) of Post-Effective Amendment No. 2 on Form S-6 of Chubb Separate Account C, to the Registration Statement filed December 10, 1993, File No. 33- 72830. (g) Not applicable. (h) (i) Fund Distribution Agreement between Chubb America Fund, Inc., and Chubb Securities Corporation (incorporated by reference to Exhibit 6(b) of Post-Effective Amendment No. 7 to Form N-lA of Chubb America Fund Inc., filed on April 11, 1990, Registration No. 2-94479). (ii) Amendment to Fund Distribution Agreement between Chubb America Fund, Inc. and Chubb Securities Corporation (incorporated by reference to Exhibit 6(a) of Post-Effective Amendment No. 7 to Form N-lA of Chubb America Fund, Inc., filed on April 11, 1990, Registration No. 2-94479). (iii) Amended and Restated Investment Management Agreement between Chubb America Fund, Inc., and Chubb Investment Advisory Corporation (incorporated by reference to Exhibit 5(a) of Post-Effective Amendment No. 7 to Form N-lA of Chubb America fund, Inc., filed on April 11, 1990, Registration No. 2-94479). (iv) Sub-Investment Management Agreement by, between and among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Templeton, Galbraith & Hansberger Ltd. (incorporated by reference to Exhibit 5(e) of Post- Effective Amendment No. 11 to Form N-lA of Chubb America Fund, Inc., filed April 14, 1993, Registration No. 2-94479). (vii) Sub-Investment Management Agreement by, between and among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Van Eck Associates Corporation (incorporated by reference to Exhibit 5(f) of Post-Effective Amendment No. 7 to Form N-lA of Chubb America Fund, Inc., filed on April 11, 1990, Registration No. 2-94479). (viii) Sub-Investment Management Agreement by, between and among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers, inc. (incorporated by reference to Exhibit 5(e) of Post-Effective Amendment No. 7 to Form N-lA of Chubb America Fund, Inc., filed on April 11, 1990, Registration No. 2-94479). (ix) Sub-Investment Management Agreement among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Pioneering Management Corporation (incorporated by reference to Exhibit 5(g) of Post-Effective Amendment No. 7 of Form N-lA of Chubb America Fund, Inc., filed on April 11, 1990, Registration No. 2-94479). (x) Sub-Investment Management Agreement by, between and among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc. (incorporated by reference to Exhibit 5(h) of Post-Effective Amendment No. 9 to Form N-lA of Chubb America, Inc., filed February 28, 1992, Registration No. 2-94479). (xi) Custodian Agreement between Chubb America Fund, Inc., and Citibank, N.A. (incorporated by reference to Exhibit 8 of Post-Effective Amendment No. 8 to Form N-lA of Chubb America Fund, Inc., filed on February 21, 1991, Registration No. 2-94479). (xii) Amendment to the Custodial Services Agreement between Chubb America Fund, Inc., and Citibank, N.A. (incorporated by reference to Exhibit 8(b) of Post-Effective Amendment No. 11 to Form N-lA of Chubb America Fund, Inc. filed on April 14, 1993, Registration No. 2-94479). (xiii) Amendment No. 2 to Custodial Services Agreement between Chubb America Fund, Inc. and Citibank, N.A. (incorporated by reference to Exhibit 8(c) of Post-Effective Amendment No. 11 of Form N-lA of Chubb America Fund, Inc. filed on April 14, 1993, Registration No. 2-94479). (xiv) Investment Management Agreement between Chubb America Fund, Inc. and Chubb Investment Advisory Corporation for the Growth and Income Portfolio (incorporated by reference to Exhibit 5(i) of Post-Effective Amendment No. 9 of Form N-lA of Chubb America Fund, Inc. filed on February 28, 1992, Registration No. 2-94479). (xv) Investment Management Agreement between Chubb America Fund, Inc. and Chubb Investment Advisory Corporation for the Capital Growth Portfolio (incorporated by reference to Exhibit 5(j) of Post-Effective Amendment No. 9 to Form N-lA of Chubb America Fund, Inc. filed on February 28, 1992, Registration No. 2-94479). (xvii) Sub-Investment Management Agreement by, between and among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc. (incorporated by reference to Exhibit 5(1) of Post-Effective Amendment No. 11 to Form N-lA of Chubb America Fund, Inc. filed on April 14, 1993, Registration No. 2-94479). (xviii) Sub-Investment Management Agreement by, between and among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Janus Capital Corporation (incorporated by reference to Exhibit 5(m) of Post-Effective Amendment No. 11 to Form N-lA of Chubb America Fund, Inc. filed on April 14, 1993, Registration No. 2-94479). (xix) Sub-Investment Management Agreement by, between and among Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Phoenix Investment Counsel, Inc. (incorporated by reference to Exhibit 5(n) of Post-Amendment No. 11 to Form N-lA of Chubb America Fund, inc. filed on April 14, 1993, Registration No. 2-94479). (xx) Form of Investment Management Agreement between Chubb America Fund, Inc. and Chubb Investment advisory Corporation with respect to the Emerging Growth Portfolio (incorporated by reference to Exhibit 5(p) of Post- Effective Amendment No. 12 to Form of Chubb America Fund, Inc. filed on February 14, 1995, Registration No. 2-94479). (xx) Form of Investment Management Agreement between Chubb America Fund, Inc. and Chubb Investment Advisory Corporation with respect to the Emerging Growth Portfolio (incorporated by reference to Exhibit 5(p) of Post- Effective Amendment No. 12 to Form 12 to Form N-lA of Chubb America Fund, Inc. filed on February 14, 1995, Registration No. 2-94479). (xxi) Form of Sub-Investment Management Agreement between Chubb America Fund, Inc., Chubb Investment Advisory Corporation and Massachusetts Financial Services Company with respect to the Emerging Growth Portfolio (incorporated by reference to Exhibit 5(q) of Post-Effective Amendment No. 12 to Form N-lA of Chubb America Fund, Inc., filed on February 14, 1995, Registration No. 2-94479). (i) Not Applicable. (j) Application. 2. Specimen Policy. (Same as 1(e)). 3. Opinion of counsel. 4. Not Applicable. 5 Not Applicable. 6. Actuarial opinion and consent of Michael J. LeBoeuf, FSA, MAAA. 7. Consent of Ernst & Young LLP. 8. Procedures Memorandum, as amended, pursuant to Rule 6e- 3(T) (b) (12) (iii) under the 1940 Act. 9. Specimen Notice of Right of Withdrawal, pursuant to Rule 6e3 (T) (b) (13) (viii). 10. Representations, description and undertakings regarding mortality and expense risk charge, pursuant to Rule 6e-3(T) (b) (13) (iii) (F). 11. (a) Not Applicable. (b) Not Applicable. 12. (Incorporated by reference to Exhibit 12 of Post-Effective Amendment No. 2 to the Registration Statement on Form S-6 of Chubb Separate Account C, filed December 10, 1993, File No. 33-72830). 13. (Incorporated by reference to Exhibit 13 of Post- Effective Amendment No. 2 to the Registration Statement on Form S-6 of Chubb Separate Account C, filed December 10, 1993, File No. 33-72830). 14. Powers of Attorney. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant, Chubb Separate Account A certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment No. 12 to the Registration Statement and, has duly caused this Post-Effective Amendment No. 12 to the Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, and its seal to be hereunto affixed and attested, all in Concord, New Hampshire on the 12th day of April, 1996. (SEAL) CHUBB SEPARATE ACCOUNT A (Registrant) CHUBB LIFE INSURANCE COMPANY OF AMERICA (Depositor) /s/ Frederick H. Condon By:_______________________________ Frederick H. Condon Title: Senior Vice President, General Counsel and Secretary ----------------------------- ATTEST: /s/ Charles C. Cornelio - --------------------------- Charles C. Cornelio Assistant Secretary SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Chubb Life Insurance Company of America certifies that it meets the requirements of the Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment No. 12 to the Registration Statement and has duly caused this Post-Effective Amendment No. 12 to the Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, and its deal to be hereunto affixed and attested, all in Concord, New Hampshire on the 12th day of April, 1996. [SEAL APPEARS HERE] CHUBB LIFE INSURANCE COMPANY OF AMERICA By: /s/ Frederick H. Condon ---------------------------- Frederick H. Condon Title: Senior Vice President General Counsel and Secretary ----------------------------- ATTEST: /s/ Charles C. Cornelio - -------------------------- Charles C. Cornelio Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed below by the following persons in the capacities and on the date indicated. Signatures Title ---------- ----- * - ------------------------------------ Director John C. Beck * - ------------------------------------ Director, Vice Chairman Percy Chubb, III * - ------------------------------------ Director Joel J. Cohen * - ------------------------------------ Director Henry U. Harder Signatures Title ---------- ----- * - ------------------------------------ Director David H. Hoag * - ------------------------------------ Director Robert V. Lindsay * - ------------------------------------ Director Thomas C. MacAvoy * - ------------------------------------ Director Gertrude G. Michelson * - ------------------------------------ Director, Chairman Dean R. O'Hare * - ------------------------------------ Director Warren B. Rudman * - ------------------------------------ Director Sir David G. Scholey, COE * - ------------------------------------ Director Raymond G.H. Seitz * - ------------------------------------ Vice President and Russell C. Simpson Treasurer * - ------------------------------------ Director Lawrence M. Small * - ------------------------------------ President and Chief Theresa M. Stone Executive Officer * - ------------------------------------ Executive Vice President and Richard V. Werner Chief Financial Officer Signatures Title ---------- ----- - -------------------------------- Director Richard D. Wood By: /s/ Frederick H. Condon ------------------------------- Frederick H. Condon, Attorney- in-Fact, executed on the 12th day of April, 1996, pursuant to Powers of Attorney filed as Exhibit 14 hereto. EXHIBIT INDEX 1. (a) Certified Copy of Resolution of Board of Directors of The Volunteer State Life Insurance Company, Adopted at a Meeting Held on August 20, 1984............................. 1. (c) (i) Underwriting Agreement Between The Volunteer State Life Insurance Company Chubb Securities Corporation........................ 1. (c) (ii) Amendments to Underwriting Agreement Between The Volunteer State Life Insurance Company and Chubb Securities Corporation......................................... 1. (c) (iii) Specimen District Manager's Agreement of Chubb Securities Corporation........................ 1. (c) (iv) Specimen Sales Representative's Agreement of Chubb Securities Corporation..................... 1. (c) (v) Schedule of Commissions............................. 1. (e) Specimen Policy with Form of Riders................. 3. Opinion of Counsel.................................. 6. Actuarial Opinion and Consent of Michael J. Leboeuf, FSA, MAAA....................... 7. Consent of Ernst & Young, LLP Independent Auditors................................ 9. Specimen Notice of Right of Withdrawal Pursuant to Rule 6e-3(T)(b)(13)(viii)............... 10. Representations, Description and Undertakings Regarding Mortality and Risk Charge Pursuant to Rule 6e-3(T)(b)(13)(iii)(F)...................... 14. Powers of Attorney EX-99.1.A 2 RESOLUTION OF BOARD OF DIRECTORS Exhibit 1(a) CERTIFIED COPY OF RESOLUTION OF BOARD OF DIRECTORS OF THE VOLUNTEER STATE LIFE INSURANCE COMPANY, ADOPTED AT A MEETING HELD ON AUGUST 20, 1984 [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] I, Jon D. Schneider, Secretary of The Volunteer State Life Insurance Company, do hereby certify that the following resolutions were adopted at a meeting of the Board of Directors on August 20, 1984: RESOLVED, that, pursuant to the provisions of Section 56-3-501 et seq. of the Tennessee Code Annotated and the regulations promulgated thereunder by the Tennessee Commissioner of Insurance, the Board of Directors of The Volunteer State Life Insurance Company (the "Company") does hereby establish a separate account to be known as 'Chubb/Volunteer Separate Account A" for the purpose of allocating thereto any amounts paid to or held by the Company in connection with the issuance of variable life insurance policies (the "Policies") including but not limited to, amounts held under optional settlement modes; FURTHER RESOLVED, that the income, gains and losses, realized or unrealized, in the Chubb/Volunteer Separate Account A shall be credited to or charged against the amounts allocated to Chubb/Volunteer Separate Account A in accordance with the terms of the Policies, without regard to other income, gains or losses of the Company; FURTHER RESOLVED, that Chubb/Volunteer Separate Account A shall be divided into divisions and subdivisions so that each division or subdivision may invest in the shares of designated investment companies with the net premiums received under the Policies as directed by the owners of said Policies; FURTHER RESOLVED, that the Executive Committee of the Board of Directors be, and it hereby is, expressly authorized in its discretion as it may deem appropriate from time to time in accordance with applicable laws and regulations (a) to divide Chubb/Volunteer Separate Account A into one or more divisions or subdivisions, (b) to modify or eliminate any such divisions or subdivisions, (c) to change the designation of Chubb/ Volunteer Separate Account A to another designation and (d) to further designate any divisions or subdivisions thereof; Certification of Resolution Page 2 FURTHER RESOLVED, that amounts allocated to Chubb/Volunteer Separate Account A and any accumulations thereon, or to any division of Chubb/Volunteer Separate Account A, may be invested and reinvested in any class of investments which may be authorized in the Policies, including, but not limited to, shares of an investment company or companies established pursuant to the Investment Company Act of 1940 and regulations promulgated thereunder, without regard to any requirements or limitations prescribed by the laws of Tennessee governing the investments of life insurance companies; provided, that, to the extent that the Company's reserve liability with regard to: (a) benefits guaranteed as to amount and duration; and (b) funds guaranteed as to principal amounts or stated rate of interest is maintained in Chubb/Volunteer Separate Account A, a portion of the assets of such separate account at least equal to such reserve liability shall be invested in accordance with the laws of the State of Tennessee governing the investments of life insurance companies; FURTHER RESOLVED, that the following binding Standards of Conduct applicable to the Company, its officers, directors, employees, and affiliates ("Persons") with respect to the purchase and sale of investments of Chubb/Volunteer Separate Account A can be adopted: (a) No Person shall engage in any action or activity which the Person has reason to believe could in any way conflict with Chubb/Volunteer Separate Account A's interests. (b) No Person, directly or indirectly, shall, in connection with any transaction, (a) employ any device, scheme or artifice to defraud Chubb/Volunteer Separate Account A; (b) make to Chubb/Volunteer Separate Account A any untrue statement of a material fact or omit to state to the Chubb/Volunteer Separate Account A a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; (c) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon Chubb/Volunteer Separate Account A; or (d) engage in any manipulative practice with respect to the Chubb/Volunteer Separate Account A. (3) No Person shall accept, directly or indirectly, any gift, favor, service, or anything of value from any broker, dealer or other person which could be construed as being Certification of Resolution Page 3 compensation for causing Chubb/Volunteer Separate Account A to engage in any transaction with such broker, dealer or other person. (4) Each Person shall keep confidential all information regarding past or future transactions, investment programs and studies of Chubb/Volunteer Separate Account A, except as may be required by applicable law or approved by the Company's Board. FURTHER RESOLVED, that the Chairman, the Vice Chairman, the President, any Senior Vice President and the Treasurer, or any of them, (herein "Officers") be, and they each hereby are, severally authorized to invest cash in Chubb/Volunteer Separate Account A or in any division thereof as may be deemed necessary or appropriate to facilitate the commencement of Chubb/Volunteer Separate Account A's operations or to meet any minimum capital requirements under the Investment Company Act of 1940 and to transfer cash or securities from time to time between the Company's general account and Chubb/Volunteer Separate Account A as deemed necessary or appropriate so long as such transfers are not prohibited by law and are consistent with the terms of the Policies; FURTHER RESOLVED, that the Officers be, and they each hereby are, authorized and directed, in conjunction with the Company's independent certified public accountants, legal counsel, independent consultants and/or such others as they deem appropriate, to take such action as they may deem necessary or appropriate to: (a) register Chubb/Volunteer Separate Account A as a unit investment trust under the Investment Company Act of 1940, as amended; (b) register the Policies in such amounts, which may be indefinite amounts, as the Officers shall from time to time deem appropriate under the Securities Act of 1933; and (c) take all other action which in their judgment may be necessary or appropriate in connection with the offering of said Policies for sale and the operation of Chubb/Volunteer Separate Account A in order to comply with the Investment Company Act of 1940, the Securities Exchange Act of 1934, the Securities Act of 1933 and all other applicable federal laws and regulations, including the filing of any registration statements, amendments to registration statements, notifications of registration statements, any undertakings, and any applications for exemptions from the Investment Certification of Resolution Page 4 Company Act of 1940, the Securities Act of 1933, or other applicable federal laws and regulations; FURTHER RESOLVED, that Harold E. Ruck, President, and George A. Henning, Senior Vice President, are duly appointed as agents for service of process under such registration statements and duly authorized to receive communications and notices from the Securities and Exchange Commission with respect thereto and to exercise any powers given to such agents by the rules and regulations under the Securities Act of 1933; FURTHER RESOLVED, that the Officers be, and they hereby are, authorized and directed on behalf of Chubb/Volunteer Separate Account A and on behalf of the Company to take any and all actions that any of them may deem necessary or advisable in order to offer and sell the Policies, including any registrations, filings and qualifications both of the Company, its officers, agents and employees, and of the Policies, under the insurance and securities laws of any state or any other jurisdiction, and in connection therewith to prepare, execute, deliver and file all such applications, reports, covenants, resolutions, applications for exemptions, consents to service of process and other papers and instruments as may be required under such laws, and to take any and all further action which said Officers or legal counsel for the Company may deem necessary or desirable in order to maintain such registrations or qualifications for as long as said Officers or legal counsel deem it to be in the best interest of Chubb/Volunteer Separate Account A and the Company; FURTHER RESOLVED, that any form of corporate resolution required by any State or other jurisdiction in connection with any filing, registration, or approval as contemplated in these resolutions is hereby adopted and the Officers be, and they hereby are, authorized to certify to the adoption thereof by this Board; FURTHER RESOLVED, that the Officers be, and they hereby are, authorized in the names and on behalf of Chubb/Volunteer Separate Account A and the Company to execute the file irrevocable written consents to be used in such States and other jurisdictions wherein such consents to service of process may be requisite under the insurance or securities laws thereof in connection with said registration or qualification of the Policies or Chubb/Volunteer Separate Account A and to appoint the appropriate State or other public official, or such other person as may be specified by said insurance or securities laws, as agent of Chubb/Volunteer Separate Account A and of the Company for the purpose of receiving and accepting process; Certification of Resolution Page 5 FURTHER RESOLVED, that the Officers be, and they hereby are, authorized to establish procedures to the extent required and subject to the limitations of applicable law, for providing a pass-through of voting rights for owners of the Policies with respect to the shares of an investment company or companies, attributable to them, owned by Chubb/Volunteer Separate Account A; FURTHER RESOLVED, that the following general Standard of Suitability which expresses the policy of the Company with respect to determining the suitability for applicants be adopted: No recommendation shall be made to a potential applicant to purchase a variable life insurance product and no variable life insurance product shall be issued in the absence of reasonable grounds to believe that the purchase of same is not unsuitable for such applicant on the basis of information furnished after reasonable inquiry of such applicant concerning the applicant's insurance and investment objectives, financial situation and needs, and any other information known to the Company or to the sales representative making the recommendation; FURTHER RESOLVED, that the Officers be, and they hereby are, authorized and directed to execute such agreement or agreements as they deem necessary or appropriate: a. with Chubb Securities Corp. or other qualified entity under which Chubb Securities Corp. or such other entity will be appointed principal underwriter and distributor for the Policies; and b. with one or more qualified banks or other qualified entities including the Company to provide administrative and/or custodial services in connection with the establishment and maintenance of Chubb/Volunteer Separate Account A and the design, issuance and administration of the Policies; FURTHER RESOLVED, that, because it is intended that Chubb/Volunteer Separate Account A will invest in the securities issued by an investment company registered under the Investment Company Act of 1940, the Officers be, and they hereby are, authorized and directed: (a) to instruct legal counsel to incorporate and register with The Securities and Exchange Commission such an investment company or companies; and (b) to execute whatever agreement or agreements as may be necessary or appropriate to enable such investments to be made; Certification of Resolution Page 6 FURTHER RESOLVED, that the Officers be, and they hereby are, authorized and directed to execute and deliver such agreements and other documents and to do such acts and things as each of them may deem necessary or desirable to carry out the foregoing resolutions and the intent and purposes thereof. /s/ Jon D. Schneider --------------------------- Jon D. Schneider Secretary The Volunteer State Life Insurance Company April 5, 1990 --------------------------- Date EX-99.1.C.I 3 UNDERWRITING AGREEMENT Exhibit 1(c) (i) UNDERWRITING AGREEMENT BETWEEN THE VOLUNTEER STATE LIFE INSURANCE COMPANY CHUBB SECURITIES CORPORATION SEPARATE ACCOUNT DISTRIBUTION AGREEMENT --------------------------------------- BETWEEN ------- CHUBB SECURITIES CORPORATION ---------------------------- AND --- THE VOLUNTEER STATE LIFE INSURANCE COMPANY ------------------------------------------ SEPARATE ACCOUNT ---------------- DISTRIBUTION AGREEMENT ---------------------- AGREEMENT made this 27th day of February , 1985, by and between CHUBB ---- -------- SECURITIES CORPORATION, a corporation organized and existing under the laws of the State of New Hampshire with its principal place of business in Concord, New Hampshire (herein the "DISTRIBUTOR") and THE VOLUNTEER STATE LIFE INSURANCE COMPANY, an insurance company organized and existing under the laws of the State of Tennessee with its principal place of business in Chattanooga, Tennessee (herein the "COMPANY"). W I T N E S S E T H: WHEREAS, the Company and Chubb/Volunteer Separate Account A (the "Account"), a separate investment account established pursuant to the provisions of (S)56-3-5Ol et seq. of the Tennessee Code Annotated and a registered investment company under the Investment Company Act of 1940 (the "1940 Act"), propose to offer for sale certain variable life insurance policies (together with any riders, the "Policies") which may be deemed to be securities under the Securities Act of 1933 (the "1933 Act") and the laws of some states; and WHEREAS, the Distributor, a wholly-owned subsidiary of Chubb Life Insurance Company of America, is registered as a broker-dealer with the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934 (the "1934 Act") and is a member of the National Association of Securities Dealers, Inc. (the "'NASD"); and WHEREAS, the parties desire to have the Distributor act as principal underwriter for the Account and assume full responsibility for the securities activities of any "person associated" (as that term is defined in Section 3(a) (18) of the 1934 Act) with the Distributor and engaged directly or indirectly in the variable life insurance operation (the "Associated Persons"); and WHEREAS, the parties desire to have the Company perform certain services in connection with the sale of the Policies; NOW, THEREFORE, in consideration of the covenants and mutual promises herein contained and of other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Distributor and the Company agree as follows: 1. The Distributor will act as the exclusive principal underwriter during the term of this Agreement in each state or other jurisdiction where the Policies may legally be sold. The Distributor shall at all times function as and be deemed to be an independent contractor and will be under no obligation to effectuate any particular amount of sales of Policies or to promote or make sales, except to the extent the Distributor deems advisable. Anything in this Agreement to the contrary notwithstanding, the Company retains the ultimate right to control the sale of the Policies, including the right to suspend sales in any jurisdiction or jurisdictions, to appoint and discharge agents of the Company, or to refuse to sell a Policy to any applicant for any reason whatsoever. 2. The Distributor will assume full responsibility for the securities activities of, and for securities law compliance by, the Associated Persons, including, as applicable, compliance with the NASD Rules of Fair Practice and Federal and state laws and regulations. The Distributor, directly or through the Company as its agent, will (a) make timely filings with the SEC, NASD, and any other securities regulatory authorities of any sales literature or materials relating to the Account, as required by law to be filed, (b) make -2- available to the Company copies of any agreements or plans intended for use in connection with the sale of the Policies in sufficient number and in adequate time for clearance by the appropriate regulatory authorities before they are used, and (c) train the Associated Persons, use its best efforts to prepare them to complete satisfactorily any and all applicable NASD and state qualification examinations, register the Associated Persons as its registered representatives before they engage in securities activities, and supervise and control them in the performance of such activities. In connection with the clearance by appropriate regulatory authorities the parties agree to use their best efforts to obtain such clearance by the appropriate regulatory authorities as expeditiously as reasonably possible and shall not use any materials, plan or agreement in any jurisdiction unless all filings have been made and approvals obtained that are necessary to make said use proper and legal therein. 3. The Company shall undertake to appoint the Distributor's qualified representatives as life insurance agents of the Company, and shall be responsible for ensuring that only agents properly qualified under the insurance laws of all relevant jurisdictions will engage in the offer and sale of Policies. Completed applications for the Policy shall be transmitted directly to the Company for acceptance or rejection in accordance with insurance underwriting and selection rules established by the Company. Initial and subsequent premium payments under the Policies shall be made payable to the Company and shall be held in a fudiciary capacity for and forwarded to the Company promptly (and, in any event, within not more than 30 days). 4. The Distributor shall take reasonable steps to ensure that the various representatives appointed by it shall not make recommendations to an applicant to purchase a policy in the absence of reasonable grounds to believe that the purchase of the Policy is suitable for said applicant. While not limited to -3- the following, a determination of suitability shall be based on information furnished to a representative after reasonable inquiry of such applicant (and any other information known about the applicant) concerning the applicant's insurance and investment objectives and financial situation and needs, including the likelihood that the applicant will make sufficient premium payments to derive the benefits thereof. No person shall use any sales aids, promotional material, or sales literature which has not been specifically approved in advance by the Company, and the Company will be responsible for filing such items, as necessary, with any insurance regulatory authorities and, where necessary, obtaining approvals of said authorities, No person shall, in connection with the offer or sale of the Policies, make any representations or communicate any information regarding the Policies or the Company, which are not contained in materials approved by the Company as aforesaid or in the then-effective Registration Statement of the Account under the Securities Act of 1933. 5. As between the Company and the Distributor, the Company will, except as otherwise provided in this Agreement, bear and/or reimburse the Distributor for the cost of all services and expenses, including direct legal services and expenses and registration, filing and other fees, in connection with (a) registering and qualifying the Account, the Policies, and (to the extent requested by the Distributor) the Associated Persons with Federal and state regulatory authorities and the NASD (including the training of Associated Persons for this purpose), (b) printing, filing and distributing all registration statements and prospectuses (including amendments), Policies, notices, periodic reports, proxy solicitation material, sales literature and advertising filed or distributed in connection with the sale of the Policies, (c) complying with the requirements of Section 7 below, and (d) performing its obligations under its -4- Fund Distribution Agreement with Chubb America Fund, Inc., including, without limitation, the Distributor's obligations thereunder to pay said fund's distribution expenses. 6. The Company will, in connection with the sale of the Policies, reimburse the Distributor for all amounts (including the sales commissions and managers overrides described in the prospectus for the Policies) paid to the sales representatives, managers or to other broker-dealers who have entered into sales agreements with the Distributor. 7. The Distributor, directly or through the Company as its agent, will (a) maintain and preserve in accordance with Rules 17a-3 and 17a-4 under the 1934 Act all books and records required to be maintained in connection with the offer and sale of the Policies being distributed pursuant to this Agreement, which books and records shall remain the property of the Distributor and shall be subject to inspection by the Securities and Exchange Commission in accordance with Section 17(a) of the Act, and (b) upon or prior to completion of each transaction for which a confirmation is legally required, send a written confirmation for each such transaction reflecting the facts of the transaction. All records maintained hereunder will be available to properly-constituted governmental authorities, should the same be required to be filed with or reviewed by said authorities. 8. The Distributor will execute such papers and do such acts and things as shall from time to time be reasonably requested by the Company for the purpose of (a) maintaining the registration of the Policies under the 1933 Act and the Account under the 1940 Act, and (b) qualifying and maintaining qualification of the Policies for sale under the applicable laws of any state. 9. The Company undertakes to guarantee the performance of all the Distributor's obligations, imposed by Section 27(f) of the 1940 Act and -5- paragraph (b) of Rule 27d-2 adopted by the SEC under that Act, to make refunds of charges required of the principal underwriter of Policies issued in connection with the Account. 10. Each party hereto shall advise the other promptly of (a) any action of the SEC of any authorities of any state or territory, of which it has knowledge, affecting registration or qualification of the Account or the Policies, or the right to offer the Policies for sale, and (b) the happening of any event which makes untrue any statement or which requires the making of any change, in the registration statement or prospectus in order to make the statements therein not misleading. 11. Neither party hereto shall be liable to the other for any action taken or omitted by it, or any of its officers, agents or employees, in performing their responsibilities under this Agreement in good faith and without negligence, willful misfeasance or reckless disregard of such responsibilities. 12. As compensation for the Distributor's assuming the expenses and performing the services to be assumed and performed by it pursuant to this Agreement, the Distributor shall receive from the Company such amounts and at such times as may from time to time be agreed upon by the Distributor and the Company. 13. As compensation for its services performed and expenses incurred under this Agreement, the Company will receive all amounts charged as "Sales Charges" under the Policies. It is understood that the Company assumes the risk that the above compensation for its services may not prove sufficient to cover its actual expenses in connection therewith. 14. It is understood that any Policyholder or agent of the Account may be a policyholder, shareholder, director, officer, employee or agent of, or be otherwise interested in, the Distributor, any affiliated person of -6- the Distributor, any organization in which the Distributor may have an interest or any organization which may have an interest in the Distributor; that the Distributor, any such affiliated person or any such organization may have an interest in the Account; and that the existence of any such dual interest shall not affect the validity hereof or of any transaction hereunder except as may otherwise be provided in the articles of organization or by-laws of the Distributor or by specific provisions of applicable law. For the purpose of this Agreement, the term "affiliated persons" shall have its respective meaning defined in the 1940 Act subject, however, to such exemptions as may be granted by or pursuant to that Act. 15. This Agreement shall become effective as of the date of its execution, shall continue in full force and effect until terminated, may be amended at any time by mutual agreement of the parties hereto, and may be terminated at any time without penalty on sixty days written notice by either party to the other. 16. The Distributor will not assign or delegate its responsibilities under this Agreement, except with the written consent of the Company. 17. This Agreement shall be construed in accordance with the laws of the State of Tennessee. 18. The Distributor shall keep confidential any information obtained pursuant to this Agreement, and shall disclose such information only if the Company has authorized such disclosure, or if such disclosure is expressly required by applicable Federal or state authorities. 19. The Distributor and the Company agree to cooperate fully in any insurance regulatory examination, investigation, or proceeding or any juridical proceeding arising in connection with the Policies. The Distributor and the Company further agree to cooperate fully in any securities regulatory -7- examination, investigation or proceeding or any judicial proceeding with respect to the Company, the Distributor, their affiliates and their agents or representatives, to the extent that such examination, investigation or proceeding is in connection with Policies distributed under this Agreement. The Distributor shall furnish applicable Federal and state regulatory authorities with any information or reports in connection with its services under this Agreement, which authorities may request in order to ascertain whether the Company's operations are being conducted in a manner consistent with any applicable law or regulations. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. CHUBB SECURITIES CORPORATION BY: [signature appears here] ---------------------------- THE VOLUNTEER STATE LIFE INSURANCE COMPANY BY: /s/ Harold E. Ruck ---------------------------- -8- EX-99.1.C.II 4 AMENDMENTS TO UNDERWRITING AGREEMENT Exhibit 1(c) (ii) AMENDMENTS TO UNDERWRITING AGREEMENT BETWEEN THE VOLUNTEER STATE LIFE INSURANCE COMPANY AND CHUBB SECURITIES CORPORATION AMENDMENT TO SEPARATE ACCOUNT DISTRIBUTION AGREEMENT ---------------------------------------------------- This Amendment to the Separate Account Distribution Agreement by and between Chubb Securities Corporation (herein the "Distributor") and The Volunteer State Life Insurance Company (herein the "Company") is made this 24th day of January, 1989. ---- ------- RECITALS -------- WHEREAS, the Company and the Distributor have entered into a Separate Account Distribution Agreement dated February 27, 1985, and WHEREAS, paragraph 15 of the Separate Account Distribution Agreement allows for the parties to amend the Agreement at any time by mutual agreement, and WHEREAS, the parties now wish to amend the Separate Account Distribution Agreement. AMENDMENT --------- 1. Paragraph 7 of the Agreement is hereby amended to read in its entirety as follows: The Distributor, directly or through the Company as its agent, will (a) maintain and preserve in accordance with Rules 17a-3 and 17a-4 under the 1934 Act all books and records required to be maintained in connection with the offer and sale of the Policies being distributed pursuant to this Agreement, which books and records shall remain the property of the Distributor and shall be subject to inspection by the Securities and Exchange Commission in accordance with Section 17(a) of the Act, and (b) upon or prior to completion of each transaction for which information is legally required, send a written confirmation for each such transaction reflecting the facts of the transaction. All records maintained hereunder will be available to properly constituted governmental authorities, should the same be required to be filed with or reviewed by said authorities. The Company shall have access to all records maintained hereunder and, upon reasonable request, copies shall be furnished to the Company. 2. This Amendment to the Separate Account Distribution Agreement shall be effective as of the date it was signed by all parties. In all other respects, the Separate Account Distribution Agreement will remain unchanged and in full force and effect. Accepted for Chubb Securities Corporation, Concord, NH this 24th day ---- of January, 1989. ------- By: /s/ Bruce R. Stefany -------------------------- Name: Bruce R. Stefany ------------------------ Title: President ----------------------- Accepted for The Volunteer State Life Insurance Company, Chattanooga, TN, this 24th day of January, 1989. ---- ------- By: /s/ Harold E. Ruck -------------------------- Name: Harold E. Ruck ------------------------ Title: President ----------------------- EX-99.1.C.III 5 SPECIMEN DISTRICT MANAGERS AGREEMENT Exhibit 1(c) (iii) SPECIMEN DISTRICT MANAGER'S AGREEMENT OF CHUBB SECURITIES CORPORATION Chubb Securities Corporation One Granite Place, P0 Box 2005 Concord, New Hampshire 03302 (603) 224-7741 DISTRICT MANAGER'S AGREEMENT This AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a corporation organized and existing under the laws of the State of New Hampshire with its principal place of business in Concord, New Hampshire (hereinafter called the Company) and ________________________________________________________ ____________________ of ________________________________ (hereinafter called the District Manager). In consideration of the premises and the mutual agreements herein made, it is agreed as follows: Effective Date The agreement shall be effective as of ________________________, 19__________ Territory It is agreed that the District Manager will represent the Company in the State(s) of __________________________________________________________________ and any other state in which the District Manager becomes registered hereafter. Terms 1. The Company, subject to the terms and conditions contained herein, hereby authorizes the District Manager, as an independent contractor, to represent it in the sale of securities for which the Company may now or hereafter act as principal, dealer, wholesaler or underwriter. The District Manager agrees to direct the sales activities of each Sales Representative assigned to the District Manager's agency and further to enforce the Supervisory Procedures (and any amendments thereto) issued by the Company from time to time in regard to such Sales Representatives. The District Manager shall at all times act in strict compliance with all state and federal securities laws, including but not limited to the Federal Securities Act of 1933, as amended, and with the rules and regulations of the National Association of Securities Dealers, Inc. 2. The Company reserves the right to accept or reject any or all business submitted to it by the District Manager. In all cases in which the question of credit for business, confirmation of orders, or compensation is not definitely stipulated herein, the decision of the Company shall be final. 3. The District Manager agrees to use his/her best efforts on behalf of the Company while so representing it, and will not engage in any employment by, or representation of, any issuer of or dealer in securities other than those offered by the Company without the written consent of the Company. The District Manager agrees to promptly report and remit to the Company all checks, drafts or funds of any kind received from customers without commingling same with the District Manager's own funds, and in the event of failure to do so, all rights hereunder, including all accrued and accruing commissions, shall immediately terminate. If and when requested by the Company, the District Manager shall furnish a surety bond satisfactory to the Company. This Agreement shall be immediately and automatically canceled upon cancellation of coverage by the surety under said bond. 4. The District Manager shall be free to exercise his/her own judgment as to whom to solicit and the time, place and manner of solicitation. The District Manager shall pay all expenses in connection with conducting business as a Sales Representative and shall comply with all federal and state laws, ordinances and regulations relating thereto. 1 The District Manager shall make no solicitation for any securities until he/she has been duly registered under the applicable state and federal laws, and until any license or permit required by law has been obtained, and unless such registration is then in effect. 5. The District Manager agrees that, in connection with all solicitations, he/she will not take or recommend any action which they may have reason to believe is not in the best interests of each client or customer. The District Manager agrees not to make any untrue statement or misrepresentations, or omit any material facts concerning the securities involved. The District Manager also agrees to comply in all respects with the Rules of Fair Practice, and other applicable rules of the National Association of Securities Dealers, Inc. and all applicable federal and state laws. 6. The District Manager hereby assigns to the Company any and all commissions or other monies owed to the District Manager under any contracts he/she may have with the Chubb Life Insurance Company of America or any subsidiary or affiliate thereof, as security for the repayment of any loan or extensions of credit made to the customers of the District Manager at the District Manager's request or for any losses incurred by the Company in any transaction. The District Manager hereby authorizes Chubb Life Insurance Company of America, or any of its subsidiaries or affiliates to pay such monies to the Company to the extent of the Company's interest therein upon receipt of written demand by the Company. 7. If the District Manager's contract with Chubb Securities Corporation has not been terminated, the District Manager shall be entitled to commissions with respect to all sales the District Manager shall make in accordance with the Commission Schedules issued from time to time by the Company and incorporated by reference herein. All commissions are payable subject to receipt of full payment for the securities sold. The District Manager hereby expressly waives all rights to such earned commissions or other payments until such time as the Company is in actual receipt of the concession due in respect to such sale. The amount of any such excess shall be refunded to the Company in the event of termination of this Agreement, to the extent that such commissions have not been earned prior to such termination. Any indebtedness from the District Manager to the Company shall be a first lien upon any amount due the District Manager hereunder. 8. The Company agrees that, if any Sales Representative assigned to the District Manager's agency is terminated under any conditions or circumstances which preclude the payment of commissions thereafter, then pursuant to Paragraph 8 of such Sales Representative's Agreement with the Company, the Company shall pay to the District Manager the Sales Representative's commissions which become due thereafter as personal production The Company shall, then treat such commissions as business personally produced by the District Manager. 9. If the District Manager either dies or retires after attaining the age of 55 or is permanently and totally disabled and terminates his license with the National Association of Securities Dealers, Inc., the Company will continue to pay commissions subject to the following conditions and limitations. If this Agreement is terminated for any reason other than death, retirement or permanent and total disability, then no commissions or other compensation shall be paid; provided however, that if this Agreement is terminated for any reason other than the National Association of Securities Dealers, Inc. disqualification, then commissions will continue to be paid in accordance with the Supplemental Commission Schedule (for any replacement thereof) on all premium payments received by the Company on variable life insurance products. Other than in the event of death, the District Manager must agree to the continuance of this Agreement and must agree in writing not to solicit any new securities business or to attempt to obtain a securities license through any other entity. If the District Manager so agrees, or in the event of death, the Company will continue to pay to the District Manager or his/her estate, all commissions due the District Manager totaling in excess of $100 per annum on business personally produced by the District Manager. Commissions payable will be determined based on New Customer Account forms executed prior to the termination of his license. Commissions will be payable for a period not to exceed 10 years from the date of termination or death. Commissions will be paid for the balance of the calendar year at the rate currently in effect at the time of termination. Thereafter, commissions will be paid at the appropriate commission level as determined pursuant to the terms of the District Manager's Commission Schedule. The Company will not pay commissions to any District Manager who is disqualified from association with any member of the National Association of Securities Dealers, Inc. because of revocation, expulsion, suspension, or any other reason, nor will the Company pay commissions in violation of any applicable laws or regulations. 10. The Company will, each month, furnish to the District Manager a statement of the District Manager's account showing all earnings and payments made to his/her account and the balance due from the Company and the amount of any indebtedness due from the District Manager to the Company. The District Manager agrees to notify the Company, in writing, 2 within 30 days, of any discrepancy or disagreement with such statement in any respect. In the absence of such notice, such statement shall be conclusively presumed to be correct unless the parties mutually agree to an adjustment in writing. 11. The Company may offset against any commissions or other monies accruing to the account of the District Manager under the terms of this Agreement any debts, liabilities, or other obligations of the District Manager due to the Company or any affiliate of the Company. This right of offset shall apply both during the existence of this Agreement and upon its termination. 12. Any commissions or other compensation due to a Sales Representative assigned to the District Manager's agency will be included in the commission paid to the District Manager for payment to the Sales Representative, unless the District Manager informs the Company in writing to pay commissions or other compensation directly to the Sales Representative. The District Manager agrees to pay commissions or other compensation to the Sales Representative in accordance with the Commission Schedules issued by the Company. 13. The District Manager shall obtain and maintain for the term of this Agreement errors and omissions insurance, satisfactory to the Company, and shall provide proof of such coverage to the Company. 14. This Agreement may be terminated at any time by either party upon thirty (30) days written notice to the other, and may be terminated immediately by the Company for cause or breach of this Agreement by the District Manager. Notice of such termination shall be deemed to be given on the day mailed or delivered. If mailed to the Company, such notice shall be addressed to the principal office of the Company at One Granite Place, Concord, New Hampshire 03301. If mailed to the District Manager, notice shall be addressed to the last known address as shown on the records of the Company. 15. With respect to any concession which the Company may receive as a residual concession at the termination of a direct participation program, it being understood that any such residual concession to the Company is contingent in nature and there is no guarantee that the Company will ever actually receive such payment, the Company will, upon receipt of such residual concession, pay out a commission to the District Manager in accordance with the vesting schedule as follows: (i) If the District Manager has been under agreement with the Company for no less than one nor more than five years, then he/she shall be vested to receive any residual concession three years or more after the program sale is made; (ii) If the District Manager has been under agreement with the Company for no less than six nor more than ten years, he/she shall be vested to receive any residual concession two years or more after the program sale is made; and (iii) If the District Manager has been under agreement with the Company for more than ten years, then he/she shall be vested to receive any residual concession one year or more after the program sale is made; provided, however, that the District Manager must continue to be under agreement with the Company for the number of years set forth in the applicable portion of the above vesting schedule after a program sale is made. If the District Manager does not remain under agreement for the applicable number of years after a program sale is made, then no residual concession shall be paid. The amount of the residual concession commission paid shall be as set forth in the Commission Schedule in effect at the time of the payment, but in no event will the commission be less than 75% of the concession which the Company actually receives. Payment of a commission to the District Manager out of any residual concessions received by the Company will be considered as any other commission and all provisions of this Agreement which relate to commissions will also apply to these commissions, specifically including but not limited to the terms of paragraphs 8 and 9. 16. This Agreement is made in the State of New Hampshire and all questions concerning its validity, construction or otherwise shall be determined under the laws of New Hampshire. IN WITNESS WHEREOF, the parties hereto have executed this agreement in duplicate as of the date first written below. Chubb Securities Corporation District Manager ---------------- by: -------------------------------- -------------------------------- Date: Date: ----------------------------- --------------------------- Date: --------------------- 3 Chubb Securities Corporation One Granite Place, PO Box 2005 Concord, New Hampshire 03302 (603) 224-7741 DISTRICT MANAGER COMMISSION SCHEDULE This Commission Schedule is a part of the District Manager's Agreement entered into by the District Manager and the Company, is incorporated by reference therein, and supersedes any prior schedule. Commissions will be a percentage of total dealer concession actually paid to the Company on all business produced personally by the District Manager or by any and all Sales Representatives assigned to the District Manager for supervision. Commissions will be paid on the following transactions: 1. Mutual Fund Cash Sales - Commissions will be paid only on sales of $20.00 or more. 2. Variable or Fixed Annuity and Mutual Fund Contractual Sales - Commissions will be paid on first year and subsequent payments. Commissions will be paid only on sales of $20.00 or more. 3. Private Placements - Commissions will be paid for all staged-in payments as well as any residual benefits available to the District Manager. For the purposes of computing commissions on private placements, the Company shall retain one-third of any marketing or due diligence expense allowance (or other terminology generally accepted to mean such a concept) paid on a per unit basis in excess of 9%, and will pay commissions out of the balance. 4. General Securities Sales of Any Other Type - No commissions are payable on the Execution fee collected from the customer. 5. Public Limited Partnerships, Unit Investment Trusts 6. Any Other Sales Made Available Through the Company's Facilities - In accordance with Supplemental Commission Schedules. Ensemble Premium (up to VOLCAP) Credit for purposes of commission level as set forth below will be given and applied to Dealer Concession until the total, including Ensemble premium, equals $25,000. After a total of $25,000 has been reached, no Ensemble premium credit will be allowed to reach any other commission level. During the first contract year (12 months following the date of full registration with the Company), the District Manager will receive 50% of Dealer Concession. A level in excess of 50% can be established during the first contract year if the District Manager provides the Company with proof of earnings from Securities Sales for a period immediately preceding registration with the Company. This higher level of commission must be authorized in writing by a Principal of the Company. After the first contract year, a commission level will be established for future commission payments on the basis of the Dealer Concession achieved by the District Manager during the first contract year. The commission level for each subsequent year will be established thereafter in January, based on the previous calendar year's Dealer Concession. Overriding commission has been incorporated in the below commission levels. Any reference to overriding commissions in the District Manager's Agreement is superseded by this Commission Schedule. The Dealer Concession levels to establish commission rates are as follows:
Dealer Concession Commission Level ----------------- ---------------- Up to $10,000 50% $10,000 to $24,999 65% $25,000 to $49,999 75% $50,000 to $74,999 77% $75,000 to $124.999 80% $125,000 to $199,999 82% $200,000 to $649,999 85% $650,000 to $899,999 87% $900,000 and above 90%
The above commission levels are retroactive to all Dealer Concession earned after January 1 of the then current year if a new commission level is attained during any given calendar year. 4 Dealer Concession earned will be monitored to effect the change in commission level as the District Manager becomes eligible for it. Once a higher commission level has been achieved, it will be credited and paid on the following commission statement. Each District Manager's Dealer Concession production will be subject to review on June 30th of each year. If the District Manager has not produced dealer concession above 70% of the prorated minimum for the attained commission level, the commission rate will be reduced on subsequent commissions earned to the appropriate level. If the District Manager is still in the first contract year, no reduction will take effect. The District Manager shall be responsible for the payment of the Sales Representative's commission from the commission paid to the District Manager. Payment to the Sales Representative in excess of the standard commission set forth in the Sales Representative's contract shall be permissible. Factors such as sales ability, potential, and other factors may be taken into account in making such payments to Sales Representatives assigned to the District Manager. This Commission Schedule rescinds and replaces all prior commission Schedules issued by the Company as of its effective date and will continue in effect until such time as a new Schedule is issued by the Company. Effective date of this Schedule: December 1, 1989. 5 Chubb Securities Corporation One Granite Place, PO Box 2005 Concord, New Hampshire 03302 (603) 224-7741 SUPPLEMENTAL DISTRICT MANAGER COMMISSION SCHEDULE Non-Participating Flexible Premium Variable Life Insurance Policies Issued by an Affiliated Life Insurance Company This Supplemental Commission Schedule is a part of the District Manager's Agreement entered into by the District Manager and Chubb Securities Corporation (the Company) and is incorporated by reference therein. COMMISSION Commissions on policies issued on applications personally written by the District Manager will be paid on premiums received by the Company as outlined on the below table. OVERRIDE Gross commissions on policies issued on applications personally written by the District Manager and on applications written by Sales Representatives attached to the District Manager's office will be paid on premiums received by the Company as outlined on the below table:
TYPE OF POLICY 1ST YEAR 2ND - 15TH YEAR RR DM RR DM Ensemble (1) Issue Ages 0-75 40% 15% 2% 2%
INITIAL SPECIFIED AMOUNT INITIAL SPECIFIED AMOUNT $25,000 - $99,999 $100,000 AND OVER RR DM RR DM ALL SPECIFIED AMOUNTS Ensemble II (1) Issue Ages 0-39 35 12.5 40 15 2% 2% Issue Ages 40-49 40 12.5 45 15 2% 2% Issue Ages 50-69 40 17.5 45 20 2% 2% Issue Ages 70-75 45 17.5 50 20 2% 2%
(i) First year rate based on premium less than or equal to the appropriate VOLCAP premium.
ALL SPECIFIED AMOUNTS Excess 1ST year 2% 2% premium
INITIAL SPECIFIED AMOUNT INITIAL SPECIFIED AMOUNT $25,000 - $99,999 $100,000 AND OVER RR DM RR DM ALL SPECIFIED AMOUNTS Ensemble II (Single Pay) (2) 3.5 2.5 4 3 2% 2%
(2) A Single Premium sale is defined as when the premium received in year one exceeds 75% of the DEFRA Guideline Single Premium as published in the rate card. The District Manager's Gross Commissions will be paid on this product as stated above even if the minimum commission requirement as stated in the District Manager Commission Schedule is not achieved. The Schedule of VOLCAP premium is published by the underwriting life insurance company in the rate card giving The Guideline Premium for Non Participating Flexible Premium Variable Life. Such Schedule is subject to change upon 30 days notice by the underwriting life insurance company. 6 VESTINGS I. Immediate Vesting ----------------- All overriding commissions and Sales Representative's commissions on personally produced business which accrue during the first ten policy years will be vested immediately. II. Lifetime Vestings ----------------- So long as 1) this contract will have been in force for at least three years before termination, 2) this contract will have been terminated for reasons other than cause, and 3) the District Manager has equivalent annualized life insurance premiums in force of $300,000, agent commissions and overriding commissions will be paid during the lifetime of the District Manager and for ten years following death to the District Manager's estate. III. Vesting in the Event of Death ----------------------------- The Company will pay all overriding commissions and Sales Representative's commissions on personally produced business to the District Manager's estate which accrue during the ten years following the District Manager's death. IV. Vesting in the Event of Total and Permanent Disability ------------------------------------------------------ The Company will pay all overriding commissions and Sales Representative's commissions on personally produced business to the District Manager which accrue during the District Manager's lifetime while total and permanent disability continues and to the District Manager's estate which accrue during the ten years following the District Manager's death if such death occurs while the District Manager is totally and permanently disabled. "Total and permanent disability" means the complete inability of the District Manager for a continuous period of six consecutive months in any occupation for which the District Manager is reasonably fitted by education, training or experience. V. Minimum Payment Condition ------------------------- After termination of this contract, commissions will be paid whenever the total amount due accrues to a minimum of $100. If the total commissions in any calendar year following contract termination amount to less than $500, no further commissions of any kind shall be paid. EFFECTIVE DATE OF THIS SCHEDULE: December 1, 1989. 7 EX-99.1.C.IV 6 SPECIMEN SALES REPS AGREEMENT Exhibit 1(c) (iv) SPECIMEN SALES REPRESENTATIVE'S AGREEMENT OF CHUBB SECURITIES CORPORATION Chubb Securities Corporation One Granite Place, PO Box 2005 Concord, New Hampshire 03302 (603) 224-7741 SALES REPRESENTATIVE'S AGREEMENT This AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a corporation organized and existing under the laws of the State of New Hampshire with its principal place of business in Concord, New Hampshire (hereinafter called the Company) and ________________________________________________________ ____________________ of ______________________ (hereinafter called the Sales Representative) In consideration of the premises and the mutual agreements herein made, it is agreed as follows: Effective Date The agreement shall be effective as of _________________________, 19 _________ Territory It is agreed that the Sales Representative will represent the Company in the State(s) of ________________________ and any other state in which the Sales Representative becomes registered hereafter. Terms 1. The Company, subject to the terms and conditions contained herein, hereby authorizes the Sales Representative, as an independent contractor, to represent it in the sale of securities for which the Company may now or hereafter act as principal, dealer, wholesaler or underwriter. The Sales Representative shall at all times act in strict compliance with the state and federal securities laws, including but not limited to the Federal Securities Act of 1933, as amended, and with the rules and regulations of the National Association of Securities Dealers, Inc. 2. The Company reserves the right to accept or reject any or all business submitted to it by the Sales Representative. In all cases in which the question of credit for business, confirmation of orders, or compensation is not definitely stipulated herein, the decision of the Company shall be final. 3. The Sales Representatives agrees to use his/her best efforts on behalf of the Company while so representing it, and will not engage in any employment by, or representation of, any issuer of or dealer in securities other than those offered by the Company without the written consent of the Company. The Sales Representative agrees to promptly report and remit to the Company all checks, drafts or funds of any kind received from customers without commingling same with the Sales Representative's own funds and, in the event of failure to do so, all rights hereunder, including all accrued and accruing commissions, shall immediately terminate. If and when requested by the Company, the Sales Representative shall furnish a surety bond satisfactory to the Company. This Agreement shall be immediately and automatically canceled upon cancellation of coverage by the surety under said bond. 4. The Sales Representative shall be free to exercise his/her own judgment as to whom to solicit and the time, place and manner of solicitation, subject to the vesting provisions of this Agreement. The Sales Representative shall pay all expenses in connection with conducting business as a Sales Representative and shall comply with all federal and state laws, ordinances and regulations relating thereto. The Sales Representative shall make no solicitation for any securities until he/she have been duly registered under the applicable state and federal laws, and until any license or permit required by law have been obtained, and unless such registration is then in effect. 5. The Sales Representative agrees that, in connection with all solicitations, he/she will not take or recommend any action which they may have reason to believe is not in the best interest of each client or customer. The Sales Representative agrees not to make any untrue statement or misrepresentations, or omit any material facts concerning the securities involved, and will also comply in all respects with the Rules of Fair Practice and other applicable rules of the National Association of Securities Dealers, Inc. and all applicable) federal and state laws. 6. The Sales Representative hereby assigns to the Company any and all commissions or other monies owed to the Sales Representative or which hereafter accrue to the Sales Representative under any contracts he/she may have with the Chubb Life Insurance Company of America or any subsidiary or affiliate thereof, as security for the repayment of any loan or extensions of credit made to the customers of the Sales Representative at the Representative's request by the Company or for any losses incurred by the Company in such transaction. The Sales Representative hereby authorizes Chubb Life Insurance Company of America, or applicable subsidiary or affiliate, upon receipt of written demand by the Company, to pay such monies to the Company to the extent of the Company s interest therein. 7. The Sales Representative shall be entitled to commissions with respect to all sales the Sales Representative shall make in accordance with the Commission Schedules issued from time to time by the Company and incorporated by reference herein. Any commission will be paid by the Company to the Sales Representative's District Manager, who will then pay the commission over to the Sales Representative, unless the District Manager specifies in writing to the Company that commissions shall be paid directly to the Sales Representative or as otherwise required by law. All commissions are payable subject to receipt of full payment for the securities sold and the Sales Representative hereby expressly waives all rights to such earned commissions or other payments until such time as the Company is in actual receipt of the concession due in respect to such sale. Payments, if any, made to the Sales Representative or for the Sales Representative's account in excess of commissions earned by the Sales Representative in accordance with said Commission Schedules as amended or supplemented shall be deemed advances against future commissions and the amount of any such excess shall be refunded to the Company in the event of termination of this Agreement, to the extent that such commissions have not been earned prior to such termination. Any indebtedness from the Sales Representative to the Company shall be a first lien upon any amount due the Sales Representative hereunder. 8. If the Sales Representative's license with the National Association of Securities Dealers, Inc. is terminated as a result of retirement, after attaining the age of 55, or as a result of sustaining a total and permanent disability, and if the Sales Representative agrees in the case of such retirement or disability to the continuance of this Agreement and executes a form agreeing not to solicit any new securities business or attempt to obtain licensing with the National Association of Securities Dealers, Inc. through any other entity, or if this Agreement is terminated as a result of the death of the Sales Representative then, in any such case, the Company will continue to pay to the Sales Representative, successors or assigns, all commissions totaling in excess of $100 per annum, on business which was personally produced by the Sales Representative, which would otherwise be due the Sales Representative under the applicable Commissions Schedules, on all accounts which continue to be credited to the Sales Representative as personal production pursuant to the New Customer Account forms executed under this Agreement prior to such termination or death and not resulting from any solicitation after termination for a period not to exceed five (5) years from the date of such termination or death. All vested payments as detailed above, shall relate solely to business of the Sales Representative which remains credited to the Sales Representative pursuant to New Customer Account forms executed prior to such termination or death and which remain in force during the term of such vesting. The Company reserves the right not to pay any commissions after termination if the Sales Representative refuses to execute written acknowledgement of the continuance of this Agreement or if the Company receives proof of further securities solicitation or licensing with the National Association of Securities Dealers, Inc. by the former Sales Representative. If this Agreement is terminated for any reason other than death, retirement or permanent and total disability, then no commissions or other compensation shall be paid; provided, however, that if this Agreement is terminated for any reason other than the National Association of Securities Dealers, Inc. disqualification, then commissions will continue to be paid in accordance with the Supplemental Commission Schedule (or any replacement thereof) on all premium payments received by the Company on variable life insurance products. The Company will not pay commissions to any Sales Representative who is disqualified from association with any member of the National Association of Securities Dealers, Inc. because of revocation, expulsion, suspension, or any other reason, nor will the Company pay commissions in violation of any applicable laws or regulations. 9. The Company will, each month, furnish to the Sales Representative a statement of the Sales Representative's account showing all earnings and payments made to his/her account and the balance due from the Company and the amount of any indebtedness due from the Sales Representative to the Company. The Sales Representative agrees to notify the Company, in writing, within 30 days, of any discrepancy or disagreement with such statement in any respect, and in the absence of such notice, the statement shall be conclusively presumed to be correct unless the parties mutually agree to an adjustment in writing. 10. The Company may offset against any commissions or other monies accruing to the account of the Sales Representative any debts, liabilities, or other obligations of the Sales Representative due to the Company or any affiliate of the Company. The Company may also in its sole discretion offset against any commissions or other monies accruing to the account of the Sales Representative any debts or liabilities of the Sales Representative due to his/her District Manager. 11. Should the Sales Representative transfer to a new District Manager's agency, any override commissions shall then be paid to the New District Manager. Should Chubb Securities Corporation One Granite Place, PO Box 2005 Concord, New Hampshire 03302 (603) 224-7741 CHUBB SECURITIES CORPORATION COMMISSION SCHEDULE This Commission Schedule is a part of the Sales Representative Agreement entered into by the Sales Representative and the Company and is incorporated by reference therein. Commissions on sales made and actually paid for will be paid in accordance with the Agreement and the following schedule: 1. Mutual Fund Cash Sales - 50% of dealer concession on sales of $20.00 or more. 2. Variable or Fixed Annuity and Mutual Fund Contractual Sales - 50% of dealer concession or commission on first year and subsequent payments on sales of $20.00 or more. 3. Private Placements - 50% of dealer concession as received, for all staged-in payments. For the purposes of computing commissions on private placements, the Company shall retain one-third of any marketing or due diligence expense allowance (or other terminology generally accepted to mean such a concept) paid on a per unit basis in excess of 9%, and will pay commissions out of the balance. 4. General Securities Sales of any other type - 50% of Dealer concession, as received, after deduction of the Execution fee. 5. Public Limited Partnerships, Unit Investment Trusts - 50% of Dealer concession. 6. Any other securities made available through the Company's facilities - in accordance with Supplemental Commission Schedules. This Commission Schedule rescinds and replaces all prior commission schedules issued by the Company as of its effective date and will continue in effect until such time as a new Schedule of Commissions may be established by the Company. The effective date of this Commission Schedule is _______________, 19____. Chubb Securities Corporation One Granite Place, PO Box 2005 Concord, New Hampshire 03302 (603) 224-7741 SUPPLEMENTAL SALES REPRESENTATIVE COMMISSION SCHEDULE Non-Participating Flexible Premium Variable Life Insurance Policies Issued by an Affiliated Life Insurance Company This Supplemental Commission Schedule is a part of the Sales Representative's Agreement entered into by the Sales Representative and Chubb Securities Corporation (the Company) and is incorporated by reference therein. Commissions on policies issued on applications personally written by the Sales Representative will be paid on premiums received by the Company in accordance with the Agreement and the following table:
TYPE OF POLICY 1ST YEAR 2ND - 15TH YEAR Ensemble (1) Issue Ages 0-75 40% 2%
INITIAL SPECIFIED AMOUNT $25,000 - $99,999 $100,000 AND OVER ALL SPECIFIED AMOUNTS Ensemble II (1) Issue Ages 0-39 35% 40% 2% Issue Ages 40-49 40% 45% 2% Issue Ages 50-69 40% 45% 2% Issue Ages 70-75 45% 50% 2%
(1) First year rate based on premium less than or equal to the appropriate VOLCAP premium.
INITIAL SPECIFIED AMOUNT $25,000 - $99,999 $100,000 AND OVER ALL SPECIFIED AMOUNTS Excess 1ST year premium Ensemble II (Single Pay) (2) 3.5% 4% 2%
(2) A Single Premium sale is defined as when the premium received in year one exceeds 75% of the DEFRA Guideline Single Premium as published in the rate card. The Schedule of VOLCAP premium is published by the underwriting life insurance company as part of The Guide Line Premiums for Non-Participating Flexible Premium Variable Life. Such Schedule is subject to change upon 30 days notice by the underwriting life insurance company. VESTINGS I. Immediate Vesting ----------------- Sales representative's commissions which accrue during the first five policy years immediately will be vested. II. Lifetime Vesting ---------------- So long as 1) this contract is terminated after the sales representative's sixty-fifth birthday and during the sales representative's lifetime, 2) this contract will have been in force for three years, and 3) the contract is terminated not for cause, commissions will be paid as they accrue to the Sales Representative during his/her lifetime and to the Sales Representative's estate for five years following the Sales Representative's death. III. Vesting in the Event of Death ----------------------------- The Company will pay to the Sales Representative's estate all commissions which accrue during the five years following the Sales Representative's death. IV. Vesting in the Event of Total and Permanent Disability ------------------------------------------------------ The Company will pay all commissions on business which accrues during the Sales Representative's lifetime while total and permanent disability continues and to the Sales Representative's estate which accrue during the five years following the Sales Representative's death if such death occurs while the Sales Representative is totally and permanently disabled. "Total and permanent disability" means the complete inability of the Sales Representative for a continuous period to six consecutive months to engage in any occupation for which the Sales Representative is reasonably fitted by education, training, or experience. V. Minimum Payment Conditions -------------------------- After termination of this contract, commissions will be paid whenever the total amount due accrues to a minimum of $100. If the total commissions in any calendar year following contract termination amount to less than $500, no further commissions of any kind shall be paid. EFFECTIVE DATE OF THIS SCHEDULE: December 1, 1989. EX-99.1.C.V 7 SCHEDULE OF COMMISSIONS Exhibit 1(c) (v) SCHEDULE OF COMMISSIONS SCHEDULE OF SALES COMMISSIONS ----------------------------- WRITING AGENTS -------------- First year commissions to writing agents can range up to 50% of first year gross premiums, and up to 2% of gross premiums for policy years two through fifteen. No commissions are paid after the fifteenth policy year. DISTRICT MANAGERS ----------------- First year commissions, including bonuses, to district managers can range up to 35% of first year gross premiums, 17% of second year gross premiums, 12% of the third through fifth year gross premiums, and 2% of the sixth through fifteenth year gross premiums. No commissions or bonuses are paid after the fifteenth policy year. EX-99.1.E 8 SPECIMEN POLICY W/FORM OF RIDERS Exhibit 1(e) SPECIMEN POLICY WITH FORM OF RIDERS [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] INSURED: #ENSEMBLE II - TN POLICY NUMBER: 6550001 The Volunteer State Life Insurance Company (A stock company, herein called the Company), will pay the Death Benefit specified on page 6 to the Beneficiary on receipt of due proof of the Insured's death, subject to the provisions of this and the following pages, all of which are a part of this policy. This is a Flexible Premium Variable Life Insurance Policy. The Specified Amount may be increased or decreased by the Owner. Net Premiums will be allocated to the General Account or to one or more divisions of Chubb/Volunteer Separate Account A (herein called Separate Account A) as determined by the Owner. THE POLICY'S ACCUMULATION VALUE IN EACH DIVISION OF SEPARATE ACCOUNT A IS BASED ON THE INVESTMENT EXPERIENCE OF THAT DIVISION AND MAY INCREASE OR DECREASE DAILY. THE ACCUMULATION VALUE IS NOT GUARANTEED AS TO DOLLAR AMOUNT. The policy's accumulation value in the General Account will earn interest daily at a minimum guaranteed effective rate of 4 1/2%. Interest in excess of the guaranteed rate may be applied in the calculation of the accumulation value at such increased rates as the Company may determine. THE AMOUNT OF DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY VARY UNDER THE CONDITIONS DESCRIBED ON PAGES 6 AND 7. This policy is a legal contract between the Owner and The Volunteer State Life Insurance Company. READ YOUR POLICY CAREFULLY RIGHT TO CANCEL - Please examine this policy carefully. The Owner may cancel this policy by returning it to Volunteer or to the agent through whom it was purchased within 10 days after the date the Owner receives the policy, within 45 days of the date of the execution of the application for insurance, or within 10 days after mailing or personal delivery of a Notice of the Right of Withdrawal, whichever is later. If the policy is returned, it will be deemed void from the beginning and any premium paid for it will be refunded within 7 days. Executed for the Company at its Home Office in Chattanooga, Tennessee, as of the policy date. [SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE] President Secretary _____________________________________________ Registrar Flexible Premium Variable Life Insurance Policy. Flexible Premiums Payable Until the Maturity Date or Until Prior Death. Adjustable Death Benefit. Insurance Payable at Death. Some Benefits Reflect Investment Results. Additional Benefits, if any, as indicated on Page 3. Non-Participating. No Dividends. GUIDE TO POLICY PROVISIONS
Page Administrative Charges....................................................... 3 Age at Issue................................................................. 3 Beneficiary.................................................................. 3 Death Benefit Option......................................................... 3 Death Benefit Provisions: Death Benefit............................................................... 6 Changes in Existing Insurance Coverage................................................................... 7 Change of Maturity Date..................................................... 7 General Provisions: Contract.................................................................... 8 Ownership................................................................... 8 Incontestability............................................................ 8 Suicide..................................................................... 8 Misstatement of Age......................................................... 8 Beneficiary................................................................. 9 Assignment.................................................................. 9 Proceeds.................................................................... 9 Payment of Proceeds......................................................... 9 Postponement of Payments.................................................... 9 Age......................................................................... 10 Modification................................................................ 10 Policy Date................................................................. 10 Effective Date of Coverage.................................................. 10 Termination................................................................. 10 Maturity Date............................................................... 10 Annual Report............................................................... 10 Non-Participating........................................................... 10 Guaranteed Monthly Cost of Insurance Rates............................................................ 4 Initial Specified Amount..................................................... 3 Insured...................................................................... 3 Nonforfeiture Values: Accumulation Value.......................................................... 14 Cash Value.................................................................. 14 Surrender Charge............................................................ 14 Separate Account Accumulation Values..................................................................... 1 Net Investment Factor....................................................... 15 Page Nonforfeiture Values (cont.): General Account Accumulation Value...................................................................... 15 General Account Interest Rate............................................... 15 Monthly Deduction........................................................... 16 Cost of Insurance........................................................... 16 Cost of Insurance Rates..................................................... 16 Insufficient Cash Value..................................................... 16 Continuation of Insurance................................................... 16 Surrender................................................................... 16 Withdrawal of Cash Value (Withdrawal)............................................................... 17 Basis of Computations....................................................... 17 Illustration of Benefits and Values..................................................................... 17 Owner........................................................................ 3 Policy Date.................................................................. 3 Policy Loans: Policy Loans................................................................ 11 Policy Loan Interest........................................................ 11 Debt........................................................................ 11 Policy Loan Repayment....................................................... 11 Premium Provisions: Premium Payments............................................................ 5 Planned Periodic Premiums................................................... 5 Net Premiums................................................................ 5 Allocation of Net Premiums.................................................. 5 Unscheduled Premiums........................................................ 5 Grace Period................................................................ 5 Reinstatement............................................................... 6 Separate Account Provisions: Separate Account............................................................ 12 Divisions................................................................... 12 Transfers.................................................................12,13 Addition, Deletion, or Substitution of Investments................................................ 13 Settlement Options.........................................................18,19 Right to Cancel.............................................................. 1
A copy of the application will be found after page 18. Any other benefit agreements will also be found after page 18. Page 2 PREMIUM PROVISIONS Premium Payments - An initial premium is due and payable on the policy date. The initial premium must be large enough, after the deduction of the premium expense charge, to cover monthly deductions for at least three months. All premiums are payable at the Home Office of the Company or to an authorized agent of the Company in exchange for a receipt. This receipt must be signed by an elected officer of the Company and countersigned by such agent. The Company will not accept a premium payment less than $25. Planned Periodic Premium and Premium Frequency - The Planned Periodic Premium and Premium Frequency, as shown on page 3, are selected by the Owner. The Planned Periodic Premium is the amount of premium the Owner intends to pay. The Premium Frequency is how often the Owner intends to pay the Planned Periodic Premium. Payment of the Planned Periodic Premium is at the option of the Owner. The Company will send Planned Periodic Premium payment reminder notices. If the mode of premium payment is preauthorized check, government allotment or payroll deduction, notice of any Planned Periodic Premium due will not be sent. Changes in Premium Frequency and increases or decreases in the Planned Periodic Premium may be made by the Owner by providing written notification to the Company. The Company reserves the right to limit the amount of any increase. Net Premium - The net premium is equal to the premium paid multiplied by 97.5%. The deduction of 2.5% is a premium tax charge. Allocation of Net Premiums - The Owner will determine the allocation of the net premiums among the General Account and the divisions of Separate Account A. The minimum percentage that may be allocated to any of these accounts is 10%. Unscheduled Premiums - Premium payments in addition to the Planned Periodic Premium may be made at any time prior to the Maturity Date. The Company reserves the right to limit the number and amount of additional premium payments. If there is an existing policy loan, premium payments in the amount of the Planned Periodic Premium, received at the Premium Frequency, will be applied as premium. Premium payments in excess of the Planned Periodic Premium or premium payments received other than at the Premium Frequency, will first be applied as policy loan repayments, then as premium when the policy loan is repaid. Grace Period - The Company will allow a grace period of 61 days. Such grace period will begin on the day that the Company sends notice to the Owner and to the assignee, if any, that the cash value less any policy debt on a Monthly Anniversary Day is not enough to cover the monthly deduction for the month following such Monthly Anniversary Day. The cash value and monthly deduction are defined in the Nonforfeiture Provisions section. The policy will terminate without value at the end of the grace period unless a premium large enough, after the deduction of the premium expense charge, to cover monthly deductions for at least three months is paid by the end of the grace period. If the Insured dies during the grace period, the Company will deduct any overdue monthly deduction, which is applicable to the grace period, from the proceeds of the policy. 8602 Page 5 Reinstatement - If this policy terminates as provided in the Grace Period provision, it may be reinstated by the Owner at any time within five years after the date of termination. Reinstatement must occur before the maturity date. Reinstatement is subject to the following requirements: (1) Receipt of satisfactory evidence of insurability by the Company. (2) Payment of a premium large enough, after the deduction of the premium expense charge, to cover: (a) Monthly deductions for at least three policy months following the effective date of reinstatement. (b) Any due and unpaid monthly administrative charges. (3) Payment or reinstatement of any debt against the policy which existed on the date of termination. The effective date of a reinstated policy shall be the date the Company approves the application for reinstatement. Prior to receipt of the required premium for reinstatement, the accumulation value of the policy on the date of reinstatement shall be the accumulation value on the date of termination. The surrender factor in effect on reinstatement shall be as defined in the Surrender Charge section. DEATH BENEFIT PROVISIONS Death Benefit - The death benefit provided by this policy depends on the Death Benefit Option in effect on the date of death. The Death Benefit Option for this policy is shown on page 3. Option I - Under Option I, the death benefit shall be the greater of: (1) The Specified Amount, or (2) The accumulation value on the date of death multiplied by the corridor percentage. Option II - Under Option II, the death benefit shall be equal to the Specified Amount plus the accumulation value on the date of death. However, the death benefit can never be less than the accumulation value on the date of death multiplied by the corridor percentage. The corridor percentage depends on the attained age of the Insured on the date of death.
- ------------------------------------------------------------------------------------------------------------------------- Attained Corridor Attained Corridor Attained Corridor Attained Corridor Age Percentage Age Percentage Age Percentage Age Percentage - ------------------------------------------------------------------------------------------------------------------------- 40 & below 250% 52 171% 64 122% 91 104% 41 243 53 164 65 120 92 103 42 236 54 157 66 119 93 102 43 229 55 150 67 118 94 101 44 222 56 146 68 117 95 100 45 215 57 142 69 116 46 209 58 138 70 115 47 203 59 134 71 113 48 197 60 130 72 111 49 191 61 128 73 109 50 185 62 126 74 107 51 178 63 124 75-90 105 - -------------------------------------------------------------------------------------------------------------------------
8602 Page 6 Changes in Existing Coverage - The Initial Specified Amount is shown on page 3. At any time after the first policy anniversary, the Owner may, by written request, increase or decrease the Specified Amount. Any change is subject to the following conditions: (1) Any decrease will become effective on the Monthly Anniversary Day that coincides with or next follows receipt of the request. Any such decrease will be deducted in the following order: (a) From the most recent Specified Amount increase, if any; (b) Successively from the next most recent Specified Amount increase, if any; (c) From the Initial Specified Amount. (2) Any request for an increase must be applied for on a supplemental application and shall be subject to evidence of insurability satisfactory to the Company. The minimum increase in Specified Amount is $25,000. (3) Any change approved by the Company will become effective on the effective date shown in the Supplemental Policy Specifications page, subject to deduction of the first month's cost of insurance therefor from the accumulation value of this policy. (4) The Owner may request in writing to change the Death Benefit Option. If the request is to change from Option I to Option II, the Specified Amount will be decreased by the amount of the accumulation value. Evidence of insurability satisfactory to the Company will be required on a change from Option I to Option II. If the request is to change from Option II to Option I, the Specified Amount will be increased by the amount of the accumulation value. The effective date of either change shall be the Monthly Anniversary Day that coincides with or next follows the day the request for change is received. (5) The minimum decrease in Specified Amount, by the Owner, is $25,000. No such decrease may reduce the Specified Amount below $100,000. Change of Maturity Date - The Maturity Date may be changed, upon written request by the Owner. The new Maturity Date may be any policy anniversary after the end of the tenth policy year and before the policy anniversary nearest the Insured's 95th birthday. However, the new Maturity Date must be at least twelve months from the date the Company receives a written request therefor from the Owner. 8603 Page 7 GENERAL PROVISIONS The Contract - This contract is made in consideration of the application and the payment of an initial premium sufficient to keep this policy in force for at least two months. A copy of the application is attached as a part of this policy. The entire contract consists of this policy and the application (and any supplemental applications for additional Specified Amounts). In the absence of fraud, all statements in an application shall be deemed representations and not warranties. No statement shall be used to avoid this policy or to defend against a claim unless it is contained in the application or in a supplemental application, and a copy of such application is attached to the policy when issued or made a part of the policy when changes in the Specified Amount become effective. Ownership of Policy - The Insured shall be the Owner of the policy unless stated otherwise in the contract or changed at a later date. During the lifetime of the Insured all rights under this policy will be exercised by the Owner if the Owner has reserved the right to change the beneficiary. The Owner may name a new Owner or name a Contingent Owner. The Owner may change a Contingent Owner. If the Owner does not survive the Insured, the Contingent Owner will, if living, become the Owner. Upon proper written notice of the Owner any prior revocable designation of a Contingent Owner or beneficiary will be voided. Unless otherwise stated, all rights under this policy are vested in the Owner or in the Owner's assigns. Incontestability - The Company will not contest this policy, except for any increase in the Specified Amount, after it has been in force during the lifetime of the Insured for a period of two years from its policy date. This provision does not apply to any benefits provided by a rider which grants disability benefits or an added benefit in the event death results from an accident. Any increase in the Specified Amount will not be contested after such increase has been in force during the lifetime of the Insured for two years following the effective date of such increase. Any increase will be contestable, within the two year period, only with regard to statements concerning the increase. Suicide - This policy does not cover the risk of suicide within two years from the policy date, whether the Insured is sane or insane. In such event, the only liability of the Company will be a refund of premiums paid without interest less any policy loan and less any partial surrender. This policy does not cover the risk of suicide, whether sane or insane, within two years from the effective date of any increase in the Specified Amount with respect to such increase. In such event, the only liability of the Company will be a refund of the cost of insurance for such increase. Misstatement of Age or Sex- If the age or sex of the Insured has been misstated, the amount payable under this policy by reason of the death of the Insured shall be equal to the sum of the following: (1) The accumulation value on the date of death, less any debt. (2) The death benefit, less the accumulation value on the date of death, multiplied by the ratio of (a) the cost of insurance actually deducted at the beginning of the policy month in which death occurs, to (b) the cost of insurance that should have been deducted at the Insured's true age or sex. 8603 Page 8 Beneficiary - At any time prior to the death of the Insured, the Owner may name or change a revocable beneficiary. If no beneficiary has been named, the Owner will be the beneficiary. A change of the Owner or beneficiary must be made in writing. To be binding on the Company, the change must be signed by the Owner and any irrevocable beneficiary and must be filed at the Home Office. Any such change shall take effect as of the date it was signed, subject to any payment made or other action taken by the Company before the change was filed. Unless otherwise provided, the proceeds to be paid at the death of the Insured shall be paid in equal shares to those named benefici- aries who survive the Insured. Payment will be made in the following order: (1) the primary beneficiaries, (2) any secondary beneficiaries, if no primary beneficiary survives the Insured, (3) any tertiary beneficiaries, if no primary or secondary beneficiary survives the Insured, (4) Owner, (5) the executors, administrators, or assigns of the Owner, if no named beneficiary survives the Insured. The terms "children" or "lawful children" of a person, when used to name beneficiaries, shall include only lawful children born to or legally adopted by that person. Assignment - No assignment of this policy will be binding upon the Company until it has been filed at its Home Office. Each assignment will be subject to any payments made or action taken by the Company before it was filed. The Company will not be responsible for any assignment being valid or sufficient. Proceeds - Proceeds means the amount payable on the maturity date, on the surrender of this policy before the maturity date or upon the death of the Insured. The proceeds payable on the death of the Insured shall be the death benefit, less any debt. If the policy is surrendered, the proceeds shall be the cash value, less any debt. On the maturity date the proceeds shall be the cash value, less any debt. The proceeds are subject to the adjustment provided in the Misstatement of Age, Incontestability and Suicide provisions of this policy. Payment of Proceeds - Unless an optional mode of settlement is elected, the proceeds payable on the death of the Insured shall be paid in one sum to the beneficiary. Unless an optional mode of settlement is elected, any proceeds payable on the maturity date or upon surrender of this policy shall be paid in one sum to the Owner. Postponement of Payments - The Company will usually pay any amounts payable on surrender, withdrawal, or policy loan allocated to Separate Account A within seven days after written notice is received. The Company will usually pay any death benefit proceeds within seven days after the Company receives due proof of death. Payment of any amount payable on surrender, withdrawal, policy loan, or death may be postponed whenever: (1) The New York Stock Exchange is closed other than customary week-end and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Commission; (2) The Securities and Exchange Commission, by order, permits postponement for the protection of policyowners; or (3) An emergency exists as determined by the Securities and Exchange Commission, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the net assets of Separate Account A. Transfers may also be postponed under these circumstances. The Company may defer the portion of any transfer, amount payable on surrender, withdrawal or policy loan from the General Account for not more than six months. However, no payment from the General Account to pay premiums on policies with the Company will be deferred. 8604 Page 9 Age - Age of the Insured, as used herein, refers to the age nearest birthday on the policy date. Attained age of the Insured means the age nearest birthday on the last policy anniversary. Modification - Only an elected officer of the Company can, on behalf of the Company, change or modify this policy or waive any of the Company's rights or requirements. Any such changes must be made in writing. Policy Date - The date shown on page 3, which is the date requested by the Owner or the later of the date of application or the date of any required medical examination. The policy date is the date from which policy years, policy months, and policy anniversaries will be determined. Effective Date of Coverage - The effective date of coverage under this policy shall be as follows: (1) For all coverage provided in the original application, the effective date shall be the policy date. (2) For any increase or addition to coverage, the effective date shall be the date shown on the Supplemental Policy Specifications page. The effective date for such coverage shall begin on the policy Monthly Anniversary Day that coincides with or next follows the date the application for the increase or addition is approved by the Company. Termination - All coverage under this policy shall terminate when any one of the following events occurs: (1) The Owner requests that coverage terminate. (Such request will require a surrender of this policy.) (2) The Insured dies. (3) The policy matures. (4) The grace period ends. Maturity Date - Unless otherwise specified, the maturity date will be the policy anniversary nearest the Insured's 95th birthday. Coverage may expire before the maturity date if no premiums are paid after the initial premium or future premiums are not enough to continue coverage to such date. Annual Report - Each year a report will be sent to the Owner which shows the current cash value, premiums paid and all charges since the last report, and outstanding policy loans. Non-Participating - This policy does not share in any surplus distribution of the Company. No dividends are payable. Specified Amount - The face amount of the policy, which is the minimum death benefit payable under the policy. 8604 Page 10 POLICY LOANS Policy Loans - After the first policy anniversary, a loan will be granted upon the sole security and assignment of this policy to the Company. The maximum loan amount is 90% of the cash value on the date of the loan. Any prior debts to the Company against this policy will be deducted from the amount advanced under the loan. Any outstanding debt will be deducted from the proceeds payable at the Insured's death, on maturity, or on surrender. The Owner may allocate the policy loan among the General Account and the divisions of Separate Account A. If the Owner does not specify the allocation, then the policy loan will be allocated among the General Account and the divisions of Separate Account A in the same proportion that the accumulation value in the General Account, less any debt, and the accumulation value in each division bears to the total accumulation value of the policy, less any debt, on the date of the policy loan. Accumulation value in each division equal to the policy loan allocated to each division will be transferred to the General Account and reduce the accumulation value in that division. If loan interest is not paid when due, an amount of accumulation value equal to the loan interest will also be transferred. If the policy debt exceeds the policy's accumulation value in the General Account, the Company will transfer accumulation value equal to the excess debt from the divisions of Separate Account A to the General Account as security for the excess debt. The amount transferred will be allocated among the divisions in the same proportion that the accumulation value in each division bears to the policy's total accumulation value in all divisions of Separate Account A. Policy Loan Interest - Interest on policy loans is payable at the effective rate of 8%, or at any lower rate established by the Company for any period during which the loan is outstanding. Loan interest accrues on a daily basis from the date of the loan and is payable at the end of each policy year. Loan interest unpaid on a policy anniversary becomes loan principal. The Company shall provide at least 30 days written notice to the Owner (or any other party designated by the Owner to receive notice under this policy) and any assignee recorded at the Home Office of any increase in the interest rate on loans outstanding 40 or more days prior to the effective date of the increase. As to loans made during the 40 days before the effective date of the policy loan interest rate increase, the Company shall notify the Owner and any assignee at the time the loan is made. The effective date of any increase in such interest rate shall not be less than one year after the effective date of the establishment of the previous rate. If the interest rate is increased, the amount of such increase shall not exceed one percent per year. Interest accrues on a daily basis from the date of the loan and is compounded annually. Interest unpaid on a policy anniversary becomes loan principal. Debt - As used in this policy, debt means the principal of any loan outstanding against this policy, plus any accrued loan interest. If the policy debt exceeds the cash value, the Company will send a notice by mail to the Owner and to the assignee, if any, at their addresses last reported to the Company. If the excess is not paid within 61 days from the date the notice is mailed, the policy will terminate without value. Policy Loan Repayment - Any debt may be repaid, in whole or in part, at any time while this policy is in force. When a loan repayment is made, accumulation value securing the debt in the General Account equal to the loan repayment will be allocated among the General Account and divisions of Separate Account A using the same percentages used to allocate net premiums. 8605 Page 11 SEPARATE ACCOUNT PROVISIONS Separate Account - The variable benefits under this policy are provided through investments in Separate Account A. The Company established Separate Account A as a separate investment account to support variable life insurance contracts. The Company will not allocate assets to Separate Account A to support the operation of any contracts or policies that are not variable life insurance. The assets of Separate Account A are owned by the Company. However, these assets are not part of the Company's General Account. Income, gains and losses, whether or not realized, from assets allocated to Separate Account A will be credited to or charged against the account without regard to the Company's other income, gains or losses. Assets equal to the reserves and other liabilities of Separate Account A will not be charged with liabilities that arise from any other business the Company may conduct. The Company shall have the right to transfer to its General Account any assets of Separate Account A which are in excess of such reserves and other policy liabilities. Separate Account A is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940. Separate Account A is also subject to the laws of the State of Tennessee which regulate the operations of insurance companies incorporated in Tennessee. The investment policy of Separate Account A will not be changed without the approval of the Insurance Commissioner of the State of Tennessee. The approval process is on file with the Insurance Commissioner of the state in which this policy was delivered. Divisions - Separate Account A has several divisions. Each division will buy shares of a separate series of Chubb America Fund, Inc. Each series represents a separate investment portfolio of Chubb America Fund, Inc. All divisions of Separate Account A are shown on page 3. The Owner will determine the percentage of net premiums which will be allocated to each division. Income, gains and losses, whether or not realized, from the assets of each division of Separate Account A are credited to or charged against that division without regard to income, gains or losses in other divisions of Separate Account A or in the General Account. The Company will value the assets of each division of Separate Account A at the end of each valuation period. A valuation period is the period between two successive valuation dates. A valuation date is each day that the New York Stock Exchange is open for business or any other day in which there is material change in the value of the assets in Separate Account A. Transfers - The Owner may transfer amounts between the General Account and the divisions of Separate Account A or among the divisions of Separate Account A by sending a written request to the Company. The total amount transferred must be at least $250. No amounts under $250 may be transferred out of any division of Separate Account A or the General Account unless such lesser amount constitutes the entire balance. A transfer charge equal to the lesser of $25 or 10% of the amount transferred will be imposed each time amounts are transferred, except with respect to policy loans. The transfer charge will be deducted from the amount that is transferred. The Company will make transfers so that the accumulation value on the date of transfer will not be affected by the transfer except to the extent of the transfer charge. The Company may revoke or modify the transfer privilege at any time, including the minimum amount transferable and the transfer charge. 8605 Page 12 As long as any portion of the policy's accumulation value is allocated to a division of Separate Account A, the policy's accumulation value and cash value will reflect the investment performance of the chosen division(s) of Separate Account A. The death benefit may also reflect the performance of the chosen division(s) of Separate Account A. At any time, the Owner may transfer 100% of the policy's accumulation value to the General Account. While 100% of the policy's accumulation value is allocated to the General Account, minimum benefits for the policy will be fixed and guaranteed. No transfer charge will be imposed for a transfer of all accumulation value in Separate Account A to the General Account. However, any transfer from the General Account to the division(s) of Separate Account A will be subject to the transfer charge. Addition, Deletion, or Substitution of Investments - The Company reserves the right, subject to compliance with applicable law, to make additions to, deletions from, or substitutions for the shares of a series that are held by Separate Account A or that Separate Account A may purchase. The Company reserves the right to eliminate the shares of any of the series of Chubb America Fund, Inc. and to substitute shares of another series of Chubb America Fund, Inc. or of another open-end, registered investment company, if the shares or series are no longer available for investment or if in the Company's judgement, further investment in any eligible series should become inappropriate in view of the purposes of the policy. The Company will not substitute any shares attributable to the Owner's interest in a division of Separate Account A without notice to the Owner and prior approval of the Securities and Exchange Commission, to the extent required by the Investment Company Act of 1940. This shall not prevent Separate Account A from purchasing other securities for other series or classes of policies, or from permitting conversion between series or classes of policies or contracts on the basis of requests made by owners. The Company reserves the right to establish additional divisions of Separate Account A, each of which would invest in a new series of Chubb America Fund, Inc. or in shares of another open-end investment company. The Company also reserves the right to eliminate existing divisions of Separate Account A. If the Company considers it to be in the best interest of persons having voting privileges under the policies, Separate Account A may be operated as a management company under the Investment Company Act of 1940; or it may be deregistered under that Act in the event registration is no longer required or it may be combined with other separate accounts. 8606 Ed. 3-87 Page 13 NONFORFEITURE VALUES Accumulation Value - The accumulation value of the policy is equal to the total of the policy's accumulation value in the General Account and the policy's accumulation value in divisions of Separate Account A. Cash Value - The cash value is equal to the accumulation value less a surrender charge. Surrender Charge - The surrender charge for the Initial Specified Amount is calculated by multiplying the surrender factor (shown below) by the lesser of (1) or (2), where: (1) is the total premiums paid in the first policy year; (2) is the Maximum Surrender Premium for the issue age, as shown in the table on page 3A, multiplied by the Initial Specified Amount. The surrender factor will vary by policy year according to the following table: Policy Year 1-5 6 7 8 9 10 11 and later Surrender Factor .30 .25 .20 .15 .10 .05 0
An additional surrender charge will be assessed for any increase in the Specified Amount. The additional charge is calculated by multiplying the surrender factor (shown below) by the lesser of (1) or (2), where: (1) is (a) times (b) divided by (c), where: (a) is the increase in the Specified Amount; (b) is the sum of the cash value just prior to the increase in the Specified Amount and the total premiums received in the twelve months just following the increase in the Specified Amount; (c) is the Specified Amount after the increase in the Specified Amount; (2) is the Maximum Surrender Premium for the attained age of the Insured on the effective date of the increase in the Specified Amount, as shown on page 3A, multiplied by the increase in the Specified Amount. The surrender factor is based on how long the increase has been in effect according to the following table: Increase Year 1-5 6 7 8 9 10 11 and later Surrender Factor .15 .125 .10 .075 .05 .025 0
The surrender charge in effect at any time is the sum of the surrender charge for the Initial Specified Amount plus the additional surrender charge for any increase in the Specified Amount. If the Specified Amount is decreased, the surrender charge will not decrease. Separate Account Accumulation Values - The accumulation value in each division on the policy date is equal to the portion of the net premium which has been paid and allocated to that division, less the portion of the first monthly deduction allocated to the policy's accumulation value in that division. At the end of each valuation period after the policy date, the policy's accumulation value in a division is equal to (1) plus (2) plus (3) minus (4) minus (5) where: (1) is the accumulation value in the division on the preceding valuation date multiplied by the Net Investment Factor for the current valuation period. (2) is any net premium received during the current valuation period which is allocated to the division. (3) is all accumulation values transferred to the division from another division or the General Account during the current valuation period. (4) is all accumulation values transferred from the division to another division or the General Account and accumulation values transferred to secure a policy debt during the current valuation period. (5) is all withdrawals from the division during the current valuation period. In addition, whenever a valuation period includes the Monthly Anniversary Day, the accumulation value at the end of such period is reduced by the portion of the monthly deduction allocated to the division. 8606 Ed. 3-87 Page 14 Net Investment Factor - The Net Investment Factor measures the investment performance of a division during a valuation period. The Net Investment Factor for each division for a valuation period is calculated as (a) divided by (b), minus (c) where: (a) is (1) the value of the assets in the division at the end of the preceding valuation period, plus (2) the investment income and capital gains, realized or unrealized, credited to the assets in the valuation period for which the net investment factor is being determined, minus (3) the capital losses, realized or unrealized, charged against those assets during the valuation period, minus (4) any amount charged against each division for taxes, or any amount the Company sets aside during the valuation period as a reserve for taxes attributable to the operation or maintenance of each division. (b) is the value of the assets in the division at the end of the preceding valuation period. (c) is a charge not to exceed .0024657% for each day in the valuation period. This corresponds to .9% per year for mortality and expense risks. General Account Accumulation Value - The accumulation value in the General Account on the policy date is equal to the portion of the net premium which has been paid and allocated to the General Account, less the portion of the first monthly deduction allocated to the General Account. On each Monthly Anniversary Day, the accumulation value in the General Account is equal to (1) plus (2) plus (3) plus (4) minus (5) minus (6) minus (7) where: (1) is the accumulation value in the General Account on the preceding Monthly Anniversary Day. (2) is one month's interest on item (1). (3) is any net premium received since the preceding Monthly Anniversary Day plus interest from the date the net premium is received to the Monthly Anniversary Day. (4) is the sum of all accumulation values transferred to the General Account division of Separate Account A since the preceding Monthly Anniversary Day and interest from the date the accumulation value is transferred to the Monthly Anniversary Day. (5) is the sum of all accumulation values transferred from the General Account to a division of Separate Account A since the preceding Monthly Anniversary Day and interest from the date the accumulation value is transferred to the Monthly Anniversary Day. (6) is all withdrawals from the General Account since the preceding Monthly Anniversary Day plus interest from the date of the withdrawal to the Monthly Anniversary Day. (7) is the portion of the monthly deduction allocated to the accumulation value in the General Account, to cover the policy month following the Monthly Anniversary Day. On any date other than a Monthly Anniversary Day, the accumulation value will be calculated on a consistent basis. General Account Interest Rate - The policy's accumulation value in the General Account will earn interest daily at a minimum guaranteed effective rate of 4 1/2%. Interest in excess of the guaranteed rate may be applied in the calculation of the accumulation value at such increased rates as the Company may determine. The policy's accumulation value held in the General Account for policy loan collateral will earn interest daily at the lesser of an effective rate of 6% or the interest rate currently credited. 8607 Page 15 Monthly Deduction - The monthly deduction for a policy month shall be equal to (1) plus (2), where: (1) is the cost of insurance (as described below) and the cost of additional benefits provided by rider for the policy month. (2) is a monthly administrative charge. This charge is equal to $6.00 per month in each policy year. The monthly deduction for a policy month will be allocated among the General Account and the divisions of Separate Account A in the same proportion that the accumulation value in the General Account less any debt and the accumulation value in each division bears to the total accumulation value of the policy, less any debt, at the beginning of the policy month. Cost of Insurance - The cost of insurance for the Insured is determined on a monthly basis. The cost of insurance is determined separately for the Initial Specified Amount and each subsequent increase in Specified Amount. The cost of insurance is calculated as (1), multiplied by the result of (2) minus (3), where: (1) is the cost of insurance rate as described in the Cost of Insurance Rates provision. (2) is the death benefit at the beginning of the policy month, divided by 1.0036748. (3) is the accumulation value at the beginning of the policy month, prior to the monthly deduction for the cost of insurance. If the Death Benefit Option is Option I and there have been increases in the Specified Amount then the accumulation value shall be first considered a part of the Initial Specified Amount. If the accumulation value exceeds the Initial Specified Amount, it shall then be considered a part of the additional Specified Amounts resulting from increases in the order of such increases. Cost of Insurance Rates - The monthly cost of insurance rate is based on the sex, issue age, policy year, and rating class of the Insured. Monthly cost of insurance rates will be determined by the Company based upon expectations as to future mortality experience. Any change in cost of insurance rates will apply to all individuals of the same class as the Insured. The rating class will be determined separately for the Initial Specified Amount and for any increase in Specified Amount that requires evidence of insurability. However, the cost of insurance rates can never be greater than those shown in the Table of Monthly Guaranteed Cost of Insurance Rates. Such guaranteed maximum rates are based on the Commissioners 1980 Standard Ordinary Mortality Table. Insufficient Cash Value - If the cash value less any debt on a Monthly Anniversary Day is insufficient to cover the monthly deduction for the month following such Monthly Anniversary Day, the policy shall terminate as provided in the Grace Period provision. Continuation of Insurance - In the event Planned Periodic Premium payments are not continued, insurance coverage under this policy and any benefits provided by rider will be continued until the cash value, less any debt, is insufficient to cover the monthly deduction, as provided in the Grace Period provision. This provision shall not continue the policy beyond the Maturity Date nor continue any rider beyond the date for its termination, as provided in the rider. If the cash value is sufficient to continue this policy to the Maturity Date, then any remaining cash value will be paid to the Owner if the Insured is then living. Surrender - Upon written request the Owner may surrender this policy at any time during the lifetime of the Insured and before the Maturity Date. The amount payable on surrender of this policy shall be the cash value on the date the Company receives the request for surrender, less any debt. 8607 Page 16 Withdrawal of Cash Value (Withdrawal) - Upon written request the Owner may make a withdrawal from this policy. Any withdrawal is subject to the following conditions: (1) The amount withdrawn may not exceed the cash value less any outstanding debt. (2) The minimum amount that may be withdrawn is $750. (3) A charge equal to the lesser of $25 or 2% of the amount of the withdrawal will be deducted from the amount of each withdrawal. (4) The accumulation value will be reduced by the sum of the withdrawal and a pro-rata portion of the surrender charge in effect on the date of the withdrawal. The remaining accumulation value and schedule of surrender charges will be determined by multiplying each of these values by a numerical factor. This numerical factor is equal to 1 - Amount of Withdrawal [ -------------------------------------- ] Cash Value Immediately Before Withdrawal (5) The Death Benefit will be reduced by an amount equal to the reduction in the accumulation value. This will result in a reduction of the Specified Amount if the Death Benefit is Option I by an amount equal to the reduction in the accumulation value. The Specified Amount remaining in force after any withdrawal must be at least $10,000. The Owner may allocate the withdrawal among the General Account and the divisions of Separate Account A. If the Owner does not specify the allocation, then the withdrawal will be allocated among the General Account and the divisions of Separate Account A in the same proportion that the accumulation value in the General Account, less any debt, and the accumulation value in each division bears to the total accumulation value of the policy, less any debt, on the date of the withdrawal. Basis of Computations - Minimum cash values and reserves in the General Account are based on the Commissioners 1980 Standard Ordinary Mortality Table with interest at 4 1/2% per year. The method used in computing cash values and reserves in Separate Account A is in accordance with actuarial procedures that recognize the variable nature of Separate Account A. The method used is such that if the Net Investment Factor, less one, for all divisions of Separate Account A, at all times from the policy date, is equal to an effective annual interest rate of 4 1/2%, then the cash values and reserves in Separate Account A will be at least equal to the minimum cash values and reserves, which would have been required by the law of the state in which this policy is delivered, of an equivalent policy in which all net premiums have been allocated to the General Account. All values under this policy are not less than the values required by the state in which this policy was delivered. A detailed statement of the method of computation of cash values under this policy has been filed with the insurance department of the state in which this policy was delivered. Illustration of Benefits and Values - The Company will provide illustrations of death benefits and cash values at any time after the policy date upon written request by the Owner and payment of a nominal fee. The fee payable will be the one then in effect for this service; however, such fee can never exceed $25. This illustration will be based on the existing cash value at the time of request and maximum cost of insurance rates. Additional illustrations will be made based on the existing cash value and current mortality assumptions. 8608 Page 17 SETTLEMENT OPTIONS Election of an Option - Any proceeds to be paid under this policy may be paid as an income under any one of the options stated below. The election of an option or change of prior election must be made in writing to the Company at its Home Office. If an option is not chosen by the Owner prior to the death of the Insured, the primary beneficiary may make such election. Unless the Company agrees otherwise, any such payments will be made only to a natural person taking in his own right. An option may be elected only if the amount of the proceeds is $2,000 or more. The Company may change the interval of payments to 3, 6 or 12 months, if necessary to increase the guaranteed payments to at least $20.00 each. Option A - Installments of a Specified Amount - Payments of an agreed amount to be made each month until the proceeds and interest are exhausted. Option B - Installments for a Specified Period - Payments to be made each month for an agreed number of years. Option C - Life Income-Payments to be made each month for the lifetime of the payee. It is guaranteed that payments will be made for a minimum of 10, 15, or 20 years as agreed upon. Option D - Interest - Payment of interest on the proceeds held by the Company. The amount of interest payment is calculated at the compound rate of 3% per year. Interest payments will be made in 12-, 6-, 3-, or 1-month intervals as agreed upon. Supplementary Contract - When the proceeds of this policy become payable, a supplementary contract setting forth the terms of the option chosen will be issued to the payee. The first payment under Option A, B, or C shall be payable on the effective date of such option. The first payment under Option D shall be payable at the end of the first agreed payment interval. Interest - The interest rate for Options A, B, and D will not be less than 3% per year. The interest rate for Option C will not be less than 2 1/2% per year. Interest in addition to that stated may be paid or credited from time to time under any option but only at the sole discretion of the Company. Withdrawal Value - Unless otherwise stated in the election of an option, the payee shall have the right to receive the withdrawal value under that option. For Options A and D the withdrawal value shall be any unpaid balance of proceeds plus accrued interest. For Option B the withdrawal value shall be the commuted value of the remaining payments. Such value will be calculated on the same basis as the original payments. For Option C the withdrawal value shall be the commuted value of the remaining payments. Such value will be calculated on the same basis as the original payments. To receive this value, the payee must submit evidence of insurability. Such evidence must be satisfactory to the Company. Otherwise, the withdrawal value shall be the commuted value of any remaining guaranteed payments. In this event the payments will be resumed at the end of the guaranteed period if the payee should be alive on that date. The payments will then continue for the lifetime of the payee. Under any of these options, the payee shall have the right to receive the withdrawal value in partial amounts. However, the partial amounts shall not be less than the smaller of the withdrawal value or $100. Death of Payee - If the payee dies before the proceeds are exhausted or the prescribed payments made, a final payment will be made in one sum to the estate of the last surviving payee. The amount to be paid will be calculated as described for the applicable option in the Withdrawal Value Provision. Limitation on Rights of Payee and Claims of Creditors - Neither the amount retained under an option nor any payment made under an option can be assigned or pledged. To the extent permitted by law such amounts or payments shall not be subject to claims of creditors or legal process. 8608 Page 18 [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] GENERAL REVISIONS RIDER The Volunteer State Life Insurance Company issues this Rider as a part of the policy to which it is attached. This Rider is issued in consideration of the application and the payment of the initial premium for the policy. There is no premium charge for this Rider. The following sections of the policy are changed: (1) The last sentence in sub-paragraph 5 under Changes in Existing Coverage on Page 7 is changed to "No such decrease may reduce the Specified Amount below $25,000.00." (2) The following sub-paragraph under Changes in Existing Coverage on Page 7 is added: (6) The Specified Amount cannot be increased at any time after the Insured reaches the age of 85. (3) The entire section Policy Loans on Page 11 is replaced by the following section: Policy Loans - After the first policy anniversary, a loan will be granted upon the sole security and assignment of this policy to the Company. The maximum loan amount is 90% of the cash value on the date of the loan less any debt. Cash value is defined under Nonforfeiture Values on Page 14. Any debt will be deducted from the proceeds payable at the Insured's death, on maturity, or on surrender. The Owner may allocate the policy loan among the General Account and the divisions of Separate Account A. If the Owner does not specify the allocation, then the policy loan will be allocated among the General Account and the divisions of Separate Account A in the same proportion that the accumulation value in the General Account, less any debt, and the accumulation value in each division bears to the total accumulation value of the policy, less any debt, on the date of the policy loan. Accumulation value in each division equal to the policy loan allocated to each division will be transferred to the General Account and reduce the accumulation value in that division. If loan interest is not paid when due, an amount of accumulation value equal to the loan interest will also be transferred. If the policy debt exceeds the policy's accumulation value in the General Account, the Company will transfer accumulation value equal to the excess debt from the divisions of Separate Account A to the General Account as security for the excess debt. The amount transferred will be allocated among the divisions in the same proportion that the accumulation value in each division bears to the policy's total accumulation value in all divisions of Separate Account A. GENERAL REVISIONS RIDER Form R87-30 8730 Types of Policy Loans - Type A and Type B - There are two (2) types of policy loans which the Company will grant to the Owner - Type A and Type B. The type of loan which the Company will grant depends upon the amount of unloaned Type A balance available at the time the loan is taken. The unloaned Type A balance is 90% of the cash value, less the threshold, and less the sum of any outstanding Type A loans as defined below. The threshold is the Guideline Single Premium for this policy at issue as defined in Section 7702 of the Internal Revenue Code of 1986 entitled "Life Insurance Contract Defined". If the Specified Amount as defined on Page 10 of this policy increases, the threshold will be increased to the threshold at issue times the ratio of the largest Specified Amount ever existing on the policy to the Initial Specified Amount. If the Specified Amount decreases, the threshold will not change. A Type A Loan is a policy loan granted by the Company when the unloaned Type A balance before the loan is taken exceeds the loan requested. A Type B Loan is a policy loan granted by the Company when the unloaned Type A balance before the loan is taken is less than or equal to zero. When the unloaned Type A balance before the loan is taken exceeds zero, but is less than the loan requested, a Type A Loan equal to the unloaned Type A balance will be granted by the Company. The remainder of the requested loan will be a Type B Loan. The Company will grant a Type A Loan first before a Type B Loan. Once a policy loan is granted, it remains a Type A or a Type B until it is repaid. Policy Loan Interest - The interest charged by the Company on a policy loan depends upon the type of loan granted. On a Type A Loan the Company will charge an effective interest rate of two (2) percentage points lower than the effective interest rate charged at the time by the Company for a Type B Loan. On a Type B Loan the Company will charge interest at the effective maximum rate of 8%, or at any lower rate established by the Company for any period during which the loan is outstanding. Loan interest accrues on a daily basis from the date of the loan and is payable at the end of each policy year. Loan interest unpaid on a policy anniversary becomes loan principal. The Company shall provide at least 30 days written notice to the Owner (or any other party designated by the Owner to receive notice under this policy) and any assignee recorded at the Home Office of any increase in the interest rate on loans outstanding 40 or more days prior to the effective date of the increase. As to loans made during the 40 days before the effective date of the policy loan interest rate increase, the Company shall notify the Owner and any assignee at the time the loan is made. The effective date of any increase in such interest rate shall not be less than twelve months after the effective date of the establishment of the previous rate. If the interest rate is increased, the amount of such increase shall not exceed one percent per year. Interest accrues on a daily basis from the date of the loan and is compounded annually. Interest unpaid on a policy anniversary becomes loan principal. 8730 Page 2 Debt - As used in this policy, debt means the principal of any loan outstanding against this policy, plus any accrued loan interest. If the policy debt exceeds the cash value, the Company will send a notice by mail to the Owner and to the assignee, if any, at their addresses last reported to the Company. If the excess is not paid within 61 days from the date the notice is mailed, the policy will terminate without value. Policy Loan Repayment - Any debt may be repaid, in whole or in part, at any time while this policy is in force. When a loan repayment is made, accumulation value securing the debt in the General Account equal to the loan repayment will be allocated among the General Account and divisions of Separate Account A using the same percentages used to allocate net premiums. Repayments will be used to reduce policy loans until fully paid in the following order: (1) Any or all Type B Loans; then (2) Any or all Type A Loans. [SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE] President Secretary 8730 Page 3 SETTLEMENT OPTIONS TABLES OF MONTHLY INSTALLMENTS UNDER OPTION B OR C Monthly installments are shown for each $1,000 of net proceeds applied. The ages shown are ages nearest birthday when the first monthly installment is payable. OPTION B TABLE INSTALLMENTS FOR A SPECIFIED PERIOD
- ----------------------------------------------------------------------------------------------------------------------------------- Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly Installment Installment Installment Installment Installment - ----------------------------------------------------------------------------------------------------------------------------------- 1 $84.47 7 $13.16 13 $7.71 19 $5.73 25 $4.71 2 42.86 8 11.68 14 7.26 20 5.51 26 4.59 3 28.99 9 10.53 15 6.87 21 5.32 27 4.48 4 22.06 10 9.61 16 6.53 22 5.15 28 4,37 5 17.91 11 8.86 17 6.23 23 4.99 29 4.27 6 15.14 12 8.24 18 5.96 24 4.84 30 4.18 Multiply the monthly installment by 11.84 for annual, by 5.96 for semi-annual or by 2.99 for quarterly installments.
- -------------------------------------------------------------------------------- OPTION C TABLE LIFE INCOME - -------------------------------------------------------------------------------- Attained Attained Age of Payee MONTHLY INSTALLMENTS Age of Payee MONTHLY INSTALLMENTS - -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------- ---------------GUARANTEED--------------- ---------------GUARANTEED--------------- Male Female 10 Years 15 Years 20 Years Male Female 10 Years 15 Years 20 Years - --------------------------------------------------------------------------------------------------------------------------- 16 or 21 or Under Under $2.83 $2.82 $2.81 51 56 $4.60 $4.44 $4.24 17 22 2.85 2.84 2.84 52 57 4.69 4.52 4.30 18 23 2.88 2.87 2.86 53 58 4.79 4.60 4.36 19 24 2.90 2.89 2.88 54 59 4.90 4.69 4.41 20 25 2.93 2.92 2.91 55 60 5.01 4.77 4.47 21 26 2.95 2.95 2.93 56 61 5.12 4.86 4.53 22 27 2.98 2.97 2.96 57 62 5.23 4.94 4.59 23 28 3.01 3.00 2.99 58 63 5.35 5.03 4.64 24 29 3.04 3.03 3.02 59 64 5.48 5.12 4.70 25 30 3.08 3.07 3.05 60 65 5.61 5.21 4.75 26 31 3.11 3.10 3.08 61 66 5.74 5.30 4.80 27 32 3.14 3.13 3.11 62 67 5.87 5.39 4.85 28 33 3.18 3.17 3.15 63 68 6.01 5.48 4.90 29 34 3.22 3.20 3.18 64 69 6.16 5.56 4.94 30 35 3.26 3.24 3.22 65 70 6.30 5.65 4.98 31 36 3.30 3.28 3.25 66 71 6.45 5.73 5.02 32 37 3.34 3.32 3.29 67 72 6.60 5.82 5.05 33 38 3.39 3.36 3.33 68 73 6.76 5.90 5.09 34 39 3.43 3.41 3.37 69 74 6.91 5.97 5.12 35 40 3.48 3.45 3.41 70 75 7.07 6.05 5.14 36 41 3.53 3.50 3.45 71 76 7.23 6.12 5.17 37 42 3.59 3.55 3.50 72 77 7.38 6.18 5.19 38 43 3.64 3.60 3.54 73 78 7.54 6.24 5.20 39 44 3.70 3.65 3.59 74 79 7.69 6.30 5.22 40 45 3.76 3.71 3.64 75 80 7.84 6.35 5.23 41 46 3.82 3.77 3.69 76 81 7.98 6.39 5.24 42 47 3.88 3.82 3.74 77 82 8.13 6.43 5.25 43 48 3.95 3.88 3.79 78 83 8.26 6.47 5.26 44 49 4.02 3.95 3.84 79 84 8.39 6.50 5.26 45 50 4.09 4.01 3.90 80 or 85 or 8.51 6.53 5.27 46 51 4.17 4.08 3.95 Over Over 47 52 4.25 4.15 4.01 48 53 4.33 4.22 4.07 49 54 4.42 4.29 4.12 50 55 4.50 4.37 4.18 Multiply the monthly installment by 11.80 for annual, by 5.93 for semi-annual or by 2.98 for quarterly installments.
Page 19 ENDORSEMENTS: Flexible Premium Variable Life Insurance Policy. Flexible Premiums Payable Until the Maturity Date or Until Prior Death. Adjustable Death Benefit. Insurance Payable at Death. Some Benefits Reflect Investment Results. Additional Benefits, if any, as indicated on Page 3. Non-Participating. No Dividends. 8609 Page 20 WAIVER OF PREMIUM DISABILITY BENEFIT RIDER The Volunteer State Life Insurance Company has issued this rider as a part of the policy to which it is attached. Benefit - Subject to the provisions of the basic policy, the Company will waive the monthly deduction (as defined in the basic policy) each month while the Insured is totally disabled. The Company must receive due proof of the Insured's Total Disability and that it has continued with no interruption for at least six months. Total Disability - Total Disability means the complete incapacity of the Insured to engage in an occupation for remuneration or profit. Such incapacity must be the result of bodily injury or disease. During the first two years of total disability, "occupation" means the regular occupation of the Insured. Thereafter, it means any occupation, for which the Insured is qualified due to education, training or experience, in which the Insured may be engaged for remuneration or profit. The total and irrecoverable loss by the Insured of the following shall be deemed Total Disability: (1) The sight of both eyes, (2) The use of both hands, (3) The use of both feet, or (4) The use of one hand and one foot. Risks Not Assumed - The monthly deduction shall not be waived or refunded if: (1) Total Disability began prior to the date this benefit takes effect. (2) Total Disability began after the grace period. (3) Total Disability is a direct result of intentional self inflicted injury. (4) Total Disability is the result of an act of war while the Insured is serving in the military, naval or air forces of any country at war, declared or undeclared. If Total Disability begins within the grace period, as defined in the basic policy, the monthly deduction due at the time the policy entered the grace period will not be waived. Consideration - This rider is issued in consideration of the application. The waiver of premium cost is payable on the same dates and under the same conditions as the cost of insurance for the basic policy. The payment of any waiver of premium cost after this rider has ceased shall not extend the term of the rider. Any such waiver of premium cost shall be returned by the Company within a reasonable time. Monthly Deductions Not Deducted - Any monthly deduction waived under this benefit will not reduce the proceeds to be paid under the basic policy. The Insured will remain liable to pay interest on any debt to the Company. - -------------------------------------------------------------------------------- VOLUNTEER STATE LIFE INSURANCE COMPANY P.O. Box 1369 Chattanooga, Tennessee 37401 HAS ISSUED THIS RIDER AS PART OF THE POLICY TO WHICH IT IS ATTACHED WAIVER OF PREMIUM DISABILITY BENEFIT RIDER Form P81-12 8112 Waiver of Premium Cost - The waiver of premium cost for the Insured is determined on a monthly basis. The waiver of premium cost is calculated as (1), multiplied by the result of (2) minus (3), where: (1) is the waiver of premium cost rate as shown on page 3 of this rider. (2) is the basic policy's death benefit at the beginning of the policy month, divided by 1.0036748. (3) is the basic policy's cash value at the beginning of the month. Notice of Claim - Written notice of claim and proof of Total Disability must be given to the Company at its Home Office. Such notice and proof must be given during the lifetime of the Insured and during the period of Total Disability. Such notice and proof must be furnished not later than one year after the policy anniversary nearest age 60 of the Insured. Failure to give such notice and proof will not invalidate or diminish any claim if it is shown that notice and proof were given as soon as was reasonably possible. Subject to this condition, no monthly deduction, the due date of which is more than twelve months prior to the date of receipt at the Home Office of written notice of claim, will be waived. Proof of Disability - At reasonable intervals the Company will have the right to require due proof of the continuance of Total Disability. As a part of such proof, the Insured may be required to be examined by a physician chosen by the Company. After the first two years of Total Disability, proof will not be required more than once a year. Monthly deductions as described in the terms of this policy are to be resumed when: (1) Total Disability ceases. (2) Proof of the continuance of Total Disability is not furnished as required. Termination - This rider will cease as soon as one of the following occurs: (1) The premium for this rider remains unpaid at the end of the grace period. (2) The basic policy is surrendered. (3) The policy anniversary nearest age 60 of the Insured is attained. (4) The maturity date of the basic policy is attained. (5) The Company receives a proper written request to terminate this rider. 8112 Page 2 23 Table of Monthly Waiver of Premium Cost Rates Per $1,000 The monthly waiver of premium cost rate is based on the attained age and rating class of the Insured. Attained age means age nearest birthday on the prior policy anniversary.
- -------------------------------------------------------- WP WP WP Attained Cost Attained Cost Attained Cost Age Rate Age Rate Age Rate - -------------------------------------------------------- 15 .01 30 .02 45 .04 16 .01 31 .02 46 .05 17 .01 32 .02 47 .06 18 .01 33 .02 48 .07 19 .01 34 .02 49 .08 20 .01 35 .02 50 .09 21 .01 36 .02 51 .11 22 .01 37 .02 52 .12 23 .01 38 .02 53 .14 24 .01 39 .02 54 .17 25 .01 40 .02 55 .19 26 .01 41 .03 56 * .22 27 .01 42 .03 57 * .24 28 .02 43 .03 58 * .27 29 .02 44 .04 59 * .29 - --------------------------------------------------------
* Renewal only 8112 Page 3 ACCIDENTAL DEATH BENEFIT RIDER The Volunteer State Life Insurance Company has issued this Rider as a part of the policy to which it is attached. Benefit - The Company will pay to the beneficiary, subject to the provisions of this policy, the Accidental Death Benefit upon receipt of due proof of both of the following: (1) The death of the Insured occurred while this Rider was in force. (2) The death of the Insured occurred as a result of bodily injuries effected solely and independently of all other causes through accidental means. The amount of this Benefit is shown on page three of this policy. Risks Not Assumed - This Accidental Death Benefit will not be paid if: (1) The Insured dies more than 90 days after the accident causing death. (2) The death of the Insured is caused by suicide while sane or insane. (3) The death of the Insured results from travel or flight in or descent from any kind of aircraft, unless: (a) The Insured was a fare paying passenger on a commercial airline; and (b) The flight was a regularly scheduled flight between definitely established airports. (4) The death of the Insured results, directly or indirectly, from any war declared or undeclared, any act of war, or any hostile action by a foreign power. (5) The death of the Insured results from committing or attempting to commit a felony. (6) The death of the Insured is caused or contributed to, directly or indirectly, by: (a) Disease or bodily or mental infirmity, or (b) Infection other than a pyogenic infection which occurs through and with an accidental cut or wound. (7) The death of the Insured is caused by the voluntary taking, inhaling, or absorbing of any drug (unless taken as prescribed by a physician), poison, gas or fumes. (8) The death of the Insured results directly or indirectly from medical or surgical treatment, unless such treatment is necessitated by an injury covered in this Rider. Right of Examination - The Company shall have the right and opportunity to examine the body of the Insured and to make an autopsy unless prohibited by law. Termination - This Rider will cease as soon as one of the following occurs: (1) The premium remains unpaid at the end of the grace period. (2) The policy is surrendered or continued as Reduced Paid Up or Extended Term Insurance. (3) The policy anniversary nearest age 70 of the Insured is attained. (4) The maturity date of this policy, if it has one, is attained. (5) The term period ends, if this policy is on a Term Insurance Plan. (6) The Company receives a proper written request to terminate this Rider. Consideration - This Rider is issued in consideration of the application and of the premium shown on page three of this policy. This premium is to be paid on the same dates and under the same conditions as the premium on the policy. Any premium falling due on this policy after this Rider has ceased shall be reduced by the amount of premium charged for this Rider. The payment of any premium under this Rider after it has ceased shall not extend the term hereof. Any such premium shall be returned by the Company within a reasonable time. - -------------------------------------------------------------------------------- VOLUNTEER STATE LIFE INSURANCE COMPANY P.O. Box 1369 Chattanooga, Tennessee 37401 ACCIDENTAL DEATH BENEFIT ....................... death by accidental means Form P82-85 8285 GUARANTEED INSURABILITY OPTION RIDER An Option to Purchase Additional Life Insurance The Volunteer State Life Insurance Company has issued this Rider as a part of the policy to which it is attached. Benefit - The Company agrees, at the option of the Insured, to permit the purchase of an increase in the Specified Amount of the policy. Such purchase must be made during an Option Period. Evidence of insurability is not required. Each increase purchased must be for an amount equal to or less than the applicable Schedule Amount shown below.
- -------------------------------------------------------------------------------- SCHEDULE AMOUNT - -------------------------------------------------------------------------------- Age at Issue First Option Subsequent of the Policy Date Option Dates - -------------------------------------------------------------------------------- 0-35 Twice the Amount of The Amount of Guaranteed Guaranteed Insurability Insurability Benefit* Benefit* - -------------------------------------------------------------------------------- 36-40 The Amount of Guaranteed Insurability Benefit* NONE - --------------------------------------------------------------------------------
*As shown on page 3 of the policy. Conditions - This Rider is subject to the following conditions: (1) Proper written application must be received by the Company at its Home Office during the Option Period. The application must be in such form as may be required by the Company. (2) If this option is exercised during a Regular Option Period, then the effective date of the increase will be the Regular Option Date. If this option is exercised during a Substitute Option Period, then the effective date of the increase will be the next monthly anniversary day after written request. (3) The minimum increase is $10,000. (4) The cost of the increase will be based on the same premium class as the original amount of insurance. (5) The cost of the increase shall be that in effect by the Company on the effective date of the increase. Such cost shall be based on the then attained age of the Insured at nearest birthday. (6) The total number of options that may be exercised cannot be greater than the number of Regular Option Dates available. (7) If the basic policy does not contain a benefit to waive monthly deductions in the event of total and permanent disability, then increases to the Specified Amount will not include such a waiver benefit. If the basic policy does contain a benefit to waive monthly deductions in the event of total and permanent disability, then increases to the Specified Amount may include such a waiver benefit. Satisfactory evidence of insurability will be required to include this waiver benefit for the increase. - -------------------------------------------------------------------------------- VOLUNTEER STATE LIFE INSURANCE COMPANY P.O. Box 1369 Chattanooga, Tennessee 37401 GUARANTEED INSURABILITY OPTION RIDER.. an option to purchase additional insurance Form P83-07 8307 Conditions - (continued) (8) The right to purchase an increase during an Option Period shall expire at the end of such Option Period. This right cannot be carried forward to be exercised on any future date. However, such expiry dates shall not affect the right to purchase an increase during a subsequent Option Period, if any. OPTION PERIODS Regular Option Period - A Regular Option Period shall be the 60 day period which ends on a Regular Option Date. Substitute Option Period - A Substitute Option Period shall be the 90 day period immediately following a Substitute Option Date. If an increase is purchased during a Substitute Option Period, then the next Regular Option Date will be cancelled. OPTION DATES Regular Option Dates - Regular Option Dates shall be the policy anniversaries nearest the Attained Ages shown below.
- ---------------------------------------------- Age at Issue Regular Option Dates of the Policy (Attained Ages) - ---------------------------------------------- 0-23 24, 28, 32, 36, 40 24-27 28, 32, 36, 40 28-31 32, 36, 40 32-35 36,40 36 40 37 41 38 42 39 43 40 44 - ----------------------------------------------
Substitute Option Dates - The Substitute Option Dates will be those dates of: (1) The Insured's marriage; and (2) The birth or legal adoption of the children of the Insured. Substitute Option Dates must occur before the last Regular Option Date. TERMINATION Termination - This Rider will cease as soon as one of the following occurs: (1) The basic policy terminates. (2) The last Regular Option Date shown in the table has passed. (3) The maturity date of the basic policy is attained. (4) The Company receives a proper written request to terminate this rider. In this case the Company reserves the right to require the policy for endorsement. CONSIDERATION Consideration - This Rider is issued in consideration of the application therefor and payment of the cost for this Rider. The cost for this Rider will be included in the monthly deduction, as defined in The Policy. The monthly deduction for The Policy after this Rider has ceased will be reduced by the cost for this Rider. The deduction of any cost for this Rider after it has ceased shall not extend the term of this Rider. Any such deduction will be refunded. CHILDREN'S TERM INSURANCE RIDER READ CAREFULLY - TERM INSURANCE ON DEPENDENTS The Volunteer State Life Insurance Company has issued this Rider as a part of the policy to which it is attached. Benefit - The Company will pay to the proper Beneficiary on due proof of death of any Insured Child a lump sum payment of $1,000 multiplied by the number of units shown on page three of the policy of which this Rider is a part, herein called "The Policy". Such payment will be made subject to the provisions of this Rider and those of The Policy. This benefit is to be paid in the event the death of an Insured Child occurs: (1) After such child has attained the age of 15 days; (2) Before the policy anniversary nearest the child's 25th birthday; and (3) Before the Expiry Date. Insured - As used herein, "Insured" means the Insured in The Policy. Owner - As used herein, "Owner" means the Owner of The Policy. Insured Child - As used herein, "Insured Child" means: (1) Each of the Insured's children, stepchildren or legally adopted children who is named in the application for this Rider and who, on the date of the application, has not attained the age of 18 years; (2) Any child who is born to the Insured after the date of the application; and (3) Any child who, prior to attaining the age of 18 years, is legally adopted by the Insured. Beneficiaries of This Rider - Proceeds to be paid due to the death of an Insured Child will be paid to the Insured, if then living. Otherwise, the proceeds will be paid to the Insured's Spouse, if then living. If neither the Insured nor the Insured's Spouse is then living, the proceeds will be paid to the executors, administrators, or assigns of the Insured Child. While the Insured is living, the Owner may name or change a revocable beneficiary at any time. A change of the Owner or beneficiary must be made in writing. To be binding on the Company, the change must be signed by the Owner and any irrevocable beneficiary and must be filed at the Home Office. Any such change will take effect as of the date it was signed, subject to any payment made or action taken by the Company before the change was filed. Expiry Date - The Expiry Date of this Rider shall be the earlier of: (1) The policy anniversary nearest the 25th birthday of the youngest child; or (2) The policy anniversary nearest the 65th birthday of the Insured. Termination - This Rider will cease as soon as one of the following occurs: (1) The Policy terminates. (2) The Expiry Date of this Rider is attained. (3) The Company receives a proper request to terminate this Rider. Waiver of Cost of Insurance - The cost of insurance for this Rider shall be waived only if and when the monthly deduction under The Policy is waived under any Rider which is a part of The Policy. - -------------------------------------------------------------------------------- VOLUNTEER STATE LIFE INSURANCE COMPANY P.O. Box 1369 Chattanooga, Tennessee 37401 CHILDREN'S TERM INSURANCE RIDER READ CAREFULLY - TERM INSURANCE ON DEPENDENTS Form P88-80 8880 CONVERSION PRIVILEGE Insured Child's Benefit - The Insurance under this Rider on an Insured Child may be converted to a new policy on the earlier of: (1) The Expiry Date, or (2) The policy anniversary nearest the Insured Child's 25th birthday. The amount converted is not to exceed $5,000 multiplied by the number of units shown on page three of The Policy. The new policy will be issued without evidence of insurability. Issue will be governed by all the conditions set forth below. Conversion Conditions - Conversion to a new policy shall be subject to the following conditions: (1) Proper written application for the new policy must be made to the Company at its Home Office. The first premium for the new policy shall be paid to the Company not later than the termination date of the insurance to be converted. The first premium must also be paid during the lifetime of the person to be insured under the new policy. (2) The effective date of the new policy shall be the date of termination of the insurance to be converted. (3) Subject to the Company's minimum policy rules, the new policy will be issued on any plan of non-participating whole life or endowment insurance offered by the Company on the effective date of the new policy. (4) The new policy will be issued on a form and at premium rates in use by the Company on the effective date of conversion. Such rates will be based on the then attained age at the nearest birthday to the person to be insured. The new policy will not include disability or accidental death benefits unless evidence satisfactory to the Company of the insurability of the person to be insured is furnished. (5) The application for a new policy on an Insured Child shall be made by the Owner. PAID UP INSURANCE AT DEATH OF INSURED Benefit - Any term insurance in force under this rider on any Insured Child on the date of the Insured's death will become fully paid up on that date. Upon the death of the Insured the Company shall have the right to require surrender of this Rider in exchange for any fully paid up term insurance. Such paid up term insurance may be surrendered at any time for its cash value, the then net single premium for the remaining term insurance. The net single premium will be computed on the basis of the 1980 CSO Mortality Tables, without the ten year select mortality factors, and four and one-half percent interest. The cash value payable within 30 days of a policy anniversary shall not be less than the cash value on the anniversary. Consideration - This Rider is issued in consideration of the application therefor and payment of the cost for this Rider. The cost for this Rider will be included in the monthly deduction, as defined in The Policy. The monthly deduction for The Policy after this Rider has ceased will be reduced by the cost for this Rider. The deduction of any cost for this Rider after it has ceased shall not extend the term of this Rider. Any such deduction will be refunded. 8880 SPOUSE TERM INSURANCE RIDER The Volunteer State Life Insurance Company has issued this Rider as a part of the policy to which it is attached. Benefit - The Company will pay to the named Beneficiary on due proof of death of the Insured Spouse a lump sum payment equal to $1,000 multiplied by the number of units shown on page three of The Policy. This benefit is to be paid in the event the death of the Insured Spouse occurs while this Rider is in force and before the Expiry Date. Such payment will be made subject to the provisions of this Rider and those of the policy (herein called "The Policy") of which this Rider is a part. Insured - As used herein, "Insured" means the Insured in The Policy. Owner - As used herein, "Owner" means the Owner of The Policy. Insured Spouse - As used herein, "Insured Spouse" means the Insured's spouse who is named in the application for this Rider. Beneficiaries of This Rider - Proceeds to be paid due to the death of the Insured Spouse will be paid to the Insured, if then living. Otherwise, the proceeds will be paid to the executors, administrators, or assigns of the Insured Spouse. While the Insured is living, the Owner may name or change a revocable beneficiary at any time. A change of the Owner or beneficiary must be made in writing. To be binding on the Company, the change must be signed by the Owner and any irrevocable beneficiary and must be filed at the Home Office. Any such change will take effect as of the date it was signed, subject to any payment made or action taken by the Company before the change was filed. Expiry Date - The Expiry Date of this Rider shall be the policy anniversary nearest the 70th birthday of the Insured Spouse. Termination - This Rider will cease as soon as one of the following occurs: (1) The Policy terminates. (2) The Expiry Date of this Rider is attained. (3) The date this Rider is converted. (4) The Company receives a proper request to terminate this Rider. Waiver of Cost of Insurance - The cost of insurance for this Rider shall be waived only if and when the monthly deduction under The Policy is waived under any Disability Rider which is a part of The Policy. [SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE] President Secretary - -------------------------------------------------------------------------------- VOLUNTEER STATE LIFE INSURANCE COMPANY P.O. Box 1369 Chattanooga, Tennessee 37401 SPOUSE TERM INSURANCE RIDER FORM P88-86 8886(S-D) Consideration - This Rider is issued in consideration of the application therefor and payment of the cost for this Rider. The cost for this Rider will be included in the monthly deduction, as defined in The Policy. The monthly deduction for The Policy after this Rider has ceased will be reduced by the cost for this Rider. The deduction of any cost for this Rider after it has ceased shall not extend the term of this Rider. Any such deduction will be refunded. CONVERSION PRIVILEGE Insured Spouse's Benefit - The insurance under this Rider on the Insured Spouse may be converted to a new policy at any time while this Rider is in force before the policy anniversary nearest the 65th birthday of the Insured Spouse. The amount converted is not to exceed $1,000 multiplied by the number of units shown on page three of The Policy. The new policy will be issued without evidence of insurability. Issue will be governed by all the conditions set forth below. Conversion Conditions - Conversion to a new policy shall be subject to the following conditions: (1) Proper written application for the new policy must be made to the Company at its Home Office. The first premium for the new policy shall be paid to the Company not later than the termination date of the insurance to be converted. The first premium must also be paid during the lifetime of the person to be insured under the new policy. (2) The effective date of the new policy shall be the date of termination of the insurance to be converted. (3) Subject to the Company's minimum policy rules, the new policy will be issued on any plan of non-participating whole life or endowment insurance offered by the Company on the effective date of the new policy. (4) The new policy will be issued on a form and at premium rates in use by the Company on the effective date of the conversion. Such rates will be based on the then attained age to the nearest birthday of the person to be insured. For conversion of insurance on the Insured Spouse, the premium shall be that for the risk classification of such Insured Spouse at the effective date of this Rider. The new policy will not include disability waiver or accidental death benefits unless evidence satisfactory to the Company of the insurability of the person to be insured is furnished. (5) The application for a new policy on the Insured Spouse must be made by the Owner. (6) The suicide and contestable periods of the new policy will be measured from the effective date of the insurance provided by this Rider. PAID UP INSURANCE AT DEATH OF INSURED Benefit - Any term insurance in force under this Rider on the Insured Spouse will become fully paid up on the date of the Insured's death. Any such paid up term insurance will remain in effect until the Expiry Date. Upon the death of the Insured the Company shall have the right to require surrender of this Rider in exchange for any such fully paid up term insurance. Such paid up term insurance may be surrendered at any time for the then net single premium for the remaining term insurance. The net single premium will be computed on the basis of the Commissioners 1980 Standard Ordinary Smoker or Nonsmoker Mortality Table and four percent interest. Any cash value of a paid up term policy payable within thirty (30) days after a policy anniversary shall not be less than such value on the anniversary. COST OF INSURANCE RATES Cost of Insurance Rates - The monthly cost of insurance rate for this Rider is based on the sex, attained age, and rating class of the Insured Spouse. Attained age means the age nearest birthday on the prior policy anniversary. Monthly cost of insurance rates will be determined by the Company based upon expectations as to future mortality experience. Any change in cost of insurance rates will apply to all individuals of the same class as the Insured Spouse. However, the cost of insurance rates can never be greater than those shown in the Table of Monthly Guaranteed Cost of Insurance Rates on page 4A of the Policy. Such guaranteed maximum rates are based on the Commissioners 1980 Standard Ordinary Smoker or Nonsmoker Mortality Table. [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] EXCHANGE OF INSURED RIDER Effective Date - Chubb Life Insurance Company of America has issued this rider as a part of the policy to which it is attached. It takes effect on the Policy Date unless a later effective date is shown above. In this rider, "we", "us" or "our" means Chubb Life Insurance Company of America; "you" means the Owner of the policy; and "Insured" means the person named on Page 3 of the policy as insured under this rider. Benefit - Subject to the provisions of this rider and the original policy to which it is attached, the original policy may be exchanged for a reissued policy on the life of a substitute Insured. This rider has no cash or loan value. Conditions for Exchange - The exchange of Insured will be subject to the following conditions: (1) You and the substitute Insured must sign the application for the reissued policy. (2) The original policy and this rider must be in force and not within the Grace Period, as defined in the policy. (3) You must have an insurable interest in the life of the substitute Insured. (4) We must receive the Charge for Exchange as described below. (5) The original policy must be returned to us before the Exchange Date. (6) The exchange is subject to proof of insurability of the substitute Insured which satisfies us. (7) We must accept the substitute Insured. (8) Any assignee of the original policy must agree in writing to the exchange. Exchange Date - The exchange date will be the monthly anniversary day on or following the date all the Conditions for Exchange are satisfied. On the Exchange Date, coverage on the substitute Insured will become effective and coverage on the previous Insured will terminate. In no event will coverage on the previous Insured and substitute Insured be effective at the same time. Charge for Exchange - A charge for exchange of $1.00 per $1,000 of Specified Amount, but not more than $150, must be paid to us. If we do not accept the substitute Insured, the charge will be refunded. The Reissued Policy - The reissued policy will be subject to the following conditions: (1) The reissued policy will not be changed as to plan or Policy Date (except as provided below). The Specified Amount may be reduced by mutual consent of you and us but cannot be increased. (2) The Age at Issue of the reissued policy will be changed to the age of the substitute Insured as of the birthday nearest the Policy Date. (3) If the Policy Date of the original policy is before the date of birth of the substitute Insured, the Policy Date of the reissued policy will be changed to the first policy anniversary following such date of birth. (4) The Suicide and Incontestability provisions of the reissued policy will apply for two years following the Exchange Date. If the substitute Insured commits suicide within this period, our only liability will be a refund of the premiums paid on and after the Exchange Date plus the cash value of the reissued policy on the date of exchange, less any indebtedness. (5) Cost of insurance rates for the reissued policy will be based on the age at issue and policy year and on the sex of the substitute Insured if the original policy has cost of insurance rates which vary by the sex of the Insured. (6) The Accumulation Value and Cash Value of the reissued policy on the Exchange Date will be those in effect on the original policy on the Exchange Date. (7) The reissued policy will be subject to any policy loans on the original policy and to any assignment of the original policy on file with us. (8) Any rider or benefits attached to this policy, including this rider, may be continued on the substitute Insured only with our consent. Monthly Deduction - There is no monthly deduction for this rider. A Charge for Exchange will apply upon exchange as described above. Termination - This rider will cease as soon as one of the following occurs: (1) The original policy is surrendered, exchanged, or lapsed. (2) We receive a proper written request to terminate this rider. (3) The policy anniversary nearest the Insured's attained age 70. (4) The Maturity Date of the original policy is attained. (5) The death of the Insured. (6) The original policy is exchanged for a reissued policy under the provisions of this rider unless we agree to a continuation of this rider thereafter. [SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE] President Secretary [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] TERMINAL ILLNESS ACCELERATED BENEFIT RIDER NOTICE. Death benefits and policy cash values, if any, will be reduced if an accelerated benefit is paid. Benefits paid under this Rider may or may not be taxable. Consult your personal tax advisor to assess the tax consequences of the benefit. This Rider is part of the Policy to which it is attached. It takes effect on the date of Issue or Policy Date of the Policy. In this Rider, "we", us", or "our" means Chubb Life Insurance Company of America; "you" and "your" means the Owner of the Policy; and "Insured" means the person named on the data page of the Policy. CONSIDERATION - This Rider is issued in consideration of the application. There is no charge for this Rider prior to the time you request Rider benefits. CANCELLATION - We will not cancel this Rider, unless you request termination of this Rider. It will remain in force as long as this Policy remains in force or until benefits are paid under this Rider. DEFINITIONS Accelerated Benefit Payment - The Accelerated Benefit Payment is the requested portion of the Eligible Death Benefit less the adjustments and deductions as explained in the Benefits section. Administrative Expense Charge - The Administrative Expense Charge will be deducted from the requested portion of the Eligible Death Benefit upon payment of the Accelerated Benefit. Benefit Ratio - The Benefit Ratio is the result of dividing (a) by (b) where: (a) is the requested portion of the Eligible Death Benefit; and (b) is the Death Benefit or current Face Amount of Insurance under the policy to which this Rider is attached. Eligible Death Benefit - The Eligible Death Benefit for the Insured is the Death Benefit or current Face Amount of Insurance on the life of the Insured provided by this Policy. Immediate Family - Immediate Family means the spouse, child, brother, sister, parent, or grandparent of the Insured or the Owner. Physician - Physician means an individual who is licensed to practice medicine and treat illness or injury in the state in which treatment is received and who is acting within the scope of that license. Physician does not include: (1) the Insured; (2) you; (3) a person who lives with the Insured or you; or (4) a person who is part of the Insured's or your Immediate Family. Physician Statement - A Physician Statement means a written statement acceptable to us, signed by a Physician which: (1) gives the Physician's diagnosis of the Insured's noncorrectable medical condition; and (2) states that, with reasonable medical certainty, the noncorrectable medical condition will result in the death of the Insured within 6 months or less from the date of the Physician Statement, assuming the exercise of ordinary and reasonable medical care, advice, and treatment available in the same or similar communities. Terminal Illness - Terminal illness is a noncorrectable medical condition, which will result in the death of the Insured within 6 months or less from the date of the Physician Statement. BENEFITS If the Insured develops a Terminal Illness, you may request an acceleration of a portion of the Eligible Death Benefit. The Eligible Death Benefit will be determined as of the date the Notice of Claim is received at our Home Office. The maximum amount of Eligible Death Benefit which you may request from this Policy is fifty per cent (50%) of the Death Benefit or current Face Amount exclusive of any and all riders. The maximum amount available on all policies with this Rider attached in force with us is $250,000 per Insured. Adjustments and Deductions - The requested portion of the Eligible Death Benefit will be subject to the following adjustments and deduction: (1) An actuarial discount will be deducted from the requested portion of the Eligible Death Benefit. This discount reflects the early payment of amounts held under the Policy. It will be based on an annual interest rate which has been declared by us and the then current premium or cost of insurance rate, both of which are in effect as of the date your Notice of Claim is received at our Home Office. The maximum interest rate used shall be the greater of the yield on 90 day treasury bills or the maximum statutory adjustable policy loan interest rate in effect the date of the request. Page 1 (2) If, on the date we approve your request, there is a Policy loan outstanding on this Policy, a reduction to the requested portion of the Eligible Death Benefit will apply. This reduction serves to repay a portion of the Policy loan and is determined as follows: (Outstanding Policy Loan) x (Benefit Ratio). (3) A deduction will be made for any premiums due within the Policy's grace period and are unpaid at the time we approve your request. (4) A deduction will be made for the Administrative Expense Charge. Waiver of Premiums or Cost of Insurance - If all of the following occur: (1) a Waiver of Premium Rider or a Waiver of Monthly Deduction Rider on the Insured is attached to this Policy; (2) that Rider is in force at the time of the claim for this Rider's benefits; and (3) Proof of Terminal Illness is submitted and approved; then for purposes of any Waiver of Premium Rider or Waiver of Monthly Deduction Rider that is in force, the Insured will be deemed to be Totally Disabled and have satisfied the initial waiting period required by the applicable Rider. Conditions for the Accelerated Benefit Payment - The Accelerated Benefit Payment is subject to the following conditions: (1) This Policy must be in force other than as Extended Term Insurance or Reduced Paid-up Insurance. (2) During the lifetime of the Insured, we must receive Proof of Terminal Illness that is acceptable to us. (3) No prior request for an Accelerated Benefit Payment may have been made under this or any other Terminal Illness Accelerated Benefit Rider issued by us with respect to the Insured. If more than one request is received at the same time, we will determine which request is deemed to have been received first and the other requests will be returned. (4) We must receive a consent form from all irrevocable beneficiaries, if any, and all assignees, if any. We also reserve the right to require a consent form from a spouse, the Insured, other beneficiaries, or any other person if, in our discretion, such person's consent is necessary to protect our interests. (5) This Rider provides for the advance of a portion of the Eligible Death Benefit of this Policy. This is not meant to cause involuntary access to proceeds ultimately payable to the beneficiary. Therefore, this benefit is not available. (a) if either you or the Insured is required by law to use this benefit to meet the claims of creditors, whether in bankruptcy or otherwise; or (b) if either you or the Insured is required by a government agency to use this benefit in order to apply for, obtain or otherwise keep a government benefit or entitlement. Limitations - No benefit will be provided by this Rider if Terminal Illness results from intentionally self-inflicted injuries. ADJUSTMENTS TO THE POLICY After an Accelerated Benefit Payment is made, the Policy and all riders will remain in force subject to the following adjustments: (1) The Policy's Death Benefit or current Face Amount, its current and Guaranteed Cash Value, if any, its Fund Account or Accumulation Value, if any, and its required Premium, if any, will be reduced by the Benefit Ratio. (2) Any outstanding Policy loan will be reduced by the portion of the Policy loan repaid as specified in the Benefits provision of this Rider. (3) We will mail to you, for attachment to the Policy, a new policy data page showing the decrease in policy values resulting from the Accelerated Benefit Payment. CLAIMS Notice of Claim - Written Notice of Claim may be given to us any time after the date the Insured develops a Terminal Illness as defined in this Rider. Notice of Claim must identify the Insured and be sent to us at our Home Office. Claim Forms - We will send claim forms to the Owner when Notice of Claim is received. If we do not mail the claim form within 15 days, the Owner will be considered to have complied with the Proof of Terminal Illness requirements by giving us a Physician Statement acceptable to us and a written statement of the nature and extent of the Terminal Illness. Proof of Terminal Illness - Written proof of the Insured's Terminal Illness must be received by us before we will make a Benefit payment. This proof will include a properly completed claim form and a Physician Statement acceptable to us. We may request additional medical information from the Physician submitting the statement or any physician or institution deemed necessary. We will not unreasonably withhold our acceptance of Proof of Terminal Illness. R879 Page 2 6550001 Physical Examination - At our expense, we reserve the right to have a Physician of our choosing examine the Insured prior to making an Accelerated Benefit payment. In the event that the Physician we choose provides a different diagnosis of the Insured's medical conditions, we reserve the right to rely on the statement from the Physician of our choosing for claim purposes. Time of Payment of Claims - All benefits described in this Rider will be available as soon as we receive satisfactory Proof of Terminal Illness. Payment of Claims - All Rider benefits will be paid in a lump sum to the Owner as of the date of benefit payment. Upon the death of the Owner, we will pay the benefits to the estate of the Owner, or contingent Owner, if applicable. GENERAL PROVISIONS Representations and Contestability - All statements made in the application for this Rider, or the policy to which it is attached, by or on behalf of the Insured will, in the absence of fraud, be deemed representations and not warranties. The validity of the Rider with respect to the Insured will not be contestable after it has been in force for 2 years from the date of issue or Policy Date or reinstatement of the policy to which this Rider is attached during which time the Insured was living. Reinstatement - If this Policy is reinstated, this Rider will also be reinstated provided a benefit has not been paid under this rider. Incorrect Age or Sex - If there is an error in the age or sex of the Insured, the benefits available under this Rider will be the amount that would be available based on the Death Benefit or Face Amount that this Policy would have provided at the correct age or sex. Termination of Rider - This Rider terminates: (1) on the day we receive written request of the Owner; or (2) upon termination of this Policy; or (3) when this Policy reaches its Maturity Date, if any; or (4) upon payment of the accelerated benefit provided by this Rider; or (5) upon the death of the Insured. [SIGNATURE APPEARS HERE] /s/ Frederick D. Condon President Secretary R879 Page 3 6550001 [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] EXTENSION OF MATURITY DATE RIDER Effective Date - This rider is part of the policy to which it is attached. It takes effect on the effective date of the policy unless a later effective date is shown above. In this rider, "we", "us" or "our" means the Chubb Life Insurance Company of America; "you" means the Owner of the policy; and "Insured" means the person named on the Data Page. The Maturity Date may be extended beyond that date otherwise defined in the policy by written request. The new Maturity Date will be that requested by you. If you elect to extend the original Maturity Date, you may revoke this election in writing at any time prior to the original Maturity Date. After the original Maturity Date: (1) No new premiums will be accepted by us; (2) We will continue to credit interest to the policy's Accumulation Value of the General Account in the same manner; (3) The Accumulation Value in each division of Separate Account A will continue to be calculated in the same manner; (4) The Death Benefit will always be equal to the Accumulation Value of the policy; (5) Interest on any policy loans will continue to accrue and become part of any debt; (6) We will deduct no more cost of insurance charges. [SIGNATURE APPEARS HERE] /s/ Frederick D. Condon President Secretary P93-55 6550001 [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] OTHER INSURED TERM RIDER Chubb Life Insurance Company of America has issued this rider as a part of the policy to which it is attached. Consideration - This rider is issued in consideration of the application therefor and payment of the cost for this rider. The cost for this rider will be included in the monthly deduction, as defined in the policy. The monthly deduction for the policy after this rider has ceased will be reduced by the cost for this rider. The deduction of any cost for this rider after it has ceased shall not extend the term of this rider. Any such deduction will be refunded. Insured - As used herein, "Insured" means the primary Insured in the policy. Owner - As used herein, "Owner" means the Owner of the policy. Other insured - As used herein, "Other Insured" means the Other Insured who is named in the application for this rider, and on Data Page 3 of the policy. Benefit - The Company will pay to the named Beneficiary on due proof of death of the Other Insured, a lump sum payment equal to $1,000 multiplied by the number of units shown on Data Page 3 of the policy. This benefit is to be paid in the event the death of the Other Insured occurs while this rider is in force and before the Expiry Date. Such payment will be made subject to the provisions of this rider and those of the policy of which this rider is a part. Beneficiary - Any proceeds to be paid under this rider will be paid to the Beneficiary named in the application for this rider. While the Insured is living, the Owner may name or change a revocable Beneficiary at any time. A change of the Owner or Beneficiary must be made in writing. To be binding on the Company, the change must be signed by the Owner and any irrevocable Beneficiary and must be filed at the Home Office. Any change will take effect as of the date it was signed, subject to any payment made or action taken by the Company before the change was filed. CONVERSION PRIVILEGE Other Insured's Benefit - The insurance under this rider on the Other Insured may be converted to a new policy at any time while this rider is in force before the policy anniversary nearest the 7Oth birthday of the Other Insured, or upon the death of the Insured. The amount converted is not to exceed $1,000 multiplied by the number of units shown on Data Page 3 of the policy. The new policy will be issued without evidence of insurability. Issue will be governed by all the conditions set forth below. P93-58 6550001 CONVERSION PRIVILEGE (CONTINUED) Conversion Conditions - Conversion to a new policy shall be subject to the following conditions: (1) Proper written application for the policy must be made to the Company at its Home Office. The first premium for the new policy shall be paid to the Company not later than the termination date of the insurance to be converted. The first premium must also be paid during the lifetime of the person to be insured under the new policy. (2) The effective date of the new policy shall be the date of termination of the insurance to be converted. (3) Subject to the Company's minimum policy rules, the new policy will be issued on any plan of non-participating whole life or endowment insurance offered by the Company on the effective date of the new policy. (4) The new policy will be issued on a form and at premium rates in use by the Company on the effective date of the conversion. Such rates will be based on the then attained age to the nearest birthday of the person to be insured. For conversion of insurance on the Other Insured, the premium shall be that for the risk classification of such Other Insured at the effective date of this rider. The new policy will not include disability waiver or accidental death benefits unless evidence satisfactory to the Company of the insurability of the person to be insured is furnished. (5) The application for a new policy on the Other Insured must be made by the Owner of the policy to which this rider is attached. (6) The suicide and contestable periods of the new policy will be measured from the effective date of the insurance provided by this rider. COST OF INSURANCE RATES Cost of Insurance Rates - The monthly cost of insurance rate for this rider is based on the sex, attained age, and rating class of the Other Insured. Attained age means the age nearest birthday on the prior policy anniversary. Monthly cost of insurance rates will be determined by the Company based upon expectations as to future mortality experience. Any change in cost of insurance rates will apply to all individuals of the same class as the Other Insured. However, the cost of insurance rates can never be greater than those shown in the Table of Monthly Guaranteed Cost of Insurance Rates on page 4A of the policy. Such guaranteed maximum rates are based on the 1980 Standard Ordinary Smoker or Nonsmoker Mortality Table. Waiver of Cost of insurance - The cost of insurance for this rider shall be waived only if and when the monthly deduction under the policy is waived under any disability rider which is a part of the policy. Expiry Date - The Expiry Date of this rider shall be the policy anniversary nearest the 95th birthday of the Other Insured, or the Maturity Date of the policy, whichever occurs first. Termination - This rider will cease as soon as one of the following first occurs: (1) The policy terminates; (2) The Expiry Date of this rider is attained; (3) The date this rider is converted; (4) The Company receives a proper request, from the Owner to terminate this rider. [SIGNATURE APPEARS HERE] /s/ Frederick D. Condon President Secretary P93-58 6550001 [LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE] PRIMARY INSURED TERM RIDER Effective Date - This Rider is part of the policy to which it is attached. It takes effect on the effective date of the policy unless a later effective date is shown above. In this rider, "we", "us" or "our" means Chubb Life Insurance Company of America; "you" means the Owner of the policy; and "Insured" means the person named on Page 3 of the policy. Consideration - In return for the payment of the monthly deductions and receipt of an application for this rider, we will provide the benefit described in this rider. Benefit - Upon receipt of proof of death of the Insured, while this rider is in force and before the Expiry Date, we will pay the named beneficiary the Rider Death Benefit on the date of death. In addition, this rider modifies the Death Benefit of the policy as stated below. Total Death Benefit - The Total Death Benefit payable under this rider and the policy to which it is attached depends on the Death Benefit Option for the policy in effect on the date of death. The Death Benefit Option for the policy is shown on Page 3. Option I - Under Option I, the Total Death Benefit shall be the greater of: (1) The Specified Amount of the policy, plus the Specified Amount of this rider; or (2) The Accumulated Value on the date of death multiplied by the corridor percentage shown in the policy to which this rider is attached. Option II - Under Option II, the Total Death Benefit shall be the greater of: (1) The Specified Amount of the policy, plus the Specified Amount of this rider, plus the Accumulated Value of the policy on the date of death; or (2) The Accumulated Value on the date of death multiplied by the corridor percentage shown in the policy to which this rider is attached. Total Amount at Risk - The Total Amount at Risk for the policy and this rider is equal to the Total Death Benefit less the Accumulated Value of the policy. Rider Death Benefit - The Specified Amount of this rider is shown on Page 3 of the policy. The initial Rider Death Benefit is equal to the Specified Amount of this rider. On any later date, the Rider Death Benefit will be the lesser of: (1) The Specified Amount of this rider; or (2) The Total Amount at Risk for the policy and this rider, but not less than zero. Policy Death Benefit - The Policy Death Benefit is equal to the Total Death Benefit less the Rider Death Benefit. Monthly Deduction - The monthly deduction for this rider will be (a) multiplied by (b), divided by $1,000, where: (a) is the monthly cost of insurance rate for this rider; and (b) is the Rider Death Benefit. P93-54 6550001 Expiry Date - The Expiry Date of this rider is shown on Page 3 of the policy. Conversion Privilege - The amount of Rider Death Benefit may be converted to an increase of the Specified Amount in the policy at any time prior to the Insured's age 85, while this rider is in force. The amount converted is not to exceed the Specified Amount of this rider as shown on Page 3 of the policy. The increase will be issued without evidence of insurability. Issue will be subject to the conditions set forth below. Conversion Conditions - Conversion to an increase of the Specified Amount in the policy shall be subject to the following conditions: (1) Proper written application for the increase must be made by you to our Home Office. (2) The Accumulated Value of the policy must be sufficient to cover the additional monthly deduction for the increase. (3) The effective date of the increase shall be the date of termination of this rider. (4) The rates for the increase will be the current cost of insurance rates for the policy at the Insured's attained age and rating class at the time of the increase. (5) The suicide and contestability period of the increase will begin on the effective date of the policy or the effective date of this rider, if later. Cost of Insurance Rates - The monthly cost of insurance rate for this rider is based on the policy year and the sex and rating class of the Insured. Monthly cost of insurance rates, which are determined by us based upon future expectations, include charges for mortality experience, amortized sales charges, and other administrative charges. Any change in cost of insurance rates will apply to all individuals of the same rating class as the Insured. We will consider changes in the cost of insurance rates at least every five years and when cost of insurance rates for new issues change. However, the cost of insurance rates can never be greater than those shown in the Table of Monthly Guaranteed Cost of Insurance rates on Page 4 of the policy. Such guaranteed maximum rates are based on the 1980 CSO Smoker or Nonsmoker Mortality Table, with appropriate increases for rated risks. Termination - This rider will cease as soon as one of the following occurs: (1) The monthly deduction for this rider remains unpaid at the end of the Grace Period; or (2) The policy is surrendered, exchanged, or lapsed; or (3) The Expiry Date of this rider is attained; or (4) The date of this rider is converted; or (5) We receive a proper written request to terminate this rider. /s/ /s/ Frederick H. Condon President Secretary P93-54 6550001 [LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE] WAIVER OF SPECIFIED PREMIUM RIDER Effective Date - This rider is part of the policy to which it is attached. It takes effect on the effective date of the policy unless a later effective date is shown above. In this rider, "we", "us", or "our" means Chubb Life Insurance Company of America; "you" means the Owner of the policy; and "Insured" means the person named on Page 3 of the policy as Insured under this rider. Consideration - In return for the payment of the monthly deductions and receipt of an application for this rider, we will provide the benefit described in this rider. Benefit - We will pay the specified monthly premium (as applied for by the policyowner, as shown on Page 3 of the policy) for the policy to which this rider is attached, starting with the monthly anniversary day following commencement of Total Disability, while the Insured under this rider is totally disabled. We must receive due proof of the Insured's Total Disability commencing prior to the policy anniversary nearest the Insured's attained age 60 while this rider is in force, and that Total Disability has continued with no interruption for at least six months. Total Disability - Disability is total in the first two years if the Insured is wholly unable to do any of the main tasks of his or her regular job at the time of commencement of Total Disability, and is not working at any other job. After two years, disability is total if the Insured is wholly unable to do any work for which he or she is fitted by knowledge, training, or prior skill, and is not working at any other job. A disability will be deemed total from the date it starts when it has gone on without a break for six months. The following losses will be considered Total Disability as long as the loss continues, whether or not the Insured is working: (1) The sight of both eyes; (2) The use of both hands; (3) The use of both feet; or (4) The use of one hand and one foot. These losses must not have existed prior to the effective date of the policy or the effective date of this rider, if later. Risks Not Assumed - We will not pay the specified monthly premium for the policy to which this rider is attached if: (1) Total Disability commenced prior to the effective date of the policy. (2) Total Disability commenced during the Grace Period, as defined in the policy, and the policy subsequently lapsed. (3) Total Disability is a direct result of intentional self inflicted injury, whether the Insured is sane or insane. (4) Total Disability is the result of an act of war while the Insured is serving in the military, naval, or air forces of any country at war, declared or undeclared. Reinstatement - If the Insured becomes totally and permanently disabled in the Grace Period, as defined in the policy, and remains so past the end of the Grace Period, the policy will lapse. The policy may be reinstated while the Insured remains totally disabled if: (1) The conditions contained in the Reinstatement provision of the policy are met; (2) Written notice of claim is received by us within one year from the commencement of the Grace Period; and (3) Proof that disability began during the Grace Period is received by us within one year from the end of the Grace Period. Monthly Deduction - The monthly deduction for this rider will be (a), multiplied by (b) where: (a) is the waiver of specified premium rate shown on the attached table; (b) is the specified monthly premium (as shown on Data Page 3). The waiver of specified premium rate is based on the attained age of the Insured and the rating class for this rider. Waiver of specified premium rates for standard rider issues are shown on the attached table. Appropriate increases will be made to these rates for rated risks. Monthly Deductions Not Deducted - Any specified monthly premium paid for the policy to which this rider is attached will not reduce the proceeds to be paid under the policy. You will remain liable to pay interest on any debt to us. Notice of Claim - Written notice of claim and proof of Total Disability must be given to us at our Home Office. Such notice and proof must be given during the lifetime of the Insured during the period of Total Disability. Such notice and proof must be furnished not later than one year after the policy anniversary nearest the Insured's attained age 60 while this rider is in force. Failure to give such notice and proof will not invalidate or diminish any claim if it is shown that notice and proof were given as soon as was reasonably possible. Subject to this condition, no specified monthly premium, the due date of which is more than twelve months prior to the date of receipt at the Home Office of written notice of claim, will be paid for the policy to which this rider is attached. Proof of Disability - At reasonable intervals we will have the right to require due proof of the continuance of Total Disability. Proof must be furnished to us on our forms. As a part of such proof, the disabled Insured may be required to be examined by a physician chosen by us at our expense. After the first two years of Total Disability, proof will not be required more than once a year. Specified monthly premium payments for the policy to which this rider is attached cease when: (1) Total Disability ceases; (2) Proof of the continuance of Total Disability is not furnished as required; or (3) The Insured will not submit to an examination. Termination - This rider will cease as soon as one of the following occurs: (1) The monthly deduction for this rider remains unpaid at the end of the Grace Period. (2) The policy is surrendered, exchanged, or lapsed. (3) We receive a proper written request to terminate this rider. (4) The policy anniversary nearest attained age 60 of the Insured is attained. (5) The maturity date of the policy is attained. (6) The death of the Insured. /s/ /s/ Frederick H. Condon President Secretary [LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
TABLE OF MONTHLY WAIVER OF SPECIFIED PREMIUM RATES PER $1.00 ATTAINED AGE MALE FEMALE 15-27 .0122 .0260 28-37 .0141 .0304 38 .0153 .0328 39 .0166 .0353 40 .0182 .0379 41 .0200 .0406 42 .0221 .0435 43 .0244 .0464 44 .0270 .0494 45 .0300 .0525 46 .0333 .0557 47 .0370 .0589 48 .0410 .0622 49 .0454 .0656 50 .0502 .0690 51 .0554 .0725 52 .0609 .0760 53 .0668 .0795 54 .0731 .0831 55 .0797 .0868 56 .0866 .0906 57 .0938 .0944 58 .1013 .0983 59 .1089 .1024 60 .1168 .1066
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE] GUARANTEED DEATH BENEFIT RIDER Effective Date - This Rider is part of the policy to which it is attached. It takes effect on the Policy Date of the policy unless a later effective date is shown above. In this rider, "we", "us", or "our" means the Chubb Life Insurance Company of America; "you" means the Owner of the policy; and "Insured" means the person named on Page 3 of the policy. Consideration - In return for the payment of the monthly deductions and receipt of any application for this rider, we will provide the benefit described in this rider. Benefit - We guarantee that the death benefit of the policy will be no less than the Specified Amount, regardless of the investment experience of the divisions within the Separate Account, provided that the cumulative minimum premium requirements have been satisfied. This Rider has no loan value and no surrender value. Cumulative Minimum Premium Requirement - On each monthly anniversary day, we will determine if the cumulative minimum premium requirement for this rider has been met. The cumulative minimum premium requirement is met provided that (a) is greater than or equal to (b), where: (a) is the sum of all previous premium payments under the policy less any policy loans or withdrawals; and (b) is the minimum premium, as shown on Page 3 of the policy, divided by twelve, multiplied by the number of completed policy months. If this requirement has been met, the policy is guaranteed to remain in force during the next policy month. If this requirement is not met, we will notify you of the premium payments required in order to continue benefits under this rider. A grace period of 61 days will be provided. If the necessary premiums are not received during this grace period, this rider will terminate without value. Any increase in the Specified Amount will require an increase in the minimum premium. The cumulative minimum premium requirement will be the sum of the minimum premium requirements for the Initial Specified Amount and each respective increase to the Specified Amount. The portion of the minimum premium associated with any increase in the Specified Amount will be based on the attained age of the Insured as of the date of increase. Monthly Deduction - The monthly deduction for this rider will be (a), multiplied by (b), divided by $1,000, where: (a) is the Specified Amount of the policy; and (b) is $0.01. Termination - This Rider will cease as soon as one of the following occurs: (1) The cumulative minimum premium requirement remains unsatisfied at the end of the Grace Period. (2) The policy is surrendered, exchanged, or lapsed. (3) The Maturity Date of the policy is attained. (4) We receive a proper written request to terminate this rider. /s/ Theresa M. Stone /s/ Frederick H. Condon President Secretary P94-64 EX-99.3 9 OPINION OF COUNCIL Exhibit 3 OPINION OF COUNSEL [LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE] March 19, 1996 Chubb Life Insurance Company of America One Granite Place Concord, New Hampshire 03301 Gentlemen: This opinion is furnished in connection with the filing by Chubb Life Insurance Company of America ("Chubb Life") of Post-Effective Amendment No. 12 to its Registration Statement on Form S-6 under the Securities Act of 1933 (the "Act") of interests in Chubb Separate Account A (the "Separate Account") under its variable life insurance policies (the "Policies"). This opinion covers both the individual flexible premium variable life insurance policy and the survivorship flexible premium variable life insurance policy. I am familiar with the terms of the Policies and the Post-Effective Amendment No. 12 to the Registration Statement and the Exhibits hereto. I have also examined all such corporate records of Chubb Life and such other documents and laws as I considered appropriate as a basis for the opinion hereinafter expressed. On the basis of such examination, it is my opinion that: 1. Chubb Life is a corporation duly organized and validly existing under the laws of the State of New Hampshire. 2. The Separate Account is a separate account of Chubb Life validly existing pursuant to the New Hampshire Insurance Code and the regulations issued thereunder, under which income, gains and losses, whether or not realized, from assets allocated to the Separate Account, are, in accordance with the Policies, credited to or charged against the Separate Account without regard to other income, gains or losses of Chubb Life. 3. Assets allocated to the Separate Account will be owned by Chubb Life; Chubb Life is not a trustee with respect thereto. The Policies proved that the portion of the assets of the Separate Account equal to the reserves and other Policy liabilities with respect to the Separate Account will not be Chargeable with liabilities arising out of any other business Chubb Life may conduct. Chubb Life reserves the right to transfer assets of the Separate Account in excess of such reserves and other Policy liabilities to the general account of Chubb Life. Chubb Life America is the servicemark of Chubb Life Insurance Company of America . The Colonial Life Insurance Company of America Chubb Sovereign Life Insurance Company Chubb Life Insurance Company of America March 19, 1996 Page Two 4. The Policies (including any units duly credited thereunder) have been duly authorized by Chubb Life and, when issued and sold in jurisdictions that have approved the policy form for sale in accordance with the insurance law of that jurisdiction, each of the Policies (including any such units) will constitute validly issued and binding obligations of Chubb Life in accordance with its terms. Purchasers of the Policies are subject only to the deductions, charges and fees set forth in the Prospectus. I hereby consent to the filing of this opinion as an Exhibit to the Post- Effective Amendment No. 2 to the Registration Statement of the Separate Account filed under the Act. Sincerely, /s/ Shari J. Lease Assistant Vice President and Counsel SJL/lkp EX-99.6 10 ACTURIAL OPINION AND CONSENT Exhibit 6 ACTURIAL OPINION AND CONSENT OF MICHAEL J. LEBOEUF, FA, MAAA [LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE] March 19, 1996 Chubb Life Insurance Company of America Post Office Box 515 Concord, New Hampshire 03301 Gentlemen: This opinion is furnished in connection with the filing of the registration statement of Chubb Life Insurance Company of America ("Chubb") on Form S-6, ("Registration Statement") of interests in Chubb Separate Account A ("Separate Account A") under its variable life insurance policies (the "Policies"). This opinion covers both the individual flexible premium variable life insurance policy, and the survivorship flexible premium variable life insurance policy ("Chubb Ensemble II"). I am familiar with the terms of the Policies and the Registration Statement and the Exhibits thereto. In my opinion: 1. The illustrations of death benefits, accumulation value, and cash value for the Policies in Appendix A of the prospectus, based on the assumptions stated in the illustrations, are consistent with the provisions of the Policies. The Policies have not been designed so as to make the relationship between premiums and benefits, as shown in the illustrations, appear disproportionately more favorable to prospective purchasers of Policies for the age(s), gender(s), smoking status(es), and underwriting class(es) illustrated in Appendix A than to prospective purchasers of Policies for other age(s), gender(s), smoking status(es), and underwriting class(es) . The particular illustrations shown were not selected for the purpose of making this relationship appear more favorable. Generally, the rates for non-smokers are lower than for smokers and the rates for females are lower than for males. Chubb LifeAmerica is the servicemark of Chubb Life Insurance Company of America . The Colonial Life Insurance Company of America Chubb Sovereign Life Insurance Company March 12, 1996 Page Two 2. The illustrations of death benefits, accumulation value and cash value for the Policies, set forth in Appendix A of the prospectus, based on the net return of the five divisions of Separate Account A and the assumptions stated within the examples, are consistent with the provisions of the Policies. The illustrations in Appendix A. have not been designed so as to make the relationships between premiums and benefits appear disproportionately more favorable to prospective purchasers of Policies for age(s), gender(s), smoking status(es), and underwriting class(es) illustrated in appendix A than to prospective purchasers of Policies for other age(s), gender(s), smoking status(es), and underwriting class(es). Generally, the rates for non-smokers are lower than for smokers and the rates for females are lower than for males. 3. The illustrations set forth in Appendix A of the prospectus contain both the current and guaranteed rates of cost of insurance charges to be used for those Policies. These rates have not been designed so as to make the relationships between current and guaranteed rates appear disproportionately more favorable to prospective purchasers of Policies for the age(s), gender(s), smoking status(es) and underwriting class(es) illustrated in Appendix A than to prospective purchasers of policies for other age(s), gender(s), smoking status(es), and underwriting class(es). The particular illustrations shown were not selected for the purpose of making this relationship appear more favorable. Generally, the rates for non-smokers are lower than for smokers and the rates for females are lower than for males. I hereby consent to the use of this opinion as an Exhibit to the Registration Statement and to the reference to my name under the heading "Experts" in the prospectus. Sincerely, Michael J. LeBoeuf, FA, MALA Assistant Vice President and Product Actuary MAL/lkp EX-7 11 CONSENT OF ERNST AND YOUNG CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" and to the use of our reports dated February 5, 1996 for Chubb Life Insurance Company of America and Subsidiaries and March 8, 1996 for Chubb Separate Account A in Post-Effective Amendment No. 12 to the Registration Statement (Form S-6 No. 33-7734) and related Prospectus for the registration of units of interest in the Chubb Separate Account A under individual flexible premium variable life insurance policies offered by Chubb Life Insurance Company of America. ERNST & YOUNG LLP Boston, Massachusetts April 16, 1996 EX-99.9 12 SPECIMEN NOTICE OF RIGHT OF WITHDRAWAL Exhibit 9 SPECIMEN NOTICE OF RIGHT OF WITHDRAWAL PURSUANT TO RULE 6e-3(T)(b)(13)(viii) NOTICE OF THE RIGHT OF WITHDRAWAL Volunteer State Life Insurance Company P. 0. Box 1369 Chattanooga, Tennessee 37401 Re: Policy Number: Insured's Name: Plan Name: Ensemble II Premium Frequency: Planned Periodic Premium: $ This Notice is sent to you in accordance with the laws administered by the United States Securities and Exchange Commission ("SEC"). Please read it carefully and retain it with your important records. You have recently purchased a variable life insurance policy from Volunteer State Life Insurance Company under which benefits depend on the investment experience of Separate Account A. You have, pursuant to requirements of the SEC and your policy, the right to examine and return your policy for cancellation, and receive a full refund of all premiums paid, at any time within 10 days from delivery of the policy or 45 days from the date of Part I of the application, whichever is later, but in any event you have until 10 days from the date of mailing of this notice, as determined by its postmark, or personal delivery to return the policy for cancellation. Accompanying your policy will be an illustration of the way in which the death benefit, accumulation value and cash value under your policy will vary to reflect investment experience by Separate Account A. In determining whether or not to exercise your right, you should consider, among other things, the projected cost of your policy and your ability to make payments for life as they may become necessary. Your policy provides for payments as stated above. Also you have already been furnished a prospectus which describes the charges assessed against your policy. Please see the enclosed document that refers to these charges. Should you decide to exercise this right of cancellation, complete the enclosed form and return your policy in accordance with the enclosed instructions, postmarked on or before the latest date permitted for cancellation as described above. John Wells Assistant Vice President Policy Service NOTICE OF THE RIGHT OF WITHDRAWAL Volunteer State Life Insurance Company P. 0. Box 1369 Chattanooga, Tennessee 37401 Re: Policy Number: Insured's Name: Plan Name: Ensemble II Premium Frequency: Planned Periodic Premium: $ This Notice is sent to you in accordance with the laws administered by the United States Securities and Exchange Commission ("SEC"). Please read it carefully and retain it with your important records. You have recently purchased a variable life insurance policy from Volunteer State Life Insurance Company under which benefits depend on the investment experience of Separate Account A. You have, pursuant to requirements of the SEC and your policy, the right to examine and return your policy for cancellation, and receive a full refund of all premiums paid, at any time within 10 days from delivery of the policy or 45 days from the date of Part 1 of the application, whichever is later, but in any event you have until 10 days from the date of mailing of this notice, as determined by its postmark, or personal delivery to return the policy for cancellation. Accompanying your policy will be an illustration of the way in which the death benefit, accumulation value and cash value under your policy will vary to reflect investment experience by Separate Account A. In determining whether or not to exercise your right, you should consider, among other things, the projected cost of your policy and your ability to make payments for life as they may become necessary. Your policy provides for payments as stated above. Also you have already been furnished a prospectus which describes the charges assessed against your policy. Please see the enclosed document that refers to these charges. Should you decide to exercise this right of cancellation, complete the enclosed form and return your policy in accordance with the enclosed instructions, postmarked on or before the latest date permitted for cancellation as described above. John Wells Assistant Vice President Policy Service EX-99.10 13 REPRESENTATIONS DESCRIPTIONS AND UNDER TAKINGS Exhibit 10 REPRESENTATIONS, DESCRIPTION AND UNDERTAKINGS REGARDING MORTALITY AND RISK CHARGE PURSUANT TO RULE 6e-3 (T) (b) (13) (iii) (F) [LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE] REPRESENTATIONS, DESCRIPTION AND UNDERTAKINGS PURSUANT TO RULE 6E-3(T) (b) (13) (iii) (F) UNDER THE INVESTMENT COMPANY ACT OF 1940 The Colonial Life Insurance Company of America ("Colonial"), on behalf of Colonial Separate Account A, makes the following representations: 1. Section 6e3(T) (b) (13) (iii) (F) is being relied upon. 2. The level of mortality and expense risk charge is reasonable in relation to the risks assumed and is within the range of industry practice for comparable contracts. 3. The methodology used to support the representation made in paragraph (2) above is based on an analysis of the mortality and expense risk charges being made in relation to the risks assumed, as well as those in comparable flexible premium contracts filed with the Commission. Colonial undertakes to keep and make available to the Commission on request the documents used to support the representation in paragraph (2) above. 4. Chubb has concluded that there is a reasonable likelihood that the distribution financing arrangement will benefit Separate Account A and policy owners. Chubb undertakes to keep and make to the Commission on request the memorandum setting forth the basis for this representation. 5. Chubb represents that Chubb Separate Account A will invest only in management investment companies which have undertaken to have a board of directors, a majority of whom are not interested persons of the company, formulate and approve any plan under Rule 12b-1 to finance distribution expenses. ------------------------------- Michael J. LeBoeuf, FSA, MAAA Assistant Vice President and Product Actuary Chubb LifeAmerica is the servicemark of Chubb Life Insurance Company of America The Colonial Life Insurance Company of America Chubb Soveriegn Life Insurance Company EX-99.14 14 POWER OF ATTORNEY POWER OF ATTORNEY ----------------- I, the undersigned, hereby Constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. 2/22/96 /s/ John C. Beck - ------------------------ ------------------------------------ (Date) (Signature) John C. Beck ------------------------------------ (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. 21 FEB 96 /s/ Percy Chubb V - ----------------------------- ------------------------------------ (Date) (Signature) Percy Chubb V ------------------------------------ (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. February 23, 1996 /s/ Joel J. Cohen - ----------------------------- ----------------------------------- (Date) (Signature) Joel J. Cohen ----------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. 2 - 25 - 96 /s/ Henry V. Harder - ----------------------------- -------------------------------------- (Date) (Signature) Henry V. Harder -------------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. Feb 22, 1996 /s/ David H. Hoag - ----------------------------- ------------------------------------ (Date) (Signature) David H. Hoag ------------------------------------ (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. March 1, 1996 /s/ Robert V. Lindsay - ----------------------------- ------------------------------------- (Date) (Signature) Robert V. Lindsay ------------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. March 1, 1996 /s/ Thomas C. MacAvoy - ----------------------------- ----------------------------------- (Date) (Signature) Thomas C. MacAvoy ----------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. Feb 23, 1996 /s/ Gertrude G. Michelson - ----------------------------- ----------------------------------- (Date) (Signature) Gertrude G. Michelson ----------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. March 1, 1996 /s/ Dean R. O'Hare - ----------------------------- ------------------------------------- (Date) (Signature) Dean R. O'Hare ------------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. 2/21/96 /s/ Warren B. Rudman - ----------------------------- ----------------------------------- (Date) (Signature) Warren B. Rudman ----------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. 23.FEB.96 /s/ Sir David Gerald Scholey - ----------------------------- ------------------------------------ (Date) (Signature) Sir David Gerald Scholey ------------------------------------ (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. February 26, 1996 /s/ Raymond G.H. Leitz - ----------------------------- -------------------------------------- (Date) (Signature) Raymond G.H. Leitz --------------------------------------- (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. 2/22/96 /s/ Lawrence M. Small - ----------------------------- ------------------------------------ (Date) (Signature) Lawrence M. Small ------------------------------------ (Please Print or Type Name) POWER OF ATTORNEY ----------------- I, the undersigned, hereby constitute and appoint Frederick H. Condon, Theresa M. Stone and Richard V. Werner, each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities to sign registration statements, pre-effective amendments and post- effective amendments to registration statements on Form S-6 under the Securities Act of 1933 and to file the same, or cause the same to be filed, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. I further grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the exercise of the powers herein granted, as fully as I could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any of their substitutes, may lawfully do or cause to be done by the powers herein granted. Feb. 22, 1996 /s/ Richard D. Wood - ----------------------------- ---------------------------------- (Date) (Signature) Richard D. Wood ---------------------------------- (Please Print or Type Name) EX-27.1 15 WORLD GROWTH STOCK DIVISION
6 1 WORLD GROWTH STOCK DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 64,572,886 73,692,356 3,234,707 0 0 76,927,063 0 0 75,619 75,619 0 67,731,974 2,561,179 2,123,894 0 0 0 0 9,119,470 76,851,444 3,151,912 0 0 607,380 2,544,532 1,175,160 6,318,978 10,038,670 0 0 0 0 1,715,142 1,277,857 0 21,575,187 0 0 0 0 0 0 607,380 66,063,850 0 0 0 0 0 0 0 0 0 0 Common Stock: Ensemble 59,238 Ensemble II 2,501,941 Common Stock Prior: Ensemble 61,884 Ensemble II 2,062,010 Net Assets: Ensemble 1,822,626 Ensemble II 75,028,818
EX-27.2 16 MONEY MARKET DIVISION
6 2 MONEY MARKET DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 8,550,714 8,312,676 486,030 0 0 8,798,706 0 0 0 0 0 9,036,744 569,338 468,285 0 0 0 0 (238,038) 8,798,706 401,686 0 0 70,796 330,890 118,929 (132,246) 317,573 0 0 0 0 1,688,778 1,587,725 0 1,846,357 0 0 0 0 0 0 70,796 7,875,528 0 0 0 0 0 0 0 0 0 0 Common Stock: Ensemble 4,305 Ensemble II 565,033 Common Stock Prior: Emsemble 6,329 Ensemble II 461,956 Net Assets: Ensemble 68,283 Ensemble II 8,730,423
EX-27.3 17 GOLD STOCK DIVISION
6 3 GOLD STOCK DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 6,331,508 6,867,645 23,827 0 0 6,891,472 0 0 (24,036) (24,036) 0 6,379,371 430,217 386,030 0 0 0 0 536,137 6,915,508 37,550 0 0 67,504 (29,954) 172,991 91,937 234,974 0 0 0 0 371,551 327,364 0 821,429 0 0 0 0 0 0 67,504 6,504,794 0 0 0 0 0 0 0 0 0 0 Common Stock Ensemble 11,251 Ensemble II 418,966 Common Stock Prior Ensemble 12,075 Ensemble II 373,955 Net Assets Ensemble 185,468 Ensemble II 6,730,040
EX-27.4 18 DOMESTIC GROWTH STOCK DIVISION
6 4 DOMESTIC GROWTH STOCK DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 41,547,976 48,517,886 6,122,076 0 0 54,639,962 0 0 116,093 116,093 0 47,553,959 1,698,061 1,290,152 0 0 0 0 6,969,910 54,523,869 7,085,674 0 0 376,813 6,708,861 194,361 3,886,548 10,789,770 0 0 0 0 917,824 509,915 0 22,295,945 0 0 0 0 0 0 376,813 43,375,897 0 0 0 0 0 0 0 0 0 0 Common Stock Ensemble 25,007 Ensemble II 1,673,054 Common Stock Prior Ensemble 26,636 Ensemble II 1,263,516 Net Assets Ensemble 824,059 Ensemble II 53,699,810
EX-27.5 19 BOND DIVISION
6 5 BOND DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 9,070,739 9,230,090 645,736 0 0 9,875,826 0 0 0 0 0 9,716,475 520,242 735,955 0 0 0 0 159,351 9,875,826 644,900 0 0 85,025 559,875 129,555 722,365 1,411,795 0 0 0 0 672,153 887,866 0 (2,198,207) 0 0 0 0 0 0 85,025 10,974,930 0 0 0 0 0 0 0 0 0 0 Common Stock: Ensemble 1,335 Ensemble II 518,907 Common Stock Prior: Ensemble 1,723 Ensemble II 734,232 Net Assets: Ensemble 26,004 Ensemble II 9,849,822
EX-27.6 20 GROWTH AND INCOME DIVISION
6 6 GROWTH AND INCOME DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 11,461,493 12,787,993 568,545 0 0 13,356,538 0 0 30,931 30,931 0 11,999,107 841,523 382,844 0 0 0 0 1,326,500 13,325,607 514,461 0 0 72,581 441,880 43,900 1,598,713 2,084,493 0 0 0 0 730,636 271,957 0 8,745,871 0 0 0 0 0 0 72,581 8,952,672 0 0 0 0 0 0 0 0 0 0
EX-27.7 21 CAPITAL GROWTH DIVISION
6 7 CAPITAL GROWTH DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 40,073,244 49,618,795 4,648,444 0 0 54,267,239 0 0 131,600 131,600 0 44,590,088 2,588,397 1,780,412 0 0 0 0 9,545,551 54,135,639 4,538,514 0 0 343,782 4,194,732 331,997 9,191,593 13,718,322 0 0 0 0 1,825,698 1,017,713 0 27,626,369 0 0 0 0 0 0 343,782 40,322,456 0 0 0 0 0 0 0 0 0 0
EX-27.8 22 BALANCED DIVISION
6 8 BALANCED DIVISION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 13,528,866 14,328,207 1,232,981 0 0 15,561,188 0 0 (224) (224) 0 14,762,071 1,113,152 814,231 0 0 0 0 799,341 15,561,412 1,280,253 0 0 110,589 1,169,664 56,294 1,204,925 2,430,883 0 0 0 0 763,616 464,695 0 6,174,013 0 0 0 0 0 0 110,589 12,474,406 0 0 0 0 0 0 0 0 0 0
EX-27.9 23 EMERGING GROWTH DIVISION
6 9 EMERGING GROWTH DIVISION 8-MOS DEC-31-1995 MAY-01-1995 DEC-31-1995 6,984,520 7,443,430 253,069 0 0 7,696,499 0 0 109,157 109,157 0 7,128,432 575,117 0 0 0 0 0 458,910 7,587,342 0 0 0 11,735 (11,735) 17,701 458,910 464,876 0 0 0 0 718,606 143,489 0 7,587,342 0 0 0 0 0 0 11,375 3,793,671 0 0 0 0 0 0 0 0 0 0
EX-27.10 24 TEMPLETON DIVISION
6 10 TEMPLETON DIVISION 8-MOS MAY-01-1995 DEC-31-1995 DEC-31-1995 7,330,508 7,687,549 9,253 0 0 7,696,802 0 0 0 0 0 7,339,761 691,356 0 0 0 0 0 357,041 7,696,802 0 0 0 28,459 (28,459) 316,398 357,041 644,980 0 0 0 0 1,977,300 1,285,944 0 7,696,802 0 0 0 0 0 0 28,459 3,848,401 0 0 0 0 0 0 0 0 0 0
EX-27.11 25 CHUBB LIFE INSURANCE CO.
7 0000757552 CHUBB LIFE INSURANCE CO. 1,000 YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 0 403,539 2,255,951 40,208 9,634 0 2,967,259 0 193,925 575,614 4,275,365 2,752,129 0 90,150 98,723 41,212 3,000 0 0 841,645 4,275,365 622,937 230,090 21,808 4,055 549,219 267,563 0 62,108 20,857 41,251 0 0 0 42,216 0 0 103,530 240,306 (11,773) 190,760 78,771 62,532 0
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