-----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, GwYIzkxuWcGxGh4Bun1vato+ZNG3Z+EG9JyrLZnruorSGKXAZPw4lXc6g4Ywmp3t 00f3W0RbB7OCqR1YDZcnqQ== 0001017062-99-001158.txt : 19990617 0001017062-99-001158.hdr.sgml : 19990617 ACCESSION NUMBER: 0001017062-99-001158 CONFORMED SUBMISSION TYPE: S-6 PUBLIC DOCUMENT COUNT: 26 FILED AS OF DATE: 19990616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC SELECT EXEC SEPARATE ACCT OF PM GP LIFE INSURANCE CO CENTRAL INDEX KEY: 0001074487 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-6 SEC ACT: SEC FILE NUMBER: 333-80825 FILM NUMBER: 99647521 BUSINESS ADDRESS: STREET 1: 700 NEWPORT CTR DR STREET 2: P O BOX 7500 CITY: NEWPORT BEACH STATE: CA ZIP: 92660 BUSINESS PHONE: 7146403326 S-6 1 FORM S-6 As filed with the Securities and Exchange Commission on June 16, 1999 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-6 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 PACIFIC SELECT EXEC SEPARATE ACCOUNT OF PACIFIC LIFE & ANNUITY COMPANY (Exact Name of Registrant) PACIFIC LIFE & ANNUITY COMPANY (Name of Depositor) 700 Newport Center Drive P.O. Box 9000 Newport Beach, California 92660 (Address of Depositor's Principal Executive Office) (949)219-3743 (Depositor's Telephone Number, including Area Code) Diane N. Ledger Vice President Pacific Life Insurance Company 700 Newport Center Drive P.O. Box 9000 Newport Beach, California 92660 (Name and Address of Agent for Service of Process) Copies to: Jeffrey S. Puretz, Esq. Dechert Price & Rhoads 1775 Eye Street, N.W. Washington, D.C. 20006-2401 Title of securities being registered: interests in the Separate Account under Pacific Select Exec II-NY Flexible Premium Variable Life Insurance Policies. Approximate date of proposed public offering: As soon as practicable after the effective date of the Registration Statement. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Filing fee: None Pacific Select Exec Separate Account of Pacific Life & Annuity Company CROSS-REFERENCE SHEET Pursuant to Rule 404(c) of Regulation C under the Securities Act of 1933 (Form N-8B-2 Items required by Instruction as to the Prospectus in Form S-6)
Form N-8B-2 Form S-6 Item Number Heading in Prospectus 1. (a) Name of trust............................... Prospectus front cover (b) Title of securities issued.................. Prospectus front cover 2. Name and address of each depositor............... Prospectus front cover; Back Cover 3. Name and address of trustee...................... N/A 4. Name and address of each principal underwriter... About PL&A 5. State of organization of trust................... Pacific Select Exec Separate Account 6. Execution and termination of trust agreement..... Pacific Select Exec Separate Account 7. Changes of name.................................. N/A 8. Fiscal year...................................... N/A 9. Material Litigation.............................. N/A II. General Description of the Trust and Securities of the Trust 10. (a) Registered or bearer securities............. Pacific Select Exec II-NY basics; The death benefit (b) Cumulative or distributive
securities................................ Pacific Select Exec II-NY basics; The death benefit (c) Withdrawal or redemption......... Withdrawals, surrenders and loans (d) Conversion, transfer, etc........ Withdrawals, surrenders and loans (e) Periodic payment plan............ N/A (f) Voting rights.................... Voting Rights (g) Notice to security holders....... Reports we'll send you (h) Consents required................ Voting Rights (i) Other provisions................. N/A 11. Type of securities comprising units................................. Pacific Select Exec II-NY basics 12. Certain information regarding periodic payment plan certificates.... N/A 13. (a) Load, fees, expenses, etc......... Deductions from your premiums; Surrendering your policy (b) Certain information regarding periodic payment plan certificates.... N/A (c) Certain percentages................... Deductions from your premiums; Surrendering your policy (d) Difference in price................... N/A (e) Certain other fees, etc............... Deductions from your premiums; Surrendering your policy (f) Certain other profits or benefits.............................. The death benefit; Your policy's accumulated value (g) Ratio of annual charges to income................................ N/A 14. Issuance of trust's securities........ Pacific Select Exec II-NY basics
15. Receipt and handling of payments From purchasers..................... How premiums work 16. Acquisition and disposition of Your policy's accumulated underlying securities............... value: Your investment options 17. Withdrawal or redemption............ Withdrawals, surrenders and loans 18. (a) Receipt, custody and disposition of income....................... Your policy's accumulated value (b) Reinvestment of distributions... N/A (c) Reserves or special funds....... N/A (d) Schedule of distributions....... N/A 19. Records, accounts and reports....... Statements and Reports 20. Certain miscellaneous provisions of trust agreement: (a) Amendment....................... N/A (b) Termination..................... N/A (c) and (d) Trustees, removal and successor....................... N/A (e) and (f) Depositors, removal and successor................... N/A 21. Loans to security holders........... Withdrawals, surrenders and loans 22. Limitations on liability............ N/A 23. Bonding arrangements................ N/A 24. Other material provisions of trust agreement..................... N/A
III. Organizations, Personnel and Affiliated Persons of Depositor 25. Organization of depositor...................................................... About PL&A 26. Fees received by depositor..................................................... See Items 13(a) and 13(e) 27. Business of depositor.......................................................... About PL&A 28. Certain information as to officials and affiliated persons of depositor........ About PL&A 29. Voting securities of depositor................................................. N/A 30. Persons controlling depositor.................................................. N/A 31. Payments by depositor for certain services rendered to trust................... N/A 32. Payments by depositor for certain other services rendered to trust............. N/A 33. Remuneration of employees of depositor for certain services rendered to trust.. N/A 34. Remuneration of other persons for certain services rendered to trust........... N/A IV. Distribution and Redemption of Securities 35. Distribution of trust's securities by states................................... N/A 36. Suspension of sales of trust's securities...................................... N/A 37. Revocation of authority to distribute.......................................... N/A
38. (a) Method of distribution.......................................... How policies are distributed (b) Underwriting agreements......................................... How policies are distributed (c) Selling agreements.............................................. How policies are distributed 39. (a) Organization of principal underwriters.......................... How policies are distributed (b) N.A.S.D. membership of principal underwriters................... How policies are distributed 40. Certain fees received by principal underwriters...................... How policies are distributed 41. (a) Business of each principal underwriter.......................... How policies are distributed (b) Branch offices of each principal underwriter.................... N/A (c) Salesmen of each principal underwriter.......................... N/A 42. Ownership of trust's securities by certain persons................... N/A 43. Certain brokerage commissions received by principal underwriters..... N/A 44. (a) Method of valuation............................................. Your policy's accumulated value (b) Schedule as to offering price................................... How premiums work (c) Variation in offering price to certain persons.................. Monthly deductions 45. Suspension of redemption rights...................................... Timing of payments, forms, and requests
46. (a) Redemption valuation................................................... Withdrawals, surrenders and loans (b) Schedule as to redemption price........................................ Withdrawals, surrenders and loans 47. Maintenance of position in underlying securities............................ Your investment options V. Information Concerning the Trustee or Custodian 48. Organization and regulation of trustee...................................... N/A 49. Fees and expenses of trustees............................................... N/A 50. Trustee's lien.............................................................. N/A VI. Information Concerning Insurance of Holders of Securities 51. Insurance of holders of trust's securities.................................. The death benefit VII. Policy of Registrant 52. (a) Provisions of trust agreement with respect to selection or elimination of under lying securities............................... How our accounts work (b) Transactions involving elimination of underlying securities............ How our accounts work (c) Policy regarding substitution or elimination of underlying securities.. How our accounts work (d) Fundamental policy not otherwise covered............................... N/A 53. Tax status of trust......................................................... Variable life insurance and your taxes VIII. Financial and Statistical Information
54. Trust's securities during last ten years.......... N/A 55. N/A 56. Certain information regarding periodic payment plan certificates................................. N/A 57. N/A 58. N/A 59. Financial statements (Instruction 1(c) of "Instructions as to the Prospectus" of Form S-6).. Financial Statements
PACIFIC SELECT EXEC II - NY PROSPECTUS Pacific Select Exec II - NY is a flexible premium variable life insurance policy issued by Pacific Life & Annuity Company. This policy is not available in all states. This prospectus provides information that you should know before buying a This prospectus is not an offer in any state policy. It's accompanied by a current prospectus for the Pacific Select Fund, a or jurisdiction where we're not legally fund that provides the underlying portfolios for the variable investment permitted to offer the policy. options offered under the policy. Please read these prospectuses carefully and keep them for future reference. The policy is described in detail in this prospectus. The Pacific Select Fund is Here's a list of all of the investment options available under your policy: described in its prospectus and in its Statement of Additional Information (SAI). VARIABLE INVESTMENT OPTIONS No one has the right to describe the policy Money Market Large-Cap Value or the Pacific Select Fund any differently High Yield Bond Mid-Cap Value than they have been described in Managed Bond Equity these documents. Government Securities Bond and Income Growth Equity Index You should be aware that the Securities and Aggressive Equity Small-Cap Index Exchange Commission (SEC) has not reviewed Growth LT REIT the policy for its investment merit, and Equity Income International does not guarantee that the information in Multi-Strategy Emerging Markets this prospectus is accurate or complete. It's a criminal offense to say otherwise. FIXED OPTIONS Fixed Account Fixed LT Account
YOUR GUIDE TO THIS PROSPECTUS An overview of Pacific Select Exec II - NY 4 ---------------------------------------------------------------------------- Pacific Select Exec II - NY basics 12 Owners, person insured by the policy, and beneficiaries 13 Policy date, monthly payment date, policy anniversary date 14 Statements and reports we'll send you 15 Your right to cancel 15 Timing of payments, forms and requests 16 Telephone transactions 17 ---------------------------------------------------------------------------- The death benefit 18 Choosing your death benefit option 18 Choosing a death benefit qualification test 19 Comparing the death benefit options 20 When we pay the death benefit 22 Changing your death benefit option 22 Changing the face amount 23 Optional riders 24 ---------------------------------------------------------------------------- How premiums work 26 Planned periodic premium payments 26 Deductions from your premiums 27 Allocating your premiums 27 Limits on the premium payments you can make 28 ---------------------------------------------------------------------------- Your policy's accumulated value 29 Calculating your policy's accumulated value 29 Monthly deductions 29 Lapsing and reinstatement 32 ---------------------------------------------------------------------------- Your investment options 34 Variable investment options 34 Fixed options 38 Transferring among investment options 38 Transfer programs 39 ---------------------------------------------------------------------------- Withdrawals, surrenders and loans 41 Making withdrawals 41 Taking out a loan 42 Ways to use your policy's loan and withdrawal features 43 Surrendering your policy 44 ---------------------------------------------------------------------------- General information about your policy 46 ---------------------------------------------------------------------------- Variable life insurance and your taxes 49 ---------------------------------------------------------------------------- About PL&A 53 ---------------------------------------------------------------------------- Illustrations 77 ---------------------------------------------------------------------------- Appendices 93 Appendix A: Rates per $1,000 of initial face amount 93 Appendix B: Death benefit percentages 94 ---------------------------------------------------------------------------- Where to go for more information back cover
2 Terms used in this prospectus We've tried to make this prospectus easy to read and understand, but you may find some words and terms that are new to you. We've identified some of these below and the pages where you'll find an explanation of what they mean. If you have any questions, please ask your registered representative or call us at 1-800-800-7681. Accumulated value 29 Joint owners 13 Accumulation units 36 Lapse 32 Age 13 Loan account 42 In this prospectus, you and your mean the Allocation 27 Modified endowment con- policyholder or owner. PL&A, we, us and our Assignment 48 tract 51 refer to Pacific Life & Annuity Company. Beneficiary 14 Monthly payment date 14 The fund refers to Pacific Select Fund. Business day 16 Net amount at risk 30 Policy means a Pacific Select Exec II - NY Cash surrender value 44 Net cash surrender value 44 variable life insurance policy, unless we Cash value accumulation Net premium 26 state otherwise. Pacific Life means Pacific test 19 Net single premium 19 Life Insurance Company, our parent company. Contingent beneficiary 14 Outstanding loan amount 42 Cost of insurance rate 29 Planned periodic premium 26 Death benefit 18 Policy anniversary 14 Death benefit percentage 19 Policy date 14 Death benefit qualifica- Policy year 14 tion test 19 Portfolio 34 Face amount 18 Proper form 16 Fixed account 38 Reinstatement 33 Fixed LT account 38 Riders 24 Fixed options 38 Separate account 54 General account 54 Seven-pay limit 51 Guideline minimum death Tax code 49 benefit 19 Unit value 36 Guideline premium limit 28 Variable account 34 Guideline premium test 19 Variable investment op- Illustration 15 tion 34 In force 12 Income benefit 46 3
AN OVERVIEW OF PACIFIC SELECT EXEC II - NY This overview tells you some key things you should know about your policy. It's designed as a summary only--please read the entire prospectus and your policy for more detailed information. Some states have different rules about how life insurance policies are described or administered. The terms of your policy, or of any endorsement or rider, prevail over what's in this prospectus. -------------------------------------------------------------------------------- Pacific Select Exec II - NY basics Pacific Select Exec II - NY is a flexible premium variable life insurance policy. This policy may be appropriate if you want to provide a death benefit for family . Flexible premium means you can vary the amount and frequency of your premium members or others or to help meet other payments. long-term financial objectives. It may not be the right kind of policy if you plan to . Variable means the policy's value depends on the performance of the investment withdraw money for short-term needs. options you choose. Please discuss your insurance needs and . Life insurance means the policy provides a death benefit to the beneficiary financial objectives with your registered you choose. representative. In addition to providing a death benefit that is generally free of federal You'll find more about the basics of income tax, any growth in your policy's accumulated value is tax-deferred. You Pacific Select Exec II - NY starting on can choose from 18 variable investment options, each of which invests in a page 12. corresponding portfolio of the Pacific Select Fund, and two fixed options, both of which provide a guaranteed minimum rate of interest. Pacific Select Exec II - NY is designed for long-term financial planning. Please take some time to read the information in this prospectus before you decide if this life insurance policy meets your insurance needs and financial objectives. Your right to cancel During the free look period, you have the right to cancel your policy and return it to us or your registered representative for a refund. We'll refund the amount of your premium payments. We'll hold the net premiums in the Money Market investment option until the free look transfer date.
4 -------------------------------------------------------------------------------- The death benefit You can choose one of three death benefit options depending on what is more important to you: a larger death benefit or building the accumulated value of Your policy provides a death benefit for your policy. your beneficiary after the person insured by the policy has died, as long as your The death benefit will always be the greater of the death benefit under the policy is in force. option you choose or the guideline minimum death benefit. You'll find more about the death benefit This policy offers two ways to calculate the guideline minimum death benefit: starting on page 18. the cash value accumulation test and the guideline premium test. These are called death benefit qualification tests. The test you choose will generally depend on the amount of premiums you want to pay. In general, you should choose the cash value accumulation test if you do not want to limit the amount of premiums you can pay into your policy. You cannot change your death benefit qualification test. But you can change your death benefit option and increase or decrease your policy's face amount (with certain restrictions) while your policy is in force. Any of these changes may affect your policy charges. Optional riders There are eight optional riders that provide extra benefits, some at additional cost. -------------------------------------------------------------------------------- How premiums work Deductions from your premiums We deduct a premium load from each premium payment you make. The premium load Your policy gives you the flexibility to is made up of a sales load, a state and local tax charge, and a federal tax choose the amount and frequency of your charge. premium payments within certain limits. Each premium payment must be at least $50. Limits on the premium payments you can make Federal tax law puts limits on the premium payments you can make in relation to You'll find more about how premiums work your policy's death benefit. We may refuse all or part of a premium payment you starting on page 26. make, or remove all or part of a premium from your policy and return it to you under certain circumstances. -------------------------------------------------------------------------------- Your policy's accumulated value Accumulated value is the value of your policy on any business day. It is not guaranteed - it depends on the performance of the investment options you've Accumulated value is used as the basis for chosen, the premium payments you've made, policy charges, and how much you've determining policy benefits and charges. If borrowed or withdrawn from the policy. there is not enough accumulated value to cover policy charges, your policy could Monthly deductions lapse. We deduct a monthly charge from your policy's accumulated value on each monthly payment date. The charge is made up of cost of insurance, an administrative You'll find more about accumulated value charge, and a mortality and expense risk charge. If you add any riders, we'll starting on page 29. add any charges for them to your monthly charge. Lapsing and reinstatement If there is not enough accumulated value to cover the monthly charge on the day we make the deduction, your policy may lapse - which means you'll no longer have any insurance coverage. If your policy is in danger of lapsing, we'll give you a grace period of 61 days to pay the required premium. If your policy lapses at the end of the grace period, you have five years from the day it lapses to apply for a reinstatement. 5
AN OVERVIEW OF PACIFIC SELECT EXEC II - NY -------------------------------------------------------------------------------- Your investment options You can choose from 18 variable investment options, each of which invests in a corresponding portfolio of the Pacific Select Fund. We're the investment The investment options you choose will adviser for the Pacific Select Fund. We oversee the management of all the affect your policy's accumulated value, fund's portfolios and manage two of the portfolios directly. We've retained and may affect the death benefit. other portfolio managers to manage the other portfolios. The value of each portfolio will fluctuate with the value of the investments it holds, and Please review the investment options returns are not guaranteed. carefully and ask your registered representative to help you choose the You can also choose from two fixed options, the Fixed account and the Fixed LT right ones for your goals and risk account, both of which provide a guaranteed minimum annual interest rate of 3% tolerance. during the first 10 policy years, and 3.3% thereafter. We may offer a higher interest rate. If we do, we'll guarantee that rate for one year. You'll find more about the investment options starting on page 35. We allocate your premium payments and accumulated value to the investment options you choose. Your policy's accumulated value will fluctuate depending on You'll find out more about our automatic the investment options you've chosen. You bear the investment risk of any transfer programs starting on page 39. variable investment options you choose. We'll hold your premium payments in the Money Market investment option until the free look transfer date. Please turn to Your right to cancel for details. Transferring among investment options You can transfer among the investment options during the life of your policy without paying any current income tax. There is currently no charge for transfers. You can make as many transfers as you like between variable investment options. You can also make automatic transfers from one variable investment option to another using our dollar cost averaging or portfolio rebalancing programs. These programs are not available for the fixed options. You can only make one transfer from each fixed option in any 12-month period. For the Fixed account, each transfer may be no more than $5,000 or 25% of the accumulated value in the Fixed account, whichever is greater. For the Fixed LT account, each transfer may be no more than $5,000 or 10% of the accumulated value in the Fixed LT account, whichever is greater. You can only transfer to the fixed options in the policy month right before each policy anniversary. You can also make automatic transfers from the Fixed account to other investment options during the first policy year using our first year transfer program. -------------------------------------------------------------------------------- Withdrawals, surrenders and loans You can take out all or part of your policy's accumulated value while your policy is in force by making withdrawals or surrendering your policy. You can Making a withdrawal, taking out a loan or take out a loan from us using your policy as security. You can also use your surrendering your policy can change your policy's loan and withdrawal features to supplement your income, for example, policy's tax status, generate taxable during retirement. income, or make your policy more susceptible to lapsing. Be sure to plan Making withdrawals carefully before using these policy You can withdraw part of your policy's net cash surrender value starting on benefits. your policy's first anniversary. This reduces your policy's accumulated value and could affect the face amount and death benefit. You'll find more about withdrawals, surrenders and loans starting on page 41.
6 Taking out a loan You can take out a loan from us using your policy's accumulated value as security. You pay interest at an annual rate of 3.55% on the amount you borrow. The accumulated value used to secure your loan is set aside in a loan account, where it earns interest at an annual rate of 3% during the first 10 policy years, and 3.3% thereafter. The amount in the loan account is not available to help pay for any policy charges. Taking out a loan affects the accumulated value of your policy because the amount set aside in the loan account misses out on the potential earnings available through the investment options. Surrendering your policy You can surrender or cash in your policy for its net cash surrender value while the person insured by the policy is still living. If you surrender your policy during the first 10 policy years, we'll apply a surrender charge. If you increase your policy's face amount and surrender your policy during the first 10 years after the increase, we'll apply a surrender charge to the amount of the increase. -------------------------------------------------------------------------------- Variable life insurance and your taxes Your beneficiary generally will not have to pay federal income tax on death benefit proceeds. You'll also generally not be taxed on any or all of your There are tax issues to consider when you policy's accumulated value unless you receive a cash distribution by making a own a life insurance policy. These are withdrawal or surrendering your policy. described in detail starting on page 49. If your policy is a modified endowment contract, all distributions you receive during the life of the policy may be subject to tax and a 10% penalty. -------------------------------------------------------------------------------- About PL&A PL&A is a life insurance company based in Arizona. We issue the policies. Pacific Mutual Distributors, Inc., our affiliate, is the distributor of the When you buy a life insurance policy, policies. you're relying on the insurance company that issues it to be able to meet its How our accounts work financial obligations to you. We put your premium payments in our general and separate accounts. We own the assets in our accounts and make the allocations to the investment options You'll find more about PL&A, and our you've chosen. strength as a company, starting on page 53. Amounts allocated to the fixed options are held in our general account. Our We may use any profit derived from any general account includes all of our assets, except for those held in our charges under the policy for any lawful separate accounts. Our ability to meet our obligations under the policy is purpose, including our sales and backed by our strength as an insurance company. distribution expenses. Amounts allocated to the variable investment options are held in our separate account. The assets in this account are kept separate from the assets in our general account and our other separate accounts, and are protected from our general creditors. 7
AN OVERVIEW OF PACIFIC SELECT EXEC II - NY This section of the overview explains the fees and expenses associated with your Pacific Select Exec II - NY policy. Understanding policy expenses ---------------------------------------------------------------------------------- and cash flow Your premium The chart to the right illustrates how You make a cash normally flows through a Pacific premium payment Select Exec II - NY policy. We deduct a premium load The dark shaded boxes show the fees and expenses you pay directly or Net premium indirectly under your policy. These are We allocate the explained in the pages that follow. net premium to the investment We'll hold your net premium payments in options you the Money Market investment option choose until the free look transfer date. Please turn to Your right to cancel for Fixed options Variable Pacific Select The fund deducts details. We hold amounts investment Fund advisory fees and you allocate to options The variable other fund these options in We hold amounts investment options expenses from the our general you allocate to invest in the portfolios account these options fund's portfolios in our separate account. We deduct: . cost of insurance We make monthly deductions . administrative charge . mortality and . expense risk charge . rider charges Loan account Accumulated Accumulated value We deduct a value set aside The total value If you make a withdrawal withdrawal charge to secure of your policy a policy loan We deduct a surrender charge If you surrender your policy . during the first 10 policy years . during the first 10 years after you increase the face amount
8 -------------------------------------------------------------------------------- Deductions from your premiums We deduct a premium load from each premium payment you make. The load is made up of three charges: The premium load is explained in more detail on page 27. Sales load - 2.5% of each premium payment. State and local tax charge - 2.35% of each premium payment. Federal tax charge - 1.50% of each premium payment. -------------------------------------------------------------------------------- Deductions from your policy's We deduct a monthly charge from your policy's accumulated value in the accumulated value investment options on each monthly payment date. This charge is made up of three charges: The monthly charge is explained in more detail starting on page 29. Cost of insurance - We deduct a cost of insurance charge based on the cost of insurance rate for your policy's initial face amount and for each increase you An example make to the face amount. We calculate this charge by multiplying the current cost of insurance rate by a discounted net amount at risk at the beginning of For a policy that insures a male non- each policy month. When the person insured by the policy reaches age 100, the smoker who is age 45 when the policy is cost of insurance charge is zero--in other words, you no longer pay any cost of issued, with: insurance charge. . a face amount of $350,000 Administrative charge - We deduct a charge of $7.50 a month. When the person . accumulated value of $30,000 in the insured by the policy reaches age 100, the administrative charge is zero -- in variable options. other words, you no longer pay any administrative charge. The monthly charge for the M&E risk face Mortality and expense risk charge - The mortality and expense risk charge amount charge is: varies depending on your policy's face amount, the age of the person insured by the policy, and accumulated value. We deduct a charge based on your policy's . $44.45 (($350,000 / 1,000) X 0.127) initial face amount and on each increase to the face amount. The charge is made up of two separate charges: The monthly charge for the M&E risk asset charge is $17.09 in policy years 1 through . The M&E risk face amount charge, which we deduct every month during the 10 (($25,000 X 0.0625%) plus first 10 policy years at a rate that is based on the age of the person insured ($5,000 X 0.0292%)). by the policy on the policy date and each $1,000 of the initial face amount of your policy. If you increase your policy's face amount, the charge for the The monthly charge for the M&E risk asset amount of the increase is based on the age of the person insured by the policy charge is $9.58 in policy year 11 and on the day of the increase. thereafter (($25,000 X 0.0375%) plus ($5,000 X 0.0042%)). . The M&E risk asset charge, which we deduct every month of policy years 1 through 10 at an annual rate of: Sample rates for the M&E risk face amount charge appear in Appendix A. . 0.75% (0.0625% monthly), of the first $25,000 of your policy's accumulated value in the variable investment options, plus . 0.35% (0.0292% monthly), of the accumulated value in the investment options that exceeds $25,000 and which we deduct every month of policy years 11 and thereafter at an annual rate of: . 0.45% (0.0375% monthly), of the first $25,000 of your policy's accumulated value in the variable investment options, plus . 0.05% (0.0042% monthly) of the accumulated value in the variable investment options that exceeds $25,000. For the purposes of this charge, accumulated value is calculated on the monthly payment date before we deduct the monthly charge, but after we deduct any outstanding loan amount or allocate any new net premiums, withdrawals or loans. When the person insured by the policy reaches age 100, the annual rate is 0% -- in other words, you no longer pay this charge. Riders - If you add any riders to your policy, we add any charges for them to your monthly charge. 9
AN OVERVIEW OF PACIFIC SELECT EXEC II - NY -------------------------------------------------------------------------------- Withdrawal and surrender charges You can withdraw part of your policy's net cash surrender value at any time starting on your policy's first anniversary. There is a $25 charge for each Withdrawal and surrender charges are withdrawal you make. We deduct this charge proportionately from all of your explained in more detail on pages investment options. 41 and 44. If you surrender or cash in your policy during the first 10 years of owning the An example policy, we'll deduct a surrender charge. If you increase your policy's face For a policy: amount and surrender your policy during the first 10 years after the increase, . that insures a male non-smoker who is we'll apply a surrender charge to the amount of the increase. age 45 when the policy is issued . with an initial face amount of $350,000. The surrender charge is assessed at a rate that is based on the age and risk class of the person insured by the policy on the policy date, and each $1,000 The surrender charge is: of the initial face amount of your policy. The amount of the surrender charge does not change during the first policy year. Starting on the first policy . $8,757.00 in the first policy year anniversary, we reduce the charge by 0.9259% a month until it reaches zero at (($350,000 / $1,000) X 25.02) the end of 10 policy years. . $2,919.16 at the end of the seventh Your policy's surrender charge will never be greater than the maximum surrender policy year ($8,757.00 - ($8,757.00 X charge. The maximum surrender charge is calculated at a rate that is based on .9259% X 72 months)) the age and risk class of the person insured by the policy on the policy date, and each $1,000 of the initial face amount of your policy. It does not change However, we will never deduct more than during the first 10 policy years, and then is reduced to zero at the end of the the maximum surrender charge, which is 10th policy year. $4,426.10. If you increase your policy's face amount, each increase has a surrender charge Sample rates for the surrender charge and and maximum surrender charge based on the amount of the increase. If you the maximum surrender charge appear decrease the face amount, the decrease will not affect your policy's surrender in Appendix A. charge or maximum surrender charge.
10 ------------------------------------------------------------------------------- Fees and expenses paid by the The Pacific Select Fund pays advisory fees and other expenses. These are Pacific Select Fund deducted from the assets of the fund's portfolios and may vary from year to year. They are not fixed and are not part of the terms of your policy. If you You'll find more about the Pacific Select choose a variable investment option, these fees and expenses affect you Fund starting on page 34, and in the fund's indirectly because they reduce portfolio returns. prospectus, which accompanies this prospectus. Advisory fee Pacific Life is the investment adviser to the fund. The fund pays an advisory fee to them for these services. The table below shows the advisory fee as an annual percentage of each portfolio's average daily net assets. Other expenses The table also shows expenses the fund paid in 1998 as an annual percentage of each portfolio's average daily net assets. To help limit fund expenses, Pacific Life agreed to waive all or part of their investment advisory fees or otherwise reimburse each portfolio for expenses (not including advisory fees, additional costs associated with foreign investing and extraordinary expenses) that exceed 0.25% of its average daily net assets. Pacific Life does this voluntarily, but do not guarantee that they'll continue to do so after December 31, 2000. No reimbursement was necessary for 1998. ----------------------------------------------------------------- Portfolio Advisory fee Other expenses Total expenses ----------------------------------------------------------------- Money Market/1/ 0.37% 0.06% 0.43% High Yield Bond/1/ 0.60% 0.06% 0.66% Managed Bond 0.60% 0.06% 0.66% Government Securities 0.60% 0.06% 0.66% Growth 0.65% 0.05% 0.70% Aggressive Equity 0.80% 0.09% 0.89% Growth LT 0.75% 0.05% 0.80% Equity Income/1/ 0.65% 0.05% 0.70% Multi-Strategy/1/ 0.65% 0.06% 0.71% Large-Cap Value/2/ 0.85% 0.06% 0.91% Mid-Cap Value/2/ 0.85% 0.06% 0.91% Equity 0.65% 0.06% 0.71% Bond and Income 0.60% 0.10% 0.70% Equity Index 0.16% 0.05% 0.21% Small-Cap Index/2/ 0.50% 0.06% 0.56% REIT/2/ 1.10% 0.06% 1.16% International 0.85% 0.15% 1.00% Emerging Markets 1.10% 0.36% 1.46% ----------------------------------------------------------------- /1/ Total net expenses for these portfolios in 1998, after deduction of an offset for custodian credits, was: 0.42% for Money Market Portfolio, 0.65% for High Yield Bond Portfolio, 0.69% for Equity Income Portfolio, and 0.70% for Multi-Strategy Portfolio. /2/ Expenses are estimated. There were no actual advisory fees or other expenses for these portfolios in 1998 because the portfolios started on January 4, 1999. 11
PACIFIC SELECT EXEC II - NY BASICS When you buy a Pacific Select Exec II - NY life insurance policy, you're entering into a contract with Pacific Life & Annuity Company. Your contract with us is made up of your application, your policy, applications to change or reinstate the policy, any amendments, riders or endorsements to your policy, and specification pages. Policy amendments and When we approve your signed application, we'll issue your policy. If your endorsements are a part of your application does not meet our underwriting requirements, we can reject it or policy and confirm changes you or ask you for more information. Once we receive your first premium payment, the we make to the policy. policy has been delivered to you and any delivery requirements have been met, we'll consider your policy to be in force. That's when our obligations under Specification pages summarize the policy begin. information specific to your policy at the time the policy is Your policy will be in force until one of the following happens: issued. . the person insured by the policy dies . the grace period expires and your policy lapses, or Riders provide extra benefits, . you surrender your policy. some at additional cost. Some riders may only be added when you If your policy is not in force when the person insured by the policy dies, we apply for your policy. are not obligated to pay the death benefit proceeds to your beneficiary. This policy may be appropriate if Pacific Select Exec II - NY is a flexible premium variable life insurance you want to provide a death policy that insures the life of one person and pays death benefit proceeds benefit for family members or after that person has died. others or to help meet other long-term financial objectives. Under a flexible premium life insurance policy, you have the flexibility to It may not be the right kind of choose the amount and frequency of your premium payments. You must, however, policy if you plan to withdraw pay enough premiums to cover the ongoing cost of policy benefits. money for short-term needs. A premium load is deducted from each premium payment you make. The resulting Please discuss your insurance net premium is allocated to the investment options you choose, and becomes part needs and financial objectives of your policy's accumulated value. with your registered representative. Charges are deducted from the accumulated value each month to help cover the cost of the policy's death benefit and other expenses. If there is not enough We'll hold your net premium accumulated value to cover the monthly charge on the day we make the deduction, payments in the Money Market your policy may lapse after a grace period - which means you'll no longer have investment option until the free any insurance coverage. look transfer date. Please turn to Your right to cancel for Investment earnings will increase your policy's accumulated value, while details. investment losses will decrease it. The premium payments you'll be required to make to keep your policy in force will be influenced by the investment results of the investment options you've chosen.
12 -------------------------------------------------------------------------------- Owners, person insured by the Owners policy, and beneficiaries The owner is the person named on the application who makes the decisions about the policy and its benefits while it's in force. You can own a policy by Please consult your financial yourself or with someone else. Two or more owners are called joint owners. You advisor or a lawyer about need the signatures of all owners for all policy transactions. designating ownership interests. If one of the joint owners dies, the surviving owners will hold all rights If you would like to change the under the policy. If the last joint owner dies, his or her estate will own the owner of your policy, please policy unless you've given us other instructions. contact us or your registered representative for a change of A policy can also be owned by an institution, trust, corporation or group or owner form. We can process the sponsored arrangement. These owners often buy more than one policy, which may change only if we receive your qualify them for reduced charges or lower premium payments. instructions in writing. We may reduce or waive the sales load or surrender charges on policies sold to our directors or employees, to any of our affiliates, or to trustees, employees or affiliates of the fund. You can change the owner of your policy by completing a change of owner form. Once we've received and recorded your request, the change will be effective as of the day you signed the change of owner form. Person insured by the policy Risk classes are usually based on This policy insures the life of one person who is age 85 or younger at the time age, gender, health and whether you apply for your policy, and who has given us satisfactory evidence of or not the person to be insured insurability. Your policy refers to this person as the insured. The policy pays by the policy smokes. Most death benefit proceeds after this person has died. insurance companies use similar risk classification criteria. The person to be insured by the policy is assigned an underwriting or insurance risk class which we use to calculate cost of insurance and other charges. We When we refer to age throughout normally use the medical or paramedical underwriting method to assign this prospectus, we're using the underwriting or insurance risk classes, which may require a medical word as we've defined it here, examination. We may, however, use other forms of underwriting if we think it's unless we tell you otherwise. appropriate. When we use a person's age in policy calculations, we generally use his or her age as of the nearest policy date, and we add one year to this age on each policy anniversary date. For example, when we talk about someone "reaching age 100", we're referring to the policy anniversary date closest to that person's 100th birthday, not to the day when he or she actually turns 100. 13
PACIFIC SELECT EXEC II - NY BASICS Beneficiaries The beneficiary is the person, people, entity or entities you name to receive the death benefit proceeds. Here are some things you need to know about naming beneficiaries: . You can name one or more primary beneficiaries who each receive an equal share of the death benefit proceeds unless you tell us otherwise. If one beneficiary dies, his or her share will pass to the surviving primary beneficiaries in proportion to the share of the proceeds they're entitled to receive, unless you tell us otherwise. If you would like to change the beneficiary of your policy, . You can also name a contingent beneficiary for each primary beneficiary you please contact us or your name. The contingent beneficiary will receive the death benefit proceeds if the registered representative for a primary beneficiary dies. change of beneficiary form. We can process the change only if we . You can choose to make your beneficiary permanent (sometimes called receive your instructions in irrevocable). You cannot change a permanent beneficiary's rights under the writing. policy without his or her permission. . If none of your beneficiaries is still living when the death benefit proceeds are payable, you as the policy owner will receive the proceeds. If you're no longer living, the proceeds will go to your estate. . You can change your beneficiary at any time while the person insured by the policy is still living, and while the policy is in force. The change will be effective as of the day you signed the change of beneficiary form. -------------------------------------------------------------------------------- Policy date, monthly payment Your policy date date, policy anniversary date This is usually the day we approve your policy application. It's also the beginning of your first policy year. Your policy's monthly, quarterly, semi- annual and annual anniversary dates are based on your policy date. The policy date is set so that it never falls on the 29th, 30th or 31st of any month. We'll apply your first premium payment as of your policy date or as of the day we receive your premium, whichever is later. Backdating your policy You can have your policy backdated up to six months, as long as we approve it. Backdating in some cases may lower your cost of insurance rates since these rates are based on the age of the person insured by the policy. Your first premium payment must cover the premium load and monthly charges for the period between the backdated policy date and the day your policy is issued. Your monthly payment date This is the day we deduct the monthly charges from your policy's accumulated value. The first monthly payment date is your policy date, and it's the same day each month thereafter. Monthly charges are explained in the section called Your policy's accumulated value. Your policy anniversary date This is the same day as your policy date every year after we issue your policy. A policy year starts on your policy date and each anniversary date, and ends on the day before the next anniversary date.
14 -------------------------------------------------------------------------------- Statements and reports we'll send We send the following statements and reports to policy owners: you . a confirmation for many financial transactions, usually including premium We can create customized payments and transfers, loans, loan repayments, withdrawals and surrenders. hypothetical illustrations of Monthly deductions and scheduled transactions made under the dollar cost benefits under your policy based averaging, portfolio rebalancing and first year transfer programs are reported on different assumptions. You'll on your quarterly policy statement. find sample illustrations starting on page 106. . a quarterly policy statement. The statement will tell you the accumulated value of your policy by investment options, cash surrender value, the amount of We'll send you one policy the death benefit, the policy's face amount, and any outstanding loan amount. illustration free of charge each It will also include a summary of all transactions that have taken place since policy year if you ask for one. the last quarterly statement, as well as any other information required by law. We reserve the right to charge $25 for additional illustrations. . supplemental schedules of benefits and planned periodic premiums. We'll send these to you if you change your policy's face amount or change any of the policy's other benefits. . financial statements, at least annually or as required by law, of the separate account and Pacific Select Fund, that include a listing of securities for each portfolio of the Pacific Select Fund. -------------------------------------------------------------------------------- Your right to cancel During the free look period, you have the right to cancel your policy and return it to us or your registered representative for a refund. Please call us or your registered representative if you have The amount of your refund will be the amount of the premium payments you've questions about your right to made. We'll always deduct any outstanding loan amount from the amount we refund cancel your policy. to you. You'll find a complete description of the free look period that applies to your policy on the policy's cover sheet, or on a notice that accompanied your policy. The free look period ends 10 days after you receive your policy. If you are replacing another life insurance policy, your free-look period ends 60 days after you receive your policy. If you cancel your policy during the free-look period, we're required to refund the premium payments you've made. We'll hold the net premiums in the Money Market investment option until the free look transfer date. On that day, we'll transfer the accumulated value in the Money Market investment option to the investment options you've chosen. The free look transfer date is the latest of the following: . 15 days after we issue your policy . when we consider your policy to be in force. 15
PACIFIC SELECT EXEC II - NY BASICS -------------------------------------------------------------------------------- Timing of payments, forms and Effective date requests The effective date of payments, forms and requests you send us is usually determined by the day and time we receive the item in proper form at the A business day, called a mailing address that appears on the back cover of this prospectus. valuation date in your policy, is any day that the New York Stock Planned periodic premium payments, loan requests, transfer requests, loan Exchange and our life insurance payments or withdrawal or surrender requests that we receive in proper form client services offices are open. before 4:00 p.m. Eastern time on a business day will normally be effective as It usually ends at 4:00 p.m. of the end of that day, unless the transaction is scheduled to occur on another Eastern time. business day. If we receive your payment or request on or after 4:00 p.m. Eastern time on a business day, your payment or request will be effective as of The New York Stock Exchange is the end of the next business day. If a scheduled transaction falls on a day usually closed on weekends and on that is not a business day, we'll process it as of the end of the next business the following days: day. . New Year's Day, Martin Luther King, Jr. Day, President's Day, Other forms, notices and requests are normally effective as of the next Good Friday, Memorial Day, July business day after we receive them in proper form, unless the transaction is Fourth, Labor Day, Thanksgiving scheduled to occur on another business day. Change of owner and beneficiary Day and Christmas Day. forms are effective as of the day you sign the change form, once we receive them in proper form. Our client services offices are also usually closed on the Proper form following days: We'll process your requests once we receive all letters, forms or other . the Monday before New Year's necessary documents, completed to our satisfaction. Proper form may require, Day, July Fourth, or Christmas among other things, a signature guarantee or some other proof of authenticity. Day, if any of these holidays We do not generally require a signature guarantee, but we may ask for one if it falls on a Tuesday appears that your signature has changed, if the signature does not appear to be . the Tuesday before Christmas yours, if we have not received a properly completed application or confirmation Day if that holiday falls on of an application, or for other reasons to protect you and us. a Wednesday . the Friday after New Year's Day, July Fourth or Christmas Day, if any of these holidays falls on a Thursday . the Friday after Thanksgiving. Call us or contact your registered representative if you have any questions about the proper form required for a request.
16 When we make payments and transfers We'll normally send the proceeds of transfers, withdrawals, loans, surrenders, To request payment of death exchanges and death benefit payments within seven days after the effective date benefit proceeds, send us proof of the request. We may delay payments and transfers, or the calculation of of death and payment payments and transfers based on the value in the variable investment options instructions. under unusual circumstances, for example, if: . the New York Stock Exchange closes on a day other than a regular holiday or weekend . trading on the New York Stock Exchange is restricted . an emergency exists as determined by the SEC, as a result of which the sale of securities is not practicable, or it is not practicable to determine the value of a variable account's assets, or . the SEC permits a delay for the protection of policy owners. We may delay transfers and payments from the fixed options, including the proceeds from withdrawals, surrenders and loans, for up to six months. We'll pay interest at an annual rate of at least 3% on any withdrawals or surrender proceeds from the fixed options that we delay for 30 days or more. We pay interest at an annual rate of at least 3% on death benefit proceeds, calculated from the day the person insured by the policy dies to the day we pay the proceeds. -------------------------------------------------------------------------------- Telephone transactions You can make loans or transfers by telephone any time after the free look period as long as we have your signed authorization form on file. Here are some things you need to know about telephone transactions: . You must complete a telephone authorization form. . If your policy is jointly owned, all joint owners must sign the telephone authorization. We'll take instructions from any owner. . We may use any reasonable method to confirm that your telephone instructions are genuine. For example, we may ask you to provide personal identification or we may record all or part of the telephone conversation. We may refuse any transaction request made by telephone. We'll send you a written confirmation of each telephone transaction. Sometimes, you may not be able to make loans or transfers by telephone, for example, if our telephone lines are busy because of unusual market activity or a significant economic or market change, or our telephone lines are out of service during severe storms or other emergencies. In these cases, you can send your request to us in writing, or call us the next business day or when service has resumed. When you send us your telephone authorization form, you agree that: . we can accept and act upon instructions you give us over the telephone . neither we, Pacific Life, any of our other affiliates, the Pacific Select Fund, or any director, trustee, officer, employee or agent of ours or theirs will be liable for any loss, damages, cost or expenses that result from transactions processed because of a request by telephone that we believe to be genuine, as long as we have followed our own procedures . you bear the risk of any loss that arises from your right to make loans or transfers over the telephone. 17
THE DEATH BENEFIT We'll pay death benefit proceeds to your beneficiary after the person insured by the policy dies while the policy is still in force. Your beneficiary generally will not have to pay federal income tax on death benefit proceeds. Your policy's initial amount of This policy offers three death benefit options, Options A, B and C. The option insurance coverage is its initial you choose will generally depend on which is more important to you: a larger face amount. We determine the death benefit or building the accumulated value of your policy. face amount based on instructions provided in your application. This policy offers two ways to calculate the guideline minimum death benefit: the cash value accumulation test and the guideline premium test. These are The minimum face amount when a called death benefit qualification tests. The test you choose will generally policy is issued is usually depend on the amount of premiums you want to pay. $50,000, but we may reduce this in some circumstances. Here are some things you need to know about the death benefit: . You choose your death benefit option and death benefit qualification test You'll find your policy's face on your policy application. amount, which includes any . If you do not choose a death benefit option, we'll assume you've chosen increases or decreases, in the Option A. specification pages in your . If you do not choose a death benefit qualification test, we'll assume policy. you've chosen the guideline premium test. . The death benefit will always be the greater of the death benefit under the option you choose or the guideline minimum death benefit, calculated using the death benefit qualification test you've chosen. . The death benefit will never be lower than the face amount of your policy if you've chosen Option A or B. Of course, the death benefit proceeds will always be reduced by any outstanding loan amount. . We'll pay the death benefit proceeds to your beneficiary when we receive proof of the death of the person insured by the policy. -------------------------------------------------------------------------------- Choosing your death benefit option You can choose one of the following three options for the death benefit on your application. Option A - the face amount of your policy. Option B - the face amount of your policy plus its accumulated value. [GRAPHIC APPEARS HERE] [GRAPHIC APPEARS HERE] The death benefit changes as your policy's accumulated value changes. The better your investment options perform, the larger the death benefit will be. Option C - the face amount of your policy plus the total premiums you've paid minus any withdrawals or distributions made. [GRAPHIC APPEARS HERE] The more premiums you pay and the less you withdraw, the larger the death benefit will be.
18 -------------------------------------------------------------------------------- Choosing a death benefit This policy offers two death benefit qualification tests, which we use to qualification test calculate the guideline minimum death benefit. You choose one of these tests on your application. Once you choose a test, you cannot change it. The guideline minimum death benefit is the minimum death benefit needed for your In general, you should choose the cash value accumulation test if you do not policy to qualify as life insurance under want to limit the amount of premiums you can pay into your policy. If you want Section 7702 of the Internal Revenue Code. to pay a premium that increases the net amount at risk, however, you need to provide us with satisfactory evidence of insurability before we can increase Net amount at risk is the difference between the death benefit. the death benefit that would be payable if the person insured by the policy died and The guideline minimum death benefit will generally be smaller under the the accumulated value of your policy. guideline premium test than under the cash value accumulation test. There are other limits on premiums you can Cash value accumulation test pay into your policy, which are described If you choose the cash value accumulation test, your policy's guideline minimum in How premiums work. death benefit will be the greater of: . the minimum death benefit amount that's needed for the policy to qualify as life insurance under the tax code or The cash value accumulation test is . 101% of the policy's accumulated value. defined in Section 7702(b) of the tax code. This test determines what the death benefit should be in relation to your policy's accumulated value. In general, as your policy's accumulated value increases, the death benefit must also increase to ensure that your policy qualifies as life insurance under the tax code. An example For a policy that insures a male, age 45 Under the test, a policy's death benefit must be large enough to ensure that when the policy was issued, with a standard its cash surrender value, as defined in Section 7702 of the tax code (and which nonsmoking risk class, in Policy Year 6 the is based on accumulated value, among other things), is never larger than the guideline minimum death benefit under the net single premium that's needed to fund future benefits under the policy. The cash value accumulation test is calculated net single premium under your policy varies according to the age, sex, and risk by multiplying each $1,000 of accumulated class of the person insured by your policy. It's calculated using an interest value by a "net single premium factor" rate of at least 4% and the guaranteed mortality charges as of the time the of 2.4728. policy is issued. We'll use a higher interest rate if we've guaranteed it under your policy. The death benefit determined by your policy's net single premium will be at least equal to the amount required for the policy to qualify as life insurance under the tax code. Guideline premium test The guideline premium test is defined in If you choose the guideline premium test, we calculate the guideline minimum Section 7702(a)(2) of the tax code. death benefit by multiplying your policy's accumulated value by a death benefit percentage. Death benefit percentages are defined in You'll find a table of death benefit percentages in Appendix D and in your Section 7702(d) of the tax code. policy. The death benefit percentage is based on the guideline premium limit and the age of the person insured by the policy. It is 250% when the person is age 40 or younger, and reduces as the person gets older. Under this test, the total premiums you pay cannot exceed your policy's guideline premium limit. You'll find a more detailed discussion of the guideline premium limit in How premiums work. 19
THE DEATH BENEFIT ------------------------------------------------------------------------------------- Comparing the death benefit options The tables below compare the death benefits provided by the policy's three death benefit options. The examples are intended only to show differences in death benefits and net amounts at risk. Accumulated value assumptions may not be realistic. The example below is based on the following: . the person insured by the policy is age 45 at the time the policy was issued and dies at the beginning of the sixth policy year . face amount is $100,000 . accumulated value at the date of death is $25,000 . total premium paid into the policy is $30,000 . the guideline minimum death benefit under the guideline premium test is $46,250 (assuming a guideline premium test factor of 185% x accumulated value) . the guideline minimum death benefit under the cash value accumulation test is $61,820.00 (assuming a net single premium factor of $2.4728 for each $1,000 of accumulated value) ------------------------------------------------------------------------------------- If you select the guideline premium test, the death benefit is the larger of these two amounts --------------------------- Death Death benefit Guideline Net amount at benefit How it's under minimum risk used for cost option calculated the option death benefit of insurance charge ------------------------------------------------------------------------------------- Option A Face amount $100,000 $46,250 $74,754.01 Option B Face amount plus accumulated value $125,000 $46,250 $99,692.51 Option C Face amount plus premiums less distributions $130,000 $46,250 $104,680.21 ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------- If you select the cash value accumulation test, the death benefit is the larger of these two amounts --------------------------- Death Death benefit Guideline Net amount at benefit How it's under minimum risk used for cost option calculated the option death benefit of insurance charge ------------------------------------------------------------------------------------- Option A Face amount $100,000 $61,820.00 $74,754.01 Option B Face amount plus accumulated value $125,000 $61,820.00 $99,692.51 Option C Face amount plus premiums less distributions $130,000 $61,820.00 $104,680.21 -------------------------------------------------------------------------------------
20 If the death benefit equals the guideline Here's the same example, but with an accumulated value of $75,000. Because minimum death benefit, any increase in accumulated value has increased, the guideline minimum death benefit is now: accumulated value will cause an automatic increase in the death benefit. . $138,750 for the guideline premium test . $185,460 for the cash value accumulation test. ------------------------------------------------------------------------------------- If you select the guideline premium test, the death benefit is the larger of these two amounts --------------------------- Death Death benefit Guideline Net amount at benefit How it's under minimum risk used for cost option calculated the option death benefit of insurance charge ------------------------------------------------------------------------------------- Option A Face amount $100,000 $138,750 $63,408.68 Option B Face amount plus accumulated value $175,000 $138,750 $99,569.51 Option C Face amount plus premiums less distributions $130,000 $138,750 $63,408.68 ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------- If you select the cash value accumulation test, the death benefit is the larger of these two amounts --------------------------- Death Death benefit Guideline Net amount at benefit How it's under minimum risk used for cost option calculated the option death benefit of insurance charge ------------------------------------------------------------------------------------- Option A Face amount $100,000 $185,460 $110,003.78 Option B Face amount plus accumulated value $175,000 $185,460 $110,003.78 Option C Face amount plus premiums less distributions $130,000 $185,460 $110,003.78 ------------------------------------------------------------------------------------- These examples show that each death benefit option provides a different level of protection. Keep in mind that cost of insurance charges, which affect your policy's accumulated value, increase with the amount of the death benefit, as well as over time. The cost of insurance is charged at a rate per $1,000 of the discounted net amount at risk. As the net amount at risk increases, your cost of insurance increases. Accumulated value also varies depending on the performance of the investment options in your policy. 21
THE DEATH BENEFIT -------------------------------------------------------------------------------- When we pay the death benefit We calculate the amount of the death benefit proceeds as of the end of the day the person insured by the policy dies. If that person dies on a day that is not Your beneficiary can choose to receive the a business day, we calculate the proceeds as of the next business day. death benefit proceeds in a lump sum or use it to buy an income benefit. Please see the Your policy's beneficiary must send us proof that the person insured by the discussion about income benefits in General policy died while the policy was in force, along with payment instructions. information about your policy. Death benefit proceeds equal the total of the death benefits provided by your It is important that we have a current policy and any riders you've added, minus any outstanding loan amount, minus address for your beneficiary so that we can any overdue charges. pay death benefit proceeds promptly. If we cannot pay the proceeds to your beneficiary We'll pay interest at an annual rate of at least 3% on the death benefit within five years of the death of the person proceeds, calculated from the day the person insured by the policy dies to the insured by the policy, we'll be required to day we pay the proceeds. pay them to the state. -------------------------------------------------------------------------------- Changing your death benefit option You can change your death benefit option while your policy is in force. Here's how it works: We will not change your death benefit option if it means your policy will be treated as a . You can change the death benefit option once in any policy year. modified endowment contract, unless you've told us in writing that this would be . You must send us your request in writing. acceptable to you. Modified endowment contracts are discussed in Variable life . You can change to Option A or Option B. insurance and your taxes. . You cannot change from any death benefit option to Option C. Net amount at risk is the difference between the death benefit that would be payable if . The change will become effective on the first monthly payment date after we the person insured by the policy died and receive your request. If we receive your request on a monthly payment date, the accumulated value of your policy. we'll process it that day. . The face amount of your policy will change by the amount needed to make the death benefit under the new option equal the death benefit under the old option just before the change. We will not let you change the death benefit option if doing so means the face amount of your policy will become less than $50,000. We may waive this minimum amount under certain circumstances. . Changing the death benefit option can also affect the monthly cost of insurance charge since this charge varies with the net amount at risk. . The new death benefit option will be used in all future calculations.
22 -------------------------------------------------------------------------------- Changing the face amount You can increase or decrease your policy's face amount starting on the first policy anniversary as long as we approve it. Here's how it works: If you change the face amount, we'll send you a supplemental schedule of benefits . You can change the face amount as long as the person insured by the policy is and premiums. still living. If your policy's death benefit is equal to . You can only change the face amount once in any policy year. the guideline minimum death benefit, and the net amount at risk is more than three . You must send us your request in writing while your policy is in force. times the death benefit on the policy date, we may reduce the death benefit by . The change will become effective on the first monthly payment date after we requiring you to make a withdrawal from receive your request. If we receive your request on a monthly payment date, your policy. we'll process it that day. If we require you to make a withdrawal, we . The person insured by the policy will also need to agree to the change in will not charge you our usual $25 face amount, if that person is someone other than you. withdrawal fee, but the withdrawal may be taxable. Please turn to Withdrawals, . Increasing the face amount may increase the death benefit, and decreasing the surrenders and loans for information about face amount may decrease the death benefit. The amount the death benefit making withdrawals. changes will depend, among other things, on the death benefit option you've chosen and whether, and by how much, the death benefit is greater than the face amount before you make the change. . Changing the face amount can affect the net amount at risk, which affects the cost of insurance charge. An increase in the face amount may increase the cost of insurance charge, while a decrease may decrease the charge. . We can refuse your request to make the face amount less than $50,000. We can waive this minimum amount in certain situations, such as group or sponsored arrangements. Increasing the face amount Here are some additional things you should know about increasing the face amount: . You must give us satisfactory evidence of insurability. . Each increase you make to the face amount must be $25,000 or more. . We may charge you a fee of up to $100 for each increase to cover the costs of processing the request. We deduct the fee on the day the increase is effective from all of your investment options in proportion to the accumulated value you have in each option. . Increasing the face amount will increase the mortality and expense risk charge. . For any increase in face amount which arises from conversion of a term rider, we will waive the surrender charge and the mortality and expense risk charge that would otherwise apply for the increase. . We will allow an increase in face amount only if the resulting death benefit increase at least equals our minimum limit on the request date. . We will not allow an increase if there has been a prior decrease in face amount, including any decrease caused by a withdrawal. Decreasing the face amount may affect your Decreasing the face amount policy's tax status. To ensure your policy Here are some additional things you should know about decreasing the face continues to qualify as life insurance, we amount: might be required to return part of your premium payments to you if you've chosen the . We'll apply any decrease in the face amount in the following order: guideline premium test, or make distributions . to the most recent increases you made to the face amount in the order you from the accumulated value, which may made them be taxable. . to the original face amount. . We do not charge you for a decrease in face amount. For more information, please see Variable . We can refuse your request to decrease the face amount if making the change life insurance and your taxes. means: . your policy will end because it no longer qualifies as life insurance . the distributions we'll be required to make from your policy's accumulated value will be greater than your policy's net cash surrender value . your policy will become a modified endowment contract and you have not told us in writing that this is acceptable to you. 23
THE DEATH BENEFIT -------------------------------------------------------------------------------- Optional riders There are eight optional riders that provide extra benefits, some at additional cost. Not all riders are available in every state, and some riders may only be Ask your registered representative for more added when you apply for your policy. information about the riders available with the policy. . Accidental death rider Provides additional insurance coverage in the event of the accidental death of There may be tax consequences if you the person insured by the policy. exercise your rights under the Accelerated living benefits rider. Please see Variable . Children's term rider life insurance and your taxes for more Provides term insurance for the children of the person insured by the policy. information. . Annual renewable term rider Samples of the provisions for the extra Provides annual renewal term insurance on the person insured by the policy optional benefits are available from us until age 80. upon written request. . Annual renewable and convertible term rider Provides annual renewal term insurance on members of the immediate family of the person insured by the policy. . Guaranteed insurability rider Gives the right to buy additional insurance on the life of the person insured by the policy on certain specified dates without proof of insurability. . Waiver of charges rider Waives certain charges if the person insured by the policy becomes totally disabled before age 60. . Accelerated living benefits rider Gives the policy owner access to a portion of the policy's death benefit if the person insured by the policy has been diagnosed with a terminal illness resulting in a life expectancy of six months or less (or longer than six months in some states). . Disability benefit rider Provides a monthly addition to the policy's accumulated value when the person insured by the policy has a qualifying disability, until he or she reaches age 65. We guarantee the amounts of the extra benefits when we issue your rider. We'll add any rider charges to the monthly charge we deduct from your policy's accumulated value.
24 Things to keep in mind Combining a policy and a rider may be more economical than adding another policy. It may also be more economical to provide an amount of insurance coverage through a policy alone. Under certain circumstances, combining a policy with an Annual renewable term rider may result in a face amount equal to the face amount of a single policy until age 80. Combining a policy and an Annual renewable term rider will result in current charges that are lower than for a single policy with the same face amount. However, your policy has guaranteed maximum charges. Adding an Annual renewable term rider will result in guaranteed maximum charges that are higher than for a single policy with the same face amount. 25
HOW PREMIUMS WORK Your policy gives you the flexibility to choose the amount and frequency of your premium payments within certain limits. Each premium payment must be at least $50. The amount, frequency, and period of time over which you make premium payments may We deduct a premium load from each premium payment, and then allocate your net affect whether your policy will be premium to the investment options you've chosen. Depending on the performance classified as a modified endowment contract, of your investment options, and on how many withdrawals, loans or other policy or no longer qualifies as life insurance for features you've taken advantage of, you may need to make additional premium tax purposes. See Variable life insurance payments to keep your policy in force. and your taxes for more information. If we do not receive your first premium payment within 20 days after we issue your policy, we can cancel the policy and refund any partial premium payment you've made. We may waive the 20 day requirement in some cases. -------------------------------------------------------------------------------- Planned periodic premium payments You can schedule the amount and frequency of your premium payments. We refer to scheduled premium payments as your planned periodic premium. Here's how it works: Even if you pay all your premiums when . On your application, you choose a fixed amount of at least $50 for each they're scheduled, your policy could lapse premium payment. if the accumulated value, less any outstanding loan amount, is not enough to . You indicate whether you want to make premium payments annually, semi- pay your monthly charges. Turn to Your annually, or quarterly. You can also choose monthly payments using our policy's accumulated value for more monthly Uni-check plan, which is described below. information. . We send you a notice to remind you of your scheduled premium payment (except for monthly Uni-check payments, which are paid automatically). If you own more than one policy, we'll send one notice -- called a listbill -- that reminds you of your payments for all of your policies. You can choose to receive the listbill every month. While you do not have to make the premium payments you've scheduled, not making a premium payment may have an impact on any financial objectives you may have set for your policy's accumulated value and death benefit, and could cause your policy to lapse. . We'll treat any payment you make during the life of your policy as a loan repayment, not as a premium payment, unless you tell us otherwise. When a payment, or any portion of it, exceeds your outstanding loan amount, we'll treat it as a premium payment. Some states may require us to consider your payments as premium payments if you have not given us instructions to do otherwise.
26 Monthly Uni-check plan Once you've made your first premium payment, you can make monthly premium payments using our Uni-check plan. Here's how it works: . you authorize us to withdraw a specified amount from your checking account each month . you can choose any day between the 4th and 28th of the month . if you do not specify a day for us to make the withdrawal, we'll withdraw the premium payment on your policy's monthly anniversary. If your policy's monthly anniversary falls on the 1st, 2nd or 3rd of the month, we'll withdraw the payment on the 4th of each month. -------------------------------------------------------------------------------- Deductions from your premiums We deduct a premium load from each premium payment you make. The load is made up of three charges: Your net premium is your premium payment less the premium load. Sales load We deduct a 2.5% sales load from each premium payment you make. This charge helps pay for the cost of distributing our policies and is guaranteed not to increase. If our sales and distribution expenses are more than the sales load, we can recover these expenses from other charges, such as the mortality and expense risk charge and the surrender charge, and from any mortality gains. State and local tax charge We deduct 2.35% from each premium payment to pay state and local premium and other taxes. The actual taxes we pay vary from state to state, and in some instances, among municipalities. We do not expect to profit from this charge, and do not expect to change the rate unless the rate we pay changes. Federal tax charge We deduct 1.50% from each premium payment to pay federal taxes. We reserve the right to change this rate to respond to changes in law. -------------------------------------------------------------------------------- Allocating your premiums We generally allocate your net premiums to the investment options you've chosen on your application on the day we receive them. There are special restrictions when allocating premiums to the Fixed LT We allocate your first premium on the free look transfer date. We'll hold your account. net premiums in the Money Market investment option until the free look transfer date, and then transfer them to the investment options you've chosen. Please turn to Your investment options for more information about the investment options. 27
HOW PREMIUMS WORK -------------------------------------------------------------------------------- Limits on the premium payments Federal tax law puts limits on the amount of premium payments you can make in you can make relation to your policy's death benefit. These limits apply in the following situations: Before you buy a policy, you can . If you've chosen the guideline premium test as your death benefit ask us or your registered qualification test and accepting the premium means your policy will no longer representative for a personalized qualify as life insurance for federal income tax purposes. illustration that will show you the guideline single premium and The total amount you can pay in premiums and still have your policy qualify as guideline level annual premiums. life insurance is your policy's guideline premium limit. The sum of the premiums paid, less any withdrawals, at any time cannot exceed the guideline premium limit, which is the greater of: . the guideline single premium or . the sum of the guideline level annual premiums. Your policy's guideline single premium and guideline level annual premiums appear on your policy's specification pages. We may refuse to accept all or part of a premium payment if, by accepting it, you will exceed your policy's guideline premium limit. If we find that you've exceeded your guideline premium limit, we may remove all or part of a premium you've paid from your policy as of the day we applied it, and return it to you. We'll adjust the death benefit retroactively to that date to reflect the reduction in premium payments. You'll find a detailed discussion . If applying the premium in that policy year means your policy will become a of modified endowment contracts modified endowment contract. in Variable life insurance and your taxes. A life insurance policy will become a modified endowment contract if the sum of premium payments made during the first seven contract years, less a portion of withdrawals, exceeds the seven-pay limit defined in Section 7702A of the Internal Revenue Code. Unless you've told us in writing that you want your policy to become a modified endowment contract, we'll remove all or part of the premium payment from your policy as of the day we applied it and return it to you. We'll also adjust the death benefit retroactively to that date to reflect the reduction in premium payments. If we receive such a premium within 20 days before your policy anniversary, we'll hold it and apply it to your policy on the anniversary date. In both of these situations, if we remove an excess premium from your policy, we'll return the premium amount to you no later than 60 days after the end of that policy year. We may adjust the amount for interest or for changes in accumulated value that relate to the amount of the excess premium payment we're returning to you. If we do not return the premium amount to you within that time, we'll increase your policy's death benefit retroactively, to the day we applied the premium, and prospectively so that it's always the amount necessary to ensure your policy qualifies as life insurance, or to prevent it from becoming a modified endowment contract. If we increase your death benefit, we'll adjust cost of insurance or rider charges retroactively and prospectively to reflect the increase. Net amount at risk is the . If applying the premium payment to your policy will increase the net amount difference between the death at risk. This will happen if your policy's death benefit is equal to the benefit that would be payable if guideline minimum death benefit or would be equal to it once we applied your the person insured by the policy premium payment. died and the accumulated value of your policy. We may choose to accept your premium payment in this situation, but before we do so, we may require satisfactory evidence of the insurability of the person insured by the policy. We will not accept premium payments after the person insured by the policy reaches age 100.
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YOUR POLICY'S ACCUMULATED VALUE Accumulated value is used as the Accumulated value is the value of your policy on any business day. basis for determining policy benefits and charges. We use it to calculate how much money is available to you for loans and withdrawals, and how much you'll receive if you surrender your policy. It also affects the amount of the death benefit if you choose a death benefit option that's calculated using accumulated value. The accumulated value of your policy is not guaranteed - it depends on the performance of the investment options you've chosen, the premium payments you've made, policy charges and how much you've borrowed or withdrawn from the policy. -------------------------------------------------------------------------------- Calculating your policy's Your policy's accumulated value is the total amount allocated to the variable accumulated value investment options and the fixed options, plus the amount in the loan account. Please see Taking out a loan for We determine the value allocated to the variable investment options on any information about loans and the business day by multiplying the number of accumulation units for each variable loan account. investment option credited to your policy on that day, by the variable investment option's unit value at the end of that day. The process we use to calculate unit values for the variable investment options is described in Your investment options. -------------------------------------------------------------------------------- Monthly deductions We deduct a monthly charge from your policy's accumulated value in the investment options each monthly payment date. If there is not enough accumulated value to pay the Unless you tell us otherwise, we deduct the monthly charge from the investment monthly charge, your policy could options that make up your policy's accumulated value, in proportion to the lapse. The performance of the accumulated value you have in each option. This charge is made up of three investment options you choose, charges: not making planned premium payments, or taking out a loan Cost of insurance all affect the accumulated value This charge covers the cost of providing you with life insurance protection. We of your policy. deduct a cost of insurance charge based on the cost of insurance rate for your policy's initial face amount and for each increase you make to the face amount. You'll find a discussion about when your policy might lapse, and There are maximum or guaranteed cost of insurance rates associated with your what you can do to reinstate it, policy. These rates are shown in your policy's specification pages. When the later in this section. person insured by your policy reaches age 100, the guaranteed cost of insurance rate is zero - in other words, you no longer pay any cost of insurance. Unisex rates are used when a The guaranteed rates include the insurance risks associated with insuring one policy is owned by an employer in person. They are calculated using 1980 Commissioners Standard Ordinary connection with employment- Mortality Tables or the 1980 Commissioners Ordinary Mortality Table B, which related or benefit programs. are used for unisex cost of insurance rates. The rates are also based on the age, gender and risk class of the person insured by the policy unless unisex rates are required. Our current cost of insurance rates are based on the age, risk class, smoking status and gender (unless unisex rates are required) of the person insured by the policy. These rates generally increase as the person's age increases, and they vary with the number of years the policy has been in force. Our current rates are lower than the guaranteed rates and they will not exceed the guaranteed rates in the future. 29
YOUR POLICY'S ACCUMULATED VALUE Guaranteed period We'll guarantee our current cost of insurance rates for five years. If you increase the face amount, the cost of insurance rates associated with the increase will have a five-year guaranteed period. This will be effective on the day of the increase. -------------------------------------------------------------------------------- If you add an annual renewable How we calculate cost of insurance term rider to your policy, we We calculate cost of insurance by multiplying the current cost of insurance will include the face amount of rate by a discounted net amount at risk at the beginning of each policy month. the rider in this calculation of cost of insurance. Net amount at risk for the cost of insurance calculation is the difference between a discounted death benefit that would be payable if the person insured by the policy died and the accumulated value of your policy at the beginning of the policy month before the monthly charge is due. First, we calculate the total net amount at risk for your policy in two steps: . Step 1: we divide the death benefit that would be payable at the beginning of the policy month by 1.002466. . Step 2: we subtract your policy's accumulated value at the beginning of the policy month from the amount we calculated in step 1. Next, we allocate the net amount at risk in proportion to the face amount and each increase that's in force as of your monthly payment date. We then multiply the amount of each allocated net amount at risk by the cost of insurance rate for each coverage. The sum of these amounts is your cost of insurance charge.
30 Administrative charge We deduct a charge of $7.50 a month to help cover the costs of administering and maintaining our policies. We guarantee that this charge will not increase. When the person insured by the policy reaches age 100, the administrative charge is zero - in other words, you no longer pay any administrative charge. Mortality and expense risk charge Mortality risk is the chance that the people insured by policies we've issued do not live as long as expected. This means the cost of insurance charges specified in the policies may not be enough to pay out actual claims. Expense risk is the chance that our actual administrative and operating expenses are more than the fees and expenses deducted under the policies and the separate account. The mortality and expense risk charge helps compensate us for these risks. It has two components, which are described in the following box. We guarantee this charge will not increase. -------------------------------------------------------------------------------- An example How we calculate the mortality and expense risk charge For a policy that insures a male non-smoker who is age 45 when the The mortality and expense risk charge has two separate charges: policy is issued, with: . a face amount of $350,000 . M&E risk face amount charge We deduct a face amount charge every month during the first 10 policy years, at a rate that is based on the age of the person . accumulated value of $30,000 in insured by the policy on the policy date and on a face amount component the variable options after factor per $1,000 of the initial face amount of your policy. The rates for deducting any outstanding loan the face amount component are shown in Appendix A. amount. If you increase the face amount, each increase will have a corresponding face The monthly charge for the M&E amount charge related to the amount of the increase. We'll specify these risk face amount charge is: charges in a supplemental schedule of benefits at the time of the increase. . $44.45 (($350,000 / 1,000) X 0.127). We'll apply each charge for 10 years from the day of the increase. If you decrease the face amount, the charge will remain the same. The monthly charge for the M&E risk asset charge is $17.09 in . M&E risk asset charge We deduct a risk asset charge every month. policy years 1 through 10 (($25,000 X 0.0625%) plus During policy years 1 through 10, we charge an annual rate 0.75% (0.000625 ($5,000 X 0.0292%)). monthly), of the first $25,000 of your policy's accumulated value in the variable investment options, plus an annual rate of 0.35% (0.000292 monthly), The monthly charge for the M&E of the accumulated value in the variable investment options that exceeds risk asset charge is $9.58 in $25,000. policy year 11 and thereafter (($25,000 x 0.0375%) plus During policy years 11 and thereafter, we charge an annual rate of 0.45% ($5,000 x 0.0042%)). (0.0375% monthly) on the first $25,000 of your policy's accumulated value in the variable investment options plus an annual rate of 0.05% (0.0042% monthly) Sample rates for the M&E risk of the accumulated value in the variable investment options that exceeds face amount charge appear in $25,000. Appendix A. For the purposes of this charge, the amount of accumulated value is calculated on the monthly payment date before we deduct the monthly charge, but after we deduct any outstanding loan amount or allocate any new net premiums, withdrawals or loans. When the person insured by the policy reaches age 100, the annual rate is 0%--in other words, you no longer pay this charge. Charges for optional riders If you add any riders to your policy, we add any charges for them to your monthly charge. 31
YOUR POLICY'S ACCUMULATED VALUE -------------------------------------------------------------------------------- Lapsing and reinstatement Your policy will lapse if there is not enough accumulated value, after subtracting any outstanding loan amount, to cover the monthly charge on the day we make the deduction. Your policy's accumulated value is affected by the following: . loans or withdrawals you make from your policy . not making planned premium payments . the performance of your investment options . charges under the policy. There is no guarantee that your policy will not lapse even if you pay your planned periodic premium. If there is not enough accumulated value to pay the total monthly charge, we deduct the amount that's available and send you, and anyone you've assigned your policy to, a notice telling you the minimum amount you have to pay to keep your policy in force. This minimum amount is equal to three times the monthly charge that was due on the monthly payment date when there was not enough accumulated value to pay the charge. We'll give you a grace period of 61 days from when we send the notice to pay the required premium. Your policy will remain in force during the grace period. If you do not make the minimum payment If we do not receive your payment within the grace period, your policy will lapse with no value. This means we'll end your life insurance coverage. Remember to tell us if your payment is a If you make the minimum payment premium payment. Otherwise, we'll treat it as a loan repayment. If we receive your payment within the grace period, we'll allocate your net premium to the investment options you've chosen and deduct the monthly charge from your investment options in proportion to the accumulated value you have in each option. If your policy is in danger of lapsing and you have an outstanding loan amount, you may find that making the minimum payment would cause the total premiums paid to exceed the maximum amount for your policy's face amount under tax laws. In that situation, we will not accept the portion of your payment that would exceed the maximum amount. To stop your policy from lapsing, you'll have to repay a portion of your outstanding loan amount. How to avoid future lapsing To stop your policy from lapsing in the future, you may want to make larger or more frequent premium payments if tax laws permit it. Or if you have a loan, you may want to repay a portion of it. Paying death benefit proceeds during the grace period If the person insured by the policy dies during the grace period, we'll pay death benefit proceeds to your beneficiary. We'll reduce the payment by any unpaid monthly charges and any outstanding loan amount.
32 Reinstating a lapsed policy If your policy lapses, you have five years from the end of the grace period to apply for a reinstatement. We'll reinstate it if you send us the following: . a written application . evidence satisfactory to us that the person insured by the policy is still insurable . a premium payment sufficient to keep your policy in force for three months after the day your policy is reinstated . payment of all unpaid monthly charges that were due in the grace period. We'll reinstate your policy as of the first monthly payment date on or after the day we approve the reinstatement. Once we reinstate your policy, its accumulated value will be the same as it was on the day your policy lapsed. We'll allocate it according to your most recent premium allocation instructions. Reinstating a lapsed policy with an outstanding loan amount If you had an outstanding loan amount when your policy lapsed, we will not pay or credit interest on it during the period between the lapsing and reinstatement of your policy. There are special rules that apply to reinstating a policy with an outstanding loan amount: . If we reinstate your policy on the first monthly payment date that immediately follows the lapse, we'll also reinstate the loan amount that was outstanding the day your policy lapsed. . If we reinstate your policy on any monthly payment date other than the monthly payment date that immediately follows the lapse, we'll deduct the outstanding loan amount from your policy's accumulated value. This means you will no longer have an outstanding loan amount when your policy is reinstated. 33
YOUR INVESTMENT OPTIONS This section tells you about the investment options available under your policy and how they work. You can change your premium allocation We put your premium payments in our general and separate accounts. We own the instructions by writing, sending a fax, or, assets in our accounts and allocate your premiums, less any charges, to the if we have your completed telephone investment options you've chosen. Amounts allocated to the fixed options are authorization form on file, by calling us held in our general account. Amounts allocated to the variable investment at 1-800-800-7681. Or you can ask your options are held in our separate account. registered representative to contact us. You choose your initial investment options on your application. If you choose You'll find information about when we more than one investment option, you must tell us the dollar amount or allocate premium payments to your percentage you want to allocate to each option. You can change your premium investment options in How premiums work. allocation instructions at any time. The investment options you choose, and how they perform, will affect your policy's accumulated value and may affect the death benefit. Please review the investment options carefully and ask your registered representative to help you choose the right ones for your goals and tolerance for risk. Make sure you understand any costs you may pay directly and indirectly on your investment options because they will affect the value of your policy. -------------------------------------------------------------------------------- Variable investment options You can choose from 18 variable investment options. Each variable investment option is set up as a variable account under our separate account and invests Variable investment options are also known in a corresponding portfolio of the Pacific Select Fund. Each portfolio invests as variable accounts. These variable in different securities and has its own investment goals, strategies and risks. accounts are divisions of our separate The value of each portfolio will fluctuate with the value of the investments it account. We bear the direct operating holds, and returns are not guaranteed. Your policy's accumulated value will expenses of our separate account. For more fluctuate depending on the investment options you've chosen. You bear the information about how these accounts work, investment risk of any variable investment options you choose. see About PL&A. The following chart is a summary of the Pacific Select Fund portfolios. You'll Pacific Life is the investment adviser for find detailed descriptions of the portfolios in the Pacific Select Fund the Pacific Select Fund. They oversee the prospectus that accompanies this prospectus. There's no guarantee that a management of all the fund's portfolios, portfolio will achieve its investment objective. You should read the fund and manage two of the portfolios directly. prospectus carefully before investing. They've retained other portfolio managers to manage the other portfolios.
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PORTFOLIO THE PORTFOLIO'S THE PORTFOLIO'S PORTFOLIO INVESTMENT GOAL MAIN INVESTMENTS MANAGER Money Market Current income consistent Highest quality money market Pacific Life with preservation of instruments believed to have capital. limited credit risk. High Yield Bond High level of current Fixed income securities with Pacific Life income. lower and medium-quality credit ratings and intermediate to long terms to maturity. Managed Bond Maximize total return Medium and high-quality fixed Pacific Investment consistent with prudent income securities with varying Management Company investment management. terms to maturity. Government Securities Maximize total return Fixed income securities that Pacific Investment consistent with prudent are issued or guaranteed by the Management Company investment management. U.S. government, its agencies or government-sponsored enterprises. Growth Growth of capital. Equity securities of smaller Capital Guardian and medium-sized companies. Trust Company Aggressive Equity Capital appreciation. Equity securities of small Alliance Capital emerging-growth companies and Management L.P. medium-sized companies. Growth LT Long-term growth of capital Equity securities of a large Janus Capital consistent with the number of companies of any Corporation preservation of capital. size. Equity Income Long-term growth of capital Equity securities of large and J.P. Morgan and income. medium-sized dividend-paying Investment Management U.S. companies. Inc. Multi-Strategy High total return. A mix of equity and fixed J.P. Morgan income securities. Investment Management Inc. Large-Cap Value Long-term growth of Equity securities of large U.S. Salomon Brothers capital. Current income is companies. Asset Management Inc of secondary importance. Mid-Cap Value Capital appreciation. Equity securities of medium- Lazard Asset sized U.S. companies believed Management to be undervalued. Equity Capital appreciation. Equity securities of large U.S. Goldman Sachs Asset Current income is of growth-oriented companies. Management secondary importance. Bond and Income Total return and income A wide range of fixed income Goldman Sachs Asset consistent with prudent securities with varying terms Management investment management. to maturity, with an emphasis on long-term bonds. Equity Index Investment results that Equity securities of companies Bankers Trust Company correspond to the total that are included in the return of common stocks Standard & Poor's 500 Composite publicly traded in the U.S. Stock Price Index. Small-Cap Index Investment results that Equity securities of companies Bankers Trust Company correspond to the total that are included in the return of an index of small Russell 2000 Small Stock Index. capitalization companies. REIT Current income and long- Equity securities of real Morgan Stanley Asset term capital appreciation. estate investment trusts. Management International Long-term capital Equity securities of companies Morgan Stanley Asset appreciation. of any size located in Management developed countries outside of the U.S. Emerging Markets Long-term growth of Equity securities of companies Blairlogie Capital capital. that are located in countries Management generally regarded as "emerging market" countries. 35
YOUR INVESTMENT OPTIONS An example Calculating unit values You ask us to allocate $6,000 to the When you choose a variable investment option, we credit your policy with Government Securities investment option on accumulation units. The number of units we credit equals the amount we've a business day. At the end of that day, the allocated divided by the unit value of the variable account. Similarly, the unit value of the variable account is $15. number of accumulation units in your policy will be reduced when you make a We'll credit your policy with 400 units transfer, withdrawal or loan from a variable investment option, and when your ($6,000 divided by $15). monthly charges are deducted. The value of an accumulation unit is not The value of an accumulation unit is the basis for all financial transactions the same as the value of a share in the relating to the variable investment options. We calculate the unit value for underlying portfolio. each variable account once every business day, usually at or about 4:00 p.m. Eastern time. Generally, for any transaction, we'll use the next unit value calculated after we receive your written request. If we receive your written request before 4:00 For information about timing of p.m. Eastern time, we'll use the unit value calculated as of the end of that transactions, see Pacific Select Exec II - business day. If we receive your request on or after 4:00 p.m. Eastern time, NY basics. we'll use the unit value calculated as of the end of the next business day. If a scheduled transaction falls on a day that is not a business day, we'll process it as of the end of the next business day. For your monthly charge, we'll use the unit value calculated on your monthly payment date. If your monthly payment date does not fall on a business day, we'll use the unit value calculated as of the end of the next business day. The unit value calculation is based on the following: . the investment performance of the underlying portfolio . any dividends or distributions paid by the underlying portfolio . any charges for any taxes that are, or may become, associated with the operation of the variable account. The unit value of a variable account will change with the value of its corresponding Pacific Select Fund portfolio. Changes in the unit value of a variable account will not change the number of accumulation units credited to your policy. A look at performance Performance information may appear in advertisements, sales literature, or reports to policy owners or prospective buyers. Information about the performance of any variable account of the separate account reflects only the performance of a hypothetical policy. The calculations are based on allocating the hypothetical policy's accumulated value to the variable account during a particular time period. Performance information is no guarantee of how a variable account will perform in the future. You should keep in mind the investment objectives and policies, characteristics and quality of the portfolio of the fund in which the variable account invests, and the market conditions during the period of time that's shown. We may show performance information in any way that's allowed under the law that applies to it. This may include presenting a change in accumulated value due to the performance of one or more variable accounts, or as a change in a policy owner's death benefit.
36 We may show performance as a change in accumulated value over time or in terms of the average annual compounded rate of return on accumulated value. This would be based on allocating premium payments for a hypothetical policy to a particular variable account over certain periods of time, including one year, or from the day the variable account started operating. If a portfolio has existed for longer than its corresponding variable account, we may also show the hypothetical returns that the variable account would have achieved had it invested in the portfolio from the day the portfolio started operating. Performance may reflect the deduction of all policy charges including premium load, the cost of insurance, the administrative charge, and the mortality and expense risk charge. The different death benefit options will result in different expenses for the cost of insurance, and the varying expenses will result in different accumulated values. Performance may also reflect the deduction of the surrender charge, if it applies, by assuming the hypothetical policy is surrendered at the end of the particular period. At the same time, we may give other performance figures that do not assume the policy is surrendered and do not reflect any deduction of the surrender charge. In our advertisements, sales literature and reports to policy owners, we may compare performance information for a variable account to: . other variable life separate accounts, mutual funds, or investment products tracked by research firms, ratings services, companies, publications, or persons who rank separate accounts or investment products on overall performance or other criteria . the Consumer Price Index, to assess the real rate of return from buying a policy by taking inflation into consideration. Reports and promotional literature may also contain our rating or a rating of our claims-paying ability. These ratings are set by firms that analyze and rate insurance companies and by nationally recognized statistical rating organizations. You'll find more about Pacific Select Fund Fees and expenses paid by the Pacific Select Fund fees and expenses in An overview of Pacific The Pacific Select Fund pays advisory fees and other expenses. These are Select Exec II - NY. deducted from the assets of the fund's portfolios and may vary from year to year. They are not fixed and are not part of the terms of your policy. If you choose a variable investment option, these fees and expenses affect you indirectly because they reduce portfolio returns. The fund is governed by its own Board of Trustees. 37
YOUR INVESTMENT OPTIONS -------------------------------------------------------------------------------- Fixed options You can also choose from two fixed options: the Fixed account and the Fixed LT account. The fixed options provide a guaranteed minimum annual rate of The fixed options are not securities, so interest. The amounts allocated to the fixed options are held in our general they do not fall under any securities act. account. For this reason, the SEC has not reviewed the disclosure in this prospectus about Here are some things you need to know about the fixed options: these options. However, other federal securities laws may apply to the accuracy . Accumulated value allocated to the fixed options earns interest on a daily and completeness of the disclosure about basis, using a 365-day year. Our minimum annual interest rate is 3% during the these options. first 10 policy years, and 3.3% thereafter. For more information about the general . We may offer a higher annual interest rate on the fixed options. If we do, account, see About PL&A. we'll guarantee the higher rate for one year. . If we offer a higher annual interest rate on a fixed option, we may also pay additional interest on accumulated value in excess of $25,000 in that fixed option. Ask your registered representative for current interest rates. . There are no investment risks or direct charges. . There are limitations on when and how much you can transfer from the fixed options. These limitations are described below, in Transferring among investment options. . We may limit the total amount you allocate to the Fixed LT account for all Pacific Life policies you own to $1,000,000 in any 12-month period, and transfer any amount over $1,000,000 to your other investment options according to your most recent instructions. We may increase the $1,000,000 limit at any time at our sole discretion. You should contact us to find out if a higher limit is in effect. -------------------------------------------------------------------------------- Transferring among You can transfer among your investment options any time during the life of your investment options policy without triggering any current income tax. You can make transfers by writing to us, by making a telephone transfer, or by signing up for one of our You can make transfers and use transfer automatic transfer programs. You'll find more information about making programs only after the free look transfer telephone transfers in Pacific Select Exec II basics. date. For more information, please see Pacific Select Exec II - NY basics. Transfers will normally be effective as of the end of the business day we receive your written or telephone request. You can make transfers to the fixed options any time during the first 18 Here are some things you need to know about making transfers: months of your policy. . If you're making transfers between variable investment options, there is no You'll find more about the first year minimum amount required and you can make as many transfers as you like. transfer program later in this section. . You can make transfers from the variable investment options to the fixed options only in the policy month right before each policy anniversary. . You can only make one transfer from each fixed option in any 12-month period, except if you've signed up for the first year transfer program. . You can only transfer up to the greater of $5,000 or 25% of your policy's accumulated value in the Fixed account in any 12-month period, except for scheduled transfers under the first year transfer program. . You can only transfer up to the greater of $5,000 or 10% of your policy's accumulated value in the Fixed LT account in any 12-month period. . Currently, there is no charge for making a transfer but we may charge you in the future. . There is no minimum required value for the investment option you're transferring to or from.
38 . You cannot make a transfer if your policy is in the grace period and is in danger of lapsing. . We can restrict or suspend transfers. . We may choose to impose limits on transfer amounts, the value of the investment options you're transferring to or from, or the number and frequency of transfers you can make. -------------------------------------------------------------------------------- Transfer programs We offer three programs that allow you to make automatic transfers of accumulated value from one investment option to another. Under the dollar cost averaging and portfolio rebalancing programs, you can transfer among the variable investment options. Under the first year transfer program, you can make transfers from the Fixed account to the Fixed LT account and the variable investment options. Since the value of accumulation units can Dollar cost averaging program change, more units are credited for a Our dollar cost averaging program allows you to make scheduled transfers of $50 scheduled transfer when unit values are or more between variable investment options without paying a transfer fee. It lower, and fewer units when unit values does not allow you to make transfers to or from either of the fixed options. are higher. This allows you to average the Here's how the program works: cost of investments over time. Investing this way does not guarantee profits or . You can set up this program at any time while your policy is in force. prevent losses. . You need to complete a request form to enroll in the program. . You must have at least $5,000 in a variable investment option to start the program. . We'll automatically transfer accumulated value from one variable investment option to one or more of the other variable investment options you've selected. . We'll process transfers as of the end of the business day on your policy's monthly, quarterly, semi-annual or annual anniversary, depending on the interval you've chosen. We will not make the first transfer until after the free look transfer date. . We will not charge you for the dollar cost averaging program or for transfers made under this program, even if we decide to charge you in the future for transfers outside of the program, except if we have to by law. . We have the right to discontinue, modify or suspend the program at any time. . We'll keep making transfers at the intervals you've chosen until one of the following happens: . the total amount you've asked us to transfer has been transferred . there is no more accumulated value in the investment option you're transferring from . your policy enters the grace period and is in danger of lapsing . you tell us in writing to cancel the program . we discontinue the program. 39
YOUR INVESTMENT OPTIONS Because the portfolio rebalancing Portfolio rebalancing program program matches your original As the value of the underlying portfolios changes, the value of the allocations percentage allocations, we may to the variable investment options will also change. The portfolio rebalancing transfer money from an investment program automatically transfers your policy's accumulated value among the option with relatively higher variable investment options according to your original percentage allocations. returns to one with relatively lower returns. Here's how the program works: . You can set up this program at any time while your policy is in force. . You enroll in the program by sending us a written signed request or a completed automatic rebalancing form. . Your first rebalancing will take place on the monthly payment date you choose. You choose whether we should make transfers quarterly, semi-annually or annually, based on your policy date. . If you cancel this program, you must wait 30 days to begin it again. . You cannot use this program if you're already using the dollar cost averaging program. . We do not currently charge for the portfolio rebalancing program or for transfers made under this program. . We can discontinue, suspend or change the program at any time. This program allows you to First year transfer program average the cost of investments Our first year transfer program allows you to make monthly transfers during the over your first policy year. first policy year from the Fixed account to the variable investment options or Investing this way does not the Fixed LT account. It does not allow you to transfer among variable guarantee profits or prevent investment options. losses. Here's how the program works: . You enroll in the program when you apply for your policy. . You choose a regular amount to be transferred every month for 12 months . We make the first transfer on the day we allocate your first premium to the investment options you've chosen. Each transfer will be made on the same day every month. . If you sign up for this program, we'll waive the usual transfer limit for the Fixed account during the first policy year. . If we make the last transfer during the second policy year, we will not count it toward the usual one transfer per year limit for the Fixed account. . If the accumulated value in the Fixed account is less than the amount to be transferred, we'll transfer the balance and then cancel the program. . If there is accumulated value remaining in the Fixed account at the end of the program, our usual rules for the fixed account will apply. . We do not currently charge for the first year transfer program or for transfers made under this program.
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WITHDRAWALS, SURRENDERS AND LOANS Making a withdrawal, taking out a loan or You can take out all or part of your policy's accumulated value while your surrendering your policy can change your policy is in force by making withdrawals or surrendering your policy. You can policy's tax status, generate taxable take out a loan from us using your policy as security. You can also use your income, or make your policy more susceptible policy's loan and withdrawal features to supplement your income, for example, to lapsing. Be sure to plan carefully before during retirement. using these policy benefits. If you withdraw a larger amount than you've paid into your policy, your withdrawal may be considered taxable income. For more information, see Variable life insurance and your taxes. -------------------------------------------------------------------------------- Making withdrawals You can withdraw part of your policy's net cash surrender value starting on your policy's first anniversary. Here's how it works: You can choose to receive your withdrawal in a lump sum or use it to buy an income . You must send us a written request that's signed by all joint owners. benefit. Please see the discussion about . Each withdrawal must be at least $200, and the net cash surrender value of income benefits in General information your policy after the withdrawal must be at least $500. about your policy. . If your policy has an outstanding loan amount, the maximum withdrawal you can take is the amount, if any, by which the cash surrender value just before the We will not accept your request to make a withdrawal exceeds the outstanding loan amount divided by 90%. withdrawal if it will cause your policy to . We'll charge you $25 for each withdrawal you make. become a modified endowment contract, unless . If you do not tell us which investment options to take the withdrawal from, you've told us in writing that you want your we'll deduct the withdrawal and the withdrawal charge from all of your policy to become a modified endowment investment options in proportion to the accumulated value you have in each contract. option. . The accumulated value, cash surrender value and net cash surrender value of your policy will be reduced by the amount of each withdrawal. . If the person insured under the policy dies after you've sent a withdrawal request to us, but before we've made the withdrawal, we'll deduct the amount of the withdrawal from any death benefit proceeds owing. How withdrawals affect your policy's death benefit Making a withdrawal will affect your policy's death benefit in the following ways: . if your policy's death benefit does not equal the guideline minimum death benefit, the death benefit will decrease by the amount of your withdrawal. . if your policy's death benefit equals the guideline minimum death benefit, the death benefit may decrease by more than the amount of your withdrawal. How withdrawals affect your policy's face amount If you've chosen death benefit Option B or Option C, making a withdrawal does not reduce your policy's face amount. If you've chosen death benefit Option A, a withdrawal may reduce your face amount. You can make one withdrawal during each of the first 15 policy years of up to 10% of the total premium payments you've made without reducing your policy's face amount. If you withdraw a larger amount, or make additional withdrawals, the face amount will be reduced by the amount, if any, by which the face amount exceeds the death benefit immediately before the withdrawal, minus the amount of the withdrawal. 41
WITHDRAWALS, SURRENDERS AND LOANS -------------------------------------------------------------------------------- Taking out a loan You can borrow money from us any time while your policy is in force either by sending us a request in writing, or over the telephone. You'll find more The amount in the loan account, plus any information about requesting a loan by telephone in Pacific Select Exec II - NY interest you owe, is referred to throughout basics. this prospectus as your outstanding loan amount. Your policy refers to this amount When you borrow money from us, we use your policy's accumulated value as as policy debt. security. You pay interest on the amount you borrow. The accumulated value set aside to secure your loan also earns interest. Here's how it works: Taking out a loan will affect the growth of your policy's accumulated value, and may . To secure the loan, we transfer an amount equal to the amount you're affect the death benefit. borrowing from your accumulated value in the investment options to the loan account. We'll transfer this amount from your investment options in proportion An example to the accumulated value you have in each option, unless you tell us For a policy with: otherwise. . accumulated value of $100,000 . Interest owing on the amount you've borrowed accrues daily at an annual rate . an outstanding loan amount of $60,000 of 3.55%. Interest that has accrued during the policy year is due on your . a most recent monthly charge of $225 policy anniversary. If you do not pay the interest when it's due, we'll add it to the amount of your loan and begin accruing interest on it from the day it was The maximum amount you can borrow during due. We'll also transfer an amount equal to the interest that was due, from your policy years 1 through 10 is the greater of: policy's accumulated value to the loan account. We'll transfer this amount from your investment options in proportion to the accumulated value you have in each $25,500 ((90% X ($100,000 - option, unless you tell us otherwise. $5,000)) - $60,000) . The amount in the loan account earns interest daily at an annual rate of 3% during the first 10 policy years, and 3.3% thereafter. On your policy or anniversary, we transfer the interest that's been credited to the loan account proportionately to your investment options according to your most recent $31,809.75 allocation instructions. (a X (b / c)) - d, where: a = $92,300 ($100,000 - How much you can borrow $5,000 - ($12 X $225)) The minimum amount you can borrow is $200. You can borrow up to the larger of b = 1.03 the following amounts: c = 1.0355 d = $60,000) . 90% of the accumulated value in the investment options, less any surrender charges that would apply if you surrendered your policy on the day you took The maximum amount you can borrow during out the loan. policy year 11 and thereafter is the . the result of a X (b / c) - d, where: greater of: a = the accumulated value of your policy less any surrender charges that would $25,500 have applied if you surrendered your policy on the day you took out the loan, ((90% X ($100,000 - $5,000)) - and less 12 times the most recent monthly charge $60,000) b = 1.03 during policy years 1 through 10, and or 1.033 during policy year 11 and thereafter c = 1.0355 d = any outstanding loan amount. $32,077.16 (a X (b / c)) - d, where: Paying off your loan a = $92,300 ($100,000 - You can pay off all or part of the loan any time while your policy is in force. $5,000 - ($12 X $225)) Unless you tell us otherwise, we'll generally transfer any loan payments you b = 1.033 make proportionately to your investment options according to your most recent c = 1.0355 allocation instructions. We may, however, first transfer any loan payments you d = $60,000) make to the fixed options, up to the amount originally transferred from the fixed options to the loan account. We'll then transfer any excess amount to your variable investment options according to your most recent allocation instructions. While you have an outstanding loan, we'll treat any money you send us as a loan payment unless you tell us otherwise in writing.
42 Your outstanding loan amount could result in What happens if you do not pay off your loan taxable income if you surrender your policy, If you do not pay off your loan, we'll deduct the amount in the loan account, if your policy lapses, or if your policy is including any interest you owe, from one of the following: a modified endowment contract. You should talk to your tax advisor before taking out a . the death benefit proceeds before we pay them to your beneficiary loan under your policy. See Taking out a . the cash surrender value if you surrender your policy loan in Variable life insurance and . the amount we refund if you exercise your right to cancel. your taxes. Taking out a loan, whether or not you repay it, will have a permanent effect on the value of your policy. For example, while your policy's accumulated value is held in the loan account, it will miss out on the potential earnings available through the variable investment options. The amount of interest you earn on the loan account may be less than the amount of interest you would have earned from the fixed options. These could lower your policy's accumulated value, which could reduce the amount of the death benefit. When a loan is outstanding, the amount in the loan account is not available to help pay for any policy charges. If, after deducting your outstanding loan amount, there is not enough accumulated value in your policy to cover the policy charges, your policy could lapse. You may need to make additional premium payments or loan repayments to prevent your policy from lapsing. -------------------------------------------------------------------------------- Ways to use your policy's loan and You can use your policy's loan and withdrawal features to supplement your withdrawal features income, for example, during retirement. If you're interested in using your life Using your policy to supplement your income does not change your rights or our insurance policy to supplement your obligations under the policy. The terms for loans and withdrawals described in retirement income, please contact us for this prospectus remain the same. more information. Here are some things you should consider when setting up an income stream: We can provide you with illustrations that give you examples of how this could affect . the rate of return you expect to earn on your investment options the accumulated value, net cash surrender . how long you would like to receive regular income value and death benefit of your policy based . the amount of accumulated value you want to maintain in your policy. on different hypothetical gross rates of return. We will not use a higher rate than Understanding the risks 12%, and will always compare it with a rate Setting up an income stream may not be suitable for all policy owners. It's of 0% based on guaranteed insurance costs. important to understand the risks that are involved in using your policy's loan You'll find sample illustrations and the and withdrawal features. assumptions they're based on starting on page 106. You must always leave enough accumulated value in your policy to help ensure your policy will continue to qualify as life insurance and will not lapse. Your The hypothetical rates of return are policy will lapse if there is not enough accumulated value, after subtracting illustrative of past or future results. any outstanding loan amount, to cover the monthly charge on the day we make the Policy values and benefits would be deduction and the grace period expires. If your policy lapses, we'll end your different from those shown in the life insurance coverage. illustrations if: There are also charges associated with reinstating a lapsed policy. . the gross annual rates of return are different from the hypothetical rates You should consult with your financial adviser and carefully consider how much you can withdraw and borrow from your policy each year to set up your income . premiums were not paid as illustrated stream. . loan interest was paid when due. Remember that the performance of your investment options also affects your policy's accumulated value. Poor performance can increase the danger of your policy lapsing. And as the cost of insurance generally increases with the age of the person insured by the policy, this can also reduce the accumulated value. 43
WITHDRAWALS, SURRENDERS AND LOANS You can also ask for accompanying charts In addition, you should carefully review the policy statements we send you. and graphs that compare results from Your statements will allow you to monitor your policy's accumulated value, less various retirement strategies. your outstanding loan amount, to ensure your policy can continue to support the income stream you have chosen. You can ask your registered representative If your policy lapses or you surrender your policy after you have taken out a for illustrations showing how policy loan, you could face significant income tax liability in the year of the lapse charges may affect existing accumulated or surrender. Any outstanding loan amount will automatically be repaid when value and how future withdrawals and loans your policy lapses or you surrender your policy. You could be taxed to the may affect the accumulated value and death extent that the net surrender value plus the outstanding loan amount repaid benefit. exceeds the cost basis of your policy. Tax issues are described in detail in Interest on a loan is due to us on each policy anniversary. If we do not Variable insurance and your taxes. receive the interest when due, we'll add it to the outstanding loan amount and begins accruing interest on it from the day it was due. This has a compounding effect and can add to your income tax liability. If the person insured by the policy dies, we'll deduct any outstanding loan amount from the death benefit. This means the death benefit proceeds will be less than the death benefit and may be less than the face amount. -------------------------------------------------------------------------------- Surrendering your policy You can surrender or cash in your policy at any time while the person insured by the policy is still living. Your policy's cash surrender value is its You can choose to receive your money in a accumulated value less any surrender charge that applies. The net cash lump sum or use it to buy an income benefit. surrender value equals your policy's cash surrender value after deducting any Please see the discussion about income outstanding loan amount. benefits in General information about your policy. Here are some things you need to know about surrendering your policy: If you increase your policy's face amount, . You must send us your policy and a written request. we'll send you a supplemental schedule of . We'll send you the policy's net cash surrender value. If you surrender your benefits that shows the surrender charge policy during the first 10 policy years, we'll deduct a surrender charge that associated with the increase. helps cover our costs for underwriting, issuing and distributing our policies . Your policy's surrender charge is based on the initial face amount of your policy and will never be greater than the maximum surrender charge. The maximum surrender charge is calculated at a rate that is based on the age and risk class of the person insured by the policy, and each $1,000 of initial face amount. . There's no surrender charge on the initial face amount after 10 policy years. . We guarantee the surrender charge rates will not increase. . If you increase your policy's face amount, each increase has a surrender charge and maximum surrender charge, based on the amount of the increase, for 10 years. . If you decrease the face amount, the decrease will not affect your policy's surrender charge or maximum surrender charge.
44 -------------------------------------------------------------------------------- Sample rates for the surrender charge How we calculate the surrender charge and the maximum surrender charge appear in Appendix A. The surrender charge and the maximum surrender charge are assessed against your policy's accumulated value. They are based on the age and risk class of the An example person insured by the policy for each $1,000 of the initial face amount of your For a policy: policy. . that insures a male non-smoker who is age 45 when the policy is issued The amount of the surrender charge does not change during the first policy . with an initial face amount of $350,000. year. Starting on the first policy anniversary, we reduce the charge by 0.9259% each month until it reaches zero at the end of 10 policy years. The surrender charge is: The maximum surrender charge does not change during the first 10 policy years, . $8,757.00 in the first policy year and then is reduced to zero at the end of the 10th policy year. The maximum (($350,000 / $1,000) X 25.02) surrender charge on the initial face amount of your policy will never be more . $2,919.16 at the end of the seventh than $32.752 per $1,000 of initial face amount. policy year ($8,757.00 - ($8,757.00 X .9259% X 72 months)) We will never deduct more than the maximum surrender charge, which is $4,426.10 45
GENERAL INFORMATION ABOUT YOUR POLICY This section tells you some additional things you should know about your policy. -------------------------------------------------------------------------------- Income benefit If you surrender or make a withdrawal from your policy, you can use the money to buy an income benefit that provides a monthly income. Your policy's beneficiary can use death benefit proceeds to buy an income benefit. In addition to the income benefit described below, you can choose from other income benefits we may make available from time to time. The following is one income benefit available under the Pacific Select Exec II policy: . The income benefit is based on the life of the person receiving the income. If the policy owner is buying the income benefit, monthly income will be based on the owner's life. If the policy's beneficiary buys the income benefit, monthly income will be based on the beneficiary's life. . We'll pay a monthly income for at least 10 years regardless of whether the person receiving the income is still alive. . After 10 years, we'll only pay the monthly income for as long as the person receiving it is still alive. . The minimum monthly income benefit calculated must be at least $100. . For this income benefit, the amount you receive will always be at least as much as the amount guaranteed by your policy. -------------------------------------------------------------------------------- Reduced Paid-Up Benefit You may use the net cash surrender value of your policy to purchase guaranteed fixed paid-up insurance on the life of the person insured by the policy. You may choose to do this at any time while the policy is in force. If you convert your policy, the net cash surrender value will be transferred to our general account. The amount of paid-up insurance is determined by applying the net cash surrender value as the net single premium based upon the insured's age and risk class, 1980 CSO mortality table, and 3% interest. Any riders attached to the policy will terminate at the time of conversion. -------------------------------------------------------------------------------- Substituting the person insured by Starting on your policy's first anniversary, you can apply to substitute the your policy person insured by your policy. You must apply in writing and we must receive satisfactory evidence of insurability of the new person to be insured by the If you substitute the person insured policy. You can only add riders on the new person insured by the policy if we by the policy, we'll send you a revised approve the addition of the riders. schedule of benefits. The substitution will become effective on the first monthly payment date after we approve your request. We may have to adjust the face amount, accumulated value, surrender charge and policy charges to reflect the substitution. We can refuse your request to substitute if, among other reasons: . we would be required to end the policy in order to comply with new guideline premium limits under tax law . we would be required to make distributions from your policy's accumulated value that are greater than the net cash surrender value.
46 -------------------------------------------------------------------------------- Paying the death benefit in the case If the person insured by the policy, whether sane or insane, commits suicide of suicide within two years of the policy date, death benefit proceeds will be the total of all premiums you've paid, less any outstanding loan amount and any withdrawals you've made. If you've substituted the person insured by the policy and that person, whether sane or insane, commits suicide within two years of the day the substitution was made, we'll calculate death benefit proceeds differently. Proceeds will be limited to the net cash surrender value of your policy as of the day the substitution was made, less any increase in any outstanding loan amount, any withdrawals you've made, and any dividends we've paid in cash, since the day the substitution was made. -------------------------------------------------------------------------------- Replacement of life insurance The term replacement has a special meaning in the life insurance industry. or annuities Before you make a decision to buy, we want you to understand what impact a replacement may have on your existing insurance policy. A replacement occurs when you buy a new life insurance policy or annuity contract, and a policy or contract you already own has been or will be: . lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated . converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values . amended to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid . reissued with any reduction in cash value, or . pledged as collateral or subject to borrowing, whether in a single loan or under a schedule of borrowing over a period of time. There are circumstances when replacing your existing life insurance policy or annuity contract can benefit you. As a general rule, however, replacement is not in your best interest. You should carefully compare the costs and benefits of your existing policy or contract with those of the new policy or contract to determine whether replacement is in your best interest. -------------------------------------------------------------------------------- Errors on your application If the age or gender of the person insured by your policy is stated incorrectly on your application, the death benefit under your policy will be the greater of If unisex cost of insurance rates apply to the following: your policy, we will not adjust the face amount if we discover that gender has been . the amount of death benefit that would be purchased by the most recent cost of stated incorrectly on your application. insurance charge for the correct age and gender or . the guideline minimum death benefit for the correct age and gender. We'll adjust the accumulated value by recalculating all previous cost of insurance charges and other monthly deductions based on the correct age and gender. 47
GENERAL INFORMATION ABOUT YOUR POLICY -------------------------------------------------------------------------------- Contesting the validity of your policy We have the right to contest the validity of your policy for two years from the policy date. Once your policy has been in force for two years from the policy date during the lifetime of the person insured by the policy, we generally lose the right to contest its validity. We also have the right to contest the validity of a policy that you reinstate for two years from the day that it was reinstated. Once your reinstated policy has been in force for two years from the reinstatement date during the lifetime of the person insured by the policy, we generally lose the right to contest its validity. During this period, we may contest your policy only if there is a material misrepresentation on your application for reinstatement. We have the right to contest the validity of an increase in the face amount of a policy for two years from the day the increase becomes effective. Once the increased face amount has been in force for two years during the lifetime of the person insured by the policy, we generally lose the right to contest its validity. We also have the right to contest the validity of a policy if there has been a substitution to the person insured by the policy. We can contest a policy's validity for two years from the day the substitution becomes effective. Once the substitution has been in force for two years during the lifetime of the person insured by the policy, we generally lose the right to contest its validity. Regardless of the above, we can contest the validity of your policy for failure to pay premiums at any time. The policy will terminate upon successful contest with respect to the person insured by the policy. -------------------------------------------------------------------------------- Assigning your policy as collateral You can assign your policy as collateral to secure a loan, mortgage, or other kind of debt. Here's how it works: Assigning a policy that's a modified endowment contract may generate taxable . An assignment does not change the ownership of the policy. income and a 10% penalty tax. . After the policy has been assigned, your rights and the rights of your beneficiary will be subject to the assignment. The entire policy, including any income benefit, rider, benefit and endorsement, will also be subject to the assignment. . We're not responsible for the validity of any assignment. . We must receive and record a copy of the original assignment in a form that's acceptable to us before we'll consider it binding. . Unless otherwise provided, the person or organization you assign your policy to may exercise the rights under the policy, except the right to change the policy owner or the beneficiary or the right to choose a monthly income benefit. -------------------------------------------------------------------------------- Non-participating This policy will not share in any of our surplus earnings.
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VARIABLE LIFE INSURANCE AND YOUR TAXES This discussion about taxes is based on our understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service (IRS). It's based on the Internal Revenue Code of 1986, as amended, (the tax code) and does not cover any state or local tax laws. The tax consequences of owning a policy or receiving proceeds from it may vary This is not a complete discussion of all federal income tax questions that may by jurisdiction and according to the arise under the policy. There are special rules that we do not include here circumstances of each owner or beneficiary. that may apply in certain situations. Speak to a qualified tax adviser for We do not know whether the current treatment of life insurance policies under complete information about federal, state current federal income tax or estate or gift tax laws will continue. We also do and local taxes that may apply to you. not know whether the current interpretations of the laws by the IRS or the courts will remain the same. Future legislation may adversely change the tax treatment of life insurance policies, other tax consequences described in this discussion or tax consequences that relate directly or indirectly to life insurance policies. We do not make any guarantees about the tax status of your policy, and you should not consider the discussion that follows to be tax advice. -------------------------------------------------------------------------------- Tax treatment of life insurance policies Definition of life insurance We believe that the policy qualifies as life insurance. That means it will In order to qualify as a life insurance receive the same tax advantages as a conventional fixed life insurance policy. contract for federal income tax purposes, The two main tax advantages are: the policy must meet the statutory definition of life insurance. . In general, your policy's beneficiary will not be subject to federal income tax when he or she receives the death benefit proceeds. This is true regardless Death benefits may be excluded from income of whether the beneficiary is an individual, corporation, or other entity. under Section 101(a) of the tax code. . You'll generally not be taxed on any or all of your policy's accumulated value unless you receive a cash distribution by making a withdrawal, surrendering your policy, or in some instances, taking a loan from your policy. The tax laws defining life insurance, however, do not cover all policy features. Your policy may have features that could prevent it from qualifying as life insurance. For example, the tax laws have yet to address many issues concerning the treatment of substandard risk policies and policies with term insurance on the person insured by the policy. We can make changes to your policy if we believe the changes are needed to ensure that your policy continues to qualify as a life insurance contract. Tax regulations deal with allowable charges for mortality costs and other expenses that are used in calculating whether a policy qualifies as life insurance. For life insurance policies entered into on or after October 21, 1988, these calculations must be based upon reasonable mortality charges and other charges reasonably expected to be actually paid. 49
VARIABLE LIFE INSURANCE AND YOUR TAXES The Treasury Department has issued proposed regulations about reasonable standards for mortality charges. While we believe that our mortality costs and other expenses used in calculating whether the policy qualifies as life insurance are reasonable under current laws, we cannot be sure that the IRS agrees with us. We can change our mortality charges if we believe the changes are needed to ensure that your policy qualifies as a life insurance contract. Section 817(h) of the tax code describes Diversification rules and ownership of the separate account the diversification rules. Your policy will not qualify for the tax benefit of a life insurance contract unless the separate account follows certain rules requiring diversification of For more information about diversification investments underlying the policy. In addition, the IRS requires that the rules, please see Managing the Pacific policyholder does not have control over the underlying assets. Select Fund in the accompanying Pacific Select Fund prospectus. The Treasury Department has announced that the diversification rules "do not provide guidance concerning the circumstances in which it will treat an investor, rather than the insurance company, as the owner of the assets in a separate account." The IRS treats a variable policy owner as the owner of separate account assets if he or she has the ability to exercise investment control over them. Owners of the assets are taxed on any income or gains the assets generate. Although the Treasury Department announced it would provide further guidance on the issue, it had not done so when we wrote this prospectus. No IRS rulings deal with policies that have exactly the same ownership rights as your policy. Since you have additional flexibility in allocating premiums and policy values, it is possible the IRS would treat you as the owner of your policy's proportionate share of the assets of the separate account. We do not know what will be in future Treasury Department regulations. We cannot guarantee that the fund's portfolios will be able to operate as currently described in the prospectus, or that the fund will not have to change any portfolio's investment objective or policies. We can modify your policy if we believe it will prevent you from being considered the owner of your policy's proportionate share of the assets of the separate account. Policy exchanges fall under Section Policy exchanges 1035(a) of the tax code. If you exchange your entire policy for another one that insures the same person, it generally will be treated as a tax-free exchange and, if so, will not result in the recognition of gain or loss. If the person insured by the policy is changed, the exchange will be treated as a taxable exchange. Change of ownership You may have taxable income if you transfer ownership of your policy, sell your policy, or change the ownership of it in any way. There are special rules for corporate-owned Corporate owners policies. You should consult your There are special tax issues for corporate owners: tax adviser. . using your policy to fund deferred compensation arrangements for employees Section 59A of the tax code deals with the has special tax consequences environmental tax. . corporate ownership of a policy may affect your exposure to the alternative minimum tax and the environmental tax.
50 -------------------------------------------------------------------------------- Conventional life insurance policies The tax treatment of your policy will depend upon whether it is a type of contract known as a modified endowment contract. We describe modified endowment Under Section 7702A of the tax code, contracts later in this section. If your policy is not a modified endowment policies that are not classified as contract, it will be treated as a conventional life insurance policy and will modified endowment contracts are taxed as have the following tax treatment: conventional life insurance policies. Surrendering your policy The cost basis in your policy is generally When you surrender, or cash in, your policy, you'll generally be taxed on the the premiums you've paid plus any taxable difference, if any, between the cash surrender value and the cost basis in your distributions less any withdrawals or policy. premiums previously recovered that were not taxable. Making a withdrawal If you make a withdrawal after your policy has been in force for 15 years, you'll only be taxed on the amount you withdraw that exceeds the cost basis in the policy. Special rules apply if you make a withdrawal within the first 15 policy years and it's accompanied by a reduction in benefits. In this case, there is a special formula under which you may be taxed on all or a portion of the withdrawal amount. Taking out a loan If you take out a loan, you will not pay tax on the loan amount unless your policy is surrendered or lapses and you have not repaid your outstanding loan amount. The interest you pay, or that's accrued, on a loan is generally nondeductible. Ask your tax adviser for more information. Loans and corporate-owned policies If you borrow money to buy or carry certain life insurance policies, tax law provisions may limit the deduction of interest payable on loan proceeds. If the taxpayer is an entity that's a direct or indirect beneficiary of certain life insurance, endowment or annuity contracts, a portion of the entity's deductions for loan interest may be disallowed, even though this interest may relate to debt that's completely unrelated to the contract. There may be a limited exception that applies to contracts issued on 20% owners, officers, directors or employees of the entity. For more information about this exception, you should consult your tax adviser. -------------------------------------------------------------------------------- Modified endowment contracts A modified endowment contract is a special type of life insurance policy. If your policy is a modified endowment contract, it will have the tax treatment Section 7702A of the tax code defines a described below. Any distributions you receive during the life of the policy class of life insurance policies known are treated differently than under conventional life insurance policies. as modified endowment contracts. Like Withdrawals, loans, pledges, assignments and the surrender of your policy are other life insurance policies, the death all considered distributions and may be subject to tax on an income-first basis benefit proceeds paid to your beneficiary and a 10% penalty. generally are not subject to federal income tax and your policy's accumulated When a policy becomes a modified endowment contract value grows on a tax-deferred basis A life insurance policy becomes a modified endowment contract if, at any time until you receive a cash distribution. during the first seven policy years, the sum of actual premiums paid exceeds the seven-pay limit. The seven-pay limit is the cumulative total of the level If there is a material change to your annual premiums (or seven-pay premiums) required to pay for the policy's future policy, like a change in the death death and endowment benefits. benefit, we may have to retest your policy and restart the seven-pay premium period to determine whether the change has caused the policy to become a modified endowment contract. 51
VARIABLE LIFE INSURANCE AND YOUR TAXES For example, if the seven-pay premiums were $1,000 a year, the maximum premiums you could pay during the first seven years to avoid modified endowment treatment would be $1,000 in the first year, $2,000 through the first two years and $3,000 through the first three years, etc. Under this test, a Pacific Select Exec II - NY policy may or may not be a modified endowment contract, depending on the amount of premiums paid during the policy's first seven contract years or after a material change has been made to the policy. Surrendering your policy If you surrender your policy, you're taxed on the amount by which the cash surrender value exceeds the cost basis in the policy. Making a withdrawal or taking out a loan If you make a withdrawal or take out a loan from a modified endowment contract, you're taxed on the amount of the withdrawal or loan that's considered income, including all previously non-taxed gains. Income is the difference between the cash surrender value and the cost basis in your policy. It's unclear whether interest paid, or accrued, on a loan is considered interest for federal income tax purposes. If you borrow money to buy or carry certain life insurance policies, tax law provisions may limit the deduction of interest payable on loan proceeds. You should consult your tax adviser. All modified endowment contracts we or our affiliates issue to you in a calendar year are treated as a single contract when we calculate whether a distribution amount is subject to tax. 10% penalty tax If any amount you receive from a modified endowment contract is taxable, you may also have to pay a penalty tax equal to 10% of the taxable amount. A taxpayer will not have to pay the penalty tax if any of the following exceptions apply: . you're at least 59 1/2 years old . you're receiving an amount because you've become disabled . you're receiving an amount that's part of a series of substantially equal periodic payments, paid out at least annually. These payments may be made for your life or life expectancy or for the joint lives or joint life expectancies of you and your beneficiaries. Distributions before a policy becomes a modified endowment contract If your policy fails the seven-pay test and becomes a modified endowment contract, any amount you receive or are deemed to have received during the two years before it became a modified endowment contract may be taxable. The distribution would be treated as having been made in anticipation of the policy's failing to meet the seven-pay test under Treasury Department regulations which are yet to be prescribed. -------------------------------------------------------------------------------- Policy riders Accelerated living benefits rider Amounts received under this rider should be generally excluded from taxable Please see the discussion of optional income under Section 101(g) of the tax code. riders in The death benefit. Benefits under the rider will be taxed, however, if they are paid to someone Please consult with your tax adviser if other than a person insured by the policy, and the person insured by the you want to exercise your rights under policy: this rider. . is a director, officer or employee of the person receiving the benefit, or . has a financial interest in a business of the person receiving the benefit.
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ABOUT PL&A Pacific Life & Annuity Company is a life insurance company based in Arizona. Our operations include life insurance, annuity and institutional products, group life and health insurance and various other insurance products and services. At the end of 1998, we had total assets of $337.9 million. PL&A is authorized to conduct life insurance and annuity business in the State of New York and certain other states. Our principal office is located at 700 Newport Center Drive, Newport Beach, California 92660. -------------------------------------------------------------------------------- How we're organized PL&A was incorporated in 1982 under the name of Pacific Financial Life Insurance Company. It merged with Pacific Financial Life Insurance Company of Arizona and assumed the name PM Group Life Insurance Company in transferring domicile from California to Arizona, which was completed in 1990. On January 1, 1999, we changed our name to our current name, PL&A. PL&A is a direct, wholly-owned subsidiary of Pacific Life Insurance Company. Pacific Life is a life insurance company based in California. Along with its subsidiaries and affiliates, Pacific Life's operations include life insurance, annuity, pension and institutional products, group employee benefits, broker- dealer operations, and investment advisory services. Pacific Life was established on January 2, 1868 under the name, Pacific Mutual Life Insurance Company of California. It was reincorporated as Pacific Mutual Life Insurance Company on July 22, 1936. On September 1, 1997, Pacific Life converted from a mutual life insurance company to a stock life insurance company. Pacific Life is a subsidiary of Pacific LifeCorp, a holding company, which in turn is a subsidiary of Pacific Mutual Holding Company, a mutual holding company. Under their charters, Pacific Mutual Holding Company must always hold at least 51% of the outstanding voting stock of Pacific LifeCorp. Pacific LifeCorp must always own 100% of the voting stock of Pacific Life. Owners of Pacific Life's annuity contracts and life insurance policies have certain membership interests in Pacific Mutual Holding Company. They have the right to vote on the election of the Board of Directors of the mutual holding company and on other matters. They also have certain rights if the mutual holding company is liquidated or dissolved. -------------------------------------------------------------------------------- How policies are administered Pacific Life Insurance Company administers the policies sold under this prospectus. At the end of 1998, Pacific Life had over $89.6 billion of individual life insurance and total admitted assets of approximately $37.6 billion. In 1998, they were ranked the 18th largest life insurance carrier in the U.S. in terms of admitted assets. Pacific Life, together with its affiliated enterprises, has total assets and funds under management of $290 billion. They are authorized to conduct life and annuity business in the District of Columbia and in all states except New York. Pacific Life's principal office is at 700 Newport Center Drive, Newport Beach, CA 92660. 53
ABOUT PL&A -------------------------------------------------------------------------------- How policies are distributed Pacific Mutual Distributors, Inc. (PMD), our affiliate, is the distributor of our policies. PMD is located at 700 Newport Center Drive, Newport Beach, California 92660. PMD is registered as a broker-dealer with the SEC and is a member of the National Association of Securities Dealers (NASD). We pay PMD for its services as our distributor. The policies are sold by registered representatives of broker-dealers who have signed agreements with us and PMD. Registered representatives must be licensed to sell variable life insurance under the state insurance and securities regulations that apply. Broker-dealers must be registered with the SEC. How we pay broker-dealers We pay broker-dealers commission for promoting, marketing and selling our policies. Broker-dealers pay a portion of the commission to their registered representatives, under their own arrangements. Commissions are based on "target" premiums we determine. The commission we pay will vary with the agreement, but the most common schedule of commissions we pay is: A target premium is a hypothetical premium . 63% of premiums paid up to the first target premium in the first policy year that is used only to calculate commissions. . 4% of premiums paid up to the first target premium after the first policy year It varies with the death benefit option you . 4% of the premiums paid under targets 2-10 choose, the age of the person insured by . 2% of premiums paid in excess of the 10th target premium. the policy on the policy date, and the gender (unless unisex rates are required) We may pay broker-dealers an annual renewal commission of up to 0.20% of a and risk class of the person insured by policy's accumulated value less any outstanding loan amount. We calculate the the policy renewal amount monthly and it becomes payable on each policy anniversary. A policy's target premium will be less than the policy's guideline level premiums. We may also pay override payments, expense and marketing allowances, bonuses, wholesaler fees and training allowances. Registered representatives who meet certain sales levels can qualify for sales incentives programs we sponsor. We may also pay them non-cash compensation like expense-paid trips, expense-paid educational seminars, and merchandise. They can choose to receive their compensation on a deferred basis. -------------------------------------------------------------------------------- How our accounts work We own the assets in our general account and our separate account. We allocate your net premiums to these accounts according to the investment options you've chosen. General account We can provide you with reports of our Our general account includes all of our assets, except for those held in our ratings as an insurance company and our separate accounts. We guarantee you an interest rate for up to one year on any ability to pay claims with respect to our amount allocated to the fixed options. The rate is reset annually. The fixed general account assets. options are part of our general account, which we may invest as we wish, according to any laws that apply. We'll credit the guaranteed rate even if the investments we make earn less. Our ability to pay these guarantees is backed by our strength as a company. The fixed options are not securities, so they do not fall under any securities act. For this reason, the SEC has not reviewed the disclosure in this prospectus about the fixed options. However, other federal securities laws may apply to the accuracy and completeness of the disclosure about the fixed options.
54 Separate account You'll find the audited consolidated Amounts allocated to the variable investment options are held in our separate financial statements for PL&A later in account. The assets in this account are kept separate from the assets in our this section of the prospectus. We include general account and our other separate accounts, and are protected from our these financial statements to show our general creditors. strength as a company and our ability to meet our obligations under the policies. The separate account was established on September 24, 1998 under Arizona law under the authority of our Board of Directors. It's registered with the SEC as a type of investment company called a unit investment trust. The SEC does not oversee the administration or investment practices or policies of the account. The separate account is not the only The separate account is divided into variable accounts. Each variable account investor in the Pacific Select Fund. invests in shares of a designated portfolio of the Pacific Select Fund. We may Investment in the fund by other separate add variable accounts that invest in other portfolios of the fund or in other accounts for variable annuity contracts securities. and variable life insurance contracts could cause conflicts. For more We're the legal owner of the assets in the separate account, and pay its information, please see the Statement of operating expenses. The separate account is operated only for our variable life Additional Information for the Pacific insurance policies. We must keep enough money in the account to pay anticipated Select Fund. obligations under the insurance policies funded by the account, but we can transfer any amount that's more than these anticipated obligations to our general account. Some of the money in the separate account may include charges we collect from the account and any investment results on those charges. We cannot charge the assets in the separate account attributable to our reserves and other liabilities under the policies funded by the account with any liabilities from our other business. Similarly, the income, gains or losses, realized or unrealized, of the assets of any variable account belong to that variable account and are credited to or charged against the assets held in that variable account without regard to our other income, gains or losses. Making changes to the separate account We can add, change or remove any securities that the separate account or any variable account holds or buys, as long as we comply with the laws that apply. We can substitute shares of one Pacific Select Fund portfolio with shares of another portfolio or fund if: . any portfolio is no longer available for investment . our management believes that a portfolio is no longer appropriate in view of the purposes of the policy. We'll give you any required notice or receive any required approval from policy owners or the SEC before we substitute any shares. We'll comply with the filing or other procedures established by insurance regulators as required by law. We can add new variable accounts, which may include additional subaccounts of the separate account, to serve as investment options under the policies. These may be managed separate accounts or they may invest in a new portfolio of the fund, or in shares of another investment company or one of its portfolios, or in a suitable investment vehicle with a specified investment objective. We can add new variable accounts when we believe that it's warranted by marketing needs or investment conditions. We'll decide on what basis we'll make new accounts available to existing policy owners. 55
ABOUT PL&A We can also eliminate any of our variable accounts if we believe marketing, tax or investment conditions warrant it. We can terminate and liquidate any variable account. If we make any changes to variable accounts or substitution of securities, we can make appropriate changes to this policy or any of our other policies, by appropriate endorsement, to reflect the change or substitution. We will notify you if there is a material change in the investment policy of a Variable Account. The notice will inform you of your options, including your option to transfer from such Variable Account to the Fixed Account within 60 days after: . the effective date of the material change, or . the date we send you the notice, whichever is later. If we believe it's in the best interests of people holding voting rights under the policies and we meet any required regulatory approvals we can do the following: . operate the separate account as a management investment company, unit investment trust, or any other form permitted under securities or other laws . register or deregister the separate account under securities law . combine the separate account with one of our other separate accounts or our affiliates' separate accounts . combine one or more variable accounts . create a committee, board or other group to manage the separate account. . change the classification of any variable account. Taxes we pay We may be charged for state and local taxes. Currently, we pay these taxes because they are small amounts with respect to the policy. If these taxes increase significantly, we may deduct them from the separate account. We may charge the separate account for any federal, state and local taxes that apply to the separate account or to our operations. This could happen if our tax status or the tax treatment of variable life insurance changes. -------------------------------------------------------------------------------- Voting rights We're the legal owner of the shares of the Pacific Select Fund that are held by the variable accounts. We may vote on any matter at shareholder meetings of the fund. However, we are required by law to vote as you instruct on the shares relating to your allocation in a variable investment option. This is called your voting interest. Your voting interest is calculated as of a day set by the Board of Trustees of the fund called the record date. Your voting interest equals the accumulated value in a variable investment option divided by the net asset value of a share of the corresponding portfolio. Fractional shares are included. If allowed by law, we may change how we calculate your voting interest. We'll send you documents from the fund called proxy materials. They include information about the items you'll be voting on and forms for you to give us your instructions. We'll vote shares held in the separate account for which we do not receive voting instructions in the same proportion as all other shares in the portfolio held by that separate account for which we've received timely instructions. We'll vote shares of any portfolio we hold in our general account in the same proportion as the total votes for all of our separate accounts, including this separate account.
56 If the law changes to allow it, we can vote as we wish on shares of the portfolios held in the separate account. When required by state insurance regulatory authorities, we may disregard voting instructions that: . would change a portfolio's investment objective or subclassification . would approve or disapprove an investment advisory contract. We may disregard voting instructions on a change initiated by policy owners that would change a portfolio's investment policy, investment adviser or portfolio manager if: . our disapproval is reasonable . we determine in good faith that the change would be against state law or otherwise be inappropriate, considering the portfolio's objectives and purpose, and considering what effect the change would have on us. If we disregard any voting instructions, we'll include a summary of the action we took and our reasons for it in the next report to policy owners. -------------------------------------------------------------------------------- Preparing for the year 2000 We rely significantly on Pacific Life's computer systems and applications in our daily operations. Pacific Life long ago recognized the challenges associated with the Year 2000 date change. This change involves the ability of computer systems to properly recognize the Year 2000. The inability to do so could result in major failures or miscalculations. Pacific Life began prior to 1995 to assess and plan for the potential impact of the Year 2000. More recently, Pacific Life has been executing a company-wide plan adopted during 1998 which called for correction or replacement of remaining non-compliant systems by December 31, 1998. Pacific Life has successfully executed this project plan to date. Virtually all affected systems were remediated and tested in time for use during 1998 year- end processing cycles. Although it is not possible to certify that any system will be completely free of Year 2000 problems, they have performed extensive testing to identify and deal with such potential problems. Additionally, most of the company's critical systems were subject to an independent third-party review process which used sophisticated automated tools to identify Year 2000 related bugs. The results have been very positive and Pacific Life feels the company's internal systems are positioned well for the date change in the century. Pacific Life plans to continue to test and re-test throughout 1999 and will respond promptly should any problems arise at any time thereafter. Pacific Life is continuing to work on contingency plans for critical business processes. When appropriate, alternative methods and procedures are being developed to work around unanticipated problems. In addition to the above, Pacific Life will continue to carefully evaluate responses from vendors and significant business partners regarding the compliance of their critical business processes and products. Although ultimately PL&A and Pacific Life cannot be responsible for the Year 2000 compliance efforts of these outside entities, we will take appropriate steps wherever possible to develop contingency plans to address vendors and partners deemed non-compliant. 57
ABOUT PL&A Expenses to make Pacific Life's systems Year 2000 compliant are currently estimated to range from $10 million to $12 million, which excludes the cost of their personnel who support Year 2000 compliance efforts. Pacific Life does not anticipate any other material future costs associated with the Year 2000 compliance projects, although there can be no assurance. These Year 2000 related statements are designated as "Year 2000 Readiness Disclosure" pursuant to the Year 2000 Information Readiness Disclosure Act, enacted October 19, 1998. -------------------------------------------------------------------------------- State regulation We're subject to the laws of the state of Arizona governing insurance companies and to regulations issued by the Commissioner of Insurance of Arizona. In addition, we're subject to the insurance laws and regulations of the other states and jurisdictions in which we're licensed or may become licensed to operate. An annual statement in a prescribed form must be filed with the Commissioner of Insurance of Arizona and with regulatory authorities of other states on or before March 1st in each year. This statement covers our operations for the preceding year and our financial condition as of December 31st of that year. Our affairs are subject to review and examination at any time by the Commissioner of Insurance or his agents, and subject to full examination of our operations at periodic intervals. -------------------------------------------------------------------------------- Legal proceedings and legal matters The separate account is not involved in any legal proceedings that would have a material effect on policy owners. Legal matters concerning the issue and sale of the life insurance policies described in this prospectus, our organization and authority to issue the policies under Arizona law, and the validity of the forms of the policies under Arizona law, have been passed upon by our general counsel. Legal matters relating to federal securities laws and federal income tax laws have been passed upon by Dechert Price & Rhoads. -------------------------------------------------------------------------------- Registration statement We've filed a registration statement with the SEC for Pacific Select Exec II - NY, under the Securities Act of 1933. The SEC's rules allow us to omit some of the information required by the registration statement from this prospectus. You can ask for it from the SEC's office in Washington, D.C. They may charge you a fee. -------------------------------------------------------------------------------- Management The following is a list of our directors and certain officers, along with some information about their business activities over the past five years. They do not receive any compensation from the separate account for services they provide to it nor do we pay any separately allocable compensation for these services. Unless otherwise indicated, the business address of each of these people is c/o Pacific Life & Annuity Company, 700 Newport Center Drive, Newport Beach, California 92660.
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NAME AND POSITION PRINCIPAL OCCUPATION DURING THE LAST FIVE YEARS William L. Ferris Director, President and Chief Executive Officer of PL&A; Director of American Cancer Director, President Society of Orange County and of California Health Decisions. and Chief Executive Officer Thomas C. Sutton Director and Chairman of the Board of Pacific Life & Annuity Company; Director, Director and Chairman of the Board and Chief Executive Officer of Pacific Life Insurance Company; Chairman of the Director, Chairman of the Board and Chief Executive Officer of Pacific LifeCorp, Board August 1997 to present; Director, Chairman of the Board and Chief Executive Officer of Pacific Mutual Holding Company, August 1997 to present; Trustee and Chairman of the Board and Former President of Pacific Select Fund; Management Board Member of PIMCO Advisors L.P., December 1997 to present; Former Equity Board Member of PIMCO Advisors L.P.; Former Director of Pacific Corinthian Life Insurance Company; Director of Newhall Land & Farming; The Irvine Company; Edison International; and similar positions with other affiliated companies of Pacific Life Insurance Company. David R. Carmichael Director of PL&A; Senior Vice President and General Counsel of PL&A, July 1998 to Director, Senior present; Director (since August 1997), Senior Vice President and General Counsel of Vice President and Pacific Life Insurance Company; Senior Vice President and General Counsel of Pacific General Counsel LifeCorp, August 1997 to present; Senior Vice President and General Counsel of Pacific Mutual Holding Company, August 1997 to present; Director of: Association of California Life and Health Insurance Companies and Association of Life Insurance Counsel. Audrey L. Milfs Director, Vice President (since February 1999) and Secretary of PL&A; Director Director, Vice (since August 1997), Vice President and Corporate Secretary of Pacific Life President and Insurance Company; Vice President and Corporate Secretary of Pacific LifeCorp, Secretary August 1997 to present; Vice President and Corporate Secretary of Pacific Mutual Holding Company, August 1997 to present; Secretary of Pacific Select Fund; similar positions with other affiliated companies of Pacific Life Insurance Company. Glenn S. Schafer Director of PL&A; Director (since November 1994) and President (since January 1995) Director of Pacific Life Insurance Company; Executive Vice President and Chief Financial Officer of Pacific Life Insurance Company, April 1991 to January 1995; Director and President of Pacific LifeCorp, August 1997 to present; Director and President of Pacific Mutual Holding Company, August 1997 to present; President (since February 1999) and Former Trustee of Pacific Select Fund; Management Board Member of PIMCO Advisors L.P., December 1997 to present; Former Equity Board Member of PIMCO Advisors L.P.; Former Director of Pacific Corinthian Life Insurance Company; and similar positions with other affiliated companies of Pacific Life Insurance Company. Khanh T. Tran Senior Vice President (since February 1999) and Chief Financial Officer of PL&A; Senior Vice Director (since August 1997), Senior Vice President and Chief Financial Officer of President and Chief Pacific Life Insurance Company, June 1996 to present; Vice President and Treasurer Financial Officer of Pacific Life, November 1991 to June 1996; Senior Vice President and Chief Financial Officer of Pacific LifeCorp, August 1997 to present; Senior Vice President and Chief Financial Officer of Pacific Mutual Holding Company, August 1997 to present; Senior Vice President and Chief Financial Officer of other affiliated companies of Pacific Life Insurance Company. Lynn C. Miller Executive Vice President of PL&A, July 1998 to present; Executive Vice President of Executive Vice Pacific Life Insurance Company, January 1995 to present; Senior Vice President of President Pacific Life Insurance Company 1989 to 1995. Brian D. Klemens Vice President and Treasurer of PL&A, February 1999 to present; Vice President and Vice President and Treasurer of Pacific Life Insurance Company, December 1998 to present; Assistant Treasurer Vice President, Accounting and Assistant Controller of Pacific Life Insurance Company, April 1994 to December 1998; Vice President and Treasurer of Pacific LifeCorp, June 1999 to present; Vice President and Treasurer of Pacific Mutual Holding Company, June 1999 to present; Vice President and Treasurer of other affiliated companies of Pacific Life Insurance Company. 59
ABOUT PL&A -------------------------------------------------------------------------------- Financial statements The next several pages contain the audited financial statements-statutory basis for PM Group Life Insurance Company of December 31, 1998 and 1997 and for the two years ended December 31, 1998, which are included in this prospectus only so you can assess our ability to meet our obligations under the policies. Unaudited financial statements-statutory basis for PL&A as of , 1999 and for the months ended , 1999 and 1998 are also included. -------------------------------------------------------------------------------- Experts The audited financial statements-statutory basis for PM Group Life Insurance Company as of December 31, 1998 and 1997 and for the two years ended December 31, 1998 included in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports appearing herein, and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
60 PM GROUP LIFE INSURANCE COMPANY Financial Statements - Statutory Basis as of and for the years ended December 31, 1998 and 1997 and Independent Auditors' Report 61 INDEPENDENT AUDITORS' REPORT PM Group Life Insurance Company: We have audited the accompanying statements of admitted assets, liabilities and capital and surplus - statutory basis of PM Group Life Insurance Company (the "Company") as of December 31, 1998 and 1997, and the related statements of operations - statutory basis, capital and surplus - statutory basis, and cash flows - statutory basis for the years 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 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. 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. As described more fully in Note 1 to the financial statements, the Company prepared these financial statements using accounting practices prescribed or permitted by the Insurance Department of the State of Arizona which practices differ from generally accepted accounting principles. The effects on the financial statements of the variances between the statutory basis of accounting and generally accepted accounting principles are presumed to be material. In our opinion, because of the effects of the matter described in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with generally accepted accounting principles, the financial position of PM Group Life Insurance Company as of December 31, 1998 and 1997, or the results of its operations or its cash flows for the years then ended. In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities and capital and surplus of PM Group Life Insurance Company as of December 31, 1998 and 1997, and the results of its operations and its cash flows for the years then ended, on the basis of accounting described in Note 1. DELOITTE & TOUCHE LLP Costa Mesa, California February 22, 1999 62 PM Group Life Insurance Company STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL AND SURPLUS-STATUTORY BASIS
December 31, 1998 1997 - -------------------------------------------------------------------------- (In Thousands) ADMITTED ASSETS Bonds $217,096 $227,199 Preferred stocks 5,662 5,215 Common stocks 17,372 9,419 Mortgage loans 11,118 14,079 Real estate 687 Cash and short-term investments 36,922 33,185 Premiums due and uncollected 26,186 25,635 Other assets 23,555 22,761 - -------------------------------------------------------------------------- TOTAL ADMITTED ASSETS $337,911 $338,180 - -------------------------------------------------------------------------- LIABILITIES AND CAPITAL AND SURPLUS Liabilities: Policy reserves $119,743 $126,716 Policy benefits payable 83,792 85,338 Deposit funds 7,748 9,882 Accrued general expenses 11,640 13,193 Other liabilities 31,027 24,521 Asset valuation reserve 7,262 6,870 - -------------------------------------------------------------------------- TOTAL LIABILITIES 261,212 266,520 - -------------------------------------------------------------------------- Capital and Surplus: Common stock - $1 par value; 5 million shares authorized; 2.9 million shares issued and outstanding 2,900 2,900 Paid-in surplus 37,607 37,607 Unassigned surplus 36,192 31,153 - -------------------------------------------------------------------------- TOTAL CAPITAL AND SURPLUS 76,699 71,660 - -------------------------------------------------------------------------- TOTAL LIABILITIES AND CAPITAL AND SURPLUS $337,911 $338,180 - --------------------------------------------------------------------------
See Independent Auditors' Report and Notes to Financial Statements - Statutory Basis 63 PM Group Life Insurance Company STATEMENTS OF OPERATIONS-STATUTORY BASIS
Years Ended December 31, 1998 1997 - --------------------------------------------------------------- (In Thousands) REVENUES Premiums $ 499,481 $ 439,629 Net investment income 23,795 23,143 Other income 4,510 2,695 - --------------------------------------------------------------- TOTAL REVENUES 527,786 465,467 - --------------------------------------------------------------- BENEFITS AND EXPENSES Current and future policy benefits 404,671 330,435 Operating expenses 114,774 110,288 - --------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 519,445 440,723 - --------------------------------------------------------------- INCOME BEFORE FEDERAL INCOME TAXES 8,341 24,744 Federal income taxes 2,237 8,581 - --------------------------------------------------------------- NET GAIN FROM OPERATIONS 6,104 16,163 Net realized capital gains (losses) (1,014) 1,228 - --------------------------------------------------------------- NET INCOME $ 5,090 $ 17,391 - ---------------------------------------------------------------
See Independent Auditors' Report and Notes to Financial Statements - Statutory Basis 64 PM Group Life Insurance Company STATEMENTS OF CAPITAL AND SURPLUS-STATUTORY BASIS
Common Stock ------------- Paid-in Unassigned Shares Amount Surplus Surplus Total - ---------------------------------------------------------------------- (In Thousands) BALANCES, JANUARY 1, 1997 2,900 $2,900 $37,607 $ 22,685 $ 63,192 Net income 17,391 17,391 Dividend paid to parent (14,000) (14,000) Other surplus transactions 5,077 5,077 - ---------------------------------------------------------------------- BALANCES, DECEMBER 31, 1997 2,900 2,900 37,607 31,153 71,660 Net income 5,090 5,090 Other surplus transactions (51) (51) - ---------------------------------------------------------------------- BALANCES, DECEMBER 31, 1998 2,900 $2,900 $37,607 $ 36,192 $ 76,699 - ----------------------------------------------------------------------
See Independent Auditors' Report and Notes to Financial Statements - Statutory Basis 65 PM Group Life Insurance Company STATEMENTS OF CASH FLOWS-STATUTORY BASIS
Years Ended December 31, 1998 1997 - ------------------------------------------------------ (In Thousands) CASH FLOWS FROM OPERATING ACTIVITIES Receipts Premiums $ 500,017 $ 444,232 Net investment income 22,048 21,363 Other, net 3,238 8,598 Payments Policy benefit payments (408,288) (326,113) Operating expenses (117,981) (106,716) Federal income taxes (3,377) (9,688) - ------------------------------------------------------ NET CASH PROVIDED BY (USED IN) OPERATING AC- TIVITIES (4,343) 31,676 - ------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds Bonds 72,754 56,909 Stocks 3,736 3,768 Mortgage loans 3,274 2,469 Other 8,180 2,623 Payments for the purchases of Bonds (63,816) (79,015) Stocks (7,608) (3,300) Other (8,440) (7,649) - ------------------------------------------------------ NET CASH PROVIDED BY (USED IN) INVESTING AC- TIVITIES 8,080 (24,195) - ------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid to parent (14,000) - ------------------------------------------------------ Change in cash and short- term investments 3,737 (6,519) Cash and short-term in- vestments, beginning of year 33,185 39,704 - ------------------------------------------------------ CASH AND SHORT-TERM IN- VESTMENTS, END OF YEAR $ 36,922 $ 33,185 - ------------------------------------------------------
See Independent Auditors' Report and Notes to Financial Statements - Statutory Basis 66 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS PM Group Life Insurance Company ("PM Group") is a stock life insurance company domiciled in the State of Arizona, and a wholly-owned subsidiary of Pacific Life Insurance Company ("Pacific Life"), formerly Pacific Mutual Life Insurance Company ("Pacific Mutual"). PM Group offers group health, dental and life products to three principal market segments in the United States. Its Group Employee Benefits Operation serves larger employer groups of fifty or more lives, while the Multiple Employer Trust unit insures smaller employer groups with less than fifty lives per group. The Pacific Risk Management Services unit offers stop loss and life products to self- funded plan sponsors. Pursuant to consent received from the Insurance Department of the State of California, Pacific Mutual implemented a plan of conversion to form a mutual holding company structure (the "Conversion") on September 1, 1997. The Conversion created Pacific LifeCorp, an intermediate stock holding company and Pacific Mutual Holding Company ("PMHC"), a mutual holding company. Pacific Mutual was converted to a stock life insurance company and renamed Pacific Life. Under their respective charters, PMHC must always own at least 51% of the outstanding voting stock of Pacific LifeCorp, and Pacific LifeCorp must always own 100% of the voting stock of Pacific Life. BASIS OF PRESENTATION These financial statements have been prepared in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of Arizona, which is a comprehensive basis of accounting other than generally accepted accounting principles ("GAAP"). Prescribed statutory accounting practices include a variety of publications of the National Association of Insurance Commissioners ("NAIC"), as well as state laws, regulations, and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. Accounting practices prescribed or permitted by the Insurance Department of the State of Arizona differ in certain respects, which in some cases are materially different from GAAP. The significant differences are noted below: An interest maintenance reserve ("IMR") is established to capture realized investment gains and losses, net of tax, on the sale of fixed income investments resulting from changes in the general level of interest rates, and is amortized into income over the remaining years to expected maturity of the assets sold under statutory accounting practices; no such reserve is required under GAAP. An asset valuation reserve ("AVR"), based upon a formula prescribed by the NAIC, is established as a liability to offset potential non- interest related investment losses, and changes in the AVR are charged or credited directly to surplus under statutory accounting practices; no such reserve is required under GAAP. Investments in bonds and preferred stocks are generally carried at amortized cost under statutory accounting practices; under GAAP, investments in bonds and preferred stocks, other than those classified as held to maturity, are carried at estimated fair value. Certain assets, principally deferred income taxes and furniture and equipment, are designated as non admitted and excluded from assets by a direct charge to surplus under statutory accounting practices; under GAAP, such assets are carried on the statement of financial condition with appropriate valuation allowances. In March 1998, the NAIC adopted the Codification of Statutory Accounting Principles ("Codification"). The Codification, which is intended to standardize regulatory accounting and reporting for the insurance industry, is 67 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) proposed to be effective January 1, 2001. However, statutory accounting principles will continue to be established by individual state laws and permitted practices and it is uncertain when, or if, the state of Arizona will require adoption of Codification for the preparation of statutory financial statements. PM Group has not finalized the quantification of the effects of Codification on its statutory financial statements. The following is a reconciliation of statutory capital and surplus, as reflected in the accompanying financial statements, to stockholder's equity on a GAAP basis:
December 31, 1998 1997 -------------------- (In Thousands) Statutory capital and surplus as reported herein $ 76,699 $ 71,660 Non admitted deferred income tax 19,383 16,632 Asset valuation reserve 7,262 6,870 Unrealized gain on securities 3,874 18,740 Other non admitted assets 2,309 3,102 Interest maintenance reserve 1,389 1,186 Deferred tax on unrealized gains on securities (4,877) (9,380) Other (1,891) (2,084) -------------------- Stockholder's equity - GAAP basis $104,148 $106,726 --------------------
There were no significant differences between statutory net income of $5.1 million and GAAP net income of $5.8 million for the year ended December 31, 1998 and statutory net income of $17.4 million and GAAP net income of $17.3 million for the year ended December 31, 1997. PM Group's significant statutory accounting practices are described below. INVESTMENTS Bonds qualifying for amortization are carried at amortized cost; all other bonds are carried at prescribed values. Preferred stocks are principally stated at amortized cost. Common stocks are carried at market value. Mortgage loans are stated at unpaid principal balances. Real estate is valued at the lower of depreciated cost or market, less related mortgage debt. Real estate is depreciated using the straight-line method over 5 to 30 years. Short-term investments are carried at amortized cost which approximates estimated fair value. Short-term investments generally consist of bonds, commercial paper and money market instruments whose maturities at the time of acquisition were one year or less. The AVR is computed in accordance with a prescribed formula and is designed to stabilize surplus against valuation and credit-related losses for certain invested assets. Changes to the AVR are reported as direct additions to, or deductions from, surplus. The IMR results in the deferral of after-tax realized capital gains and losses attributable to interest rate fluctuations on fixed income investments. These capital gains and losses are amortized into investment income over the remaining life of the investment sold. The IMR of $1.4 million and $1.2 million as of December 31, 1998 and 1997, respectively, is included in other liabilities on the accompanying statements of admitted assets, liabilities and capital and surplus - statutory basis. Net realized capital gains and losses are determined on the specific identification method and are presented net of Federal capital gains tax and transfers to the IMR. 68 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Derivatives are used principally for hedging purposes and are valued consistently with the hedged items. POLICY RESERVES AND DEPOSIT FUNDS Medical expense claim reserves are based on PM Group's actual loss experience. Life insurance reserves, including premium waivers, are based on various tabular methods and actual loss experience. Disabled life reserves are determined using various tabular reserve methods. The liability for deposit funds is based primarily on the policyholders' equity in their deposit accounts, including credited interest. REVENUES AND EXPENSES Premiums are recognized as revenue over the premium paying period. Investment income is recorded as earned. Expenses, including policy acquisition costs, and Federal income taxes are charged to operations as incurred. FEDERAL INCOME TAXES PM Group's operations are included in the consolidated Federal income tax return of PMHC, PM Group's ultimate parent. PM Group is allocated an income tax expense based on the effect of including its operations in the consolidated provision. Deferred taxes are provided for as permitted by the Insurance Department of the State of Arizona. The net deferred tax asset is non admitted. This practice has no effect on total surplus. OTHER SURPLUS TRANSACTIONS Other surplus transactions primarily consist of unrealized capital gains and losses, changes in non admitted assets and change in the AVR. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value of financial instruments disclosed in Notes 2 and 3 has been determined using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts PM Group could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. RISK-BASED CAPITAL Risk-based capital is a method developed by the NAIC to measure the minimum amount of capital appropriate for an insurance company to support its overall business operations in consideration of its size and risk profile. The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. The adequacy of a company's actual capital is measured by comparing it to the risk-based capital as determined by the formulas. Companies below minimum risk-based capital requirements are classified within certain levels, each of which requires specified corrective action. As of December 31, 1998 and 1997, PM Group exceeded the minimum risk-based capital requirements. 69 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) BUSINESS RISKS PM Group operates in a business environment which is subject to various risks and uncertainties. PM Group's group health insurance is subject to varying levels of regulation. The United States Congress has, from time to time, considered various health care proposals and several states have enacted health care reform legislation. Although it is not possible to predict what changes may be adopted at the state or Federal level, certain changes could have a negative impact upon the group health business of PM Group. USE OF ESTIMATES The preparation of financial statements in conformity with accounting practices prescribed or permitted by regulatory authorities requires management to make estimates and assumptions that affect the reported amounts of admitted 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. RECLASSIFICATIONS Certain prior year amounts have been reclassified to conform to the 1998 financial statement presentation. 70 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 2. INVESTMENTS IN DEBT SECURITIES The statement value, gross unrealized gains and losses, and estimated fair value of debt securities are shown below. Debt securities include bonds, redeemable preferred stocks and short-term investments. Short-term investments amounted to $38.0 million and $31.1 million as of December 31, 1998 and 1997, respectively. The estimated fair value of publicly traded securities is based on quoted market prices. For securities not actively traded, estimated fair values were provided by independent pricing services specializing in "matrix pricing" and modeling techniques. PM Group also estimates certain fair values based on interest rates, credit quality and average maturity or from securities with comparable trading characteristics.
Gross Unrealized Statement ---------------- Estimated Value Gains Losses Fair Value ------------------------------------- (In Thousands) December 31, 1998: ------------------ U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 6,145 $ 114 $ 3 $ 6,256 Obligations of states, political subdivisions and foreign governments 8,409 345 16 8,738 Corporate securities 157,844 3,189 952 160,081 Mortgage-backed and asset-backed securities 82,730 1,462 225 83,967 Redeemable preferred stock 4,862 165 6 5,021 ------------------------------------- Total $259,990 $5,275 $1,202 $264,063 ------------------------------------- December 31, 1997: ------------------ U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 5,907 $ 56 $ 5,963 Obligations of states, political subdivisions and foreign governments 7,605 228 7,833 Corporate securities 143,201 20,115 $429 162,887 Mortgage-backed and asset-backed securities 101,613 1,591 274 102,930 Redeemable preferred stock 5,203 165 193 5,175 ------------------------------------- Total $263,529 $22,155 $896 $284,788 -------------------------------------
The carrying value and estimated fair value of debt securities as of December 31, 1998, by contractual repayment date of principal, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Statement Estimated Value Fair Value --------------------- (In Thousands) Due in one year or less $ 55,829 $ 55,837 Due after one year through five years 95,381 96,983 Due after five years through ten years 20,987 21,652 Due after ten years 5,063 5,624 --------------------- 177,260 180,096 Mortgage-backed and asset-backed securities 82,730 83,967 --------------------- Total $259,990 $264,063 ---------------------
71 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 2. INVESTMENTS IN DEBT SECURITIES (Continued) Proceeds from sales of investments in debt securities were $35.8 million and $39.0 million for the years ended December 31, 1998 and 1997, respectively. Gross gains of $3.0 million and $16,000 and gross losses of $0 and $715,000 were realized on those sales for the years ended December 31, 1998 and 1997, respectively. 3. FINANCIAL INSTRUMENTS The estimated fair values of PM Group's financial instruments, including debt securities (Note 2), are as follows:
December 31, 1998 December 31, 1997 ----------------- ----------------- Statement Estimated Statement Estimated Value Fair Value Value Fair Value ------------------------------------------- (In Thousands) Assets: Debt securities $259,990 $264,063 $263,529 $284,788 Preferred and common stocks 18,172 18,172 9,431 9,445 Mortgage loans 11,118 12,396 14,079 15,775 Liabilities: Deposit funds 7,748 7,748 9,882 9,882 Derivative financial instrument: Asset swap contract (2,327)
The following methods and assumptions were used to estimate the fair value of these financial instruments as of December 31, 1998 and 1997: PREFERRED AND COMMON STOCKS The estimated fair values are based on quoted market prices or dealer quotes. MORTGAGE LOANS The estimated fair value of the mortgage loan portfolio is determined by discounting the estimated future cash flows, using a year-end market rate which is applicable to the yield, credit quality and average maturity of the composite portfolio. DERIVATIVE FINANCIAL INSTRUMENT PM Group used an asset swap contract to manage interest rate and equity risk to better match portfolio duration to liabilities. Asset swap contracts involve the exchange of upside equity potential for fixed income streams. The amounts to be received or paid pursuant to the agreement are accrued and recognized through an adjustment to net investment income in the accompanying statements of operations - statutory basis over the life of the agreement. The asset swap contract matured during 1998. As of December 31, 1997 the asset swap contract had a notional principal amount of $5.0 million. DEPOSIT FUNDS The estimated fair value of deposit funds with no defined maturities is the amount payable on demand. 72 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 4. LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES Activity in the liability for unpaid claims and claim adjustment expenses, which is included in both policy reserves and policy benefits payable on the accompanying statements of admitted assets, liabilities and capital and surplus - statutory basis, is summarized as follows:
Years Ended December 31, 1998 1997 ------------------ (In Thousands) Balance at January 1 $139,533 $118,712 Less reinsurance recoverables 755 1,009 ------------------ Net balance at January 1 138,778 117,703 ------------------ Incurred related to: Current year 415,300 350,231 Prior years (18,282) (17,973) ------------------ Total incurred 397,018 332,258 ------------------ Paid related to: Current year 305,894 241,508 Prior years 93,596 68,920 ------------------ Total paid 399,490 310,428 ------------------ Net balance at December 31 136,306 139,533 Plus reinsurance recoverables 119 755 ------------------ Balance at December 31 $136,425 $140,288 ------------------
As a result of payment of prior years estimated claims, the provision for claims and claim adjustment expenses decreased by $18.3 million and $18.0 million for the years ended December 31, 1998 and 1997, respectively. This reduction is primarily due to lower than anticipated settlement of claims and reduced claim adjustment expenses. 5. RELATED PARTY TRANSACTIONS Pacific Life provides services of certain management and other personnel, and other support services to PM Group. Services provided include employee participation in a pension plan and postretirement health care and life insurance plans maintained by Pacific Life. Charges for these services amounted to $12.1 million and $13.1 million for the years ended December 31, 1998 and 1997, respectively, and are included in operating expenses on the accompanying statements of operations - statutory basis. PM Group permits certain officers and employees to defer a portion of current cash compensation under a deferred compensation plan maintained by Pacific Life. Interest accrued to this plan amounted to $312,375 and $252,886 for the years ended December 31, 1998 and 1997, respectively. Under a reinsurance and service agreement, which terminated on January 1, 1999, PM Group assumed substantially all of Pacific Life's group life and health insurance. Premiums of $99.6 million and $98.6 million and benefits of $95.1 million and $82.1 million were assumed for the years ended December 31, 1998 and 1997, respectively. Amounts receivable under this agreement were $25.0 million and $16.8 million as of December 31, 1998 and 1997, respectively. 73 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 6. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE PLANS PM Group participates in a defined benefit health care plan and a defined benefit life insurance plan (the "Plans") sponsored by Pacific Life that provide postretirement benefits for all eligible retirees and their dependents. Generally, qualified employees may become eligible for these benefits if they reach normal retirement age, have been covered under Pacific Life's policy as an active employee for a minimum continuous period prior to the date retired, and have an employment date before January 1, 1990. The Plans contain cost-sharing features such as deductibles and coinsurance, and require retirees to make contributions which can be adjusted annually. Pacific Life's commitment to qualified employees who retire after April 1, 1994 is limited to specific dollar amounts. Pacific Life reserves the right to modify or terminate the Plans at any time. Pacific Life and PM Group utilize the accrual method of accounting for the costs of the Plans as prescribed by the Insurance Departments of the States of California and Arizona, respectively. PM Group has elected to amortize the transition obligation, which has been allocated from Pacific Life, of $3.7 million over twenty years. The transition obligation amortization amounted to $183,000 for each of the years ended December 31, 1998 and 1997. 7. DIVIDEND RESTRICTIONS Dividend payments by PM Group to its parent cannot exceed the lesser of 10% of surplus as regards to policyholders or the statutory net gain from operations, without prior approval from the Insurance Commissioner of the State of Arizona. During 1997, PM Group received approval to pay an extraordinary dividend in excess of these limitations. For the year ended December 31, 1997, PM Group paid a dividend of $14.0 million, of which $8.0 million was considered extraordinary. No dividends were paid during 1998. During 1999, PM Group can pay dividends amounting to approximately $6.1 million without prior approval from the Insurance Commissioner of the State of Arizona. 8. COMMITMENTS PM Group has outstanding commitments to make investments in bonds and limited partnerships as follows (In Thousands):
Year Ending December 31: ----------------------- 1999 $ 6,248 2000-2003 18,657 2004 and thereafter 5,370 ------- Total $30,275 -------
PM Group leases office facilities under various non-cancelable operating leases. Aggregate minimum future commitments are as follows (In Thousands):
Year Ending December 31: ----------------------- 1999 $2,190 2000 1,872 2001 1,443 2002 1,328 ------ Total $6,833 ------
74 PM Group Life Insurance Company NOTES TO FINANCIAL STATEMENTS-STATUTORY BASIS 9. LITIGATION PM Group is a respondent in a number of legal proceedings, some of which involve extra-contractual damages. In the opinion of management, the outcome of these proceedings is not likely to have a material adverse effect on the financial position of PM Group. 10. SUBSEQUENT EVENT PM Group is in the process of requesting from the New York Insurance Department authority to transact business in the State of New York. In connection with this request, the Insurance Department of the State of Arizona has approved the amendment of PM Group's certificate of authority to allow the sale of variable annuities and variable life insurance. PM Group is awaiting approval of its name change to Pacific Life & Annuity Company. ---------------------------------------------------------------------------- 75 PACIFIC LIFE & ANNUITY COMPANY Financial Statements - Statutory Basis as of , 1999 and December 31, 1998 and for the Months ended , 1999 and 1998 [To Be Inserted Later] 76
ILLUSTRATIONS ----------------------------------------------------------------------------------- If you ask us, we'll provide you with Illustrations 1 through 14, which appear on the following pages, illustrate how different kinds of illustrations: the death benefit, accumulated value and net cash surrender value of a hypothetical policy may vary over an extended period of time, based on certain . Illustrations similar to the ones in hypothetical rates of return. this prospectus, but based on information you give us about the age of the person These illustrations are based on a hypothetical policy with the following to be insured by the policy, their risk characteristics: class, the face amount, the death benefit and premium payments. . the annual premium is $10,000 . on the policy date, the person insured by the policy is a 45-year old male . Illustrations that show the allocation of select non-smoker premium payments to specified variable accounts. These will reflect the expenses The death benefit option, death benefit qualification test and the cost of of the portfolio of the fund in which the insurance rates vary by illustration, as follows: variable account invests. ----------------------------------------------------------------------------------- . Illustrations that use a hypothetical Face amount Death benefit Qualification test Cost of insurance rate gross rate of return that's greater than ----------------------------------------------------------------------------------- 12%. These are available only to certain Illustration 1 $451,940 Option A Guideline premium Current large institutional investors. Illustration 2 $451,940 Option A Guideline premium Guaranteed Illustration 3 $181,828 Option B Guideline premium Current Illustration 4 $181,828 Option B Guideline premium Guaranteed Illustration 5 $451,940 Option C Guideline premium Current Illustration 6 $451,940 Option C Guideline premium Guaranteed Illustration 7 $451,940 Option A Cash value accumulation Current Illustration 8 $451,940 Option A Cash value accumulation Guaranteed Illustration 9 $181,828 Option B Cash value accumulation Current Illustration 10 $181,828 Option B Cash value accumulation Guaranteed Illustration 11 $451,940 Option C Cash value accumulation Current Illustration 12 $451,940 Option C Cash value accumulation Guaranteed Illustration 13 $451,940 Option A Guideline premium Current Illustration 14 $451,940 Option A Guideline premium Guaranteed Assumptions Here are the assumptions we're using: . The hypothetical rates of return are equal to constant gross annual rates of 0%, 6% and 12%. . All premium payments are made at the beginning of the policy year. . An amount equal to the annual premium, after taxes, is invested to earn interest at 5% compounded annually for the second column of each table, Total premiums paid plus interest at 5%, which shows the amount that would accumulate. . No policy loans have been taken out. . The amounts shown for the death benefits, accumulated values and net cash surrender values reflect charges deducted from the variable accounts. This means that the net investment return on the variable accounts is lower than the gross investment return on the assets. . The amounts shown for the death benefits, accumulated values and net cash surrender values also reflect premium loads, cost of insurance, administrative charges, mortality and expense risk charges, and surrender charges. . Illustrations 1 through 12 assume total annual advisory fees and expenses of The fund's investment advisory fees and .77% of total average daily net assets of the fund. This reflects average expenses are shown in An overview of advisory fees of .69% and average expenses of .08% based upon fees and expenses Pacific Select Exec II - NY. of portfolios available as investment options under the policy. 77
ILLUSTRATIONS . Illustrations 13 and 14 assume total annual advisory fees and expenses of .72% of total average daily net assets of the fund. This reflects weighted average advisory fees of .65% and weighted average expenses of .08% based upon fees and expenses of portfolios available as investment options under the policy. . There are no charges against the variable accounts for income taxes but we reserve the right to impose charges in the future. Things to keep in mind Here are a few things to keep in mind when reviewing the illustrations: . The values shown would be different if, although the gross annual investment rates of return averaged 0%, 6% or 12% over a period of years, they also rose above or fell below those averages for individual policy years. . After we've deducted the charges and fund expenses described in the assumptions above, the illustrated gross annual investment rates of return of 0%, 6% and 12% correspond to approximate net annual rates of return of -.77%, 5.18%, and 11.14% for illustrations 1 through 12 and -.72%, 5.24%, and 11.19% for illustrations 13 and 14. . The amounts shown would be different if unisex insurance rates were used or if the people insured by the policy were females and insurance rates for females were used. . For the illustrations that assume current cost of insurance rates, the amounts shown would be different if either person insured by the policy was a smoker and rates for smokers were used. . The fund expenses used in the illustrations do not include foreign taxes. Here's what foreign taxes were for the year ended December 31, 1998: ------------------------------------------------- Percentage of average Portfolio daily net assets ------------------------------------------------- Aggressive Equity 0.01% Growth LT 0.01% Equity Income 0.01% Equity Index 0.01% International 0.23% Emerging Markets 0.26% -------------------------------------------------
78 ---------------------------------------------------------------------------- Illustration 1 Death benefit Option A and guideline premium test at current cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:A GUIDELINE PREMIUM TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ---------------------------------------------------------------------------- Flexible premium Total variable universal life premiums End of year DEATH BENEFIT assuming Illustration of death benefits, accumulated End of paid plus hypothetical gross annual investment values and net cash surrender values. policy interest at return of year 5% 0% 6% 12% All premium payments are illustrated as ---------------------------------------------------------------------------- if made at the beginning of the policy 1 $10,500 $451,940 $451,940 $451,940 year. 2 $21,525 $451,940 $451,940 $451,940 3 $33,101 $451,940 $451,940 $451,940 This illustration assumes no policy loans 4 $45,256 $451,940 $451,940 $451,940 or partial withdrawals have been made. 5 $58,019 $451,940 $451,940 $451,940 6 $71,420 $451,940 $451,940 $451,940 The death benefits, accumulated values and 7 $85,491 $451,940 $451,940 $451,940 cash surrender values will differ if 8 $100,266 $451,940 $451,940 $451,940 premiums are paid in different amounts 9 $115,779 $451,940 $451,940 $451,940 or frequencies. 10 $132,068 $451,940 $451,940 $451,940 15 $226,575 $451,940 $451,940 $451,940 The hypothetical investment rates shown 20 $347,193 $451,940 $451,940 $640,342 above and elsewhere in this prospectus 25 $501,135 $451,940 $451,940 $1,094,265 are illustrative only and should not be 30 $697,608 $451,940 $564,267 $1,760,824 interpreted as a representation of past 35 $948,363 $451,940 $762,929 $2,972,033 or future investment results. Actual ---------------------------------------------------------------------------- rates of return may be more or less than End of year End of year those shown and will depend on a number ACCUMULATED VALUE NET CASH SURRENDER VALUE of factors, including the investment End of assuming hypothetical gross assuming hypothetical gross allocations made to variable accounts by policy annual investment return of annual investment return of the owner and the experience of the year 0% 6% 12% 0% 6% 12% accounts. No representation can be made ---------------------------------------------------------------------------- by us, the separate account or the fund 1 $6,950 $7,431 $7,914 $1,235 $1,716 $2,198 that these hypothetical rates of return 2 $13,725 $15,120 $16,574 $8,010 $9,404 $10,859 can be achieved for any one year or 3 $20,408 $23,161 $26,151 $14,692 $17,445 $20,436 sustained over any period of time. 4 $26,996 $31,583 $36,763 $21,280 $25,868 $31,048 5 $33,502 $40,411 $48,527 $27,787 $34,696 $42,812 This is an illustration only. An 6 $39,929 $49,667 $61,573 $34,903 $44,642 $56,547 illustration is not intended to predict 7 $46,275 $59,374 $76,044 $42,506 $55,605 $72,275 actual performance. Interest rates, 8 $52,542 $69,556 $92,102 $50,029 $67,043 $89,590 dividends, and values set forth in the 9 $58,731 $80,238 $109,928 $57,475 $78,982 $108,671 illustration are not guaranteed. 10 $64,842 $91,449 $129,721 $64,842 $91,449 $129,721 15 $98,926 $162,644 $275,421 $98,926 $162,644 $275,421 20 $129,767 $254,085 $524,871 $129,767 $254,085 $524,871 25 $154,648 $372,321 $943,332 $154,648 $372,321 $943,332 30 $171,158 $527,352 $1,645,630 $171,158 $527,352 $1,645,630 35 $176,529 $726,600 $2,830,508 $176,529 $726,600 $2,830,508 ---------------------------------------------------------------------------- 79
ILLUSTRATIONS ------------------------------------------------------------------------------- Illustration 2 Death benefit Option A and guideline premium test at guaranteed cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:A GUIDELINE PREMIUM TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------- Flexible premium variable Total universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash policy interest at hypothetical gross annual investment return of surrender values. year 5% 0% 6% 12% ------------------------------------------------------------------------------- All premium payments are 1 $10,500 $451,940 $451,940 $451,940 illustrated as if made at the 2 $21,525 $451,940 $451,940 $451,940 beginning of the policy year. 3 $33,101 $451,940 $451,940 $451,940 4 $45,256 $451,940 $451,940 $451,940 This illustration assumes no 5 $58,019 $451,940 $451,940 $451,940 policy loans or partial 6 $71,420 $451,940 $451,940 $451,940 withdrawals have been made. 7 $85,491 $451,940 $451,940 $451,940 8 $100,266 $451,940 $451,940 $451,940 *Additional payment will be 9 $115,779 $451,940 $451,940 $451,940 required to prevent policy 10 $132,068 $451,940 $451,940 $451,940 termination. 15 $226,575 $451,940 $451,940 $451,940 20 $347,193 $451,940 $451,940 $563,691 The death benefits, accumulated 25 $501,135 $451,940 $451,940 $954,633 values and cash surrender values 30 $697,608 $451,940 $451,940 $1,518,808 will differ if premiums are paid 35 $948,363 $0* $527,321 $2,539,141 in different amounts or ------------------------------------------------------------------------------- frequencies. End of year End of year ACCUMULATED VALUE NET CASH SURRENDER VALUE The hypothetical investment rates End of assuming hypothetical gross assuming hypothetical gross shown above and elsewhere in this policy annual investment return of annual investment return of prospectus are illustrative only year 0% 6% 12% 0% 6% 12% and should not be interpreted as ------------------------------------------------------------------------------- a representation of past or 1 $6,950 $7,431 $7,914 $1,235 $1,716 $2,198 future investment results. Actual 2 $13,725 $15,120 $16,574 $8,010 $9,404 $10,859 rates of return may be more or 3 $20,408 $23,161 $26,151 $14,692 $17,445 $20,436 less than those shown and will 4 $26,996 $31,583 $36,763 $21,280 $25,868 $31,048 depend on a number of factors, 5 $33,502 $40,411 $48,527 $27,787 $34,696 $42,812 including the investment 6 $38,772 $48,498 $60,397 $33,747 $43,472 $55,371 allocations made to variable 7 $43,779 $56,790 $73,392 $40,010 $53,021 $69,622 accounts by the owner and the 8 $48,501 $65,283 $87,631 $45,988 $62,770 $85,118 experience of the accounts. No 9 $52,909 $73,962 $103,246 $51,653 $72,706 $101,989 representation can be made by us, 10 $56,972 $82,815 $120,386 $56,972 $82,815 $120,386 the separate account or the fund 15 $76,024 $135,816 $245,076 $76,024 $135,816 $245,076 that these hypothetical rates of 20 $82,672 $197,011 $462,042 $82,672 $197,011 $462,042 return can be achieved for any 25 $67,932 $269,079 $822,960 $67,932 $269,079 $822,960 one year or sustained over any 30 $12,450 $362,433 $1,419,447 $12,450 $362,433 $1,419,447 period of time. 35 $0* $502,210 $2,418,229 $0* $502,210 $2,418,229 ------------------------------------------------------------------------------- This is an illustration only. An illustration is not intended to predict actual performance. Interest rates, dividends, and values set forth in the illustration are not guaranteed.
80 ------------------------------------------------------------------------------- Illustration 3 Death benefit Option B and guideline premium test at current cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:B GUIDELINE PREMIUM TEST FACE AMOUNT:$181,828 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------- Flexible premium variable Total universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash policy interest at hypothetical gross annual investment return of surrender values. year 5% 0% 6% 12% ------------------------------------------------------------------------------- All premium payments are 1 $10,500 $190,072 $190,594 $191,117 illustrated as if made at the 2 $21,525 $198,153 $199,706 $201,321 beginning of the policy year. 3 $33,101 $206,107 $209,222 $212,592 4 $45,256 $213,957 $219,182 $225,059 This illustration assumes no 5 $58,019 $221,706 $229,607 $238,852 policy loans or partial 6 $71,420 $229,354 $240,520 $254,112 withdrawals have been made. 7 $85,491 $236,902 $251,943 $270,997 8 $100,266 $244,351 $263,901 $289,681 The death benefits, accumulated 9 $115,779 $251,700 $276,419 $310,357 values and cash surrender values 10 $132,068 $258,952 $289,523 $333,239 will differ if premiums are paid 15 $226,575 $296,584 $368,949 $496,165 in different amounts or 20 $347,193 $331,268 $469,350 $769,929 frequencies. 25 $501,135 $361,226 $594,492 $1,228,641 30 $697,608 $384,608 $749,059 $1,997,535 The hypothetical investment rates 35 $948,363 $399,482 $938,932 $3,288,461 shown above and elsewhere in this ------------------------------------------------------------------------------- prospectus are illustrative only End of year End of year and should not be interpreted as ACCUMULATED VALUE NET CASH SURRENDER VALUE a representation of past or End of assuming hypothetical gross assuming hypothetical gross future investment results. Actual policy annual investment return of annual investment return of rates of return may be more or year 0% 6% 12% 0% 6% 12% less than those shown and will ------------------------------------------------------------------------------- depend on a number of factors, 1 $8,244 $8,766 $9,289 $5,945 $6,467 $6,989 including the investment 2 $16,325 $17,878 $19,493 $14,026 $15,578 $17,194 allocations made to variable 3 $24,279 $27,394 $30,764 $21,979 $25,094 $28,464 accounts by the owner and the 4 $32,129 $37,354 $43,231 $29,830 $35,054 $40,932 experience of the accounts. No 5 $39,878 $47,779 $57,024 $37,579 $45,480 $54,724 representation can be made by us, 6 $47,526 $58,692 $72,284 $45,504 $56,670 $70,262 the separate account or the fund 7 $55,074 $70,115 $89,169 $53,558 $68,599 $87,652 that these hypothetical rates of 8 $62,523 $82,073 $107,853 $61,512 $81,062 $106,842 return can be achieved for any 9 $69,872 $94,591 $128,529 $69,367 $94,085 $128,023 one year or sustained over any 10 $77,124 $107,695 $151,411 $77,124 $107,695 $151,411 period of time. 15 $114,756 $187,121 $314,337 $114,756 $187,121 $314,337 20 $149,440 $287,522 $588,101 $149,440 $287,522 $588,101 This is an illustration only. An 25 $179,398 $412,664 $1,046,813 $179,398 $412,664 $1,046,813 illustration is not intended to 30 $202,780 $567,231 $1,815,707 $202,780 $567,231 $1,815,707 predict actual performance. 35 $217,654 $757,104 $3,106,633 $217,654 $757,104 $3,106,633 Interest rates, dividends, and ------------------------------------------------------------------------------- values set forth in the illustration are not guaranteed. 81
ILLUSTRATIONS ------------------------------------------------------------------------------- Illustration 4 Death benefit Option B and guideline premium test at guaranteed cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:B GUIDELINE PREMIUM TEST FACE AMOUNT:$181,828 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------- Flexible premium Total variable universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash policy interest at hypothetical gross annual investment return of surrender values. year 5% 0% 6% 12% ------------------------------------------------------------------------------- All premium payments are 1 $10,500 $190,072 $190,594 $191,117 illustrated as if made at the 2 $21,525 $198,153 $199,706 $201,321 beginning of the policy year. 3 $33,101 $206,107 $209,222 $212,592 4 $45,256 $213,957 $219,182 $225,059 This illustration assumes no 5 $58,019 $221,706 $229,607 $238,852 policy loans or partial 6 $71,420 $228,844 $239,993 $253,569 withdrawals have been made. 7 $85,491 $235,795 $250,769 $269,755 8 $100,266 $242,548 $261,940 $287,553 The death benefits, accumulated 9 $115,779 $249,090 $273,510 $307,121 values and cash surrender values 10 $132,068 $255,405 $285,477 $328,628 will differ if premiums are paid 15 $226,575 $285,974 $355,499 $478,926 in different amounts or 20 $347,193 $309,140 $438,357 $725,056 frequencies. 25 $501,135 $321,186 $533,087 $1,128,049 30 $697,608 $316,473 $636,190 $1,788,815 The hypothetical investment rates 35 $948,363 $284,496 $737,213 $2,871,603 shown above and elsewhere in this ------------------------------------------------------------------------------- prospectus are illustrative only End of year End of year and should not be interpreted as ACCUMULATED VALUE NET CASH SURRENDER VALUE a representation of past or End of assuming hypothetical gross assuming hypothetical gross future investment results. Actual policy annual investment return of annual investment return of rates of return may be more or year 0% 6% 12% 0% 6% 12% less than those shown and will ------------------------------------------------------------------------------- depend on a number of factors, 1 $8,244 $8,766 $9,289 $5,945 $6,467 $6,989 including the investment 2 $16,325 $17,878 $19,493 $14,026 $15,578 $17,194 allocations made to variable 3 $24,279 $27,394 $30,764 $21,979 $25,094 $28,464 accounts by the owner and the 4 $32,129 $37,354 $43,231 $29,830 $35,054 $40,932 experience of the accounts. No 5 $39,878 $47,779 $57,024 $37,579 $45,480 $54,724 representation can be made by us, 6 $47,016 $58,165 $71,741 $44,994 $56,143 $69,719 the separate account or the fund 7 $53,967 $68,941 $87,927 $52,450 $67,425 $86,410 that these hypothetical rates of 8 $60,720 $80,112 $105,725 $59,709 $79,101 $104,714 return can be achieved for any 9 $67,262 $91,682 $125,293 $66,757 $91,176 $124,787 one year or sustained over any 10 $73,577 $103,649 $146,800 $73,577 $103,649 $146,800 period of time. 15 $104,146 $173,671 $297,098 $104,146 $173,671 $297,098 20 $127,312 $256,529 $543,228 $127,312 $256,529 $543,228 This is an illustration only. An 25 $139,358 $351,259 $946,221 $139,358 $351,259 $946,221 illustration is not intended to 30 $134,645 $454,362 $1,606,987 $134,645 $454,362 $1,606,987 predict actual performance. 35 $102,668 $555,385 $2,689,775 $102,668 $555,385 $2,689,775 Interest rates, dividends, and ------------------------------------------------------------------------------- values set forth in the illustration are not guaranteed.
82 ------------------------------------------------------------------------------- Illustration 5 Death benefit Option C and guideline premium test at current cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:C GUIDELINE PREMIUM TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------- Flexible premium Total variable universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash policy interest at hypothetical gross annual investment return of surrender values. year 5% 0% 6% 12% ------------------------------------------------------------------------------- All premium payments are 1 $10,500 $461,940 $461,940 $461,940 illustrated as if made at the 2 $21,525 $471,940 $471,940 $471,940 beginning of the policy year. 3 $33,101 $481,940 $481,940 $481,940 4 $45,256 $491,940 $491,940 $491,940 This illustration assumes no 5 $58,019 $501,940 $501,940 $501,940 policy loans or partial 6 $71,420 $511,940 $511,940 $511,940 withdrawals have been made. 7 $85,491 $521,940 $521,940 $521,940 8 $100,266 $531,940 $531,940 $531,940 The death benefits, accumulated 9 $115,779 $541,940 $541,940 $541,940 values and cash surrender values 10 $132,068 $551,940 $551,940 $551,940 will differ if premiums are paid 15 $226,575 $601,940 $601,940 $601,940 in different amounts or 20 $347,193 $651,940 $651,940 $651,940 frequencies. 25 $501,135 $701,940 $701,940 $1,052,003 30 $697,608 $751,940 $751,940 $1,695,435 The hypothetical investment rates 35 $948,363 $801,940 $801,940 $2,864,137 shown above and elsewhere in this ------------------------------------------------------------------------------- prospectus are illustrative only End of year End of year and should not be interpreted as ACCUMULATED VALUE NET CASH SURRENDER VALUE a representation of past or End of assuming hypothetical gross assuming hypothetical gross future investment results. Actual policy annual investment return of annual investment return of rates of return may be more or year 0% 6% 12% 0% 6% 12% less than those shown and will ------------------------------------------------------------------------------- depend on a number of factors, 1 $6,916 $7,396 $7,878 $1,201 $1,681 $2,162 including the investment 2 $13,619 $15,009 $16,457 $7,904 $9,293 $10,742 allocations made to variable 3 $20,194 $22,932 $25,905 $14,479 $17,217 $20,190 accounts by the owner and the 4 $26,635 $31,189 $36,332 $20,920 $25,474 $30,617 experience of the accounts. No 5 $32,955 $39,801 $47,846 $27,240 $34,085 $42,131 representation can be made by us, 6 $39,153 $48,785 $60,568 $34,127 $43,759 $55,542 the separate account or the fund 7 $45,228 $58,160 $74,632 $41,459 $54,391 $70,863 that these hypothetical rates of 8 $51,180 $67,945 $90,189 $48,667 $65,432 $87,676 return can be achieved for any 9 $57,007 $78,159 $107,405 $55,751 $76,903 $106,149 one year or sustained over any 10 $62,709 $88,826 $126,467 $62,709 $88,826 $126,467 period of time. 15 $93,915 $155,844 $265,940 $93,915 $155,844 $265,940 20 $119,274 $238,748 $503,290 $119,274 $238,748 $503,290 This is an illustration only. An 25 $132,578 $338,474 $906,899 $132,578 $338,474 $906,899 illustration is not intended to 30 $125,391 $458,618 $1,584,518 $125,391 $458,618 $1,584,518 predict actual performance. 35 $84,760 $608,696 $2,727,749 $84,760 $608,696 $2,727,749 Interest rates, dividends, and ------------------------------------------------------------------------------- values set forth in the illustration are not guaranteed. 83
ILLUSTRATIONS --------------------------------------------------------------------------------- Illustration 6 Death benefit Option C and guideline premium test at guaranteed cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:C GUIDELINE PREMIUM TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 --------------------------------------------------------------------------------- Flexible premium Total variable universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash surrender policy interest at hypothetical gross annual investment return of values. year 5% 0% 6% 12% --------------------------------------------------------------------------------- All premium payments are illustrated as 1 $10,500 $461,940 $461,940 $461,940 if made at the beginning of the policy 2 $21,525 $471,940 $471,940 $471,940 year. 3 $33,101 $481,940 $481,940 $481,940 4 $45,256 $491,940 $491,940 $491,940 This illustration assumes no policy loans 5 $58,019 $501,940 $501,940 $501,940 or partial withdrawals have been made. 6 $71,420 $511,940 $511,940 $511,940 7 $85,491 $521,940 $521,940 $521,940 * Additional payment will be required to 8 $100,266 $531,940 $531,940 $531,940 prevent policy termination. 9 $115,779 $541,940 $541,940 $541,940 10 $132,068 $551,940 $551,940 $551,940 The death benefits, accumulated values 15 $226,575 $601,940 $601,940 $601,940 and cash surrender values will differ if 20 $347,193 $651,940 $651,940 $651,940 premiums are paid in different amounts 25 $501,135 $0* $701,940 $826,721 or frequencies. 30 $697,608 $0* $751,940 $1,324,285 35 $948,363 $0* $0* $2,222,385 The hypothetical investment rates shown --------------------------------------------------------------------------------- above and elsewhere in this prospectus End of year End of year are illustrative only and should not be ACCUMULATED VALUE NET CASH SURRENDER VALUE interpreted as a representation of past End of assuming hypothetical gross assuming hypothetical gross or future investment results. Actual rates policy annual investment return of annual investment return of of return may be more or less than those year 0% 6% 12% 0% 6% 12% shown and will depend on a number of --------------------------------------------------------------------------------- factors, including the investment 1 $6,916 $7,396 $7,878 $1,201 $1,681 $2,162 allocations made to variable accounts by 2 $13,619 $15,009 $16,457 $7,904 $9,293 $10,742 the owner and the experience of the 3 $20,194 $22,932 $25,905 $14,479 $17,217 $20,190 accounts. No representation can be made by 4 $26,635 $31,189 $36,332 $20,920 $25,474 $30,617 us, the separate account or the fund that 5 $32,955 $39,801 $47,846 $27,240 $34,085 $42,131 these hypothetical rates of return can be 6 $37,826 $47,439 $59,210 $32,800 $42,413 $54,184 achieved for any one year or sustained over 7 $42,326 $55,146 $71,525 $38,556 $51,376 $67,755 any period of time. 8 $46,416 $62,888 $84,870 $43,903 $60,375 $82,357 9 $50,046 $70,622 $99,327 $48,790 $69,365 $98,071 This is an illustration only. An 10 $53,157 $78,292 $114,987 $53,157 $78,292 $114,987 illustration is not intended to predict 15 $63,736 $120,045 $224,408 $63,736 $120,045 $224,408 actual performance. Interest rates, 20 $51,413 $153,763 $402,335 $51,413 $153,763 $402,335 dividends, and values set forth in the 25 $0* $160,610 $712,690 $0* $160,610 $712,690 illustration are not guaranteed. 30 $0* $95,774 $1,237,649 $0* $95,774 $1,237,649 35 $0* $0* $2,116,557 $0* $0* $2,116,557 ---------------------------------------------------------------------------------
84 ---------------------------------------------------------------------------- Illustration 7 Death benefit Option A and cash value accumulation test at current cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:A CASH VALUE ACCUMULATION TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ---------------------------------------------------------------------------- Flexible premium Total variable universal life premiums Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming values and net cash surrender values. policy interest at hypothetical gross annual investment return of year 5% 0% 6% 12% All premium payments are illustrated as if ---------------------------------------------------------------------------- made at the beginning of the policy year. 1 $10,500 $451,940 $451,940 $451,940 2 $21,525 $451,940 $451,940 $451,940 This illustration assumes no policy loans 3 $33,101 $451,940 $451,940 $451,940 or partial withdrawals have been made. 4 $45,256 $451,940 $451,940 $451,940 5 $58,019 $451,940 $451,940 $451,940 The death benefits, accumulated values 6 $71,420 $451,940 $451,940 $451,940 and cash surrender values will differ if 7 $85,491 $451,940 $451,940 $451,940 premiums are paid in different amounts 8 $100,266 $451,940 $451,940 $451,940 or frequencies. 9 $115,779 $451,940 $451,940 $451,940 10 $132,068 $451,940 $451,940 $451,940 The hypothetical investment rates shown 15 $226,575 $451,940 $451,940 $529,123 above and elsewhere in this prospectus 20 $347,193 $451,940 $451,940 $877,869 are illustrative only and should not be 25 $501,135 $451,940 $561,426 $1,386,191 interpreted as a representation of past 30 $697,608 $451,940 $704,553 $2,142,168 or future investment results. Actual rates 35 $948,363 $451,940 $871,967 $3,304,229 of return may be more or less than those ---------------------------------------------------------------------------- shown and will depend on a number of End of year End of year factors, including the investment ACCUMULATED VALUE NET CASH SURRENDER VALUE allocations made to variable accounts by End of assuming hypothetical gross assuming hypothetical gross the owner and the experience of the policy annual investment return of annual investment return of accounts. No representation can be made by year 0% 6% 12% 0% 6% 12% us, the separate account or the fund that ---------------------------------------------------------------------------- these hypothetical rates of return can be 1 $6,950 $7,431 $7,914 $1,235 $1,716 $2,198 achieved for any one year or sustained over 2 $13,725 $15,120 $16,574 $8,010 $9,404 $10,859 any period of time. 3 $20,408 $23,161 $26,151 $14,692 $17,445 $20,436 4 $26,996 $31,583 $36,763 $21,280 $25,868 $31,048 This is an illustration only. An 5 $33,502 $40,411 $48,527 $27,787 $34,696 $42,812 illustration is not intended to predict 6 $39,929 $49,667 $61,573 $34,903 $44,642 $56,547 actual performance. Interest rates, 7 $46,275 $59,374 $76,044 $42,506 $55,605 $72,275 dividends, and values set forth in the 8 $52,542 $69,556 $92,102 $50,029 $67,043 $89,590 illustration are not guaranteed. 9 $58,731 $80,238 $109,928 $57,475 $78,982 $108,671 10 $64,842 $91,449 $129,721 $64,842 $91,449 $129,721 15 $98,926 $162,644 $275,155 $98,926 $162,644 $275,155 20 $129,767 $254,085 $517,143 $129,767 $254,085 $517,143 25 $154,648 $369,589 $912,535 $154,648 $369,589 $912,535 30 $171,158 $511,246 $1,554,425 $171,158 $511,246 $1,554,425 35 $176,529 $684,634 $2,594,347 $176,529 $684,634 $2,594,347 ---------------------------------------------------------------------------- 85
ILLUSTRATIONS ---------------------------------------------------------------------------- Illustration 8 Death benefit Option A and cash value accumulation test at guaranteed cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:A CASH VALUE ACCUMULATION TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ---------------------------------------------------------------------------- Flexible premium Total variable universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash surrender policy interest at hypothetical gross annual investment return of values. year 5% 0% 6% 12% ---------------------------------------------------------------------------- All premium payments are illustrated as 1 $10,500 $451,940 $451,940 $451,940 if made at the beginning of the policy 2 $21,525 $451,940 $451,940 $451,940 year. 3 $33,101 $451,940 $451,940 $451,940 4 $45,256 $451,940 $451,940 $451,940 This illustration assumes no policy loans 5 $58,019 $451,940 $451,940 $451,940 or partial withdrawals have been made. 6 $71,420 $451,940 $451,940 $451,940 7 $85,491 $451,940 $451,940 $451,940 *Additional payment will be required to 8 $100,266 $451,940 $451,940 $451,940 prevent policy termination. 9 $115,779 $451,940 $451,940 $451,940 10 $132,068 $451,940 $451,940 $451,940 The death benefits, accumulated values and 15 $226,575 $451,940 $451,940 $471,175 cash surrender values will differ if 20 $347,193 $451,940 $451,940 $755,078 premiums are paid in different amounts 25 $501,135 $451,940 $451,940 $1,135,935 or frequencies. 30 $697,608 $451,940 $494,676 $1,651,999 35 $948,363 $0 $582,216 $2,358,166 The hypothetical investment rates shown ---------------------------------------------------------------------------- above and elsewhere in this prospectus End of year End of year are illustrative only and should not be ACCUMULATED VALUE NET CASH SURRENDER VALUE interpreted as a representation of past End of assuming hypothetical gross assuming hypothetical gross or future investment results. Actual rates policy annual investment return of annual investment return of of return may be more or less than those year 0% 6% 12% 0% 6% 12% shown and will depend on a number of ---------------------------------------------------------------------------- factors, including the investment 1 $6,950 $7,431 $7,914 $1,235 $1,716 $2,198 allocations made to variable accounts by 2 $13,725 $15,120 $16,574 $8,010 $9,404 $10,859 the owner and the experience of the 3 $20,408 $23,161 $26,151 $14,692 $17,445 $20,436 accounts. No representation can be made by 4 $26,996 $31,583 $36,763 $21,280 $25,868 $31,048 us, the separate account or the fund 5 $33,502 $40,411 $48,527 $27,787 $34,696 $42,812 that these hypothetical rates of return 6 $38,772 $48,498 $60,397 $33,747 $43,472 $55,371 can be achieved for any one year or 7 $43,779 $56,790 $73,392 $40,010 $53,021 $69,622 sustained over any period of time. 8 $48,501 $65,283 $87,631 $45,988 $62,770 $85,118 9 $52,909 $73,962 $103,246 $51,653 $72,706 $101,989 This is an illustration only. An 10 $56,972 $82,815 $120,386 $56,972 $82,815 $120,386 illustration is not intended to predict 15 $76,024 $135,816 $245,021 $76,024 $135,816 $245,021 actual performance. Interest rates, 20 $82,672 $197,011 $444,808 $82,672 $197,011 $444,808 dividends, and values set forth in the 25 $67,932 $269,079 $747,791 $67,932 $269,079 $747,791 illustration are not guaranteed. 30 $12,450 $358,952 $1,198,743 $12,450 $358,952 $1,198,743 35 $0* $457,132 $1,851,537 $0* $457,132 $1,851,537 ----------------------------------------------------------------------------
86 -------------------------------------------------------------------------------- Illustration 9 Death benefit Option B and cash value accumulation test at current cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:B CASH VALUE ACCUMULATION TEST FACE AMOUNT:$181,828 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 -------------------------------------------------------------------------------- Flexible premium Total variable universal life premiums Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming values and net cash surrender values. policy interest at hypothetical gross annual investment return of year 5% 0% 6% 12% All premium payments are illustrated as if -------------------------------------------------------------------------------- made at the beginning of the policy year. 1 $10,500 $190,072 $190,594 $191,117 2 $21,525 $198,153 $199,706 $201,321 This illustration assumes no policy loans 3 $33,101 $206,107 $209,222 $212,592 or partial withdrawals have been made. 4 $45,256 $213,957 $219,182 $225,059 5 $58,019 $221,706 $229,607 $238,852 The death benefits, accumulated values and 6 $71,420 $229,354 $240,520 $254,112 cash surrender values will differ if 7 $85,491 $236,902 $251,943 $270,997 premiums are paid in different amounts or 8 $100,266 $244,351 $263,901 $289,681 frequencies. 9 $115,779 $251,700 $276,419 $310,357 10 $132,068 $258,952 $289,523 $333,389 The hypothetical investment rates shown 15 $226,575 $296,584 $368,949 $601,782 above and elsewhere in this prospectus 20 $347,193 $331,268 $487,723 $983,811 are illustrative only and should not be 25 $501,135 $361,226 $624,524 $1,542,027 interpreted as a representation of past 30 $697,608 $384,608 $775,631 $2,373,347 or future investment results. Actual rates 35 $948,363 $399,482 $953,226 $3,652,280 of return may be more or less than those -------------------------------------------------------------------------------- shown and will depend on a number of End of year End of year factors, including the investment ACCUMULATED VALUE NET CASH SURRENDER VALUE allocations made to variable accounts End of assuming hypothetical gross assuming hypothetical gross by the owner and the experience of the policy annual investment return of annual investment return of accounts. No representation can be made by year 0% 6% 12% 0% 6% 12% us, the separate account or the fund that -------------------------------------------------------------------------------- these hypothetical rates of return can be 1 $8,244 $8,766 $9,289 $5,945 $6,467 $6,989 achieved for any one year or sustained over 2 $16,325 $17,878 $19,493 $14,026 $15,578 $17,194 any period of time. 3 $24,279 $27,394 $30,764 $21,979 $25,094 $28,464 4 $32,129 $37,354 $43,231 $29,830 $35,054 $40,932 This is an illustration only. An 5 $39,878 $47,779 $57,024 $37,579 $45,480 $54,724 illustration is not intended to predict 6 $47,526 $58,692 $72,284 $45,504 $56,670 $70,262 actual performance. Interest rates, 7 $55,074 $70,115 $89,169 $53,558 $68,599 $87,652 dividends, and values set forth in the 8 $62,523 $82,073 $107,853 $61,512 $81,062 $106,842 illustration are not guaranteed. 9 $69,872 $94,591 $128,529 $69,367 $94,085 $128,023 10 $77,124 $107,695 $151,411 $77,124 $107,695 $151,411 15 $114,756 $187,121 $312,939 $114,756 $187,121 $312,939 20 $149,440 $287,312 $579,552 $149,440 $287,312 $579,552 25 $179,398 $411,127 $1,015,123 $179,398 $411,127 $1,015,123 30 $202,780 $562,822 $1,722,176 $202,780 $562,822 $1,722,176 35 $217,654 $748,434 $2,867,623 $217,654 $748,434 $2,867,623 -------------------------------------------------------------------------------- 87
ILLUSTRATIONS ------------------------------------------------------------------------------- Illustration 10 Death benefit Option B and cash value accumulation test at guaranteed cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:B CASH VALUE ACCUMULATION TEST FACE AMOUNT:$181,828 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------- Flexible premium variable Total universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash policy interest at hypothetical gross annual investment return of surrender values. year 5% 0% 6% 12% ------------------------------------------------------------------------------- All premium payments are 1 $10,500 $190,072 $190,594 $191,117 illustrated as if made at the 2 $21,525 $198,153 $199,706 $201,321 beginning of the policy year. 3 $33,101 $206,107 $209,222 $212,592 4 $45,256 $213,957 $219,182 $225,059 This illustration assumes no 5 $58,019 $221,706 $229,607 $238,852 policy loans or partial 6 $71,420 $228,844 $239,993 $253,569 withdrawals have been made. 7 $85,491 $235,795 $250,769 $269,755 8 $100,266 $242,548 $261,940 $287,553 The death benefits, accumulated 9 $115,779 $249,090 $273,510 $307,121 values and cash surrender values 10 $132,068 $255,405 $285,477 $328,628 will differ if premiums are paid 15 $226,575 $285,974 $355,499 $565,099 in different amounts or 20 $347,193 $309,140 $438,357 $885,100 frequencies. 25 $501,135 $321,186 $533,577 $1,315,839 30 $697,608 $316,473 $636,187 $1,900,660 The hypothetical investment rates 35 $948,363 $284,496 $737,209 $2,701,857 shown above and elsewhere in this ------------------------------------------------------------------------------- prospectus are illustrative only End of year End of year and should not be interpreted as ACCUMULATED VALUE NET CASH SURRENDER VALUE a representation of past or End of assuming hypothetical gross assuming hypothetical gross future investment results. Actual policy annual investment return of annual investment return of rates of return may be more or year 0% 6% 12% 0% 6% 12% less than those shown and will ------------------------------------------------------------------------------- depend on a number of factors, 1 $8,244 $8,766 $9,289 $5,945 $6,467 $6,989 including the investment 2 $16,325 $17,878 $19,493 $14,026 $15,578 $17,194 allocations made to variable 3 $24,279 $27,394 $30,764 $21,979 $25,094 $28,464 accounts by the owner and the 4 $32,129 $37,354 $43,231 $29,830 $35,054 $40,932 experience of the accounts. No 5 $39,878 $47,779 $57,024 $37,579 $45,480 $54,724 representation can be made by us, 6 $47,016 $58,165 $71,741 $44,994 $56,143 $69,719 the separate account or the fund 7 $53,967 $68,941 $87,927 $52,450 $67,425 $86,410 that these hypothetical rates of 8 $60,720 $80,112 $105,725 $59,709 $79,101 $104,714 return can be achieved for any 9 $67,262 $91,682 $125,293 $66,757 $91,176 $124,787 one year or sustained over any 10 $73,577 $103,649 $146,800 $73,577 $103,649 $146,800 period of time. 15 $104,146 $173,671 $293,863 $104,146 $173,671 $293,863 20 $127,312 $256,529 $521,403 $127,312 $256,529 $521,403 This is an illustration only. An 25 $139,358 $351,256 $866,222 $139,358 $351,256 $866,222 illustration is not intended to 30 $134,645 $454,359 $1,379,179 $134,645 $454,359 $1,379,179 predict actual performance. 35 $102,668 $555,381 $2,121,389 $102,668 $555,381 $2,121,389 Interest rates, dividends, and ------------------------------------------------------------------------------- values set forth in the illustration are not guaranteed.
88 ------------------------------------------------------------------------------- Illustration 11 Death benefit Option C and cash value accumulation test at current cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:C CASH VALUE ACCUMULATION TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------- Flexible premium variable Total universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash policy interest at hypothetical gross annual investment return of surrender values. year 5% 0% 6% 12% ------------------------------------------------------------------------------- All premium payments are 1 $10,500 $461,940 $461,940 $461,940 illustrated as if made at the 2 $21,525 $471,940 $471,940 $471,940 beginning of the policy year. 3 $33,101 $481,940 $481,940 $481,940 4 $45,256 $491,940 $491,940 $491,940 This illustration assumes no 5 $58,019 $501,940 $501,940 $501,940 policy loans or partial 6 $71,420 $511,940 $511,940 $511,940 withdrawals have been made. 7 $85,491 $521,940 $521,940 $521,940 8 $100,266 $531,940 $531,940 $531,940 The death benefits, accumulated 9 $115,779 $541,940 $541,940 $541,940 values and cash surrender values 10 $132,068 $551,940 $551,940 $551,940 will differ if premiums are paid 15 $226,575 $601,940 $601,940 $601,940 in different amounts or 20 $347,193 $651,940 $651,940 $850,728 frequencies. 25 $501,135 $701,940 $701,940 $1,346,266 30 $697,608 $751,940 $751,940 $2,082,941 The hypothetical investment rates 35 $948,363 $801,940 $801,940 $3,215,061 shown above and elsewhere in this ------------------------------------------------------------------------------- prospectus are illustrative only End of year End of year and should not be interpreted as ACCUMULATED VALUE NET CASH SURRENDER VALUE a representation of past or End of assuming hypothetical gross assuming hypothetical gross future investment results. Actual policy annual investment return of annual investment return of rates of return may be more or year 0% 6% 12% 0% 6% 12% less than those shown and will ------------------------------------------------------------------------------- depend on a number of factors, 1 $6,916 $7,396 $7,878 $1,201 $1,681 $2,162 including the investment 2 $13,619 $15,009 $16,457 $7,904 $9,293 $10,742 allocations made to variable 3 $20,194 $22,932 $25,905 $14,479 $17,217 $20,190 accounts by the owner and the 4 $26,635 $31,189 $36,332 $20,920 $25,474 $30,617 experience of the accounts. No 5 $32,955 $39,801 $47,846 $27,240 $34,085 $42,131 representation can be made by us, 6 $39,153 $48,785 $60,568 $34,127 $43,759 $55,542 the separate account or the fund 7 $45,228 $58,160 $74,632 $41,459 $54,391 $70,863 that these hypothetical rates of 8 $51,180 $67,945 $90,189 $48,667 $65,432 $87,676 return can be achieved for any 9 $57,007 $78,159 $107,405 $55,751 $76,903 $106,149 one year or sustained over any 10 $62,709 $88,826 $126,467 $62,709 $88,826 $126,467 period of time. 15 $93,915 $155,844 $265,940 $93,915 $155,844 $265,940 20 $119,274 $238,748 $501,154 $119,274 $238,748 $501,154 This is an illustration only. An 25 $132,578 $338,474 $886,253 $132,578 $338,474 $886,253 illustration is not intended to 30 $125,391 $458,618 $1,511,448 $125,391 $458,618 $1,511,448 predict actual performance. 35 $84,760 $608,696 $2,524,335 $84,760 $608,696 $2,524,335 Interest rates, dividends, and ------------------------------------------------------------------------------- values set forth in the illustration are not guaranteed. 89
ILLUSTRATIONS ------------------------------------------------------------------------------ Illustration 12 Death benefit Option C and cash value accumulation test at guaranteed cost of insurance rates Based on average annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:C CASH VALUE ACCUMULATION TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------ Flexible premium Total variable universal life premiums Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming values and net cash surrender values. policy interest at hypothetical gross annual investment return of year 5% 0% 6% 12% All premium payments are illustrated as if ------------------------------------------------------------------------------ made at the beginning of the policy year. 1 $10,500 $461,940 $461,940 $461,940 2 $21,525 $471,940 $471,940 $471,940 This illustration assumes no policy loans 3 $33,101 $481,940 $481,940 $481,940 or partial withdrawals have been made. 4 $45,256 $491,940 $491,940 $491,940 5 $58,019 $501,940 $501,940 $501,940 *Additional payment will be required to 6 $71,420 $511,940 $511,940 $511,940 prevent policy termination. 7 $85,491 $521,940 $521,940 $521,940 8 $100,266 $531,940 $531,940 $531,940 The death benefits, accumulated values and 9 $115,779 $541,940 $541,940 $541,940 cash surrender values will differ if 10 $132,068 $551,940 $551,940 $551,940 premiums are paid in different amounts 15 $226,575 $601,940 $601,940 $601,940 or frequencies. 20 $347,193 $651,940 $651,940 $682,706 25 $501,135 $0* $701,940 $1,035,798 The hypothetical investment rates shown 30 $697,608 $0* $751,940 $1,513,591 above and elsewhere in this prospectus 35 $948,363 $0* $0* $2,166,863 are illustrative only and should not be ------------------------------------------------------------------------------ interpreted as a representation of past End of year End of year or future investment results. Actual ACCUMULATED VALUE NET CASH SURRENDER VALUE rates of return may be more or less than End of assuming hypothetical gross assuming hypothetical gross those shown and will depend on a number policy annual investment return of annual investment return of of factors, including the investment year 0% 6% 12% 0% 6% 12% allocations made to variable accounts by ------------------------------------------------------------------------------ the owner and the experience of the 1 $6,916 $7,396 $7,878 $1,201 $1,681 $2,162 accounts. No representation can be made 2 $13,619 $15,009 $16,457 $7,904 $9,293 $10,742 by us, the separate account or the fund 3 $20,194 $22,932 $25,905 $14,479 $17,217 $20,190 that these hypothetical rates of return 4 $26,635 $31,189 $36,332 $20,920 $25,474 $30,617 can be achieved for any one year or 5 $32,955 $39,801 $47,846 $27,240 $34,085 $42,131 sustained over any period of time. 6 $37,826 $47,439 $59,210 $32,800 $42,413 $54,184 7 $42,326 $55,146 $71,525 $38,556 $51,376 $67,755 This is an illustration only. An 8 $46,416 $62,888 $84,870 $43,903 $60,375 $82,357 illustration is not intended to predict 9 $50,046 $70,622 $99,327 $48,790 $69,365 $98,071 actual performance. Interest rates, 10 $53,157 $78,292 $114,987 $53,157 $78,292 $114,987 dividends, and values set forth in the 15 $63,736 $120,045 $224,408 $63,736 $120,045 $224,408 illustration are not guaranteed. 20 $51,413 $153,763 $402,174 $51,413 $153,763 $402,174 25 $0* $160,610 $681,871 $0* $160,610 $681,871 30 $0* $95,774 $1,098,309 $0* $95,774 $1,098,309 35 $0* $0* $1,701,333 $0* $0* $1,701,333 ------------------------------------------------------------------------------
90 ---------------------------------------------------------------------------- Illustration 13 Death benefit Option A and guideline premium test at current cost of insurance rates Based on a weighted average of annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:A GUIDELINE PREMIUM TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ---------------------------------------------------------------------------- Flexible premium Total variable universal life premiums Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming values and net cash surrender values. policy interest at hypothetical gross annual investment return of year 5% 0% 6% 12% All premium payments are illustrated as ---------------------------------------------------------------------------- if made at the beginning of the policy year. 1 $10,500 $451,940 $451,940 $451,940 2 $21,525 $451,940 $451,940 $451,940 This illustration assumes no policy loans or 3 $33,101 $451,940 $451,940 $451,940 partial withdrawals have been made. 4 $45,256 $451,940 $451,940 $451,940 5 $58,019 $451,940 $451,940 $451,940 The death benefits, accumulated values and 6 $71,420 $451,940 $451,940 $451,940 cash surrender values will differ if 7 $85,491 $451,940 $451,940 $451,940 premiums are paid in different amounts or 8 $100,266 $451,940 $451,940 $451,940 frequencies. 9 $115,779 $451,940 $451,940 $451,940 10 $132,068 $451,940 $451,940 $451,940 The hypothetical investment rates shown 15 $226,575 $451,940 $451,940 $451,940 above and elsewhere in this prospectus 20 $347,193 $451,940 $451,940 $644,794 are illustrative only and should not be 25 $501,135 $451,940 $451,940 $1,104,074 interpreted as a representation of past or 30 $697,608 $451,940 $569,883 $1,780,416 future investment results. Actual rates of 35 $948,363 $451,940 $771,855 $3,011,877 return may be more or less than those shown ---------------------------------------------------------------------------- and will depend on a number of factors, End of year End of year including the investment allocations made ACCUMULATED VALUE NET CASH SURRENDER VALUE to variable accounts by the owner and the End of assuming hypothetical gross assuming hypothetical gross experience of the accounts. No policy annual investment return of annual investment return of representation can be made by us, the year 0% 6% 12% 0% 6% 12% separate account or the fund that these ---------------------------------------------------------------------------- hypothetical rates of return can be 1 $6,954 $7,436 $7,918 $1,239 $1,720 $2,203 achieved for any one year or sustained 2 $13,736 $15,132 $16,588 $8,021 $9,417 $10,873 over any period of time. 3 $20,430 $23,186 $26,180 $14,715 $17,471 $20,465 4 $27,032 $31,626 $36,815 $21,317 $25,911 $31,100 This is an illustration only. An 5 $33,556 $40,478 $48,610 $27,841 $34,763 $42,895 illustration is not intended to predict 6 $40,002 $49,763 $61,696 $34,977 $44,738 $56,671 actual performance. Interest rates, 7 $46,372 $59,505 $76,220 $42,603 $55,736 $72,451 dividends, and values set forth in the 8 $52,666 $69,730 $92,346 $50,153 $67,217 $89,833 illustration are not guaranteed. 9 $58,884 $80,463 $110,254 $57,628 $79,206 $108,998 10 $65,028 $91,732 $130,150 $65,028 $91,732 $130,150 15 $99,325 $163,390 $276,818 $99,325 $163,390 $276,818 20 $130,463 $255,684 $528,520 $130,463 $255,684 $528,520 25 $155,724 $375,403 $951,788 $155,724 $375,403 $951,788 30 $172,713 $532,601 $1,663,941 $172,713 $532,601 $1,663,941 35 $178,691 $735,100 $2,868,454 $178,691 $735,100 $2,868,454 ---------------------------------------------------------------------------- 91
ILLUSTRATIONS ------------------------------------------------------------------------------- Illustration 14 Death benefit Option A and guideline premium test at guaranteed cost of insurance rates Based on a weighted average of annual advisory fees and expenses of the portfolios DEATH BENEFIT OPTION:A GUIDELINE PREMIUM TEST FACE AMOUNT:$451,940 MALE SELECT NONSMOKER ISSUE AGE 45 ANNUAL PREMIUM:$10,000 ------------------------------------------------------------------------------- Flexible premium variable Total universal life premiums Illustration of death benefits, End of paid plus End of year DEATH BENEFIT assuming accumulated values and net cash policy interest at hypothetical gross annual investment return of surrender values. year 5% 0% 6% 12% ------------------------------------------------------------------------------- All premium payments are 1 $10,500 $451,940 $451,940 $451,940 illustrated as if made at the 2 $21,525 $451,940 $451,940 $451,940 beginning of the policy year. 3 $33,101 $451,940 $451,940 $451,940 4 $45,256 $451,940 $451,940 $451,940 This illustration assumes no 5 $58,019 $451,940 $451,940 $451,940 policy loans or partial 6 $71,420 $451,940 $451,940 $451,940 withdrawals have been made. 7 $85,491 $451,940 $451,940 $451,940 8 $100,266 $451,940 $451,940 $451,940 *Additional payment will be 9 $115,779 $451,940 $451,940 $451,940 required to prevent policy 10 $132,068 $451,940 $451,940 $451,940 termination. 15 $226,575 $451,940 $451,940 $451,940 20 $347,193 $451,940 $451,940 $568,027 The death benefits, accumulated 25 $501,135 $451,940 $451,940 $963,776 values and cash surrender values 30 $697,608 $451,940 $451,940 $1,536,516 will differ if premiums are paid 35 $948,363 $0* $538,106 $2,574,391 in different amounts or ------------------------------------------------------------------------------- frequencies. End of year End of year ACCUMULATED VALUE NET CASH SURRENDER VALUE The hypothetical investment rates End of assuming hypothetical gross assuming hypothetical gross shown above and elsewhere in this policy annual investment return of annual investment return of prospectus are illustrative only year 0% 6% 12% 0% 6% 12% and should not be interpreted as ------------------------------------------------------------------------------- a representation of past or 1 $6,954 $7,436 $7,918 $1,239 $1,720 $2,203 future investment results. Actual 2 $13,736 $15,132 $16,588 $8,021 $9,417 $10,873 rates of return may be more or 3 $20,430 $23,186 $26,180 $14,715 $17,471 $20,465 less than those shown and will 4 $27,032 $31,626 $36,815 $21,317 $25,911 $31,100 depend on a number of factors, 5 $33,556 $40,478 $48,610 $27,841 $34,763 $42,895 including the investment 6 $38,846 $48,593 $60,520 $33,820 $43,568 $55,495 allocations made to variable 7 $43,875 $56,921 $73,567 $40,106 $53,152 $69,798 accounts by the owner and the 8 $48,622 $65,455 $87,873 $46,110 $62,942 $85,360 experience of the accounts. No 9 $53,059 $74,183 $103,569 $51,802 $72,927 $102,313 representation can be made by us, 10 $57,151 $83,092 $120,810 $57,151 $83,092 $120,810 the separate account or the fund 15 $76,390 $136,527 $246,446 $76,390 $136,527 $246,446 that these hypothetical rates of 20 $83,282 $198,530 $465,596 $83,282 $198,530 $465,596 return can be achieved for any 25 $68,837 $272,093 $830,842 $68,837 $272,093 $830,842 one year or sustained over any 30 $13,702 $368,431 $1,435,997 $13,702 $368,431 $1,435,997 period of time. 35 $0* $512,482 $2,451,801 $0* $512,482 $2,451,801 ------------------------------------------------------------------------------- This is an illustration only. An illustration is not intended to predict actual performance. Interest rates, dividends, and values set forth in the illustration are not guaranteed.
92 APPENDIX A - RATES PER $1,000 OF INITIAL FACE AMOUNT
Face amount component of M&E Risk Charge - -------------------------------------------------------------------------------- Issue Issue Age Male Female Unisex Age Male Female Unisex - ----- ----- ------ ------ ----- ----- ------ ------ 0 0.075 0.063 0.073 45 0.127 0.118 0.125 5 0.069 0.059 0.067 50 0.139 0.127 0.136 10 0.066 0.058 0.064 55 0.155 0.138 0.151 15 0.064 0.055 0.062 60 0.176 0.154 0.171 20 0.098 0.095 0.098 65 0.206 0.176 0.199 25 0.101 0.098 0.101 70 0.247 0.208 0.237 30 0.105 0.101 0.105 75 0.306 0.257 0.292 35 0.111 0.106 0.110 80 0.385 0.329 0.368 40 0.118 0.111 0.116 85 0.498 0.440 0.478 - ----- -------------------------- -------------------------------------
Surrender Charge Maximum Surrender Charge Issue ------------------------------ ------------------------------- Age Male Female Unisex Male Female Unisex - ----- ----- ------ ------ ------ ------ ------ 0 5.70 4.79 5.52 1.150 0.724 1.074 5 5.24 4.48 5.09 1.222 0.772 1.146 10 5.02 4.41 4.89 1.258 0.784 1.182 15 4.86 4.18 4.73 1.282 0.820 1.206 20 9.35 7.83 9.04 3.284 2.444 3.132 25 11.32 9.58 10.97 4.342 3.368 4.172 30 12.69 10.87 12.33 5.246 4.164 5.056 35 14.36 12.31 13.95 6.302 5.096 6.082 40 19.08 16.26 18.51 8.918 7.302 8.632 45 25.02 21.85 24.35 12.646 10.400 12.246 50 29.24 24.97 28.32 16.190 13.352 15.696 55 34.88 29.06 33.59 19.504 16.132 18.916 60 42.39 34.52 40.60 25.560 21.144 24.770 65 52.23 42.29 50.23 32.196 26.922 31.250 66 51.67 44.17 52.00 32.752 27.516 31.800 67 51.56 46.16 51.89 32.696 27.470 31.744 68 51.44 48.29 51.78 32.568 27.386 31.628 69 51.39 50.58 51.74 32.024 26.950 31.094 70 51.29 51.15 51.63 31.732 26.730 30.812 75 50.63 49.40 50.98 30.034 25.452 29.164 80 49.91 46.06 50.19 26.284 22.080 25.458 85 48.14 48.74 48.30 18.606 14.570 17.918 - ----- ------------------------------ -------------------------------
If the person insured by the policy is assigned a risk classification other than standard, a factor is applied to the M&E risk face amount charge, surrender charge rate and maximum surrender charge rate according to the nonstandard table rating assigned to that person insured. If the person insured is assigned a nonstandard rating reflected in the table below, the rates above that apply to the person insured is multiplied by the nonstandard table factor below that applies. NONSTANDARD TABLE FACTORS
Nonstandard Table Number Issue ------------------------------------------------------------------------------- age 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ----- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- 0-45 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 50 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.65 1.65 1.65 55 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35 60 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 65-85 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 ----- -------------------------------------------------------------------------------
Representative figures shown. For issue ages not listed, please ask your registered representative. 93 APPENDIX B - DEATH BENEFIT PERCENTAGES
--------------- --------------- --------------- -------------------------- Age Percentage Age Percentage Age Percentage Age Percentage --------------- --------------- --------------- -------------------------- 0-40 250 50 185 60 130 70 115 41 243 51 178 61 128 71 113 42 236 52 171 62 126 72 111 43 229 53 164 63 124 73 109 44 222 54 157 64 122 74 107 45 215 55 150 65 120 75-90 105 46 209 56 146 66 119 91 104 47 203 57 142 67 118 92 103 48 197 58 138 68 117 93 102 49 191 59 134 69 116 greater than 93 101 --------------- --------------- --------------- --------------------------
94
PACIFIC SELECT EXEC II - NY WHERE TO GO FOR MORE INFORMATION The Pacific Select Exec II - NY variable For more information about Pacific Select Exec II - NY, please call or write to life insurance policy is underwritten us at the address below. You should also use this address to send us any by Pacific Life & Annuity Company. notices, forms or requests about your policy. -------------------------------------------------------------------------------- How to contact us Pacific Life & Annuity Company Client Services Department 700 Newport Center Drive P.O. Box Newport Beach, California 92658-7500 1-800-800-7681 7 a.m. through 5 p.m. Pacific time -------------------------------------------------------------------------------- How to contact the SEC You can also find reports and other information about the policy and separate account from the SEC. The SEC may charge you a fee for this information. Public Reference Section of the SEC Washington, D.C. 20549-6009 1-800-SEC-0330 Internet: www.sec.gov
PACIFIC SELECT EXEC II - NY Flexible Premium Variable Insurance Policy Issued by Pacific Life & Annuity Company Supplement dated to Prospectus dated The attached prospectus describes two death benefit qualification tests available in connection with the Pacific Select Exec II - NY Flexible Premium Variable Life Insurance Policy ("Policy")--the cash value accumulation test and the guideline premium test. As of the date of this supplement to the prospectus, the cash value accumulation test is not yet available. The attached prospectus describes an Annual renewable term rider under "The death benefit: Optional riders". As of the date of this supplement to the prospectus, the Annual renewable term rider is not yet available. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - PACIFIC SELECT EXEC SEPARATE ACCOUNT PART II. ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS Contents of Registration Statement This Registration Statement on Form S-6 comprises the following papers and documents: The facing sheet. The cross-reference sheet. The Prospectus consisting of 94 pages. Supplement to prospectus consisting of 1 page. The undertaking to file reports. Representation pursuant to Section 26(e) of the Investment Company Act of 1940. Rule 6e-3(T) representation. The Signatures. Written consent of the following person (included in the exhibits shown below): Deloitte & Touche LLP, independent auditors Dechert Price & Rhoads The following exhibits: 1. (1) (a) Minutes of Action of Board of Directors of PM Group Life Insurance Company (PL&A) dated July 1, 1998 (b) Memorandum Establishing Separate Account (2) Inapplicable (3) (a) Form of Distribution Agreement Between PL&A and Pacific Mutual Distributors, Inc. (b) Form of Selling Agreement Between Pacific Mutual Distributors, Inc. and Various Broker-Dealers (4) Inapplicable (5) (a) Flexible Premium Variable Life Insurance Policy (b) Annual Renewable Term Rider (Form R98-ART NY) (c) Accelerated Living Benefit Rider (Form R92-ABR NY) (d) Spouse Term Rider (Form R98-SPT NY) (e) Children's Term Rider (Form R84-CT NY) (f) Waiver of Charges (Form R98-WC NY) (g) Accidental Death Benefit (Form R84-AD NY) (h) Guaranteed Insurability Rider (Form R84-GI NY) (i) Disability Benefit Rider (Form R98-DB NY) (6) (a) Bylaws of PL&A (b) Articles of Incorporation of PM Group Life Insurance Company (c) Amended & Restated Articles of Incorporation for PM Group Life Insurance Company (7) Inapplicable (8) Inapplicable (9) (a) Form of Participation Agreement between PL&A and Pacific Select Fund (b) Administrative Agreement Between PL&A and Pacific Life Insurance Company (Pacific Life) (10) Application for Flexible Premium Variable Life Insurance Policy & General Questionnaire 2. Form of Opinion and consent of legal officer of PL&A as to legality of Policies being registered 3. Inapplicable 4. Inapplicable 5. Inapplicable 6. (a) Consent of Deloitte & Touche LLP (b) Consent of Dechert Price & Rhoads 7. Opinion of Actuary 8. Memorandum Describing Issuance, Transfer and Redemption Procedures 9. Powers of Attorney 10. Inapplicable 11. Inapplicable 12. Inapplicable 13. Inapplicable 14. Inapplicable 15. Inapplicable 16. Inapplicable 17. Inapplicable UNDERTAKING TO FILE REPORTS Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that section. REPRESENTATION PURSUANT TO SECTION 26(e) OF THE INVESTMENT COMPANY ACT OF 1940 Pacific Life & Annuity Company, the sponsoring insurance company of the Registrant, represents that the fees and charges to be deducted under the variable Life Insurance Policy ("Policy") described in the prospectus contained in this registration statement are, in the aggregate, reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed in connection with the Policy. RULE 6e-3(T) REPRESENTATION This filing is made pursuant to Rule 6e-3(T) and Rule 6c-3 under the Investment Company Act of 1940. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, Pacific Select Exec Separate Account of Pacific Life & Annuity Company, has duly caused this Registration Statement on Form S-6 to be signed on its behalf by the undersigned thereunto duly authorized in the City of Newport Beach, and State of California, on this 16th day of June, 1999. PACIFIC SELECT EXEC SEPARATE ACCOUNT (Registrant) BY: PACIFIC LIFE & ANNUITY COMPANY (Depositor) BY: _____________________________________ William L. Ferris* President and Chief Executive Officer *BY: /s/ DAVID R. CARMICHAEL David R. Carmichael as attorney-in-fact (Power of Attorney is contained in this Registration Statement on Form S-6 for the Pacific Select Exec Separate Account, as Exhibit 9.) SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Pacific Life & Annuity Company has duly caused this Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized all in the City of Newport Beach, and State of California, on this 16th day of June, 1999. BY: PACIFIC LIFE & ANNUITY COMPANY (Registrant) BY: _________________________________ William L. Ferris * President and Chief Executive Officer *BY: /s/ DAVID R. CARMICHAEL David R. Carmichael as attorney-in-fact (Power of Attorney is contained in this Registration Statement on Form S-6 for the Pacific Select Exec Separate Account, as Exhibit 9.) SIGNATURES Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: Signature Title Date ____________________ Director, President and Chief __________ , 1999 William L. Ferris* Executive Officer ____________________ Director and Chairman of the Board __________ , 1999 Thomas C. Sutton* ____________________ Director, Senior Vice President and __________ , 1999 David R. Carmichael* General Counsel ____________________ Director and Secretary __________ , 1999 Audrey L. Milfs* ____________________ Director __________ , 1999 Glenn S. Schafer* ____________________ Chief Financial Officer and __________ , 1999 Khanh T. Tran* Treasurer ____________________ Executive Vice President __________ , 1999 Lynn C. Miller* ____________________ Senior Vice President __________ , 1999 William J. Doomey* ____________________ Vice President __________ , 1999 Gary L. Falde* *By: /s/ DAVID R. CARMICHAEL June 16, 1999 ------------------------------ David R. Carmichael as attorney-in-fact
(Powers of Attorney are contained as Exhibit 9 in this Registration Statement on Form S-6 of Pacific Select Exec Separate Account.) EX-99.1(1)(A) 2 MINUTES OF ACTION OF BOARD OF DIRECTORS MINUTES OF ACTION OF BOARD OF DIRECTORS OF PM GROUP LIFE INSURANCE COMPANY TAKEN BY UNANIMOUS WRITTEN CONSENT WITHOUT A MEETING The undersigned, and each of them, constituting all of the directors of PM Group Life Insurance Company, an Arizona corporation, acting by unanimous written consent without a meeting pursuant to Section 10-044 of the Arizona Revised Statutes and Article III, Section 12 of the bylaws of this corporation, take the following actions: Authority to Establish Fixed or Variable Dollar Separate Accounts, or Both, --------------------------------------------------------------------------- and to Issue Variable Life Insurance Policies and Variable Annuity Contracts. - ---------------------------------------------------------------------------- The following resolution is adopted: RESOLVED, that the Board of Directors of this corporation hereby authorizes this corporation to obtain approval from the appropriate regulatory authorities of an amendment to its Certificate of Authority to issue variable life insurance policies and variable annuity contracts and any derivative thereof being herein collectively referred to as "Variable Contracts"; and RESOLVED FURTHER, that the Board of Directors of this corporation hereby authorizes and directs the establishment of Separate Accounts ("Separate Accounts") to which the amounts received by this corporation in connection with the sale of Variable Contracts or contracts payable in fixed dollar amounts, or both, may be allocated; and RESOLVED FURTHER, that within the Separate Accounts payable in variable dollar amounts there may be a number of variable accounts with different investment policies and objectives into which a policyowner may direct their interests in the Separate Accounts; and RESOLVED FURTHER, that the Separate Accounts are to be established and maintained in accordance with the provisions of Section 20-651 of the Arizona Insurance Code and the regulations promulgated under that Section; and RESOLVED FURTHER, that any officer of this corporation is authorized and directed to take whatever action may be necessary or advisable to obtain the appropriate regulatory authority to amend the Certificate of Authority to issue Variable Contracts and to establish and maintain fixed or variable Separate Accounts, or both, and to register, file or qualify the Variable Contracts for sale, including, but not limited to, determining the states or other jurisdictions in which action shall be taken to qualify, file, or register the Variable Contracts for sale, performing any and all acts as such officer deems necessary or advisable to comply with the applicable laws of any such state or jurisdiction including making any required filings with the Arizona Insurance Department or any other regulatory authority in Arizona or any other regulatory authority in any state or jurisdiction having jurisdiction over the insurance activities of this corporation or over the Variable Contracts; performing any and all acts as such officer deems necessary or advisable to comply with the applicable laws of the United States including, but not limited to, preparing and filing registration statements with the Securities and Exchange Commission to register any Variable Contracts or interests therein under the Securities Act of 1933 and the Investment Company Act of 1940 and to register any Separate Account, the benefits of which are payable in variable dollar amounts, or interests therein under the Investment Company Act of 1940, and to file any exemptive application if necessary or advisable under the Investment Company Act of 1940 and to make such other filings or seek any interpretations that are necessary or advisable from the Securities and Exchange Commission or any other agency of the United States Government; or making any filings, seek any interpretations, or make other submissions that such officer deems necessary or advisable with other regulatory authorities having jurisdiction over the offer and sale of the Variable Contracts and to execute and file all requisite papers and documents, including, but not limited to, applications, reports, surety bonds, irrevocable consents, powers of attorneys, and appointments of agents for service of process, and the paying of all necessary fees and expenses as in such officer's judgment may be necessary or advisable. RESOLVED FURTHER, that actions taken by officers of this corporation prior to the adoption of these resolutions, which are within the authority conferred hereby had these resolutions predated such action, are hereby ratified, confirmed and approved. Dated: July 1, 1998 ------------ /s/ DAVID R. CARMICHAEL /s/ WILLIAM L. FERRIS - -------------------------- -------------------------- David R. Carmichael William L. Ferris /s/ AUDREY L. MILFS /s/ GLENN S. SCHAFER - -------------------------- -------------------------- Audrey L. Milfs Glenn S. Schafer /s/ TC SUTTON - -------------------------- Thomas C. Sutton EX-99.1(1)(B) 3 MEMORANDUM ESTABLISHING SEPARATE ACCOUNT INTEROFFICE MEMO [--] [Logo of PM Group] DATE: September 24, 1998 TO: William L. Ferris FROM: Jane M. Guon SUBJECT: PM GROUP SEPARATE ACCOUNT FOR REGISTERED VARIABLE LIFE PRODUCTS ______________________________________________________________________________ RECOMMENDATION: - -------------- That you authorize the establishment of the Pacific Select Exec Separate Account. WHY RECOMMENDATION IS SUBMITTED AT THIS TIME: - -------------------------------------------- Documentation of this authorization must accompany registered variable life product registration filings made with the Securities and Exchange Commission. BACKGROUND: - ---------- Management has approved the development of registered variable life products, for sale in the State of New York. Amounts received by PM Group in connection with the sale of the new products will be allocated to the Pacific Select Exec Separate Account and among the subaccounts, at the policyowners' direction. On July 1, 1998, the Board of Directors of PM Group Life Insurance Company adopted resolutions authorizing any Officer of the Corporation to take whatever action necessary to establish and maintain Separate Accounts, which may be, required in connection with registered variable life products. Outside counsel for our variable life products recommends that authorization for new Separate Accounts be obtained from the Chief Executive Officer. OTHERS CONSULTED: - ---------------- Diane Ledger and Sharon Cheever concur in this recommendation. AUTHORIZATION: - ------------- On behalf of PM Group Life Insurance Company, the establishment of the Pacific Select Exec Separate Account is hereby authorized to be used in connection with registered variable life products develop ed and established by PM Group. /s/WILLIAM L. FERRIS - ----------------------------- William L. Ferris President and Chief Executive Officer EX-99.1(3)(A) 4 FORM OF DISTRIBUTION AGREEMENT DRAFT DISTRIBUTION AGREEMENT AGREEMENT made this ____ day of ____________, 199__, by and between Pacific Life & Annuity Company, an Arizona Corporation, "PL&A" on its own behalf and on behalf of the segregated asset accounts of PL&A listed on Exhibit A to this Agreement (the "Separate Accounts"), and Pacific Mutual Distributors, Inc., a California corporation, ("PMD"). WHEREAS, PL&A has established and maintains the Separate Accounts, a separate investment account, for the purpose of selling variable life contracts ("Contracts") to commence after the effectiveness of the Registration Statement relating thereto filed with the Securities and Exchange Commission on form S-6, or any successor form thereto, pursuant to the Securities Act of 1933, as amended (the "1933 Act"), through PMD, acting as general agent of PL&A; WHEREAS, the Separate Accounts are registered as a unit investment trust under the Investment Company Act of 1940 ("the 1940 Act"); WHEREAS, PMD is registered as a broker-dealer under the Securities Exchange Act of 1934 (the "Securities Exchange Act") and is a member of the National Association of Securities Dealers, Inc. ("NASD"); and WHEREAS, PL&A desires to retain PMD as the Distributor and Principal Underwriter to provide for the sale and distribution to the public of the Contracts issued by PL&A and funded by interests in the General Account of PL&A and in the Separate Accounts and PMD is willing to render such services; NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the parties agree as follows: 1. Principal Underwriter. PL&A hereby appoints PMD, during the term --------------------- of this Agreement, subject to the registration requirements of the 1933 Act and the 1940 Act and the provisions of the Securities Exchange Act, to be the Distributor and Principal Underwriter for the sale of Contracts to the public in each state and other jurisdictions in which the Contracts may be lawfully sold. PL&A also appoints PMD as its independent General Agent for sale of its Contracts (including any riders which PL&A may make available in connection therewith or any contracts for which the Contracts may be exchanged or converted) and for sale of such other insurance contracts or annuity contracts as PL&A may, from time to time, authorize in writing by amendment thereto. PMD shall offer the Contracts for sale and distribution at premium rates set by PL&A. 2. Selling Agreements. PMD is hereby authorized to enter into separate ------------------ written agreements, on such terms and conditions as PMD determines are not inconsistent with this Agreement, with such organizations which agree to participate as a general agent and/or broker-dealer in the distribution of the Contracts and to use their best efforts to solicit applications for Contracts. Any such broker-dealer (hereinafter "Broker") shall be both registered as a broker-dealer under the Securities Exchange Act and a member of the NASD. PMD shall be responsible for ensuring that Broker and its agents or representatives and general agent and its sub-agents soliciting applications for Contracts shall be duly and appropriately licensed, registered and otherwise qualified for the sale of the Contracts (and the riders and other contracts offered in connection therewith) under the insurance laws and any applicable blue sky laws of each state or other jurisdiction in which such policies may be lawfully sold and in which PL&A is licensed to sell such Contracts. PL&A shall undertake to appoint Broker's qualified agents or representatives and general agent's sub-agents as life insurance agents of PL&A, provided that PL&A reserves the right to refuse to appoint any proposed representative, agent, or sub-agent or once appointed, to terminate such appointment. PMD shall be responsible for ensuring that Broker and general agent supervise its agents, representatives, or sub-agents. PMD is also authorized to enter into separate written agreements, on such terms and conditions as PMD determines are not inconsistent with this Agreement, with such organizations ("wholesalers") that agree to participate in the distribution of the Contracts and to use their best efforts to solicit Brokers and general agents that, in turn, will solicit applications of the Contracts. 3. Life Insurance Agents. PL&A shall be responsible for ensuring that Broker --------------------- and its agents or representatives and general agent and its sub-agents meet all qualifications and hold any licenses or authorizations that may be required for the solicitation or sale of the Contracts under the insurance laws of the applicable jurisdictions. 4. Suitability. PL&A desires to ensure that Contracts will be sold to ----------- purchasers for whom the Contract will be suitable. PMD shall take reasonable steps to ensure that the various representatives of Broker and sub-agents of general agents shall not make recommendations to an applicant to purchase a Contract in the absence of reasonable grounds to believe the purchase of the Contract is suitable for such applicant. While not limited to the following, a determination of suitability shall be based on information furnished to a representative or sub-agent after reasonable inquiry of such applicant concerning the applicant's other security holdings, insurance and investment objectives, financial situation and needs, and the likelihood that the applicant will continue to make any premium payments contemplated by the Contracts and will keep the Policy in force for a sufficient period of time so that PL&A's acquisition costs are amortized over a reasonable period of time. 5. Conformity with Registration Statement and Approved Sales Materials. In ------------------------------------------------------------------- performing its duties as Distributor, PMD will act in conformity with the Prospectus and with the instructions and directions of PL&A, the requirements of the 1933 Act, the 1940 Act, the Securities Exchange Act, and all other applicable federal and state laws and regulations. PMD shall not give any information nor make any representations, concerning any aspect of the Contract or of PL&A's operations to any persons or entity unless such information or representations are contained in the Registration Statement and 2 the pertinent prospectus filed with the Securities and Exchange Commission, or are contained in sales or promotional literature approved by PL&A. PMD will not use and will take reasonable steps to ensure Broker will not use any sales promotion material and advertising which has not been previously approved by PL&A. 6. Expenses. During the term of this Agreement, PMD will bear all of its -------- expenses in complying with this Agreement, including the following expenses: (a) costs of sales presentations, mailings, sales promotion materials, advertising, and any other marketing efforts by PMD in connection with the distribution or sale of the Contracts; and (b) any compensation paid to employees of PMD and to wholesalers, Brokers and general agents in connection with the distribution or sale of the Contracts. Notwithstanding any other provision of this Agreement, it is understood and agreed that PL&A shall at all times retain the ultimate responsibility for and control of all functions performed pursuant to this Agreement, and for marketing the Contract, and reserves the right to direct, approve or disapprove any action hereunder taken on its behalf by PMD. 7. Applications. Completed applications for Contracts solicited by such ------------ Broker through its agents or representatives or by general agent through its sub-agents shall be transmitted directly to PL&A. All payments under the Contracts shall be made by check to PL&A or by other method acceptable to PL&A, and if received by PMD, shall be held at all times in a fiduciary capacity and remitted promptly to PL&A. All such payments will be the property of PL&A. PL&A has the sole authority to approve or reject such applications or payments and maintains ultimate responsibility for underwriting. Anything in this Agreement to the contrary notwithstanding, PL&A retains the ultimate right to control the sale of the Contracts and to appoint and discharge life insurance agents of PL&A. 8. Standard of Care. PMD shall be responsible for exercising reasonable care ---------------- in carrying out the provisions of this Agreement. 9. Reports. PMD shall be responsible for maintaining the records of Broker ------- and general agent and their agents, representatives or sub-agents who are licensed, registered and otherwise qualified to sell the Contracts; calculating and furnishing the fees payable to Brokers or general agents; and for furnishing periodic reports to PL&A as to the sale of Contracts made pursuant to this Agreement. 10. Records. PMD shall maintain and preserve such records as are required of ------- it by applicable laws and regulations. The books, accounts and records of PL&A, the Separate Accounts and PMD shall be maintained so as to clearly and accurately disclose the nature 3 and details of the transactions, including such accounting information as necessary to support the reasonableness of the amounts to be paid by PL&A hereunder. 11. Compensation. For the services rendered and product development in the ------------ initial sales efforts and continuing obligations under this Agreement, PL&A shall pay PMD in the amounts set forth in Schedule A, which schedule is incorporated herein. PL&A shall arrange for the payment of commissions, through PMD, to those Brokers and general agents that sell Contracts under agreements entered into pursuant to Section 2, hereof, and to wholesalers that solicit brokers and general agents to sell Contracts under agreements entered into pursuant to Section 2, hereof, in amounts as may be agreed to by PL&A and PMD specified in such written agreements. 12. Investigation and proceedings. PMD and PL&A agree to cooperate fully in ----------------------------- any insurance regulatory investigation or proceeding or judicial proceeding arising in connection with the Contracts distributed under this Agreement. PMD further agrees to furnish regulatory authorities with any information or reports in connection with such services which may be requested in order to ascertain whether the operations of PL&A and the Separate Accounts are being conducted in a manner consistent with applicable laws and regulations. PMD and PL&A further agree to cooperate fully in any securities regulatory investigation or proceeding with respect to PL&A, PMD, their affiliates and their agents or representatives to the extent that such investigation or proceeding is in connection with Contracts distributed under this Agreement. Without limiting the foregoing: (a) PMD will be notified promptly of any customer complaint or notice of any regulatory investigation or proceeding or judicial proceeding received by PL&A with respect to PMD or any agent, representative, or sub-agent of a Broker or general agent or which may affect PL&A's issuance of any Contract sold under this Agreement; and (b) PMD will promptly notify PL&A of any customer complaint or notice of any regulatory investigation or proceeding received by PMD or its affiliates with respect to PMD or any agent, representative, or sub- agent of a Broker or general agent in connection with any Contract distributed under this Agreement or any activity in connection with any such Contract. In the case of a meritorious customer complaint, PMD and PL&A will cooperate in investigating such complaint and any response will be sent to the other party to this Agreement for approval not less than five business days prior to its being sent to the customer or regulatory authority, except that if a more prompt response is required, the proposed response shall be communicated by telephone or telegraph. 13. Indemnification. PL&A hereby agrees to indemnify and hold harmless PMD and --------------- its officers and directors, and employees for any expenses (including legal expenses), losses, claims, damages, or liabilities incurred by reason of any untrue or alleged untrue statement 4 or representation of a material fact or any omission or alleged omission to state a material fact required to be stated to make other statements not misleading, if made in reliance on any prospectus, registration statement, post-effective amendment thereof, or sales materials supplied or approved by PL&A or the Separate Accounts. PL&A shall reimburse each such person for any legal or other expenses reasonably incurred in connection with investigating or defending any such loss, liability, damage, or claim. However, in no case shall PL&A be required to indemnify for any expenses, losses, claims, damages, or liabilities which have resulted from the willful misfeasance, bad faith, negligence, misconduct, or wrongful act of PMD. PMD hereby agrees to indemnify and hold harmless PL&A, its officers, directors, and employees, and the Separate Accounts for any expenses, losses, claims, damages, or liabilities arising out of or based upon any of the following in connection with the offer or sale of the contracts: 1) except for such statements made in reliance on any prospectus, registration statement or sales material supplied or approved by PL&A or the Separate Accounts, any untrue or alleged untrue statement of representation made; 2) any failure to deliver a currently effective prospectus; 3) the use of any unauthorized sales literature by any officer, employee, agent, or sub-agent of PMD, Broker or general agent; or 4) any willful misfeasance, bad faith, negligence, misconduct or wrongful act. PMD shall reimburse each such person for any legal or other expenses reasonably incurred in connection with investigating or defending any such loss, liability, damage, or claim. Promptly after receipt by a party entitled to indemnification ("indemnified party") of notice of the commencement of any action, if a claim for indemnification in respect thereof is to be made against PL&A or PMD ("indemnifying party") such indemnified party will notify indemnifying party in writing of the commencement thereof, but failure to notify the indemnifying party of any claim shall not relieve it from any liability which it may have to the person against whom such action is brought otherwise than on account of this agreement contained in this Section 13. The indemnifying party will be entitled to participate in the defense of the indemnified party and such participation will not relieve such indemnifying party of the obligation to reimburse the indemnified party for reasonable legal and other expenses incurred by such indemnified party in defending himself. 14. Agent of PM Group [PLA] or Separate Accounts. Any person, even though also -------------------------------------------- an officer, director, employee, or agent of PMD, who may be or become an officer, director, employee, or agent of PL&A or the Separate Accounts shall be deemed when rendering services to PL&A or the Separate Accounts or acting in any business of PL&A or the Separate Accounts, to be rendering such services to or acting solely for PL&A or the Separate Accounts and not as an officer, director, employee, or agent or one under the control or direction of PMD even thought paid by PMD. Likewise, any person even though also an officer, director, employee, or agent of PL&A or the Separate Accounts, who may be or become an officer, director, employee, or agent of PMD shall be deemed, when rendering services to PMD or acting in any business of PMD, to be rendering such services to or acting solely for PMD and not as an officer, director, 5 employee, or agent or one under the control or direction of PL&A or the Separate Accounts even though paid by PL&A or the Separate Accounts. 15. Books and Records. It is expressly understood and agreed that all ----------------- documents, reports, records, books, files and other materials relating to this Agreement and the services to be performed hereunder shall be the sole property of PL&A and the Separate Accounts and that such property shall be held by PMD as agent, during the effective term of this Agreement. This material shall be delivered to PL&A upon the termination of this Agreement free from any claim or retention of rights by PMD. During the term of this Agreement and for a period of three years from the date of termination of this Agreement, PMD will not disclose or use any records or information and will regard and preserve as confidential all information related to the business of PL&A or the Separate Accounts that may be obtained by PMD from any source as a result of this Agreement and will disclose such information only if PL&A or the Separate Accounts has authorized such disclosure, or if such disclosure is expressly required by applicable federal or state regulatory authorities. PMD further acknowledges and agrees that, in the event of a breach or threatened breach by it of the provisions of this article, PL&A will have no adequate remedy in moneys or damages and, accordingly, PL&A shall be entitled in its discretion to seek an injunction against such breach. However, no specification in this Agreement of a specific legal or equitable remedy shall be construed as a waiver or prohibition against any other legal or equitable remedy in the event of a breach of a provision of this Agreement. 16. Employees. PMD will not employ, except with the prior written approval of --------- the Commissioner of Insurance of the state of Arizona, in any material connection with the handling of the Separate Accounts' assets any person who, to the knowledge of PMD: (a) in the last 10 years has been convicted of any felony or misdemeanor arising out of conduct involving embezzlement, fraudulent conversion, or misappropriation of funds or securities, or involving violations of Sections 1341, 1342, or 1343 of Title 18, United States Code; or (b) within the last 10 years has been found by any state regulatory authority to have violated or has acknowledged violation of any provision of any state insurance law involving fraud, deceit, or knowing misrepresentation; or (c) within the last 10 years has been found by any federal or state regulatory authorities to have violated or have acknowledged violation of any provision of federal or state securities laws involving fraud, deceit, or knowing misrepresentation. 17. Termination. This Agreement shall terminate automatically upon its ----------- assignment without the prior written consent of both parties. This Agreement may be terminated at any time, for any reason, by either party on 60 days' written notice to the other party, without the payment of any penalty. Upon termination of this Agreement, all authorizations, rights and obligations shall cease except the obligation to settle accounts hereunder, including commissions on premiums subsequently received for Contracts in effect at time of termination, and the agreements contained in Sections 12 and 13 hereof. 18. Regulations. This Agreement shall be subject to the provisions of the 1940 ----------- Act and the Securities Exchange Act and the rules, regulations and rulings thereunder, and of the applicable rules and regulations of the NASD, and applicable state insurance law and other applicable law, from time to time in effect, and the terms hereof shall be interpreted and construed in accordance therewith. 19. Independent Contractor. PMD shall act as an independent contractor and ---------------------- nothing herein contained shall constitute PMD or its agents, officers or employees as agents, officers, or employees of PL&A in connection with the sale of the Contracts. 20. Notices. Notices of any kind to be given to PMD by PL&A or the Separate ------- Accounts shall be in writing and shall be duly given if mailed, first class postage prepaid, or delivered to PMD at 700 Newport Center Drive, Newport Beach, California 92660, or at such other address or to such individual as shall be specified by PMD. Notices of any kind to be given to PL&A or the Separate Accounts shall be in writing and shall be duly given if mailed, first class postage prepaid, or delivered to them at 700 Newport Center Drive, Newport Beach, California 92660, or at such other address or to such individual as shall be specified by PL&A. If any provisions of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 21. Governing Law. This Agreement shall be construed and enforced in ------------- accordance with and governed by the laws of the State of Arizona. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PACIFIC LIFE & ANNUITY COMPANY Attest: By: - --------------------------------- --------------------------------- Name: Name: Title: PACIFIC MUTUAL DISTRIBUTORS, INC. Attest: By: - --------------------------------- --------------------------------- Name: Name: Title: EXHIBIT A PACIFIC SELECT EXEC SEPARATE ACCOUNT SEPARATE ACCOUNT A IN WITNESS WHEREOF, the parties hereto have caused this Exhibit A to be executed by their Officers designated below on this ____ day of ____________, 1999. PACIFIC MUTUAL DISTRIBUTORS, INC. Attest: By: - ------------------------------------- -------------------------------- Name: Name: Title: President PACIFIC LIFE & ANNUITY COMPANY Attest: By: - ------------------------------------- -------------------------------- Name: Name: Title: President EX-99.1(3)(B) 5 FORM OF SELLING AGREEMENT PACIFIC LIFE & ANNUITY COMPANY VARIABLE CONTRACT SELLING AGREEMENT This Agreement ("Agreement") is made as of _______________________, 19__ by and among PACIFIC LIFE & ANNUITY COMPANY ("PL&A"), PACIFIC MUTUAL DISTRIBUTORS, INC. ("Distributor"), a broker/dealer registered with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Exchange Act"), and a member of the National Association of Securities Dealers, Inc. ("NASD"), _____________________________________ ("Broker/Dealer"), and each undersigned agency (jointly and severally referred to herein as "Agency"); Broker/Dealer and Agency jointly and severally hereinafter referred to collectively as "Selling Entities". This Agreement is for the purpose of providing for the distribution of certain variable life insurance policies and/or annuity contracts set forth in Schedule A hereto and of any successor additional SEC registered insurance products (as discussed in Paragraph [3] of this Agreement) issued by PL&A and distributed by Distributor through representatives who are both (a) state insurance licensed and appointed agents of PL&A and associated with the Agency and (b) NASD registered representatives of Broker/Dealer who are appropriately licensed both with the NASD and with the relevant states. The variable life insurance and/or annuity contracts set forth in Schedule A hereto, as such Schedule may be amended and/or restated from time to time to include any successor or additional SEC registered insurance products, and together with any riders to such contracts, are referred to collectively herein as the "Contracts". 1. APPOINTMENT In consideration of the mutual promises and covenants contained in this Agreement, PL&A and Distributor appoint Broker/Dealer and those persons associated with Agency who are NASD registered representatives of Broker/Dealer and state insurance licensed agents of PL&A to solicit and procure applications for the Contracts. These appointments are not deemed to be exclusive in any manner and extend only to those jurisdictions, set forth in Schedule B hereto as such Schedule B may be amended from time to time by PL&A in its sole discretion, where the Contracts specified in such Schedule B have been approved for sale. From time to time, PL&A will provide Selling Entities with information regarding the jurisdictions in which PL&A is authorized to solicit applications for the Contracts and any limitations on the availability of such Contracts in any jurisdiction. 2. RESPONSIBILITIES Broker/Dealer is authorized to collect the premium on the Contracts and must remit such premiums to PL&A in the manner set forth in the applicable Compensation Schedule set forth in one of the Schedule Ds. Contract applications shall be taken only on preprinted, state-appropriate application forms supplied by PL&A. All completed applications, supporting documents and payments are the sole property of PL&A and must be promptly delivered to PL&A. All applications are subject to acceptance by PL&A at its sole discretion. 3. NEW PRODUCTS Distributor may propose and PL&A may issue additional or successor products, in which event Broker/Dealer will be informed of the new product and its related Compensation Schedule. If Broker/Dealer does not agree to distribute such new product(s), it must notify PL&A in writing within 30 days of receipt of the Compensation Schedule for such new product(s). If Broker/Dealer does not indicate disapproval of the new product(s) or the terms contained in its related Compensation Schedule, Broker/Dealer will be deemed to have thereby agreed (a) to distribute such new product(s) and agreed to its related Compensation Schedule, which shall be attached to and made a part of this Agreement as an amendment or addendum to the applicable Schedule D, or as 1 a new Schedule D hereto, and (b) to the amendment of Schedules A and B to this Agreement to name such new product(s) and to identify where their offer and sale has been approved. 4. SUBAGENTS Agency is authorized to appoint Subagents to solicit sales of the Contracts ("Subagents"); provided, however, that PL&A shall have the right in its sole discretion to terminate the appointment of any Subagent upon notice from PL&A to Agency. Agency warrants that no Subagent shall commence solicitation nor aid, directly or indirectly, in the solicitation of any application for any Contract unless, at the time of such solicitation or aid, such Subagent is appropriately licensed for such product under applicable insurance laws and is an NASD registered representative of Broker/Dealer. Selling Entities each represent that they have, for each Subagent, fulfilled all requirements set forth in the form of general letter of recommendation set forth in Schedule C hereto; and agree, upon reasonable request by PL&A, to furnish proof of such fulfillment as PL&A may require. 5. SALES MATERIAL Neither Selling Entities nor any of their respective Subagents, officers, directors, employees, affiliates, representatives or agents shall utilize in their marketing efforts for the Contracts any written brochure, prospectus, descriptive literature, printed and published material, audio-visual material or standard letters; provided, however, that they may: (a) use material that has been provided preprinted by PL&A or Distributor, and (b) use material, the use of which PL&A or Distributor has specifically approved, in writing, prior to such use. In order for PL&A or Distributor to review and approve materials not produced by PL&A in accordance with clause (b) above, Broker/Dealer must provide PL&A and Distributor with evidence that any material proposed to be used was filed with the NASD in accordance with applicable rules and copies of correspondence with the NASD relating to the proposed material. 6. RECORDS In accordance with the requirements of federal and state laws and rules of applicable self-regulatory organizations as defined in the Exchange Act ("SROs") including but limited to the Rules of Fair Practice of the NASD ("NASD Rules"), Selling Entities shall maintain complete records concerning the sale of the Contracts, information regarding the customs relating to the sale and/or servicing of the Contracts, including the manner and extent of distribution of any sales, marketing or other solicitation material, shall make such records and files available to staff of PL&A or Distributor at such times as PL&A or Distributor may reasonably request and shall make such material available to personnel of state insurance departments, the NASD or other regulatory agency, including the SEC, that have regulatory authority over PL&A or Distributor. 7. DELIVERY OF PROSPECTUSES Selling Entities warrant that each solicitation, specifically including any solicitation effected by any Subagent, will be made by use of a currently effective prospectus, that a prospectus will be delivered concurrently with each sales presentation and that no statements shall be made to a client superseding or controverting any statement made in the prospectus. PL&A and Distributor shall furnish Selling Entities, at no cost to Selling Entities, reasonable quantities of prospectuses and such other material as PL&A and Distributor deem necessary to aid in the solicitation of Contracts. 8. BROKER/DEALER REPRESENTATIONS The representations, warranties and covenants of Broker/Dealer set forth in this Agreement are continuous during the term of this Agreement and Broker/Dealer agrees to notify each of PL&A and Distributor immediately, in writing, if, at any time during the course of this Agreement, any of the representations, warranties or covenants set forth herein become inaccurate or untrue of the facts related thereto. Broker/Dealer represents, warrants and covenants that: (a) Broker/Dealer is affiliated with Agency which is an entity properly licensed under the insurance laws of the jurisdiction(s) in which Broker/Dealer will act under this Agreement; 2 (b) Broker/Dealer is registered with the SEC as a broker/dealer under the Exchange Act, a member of the NASD and will, throughout the duration of this Agreement, remain in compliance with the requirements of the NASD and of the Exchange Act, including but not limited to laws requiring that the Broker/Dealer and each of its Subagents/registered representatives be appropriately securities registered, insurance licensed and appointed by PL&A, and such other applicable federal or state laws; (c) Broker/Dealer has established rules, procedures, and supervisory and inspection techniques necessary to train and to supervise diligently the activities of its NASD registered representatives who are state insurance licensed and appointed agents of PL&A; (d) Broker/Dealer shall ensure that no registered representative of Broker/Dealer, including any Subagent, shall sell or recommend for sale any Contract to any person without reasonable grounds for believing, after appropriate inquiry, that the purchase of that Contract is suitable for that person; (e) Upon request by PL&A and Distributor, Broker/Dealer will furnish such appropriate records as are necessary to document the training, licensing and diligent supervision required by subparagraph (b) above, and client suitability determinations required by subparagraph (c) above. 9. AGENCY REPRESENTATIONS The representations, warranties and covenants of Agency set forth in this Agreement are continuous during the term of this Agreement and Agency agrees to notify each of PL&A and Distributor immediately, in writing, if, at any time during the course of this Agreement, any of the representations, warranties or covenants set forth herein become inaccurate or untrue of the facts related thereto. Agency represents, warrants and covenants that it will, and will cause each Subagent to, comply fully with the requirements of state insurance law and applicable federal laws, including but not limited to assuring appropriate state insurance licensing and appointment by PL&A, and will establish rules and procedures necessary to supervise diligently the activities of licensed and appointed agents of PL&A associated with Agency. Upon request by PL&A or Distributor, Agency will furnish such appropriate records as are necessary to document such diligent supervision. 10. PL&A REPRESENTATIONS PL&A represents that the prospectus(es) and registration statement(s) relating to the Contracts that are and shall be in effect from time to time contain no untrue statements of material fact and do not omit to state material facts, the omission of which makes any statement contained in such prospectus(es) and registration statement(s) misleading. 11. COMPENSATION 11.1 PL&A, through Distributor, will remit to Broker/Dealer or Agency compensation as set forth in the applicable Schedule D hereto, which payments or termination thereof shall be governed by the administrative rules established by PL&A in its sole discretion. Selling Entities shall pay all Subagents. PL&A reserves the right not to pay compensation on a Contract, the premium for which is paid in whole or in part by the loan or surrender value of any other life insurance policy or annuity contract issued by PL&A. 11.2 PL&A may offset, against any claim for commission and any other compensation payable to Broker/Dealer or Agency under this Agreement, any existing or future indebtedness of, respectively, Broker/Dealer or Agency, whether fixed or contingent, whether such indebtedness arises under this Agreement or otherwise. Such indebtedness shall constitute a first lien against any such compensation. Neither Broker/Dealer nor Agency may offset, against any such indebtedness, any compensation accruing under this Agreement. 12. COMPLAINTS AND INVESTIGATIONS PL&A, Distributor, Broker/Dealer and Agency agree to cooperate fully in any insurance or securities regulatory investigation or proceeding or judicial proceeding with respect to PL&A, 3 Distributor, Broker/Dealer and/or Agency, their affiliates and their agents or representatives to the extent that such investigation or proceeding is in connection with the Contracts distributed under this Agreement. Without limiting the foregoing: (a) Selling Entities shall promptly notify PL&A and Distributor of any complaint or comment regarding the Contracts and/or any allegation that Selling Entities or any of its Subagents/representatives violated any law, regulation or rule in soliciting applications for or servicing the Contracts. Selling Entities shall promptly investigate such complaint or allegation, take appropriate remedial measures and notify PL&A and Distributor of same. Selling Entities shall provide PL&A and Distributor with full details of and correspondence relating to any of the foregoing, including copies of all legal documents pertaining thereto. (b) Selling Entities shall cooperate fully with PL&A and Distributor in any regulatory proceeding or judicial proceeding involving the solicitation of applications for or the servicing of Contracts by the Selling Entities or any of their representatives. 13. INDEMNIFICATION 13.1 PL&A and Distributor agree to indemnify and hold harmless Selling Entities, their officers, directors, agents and employees, against any and all losses, claims, damages, or liabilities to which they may become subject under the Securities Act, the Exchange Act, the Investment Company Act of 1940, or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact or any omission or alleged omission to state a material fact required to be stated or necessary to make the statements made not misleading in the registration statement for the Contracts or for the shares of Pacific Select Fund (the "Fund") filed pursuant to the Securities Act, or any prospectus included as a part thereof, as from time to time amended and supplemented, or in any advertisement or sales literature provided by PL&A and Distributor. 13.2 Selling Entities agree to, jointly and severally, hold harmless and indemnify PL&A and Distributor and any of their respective affiliates, employees, officers, agents and directors (collectively, "Indemnified Persons") against any and all claims, liabilities and expenses (including, without limitation, losses occasioned by any rescission of any Contract pursuant to a "free look" provision or by any return of initial purchase payment in connection with an incomplete application), including, without limitation, reasonable attorneys' fees and expenses and any loss attributable to the investment experience under a Contract, that any Indemnified Person may incur from liabilities resulting or arising out of or based upon (a) any untrue or alleged untrue statement other than statements contained in the registration statement or prospectus relating to any Contract, (b) (i) any inaccurate or misleading, or allegedly inaccurate or misleading sales material used in connection with any marketing or solicitation relating to any Contract, other than sales material provided preprinted by PL&A or Distributor, and (ii) any use of any sales material that either has not been specifically approved in writing by PL&A or Distributor or that, although previously approved in writing by PL&A or Distributor, has been disapproved, in writing by either of them, for further use, or (c) any act or omission of a Subagent, director, officer or employee of Selling Entities, including, without limitation, any failure of Selling Entities or any Subagent to be registered as required as a broker/dealer under the 1934 Act, or licensed in accordance with the rules of any applicable SRO or insurance regulator. 14. FIDELITY BOND Selling Entities each represent and covenant that all directors, officers, employees and Subagents of Selling Entities licensed pursuant to this Agreement or who have access to funds of PL&A are and will continue to be covered by a blanket fidelity bond including coverage for larceny, embezzlement and other defalcation, issued by a bonding company rated A- or better from A.M. Best or equivalent rating from another nationally recognized statistical rating organization. This bond shall be maintained at Broker/Dealer's and/or Agency's expense. Such bond shall be at least equivalent to the minimal coverage required under the NASD Rules, and endorsed to extend coverage to life insurance and annuity transactions. Selling Entities acknowledge that PL&A may require evidence that such coverage is in force, and Broker/Dealer or Agency shall promptly give notice to PL&A of any notice of cancellation or change of coverage. 4 Selling Entities each assign any proceeds received from the fidelity bond company, error and omissions or other liability coverage, to PL&A to the extent of PL&A's loss due to activities covered by the bond. If there is any deficiency, Selling Entities will promptly pay PL&A the amount of such deficiency on demand. Selling Entities each shall indemnify and hold harmless PL&A from any such deficiency and from the cost of collection. 15. LIMITATIONS OF AUTHORITY The Contract forms are the sole property of PL&A. No person other than PL&A has the right or authority to: (i) make, alter or discharge any policy, Contract, certificate, supplemental contract or form issued by PL&A; (ii) make, alter, modify or discharge any Contract; (iii) waive or modify any provision with respect to any Contract or policy; (iv) incur indebtedness or liability, or expend or contract for expenditure of any funds on behalf of PL&A or the Contracts; (v) extend the time for payment of any premiums, bind PL&A to reinstate any terminated Contracts, or accept notes for payment of premiums; (vi) enter into any proceeding in a court of law or before a regulatory agency in the name of or on behalf of PL&A; or (vii) institute or file any response to any legal proceeding in connection with any matter pertaining to the Contracts on behalf of PL&A without the prior written consent of PL&A (except that if Selling Entities themselves are named as a party or parties in such proceedings each named party may enter into legal proceedings on its own behalf without the written consent of PL&A). 16. GENERAL PROVISIONS 16.1 Waiver Failure of any of the parties to insist promptly upon strict compliance with any of the obligations of any other party under this Agreement will not be deemed to constitute a waiver of the right to enforce strict compliance. 16.2 Independent Contractors Selling Entities are each an independent contractor and not an employee or subsidiary of PL&A or Distributor. Nothing contained in this Agreement or otherwise shall be deemed to make any registered representative of Broker/Dealer or any Subagent appointed by Agency an employee or agent of PL&A or Distributor for tax or any other purposes. Neither PL&A nor Distributor shall have any responsibility for training or supervision of any such Subagent or registered representative or of any other employee or affiliate of any Selling Entities. 16.3 Independent Assignment No assignment of this Agreement or of commissions or other payments under this Agreement shall be valid without prior written consent of PL&A. Any purported assignment in violation of this Paragraph 16.3 is void. 16.4 Notice Any notice required or otherwise given pursuant to this Agreement may be given electronically by facsimile or electronic mail (but not orally by telephone) or by mail, postage paid, (including any express mail service), transmitted to the last address communicated by the receiving party to the other parties to this Agreement. The current address for mailing purposes of this Agreement shall be set forth on the signature page. 16.5 Severability To the extent this Agreement may be in conflict with any applicable law or regulation, this Agreement shall be construed in a manner consistent with such law or regulation. The invalidity or illegality of any provisions of this Agreement shall not be deemed to affect the validity or legality of any other provision of this Agreement. 16.6 Amendment Except as expressly provided herein, this Agreement may be amended only by a writing signed by all parties. The Schedules hereto may be amended by PL&A or Distributor upon 10 days' written notice to Broker/Dealer and Agency which shall be deemed received the earlier of actual receipt or 10 days after mailing or transmission. The submission of an application for the Contracts by Broker/Dealer or Agency after the date of any 5 such amendment shall constitute such party's agreement to such amendment. No amendment will impair the right to receive commissions as accrued with respect to Contracts issued and applications procured prior to the amendment. 16.7 Termination This Agreement may be terminated by any party for any reason upon 10 days' prior written notice. It may be terminated, for cause, by any party immediately. Termination of this Agreement shall not impair the right to receive commissions accrued with respect to applications procured prior to the termination except as otherwise specifically provided in the applicable Schedule D hereto. 16.8 Survival All representations and warranties made in or pursuant to this Agreement and the provisions of Paragraphs 11, 12 and 14.10 of this Agreement shall survive the termination of this Agreement. 16.9 Governing Law This Agreement shall be construed in accordance with the laws of the State of California, without giving effect to the conflict of law provisions thereof. Broker/Dealer and Agency consent to the jurisdiction of the courts of the State of California and to the jurisdiction of federal courts located within California. 16.10 Proprietary Information Selling Entities acknowledge that information pertaining to any Distributor program or service, including names of Contract owners, is proprietary in nature and belongs exclusively to Distributor. Selling Entities agree that they will not disclose any information concerning Distributor programs or services to any person, for consideration or otherwise, unless (a) PL&A or Distributor has authorized such disclosure in writing or (b) if such disclosure is expressly required by state or federal regulatory authorities and PL&A and Distributor have received notice, in writing, of such disclosure. Selling Entities agree further that, following termination of this Agreement for any reason, they will not solicit or otherwise contact any Contract owner for any reason except as expressly agreed in writing by Distributor or PL&A. 16.11 Entire Agreement This Agreement shall constitute the entire agreement among the parties and supersedes all prior agreements and understandings, whether written or verbal. By signing below, each of the undersigned agrees to have read and be bound by the terms and conditions of this Agreement. Each of the undersigned acknowledges receipt of a copy of this Agreement. PACIFIC LIFE & ANNUITY COMPANY 700 Newport Center Drive Newport Beach, CA 92660 By:______________________________________ Title:___________________________________ PACIFIC MUTUAL DISTRIBUTORS, INC. 700 Newport Center Drive Newport Beach, CA 92660 By:______________________________________ Title:___________________________________ 6 BROKER/DEALER:___________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ 7 AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ 8 AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ 9 AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ AGENCY:__________________________________ Address__________________________________ __________________________________ __________________________________ By:______________________________________ Title:___________________________________ 10 SCHEDULE A PACIFIC LIFE & ANNUITY COMPANY CONTRACTS COVERED BY THIS AGREEMENT Contract Name Contract Number - ------------- --------------- Pacific Portfolios-NY Pacific Select Exec II-NY Date:_____________________ 11 SCHEDULE B JURISDICTIONS IN WHICH PACIFIC LIFE & ANNUITY COMPANY IS APPROVED FOR SALE OF CONTRACTS COVERED BY THIS AGREEMENT CONTRACT JURISDICTIONS - -------- ------------- Pacific Portfolios-NY New York Pacific Select Exec II-NY New York Date:____________________ 12 SCHEDULE C GENERAL LETTER OF RECOMMENDATION Selling Entities hereby certify to PL&A that all of the following requirements will be fulfilled in conjunction with the submission of licensing/appointment papers for all applicants as Subagents ("Applicant") submitted by Agency. Agency will, upon request, forward proof of compliance with same to PL&A in a timely manner, including but not limited to general background check information, NASD background information/reports, fingerprint reports, etc. 1. We have made a thorough and diligent inquiry and investigation relative to each applicant's identity, residence and business reputation and declare that each applicant is personally known to us, has been examined by us, is known to be of good moral character, has a good business reputation, is reliable, is financially responsible and is worthy of a license. Our inquiries and investigations were sufficient to meet the requirements of requisite state insurance regulation, federal securities regulation and NASD requirements. Each individual is trustworthy, competent, and qualified to act as an agent for PL&A, and to hold himself out in good faith to the general public. We vouch for each applicant. 2. We have on file a B-300, B-301 or U-4 form which was completed by each applicant. We have fulfilled all the necessary investigative requirements for the registration of each applicant as a registered representative through our NASD member firm, and each applicant is presently registered as an NASD registered representative. The above information in our files indicates no fact or condition which would disqualify the applicant from receiving a license, and all the findings of all investigative information is favorable. 3. We certify that all educational requirements have been met for the specific state in which each applicant is requesting a license, and that all such persons have fulfilled the appropriate examination, education and training requirements. 4. If the applicant is required to submit his or her picture, signature, and securities registration in the state in which he or she is applying for a license, we certify that those items forwarded to PL&A are those of the applicant and that the securities registration and any insurance licenses are true copies of the original. 5. We hereby warrant that the applicant is not applying for a license with PL&A in order to place insurance chiefly or solely on his or her life or property, lives or property of his or her relatives, or property or liability of his or her associates. 6. We certify that each applicant will receive close and adequate supervision, and that we will make inspection when needed of any or all risks written by these applicants, to the end that the insurance interest of the public will be properly protected. 7. We will not permit any applicant to transact insurance as an agent until duly licensed therefor. No applicants have been given a contract or furnished supplies, nor have any applicants been permitted to write, solicit business or act as an agent in any capacity, and they will not be so permitted until the certificate of authority or license applied for is received. 8. We certify that Selling Entities and applicant shall have entered into a written agreement pursuant to which: (i) applicant is appointed a Subagent of Agency and a registered representative of Broker/Dealer; (ii) applicant agrees that his/her selling activities relating to securities-regulated Contracts shall be under the supervision and control of Broker/Dealer and his/her selling activities relating to all other Contracts shall be under the supervision and control of Agency; and (iii) applicant's right to continue to sell such Contracts is subject to his/her continued compliance with such agreement and any procedures, rules or regulations implemented by Selling Entities. 13 SCHEDULE D-1 COMPENSATION SCHEDULE FOR PACIFIC PORTFOLIOS-NY - INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ACCUMULATION DEFERRED ANNUITY [TO BE FILED BY PRE-EFFECTIVE AMENDMENT] SCHEDULE D-2 COMPENSATION SCHEDULE FOR PACIFIC SELECT EXEC II-NY - INDIVIDUAL FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY [TO BE FILED BY PRE-EFFECTIVE AMENDMENT] EX-99.1(5)(A) 6 FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY (DRAFT) [PL&A LOGO APPEARS HERE] 700 Newport Center Drive Newport Beach, CA 92660
FLEXIBLE READ YOUR POLICY CAREFULLY. This is a legal contract between you, the Owner, PREMIUM and us, Pacific Life & Annuity Company, a stock insurance company. We agree to VARIABLE LIFE pay the benefits of this policy according to its provisions. The consideration INSURANCE for this policy is the application for it, a copy of which is attached, and POLICY payment of the premiums. Death Benefit is described in the Death Benefit section of this policy. Variable Account Cash Surrender Values may increase or decrease depending upon Variable Account Investment experience, subject to any minimum guarantees. There is no guaranteed Variable Account Cash Surrender Value. Policy loan value is less than one hundred percent (100%) of the policy's cash surrender value. The amount and duration of the death benefit may be fixed or variable depending upon investment experience of the Variable Accounts. Free Look Right - You may return this policy within 10 days after you receive it. To do so, deliver or mail it to us or to our agent. This policy will then be deemed void from the beginning and we will refund the premiums paid. Signed for Pacific Life & Annuity Company, . Adjustable Face Amount . Benefits Vary Based on Investment Experience /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS . Non-Participating President and Chief Executive Officer Secretary
POLICY NUMBER: VP99999990 OWNER(S): LELAND STANFORD POLICY DATE: JAN 10, 1998 INSURED: LELAND STANFORD RISK CLASSIFICATION: MALE SELECT NONSMOKER AGE ON POLICY DATE: 35 INITIAL FACE AMOUNT: $100,000
NOTE: IT IS POSSIBLE THAT COVERAGE WILL LAPSE IF THE ACCUMULATED VALUE IS INSUFFICIENT TO PAY THE CHARGES ASSESSED ON A MONTHLY PAYMENT DATE. BECAUSE THE ACCUMULATED VALUE MAY BE BASED ON THE INVESTMENT RESULTS OF THE SEPARATE ACCOUNT, THE PAYMENT OF INITIAL AND PLANNED PREMIUMS MAY NOT BE ADEQUATE TO GUARANTEE THAT THE POLICY WILL REMAIN IN FORCE. IF THE POLICY DOES NOT REMAIN IN FORCE, THERE WILL BE NO DEATH BENEFIT OR ACCUMULATED VALUE. P98-52 (PNY) GUIDE TO POLICY PROVISIONS
POLICY SPECIFICATIONS............................................. 3 DEFINITIONS....................................................... 5 PREMIUMS.......................................................... 6 DEATH BENEFIT..................................................... 7 ACCUMULATED VALUE................................................. 10 TRANSFERS......................................................... 14 SURRENDER AND WITHDRAWAL OF VALUES................................ 15 TIMING OF PAYMENTS AND TRANSFERS.................................. 16 INCOME BENEFITS................................................... 16 POLICY LOANS...................................................... 17 SEPARATE ACCOUNT PROVISIONS....................................... 17 SUBSTITUTION OF INSURED........................................... 18 GENERAL PROVISIONS................................................ 19 INDEX............................................................. 21
P98-52 NY POLICY NUMBER: VP999999990 POLICY SPECIFICATIONS BASIC POLICY: FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE PREMIUMS: PLANNED PERIODIC PREMIUM PAYMENT = $ 1,938.05 GUIDELINE SINGLE PREMIUM = $21,569.72 GUIDELINE LEVEL PREMIUM = $ 1,938.05 DEATH BENEFIT QUALIFICATION TEST: GUIDELINE PREMIUM TEST (THIS ELECTION IS IRREVOCABLE FOR THE LIFE OF THE CONTRACT) DEATH BENEFIT OPTION: A ACCOUNT ALLOCATIONS AVAILABLE: MONEY MARKET GOVERNMENT SECURITIES SMALL-CAP INDEX MULTI-STRATEGY EQUITY INDEX MID-CAP VALUE GROWTH GROWTH LT LARGE-CAP VALUE MANAGED BOND EQUITY REIT INTERNATIONAL EMERGING MARKETS FIXED EQUITY INCOME AGGRESSIVE EQUITY FIXED LT HIGH YIELD BOND BOND AND INCOME INTEREST ON THE FIXED OPTIONS IS GUARANTEED TO BE NOT LESS THAN 3.00% ANNUALLY FOR THE FIRST 10 POLICY YEARS AND 3.30% THEREAFTER. IN ADDITION, ANY EXCESS - --------------------------------------------------- INTEREST DECLARED BY US WILL BE GUARANTEED FOR ONE YEAR. BEFORE SUCH DECLARATION, EXCESS AMOUNTS ARE NOT GUARANTEED. SUBJECT TO POLICY GUARANTEES, WE HAVE THE RIGHT TO CHANGE THE INTEREST CREDITED TO THE FIXED OPTIONS AND THE COST OF INSURANCE AND OTHER CHARGES DEDUCTED, WHICH MAY REQUIRE MORE PREMIUM TO BE PAID OR THE ACCUMULATED VALUE TO BE LESS THAN WAS ILLUSTRATED. PREMIUM LOAD: FOR EACH PREMIUM PAID THERE IS A PREMIUM LOAD THAT CONSISTS OF A SALES LOAD OF 2.50% PLUS A CHARGE OF 2.35% FOR CERTAIN STATE AND LOCAL TAXES ----- PLUS A CHARGE OF 1.50% FOR CERTAIN FEDERAL TAXES. REFER TO CONTRACT FOR DETAILS. ADMINISTRATIVE CHARGE: $7.50 PER MONTH TO AGE 100; $0 THEREAFTER. SURRENDER CHARGE: SHOWN ON THE TABLE OF SURRENDER CHARGES, WHICH FOLLOWS. - -------------------------------------------------------------------------- M&E RISK FACE AMOUNT CHARGE: $5.55 PER MONTH FOR POLICY YEARS 1 TO 10; $0 THEREAFTER. REFER TO CONTRACT FOR DETAILS. POLICY NUMBER: VP99999990 OWNER(S): LELAND STANFORD POLICY DATE: JAN 10, 1998 INSURED: LELAND STANFORD RISK CLASSIFICATION: MALE SELECT NONSMOKER AGE ON POLICY DATE: 35 INITIAL FACE AMOUNT: $100,000
NOTE: IT IS POSSIBLE THAT COVERAGE WILL LAPSE IF THE ACCUMULATED VALUE IS INSUFFICIENT TO PAY THE CHARGES ASSESSED ON A MONTHLY PAYMENT DATE. BECAUSE THE ACCUMULATED VALUE MAY BE BASED ON THE INVESTMENT RESULTS OF THE SEPARATE ACCOUNT, THE PAYMENT OF INITIAL AND PLANNED PREMIUMS MAY NOT BE ADEQUATE TO GUARANTEE THAT THE POLICY WILL REMAIN IN FORCE. IF THE POLICY DOES NOT REMAIN IN FORCE, THERE WILL BE NO DEATH BENEFIT OR ACCUMULATED VALUE. P98-52 NY Page 3.0 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS SUMMARY OF COVERAGES EFFECTIVE ON THE POLICY DATE P98-52 : BASIC COVERAGE FACE AMOUNT: $50,000.00 AGE AT ISSUE: 35 RISK CLASSIFICATION: MALE SELECT NONSMOKER COVERED PERSON: LELAND STANFORD ________________________________________________________________________________ R98-ART: ANNUAL RENEWABLE TERM RIDER INITIAL FACE AMOUNT: $50,000.00 AGE AT ISSUE: 35 RISK CLASSIFICATION: MALE SELECT NONSMOKER COVERED PERSON: LELAND STANFORD ________________________________________________________________________________ R98-WC: WAIVER OF CHARGES RIDER AGE AT ISSUE: 35 RISK CLASSIFICATION: MALE NONSMOKER COVERED PERSON: LELAND STANFORD ________________________________________________________________________________ R98-SPT: ANNUAL RENEWABLE AND CONVERTIBLE TERM RIDER INITIAL FACE AMOUNT: $50,000.00 AGE AT ISSUE: 35 RISK CLASSIFICATION: FEMALE NONSMOKER COVERED PERSON: MARY STANFORD ________________________________________________________________________________ P98-52 NY Page 3.1 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS SUMMARY OF COVERAGES EFFECTIVE ON THE POLICY DATE ANNUAL RENEWABLE TERM RIDER VARYING SCHEDULE FACE AMOUNT: $50,000.00 AGE AT ISSUE: 35 RISK CLASSIFICATION: MALE SELECT NONSMOKER PERSON COVERED: LELAND STANFORD
ATTAINED FACE ATTAINED FACE ATTAINED FACE AGE AMOUNT AGE AMOUNT AGE AMOUNT - ------------------------------------------------------------------------------------------------------------ 35 $ 50,000 70 $100,000 36 50,000 71 100,000 37 50,000 72 100,000 38 50,000 73 100,000 39 50,000 74 100,000 40 100,000 75 100,000 41 100,000 76 100,000 42 100,000 77 100,000 43 100,000 78 100,000 44 100,000 79 100,000 45 100,000 80 100,000 46 100,000 47 100,000 48 100,000 49 100,000 50 100,000 51 100,000 52 100,000 53 100,000 54 100,000 55 100,000 56 100,000 57 100,000 58 100,000 59 100,000 60 100,000 61 100,000 62 100,000 63 100,000 64 100,000 65 100,000 66 100,000 67 100,000 68 100,000 69 100,000
P98-52 NY Page 3.2 POLICY NUMBER: VP99999990 POLICY SPECIFICATION TABLE OF SURRENDER CHARGES END OF POLICY YEAR SURRENDER CHARGE* 1 $718.00 2 $638.22 3 $558.44 4 $478.67 5 $398.89 6 $319.11 7 $239.33 8 $159.56 9 $ 79.78 10 $ 0.00
* VALUES ARE THE SURRENDER CHARGE FOR THE END OF EACH POLICY YEAR BEFORE THE MAXIMUM SURRENDER CHARGE HAS BEEN APPLIED. THE SURRENDER CHARGE IS LEVEL FOR THE FIRST POLICY YEAR, THEN DECREASES MONTHLY. FOR POLICY MONTHS BETWEEN POLICY ANNIVERSARIES, THE SURRENDER CHARGE IS A STRAIGHT LINE INTERPOLATION OF THE END OF POLICY YEAR SURRENDER CHARGES SHOWN ABOVE. HOWEVER, THE SURRENDER CHARGE WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE OF $315.10. THERE IS NO SURRENDER CHARGE AFTER THE TENTH POLICY ANNIVERSARY. P98-52 NY Page 3.3 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS TABLE OF INSURANCE CHARGES - BASIC POLICY GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1.00 OF COVERAGE APPLICABLE TO BASIC POLICY COVERING LELAND STANFORD. THE RATES BELOW INCLUDE A 5-YEAR GUARANTEE OF OUR CURRENT RATES AS OF THE ISSUE DATE.
MONTHLY MONTHLY MONTHLY MONTHLY AGE RATE AGE RATE AGE RATE AGE RATE - ------------------------------------------------------------------------------------------------------------------- 35 0.00012477 60 0.00134998 85 0.01373773 36 0.00012873 61 0.00147355 86 0.01502185 37 0.00013293 62 0.00161341 87 0.01635661 38 0.00013525 63 0.00177217 88 0.01773798 39 0.00013763 64 0.00194909 89 0.01917199 40 0.00025202 65 0.00214342 90 0.02067766 41 0.00027458 66 0.00235100 91 0.02228714 42 0.00029715 67 0.00257276 92 0.02406347 43 0.00032307 68 0.00280882 93 0.02611993 44 0.00034984 69 0.00306532 94 0.02881300 45 0.00037996 70 0.00335367 95 0.03281758 46 0.00041093 71 0.00368199 96 0.03964295 47 0.00044442 72 0.00406029 97 0.05306605 48 0.00047960 73 0.00449620 98 0.08333300 49 0.00051898 74 0.00498352 99 0.08333300 50 0.00056089 75 0.00551331 100+ 0.00000000 51 0.00061038 76 0.00607653 52 0.00066577 77 0.00666569 53 0.00072875 78 0.00727588 54 0.00080018 79 0.00792387 55 0.00087672 80 0.00863521 56 0.00096005 81 0.00943078 57 0.00104684 82 0.01033895 58 0.00113962 83 0.01137350 59 0.00123925 84 0.01251385
P98-52 NY Page 4.0 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS TABLE OF INSURANCE CHARGES - ANNUAL RENEWABLE TERM RIDER GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1.00 OF COVERAGE APPLICABLE TO THE ANNUAL RENEWABLE TERM RIDER COVERING LELAND STANFORD.
MONTHLY MONTHLY MONTHLY MONTHLY AGE RATE AGE RATE AGE RATE AGE RATE - ---------------------------------------------------------------------------------------------------------- 35 0.00017600 60 0.00134998 36 0.00018686 61 0.00147355 37 0.00020022 62 0.00161341 38 0.00021526 63 0.00177217 39 0.00023280 64 0.00194909 40 0.00025202 65 0.00214342 41 0.00027458 66 0.00235100 42 0.00029715 67 0.00257276 43 0.00032307 68 0.00280882 44 0.00034984 69 0.00306532 45 0.00037996 70 0.00335367 46 0.00041093 71 0.00368199 47 0.00044442 72 0.00406029 48 0.00047960 73 0.00449620 49 0.00051898 74 0.00498352 50 0.00056089 75 0.00551331 51 0.00061038 76 0.00607653 52 0.00066577 77 0.00666569 53 0.00072875 78 0.00727588 54 0.00080018 79 0.00792387 55 0.00087672 80 0.00863521 56 0.00096005 57 0.00104684 58 0.00113962 59 0.00123925
P98-52 NY Page 4.1 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS TABLE OF GUARANTEED MAXIMUM M&E RISK FACE AMOUNT CHARGES ANNUAL RENEWABLE TERM RIDER M&E RISK FACE AMOUNT CHARGE APPLICABLE TO THE ANNUAL RENEWABLE TERM RIDER: MONTHLY CHARGE EQUAL TO THE AMOUNTS SHOWN BELOW. REFER TO THE CONTRACT FOR DETAILS.
ATTAINED M&E RISK ATTAINED M&E RISK ATTAINED M&E RISK AGE CHARGE AGE CHARGE AGE CHARGE - ------------------------------------------------------------------------------------------------------------------------ 35 $ 5.55 70 11.45 36 5.55 71 11.45 37 5.55 72 11.45 38 5.55 73 11.45 39 5.55 74 11.45 40 11.45 75 11.45 41 11.45 76 11.45 42 11.45 77 11.45 43 11.45 78 11.45 44 11.45 79 11.45 45 11.45 80 11.45 46 11.45 47 11.45 48 11.45 49 11.45 50 11.45 51 11.45 52 11.45 53 11.45 54 11.45 55 11.45 56 11.45 57 11.45 58 11.45 59 11.45 60 11.45 61 11.45 62 11.45 63 11.45 64 11.45 65 11.45 66 11.45 67 11.45 68 11.45 69 11.45
P98-52 NY Page 4.2 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS TABLE OF MONTHLY M&E RISK ASSET CHARGE PERCENTAGES M&E RISK ASSET CHARGE IS A PERCENTAGE OF THE VARIABLE ACCUMULATED VALUE (AV), AS SHOWN BELOW, AND IS DEDUCTED MONTHLY. REFER TO THE CONTRACT FOR DETAILS.
ATTAINED % OF FIRST % OF AV ATTAINED % OF FIRST % OF AV AGE $25,000 OF AV OVER $25,000 AGE $25,000 OF AV OVER $25,000 - ---------------------------------------------------------------------------------------------- 35 0.0625% 0.0292% 70 0.0375% 0.0042% 36 0.0625 0.0292 71 0.0375 0.0042 37 0.0625 0.0292 72 0.0375 0.0042 38 0.0625 0.0292 73 0.0375 0.0042 39 0.0625 0.0292 74 0.0375 0.0042 40 0.0625 0.0292 75 0.0375 0.0042 41 0.0625 0.0292 76 0.0375 0.0042 42 0.0625 0.0292 77 0.0375 0.0042 43 0.0625 0.0292 78 0.0375 0.0042 44 0.0625 0.0292 79 0.0375 0.0042 45 0.0375 0.0042 80 0.0375 0.0042 46 0.0375 0.0042 81 0.0375 0.0042 47 0.0375 0.0042 82 0.0375 0.0042 48 0.0375 0.0042 83 0.0375 0.0042 49 0.0375 0.0042 84 0.0375 0.0042 50 0.0375 0.0042 85 0.0375 0.0042 51 0.0375 0.0042 86 0.0375 0.0042 52 0.0375 0.0042 87 0.0375 0.0042 53 0.0375 0.0042 88 0.0375 0.0042 54 0.0375 0.0042 89 0.0375 0.0042 55 0.0375 0.0042 90 0.0375 0.0042 56 0.0375 0.0042 91 0.0375 0.0042 57 0.0375 0.0042 92 0.0375 0.0042 58 0.0375 0.0042 93 0.0375 0.0042 59 0.0375 0.0042 94 0.0375 0.0042 60 0.0375 0.0042 95 0.0375 0.0042 61 0.0375 0.0042 96 0.0375 0.0042 62 0.0375 0.0042 97 0.0375 0.0042 63 0.0375 0.0042 98 0.0375 0.0042 64 0.0375 0.0042 99 0.0375 0.0042 65 0.0375 0.0042 100+ 0 0 66 0.0375 0.0042 67 0.0375 0.0042 68 0.0375 0.0042 69 0.0375 0.0042
P98-52 NY Page 4.3 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS TABLE OF INSURANCE CHARGES GUARANTEED MAXIMUM MONTHLY WAIVER OF CHARGES RATES APPLICABLE TO THE POLICY COVERING LELAND STANFORD.
MONTHLY MONTHLY MONTHLY MONTHLY AGE RATE AGE RATE AGE RATE AGE RATE - -------------------------------------------------------------------- 35 0.00006 36 0.00006 37 0.00006 38 0.00007 39 0.00007 40 0.00007 41 0.00007 42 0.00007 43 0.00007 44 0.00007 45 0.00007 46 0.00007 47 0.00007 48 0.00007 49 0.00008 50 0.00008 51 0.00009 52 0.00011 53 0.00012 54 0.00015 55* 0.00019 56* 0.00025 57* 0.00030 58* 0.00037 59* 0.00044
* ONLY FOR RENEWAL PURPOSES P98-52 NY Page 4.4 POLICY NUMBER: VP99999990 POLICY SPECIFICATIONS TABLE OF INSURANCE CHARGES - ANNUAL RENEWABLE AND CONVERTIBLE TERM RIDER GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1.00 OF COVERAGE APPLICABLE TO THE ANNUAL RENEWABLE AND CONVERTIBLE TERM RIDER COVERING MARY STANFORD.
MONTHLY MONTHLY MONTHLY MONTHLY AGE RATE AGE RATE AGE RATE AGE RATE - ------------------------------------------------------------------------------------------------------------- 35 0.00013760 60 0.00079261 36 0.00014679 61 0.00084811 37 0.00015764 62 0.00091795 38 0.00017016 63 0.00100723 39 0.00018519 64 0.00111093 40 0.00020189 65 0.00122404 41 0.00022027 66 0.00134321 42 0.00023948 67 0.00146424 43 0.00025787 68 0.00158372 44 0.00027709 69 0.00171271 45 0.00029715 70 0.00186144 46 0.00031722 71 0.00204194 47 0.00033813 72 0.00226723 48 0.00036155 73 0.00254448 49 0.00038666 74 0.00287245 50 0.00041428 75 0.00324392 51 0.00044358 76 0.00365336 52 0.00047625 77 0.00409428 53 0.00051395 78 0.00456716 54 0.00055251 79 0.00508570 55 0.00059276 80 0.00567286 56 0.00063303 57 0.00067164 58 0.00070859 59 0.00074807
P98-52 NY Page 4.5 DEFINITIONS In this section, we define certain terms used throughout this policy. Other terms may be defined in other parts of the policy. Defined terms are usually capitalized to provide emphasis. Age -- means the Insured's Age to the nearest birthday as of the Policy Date, increased by the number of complete policy years elapsed. Code -- is the U.S. Internal Revenue Code, and the rules and regulations issued thereunder. Evidence of Insurability -- is information, including medical information, satisfactory to us that is used to determine insurability and the Insured's risk class. Face Amount -- is used in determining the death benefit under this policy, including any increases or decreases. The Face Amount is shown in the Policy Specifications. Fixed Options -- consist of the Fixed Account and the Fixed LT Account. Free Look Transfer Date -- is 15 days after the policy is issued, or if later, the date all requirements necessary to place the policy in force are delivered to the Service Center. Insured -- is the person insured under this policy. The Insured is shown in the Policy Specifications as the Covered Person. Investment Options -- consist of the Variable Accounts and the Fixed Options. Monthly Payment Date -- is the day each month on which certain policy charges are deducted from the Accumulated Value. The first Monthly Payment Date is the Policy Date. Later Monthly Payment Dates occur each month after the Policy Date on the same day of the month as the Policy Date. Net Premium -- is the premium we receive reduced by any Premium Load. PL&A, we, our, ours, us and the Company -- refers to Pacific Life & Annuity Company. Policy Date -- is shown on page 3. Policy months, quarters, years and anniversaries are measured from this date. Policy Debt -- is the Loan Account plus Loan Interest. Separate Account -- is the Pacific Select Exec Separate Account, which is a separate account of ours that consists of subaccounts, also called Variable Accounts. Each Variable Account may invest its assets in a separate class of shares of a designated investment company or companies. Service Center -- means our service office located at 700 Newport Center Drive, Newport Beach, CA 92660. Valuation Date -- is each day required by applicable law and currently includes each day the New York Stock Exchange is open for trading and our Service Center is open. Valuation Period -- is the period of time between successive Valuation Dates. Variable Account -- is a separate account of ours or a subaccount of a separate account of ours in which assets are segregated from assets in our general account or our other separate accounts. Premiums and Accumulated Value (AV) under this policy may be allocated to a Variable Account for variable accumulation. Written Request -- is a request in writing, signed by you, and accepted by us at our Service Center. P98-52 Page 5 NY You, your or Owner -- refers to the Owner of this policy. OWNER AND BENEFICIARY Owner -- The Owner of this policy is as shown in the Policy Specifications or in a later Written Request. If there are two or more Owners, they will own this contract as joint tenants with right of survivorship. Assignment -- You may assign this policy by Written Request. An assignment will take place only when recorded at our Service Center. When recorded, the assignment will take effect as of the date the Written Request was signed. Any rights created by the assignment will be subject to any payments made or actions taken by us before the change is recorded. We will not be responsible for the validity of any assignment. Beneficiary -- The beneficiary is named by you in the application to receive the death benefit proceeds. The interest of any beneficiary will be subject to any assignment. You may make a change of beneficiary by Written Request on a form provided by us while the Insured is living. The change will take place as of the date the request is signed. Any rights created by the change will be subject to any payments made or actions taken by us before the Written Request is received. You may designate a permanent beneficiary whose rights under the policy cannot be changed without his or her consent. The interest of a beneficiary who does not survive to receive payment will pass to the surviving beneficiaries in proportion to their share in the proceeds, unless otherwise provided. If no beneficiaries survive to receive payment, the death proceeds will pass to the Owner, or the Owner's estate if the Owner does not survive to receive payment. PREMIUMS Premiums -- This policy will not be in force until the initial premium is paid. The initial premium is payable either at our Service Center or to our agent. Additional premiums, if any, are payable in advance at our Service Center. At your request, a premium receipt signed by one of our officers will be given to you. No premium may be less than $50. Premiums may be paid at any time before the Insured attains Age 100, subject to the premium limitations below. Premium Allocation Before the Free Look Transfer Date -- Any Net Premium received before the Free Look Transfer Date will be allocated to the Money Market Variable Account on the issue date or, if later, the date the premium is received and accepted by us. On the Free Look Transfer Date, the Accumulated Value in the Money Market Variable Account will be allocated to the Investment Options according to the premium allocation specified in the application or your most recent instructions received by us, if any. Premium Allocation On or After the Free Look Transfer Date -- Any Net Premium received by us on or after the Free Look Transfer Date will be allocated to the Investment Options according to the premium allocation specified in the application or your most recent instructions received by us, if any. Upon Written Request, you may change the premium allocation. Subsequently, Net Premiums will be allocated to the Investment Options according to your most recent instructions. Premium Limitation -- We reserve the right to require evidence of insurability, satisfactory to us, for any premium payment that would result in an immediate increase in the difference between the death benefit and the Accumulated Value. P98-52 Page 6 NY Guideline Premium Limitation -- (This subsection applies only if you have elected the Guideline Premium Test.) For this policy to be treated as life insurance under the Code, the sum of premiums paid less a portion of any withdrawals, as defined in the Code, may not exceed the greater of: . The Guideline Single Premium; or . The sum of the Guideline Level Premiums to the date of payment. The amounts of the Guideline Premiums are shown on the Policy Specification pages. The Guideline Premiums will change whenever there is a change in the Face Amount of insurance or in other policy benefits. Such Guideline Premium change will be shown in the supplemental schedule of benefits and premiums. Qualification as Life Insurance - (This subsection applies only if you have elected the Guideline Premium Test.) The Guideline Premiums are determined by the rules set forth in the Internal Revenue Code Section 7702. The Guideline Premiums will be adjusted to conform to any changes in the Code. In the event that a premium payment would exceed these limits, we will refund the excess premium, including any associated premium load, within 60 days of the next policy anniversary. If any such refunds are made, we will adjust the amount payable for interest, and recalculate policy values as if the excess premium had never been paid. Modified Endowment Contract (MEC) Premium Limitation -- In order for this policy to avoid being treated as a MEC, the sum of premiums paid less a portion of any withdrawals may not exceed the 7-Pay limit as defined in the Internal Revenue Code Section 7702(a). In the event that a premium payment would exceed the 7-Pay limit, we will refund the excess premium to you, including any associated premium load, within 60 days of the next policy anniversary, unless you have previously notified us in writing that such payments may be accepted by us and applied to the policy. If any such refunds are made, we will adjust the amount payable for interest, and recalculate policy values as if the excess premium had never been paid. DEATH BENEFIT Death Benefit -- This policy provides a death benefit on the death of the Insured. The death benefit, Death Benefit Option and the two Death Benefit Qualification Tests are described in this section. On the date of death, the death benefit is calculated as the larger of: . The Guideline Minimum Death Benefit calculated under the Death Benefit Qualification Test elected; and . The death benefit as calculated under the Death Benefit Option in effect. Death Benefit Qualification Test -- Unless you have elected otherwise, the Death Benefit Qualification Test for this policy is the Guideline Premium Test. The Death Benefit Qualification Test for this policy appears in the Policy Specifications section. The Death Benefit Qualification Test may not be changed for the life of the contract. The two Death Benefit Qualification Tests are explained in this subsection. 1. Cash Value Accumulation Test -- The Guideline Minimum Death Benefit will be the greater of the amount required for this policy to be deemed "life insurance" according to the Code or 101% of the Accumulated Value. Such required amount will be equal to the AV divided by the Net Single Premium (NSP), as defined in Code Section 7702(b). The NSP for each attained age, based on the policy as issued, is shown in the Table of NSP's in the Policy Specifications pages. If there are changes to the policy, the NSP's may also change. If they do change, we will send you a supplemental schedule of NSP's. 2. Guideline Premium Test -- The Guideline Minimum Death Benefit at any time is the Accumulated Value multiplied by the death benefit Percentage shown in the following table: P98-52 Page 7 NY
Death Benefit Death Benefit Death Benefit Death Benefit Age Percentage Age Percentage Age Percentage Age Percentage 0-40 250% 50 185% 60 130% 70 115% 41 243 51 178 61 128 71 113 42 236 52 171 62 126 72 111 43 229 53 164 63 124 73 109 44 222 54 157 64 122 74 107 45 215 55 150 65 120 75-90 105 46 209 56 146 66 119 91 104 47 203 57 142 67 118 92 103 48 197 58 138 68 117 93 102 49 191 59 134 69 116 Over 93 101
We reserve the right to reduce the Guideline Minimum Death Benefit by requiring distributions be made in order to maintain the Net Amount at Risk at a level that will not exceed three times the Face Amount on the Policy Date. The distribution will be equal to the change in Accumulated Value plus premium load rate calculated on the amount of the distribution, provided that the amount related to the premium load rate will never exceed the total amount of premium load paid under the policy. No surrender charge will be imposed. Qualification as Life Insurance - This policy is intended to qualify as a life insurance contract under the Internal Revenue Code Section 7702, and the death benefit under this policy is intended to qualify for income tax exclusion under the Code. To that end, the provisions of this policy, including any other rider, benefit or endorsement, are to be interpreted to ensure such tax qualification, notwithstanding any other provisions to the contrary. Any mandatory removal of funds from the Accumulated Value initiated by us and not by you will be treated as a premium refund. The premium load will be refunded up to the total premium load paid under the policy and no surrender charges will be imposed. If premiums paid under this policy exceed the Guideline Premium limitation, if applicable, and if the excess is greater than the premiums paid in the current policy year, we will, within 60 days of the next anniversary, make a distribution of the difference between such excess and the premiums paid in such policy year. For any such distribution, the face amount will not be reduced and no surrender charge will be imposed. In such case, we will also refund the premiums paid in the current year as provided for the in the Premiums section. If we do not make such a distribution within 60 days of your next policy anniversary, then we will increase the death benefit under this policy on or before the date the premium was paid. The death benefit will be increased to the amount necessary to ensure tax qualification. We will then reduce the Accumulated Value from the date of the increase to the current date to reflect the increased Monthly Deductions during the period. MEC Rules -- Unless you have instructed us differently in writing, it is intended that this policy will not be treated as a MEC under Internal Revenue Code Section 7702(a). To that end, the provisions of this policy, including any other rider, benefit or endorsement, are to be interpreted to prevent the policy from being subject to such treatment, notwithstanding any other provisions to the contrary. Any mandatory removal of funds from the Accumulated Value initiated by us and not by you will be treated as a premium refund. The premium load will be refunded up to the total premium load paid under the policy and no surrender charges will be imposed. Unless you specify to us by Written Request, any request that would change the death benefits under the policy and riders will not be processed if the change would cause the policy to be treated as a MEC under the Code. Such changes include a reduction in the face amount, a change in death benefit option, and a reduction in face amount due to a Withdrawal. P98-52 Page 8 NY If such a change would result in the policy not qualifying as a MEC and the excess of the premiums paid over the 7-Pay limit is greater than the premiums paid in the current year, we will, unless you instruct us by Written Request to the contrary, increase the death benefit under this policy on or before the date the limit was exceeded. The death benefit will be increased to the amount necessary to ensure qualification as a non-MEC. We will then reduce the Accumulated Value from the date of the increase to the current date to reflect the increased Monthly Deductions during the period. In addition, we will also refund the premiums paid in the current year as provided for in the Premiums section. Death Benefit Options -- There are three Death Benefit Options, as described in this subsection. You have elected the Death Benefit Option in the application. The Death Benefit Option for this policy appears in the Policy Specifications. . Option A -- The death benefit equals the Face Amount. . Option B -- The death benefit equals the Face Amount plus the Accumulated Value on the date of death. . Option C -- The death benefit is the Face Amount plus the sum of the premiums paid minus the sum of any withdrawals taken and any other distribution of the Accumulated Value to the date of death. If the sum of the withdrawals is greater than the sum of the premiums paid, then the death benefit will be less than the Face Amount. The Death Benefit Option may be changed to Option A or B upon Written Request a maximum of once per year. Changes to Option C are not permitted. After any such change, the Face Amount will be that amount which results in the death benefit after the change being equal to the death benefit before the change. The change will be effective on the Monthly Payment Date on or next following the day we receive your Written Request at our Service Center. Unless specified otherwise by you in writing, any request for a Death Benefit Option change will not be processed if the option change would cause the policy to be treated as a MEC under the Code. Death Benefit Proceeds -- The death benefit proceeds are the actual amount payable if the Insured dies while this policy is in force. The death benefit proceeds are equal to the death benefit, as of the date of the Insured's death, less any Policy Debt and less any due and unpaid monthly deductions occurring during a grace period. We will pay the death benefit proceeds to the beneficiary after we receive, at our Service Center, due proof of the Insured's death and such other information as we may reasonably require. The death benefit proceeds paid are subject to the conditions and adjustments defined in other policy provisions, such as General Provisions, Withdrawals and Policy Loans. We will pay interest on Death Benefit Proceeds from the date of death to the date payment is made at a rate of interest not less than the guaranteed interest rate used for the Fixed Options under this policy. If state law requires payment of a greater amount of interest, we will pay that amount. Face Amount Change -- Subject to our approval, the Owner may change the Face Amount if such request is made: . during the lifetime of the Insured; . no more often than once in any policy year; and . on your Written Request while this policy is in force. Face Amount Increase -- The effective date of the increased Face Amount will be the first Monthly Payment Date on or following the date all applicable conditions are met. A supplemental schedule of benefits and premiums will be issued. This schedule will include: . the risk class; . the effective date; . the M&E Risk Charges; . the Surrender Charges; . the guaranteed Cost of Insurance Rates; . the amount of the increase and the total Face Amount after the increase; and P98-52 Page 9 NY . if the Guideline Premium Test is used, the new Guideline Premiums. We reserve the right to charge a fee not to exceed $100 for each increase. Any such fee will be deducted from the Accumulated Value of the Fixed and the Variable Accounts in the proportion that each bears to the Accumulated Value less Policy Debt on the effective date of the increase. For any increase in Face Amount which arises from conversion of a term rider, we will waive the Surrender Charges and M&E Risk Face Amount Charges that would otherwise apply for the increase. Limits on Face Amount Increase -- An increase in Face Amount will be allowed only if it results in a death benefit increase no less than our minimum limit in effect on the date of the request. Also, an increase will not be allowed if there has been a prior decrease in Face Amount, including any decrease which occurred as a result of a Withdrawal. Face Amount Decrease -- We recommend you consult your tax advisor before requesting a decrease in policy Face Amount. You may not decrease the Face Amount before the fifth anniversary of the effective date of the associated coverage. The effective date of the decreased Face Amount will be the first Monthly Payment Date on or following the date we receive the Written Request. Existing insurance will be decreased or eliminated in the following order: . first, the most recent increase; . second, the next most recent increases successively; and . finally, the original Face Amount. A supplemental schedule of benefits and premiums will be issued. This schedule will include the following information: . the effective date of the decreased Face Amount; . the amount of the decrease and the decreased Face Amount; and . if the Death Benefit Qualification is the Guideline Premium Test, the new Guideline Premiums. If the Guideline Premium Test has been elected as the Death Benefit Qualification Test, the request for a decrease in the Face Amount will be subject to the Guideline Premiums Limitation as defined in the Code. This may result in a refund of premiums and/or the distribution of Accumulated Value in order to maintain compliance with such limitations. Such request will not be allowed if the resulting Guideline Premiums could cause an amount greater than the Net Cash Surrender Value to be distributed from the policy. Unless specified otherwise by you in writing, no request for a face amount decrease will be processed if the decrease would cause the policy to be treated as a MEC under the Code. Paid-Up Insurance -- At any time you may use the Net Cash Surrender Value to purchase guaranteed fixed paid-up insurance on the life of the Insured. At the time of conversion, the Net Cash Surrender Value will be transferred to our general account. The amount of paid-up insurance is determined by applying the Net Cash Surrender Value as the net single premium based upon the Insured's Age and Risk Classification, 1980 CSO mortality and 3% interest. Any riders attached to the policy will terminate at the time of conversion. Such paid-up insurance may be surrendered at any time, with the cash surrender value being determined on the same basis. ACCUMULATED VALUE Accumulated Value (AV) -- is the sum of the Fixed Accumulated Value plus the Variable Accumulated Value plus the Loan Account and any interest credited to it. Fixed Accumulated Value -- The Fixed Accumulated Value is the sum of the Accumulated Value in each Fixed Option as of the last Valuation Period. This subsection describes how we calculate the Accumulated Value in each Fixed Option. We credit interest on a daily basis using a 365-day year and at a rate not less than an annual effective rate of P98-52 Page 10 NY 3.00% in the first 10 policy years and 3.30% thereafter. At our discretion, we may credit a higher rate of interest. The Accumulated Value for each Fixed Option on any date is the following, including interest on each: . the Accumulated Value for the Fixed Option on the prior Monthly Payment Date; . plus the amount of any Net Premium received and allocated to the Fixed Option since the last Monthly Payment Date; . plus the amount of any transfer to the Fixed Option, including transfers from the Loan Account, since the last Monthly Payment Date; . minus the monthly deduction and other deductions due, if any, and assessed against the Fixed Option; and . minus the amount of any withdrawals, or transfers from the Fixed Option, including transfers to the Loan Account, since the last Monthly Payment Date. Variable Accumulated Value -- The Variable Accumulated Value is the sum of the Accumulated Value in each Variable Account. This subsection describes how we calculate the Accumulated Value in each of the Variable Accounts. Assets in each Variable Account are divided into Accumulation Units, which are a measure of value used for bookkeeping purposes. We credit your policy with Accumulation Units in each Variable Account as a result of: . the amount of any Net Premium received and allocated to the Variable Account; and . transfers of Accumulated Value to the Variable Account, including transfers from the Loan Account. We debit Accumulation Units in each Variable Account as a result of: . transfers from the Variable Account, including transfers to the Loan Account; . Surrenders and withdrawals from the Variable Account; and . the monthly deduction and other deductions due, if any, and assessed against the Variable Account. To determine the number of Accumulation Units debited or credited for a transaction, we divide the dollar amount of the transaction by the Unit Value of the affected Variable Account. To determine your Accumulated Value in each Variable Account, we multiply the number of Accumulation Units in the Variable Account by the Unit Value of the Variable Account. The number of Accumulation Units in each Variable Account will not change because of subsequent changes in Unit Value. At the inception of each Variable Account the Unit Value was $10. The Unit Value of each Variable Account is determined on each Valuation Date. To calculate the Unit Value of a Variable Account on any Valuation Date, we adjust the Unit Value from the previous Valuation Date for a number of factors, including: . any dividends or distributions paid to the Variable Account; . the investment performance of the Variable Account, which is based on the investment performance of the corresponding portfolio and includes expenses related to the portfolio's management; . charges, if any, that may be assessed by us for income taxes attributable to the operation of the Variable Account. Loan Account -- The Loan Account is the amount set aside to secure Policy Debt. The amount in the Loan Account on any date is the following, including interest on each: P98-52 Page 11 NY . the amount in the Loan Account on the prior anniversary; . plus any loan taken since the prior anniversary; and . minus any loan amount repaid since the prior anniversary. We will credit interest to the Loan Account on a daily basis using a 365-day year and at a rate equivalent to an annual effective rate of 3.00% in the first 10 policy years, and 3.30% thereafter. On each policy anniversary, any interest earned and held in the Loan Account will be transferred to the Investment Options in accordance with your most recent premium allocation instructions. Monthly Deduction -- A Monthly Deduction for a policy month is due on each Monthly Payment Date and is equal to the sum of the following items: . the monthly Cost of Insurance Charge; . the M&E Risk Charge; . the Administrative Charge, if any; and . rider charges, if any. Unless you have made a Written Request to the contrary, the Monthly Deduction will be charged proportionately to the Accumulated Value in each Variable Account and each Fixed Option on the Monthly Payment Date. Cost of Insurance Charge -- Beginning on the Policy Date and monthly thereafter, there will be a charge equal to the Cost of Insurance applicable to the following: . the initial Face Amount; plus . each increase in the Face Amount. The monthly Cost of Insurance Charge for the death benefit payable under this policy, is (1) multiplied by (2), where: (1) is the applicable monthly Cost of Insurance Rate; and (2) is the Net Amount at Risk. Net Amount at Risk -- The Net Amount at Risk is equal to the death benefit as of the most recent Monthly Payment Date divided by 1.002466, then reduced by the Accumulated Value at the beginning of the policy month before the Monthly Deduction is due. If there have been increases of Face Amount, then the Net Amount at Risk will be proportionately allocated to each increase according to the Face Amount of each increase in force as of the Monthly Payment Date. Cost of Insurance Rates -- The Cost of Insurance Rates are based on a number of factors, including the Insured's Age, Risk Classification and the policy duration. Part of the cost is intended to recover acquisition expenses at issue. Such expenses are greater in the early policy years. The current monthly Cost of Insurance Rates will be determined by us. These rates will not exceed the Guaranteed Maximum Monthly Cost of Insurance Rates shown in the Policy Specifications. Change in Policy Cost Factors -- Any change in policy cost factors, including interest, cost of insurance rates, expense charges and loads, will be by class and based on changes in our expectations of future investment earnings, mortality, persistency and expenses. Any such change will be determined in accordance with procedures and standards on file with the Insurance Department of the state in which this policy is delivered. M&E Risk Charge -- The Mortality and Expense Risk Charge (M&E Risk Charge) is to compensate us for the risk we assume that mortality, expenses and other costs of providing your policy will be greater than estimated. Beginning on the Policy Date and monthly thereafter, the M&E Risk Charge will be P98-52 Page 12 NY the sum of the M&E Risk Asset Charge and the M&E Risk Face Amount Charge. These are calculated as follows: The M&E Risk Asset Charge is a percentage of the Variable Accumulated Value. In the first 10 policy years, the charge is 0.0625% (0.75% annually) of the first $25,000 of Variable Accumulated Value plus a charge of 0.0292% (0.35% annually) of the Variable Accumulated Value above $25,000. After the 10th policy year, the charge is 0.0375% (0.45% annually) of the first $25,000 of Variable Accumulated Value plus a charge of 0.0042 (0.05% annually) of the Variable Accumulated Value above $25,000. After the Insured's Age 100, the charge is zero. The M&E Risk Face Amount Charge is the amount shown in the Policy Specifications, and is based on the Face Amount at policy issue. If there have been increases in the Face Amount, each increase will have a corresponding M&E Risk Face Amount Charge related to the amount of the increase. These charges will be specified in the supplemental schedule of benefits at the time of the increase. Administrative Charge -- Beginning on the Policy Date and monthly thereafter, there will be an Administrative Charge against the Accumulated Value. The amount of this charge will equal the amount shown in the Policy Specifications. Premium Load -- A Premium Load will be charged each time that a premium is paid to cover certain local, state and federal tax and certain sales and distribution costs. The Premium Load will equal the premium paid multiplied by the Premium Load rate shown in the Policy Specifications. The Premium Load associated with each premium will be immediately deducted from the premium paid. We reserve the right to increase the Premium Load with respect to the charge for local, state and federal tax. We will only increase the Premium Load if the effective tax paid by us increases. We will notify you of any such change. Other Taxes -- In addition to the charges imposed under Premium Load and elsewhere, we reserve the right to make a charge for Federal, state or local taxes that may be attributable to the Variable Accounts or to our operations with respect to this policy if we incur any such taxes. Grace Period and Lapse -- If the Accumulated Value less Policy Debt on a Monthly Payment Date is not sufficient to cover the current monthly deduction, a grace period of 61 days will be allowed for the payment of sufficient premium to keep your policy in force. The grace period begins on the Monthly Payment Date on which the insufficiency occurred and ends 61 days thereafter. At the start of the grace period, we will send notice to you at your last known address and to any assignee of record. The notice will state the due date and the amount of premium required for your policy to remain in force. A minimum of three times the monthly deduction due when the insufficiency occurred, plus Premium Load, must be paid. Premiums we receive during the grace period will be applied to your policy according to your most recent premium allocation instructions. There is no penalty for paying a premium during the grace period. Your policy will remain in force during the grace period. If sufficient premium is not paid by the end of the grace period, a lapse will occur. Thirty days prior to lapse, we will send you and any assignee of record a notice containing the lapse date and the required premium to keep your policy in force. If the Insured dies during the grace period, the death benefit proceeds will be reduced by any overdue charges. Upon lapse, the policy will terminate with no value. Reinstatement -- If it has not been surrendered, this policy may be reinstated not more than five years after the end of the grace period. To reinstate this policy you must provide us with the following: . a written application; . evidence of insurability satisfactory to us; . payment of sufficient premium to cover all monthly deductions that were due and unpaid during the grace period; plus . payment of sufficient premium to keep the policy in force for three months after the date of reinstatement. P98-52 Page 13 NY The effective date of the reinstated policy will be the first Monthly Payment Date on or following the date we approve your reinstatement application. When this policy is reinstated, the Accumulated Value will be equal to the Accumulated Value on the date of lapse subject to the following. If the policy is reinstated after the first Monthly Payment Date following lapse, the Accumulated Value will be reduced by the amount of any Policy Debt on the date of lapse. If the policy is reinstated on the first Monthly Payment Date following lapse, any Policy Debt on the date of lapse will also be reinstated, with the corresponding portion of the Accumulated Value allocated to the Loan Account as described in the Policy Loan provision. TRANSFERS Transfers -- After your initial Net Premium has been allocated according to your instructions and while your policy is in force, you may, upon Written Request, transfer your Accumulated Value, or a part of it, among the Investment Options as provided in this section. No transfer may be made if the policy is in a grace period and the required premium has not been paid. Transfers from the Fixed Account: One transfer from the Fixed Account may be made in any twelve-month period. Transfers from the Fixed Account will be limited to the greater of $5,000 or 25% of the Accumulated Value in the Fixed Account. Transfers from the Fixed LT Account: One transfer from the Fixed LT Account may be made in any twelve month period. Transfers from the Fixed LT Account will be limited to the greater of $5,000 or 10% of the Accumulated Value in the Fixed LT Account. Transfers into the Fixed Options: Except during the first 18 policy months during which transfers into the Fixed Account are unlimited (see below), transfers into the Fixed Options may be made only during the policy month preceding the policy anniversary. Allocations into the Fixed LT Account: We reserve the right to limit the amount allocated to the Fixed LT Account to $1,000,000 during the most recent 12 months for all policies owned by you. Allocations include Net Premium payments, transfers and loan repayments. Any excess over $1,000,000 will be transferred to your other Investment Options relative to your most recent instructions. We may increase the $1,000,000 limit at any time at our sole discretion. You may contact us to find out if a higher limit is in effect. Transfer into the Fixed Account Unlimited Under Special Circumstances: You may transfer from any Variable Account to the Fixed Account with no limitation under the following circumstances: . For a period of time, as described below, after a material change in the investment policy of that Variable Account; and . During the first 18 policy months as long as this policy is not in the grace period. We will notify you if there is a material change in the investment policy of a Variable Account. The notice will inform you of your options, including your option to transfer from such Variable Account to the Fixed Account within 60 days after (i) the effective date of the material change or (ii) the date we send you the notice, whichever is later. No charges are currently imposed for transfers. We reserve the right: . to limit the size of transfers so that each transfer is at least $500; . to limit the frequency of transfers (however, at least one transfer per quarter will be allowed); . to limit the remaining balance in any account as a result of a transfer to $500; and . to assess a $50 charge for each transfer exceeding 12 per policy year. P98-52 Page 14 NY SURRENDER AND WITHDRAWAL OF VALUES Surrender -- Upon Written Request while the Insured is living you may surrender this policy for its Net Cash Surrender Value. The policy will terminate on the date the request is received. Net Cash Surrender Value -- The Net Cash Surrender Value is the Cash Surrender Value less any Policy Debt. Cash Surrender Value -- The Cash Surrender Value is the Accumulated Value less any Surrender Charge. Surrender Charges -- A Surrender Charge will be deducted from the Accumulated Value upon surrender of the policy. The Surrender Charge is needed to help pay for costs such as underwriting, policy issue and sales and distribution costs. The initial Surrender Charge is equal to the amount shown on the Policy Specifications pages. This will remain level for the first policy year and then will decrease by 0.9259% per month to zero at the 120th month. However, the surrender charge will never be more than the Maximum Surrender Charge that is shown in the Policy Specifications pages. If there have been increases in the Face Amount, each increase will have a corresponding Surrender Charge and Maximum Surrender Charge related to the amount of the increase. These charges will be specified in the supplemental schedule of benefits at the time of the increase. If there have been decreases in the Face Amount, including decreases in Face Amount due to withdrawals, the Surrender Charge and Maximum Surrender Charge will be unchanged as a result of such decrease in Face Amount. Withdrawals -- Upon Written Request on or after the first policy anniversary while the Insured is living, you may withdraw a portion of the Net Cash Surrender Value of this policy. We will deduct a withdrawal fee of $25 from the Accumulated Value for each withdrawal. The withdrawal fee will be deducted from the Investment Options in the same proportion as the withdrawal. Withdrawals will be subject to the following conditions: The amount of each withdrawal must be at least $200 and the Net Cash Surrender Value remaining after each withdrawal must be at least $500. Also, if there is any Policy Debt at the time of each withdrawal, the amount of the withdrawal is limited to the excess, if any, of the Cash Surrender Value immediately prior to the withdrawal over the result of the Policy Debt divided by 90%. The amount of each withdrawal will be allocated proportionately to the Accumulated Value in the Investment Options unless you request otherwise. If the Insured dies after the request for a withdrawal is sent to us and prior to the withdrawal being effected, the amount of the withdrawal will be deducted from the death benefit proceeds, which will be determined without taking the withdrawal into account. Unless you request otherwise, no withdrawal will be processed if the withdrawal would cause the policy to be treated as a MEC. A withdrawal will affect the death benefit, depending on the Death Benefit Option you have chosen. If your policy's death benefit is greater than the Guideline Minimum Death Benefit, then the withdrawal will reduce the death benefit by the amount of the withdrawal. However, if your policy's death benefit is equal to the Guideline Minimum Death Benefit, the withdrawal may cause the death benefit to decrease by an amount greater than the amount of the withdrawal. For Death Benefit Option C, if the sum of the withdrawals and other distributions from the policy is greater than the premiums, the death benefit will be less than the Face Amount. Withdrawals may also affect the Face Amount. A withdrawal will reduce the Face Amount, but only for policies having Death Benefit Option A. In such case, a withdrawal in excess of the difference between the Guideline Minimum Death Benefit and the Face Amount will reduce the Face Amount by the amount of the excess. However, for the first withdrawal from a Death Benefit Option A policy in P98-52 Page 15 NY each of the first 15 policy years, the Face Amount will be reduced only to the extent that the withdrawal exceeds 10% of the premiums paid. TIMING OF PAYMENTS AND TRANSFERS Variable Accounts -- With respect to allocations made to the Variable Accounts, we will pay death benefit proceeds, Net Cash Surrender Value on surrender, withdrawals, and loans and will effect a transfer between Variable Accounts or from a Variable Account to a Fixed Option within seven days after we receive all the information needed to process the payment. However, we may postpone the calculation, payment or transfer of any amounts that are based on the investment performance of the Variable Accounts, if: . the New York Stock Exchange is closed on other than normal weekend and holiday closings; or . trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Commission (SEC); or . an emergency exists, as determined by the SEC, as a result of which it is not reasonably practicable to determine the value of the Account assets or to dispose of Account securities; or . The SEC by order permits postponement for the protection of securities owners. Fixed Options -- With respect to allocations made to the Fixed Options, we may defer payment of any Net Cash Surrender Value, withdrawals or loan amounts or defer transfers from either Fixed Option for up to six months after we receive your request. We will allow interest, at a rate of at least 3% annually, on any Net Cash Surrender Value or withdrawal benefit derived from a Fixed Option if we defer payment for 30 days or more. INCOME BENEFITS Income Benefits -- Surrender or withdrawal benefits may be used to buy a lifetime monthly income as long as the monthly income is at least $100. Death benefits may be used to buy a monthly income for the lifetime of the beneficiary. The monthly income will automatically be guaranteed to continue for at least ten years, unless another form of payment is requested. Under the automatic form of payment, if the income recipient dies before the end of the ten-year period, payments will continue to the end of the ten-year period to a person designated by the income recipient in writing. The purchase rates for the monthly income will be set periodically by the Company. However, under the automatic form, the monthly income bought by each $1,000 of benefit amount will always be at least as large as that shown below.
Monthly Income Monthly Income Monthly Income Age Male Female Age Male Female Age Male Female 0-30 3.20 3.09 46 3.81 3.61 62 5.10 4.73 32 3.25 3.14 48 3.92 3.71 64 5.35 4.95 34 3.31 3.19 50 4.05 3.81 66 5.62 5.20 36 3.38 3.24 52 4.18 3.93 68 5.92 5.47 38 3.45 3.30 54 4.33 4.06 70 6.23 5.78 40 3.53 3.37 56 4.49 4.20 72 6.56 6.11 42 3.62 3.44 58 4.68 4.36 74 6.90 6.48 44 3.71 3.52 60 4.88 4.54 75+ 7.08 6.67
Monthly income amount for ages not shown are halfway between the two amounts for the nearest two ages that are shown. Amounts shown are based on the Annuity 2000 table with interest at 3.00%. This benefit is not available if the income would be less than $100 a month. We may require evidence of survival for incomes that last more than ten years. P98-52 Page 16 NY Other Income Options -- Surrender, withdrawal or death benefits may be used under any other payment plans that we make available at that time. POLICY LOANS Policy Loans -- You may obtain loans by Written Request after the Free Look Period, on the sole security of the Loan Account of this policy. We recommend you consult your tax advisor before requesting a policy loan. Loan Amount Available -- The amount available for a loan is equal to 90% of Accumulated Value less any Policy Debt and also less any Surrender Charges that would be imposed if the policy were surrendered on the date the loan is taken or, if greater, the result of (a x b/c)-d, where: a is the Accumulated Value less 12 times the most recent monthly deduction less any Surrender Charge on the date of the loan; b = 1 + the loan interest credited; c = 1.0355; and d = any existing Policy Debt. The amount of a loan must be at least $200. Loan Interest -- Interest will accrue daily and is payable in arrears at the annual rate of 3.55%. Interest not paid when due will be added to the loan principal and bear interest at the same rate of interest. Loan Account -- When a loan is taken, an amount equal to the loan is transferred out of the Accumulated Value in the Investment Options into the Loan Account to secure the loan. Unless you request otherwise, loan amounts will be deducted from the Variable Accounts and the Fixed Options on a pro rata basis, up to the amount available. We will credit interest to the Loan Account as described in the Accumulated Value section. On each policy anniversary, if the amount in the Loan Account exceeds Policy Debt, the excess will be transferred from the Loan Account to the Investment Options according to your most recent instructions. If Policy Debt exceeds the amount in the Loan Account, an amount equal to such excess will be transferred from the Investment Options on a proportionate basis to the Loan Account. Loan Repayment -- Loans may be repaid at any time prior to lapse of this policy. An amount equal to the portion of any loan repaid, but not more than the amount in the Loan Account, will be transferred from the Loan Account to the Investment Options according to your most recent instructions. We reserve the right to first transfer repayments from the Loan Account to each Fixed Option up to the amount that was originally borrowed. Any excess over such amount will be transferred to the Variable Accounts relative to your most recent instructions. Any payment we receive from you while you have a loan will be first considered a loan repayment, unless you tell us in writing it is a premium payment. SEPARATE ACCOUNT PROVISIONS Separate Account -- This policy uses the Pacific Select Exec Separate Account owned by PM Group Life Insurance Company, hereafter called the "Separate Account". We established the Separate Account and maintain it under the laws of Arizona. The Separate Account is divided into subaccounts, called Variable Accounts. Realized and unrealized gains and losses from the assets of each Variable Account are credited or charged against it without regard to our other income, gains or losses. Assets may be put in our Separate Account to support this policy and other variable life policies. Assets may be put in our Separate Account for other purposes, but not to support contracts or policies other than variable life contracts or policies. The assets of our Separate Account are our property. The portion of its assets equal to the reserves and other policy liabilities with respect to our Separate Account will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of a Variable Account in excess P98-52 Page 17 NY of the reserves and other liabilities with respect to that Variable Account to another Variable Account or to our general account. All obligations arising under the policy are general corporate obligations of ours. We do not hold ourselves out to be trustees of the Separate Account assets. Variable Accounts -- Each Variable Account may invest its assets in a separate class of shares of a designated investment company or companies. The Variable Accounts of our Separate Account that were available for your initial allocations are shown in the Policy Specifications. From time to time, we may make other Variable Accounts available to you. We will provide you with written notice of all material details including investment objectives and all charges. We reserve the right, subject to compliance with the law then in effect, to: . change or add designated investment companies; . add, remove or combine Variable Accounts; . add, delete or make substitutions for the securities that are held or purchased by the Separate Account or any Variable Account; . register or deregister any Variable Account under the Investment Company Act of 1940; . change the classification of any Variable Account; . operate any Variable Account as a managed investment company or as a unit investment trust; . combine the assets of any Variable Account with other separate accounts or subaccounts of ours or our affiliates; . transfer the assets of any Variable Account to other separate accounts or subaccounts of ours or our affiliates; . run any Variable Account under the direction of a committee, board, or other group; . restrict or eliminate any voting rights of policy Owners with respect to any Variable Account, or other persons who have voting rights as to any Variable Account; . change the allocations permitted under the policy; . terminate and liquidate any Variable Account; and . make any other change needed to comply with law. If any of these changes result in a material change in the underlying investment of a Variable Account of our Separate Account, we will notify you of such change. Unless required by law or regulation, an investment policy may not be changed without our consent. We will not change the investment policy of the Separate Account without the approval of the Insurance Commissioner in the state of Arizona and without following filing and other procedures established by insurance regulators of the state of issue. SUBSTITUTION OF INSURED Benefit -- Subject to our approval, you may request a substitution of the Insured under this policy for a new Insured after the first policy year. We will require the following before we substitute the Insured: . The new Insured must submit evidence of insurability satisfactory to us. . You must submit a written application for the substitution. We may adjust the Face Amount, Accumulated Value, Surrender Charge, and any policy fees and charges to reflect the new Insured. A revised schedule of benefits will be sent to you outlining the benefits for the new Insured. Riders on the new Insured will be added only with our consent and subject to our requirements for those riders. If approved, the substitution will be effective on the next Monthly Payment Date on or next following our approval. P98-52 Page 18 NY GENERAL PROVISIONS Entire Contract -- This policy is a contract between you and us. This policy, any attached endorsements, benefits and riders and the attached copy of the initial application are the entire contract, except as follows. Any application or written notice of exercise of policy options made after the policy has been issued will also become part of the contract upon our acceptance of such application or notice and our mailing of same to your address last known to us. Only an authorized officer is permitted to change this contract or extend the time for paying premiums. Any such change must be in writing. All statements in the application shall, in the absence of fraud, be deemed representations and not warranties. We will not use any statement to contest this policy or defend a claim on grounds of misrepresentation unless the statement is in an application. Incontestability -- We will not contest this policy unless there was a material misstatement in an application, including any reinstatement application. Except for failure to pay premiums, this policy cannot be contested after the expiration of the following time periods: . The initial Face Amount cannot be contested after the policy has been in force during the Insured's lifetime for two years from the later of the Policy Date or any reinstatement date; and . An increase in the Face Amount, for which evidence of insurability was required, cannot be contested after the increased amount has been in force during the Insured's lifetime for two years from the later of its effective date or any reinstatement date. Non-Participating This policy will not share in any of our surplus earnings. Juvenile Insured -- If an Insured's Age on the Policy Date is less than 20, the Insured may apply for Nonsmoker risk status on attaining Age 20. This option must be requested in writing and accompanied by satisfactory evidence of nonsmoking. Suicide Exclusion -- If the Insured dies by suicide, while sane or insane, within two years of the Policy Date or any reinstatement date, no death benefit proceeds will be paid. Instead, we will return the sum of the premiums paid, less the sum of any Policy Debt and withdrawals. If the Insured dies by suicide, while sane or insane, within two years of the effective date of any increase in the Face Amount, no benefit will be paid with respect to such increase. Instead, we will refund the Cost of Insurance Charges made with respect to that increase. Misstatement -- If the Insured's age is misstated in the application, the amount of the death benefit shall be the greater of that which would be purchased by the most recent Cost of Insurance Charge at the correct age, or the Guideline Minimum Death Benefit for the correct age. If the Insured's age is misstated, the Accumulated Value will be modified by recalculating all prior Cost of Insurance charges and other monthly deductions based on the correct age. Reports -- A report will be mailed to you at the end of each policy quarter to your last known address. This report will include the following information for the policy quarter: . the Accumulated Value; . the Cash Surrender Value; . the current death benefit; . any Surrender Charges; . any existing Policy Debt; . transactions that occurred during the policy quarter; . changes in the Guideline Premiums, if applicable; and P98-52 Page 19 NY . any information required by law. In addition to the above reports, an annual report will also be mailed to you. The report will contain financial statements for the Separate Account and the designated investment company or companies in which the Separate Account invests, the latter of which will include a list of the portfolio securities of the investment company, as required by the Investment Company Act of 1940. We will also send any other reports as required by Federal securities law. Policy Illustrations -- Upon request we will give you an illustration of the future benefits under this policy based upon both guaranteed and current cost factor assumptions. However, if you ask us to do this more than once in any policy year, we reserve the right to charge you a fee not to exceed $25 per request for this service. Illustrated benefits that are not guaranteed, such as benefits based on the current cost factor assumptions, will vary depending upon a number of factors, including but not limited to, changes in future investment performance. Basis of Values -- A detailed statement showing how values are determined has been filed with the state insurance department. All values are at least equal to the minimums required by the law of the state in which this policy is delivered, based on the Commissioner's 1980 Standard Ordinary Mortality Table and interest at the rate of 3%, except for unisex issues which are based on the 1980 CSO Table B and interest at the rate of 3%. Ownership of Assets -- We have the exclusive and absolute control of our assets, including all assets in the Separate Account. Compliance -- We reserve the right to make any change to the provisions of this policy to comply with, or give you the benefit of, any Federal or state statute, rule, or regulation, including but not limited to requirements for life insurance contracts under the Code or any state. We will provide you with a copy of any such change, and file such a change with the insurance supervisory official of the state in which this policy is delivered. You have the right to refuse any such change. NY Page 20
INDEX Accumulated Value (AV) 10 M&E Risk Charge 12 Administrative Charge 13 MEC 7 Age 5 MEC Premium Limitation 7 Assignment 6 MEC Rules 8 Basis of Values 20 Misstatement 19 Beneficiary 6 Modified Endowment Contract 7 Cash Surrender Value 15 Monthly Deduction 12 Cash Value Accumulation Test 7 Monthly Payment Date 5 Change in Policy Cost Factors 12 Mortality and Expense Risk Charge 12 Code 5 Net Amount at Risk 12 Compliance 20 Net Cash Surrender Value 15 Cost of Insurance Charge 12 Net Premium 5 Cost of Insurance Rates 12 Net Single Premium (NSP) 7 Death Benefit 7 Non-Participating 19 Death Benefit Options 9 Owner 6 Death Benefit Proceeds 9 Paid-Up Benefit 10 Death Benefit Qualification Test 7 Policy Date 5 Entire Contract 19 Policy Debt 5 Evidence of Insurability 5 Policy Illustrations 20 Face Amount 5 Policy Loans 17 Face Amount Change 9 Premium Allocation 6 Face Amount Decrease 10 Premium Limitation 6 Face Amount Increase 9 Premium Load 13 Fixed Accumulated Value 10 Premiums 6 Fixed Options 5, 16 Qualification as Life Insurance 7, 8 Free Look Transfer Date 5 Reinstatement 13 Grace Period 13 Reports 19 Guideline Premium Limitation 7 Risk Classification 3 Guideline Premium Test 7 Separate Account 5, 17 Income Benefits 16 Service Center 5 Incontestability 19 Suicide Exclusion 19 Insured 5 Surrender 15 Investment Options 5 Surrender Charges 15 Juvenile Insured 19 Transfers 14 Lapse 13 Valuation Date 5 Limits on Face Amount Increase 10 Valuation Period 5 Loan Account 11, 17 Variable Account 5, 18 Loan Amount Available 17 Variable Accumulated Value 11 Loan Interest 17 Withdrawals 15 Loan Repayment 17 Written Request 5
P98-52 Page 21 NY PACIFIC LIFE & ANNUITY COMPANY 700 Newport Center Drive Newport Beach, CA 92660 ===================================================================== FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY . Adjustable Face Amount . Benefits Vary Based on Investment Experience . Non-Participating P98-52 NY EX-99.1(5)(B) 7 ANNUAL RENEWABLE TERM RIDER DRAFT ANNUAL RENEWABLE TERM RIDER INSURED - As used in this rider, "Insured" means the individual covered under the policy. ANNUAL RENEWABLE TERM (ART) FACE AMOUNT - The ART Face Amount provided by this rider is shown in the Policy Specifications. DEATH BENEFIT OPTION - This rider provides term insurance on the Insured under this policy. This rider has no cash value, but it affects the cash value of the policy. The death benefit of the policy to which this rider is attached is modified to include the ART Face Amount under this rider. It is now as follows: The death benefit equals the greater of the Guideline Minimum Death Benefit or the death benefit as calculated under one of the options below: . Option A: the Face Amount of the policy plus the ART Face Amount; . Option B: the Face Amount of the policy plus the ART Face Amount plus the Accumulated Value on the date of death; . Option C: the Face Amount of the policy plus the ART Face Amount plus premiums paid and less withdrawals taken. CHANGING THE ART FACE AMOUNT - Subject to our approval, you may change the ART Face Amount by Written Request during the lifetime of the Insured. Such request may be made not more than once per policy year. ART FACE AMOUNT INCREASES - You must provide evidence of insurability satisfactory to us before any request for an increase in ART Face Amount becomes effective. An Administrative Charge not to exceed $100 will be deducted from the policy's Accumulated Value on the effective date of any such increase in ART Face Amount. The effective date of the increase will be the first Monthly Payment Date on or following the date all applicable conditions are met. ART FACE AMOUNT DECREASES - Any decrease in ART Face Amount that you request for any policy year will first be applied against the most recent increase, if any, and then against successively earlier increases, if any, and finally against the original ART Face Amount. The effective date of the decrease will be the first Monthly Payment Date on or following the date we receive your Written Request. COST OF INSURANCE CHARGE - Beginning on the Policy Date and for every month thereafter, there will be a charge equal to the Cost of Insurance Charge applicable to the following: . the initial ART Face Amount; plus . each increase in the ART Face Amount. The monthly Cost of Insurance Charge for the death benefit payable under this rider is (1) multiplied by (2) where: (1) is the applicable monthly Cost of Insurance Rate for this rider; and (2) is the Net Amount at Risk attributed to the ART Face Amount. The Net Amount at Risk for the policy is calculated by taking the total death benefit of the policy divided by 1.002466 and subtracting the Accumulated Value at the beginning of the policy month before the Monthly Deduction is due. The Net Amount at Risk is allocated between the policy and this rider in proportion to the Face Amounts of each as of the Monthly Payment Date. If there have been increases in the ART Face Amount, the Net Amount at Risk will be proportionately allocated to each increase according to the Face Amount of each increase in force as of the Monthly Payment Date. COST OF INSURANCE RATES - The Cost of Insurance Rates are based on a number of factors, including the Insured's Age, Risk Classification, and the policy duration. The current monthly Cost of Insurance Rates will be determined by us. These rates will not exceed the Guaranteed Maximum Monthly Cost of Insurance Rates shown in the Policy Specifications. Any changes in the Cost of Insurance Rates will apply uniformly to all members of the same class. The Cost of Insurance Rates used to calculate the Cost of Insurance Charges for an increase in coverage necessary to meet the Guideline Minimum Death Benefit will be the same as shown in the Policy Specifications. R98-ART NY Page 1 M&E RISK FACE AMOUNT CHARGE - This M&E Risk Face Amount Charge for this rider is to compensate us for the risk we assume that mortality, expenses and other costs associated with the rider will be greater than estimated. The amount of this charge will not exceed the monthly charges shown in the Policy Specifications. We reserve the right to charge less than such amount. The amount of this charge is based on the amount of insurance issued under this rider and any subsequent increases as shown in the Policy Specifications. WITHDRAWALS - The Withdrawals provision of the policy, to which this rider is attached, is modified to include this rider. For the purpose of the Withdrawals provision, this rider is treated the same as any other increase in the policy Face Amount. For further details, please see the Withdrawals provision of your contract. CONVERSION - Coverage under this rider is convertible to an increase in Face Amount of the policy to which this rider is attached after 5 years from the effective date of the rider coverage or at the Insured's Age 80. Cost of insurance rates for such conversion amount will be those applicable for conversions. No evidence of insurability will be required. The ART Face Amount will be cancelled on the effective date of the corresponding increase in policy Face Amount. EFFECTIVE DATE - This rider is effective on the Policy Date unless otherwise notified. TERMINATION This rider will terminate on the earliest of the following: . the Insured's Age 80; or . your Written Request; or . lapse of the policy; or . termination of the policy. GENERAL CONDITIONS - This rider is part of the policy to which it is attached. As applied to this rider, the periods stated in this policy's Incontestability and Suicide provisions will start with this rider's effective date. This will also apply to any increase in the Face Amount under this rider. All terms of this policy that do not conflict with this rider's terms apply to this rider. Signed for Pacific Life & Annuity Company, /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R98-ART NY Page 2 EX-99.1(5)(C) 8 ACCELERATED LIVING BENEFIT RIDER ACCELERATED LIVING BENEFIT RIDER This rider is attached to and made part of your policy. Issue Date: ___________________________ Policy Number: ________________________ AN ACCELERATED BENEFIT (AB) RECEIVED UNDER THIS RIDER MAY BE TAXABLE. YOU SHOULD CONSULT YOUR TAX ADVISOR PRIOR TO REQUESTING THIS BENEFIT. ANY BENEFIT RECEIVED UNDER THIS RIDER MAY AFFECT YOUR ELIGIBILITY FOR GOVERNMENT BENEFITS. This rider is not meant to cause involuntary access to proceeds, which may be ultimately payable to the beneficiary. Therefore, this benefit is not available: . If either you or the Insured is required by law to use proceeds from this rider to meet the claims of creditors, whether in bankruptcy or otherwise; or . If either you or the Insured is required by a government agency to use proceeds from this rider to apply for, obtain or keep a government benefit. Requested Portion - is the amount of the policy proceeds you request. The Requested Portion divided by the Eligible Coverage will be called the Requested Percentage. The Requested Portion may not exceed the lesser of: . 50% of the Eligible Coverage; or . $250,000 for all policies in force with us. Eligible Coverage - is the portion of the policy proceeds that qualifies for determining the AB Amount. The Eligible Coverage includes: . the base policy death benefit; . any paid-up additions; and . any term rider or term coverage on the Insured that has at least two years of coverage remaining. For term coverage that varies by year, we will use the lowest coverage for the two years following your request. Eligible Coverage does not include: . any insurance provided under the policy on the life of someone other than the Insured; . the face amount of any scheduled increase(s) in insurance as provided by an additional benefit rider during the 12-month period from the date you request acceleration; or . any accidental death benefit. AB Amount - The AB Amount will be determined as of the date we approve your Written Request. The AB Amount will equal the Requested Portion less the following: 1. An actuarial discount will apply to the Requested Portion. This discount reflects the early payment of the Requested Portion of your policy. The discount will be based on a declared interest rate in effect as of the date we approve your Written Request; and 2. If there is a policy loan on your policy as of the date we approve your Written Request, we will reduce the Requested Portion to repay a portion of the policy loan equal to the Requested Percentage times the policy loan. 3. A reduction to the Requested Portion will be applied to any premiums due and unpaid if the policy has entered the Grace Period when we approve your request. 4. An administrative charge not to exceed $150. We will refund the amounts discussed in 1) and 4) above should the death of the Insured occur within 30 days after we pay the AB Amount. The AB Amount may not be less than $500. The AB will be paid either in a lump sum or under any other payment plan available at the time the Insured qualifies for payment. WE WILL PAY THE AB AMOUNT ONLY ONCE PER INSURED. If you choose a payment plan and the Insured dies before all payments have been made, the remaining amount will be paid to the beneficiary. Impact on Policy - After we pay the AB, the policy and all riders will remain in force, but all of the following will be reduced by the Requested Percentage: . The policy death benefit; . any cash value; . any paid-up additions; . any Accumulated Value; R92-ABR NY . any term insurance eligible to be accelerated under this rider; and . any required premium payments. Any policy loan will be reduced as described in the AB Amount Section. Any adjustment in Accumulated Value will be allocated to the Fixed and Variable Accounts on a pro-rata basis. Cost of Insurance Charges will be adjusted to reflect the reduction in the death benefit. Eligibility - The following conditions must be met prior to payment of any AB Amount: . The policy must be in force when your request is approved. If you have a term insurance policy or your policy is on Extended Term, two years of coverage must remain to qualify for an AB Amount. . We must receive written proof satisfactory to us that the Insured is expected to live 6 months or less from the date of the Written Request. A licensed physician, other than yourself or a member of your family, must certify to the condition. Such proof may include clinical, radiological or laboratory evidence. We reserve the right to obtain a second medical opinion from a physician of our choice, at our expense. . You or your legal guardian must apply in writing for this benefit on a form we supply. . We require written consent from any irrevocable beneficiary and assignee. . Joint life policies will qualify for acceleration only after the death of one of the joint Insureds and only if the surviving Insured meets the requirements for an AB. In the case of joint life policies, "Insured" in this rider refers to the survivor of the joint Insureds under the joint life policy. Incontestability - This rider is subject to the Incontestability provision of the policy to which it is attached. Effective Date - This rider is effective on the issue date shown. This rider will terminate: . On your written request; . On lapse or termination of the policy; or . When an AB is paid. General Provisions - There will be an administrative charge, not to exceed $150, which we will deduct from the AB. Signed for Pacific Life & Annuity Company, /s/ WILLIAM L. FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R92-ABR 2 NY EX-99.1(5)(D) 9 SPOUSE TERM RIDER DRAFT ANNUAL RENEWABLE AND CONVERTIBLE TERM RIDER COVERED PERSON - As used in this rider, the term "Covered Person" means any of the persons covered under this rider on the Policy Date. Covered Persons may be deleted from or, with evidence of insurability, added to this rider. When this occurs, we will give you a revised Policy Specifications page. BENEFIT AMOUNT - This rider provides term insurance on any Covered Person under this rider. This rider has no cash value, but it affects the cash value of the policy. The Benefit Amount is shown on the Policy Specifications pages for each Covered Person. Any reduction in Benefit Amount for any year may require a reduction in Benefit Amounts for future years. Any decrease in the face amount of the policy to which this rider is attached may require a decrease in the Benefit Amounts under this rider. We will pay the Benefit Amount for this rider when we receive proof that the death of a Covered Person occurred while this rider was in force. COST OF INSURANCE CHARGES - The Cost of Insurance Charges for this rider are calculated separately for each Covered Person. The monthly Cost of Insurance Charge for any Covered Person is equal to the product of the applicable monthly cost of insurance rate times the Benefit Amount for such Covered Person. The cost of insurance rates are based on a number of factors, including the Covered Person's attained Age and risk class and the duration of this rider. The current monthly cost of insurance rates will be determined by us. These rates will not exceed the Guaranteed Maximum Monthly Cost of Insurance Rates shown on the Policy Specifications pages. RENEWAL - Coverage under this rider will be automatically renewed for each Covered Person on each monthly payment date for which there is an applicable Guaranteed Maximum Monthly Cost of Insurance Rate shown on the Policy Specifications pages. CONVERSION - While this rider is in force or upon termination of this policy by death of the Insured, the Benefit Amount for this rider may be converted to a new policy on any Covered Person's life at any time before such Covered Person becomes Age 65. This rider may be converted during the first two years it is in force regardless of the Covered Person's Age. The Covered Person's Benefit Amount for this rider will be cancelled on the new policy's issue date. The amount of insurance under the new policy will be the same as the Covered Person's Benefit Amount under this rider. A lower amount may be selected as long as it is not less than our regular minimum limit at the time of conversion. The new policy may be on the whole life or any higher premium plan we regularly issue at the time of conversion. It will be issued in the same underwriting class and contain the same restrictions, if any, as this rider. It will be issued at our published rates which apply at the Covered Person's Age on the new policy's issue date. Riders will not be included in the new policy without our consent at the time. If we are waiving charges for this rider at the Covered Person's Age 65, and if this rider is converted to a whole life policy in the manner described above, we will waive premiums under the new policy while total disability continues without interruption. EFFECTIVE DATE - This rider is effective on the policy date unless otherwise stated. This rider will terminate on the earliest of the following: . on your written request; . on lapse or termination of this policy; or . when the last person covered by this rider becomes Age 80. GENERAL CONDITIONS - This rider is part of the policy to which it is attached. As applied to this rider, the periods stated in this policy's Incontestability and Suicide provisions will start with this rider's effective date. This will also apply to any increase in the Face Amount under this rider. All terms of this policy which do not conflict with this rider's terms apply to this rider. Signed for Pacific Life & Annuity Company, /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R98-SPT NY EX-99.1(5)(E) 10 CHILDREN'S TERM RIDER DRAFT CHILDREN'S TERM RIDER BENEFIT - We will pay a benefit when we receive proof that a child's death occurred while this rider was in effect. The benefit provided is term insurance to the child's 25th birthday. The Benefit Amount is $1,000 for each rider unit. CHILD - "Child" means any natural child, adopted child or step-child of the Insured who is: . At least 14 days old but not more than 25 years old; and . Named in the application for this rider, or born to the Insured or adopted by the Insured or who has become a stepchild of the Insured thereafter. PAID-UP INSURANCE BENEFIT - The term insurance on each child will become paid-up upon the insured's death. We will issue a separate policy for the paid-up insurance with the child as owner. INSURANCE CHARGES - The monthly Insurance Charge for this rider is shown on the Policy Specifications pages. EFFECTIVE DATE - This rider is effective on the policy date unless otherwise stated hereon. This rider will terminate: . On your Written Request; or . On lapse or termination of this policy; or . When the Insured becomes age 65. CONVERSION - You may convert the term insurance under this rider to a new policy on the child's life. The conversion date for insurance on each child is the earlier of: . the child's 25th birthday; or . the date the Insured becomes age 65. You or the child must apply in writing on a form we provide within 31 days of the conversion date. The conversion date will be the new policy's date. The new policy will become effective on its date only if the child is then living. The amount of insurance on the new policy will be five times the child's Benefit Amount. If you wish, you may select a lower amount but not less than our regular minimum limit at the time of conversion. The new policy will be on the whole life or any higher premium plan we regularly issue at the time of conversion. It will be issued at our published rates for the standard class and for the child's age on the new policy's date. INCONTESTABILITY - This rider will be incontestable after two years from its issue date during the Insured's lifetime. Any paid-up term insurance issued under this rider will be incontestable from its issue date. SUICIDE - If the Insured dies by suicide, while sane or insane, within two years from the issue date of this rider, no paid-up benefit will be issued. REINSTATEMENT - The reinstatement provision of this policy applies to this rider except that we will require satisfactory evidence of insurability for each child upon reinstatement. GENERAL CONDITIONS - This rider is part of the policy to which it is attached. All terms of the policy which do not conflict with this rider's terms apply to this rider. Signed for Pacific Life & Annuity Company, /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R84-CT NY EX-99.1(5)(F) 11 WAIVER OF CHARGES DRAFT WAIVER OF CHARGES RIDER BENEFIT -- Subject to this rider's terms, we will waive any monthly Cost of Insurance Charges, any monthly Administrative Charges and any monthly cost of any rider benefits for this policy which fall due while the Insured is totally disabled. We will not waive any charges, which fall due more than one year before we receive proof of total disability. We will not waive any charges, which fall due before the Insured's age 5. If total disability begins during the grace period for an unpaid premium, that premium must be paid in order to establish a valid claim under this rider. TOTAL DISABILITY -- Total disability means a condition which: . results from bodily injury accidentally sustained or disease which first manifests itself while this rider is in effect; . occurs before the Insured's age 60; . lasts continuously for at least 3 months; and, either . stops the Insured from performing the substantial and material duties of the job; or . includes the Insured's total and irrecoverable loss of sight of both eyes or use of two hands, two feet or one hand and one foot. During the first 24 months of disability, "the job" means the Insured's occupation for pay or profit at the time total disability began. After that, "the job" means any job for which the Insured is or becomes reasonably fitted by education, training or experience. If the Insured is a student when disability begins, "the job" means attending school. If the Insured becomes totally disabled, any monthly charges that were deducted during the three-month waiting period will be credited back to the policy. NOTICE OF DISABILITY CLAIM -- We must receive notice of the Insured's total disability, at our home office, on forms we provide while the Insured is alive and disabled. If it is not reasonably possible for you to give us notice within the time limits, you must give us notice within one year from the time total disability ends. PROOF OF DISABILITY -- Before we pay a benefit, we must receive proof of total disability. From time to time after the Insured is disabled, we may require proof of continuing disability. This proof may include a medical exam by a physician we select and pay. After two years of disability, we will not require such proof more than once a year. We will not require proof after the Insured's age 70. WAR SERVICE NOT COVERED -- Disability occurring in a period during which the Insured is in the armed forces of any country at war (declared or not) is not covered under this rider. No insurance charges for this rider will be made for such a period. If any such charges are made, we will reverse them. INSURANCE CHARGES -- The monthly Insurance Charge for this rider is the result of multiplying the applicable monthly Waiver of Charges Rate as shown in the Policy Specifications pages by the sum of the Net Amount at Risk as calculated under the policy plus the Benefit Amount for any Annual Renewable and Convertible Term Rider present. EFFECTIVE DATE -- This rider is effective on the Policy Date unless otherwise stated. This rider will terminate (without affecting any claim for disability occurring before such termination) on the earliest of: . your Written Request; or . lapse or termination of the policy; or . when the Insured becomes age 60. INCONTESTABILITY -- This rider will be incontestable after 2 years from it's issue date, excluding any period the insured is disabled. GENERAL CONDITIONS -- This rider is part of the policy to which it is attached. All terms of the policy that do not conflict with this rider's terms apply to this rider. Signed for Pacific Life & Annuity Company, /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R98-WC NY EX-99.1(5)(G) 12 ACCIDENTAL DEATH BENEFIT DRAFT ACCIDENTAL DEATH RIDER BENEFIT - We will pay the extra benefit amount when we receive proof that the insured's death: . Was accidental, subject to this rider's provisions; and . Occurred while this rider was in force. ACCIDENTAL DEATH - An accidental death is one which: . Results directly and independently of all other causes from bodily injuries accidentally sustained while this rider is in force; and . Is not caused by bodily or mental infirmity, illness or disease; and . Occurs within 120 days of the injuries. We will waive the 120-day limit if the insured continuously requires artificial means to sustain life from the time of injury to the time of death. RISKS NOT COVERED - This rider does not cover death which results from: . Intentionally self-inflicted injuries while sane or insane; or . Medical, surgical or dental treatment; or . Any poison or gas taken or inhaled voluntarily; or . War or any incident of war, declared or not; or . Descent from any kind of aircraft; or . Riding in any kind of aircraft unless solely as a passenger in an aircraft not operated by or for any armed forces. WAR SERVICE - This rider will be suspended while the insured is in the armed forces of any country at war, declared or not. No insurance charges will be made for this rider during the suspension. If any are made we will reverse them. INSURANCE CHARGES - The monthly Insurance Charge for this rider is shown on the Policy Specifications pages. EFFECTIVE DATE - This rider is effective on the policy date unless otherwise stated hereon. This rider will terminate: . On your Written Request; or . On lapse or termination of this policy; or . When the insured becomes age 70. AUTOPSY - We reserve the right to make an autopsy, at our expense, unless prohibited by law. INCONTESTABILITY - This rider will be incontestable after 2 years from its issue date during the insured's lifetime. GENERAL CONDITIONS - This rider is part of the policy to which it is attached. All terms of the policy, which do not conflict with this rider's terms apply to this rider. Signed for Pacific Life & Annuity Company, /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R84-AD NY EX-99.1(5)(H) 13 GUARANTEED INSURABILITY RIDER DRAFT GUARANTEED INSURABILITY RIDER BENEFIT - You may, without providing evidence of insurability, increase the face amount of this policy on each option date shown in the Policy Specification pages. To do this, you must make a written request on a form we provide: . While this rider is in effect: . During the Insured's lifetime: and . Within 31 days of the option date. ADVANCE OF OPTION DATES - You may advance the next available option date to any date you state following the insured's marriage or the birth of any child of the Insured. Birth includes legal adoption. The date you state will be an option date and will replace and cancel the option date so advanced. AMOUNT OF INCREASE - The increase in face amount may not exceed the maximum shown in the Policy Specifications pages. The increase will be effective on the option date if the Insured is then living. If we are waiving insurance and administrative charges for this policy on any option date, we will automatically effect any increase options available to you and will waive any increases in charges, which result from this during continued total disability. INSURANCE CHARGES - Insurance Charges for this rider are shown in the Policy Specifications pages. EFFECTIVE DATE - This rider is effective on the policy date unless otherwise stated hereon. This rider will terminate: . On your Written Request: or . On lapse or termination of this policy: or . 31 days after the last option date. GENERAL CONDITIONS - This rider is part of the policy to which it is attached. As applied to this rider, the periods stated in the policy's Incontestability and Suicide provisions will start with this rider's effective date. All terms of the policy, which do not conflict with this rider's terms apply to this rider. Signed for Pacific Life & Annuity Company, /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R84-GI NY EX-99.1(5)(I) 14 DISABILITY BENEFIT RIDER DISABILITY BENEFIT RIDER DISABILITY BENEFITS - On each monthly payment date that the Insured qualifies, we will add the Disability Benefit Amount shown in the Policy Specifications pages to the Accumulated Value. To qualify, the Insured must be totally disabled, as defined below, and under age 65. We will make the addition on the monthly payment date or, if later, at the time we receive proof of disability. We will not make the addition for a monthly payment date unless we receive proof of disability within one year following that date. If total disability begins during the grace period for an unpaid premium, that premium must be paid in order to establish a valid claim under this rider. TOTAL DISABILITY - Total disability means a condition which: . results from bodily injury accidentally sustained or disease which first manifests itself while this rider is in effect; . occurs before the Insured's age 60; . lasts continuously for at least 3 months; and, either . stops the Insured from performing the substantial and material duties of the job; or . includes the Insured's total and irrecoverable loss of sight of both eyes or the use of two hands, two feet or one hand and one foot. During the first 24 months of disability, "the job" means the Insured's occupation for pay or profit at the time total disability began. After that, "the job" means any job for which the Insured is or becomes reasonably fitted by education, training or experience. If the Insured is a student when disability begins, "the job" means attending school. NOTICE OF DISABILITY CLAIM - We must receive notice of the Insured's total disability, at our home office, on forms we provide and while the Insured is alive and disabled. If it is not reasonably possible for you to give us notice within the time limits, you must give us notice within one year from the time total disability ends. PROOF OF DISABILITY - Before we pay a benefit, we must receive proof of total disability. From time to time after the Insured is disabled, we may require proof of continuing disability. This proof may include a medical exam by a physician we select and pay. After two years of disability, we will not require such proof more than once a year. WAR SERVICE NOT COVERED - Disability occurring in a period during which the Insured is in the armed forces of any country at war (declared or not) is not covered under this rider. No insurance charges for this rider will be made for such a period. If any such charges are made, we will reverse them. INSURANCE CHARGES - The Insurance Charges for this rider are shown in the Policy Specifications pages. EFFECTIVE DATE - This rider is effective on the Policy Date unless otherwise stated. This rider will terminate (without affecting any claim for disability occurring before such termination) on the earliest of: . your Written Request; or . lapse or termination of this policy; or . when the Insured becomes age 60. INCONTESTABILITY - This rider will be incontestable after 2 years from its issue date, excluding any period the Insured is disabled. GENERAL CONDITIONS - This rider is part of the policy to which it is attached. All terms of the policy that do not conflict with this rider's terms apply to this rider. Signed for Pacific Life & Annuity Company, /s/ WILLIAM FERRIS /s/ AUDREY L. MILFS President and Chief Executive Officer Secretary R98-DB NY EX-99.1(6)(A) 15 BYLAWS OF PACIFIC LIFE AND ANNUITY COMPANY BYLAWS OF PACIFIC LIFE & ANNUITY COMPANY ARTICLE I OFFICES SECTION 1. PRINCIPAL EXECUTIVE OFFICE. The principal executive office of the corporation is fixed at 700 Newport Center Drive, Newport Beach, California 92660. The board of directors may relocate the principal executive office by amendment to these bylaws. SECTION 2. OTHER OFFICES. The board of directors may establish branch or subordinate offices wherever the corporation is authorized to do business. ARTICLE II MEETINGS OF SHAREHOLDERS SECTION 1. PLACE OF MEETINGS. All meetings of shareholders shall be held at the principal office or at such other place as may be designated for that purpose from time to time by the board of directors. SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders shall be held on the fourth Tuesday of February in each year at 10:00 a.m. However, if this day falls on a legal holiday, then the meeting shall be held at the same time and place on the next succeeding full business day. At this meeting, directors shall be elected, and any other proper business within the power of the shareholders shall be transacted. SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders, for any purpose or purposes whatsoever, may be called at any time by the chairman of the board, the president or by the board of directors, or by any two or more members thereof, or by one or more shareholders holding not less than one-tenth (1/10) of the voting power of the corporation. SECTION 4. NOTICE OF MEETINGS. Notices of annual or special meetings shall be given in writing to shareholders entitled to vote by the secretary or the assistant secretary, or if there be no such officer, or in case of his neglect or refusal, by any director or shareholder. Such notices shall be sent to the shareholder's address appearing on the books of the corporation or supplied by him to the corporation for the purpose of notice, or shall be delivered personally, not less than ten (10) days before such meeting. Notice of any meeting of shareholders shall specify the place, the day and the hour of meeting, and in case of special meeting, as provided by the general corporation law of Arizona, the purpose or purposes for which the meeting is called. When a meeting is adjourned for forty-five (45) days or more, notice of the adjourned meeting shall be given as in case of an original meeting. If the meeting is adjourned for less than forty-five days, it shall not be necessary to give any notice of the adjournment or of the business to be transacted at any adjourned meeting other than by announcement at the meeting at which such adjournment is taken. SECTION 5. CONSENT TO SHAREHOLDERS' MEETINGS. The transactions of any meeting of shareholders, however called and noticed, shall be valid as though had at a meeting duly held after regular call and notice if a quorum be present either in person or by proxy, and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, sign a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Any action which may be taken at a meeting of the shareholders, may be taken without a meeting if authorized by a writing signed by all of the holders of shares who would be entitled to vote at a meeting for such purpose, and filed with the secretary of the corporation. SECTION 6. QUORUM. The holders of a majority of the shares entitled to vote thereat, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by law, by the articles of incorporation, or by these bylaws. If however, such majority shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote thereat, present in person, or by proxy, shall have power to adjourn the meeting from time to time, until the requisite amount of voting shares shall be present. At such adjourned meeting at which the requisite amount of voting shares shall be represented, any business may be transacted which might have been transacted at the meeting as originally notified. No notice of the adjourned meeting need be given, other than an announcement at the meeting at which the adjournment is 2 taken, unless the meeting is adjourned for forty-five (45) days or more in which case notice of the adjourned meeting shall be given as in the case of an original meeting. SECTION 7. VOTING RIGHTS; CUMULATIVE VOTING. Only persons in whose names shares entitled to vote stand on the stock records of the corporation on the day of any meeting of shareholders, unless some other day be fixed by the board of directors for the determination of shareholders of record, then on such other day, shall be entitled to vote at such meeting. Every shareholder entitled to vote shall be entitled to one vote for each said share and in any election of directors he shall have the right to cumulate his votes as provided in A.R.S. S 10-033. SECTION 8. PROXIES. Every person entitled to vote or execute consents shall have the right to do so either in person or by one or more agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the secretary of the corporation. Any proxy duly executed is not revoked and continues in full force and effect until an instrument revoking it or a duly executed proxy bearing a later date is filed with the secretary of the corporation; provided that no such proxy shall be valid after the expiration of eleven months from the date of its execution, unless the person executing it specifies therein the length of time for which such proxy is to continue in force, which in no case shall exceed seven years from the date of its execution. SECTION 9. INSPECTORS OF ELECTION. In advance of any meeting of shareholders, the board of directors may appoint any persons, other than nominees for office, inspectors of election to act at such meeting or any adjournment thereof. If inspectors of election be not so appointed, the chairman of any such meeting may, and on the request of any shareholder or his proxy shall, make such appointment at the meeting. The number of inspectors shall be either one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares present shall determine whether one or three inspectors are to be appointed. In case any person appointed as inspector fails to appear or fails or refuses to act, the vacancy may be filled by appointment by the board of directors in advance of the meeting, or at the meeting by the chairman. The duties of such inspectors shall include: determining the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies; receiving votes, ballots or consents, hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining the result; and such acts as may be proper to conduct the election or vote with fairness to all shareholders. 3 ARTICLE III DIRECTORS; MANAGEMENT SECTION 1. POWERS. Subject to the articles of incorporation, the bylaws and the laws of the State of Arizona as to action to be authorized or approved by the shareholders, all corporate powers shall be exercised by or under authority of, and the business and affairs of this corporation shall be controlled by, a board of directors. SECTION 2. NUMBERS AND QUALIFICATION OF DIRECTORS. The authorized number of directors of the corporation shall be not less than five (5) nor more than fifteen (15). The exact number of directors shall be five (5) until changed, within the limits specified herein, by a bylaw amending this Section 2, duly adopted by the board of directors or by the shareholders. SECTION 3. ELECTION AND TENURE OF OFFICE. The directors shall be elected by ballot at the annual meeting of the shareholders, to serve for one (1) year and until their successors are elected and have qualified. Their term of office shall begin immediately after election. SECTION 4. VACANCIES. Vacancies in the board of directors may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual meeting of shareholders or at a special meeting called for that purpose. The shareholders may at any time elect a director to fill any vacancy not filled by the directors, and may elect the additional directors at the meeting at which an amendment of the bylaws is voted authorizing an increase in the number of directors. A vacancy or vacancies shall be deemed to exist in case of the death, resignation or removal of any director, or if the shareholders shall increase the authorized number of directors but shall fail at the meeting at which such increase is authorized, or at an adjournment thereof, to elect the additional director so provided for, or in case the shareholders fail at any time to elect the full number of authorized directors. If the board of directors accepts the resignation of a director tendered to take effect at a future time, the board, or the shareholders, shall have power to elect a successor to take office when the resignation shall become effective. 4 No reduction of the number of directors shall have the effect of removing any director prior to the expiration of his term of office. SECTION 5. REMOVAL OF DIRECTORS. The entire board of directors or any individual director may be removed from office as provided by A.R.S. S 10-039. SECTION 6. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. Meetings of the board of directors shall be held at the principal office of the corporation in the State of California, or at any place within or without the State of California as may be designated for that purpose, from time to time, by resolution of the board of directors, or written consent of all of the members of the board. Any meeting shall be valid, wherever held, if held by the written consent of all members of the board of directors, given either before or after the meeting and filed with the secretary of the corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, as long as all directors participating in the meeting can hear one another, and all such directors shall be deemed to be present in person at the meeting. SECTION 7. ORGANIZATION MEETINGS AND REGULAR MEETINGS. The organization meetings of the board of directors shall be held immediately following the adjournment of the annual meetings of the shareholders at the place where the annual meeting of the shareholders was held or at any other place that shall have been designated by the board of directors, for the purpose of organization, any desired election of officers, and the transaction of other business. Notice of this meeting shall not be required. Regular meetings of the board of directors as scheduled by the board of directors may be held without notice. SECTION 8. SPECIAL MEETINGS--NOTICES. Special meetings of the board of directors for any purpose or purposes shall be called at any time by the chairman of the board, the president or by any vice president, or by any two directors. Notice of the time and place of special meetings shall be delivered personally or by telephone to the directors or sent to each director by letter or by telegram, charges prepaid, addressed to him at his address as it is shown upon the records of the corporation, or if it is not so shown on such records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held. In case such notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the place in which the principal office of the corporation is located at least ninety-six (96) hours prior to the time of the holding of the meeting if sent by mail and at least forty-eight (48) hours prior to the time of the holding of the meeting if sent by telegram or if personally delivered, it shall be so delivered at least forty-eight (48) hours prior to the time of the holding of the meeting. Such mailing, telegraphing, 5 personal delivery, or telephonic notice above provided shall be due, legal and personal notice to such director. SECTION 9. WAIVER OF NOTICE. When all the directors are present at any directors' meeting, however called or noticed, and sign a written consent thereto on the records of such meeting, or, if a quorum of the directors are present, and if those not present sign in writing a waiver of notice of such meeting, whether prior to or after the holding of such meeting, which said waiver shall be filed with secretary of the corporation, the transactions thereof are as valid as if had at a meeting regularly called and noticed. Any such waiver of notice of consent need not specify the purpose of the meeting. SECTION 10. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting adjourned, unless the meeting is adjourned for more than twenty-four (24) hours, in which case notice of the time and place shall be given to the absent directors in the manner specified in Section 8 of this Article III. SECTION 11. QUORUM. A majority of the authorized number of directors shall constitute a quorum for the transaction of business. The action of a majority of the directors present at any meeting at which there is a quorum, when duly assembled, is valid as a corporate act; provided that the directors present in the absence of a quorum, may adjourn from time to time, but may not transact any business. SECTION 12. ACTION WITHOUT MEETING BY UNANIMOUS CONSENT. Notwithstanding anything to the contrary contained in these bylaws, any action required or permitted to be taken by the board of directors may be taken without a meeting, if all members of the board of directors shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the board. Such action by written consent shall have the same force and effect as a unanimous vote of such directors. ARTICLE IV OFFICERS SECTION 1. OFFICERS. The officers shall be a chairman of the board, a president, one or more vice presidents, a secretary, a chief financial officer/treasurer, and such other officers as the board of directors may from time to time determine, which officers shall be elected by, and hold office at the pleasure of, the board of directors. 6 SECTION 2. ELECTION. After their election, the directors shall meet and organize by electing a chairman of the board, a president, one or more vice presidents, a secretary and a chief financial officer/treasurer, who may, but need not be, members of the board of directors. The directors shall also elect such other officers as they may from time to time determine. Any two or more of such offices, except those of president and secretary, may be held by the same person. SECTION 3. COMPENSATION AND TENURE OF OFFICE. The compensation and tenure of office of all the officers of the corporation shall be fixed by the board of directors. SECTION 4. REMOVAL AND RESIGNATION. Any officer may be removed, either with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the board, or, except in case of any officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors. Any officer may resign at any time by giving written notice to the board of directors, or to the chairman of the board, or to the president, or to the secretary of the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 5. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the bylaws for regular appointments to such office. SECTION 6. CHAIRMAN OF THE BOARD. The chairman of the board shall preside at all meetings of the board of directors, shall preside at all meetings of the shareholders, shall be an ex- officio member of all standing committees, including the executive committee, if any, shall be the chief executive officer of the corporation and shall exercise and perform such other powers and duties as may be from time to time assigned to him by the board of directors or prescribed by the bylaws. SECTION 7. PRESIDENT. Subject to such supervisory powers, if any, as may be given by the board of directors to the chairman of the board, the president shall have general supervision, direction and control of the business and affairs of the corporation, subject only to the control of the board of directors 7 and subject to any supervisory power granted the chairman of the board. In the absence of the chairman of the board, he shall preside at meetings of the shareholders and at meetings of the board of directors. He shall be ex-officio a member of all the standing committees, including the executive committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the board of directors or the bylaws. SECTION 8. VICE PRESIDENTS. In the absence or disability of the president, the vice presidents in order of their rank as fixed by the board of directors or, if not ranked, the vice- president designated by the board of directors, shall perform all the duties of the president, and when so acting shall have all the powers of, and be subject to all the restrictions upon the president. The vice-presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors or by the bylaws. SECTION 9. SECRETARY. The secretary shall keep or cause to be kept, at the principal office or such other place as the board of directors may order, a book of minutes of all meetings of directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. The secretary shall keep, or cause to be kept, at the principal office or at the office of the corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. The secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the board of directors required by the bylaws or by law to be given, and shall keep the seal of the corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the board of directors or by the bylaws. SECTION 10. CHIEF FINANCIAL OFFICER/TREASURER. The chief financial officer/treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all reasonable times be open to inspection by any director. 8 The chief financial officer/treasurer shall deposit all monies and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the board of directors or the bylaws. SECTION 11. ASSISTANTS. Any assistant secretary or assistant treasurer, respectively, may exercise any of the powers of secretary or treasurer, respectively, as provided in these bylaws or as directed by the board of directors, and shall perform such other duties as may be prescribed by the bylaws or the board of directors. SECTION 12. OTHER. The board of directors may from time to time appoint such other officers or agents as the business of the corporation may require, fix their tenure of office and allow them suitable compensation. ARTICLE V EXECUTIVE AND OTHER COMMITTEES The board of directors may appoint an executive committee, and such other committees as may be necessary from time to time, consisting of such number of its members and with such powers as it may designate, consistent with the articles of incorporation and bylaws and the general corporation laws of the State of Arizona. Such committees shall hold office at the pleasure of the board. ARTICLE VI CORPORATE RECORDS AND REPORTS--INSPECTION SECTION 1. RECORDS. The corporation shall maintain adequate and correct accounts, books and records of its business and properties. All of such books, records and accounts shall be kept at its principal place of business in the State of California, as fixed by the board of directors from time to time. SECTION 2. INSPECTION BY DIRECTORS. Every director shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and the physical properties of the corporation and each of 9 its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents. SECTION 3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS. The accounting books and records and minutes of proceedings of the shareholders and the board of directors and any committee or committees of the board of directors shall be kept at such place or places designated by the board of directors, or, in the absence of such designation, at the principal executive office of the corporation. The minutes shall be kept either in written form or in any other form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate, at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interest as a shareholder or as the holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary corporation of the corporation. SECTION 4. MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep at its principal business office in California, the original or a copy of these bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. SECTION 5. INSURANCE POLICIES -- HOW SIGNED. All policies issued by the corporation shall be signed by the president and countersigned by the secretary either personally or by facsimile. SECTION 6. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as shall be determined from time to time by resolution of the board of directors. SECTION 7. CONTRACTS, ETC. -- HOW EXECUTED. The board of directors, except as in the bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and this authority may be general or confined to specific instances; and, unless so authorized or ratified by the board of directors or within the authority of an officer, no office, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount. 10 SECTION 8. ANNUAL REPORTS. Unless dispensed with by resolution of the board of directors as to any calendar year or waived by written consent of all shareholders entitled to vote as to any calendar year, the board of directors shall cause annual reports to be made to the shareholders as provided by the general corporation law of Arizona. If made, the board of directors shall cause such annual reports to be sent to the shareholders not later than one hundred twenty (120) days after the close of the calendar year. ARTICLE VII INVESTMENTS SECTION 1. INVESTMENTS IN THE CORPORATION'S NAME. All investments of the corporation shall be made in the name of the corporation or its nominee. SECTION 2. INVESTMENTS BY THE CORPORATION. All investments of the corporation shall be authorized or approved by the board of directors or by a committee of the board charged with the duty of supervising or making such investments. If authorized or approved by such a committee, a report shall be submitted to the board of directors at its next meeting. The approval of investments shall be entered on the records of the corporation in such form and detail as required by the general corporation law of Arizona. ARTICLE VIII CERTIFICATES AND TRANSFER OF SHARES SECTION 1. CERTIFICATES FOR SHARES. Certificates for shares shall be of such form and device as the board of directors may designate and shall state the name of the record holder of the shares represented thereby; its number; date of issuance; the number of shares for which it is issued; the par value; a statement of the rights, privileges, preferences and restrictions, if any; a statement as to redemption or conversion, if any; a statement of liens or restrictions upon transfer or voting, if any; if the shares be assessable, or, if assessments are collectible by personal action, a plain statement of such facts. Every certificate for shares must be signed in the name of the corporation by the president, or a vice president and the secretary or an assistant secretary or must be authenticated by facsimiles of the signatures of the president and secretary or by a facsimile of the signature of its president and the written signature of its secretary or an assistant secretary. 11 SECTION 2. TRANSFER ON THE BOOKS. Upon surrender to the secretary or transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. SECTION 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of that fact and advertise the same in such manner as the board of directors may require, and shall, if the directors so require, give the corporation a bond of indemnity, in form and with one or more sureties satisfactory to the board, in at least double the value of the stock represented by said certificate, whereupon, a new certificate may be issued of the same tenor and for the same number of shares as the one alleged to be lost or destroyed. SECTION 4. TRANSFER AGENTS AND REGISTRARS. The board of directors may appoint one or more transfer agents or transfer clerks, and one or more registrars, which shall be an incorporated bank or trust company--either domestic or foreign, who shall be appointed at such times and places as the requirements of the corporation may necessitate and the board of directors may designate. SECTION 5. CLOSING STOCK TRANSFER BOOKS. The board of directors may close the transfer books in their discretion for a period not exceeding thirty (30) days preceding any meeting, annual or special, of the shareholders, or the day appointed for the payment of a dividend. ARTICLE IX CORPORATE SEAL The corporate seal shall be circular in form, and shall have inscribed thereon the name of the corporation, the date of its incorporation, and the word Arizona. ARTICLE X AMENDMENTS TO BYLAWS SECTION 1. BY SHAREHOLDERS. New bylaws may be adopted or these bylaws may be repealed or amended at their annual meeting, or at any other meeting of the shareholders called for that purpose, by a vote of 12 shareholders entitled to exercise a majority of the voting power of the corporation, or by written assent of such shareholders. SECTION 2. POWERS OF DIRECTORS. Subject to the rights of the shareholders to adopt, amend or repeal bylaws, as provided in Section 1 of this Article X, the board of directors may adopt, amend or repeal any of these bylaws or amendment thereof, provided, however that the board of directors may adopt a bylaw or amendment of a bylaw changing the authorized number of directors only for the purpose of fixing the exact number of directors within the limits specified in Section 2 of Articles III of the bylaws. SECTION 3. RECORD OF AMENDMENTS. Whenever an amendment or new bylaw is adopted, it shall be copied in the Book of Bylaws with the original bylaw, in the appropriate place. If any bylaw is repealed, the fact of repeal with the date of the meeting at which the repeal was enacted or written assent was filed shall be stated in said book. 13 EX-99.1(6)(B) 16 ARTICLES OF INCORPORATION OF PM GROUP AMENDED AND RESTATED ARTICLES OF REDOMESTICATION OF PM GROUP LIFE INSURANCE COMPANY The Articles of Redomestication of PM Group Life Insurance Company are hereby amended and restated, effective as of September 30, 1990, to read as follows: We, the undersigned, acting as incorporators for the purpose of redomesticating PM Group Life Insurance Co., a California corporation, which intends to simultaneously redomesticate to Arizona and merge with Pacific Financial Life Insurance Company of Arizona, an Arizona corporation, without interruption, as a corporation organized under the laws of the State of Arizona pursuant to Arizona Revised Statutes Section 20-231.A, do hereby adopt the following Articles of Redomestication for said corporation. ARTICLE I --------- The name of the corporation shall be PM Group Life Insurance Company. ARTICLE II ---------- The corporation was incorporated in the State of California on September 20, 1982. ARTICLE III ----------- The existence of the corporation shall be perpetual. ARTICLE IV ---------- Upon the approval of these Articles of Redomestication, PM Group Life Insurance Company shall be and continue to be possessed of all privileges, franchises and powers to the same extent as if it had been originally incorporated under the laws of the State of Arizona; and all privileges, franchises and powers belonging to said corporation, and all property, real, personal and mixed, and all debts due on whatever account, all Certificates of Authority, agent appointments, outstanding insurance policies, and all choses in action, shall be and the same are hereby ratified, approved, confirmed and assured to PM Group Life Insurance Company, with like effect and to all intents and purposes as if it had been originally incorporated under the laws of the State of Arizona. Said corporation shall be given recognition as a domestic insurer of the State of Arizona from and after September 20, 1982, the date of its initial incorporation under the laws of the State of California. ARTICLE V --------- The purpose for which this corporation is organized is the transaction, direct and as a reinsurer, of life and disability insurance and such other lines of insurance as it may be authorized to transact. In no event shall the corporation incur indebtedness in excess of the amount authorized by law. ARTICLE VI ---------- The authorized amount of capital stock of the corporation shall be Five Million (5,000,000) shares of common stock with a par value of One Dollar ($1.00) per share. Two Million Nine Hundred Thousand (2,900,000) shares have been issued, and are fully paid and non-assessable. Any additional shares of common stock shall be issued and paid for at such time or times and in such manner as the Board of Directors shall determine and, when issued and paid for shall be non-assessable, except as provided by Article 14, Section 11 of the Constitution of Arizona. ARTICLE VII ----------- The affairs of the corporation shall be conducted by a Board of Directors consisting of not less than five (5) nor more than fifteen (15) directors as fixed by the Bylaws, and such officers as the said directors may at any time elect or appoint. No officer or director need be a shareholder of this corporation. The directors shall be elected by the shareholders during the annual meeting of each year, beginning in 1990. The annual meeting shall be held at the principal office of the corporation in Phoenix, Arizona, or at any place determined by the Board of Directors at an hour to be named in the Notice of Meeting or Waiver of Notice of Meeting. If the date of the annual meeting falls on a legal holiday, the meeting shall be held on the next succeeding business day. A director shall serve until his successor is duly elected and qualified. The Board of Directors shall have the power to adopt, amend, alter and repeal the Bylaws. Bylaws made by the Board may be altered or repealed and new Bylaws made by the shareholders, in accordance with the provisions contained in said Bylaws and these Articles. The Board of Directors shall have the power to manage the corporate affairs and make all rules and regulations necessary for the management of the affairs of the corporation, to appoint or remove any officer and to fill all vacancies occurring on the Board or in any office for any cause, and to appoint from their own number an Executive Committee and other committees and invest said committee with all the powers permitted by the Bylaws. 2 ARTICLE VIII ------------ The private property of the shareholders, directors and officers of the corporation shall be forever exempt from debts and obligations of the corporation. ARTICLE IX ---------- Subject to the further provisions hereof, the corporation shall indemnify and hold harmless any and all of its existing and former directors and officers against all expenses incurred by them, including but not limited to legal fees, judgments and penalties which may be incurred, rendered or levied in any legal action brought against any of them, for or on account of any action or omission alleged to have been committed while acting within the scope of employment as director or officer of the corporation. Whenever any such person has ground to believe that he may incur any such aforementioned expense he shall promptly make a full report of the matter to the president and the secretary of the corporation. Thereafter, the Board of Directors of the corporation shall, within a reasonable time, determine if such person acted, or failed to act, in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. If the Board of Directors determines that such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, then indemnification shall be mandatory and shall be automatically extended as specified herein, provided, however, that the corporation shall have the right to refuse indemnification, wholly or partially, in any instance in which the person to which indemnification would have otherwise been applicable, shall have unreasonably refused to permit the corporation, at its own expense and through counsel of its own choosing, to defend him in the action, or shall have unreasonably refused to cooperate in the defense of such action. To the fullest extent permitted by Title 10, Chapter 1 of the Arizona Revised Statutes as the same exists or may hereafter be amended, no director shall be liable to the corporation or its shareholders for monetary damages for breach of fiduciary duties as director. ARTICLE X --------- The fiscal year of the corporation shall be the calendar year. 3 ARTICLE XI ---------- J. Michael Low, of Low & Childers, P.C., whose address is 1221 East Osborn Road, Suite 104, Phoenix, Arizona 85014, having been a bonafide resident of Arizona for at least three (3) years is hereby appointed statutory agent of the corporation in the State of Arizona, upon whom notices and processes, including service of summons may be served, and which, when so served, shall have lawful personal service on the corporation. The Board of Directors may revoke this appointment at any time, and shall fill the vacancy in such position whenever one exists. ARTICLE XII ----------- The corporation reserves the right to amend, alter, change or repeal any provisions contained in these Articles of Redomestication in the manner now or hereafter prescribed by law, and all rights and powers conferred herein on shareholders, directors or officers are subject to this reserve power. ARTICLE XIII ------------ The incorporators of the corporation are: J. Michael Low 1221 East Osborn Road Suite 104 Phoenix, Arizona 85014 S. David Childers 1221 East Osborn Road Suite 104 Phoenix, Arizona 85014 Steven R. Henry 1221 East Osborn Road Suite 104 Phoenix, Arizona 85014 Carrie M. McDonald 1221 East Osborn Road Suite 104 Phoenix. Arizona 850l4 Robin Bradshaw 1221 East Osborn Road Suite 104 Phoenix, Arizona 85104 4 The initial Directors of the corporation are: Mr. William L. Ferris PM Group Life Insurance Company 700 Newport Center Drive Newport Beach, California 92660 Ms. Audrey L. Milfs PM Group Life Insurance Company 700 Newport Center Drive Newport Beach, California 92660 Mr. Thomas C. Sutton PM Group Life Insurance Company 700 Newport Center Drive Newport Beach, California 92660 Mr. Harold G. Joanning PM Group Life Insurance Company 700 Newport Center Drive Newport Beach, California 92660 Mr. Glenn S. Schafer PM Group Life Insurance Company 700 Newport Center Drive Newport Beach, California 92660 All individual incorporators are eighteen (18) years of age or older. All powers, duties and responsibilities of the incorporators shall cease at the time of delivery of these Articles of Redomestication to the Arizona Corporation Commission for filing. WHEREOF, we have hereunto affixed our signatures this 29th day of October, 1990. (signed) (signed) - ------------------------ ------------------------ J. Michael Low S. David Childers (signed) (signed) - ------------------------ ------------------------ Steven R. Henry Carrie M. McDonald (signed) - ------------------------ Robin G. Bradshaw ****************************************************** 5 STATE OF ARIZONA ) ) ss. County of Maricopa ) IN WITNESS WHEREOF, I, Lori M. Barker, hereby place my hand and official seal as acknowledgement that J. Michael Low, S. David Childers, Steven R. Henry, Carrie M. McDonald and Robin R. Bradshaw, being the persons represented herein, placed their hand as of the 29th day of October, 1970. (signed) -------------------------- Lori M. Barker My Commission~Expires: 8/15/91 - ------------------------- 6 ACCEPTANCE OF NOTIFICATION OF APPOINTMENT AS STATUTORY AGENT I, J. Michael Low, hereby acknowledge that I have been notified of my appointment as Statutory Agent for PM Group Life Insurance Company, an Arizona corporation, and I hereby agree to serve in such capacity until removal by Company or written resignation as permitted by Arizona Revised Statute. (signed) -------------------------------- J. Michael Low, Esq. 1221 East Osborn Road, Suite 104 Phoenix, Arizona 85014 pacific art.red 7 EX-99.1(6)(C) 17 AMENDED AND RESTATED ARTICLES AMENDED & RESTATED ARTICLES OF INCORPORATION FOR PM GROUP LIFE INSURANCE COMPANY William L Ferris and Audrey L. Milfs certify that: 1. They are the President and Chief Executive Officer, and Secretary, respectively, of PM Group Life Insurance Company, an Arizona corporation. 2. Article I of the restated articles of incorporation of this corporation is amended to read as follows: "the name of this Corporation shall be PACIFIC LIFE & ANNUITY COMPANY." 3. The foregoing amendment of the Amended and Restated Articles of Redomestication was duly approved by the board of directors on November 1, 1998. 4. The foregoing amendment of the restated articles of incorporation has been duly approved by the required vote of shareholders in accordance with Section 10-1006 of the Arizona Revised Statutes. The total number of outstanding shares of the corporation is 2,900,000. The total number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50%. We further declare under penalty of perjury under the laws of the State of Arizona that the matters set forth in this certificate are true and correct of our own knowledge. Dated: January 4, 1999 /s/ WILLIAM L. FERRIS ____________________________________ William L. Ferris President & Chief Executive Officer /s/ AUDREY L. MILFS ____________________________________ Audrey L. Milfs Secretary EX-99.1(9)(A) 18 FORM OF PARTICIPATION AGREEMENT FUND PARTICIPATION AGREEMENT This AGREEMENT is made this _____ day of _______, 199__, by and between Pacific Life & Annuity Company (the "Company"), a life insurance company domiciled in Arizona, on its behalf and on behalf of the segregated asset accounts of the Company listed on Exhibit A to this Agreement (the "Separate Accounts"); Pacific Select Fund (the "Fund"), a Massachusetts business trust; and Pacific Mutual Distributors, Inc. ("Distributor"), a California corporation. WITNESSETH: WHEREAS, the Fund is registered with the Securities and Exchange Commission ("SEC") as an open-end management investment company under the Investment Company Act of 1940, as amended ("1940 Act") and the Fund is authorized to issue separate classes of shares of beneficial interests ("shares"), each representing an interest in a separate portfolio of assets known as a "portfolio" and each portfolio has its own investment objective, policies, and limitations; and WHEREAS, the Fund is available to offer shares of one or more of its portfolios to separate accounts of insurance companies that fund variable life insurance policies and variable annuity contracts ("Variable Contracts") and to serve as an investment medium for Variable Contracts offered by insurance companies that have entered into participation agreements substantially similar to this agreement ("Participating Insurance Companies"), and the Fund is currently comprised of fourteen separate portfolios and other portfolios may be established in the future; and WHEREAS, the Fund has obtained an order from the SEC granting Participating Insurance Companies, separate accounts funding Variable Contracts of Participating Insurance Companies, and the Fund exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and paragraph (b)(15) of Rule 6e-3(T) under the 1940 Act, to the extent necessary to permit such persons to rely on the exemptive relief provided under paragraph (b)(15) of Rule 6e-3(t), even though shares of the Fund may be offered to and held by separate accounts funding variable annuity contracts or scheduled or flexible premium variable life insurance contracts of both affiliated and unaffiliated life insurance companies (the "Shared Funding Exemptive Order"); and WHEREAS, the Distributor is registered as a broker-dealer with the SEC under the Securities Exchange Act of 1934, as amended ("1934 Act"), and is a member in good standing of the National Association of Securities Dealers, Inc. ("NASD"); and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the company wishes to purchase shares of one or more of the Fund's portfolios on behalf of its Separate Accounts to serve as an investment medium for Variable Contracts funded by the Separate Accounts, and the Distributor is authorized to sell shares of the Fund's portfolios; NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants hereinafter set forth, the parties hereby agree as follows: ARTICLE I. Sale of Fund Shares 1.1 The Distributor agrees to sell to the Company those shares of the portfolios offered and made available by the Fund and identified on Exhibit B ("Portfolios") that the Company orders on behalf of its Separate Accounts, and agrees to execute such orders on each day on which the Fund calculates its net asset value pursuant to rules of the SEC ("business day") at the net asset value next computed after receipt and acceptance by the Fund or its agent of the order for the shares of the Fund. 1.2. The Fund agrees to make available on each business day shares of the Portfolios for purchase at the applicable net asset value per share by the Company on behalf of its Separate Accounts provided, however, that the Board of Trustees of the Fund may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio, if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Trustees, acting in good faith and in light of the Trustees' fiduciary duties under applicable law, necessary in the best interests of the shareholders of any Portfolio. 1.3. The Fund and the Distributor agree that shares of the Portfolios of the Fund will be sold only to Participating Insurance Companies, their separate accounts, and other persons consistent with each Portfolio being adequately diversified pursuant to Section 817(h) of the Internal Revenue Code of 1986, as amended ("Code") and the regulations thereunder. No shares of any Portfolio will be sold directly to the general public. 1.4. The Fund and the Distributor will not sell shares of the Portfolios to any insurance company or separate account unless an agreement containing provisions substantially the same as this Agreement is in effect to govern such sales. 1.5. Upon receipt of a request for redemption in proper form from the Company, the Fund agrees to redeem any full or fractional shares of the Portfolios held by the Company, ordinarily executing such requests on each business day at the net asset value next computed after receipt and acceptance by the Fund or its agent of the request for redemption, except that the Fund reserves the right to suspend the right of redemption, consistent with Section 22(e) of the 1940 Act and any rules thereunder. Such redemption shall be paid consistent with applicable rules of the SEC and procedures and policies of the Fund as described in the current prospectus. 1.6. The Company agrees to purchase and redeem the shares of each Portfolio in accordance with the provisions of the current prospectus for the Fund. 1.7. The Company shall pay for shares of the Portfolios on the same day that it places an order to purchase shares of the Portfolios. Payment shall be in federal funds transmitted by wire. 1.8. Issuance and transfer of shares of the Portfolios will be by book entry only unless otherwise agreed by the Fund. Stock certificates will not be issued to the Company or the Separate Accounts unless otherwise agreed by the Fund. Shares ordered from the Fund will be recorded in an appropriate title for the Separate Accounts or the appropriate subaccounts of the Separate Accounts. 1.9. The Fund shall promptly furnish notice (by wire or telephone, followed by written confirmation) to the Company of any income dividends or capital gain distributions payable on the shares of the Portfolios. The Company hereby elects to reinvest in the Portfolios all such dividends and distributions as are payable on a Portfolio's shares and to receive such dividends and distributions in additional shares of the Portfolio. The Company reserves the right to revoke this election in writing and to receive all such dividends and distributions in cash. The Fund shall notify the Company of the number of shares so issued as payment of such dividends and distributions. 1.10. The Fund shall instruct its recordkeeping agent to advise the Company on each business day of the net asset value per share for each Portfolio as soon as reasonably practical after the net asset value per share is calculated. ARTICLE II. Representations and Warranties 2.1. The Company represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it is taxed as an insurance company under Subchapter L of the Code. 2.2. The Company represents and warrants that it has legally and validly established each of the Separate Accounts as a segregated asset account under the Arizona Insurance Code, and that each of the Separate Accounts is a validly existing segregated asset account under applicable federal and state law. 2.3. The Company represents and warrants that the Variable Contracts issued by the Company or interests in the Separate Accounts under such Variable Contracts (1) are or, prior to issuance, will be registered as securities under the Securities Act of 1933 ("1933 Act") or, alternatively (2) are not registered because they are properly exempt from registration under the 1933 Act or will be offered exclusively in transactions that are properly exempt from registration under the 1933 Act. 2.4. The Company represents and warrants that each of the Separate Accounts (1) has been registered as a unit investment trust in accordance with the provisions of the 1940 Act or, alternatively (2) has not been registered in proper reliance upon an exclusion from registration under the 1940 Act. 2.5. The Company represents that it believes, in good faith, that the Variable Contracts issued by the Company are currently treated as annuity contracts or life insurance policies (which may include modified endowment contracts), whichever is appropriate, under applicable provisions of the Code. 2.6. The Company represents and warrants that any of its Separate Accounts that fund variable life insurance contracts and that are registered with the SEC as investment companies rely on the exemptions provided by Rule 6e- 3(T), or any successor thereto, and not on Rule 6e-2 under the 1940 Act. 2.7. The Fund represents and warrants that it is duly organized as a business trust under the laws of the Commonwealth of Massachusetts, and is in good standing under applicable law. 2.8. The Fund represents and warrants that the shares of the Portfolios are duly authorized for issuance in accordance with applicable law and that the Fund is registered as an open-end management investment company under the 1940 Act. 2.9. The Fund represents that it believes, in good faith, that the Portfolios currently comply with the diversification provisions of Section 817(h) of the Code and the regulations issued thereunder relating to the diversification requirements for variable life insurance policies and variable annuity contracts. 2.10. The Distributor represents and warrants that it is a member in good standing of the NASD and is registered as a broker-dealer with the SEC. ARTICLE III. General Duties 3.1. The Fund shall take all such actions as are necessary to permit the sale of the shares of each Portfolio to the Separate Accounts, including maintaining its registration as an investment company under the 1940 Act, and registering the shares of the Portfolios sold to the Separate Accounts under the 1933 Act for so long as required by applicable law. The Fund shall amend its Registration Statement filed with the SEC under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of the shares of the Portfolios. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states to the extent deemed necessary by the Fund or the Distributor. 3.2. The Fund shall make every effort to maintain qualification of each Portfolio as a Regulated Investment Company under Subchapter M of the Code (or any successor or similar provision) and shall notify the Company immediately upon having a reasonable basis for believing that a Portfolio has ceased to so qualify or that it might not so qualify in the future. 3.3. The Fund shall make every effort to enable each Portfolio to comply with the diversification provisions of Section 817(h) of the Code and the regulations issued thereunder relating to the diversification requirements for variable life insurance policies and variable annuity contracts and any prospective amendments or other modifications to Section 817 or regulations thereunder, and shall notify the Company immediately upon having a reasonable basis for believing that any Portfolio has ceased to comply. 3.4. The Fund shall be entitled to receive and act upon advice of its General Counsel or its outside counsel in meeting the requirements specified in Sections 3.2 and 3.3 hereof. 3.5. The Company shall take all such actions as are necessary under applicable federal and state law to permit the sale of the Variable Contracts issued by the Company, including registering each Separate Account as an investment company to the extent required under the 1940 Act, and registering the Variable Contracts or interests in the Separate Accounts under the Variable Contracts to the extent required under the 1933 Act, and obtaining all necessary approvals to offer the Variable Contracts from state insurance commissioners. 3.6. The Company shall make every effort to maintain the treatment of the Variable Contracts issued by the Company as annuity contracts or life insurance policies, whichever is appropriate, under applicable provisions of the Code, and shall notify the Fund and the Distributor immediately upon having a reasonable basis for believing that such Variable Contracts have ceased to be so treated or that they might not be so treated in the future. 3.7. The Company shall offer and sell the Variable Contracts issued by the Company in accordance with applicable provisions of the 1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law respecting the offering of variable life insurance policies and variable annuity contracts. 3.8. The Distributor shall sell and distribute the shares of the Portfolios of the Fund in accordance with the applicable provisions of the 1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law. 3.9. A majority of the Board of Trustees of the Fund shall consist of persons who are not "interested persons" of the Fund ("disinterested Trustees"), as defined by Section 2(a)(19) of the 1940 Act, except that if this provision of this Section 3.9 is not met by reason of the death, disqualification, or bona fide resignation of any Trustee or Trustees, then the operation of this provision shall be suspended (a) for a period of 45 days if the vacancy or vacancies may be filled by the Fund's Board; (b) for a period of 60 days if a vote of shareholders is required to fill the vacancy or vacancies; or (c) for such longer period as the SEC may prescribe by order upon application. 3.10. The Company agrees to provide, as promptly as possible, notice to the Fund and to the Distributor if the Company has reason to know about a meeting of some or all of the owners of the Variable Contracts or shareholders of the Fund, where the agenda or purpose of the meeting relates, in whole or in part, to the Fund and that has not been called by the Fund's Board of Trustees (and which shall not include a vote of Variable Contract Owners having an interest in a Separate Account to substitute shares of another investment company for corresponding shares of the Fund or a Portfolio, as described in Section 9(e) and to which the notice provision of Section 9.2 shall apply). In such an event, the Company agrees to distribute proxy statements and any additional solicitation materials upon the request of the Fund or the Distributor to the owners of the Variable Contracts issued by the Company at least 30 days prior to the meeting. The Company further agrees that it shall take no action, directly or indirectly, in furtherance of shareholders of the Fund or Contract Owners taking any action with respect to the Fund by written consent and without a meeting. 3.11. Each party hereto shall cooperate with each other party and all appropriate governmental authorities having jurisdiction (including, without limitation, the SEC, the NASD, and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. ARTICLE IV. Potential Conflicts 4.1. The Fund's Board of Trustees shall monitor the Fund for the existence of any material irreconcilable conflict (1) between the interests of owners of variable annuity contracts and variable life insurance policies, and (2) between the interests of owners of Variable Contracts ("Variable Contract Owners") issued by different Participating Insurance Companies that invest in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretive letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of the Fund or any Portfolio are being managed; or (e) a decision by a Participating Insurance Company to disregard the voting instructions of Variable Contract Owners. 4.2. The Company agrees that it shall be responsible for reporting any potential or existing conflicts to the Fund's Board of Trustees. The Company will be responsible for assisting the Board of Trustees of the Fund in carrying out its responsibilities under this agreement, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by the Company to inform the Board whenever Variable Contract Owner voting instructions are disregarded. The Company shall carry out its responsibility under this Section 4.2 with a view only to the interests of the Variable Contract Owners. 4.3 The Company agrees that in the event that it is determined by a majority of the Board of Trustees of the Fund or a majority of the Fund's disinterested Trustees that a material irreconcilable conflict exists, the Company shall, to the extent reasonably practicable (as determined by a majority of the disinterested Trustees of the Board of the Fund), take whatever steps are necessary to eliminate the irreconcilable material conflict, including: (1) withdrawing the assets allocable to some or all of the Separate Accounts from the Fund or any Portfolio and reinvesting such assets in a different investment medium, which may include another portfolio of the Fund, or submitting the question of whether such segregation should be implemented to a vote of all affected Variable Contract Owners and, as appropriate, segregating the assets of any appropriate group (i.e., contract Owners of Variable Contracts issued by one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected Variable Contract Owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. If a material irreconcilable conflict arises because of the Company's decision to disregard Variable Contract Owners' voting instructions and that decision represents a minority position or would preclude a majority vote, the Company shall be required, at the Fund's election, to withdraw the Separate Accounts' investment in the Fund, and no charge or penalty will be imposed as a result of such withdrawal. The Fund shall neither be required to bear the costs of remedial actions taken to remedy a material irreconcilable conflict nor shall it be requested to pay a higher investment advisory fee for the sole purpose of covering such costs. In addition, no Variable Contract Owner shall be required directly to indirectly to bear the direct or indirect costs of remedial actions taken to remedy a material irreconcilable conflict. A new funding medium for any Variable Contract need not be established pursuant to this Section 4.3, if an offer to do so has been declined by vote of a majority of Variable Contract Owners materially adversely affected by the irreconcilable material conflict. All reports received by the Fund's Board of Trustees of potential or existing conflicts, and all Board action with regard to determining the existence of a conflict, notifying Participating Insurance Companies and the Fund's investment adviser of a conflict, and determining whether any proposed action adequately remedies a conflict,, shall be properly recorded life insurance policies, and (2) between the interests of owners of Variable Contracts ("Variable Contract Owners") issued by different Participating Insurance Companies that invest in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretive letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of the Fund or any Portfolio are being managed; or (e) a decision by a Participating Insurance Company to disregard the voting instructions of Variable Contract Owners. 4.2 The Company agrees that it shall be responsible for reporting any potential or existing conflicts to the Fund's Board of Trustees. The Company will be responsible for assisting the Board of Trustees of the Fund in carrying out its responsibilities under this Agreement, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by the Company to inform the Board whenever Variable Contract Owner voting instructions are disregarded. The Company shall carry out its responsibility under this Section 4.2 with a view only to the interests of the Variable Contract Owners. 4.3 The Company agrees that in the event that it is determined by a majority of the Board of Trustees of the Fund or a majority of the Fund's disinterested Trustees that a material irreconcilable conflict exists, the Company shall, to the extent reasonably practicable (as determined by a majority of the disinterested Trustees of the Board of the Fund), take whatever steps are necessary to eliminate the irreconcilable material conflict, including: (1) withdrawing the assets allocable to some or all of the Separate Accounts from the Fund or any Portfolio and reinvesting such assets in a different investment medium, which may include another portfolio of the Fund, or submitting the question of whether such segregation should be implemented to a vote of all affected Variable Contract Owners and, as appropriate, segregating the assets of any appropriate group (i.e., Contract Owners of Variable Contracts issued by one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected Variable Contract Owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. If a material irreconcilable conflict arises because of the Company's decision to disregard Variable Contract Owners' voting instructions and that decision represents a minority position or would preclude a majority vote, the Company shall be required, at the Fund's election, to withdraw the Separate Accounts' investment in the Fund, and no charge or penalty will be imposed as a result of such withdrawal. The Fund shall neither be required to bear the costs of remedial actions taken to remedy a material irreconcilable conflict nor shall it be requested to pay a higher investment advisory fee for the sole purpose of covering such costs. In addition, no Variable Contract Owner shall be required directly or indirectly to bear the direct or indirect costs of remedial actions taken to remedy a material irreconcilable conflict. A new funding medium for any Variable Contract need not be established pursuant to this Section 4.3, if an offer to do so has been declined by vote of a majority of Variable Contract Owners materially adversely affected by the irreconcilable material conflict. All reports received by the Fund's Board of Trustees of potential or existing conflicts, and all Board action with regard to determining the existence of a conflict, notifying Participating Insurance Companies and the Fund's investment adviser of a conflict, and determining whether any proposed action adequately remedies a conflict, shall be properly recorded in the minutes of the Board of Trustees of the Fund or other appropriate records, and such minutes or other records shall be made available to the SEC upon request. The Company and the Fund shall carry out their responsibilities under this Section 4.3 with a view only to the interests of the Variable Contract Owners. 4.4 The Board of Trustees of the Fund shall promptly notify the Company in writing of its determination of the existence of an irreconcilable material conflict and its implications. ARTICLE V. Prospectuses and Proxy Statements; Voting 5.1 The Company shall distribute such prospectuses, proxy statements and periodic reports of the Fund to the owners of Variable Contracts issued by the Company as required to be distributed to such Variable Contract Owners under applicable federal or state law. 5.2 The Distributor shall provide the Company with as many copies of the current prospectus of the Fund as the Company may reasonably request. If requested by the Company in lieu thereof, the Fund shall provide such documentation (including a final copy of the Fund's prospectus as set in type or in camera-ready copy) and other assistance as is reasonably necessary in order for the Company to print together in one document the current prospectus for the Variable Contracts issued by the Company and the current prospectus for the Fund. The Fund shall bear the expense of printing copies of its current prospectus that will be distributed to existing Variable Contract Owners, and the Company shall bear the expense of printing copies of the Fund's prospectus that are used in connection with offering the Variable Contracts issued by the Company. 5.3 The Fund and the Distributor shall provide (1) at the Fund's expense, one copy of the Fund's current Statement of Additional Information ("SAI") to the Company and to any owner of a Variable Contract issued by the Company who requests such SAI, (2) at the Company's expense, such additional copies of the Fund's current SAI as the Company shall reasonably request and that the Company shall require in accordance with applicable law in connection with offering the Variable Contracts issued by the Company. 5.4 The Fund, at its expense, shall provide the Company with copies of its proxy material, periodic reports to shareholders and other communications to shareholders in such quantity as the Company shall reasonably require for purposes of distributing to owners of Variable Contracts issued by the Company. The Fund, at the Company's expense, shall provide the Company with copies of its periodic reports to shareholders and other communications to shareholders in such quantity as the Company shall reasonably request for use in connection with offering the Variable Contracts issued by the Company. If requested by the Company in lieu thereof, the Fund shall provide such documentation (including a final copy of the Fund's proxy materials, periodic reports to shareholders and other communications to shareholders, as set in type or in camera-ready copy) and other assistance as reasonably necessary in order for the Company to print such shareholder communications for distribution to owners of Variable Contracts issued by the Company. 5.5 For so long as the SEC interprets the 1940 Act to require pass-through voting by Participating Insurance Companies whose Separate Accounts are registered as investment companies under the 1940 Act, the Company shall vote shares of each Portfolio of the Fund held in a Separate Account or a subaccount thereof, whether or not registered under the 1940 Act, at regular and special meetings of the Fund in accordance with instructions timely received by the Company (or its designated agent) from owners of Variable Contracts funded by such Separate Account or subaccount thereof having a voting interest in the Portfolio. The Company shall vote shares of a Portfolio of the Fund held in a Separate Account or a subaccount thereof that are attributable to the Variable Contracts as to which no timely instructions are received, as well as shares held in such Separate Account or subaccount thereof that are not attributable to the Variable Contracts and owned beneficially by the Company (resulting from charges against the Variable Contracts or otherwise), in the same proportion as the votes cast by owners of the Variable Contracts funded by that Separate Account or subaccount thereof having a voting interest in the Portfolio from whom instructions have been timely received. The Company shall vote shares of each Portfolio of the Fund held in its general account, if any, in the same proportion as the votes cast with respect to shares of the Portfolio held in all Separate Accounts of the Company or subaccounts thereof, in the aggregate. 5.6 The Fund shall disclose in its prospectus that (1) shares of the Portfolios of the Fund are offered to affiliated or unaffiliated insurance company separate accounts which fund both annuity and life insurance contracts, (2) due to differences in tax treatment or other considerations, the interests of various Variable Contract Owners participating in the Fund or a Portfolio might at some time be in conflict, and (3) the Board of Trustees of the Fund will monitor for any material conflicts and determine what action, if any, should be taken. The Fund hereby notifies the Company that prospectus disclosure may be appropriate regarding potential risks of offering shares of the Fund to separate accounts funding both variable annuity contracts and variable life insurance policies and to separate accounts funding Variable Contracts of unaffiliated life insurance companies. ARTICLE VI. Sales Material and Information 6.1 The Company shall furnish, or shall cause to be furnished, to the Fund or its designee, each piece of sales literature or other promotional material in which the Fund (or any Portfolio thereof) or its investment adviser or the Distributor is named, and no such sales literature or other promotional material shall be used without the approval of the Fund and the Distributor or the designee of either. 6.2 The Company agrees that neither it nor any of its affiliates or agents shall give any information or make any representations or statements on behalf of the Fund or concerning the Fund other than the information or representations contained in the Registration Statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or its designee and by the Distributor or its designee, except with the permission of the Fund or its designee and the Distributor or its designee. 6.3 The Fund or the Distributor or the designee of either shall furnish to the Company or its designee, each piece of sales literature or other promotional material in which the Company or its Separate accounts are named, and no such material shall be used without the approval of the Company or its designee. 6.4 The Fund and the Distributor agree that each and the affiliates and agents of each shall not give any information or make any representations on behalf of the Company or concerning the Company, the Separate Accounts, or the Variable Contracts issued by the Company, other than the information or representations contained in a registration statement or prospectus for such Variable Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Separate Accounts or prepared for distribution to owners of such Variable Contracts, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company. 6.5 The Fund will provide to the Company at least one complete copy of all prospectuses, Statements of Additional Information, reports, proxy statements and other voting solicitation materials, and all amendments and supplements to any of the above, that relate to the Fund or its shares, promptly after the filing of such document with the SEC or other regulatory authorities. 6.6 The Company will provide to the Fund at least one complete copy of all prospectuses (which shall include an offering memorandum if the Variable Contracts issued by the Company or interests therein are not registered under the 1933 Act), Statements of Additional Information, reports, solicitations for voting instructions, and all amendments or supplements to any of the above, that relate to the Variable Contracts issued by the Company or the Separate Accounts promptly after the filing of such document with the SEC or other regulatory authority. 6.7 For purposes of this Article VI, the phrase "sales literature or other promotional material" includes, but is not limited to, advertisements (such as periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, computerized media, or other public media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees. ARTICLE VII. Indemnification 7.1 Indemnification By The Company 7.1(a). The Company agrees to indemnify and hold harmless the Fund, each of its Trustees and officers, any affiliated person of the Fund within the meaning of Section 2(a)(3) of the 1940 Act, and the Distributor (collectively, the "Indemnified Parties" for purposes of this Section 7.1) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Company) or litigation expenses (including legal and other expenses), to which the Indemnified Parties may become subject under any statute, regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or litigation expenses are related to the sale or acquisition of the Fund's shares or the Variable Contracts issued by the Company and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus (which shall include an offering memorandum) for the Variable Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of the Fund for use in the registration statement or prospectus for the Variable Contracts issued by the Company or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of such Variable Contracts or Fund shares; or (ii) arise out of or as a result of any statement or representation (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by the Company or persons under its control) or wrongful conduct of the Company or any of its affiliates, employees or agents with respect to the sale or distribution of the Variable Contracts issued by the Company or the Fund shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such a statement or omission was made in reliance upon information furnished to the Fund by or on behalf of the Company; except to the extent provided in Sections 7.1(b) and 7.1(c) hereof. 7.1(b). The Company shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation expenses to which an Indemnified Party would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his or her duties or by reason of his or her reckless disregard of obligations or duties under this Agreement or to the Fund. 7.1(c). The Company shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Party shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Party shall have received notice of such service on any designated agent), but failure to notify the Company of any such claim shall not relieve the Company from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Company shall be entitled to participate, at its own expense, in the defense of such action. The Company also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Company to such party of the Company's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Company will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 7.1(d). The Indemnified Parties shall promptly notify the Company of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund shares or the Variable Contracts issued by the Company or the operation of the Fund. 7.2 Indemnification By The Distributor 7.2(a). The Distributor agrees to indemnify and hold harmless the Company and each of its directors and officers and each person, if any, who is an affiliated person of the Company within the meaning of Section 2(a)(3) of the 1940 Act (collectively, the "Indemnified Parties" for purposes of this Section 7.2) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation expenses (including legal and other expenses) to which the Indemnified Parties may become subject under any statute, at common law or otherwise, insofar as such losses, claims, damages, liabilities or litigation expenses are related to the sale or acquisition of the Fund's shares or the Variable Contracts issued by the Company and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or sales literature of the Fund (or any amendment or supplement to any of the foregoing),or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Distributor or the Fund or the designee of either by or on behalf of the Company for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Variable Contracts issued by the Company or Fund shares; or (ii) arise out of or as a result of any statement or representation (other than statements or representations contained in the registration statement, prospectus or sales literature for the Variable Contracts not supplied by the Distributor or any employees or agents thereof) or wrongful conduct of the Fund or Distributor, or the affiliates, employees, or agents of the Fund or the Distributor with respect to the sale or distribution of the Variable Contracts issued by the Company or Fund shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature covering the Variable Contracts issued by the Company, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Company by or on behalf of the Fund; except to the extent provided in Sections 7.2(b) and 7.2(c) hereof. 7.2(b). The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation expenses to which an Indemnified Party would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his or her duties or by reason of his or her reckless disregard of obligations and duties under this Agreement or to the Company or the Separate Accounts. 7.2(c). The Distributor shall not be liable under this indemnification provision with respect to any claim made against the Indemnified Party unless such Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this Indemnification Provision. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 7.2(d). The Company shall promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Variable Contracts issued by the Company or the operation of the Separate Accounts. ARTICLE VIII. Applicable Law 8.1 This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Arizona. 8.2 This Agreement shall be subject to the provisions of the 1933, 1934, and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE IX. Termination 9.1. This Agreement shall terminate: (a) at the option of any party upon 180 days advance written notice to the other parties; or (b) at the option of the Company if shares of the Portfolios are not reasonably available to meet the requirements of the Variable Contracts issued by the Company, as determined by the Company, and upon prompt notice by the Company to the other parties; or (c) at the option of the Fund or the Distributor upon institution of formal proceedings against the Company or its agent by the NASD, the SEC, or any state securities or insurance department or any other regulatory body regarding the Company's duties under this Agreement or related to the sale of the Variable Contracts issued by the Company, the operation of the Separate Accounts, or the purchase of the Fund shares; or (d) at the option of the Company upon institution of formal proceedings against the Fund or the Distributor by the NASD, the SEC, or any state securities or insurance department or any other regulatory body; or (e) upon requisite vote of the Variable Contract Owners having an interest in the Separate Accounts (or any subaccounts thereof) to substitute the shares of another investment company for the corresponding shares of the Fund or a Portfolio in accordance with the terms of the Variable Contracts for which those shares had been selected to serve as the underlying investment media; or (f) in the event any of the shares of a Portfolio are not registered, issued or sold in accordance with applicable state and/or federal law, or such law precludes the use of such shares as the underlying investment media of the Variable Contracts issued or to be issued by the Company; or (g) by any party to the Agreement upon a determination by a majority of the Trustees of the Fund, or a majority of its disinterested Trustees, that an irreconcilable conflict exists; or (h) at the option of the Company if the Fund or a Portfolio fails to meet the diversification requirements specified in Section 3.3 hereof. 9.2 Each party to this Agreement shall promptly notify the other parties to the Agreement of the institution against such party of any such formal proceedings as described in Sections 9.1(c) and (d) hereof. The Company shall give 60 day's prior written notice to the Fund of the date of any proposed vote of Variable Contract Owners to replace the Fund's shares as described in Section 9.1(e) hereof. 9.3 Except as necessary to implement Variable Contract Owner initiated transactions, or as required by state insurance laws or regulations, the Company shall not redeem Fund shares attributable to the Variable Contracts issued by the Company (as opposed to Fund shares attributable to the Company's assets held in the Separate Accounts), and the Company shall not prevent Variable Contract Owners from allocating payments to a Portfolio, until 60 days after the Company shall have notified the Fund or Distributor of its intention to do so. 9.4 If this Agreement terminates, any provision of this Agreement necessary to the orderly windup of business under it will remain in effect as to that business, after termination. ARTICLE X. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Pacific Select Fund Attn: SEC Regulatory Compliance Department 700 Newport Center Drive P.O. Box 7500 Newport Beach, CA 92260 If to the Distributor: Pacific Mutual Distributors, Inc. Attn: Compliance Officer 700 Newport Center Drive, NB-3 Newport Beach, CA 92660 If to the Company: Pacific Life & Annuity Company c/o Pacific Life Insurance Company 700 Newport Center Drive P.O. Box 7500 Newport Beach, CA 92260 ARTICLE XI. Miscellaneous 11.1 The Fund and the Company agree that if and to the extent Rule 6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted in final form, to the extent applicable, the Fund and the Company shall each take such steps as may be necessary to comply with the Rule as amended or adopted in final form. 11.2 A copy of the Fund's Agreement and Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts and notice is hereby given that the Agreement has been executed on behalf of the Fund by a Trustee of the Fund in his or her capacity as Trustee and not individually. The obligations of this Agreement shall only be binding upon the assets and property of the Fund and shall not be binding upon any Trustee, officer or shareholder of the Fund individually. 11.3 Nothing in this Agreement shall impede the Fund's Trustees or shareholders of the shares of the Fund's Portfolios from exercising any of the rights provided to such Trustees or shareholders in the Fund's Agreement and Declaration of Trust, as amended, a copy of which will be provided to the Company upon request. 11.4 It is understood that the name "Pacific", "Pacific Mutual", "Pacific Life", or "Pacific Select" or any derivative thereof or logo associated with that name is the valuable property of the Distributor and its affiliates, and that the Company has the right to use such name (or derivative or logo) only so long as this Agreement is in effect. Upon termination of this Agreement the Company shall forthwith cease to use such name (or derivative or logo). 11.5 The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 11.6 This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 11.7 If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 11.8 This Agreement may not be assigned by any party to the Agreement except with the written consent of the other parties to the Agreement. Notwithstanding the forgoing, the Company may assign some or all of its duties under this Agreement to Pacific Life Insurance Company upon such terms and conditions as are deemed appropriate between the Company and Pacific Life Insurance Company. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PACIFIC SELECT FUND Attest: By: - ---------------------------------- --------------------------------- Name: Name: Thomas C. Sutton Title: President PACIFIC MUTUAL DISTRIBUTORS, INC. Attest: By: - ---------------------------------- --------------------------------- Name: Name: Title: President PACIFIC LIFE & ANNUITY COMPANY Attest: By: - ---------------------------------- --------------------------------- Name: Name: Title: President EXHIBIT A PACIFIC SELECT EXEC SEPARATE ACCOUNT SEPARATE ACCOUNT A IN WITNESS WHEREOF, the parties hereto have caused this Exhibit A to be executed by their Officers designated below on this ____ day of ____________, 1998. PACIFIC SELECT FUND Attest: By: - ---------------------------------- --------------------------------- Name: Name: Thomas C. Sutton Title: President PACIFIC MUTUAL DISTRIBUTORS, INC. Attest: By: - ---------------------------------- --------------------------------- Name: Name: Title: President PACIFIC LIFE & ANNUITY COMPANY Attest: By: - ---------------------------------- --------------------------------- Name: Name: Title: President EXHIBIT B MONEY MARKET PORTFOLIO MANAGED BOND PORTFOLIO GOVERNMENT SECURITIES PORTFOLIO HIGH YIELD BOND PORTFOLIO GROWTH PORTFOLIO GROWTH LT PORTFOLIO EQUITY INCOME PORTFOLIO MULTI-STRATEGY PORTFOLIO EQUITY PORTFOLIO BOND AND INCOME PORTFOLIO EQUITY INDEX PORTFOLIO INTERNATIONAL PORTFOLIO EMERGING MARKETS PORTFOLIO AGGRESSIVE EQUITY PORTFOLIO MID-CAP VALUE PORTFOLIO LARGE-CAP VALUE PORTFOLIO SMALL-CAP INDEX PORTFOLIO REIT PORTFOLIO EX-99.1(9)(B) 19 ADMINISTRATIVE AGREEMENT SERVICES AGREEMENT THIS Services Agreement ("Agreement") is made this day of 1999, by and between Pacific Life & Annuity Co. ("PL&A"), an Arizona corporation, and Pacific Life Insurance Company (PLIC), a California corporation. WHEREAS, PL&A desires to provide such administrative services for certain individual life, individual annuity, and institutional product contracts; and WHEREAS, PLIC desires to provide certain administrative services for PL&A on the following terms and conditions; NOW THEREFORE, in consideration of the mutual promises and agreements contained herein, the parties do mutually agree as follows: 1. Services. Subject to the terms and conditions set forth in this Agreement, PLIC agrees with respect to certain PL&A contracts, specifically, any and all individual life, individual annuity, and institutional product contracts (collectively "the Contracts"), to provide the administrative services described in Schedule A, attached hereto and made a part hereof, together with such other services that PL&A may reasonably request (collectively "the Services") with respect to the Contracts. 2. Charges for Services. As consideration for the Services provided by PLIC pursuant to this Agreement, PL&A agrees to pay PLIC a fee based on an estimation of actual costs, determined in a fair and reasonable manner, which costs will not include a profit factor and which will be allocated equitably in accordance with customary insurance accounting practices, where applicable, consistently applied. 3. Subcontractors. PLIC may subcontract with any subsidiary or affiliate of PLIC to provide Services; provided that subcontracting shall not result in an increase in the amount charged for such Services or a decrease in the quality of such Services provided. 4. Indemnification. PL&A agrees to defend, indemnify and hold PLIC harmless from and against all costs, reasonable expenses, losses, damages, attorneys' fees, claims, obligations and liabilities imposed upon, incurred or asserted against PLIC which arise out of or in any manner are connected with Contracts administered by PLIC under this Agreement, except if the conduct of PLIC constitutes an intentional tort, reckless conduct, gross negligence or bad faith, or if PLIC issues a Contract which is inconsistent with the approved policy specifications. Page 2 Services Agreement 5. Underwriting and Claims Services. All underwriting and claims services provided to PL&A under this Agreement are to be based upon the written criteria, standard and guidelines of PL&A. PL&A shall have the ultimate and final authority over decisions and policies relating to the Contracts; to include but not be limited to the acceptance, rejection or canceling of risks relating to or with respect to such Contracts. 6. Supervision by the Company. PLIC acknowledges that (a) the Board of Directors and officers of PL&A are vested with the power, authority, and responsibility for managing the business and affairs of PL&A, and (b) any and all actions taken or advice or services provided pursuant to this Agreement by PLIC are subject to the continuous supervision and approval of the Board of Directors and the officers of PL&A. 7. Billing. All charges and advances made pursuant to this Agreement shall be billed by PLIC on a timely basis in the ordinary course of business and shall be 100 percent repaid to PLIC in the ordinary course of business, as soon as practicable. Interest may be assessed by PLIC at a market-based short-term borrowing rate. Billings shall be accompanied by sufficient documentation to support the charges and to meet all state insurance regulatory requirements. Statements are subject to final adjustment only if mutually agreed upon by both parties. 8. Accounting Records and Documents. (a) PLIC shall be responsible for maintaining full and accurate accounts and records of all services rendered pursuant to this Agreement. PLIC shall keep such account and records insofar as they pertain to the computation of charges hereunder available at its principal offices for audit, inspection, and copying, during reasonable business hours, by PL&A and persons authorized by it and any governmental agency having jurisdiction over PL&A. (b) All books, records and files established and maintained by PLIC by reason of its performance under this Agreement which, absent this Agreement, would have been held by PL&A, shall be deemed the property of PL&A, and shall be subject to audit, inspection, and copying, during reasonable business hours, by PL&A and persons authorized by it and any governmental agency having jurisdiction over PL&A. All such books, records and files shall be promptly transferred to PL&A by PLIC upon termination of this Agreement, at PL&A's expense. Page 3 Services Agreement 9. Notices. All written notices, requests, and other communications hereunder shall be delivered to the addresses set forth on the signature page of this Agreement, or any address hereinafter agreed upon by the parties. 10. Governing Law. This Agreement shall be construed and governed in accordance with the laws of the State of Arizona. 11. Entire Agreement; Amendment. This Agreement shall constitute the entire agreement among the parties and supersedes all prior agreements and understandings, whether written or verbal, to the extent such agreements pertain to the rights and responsibilities set forth herein. Notwithstanding the foregoing, this Agreement does not supersede either of the Pacific Life Insurance Company Administrative Services Agreement with Pacific Life Insurance Company and its Subsidiaries and Affiliates dated September 1, 1997 and the Investment Management Agreement dated January 1, 1990. This Agreement may be amended only in a writing executed by all parties. 12. Arbitration. In the event any dispute arises between the parties related in any way to this Agreement on which agreement between the parties cannot be reached, the dispute shall be decided by arbitration in accordance with procedures agreed upon by the parties after such dispute arises. 13. Termination. This Agreement may be terminated upon 60 days written notice by written agreement of the parties hereto. PL&A may terminate the contract in the event PLIC fails to perform its responsibilities hereunder in a satisfactory manner. 14. Assignment. Except as set forth in Section 3 hereof, PLIC cannot assign its duties or obligation, in whole or in part, under this Agreement to any other firm, organization or individuals without the express written consent of PL&A, which consent shall not be unreasonably withheld. 15. Severability. To the extent this Agreement may be in conflict with any applicable law or regulation, this Agreement shall be construed in a manner consistent with such law or regulation. The invalidity or illegality of any provision of this Agreement shall not be deemed to affect the validity or legality of any other provision of this Agreement. Page 4 Services Agreement IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. PACIFIC LIFE & ANNUITY CO. 17360 Brookhurst Fountain Valley, CA 92708 By: _____________________ By: _________________________ Title: __________________ Title: ______________________ PACIFIC LIFE INSURANCE COMPANY 700 Newport Center Drive Newport Beach, CA 92660 By: _____________________ By: _________________________ Title: __________________ Title: ______________________ SCHEDULE A SERVICES PROVIDED BY PLIC PURSUANT TO THIS AGREEMENT FOR THE CONTRACTS 1. Marketing Preparation and distribution of illustrations and marketing materials. Communications with the field. Contest qualification and production credit tracking. 2. Compliance Provide contracts and policies in compliance with applicable state and federal laws. File PL&A contracts and policies with insurance departments and other regulatory agencies. 3. Policy Administration Prepare, in accordance with Section 5, and deliver and maintain contracts and policies. Obtain clients acceptance of contracts and policies. Maintain originals of all contracts and policies. Provide customer service in relation to all contracts and policies. Prepare and issue reports required by state and federal law. 4. Accounting and Financial Reporting Prepare billings and collect premiums and other fees in relation to contracts and policies. Provide accounting for contracts and policies. Provide financial reporting results for inclusion in PL&A financial statements. Provide valuation and compliance with valuation and actuarial requirements for business subject to this Agreement. Provide support for PL&A examinations and audits. 5. Claims Processing In accordance with Section 5, process all claims arising under policies and contracts. Maintain claim documents, files and related information. Maintain and update beneficiary designations and life assignments. Control and maintain all draft and check stock, claim forms and other forms and documents incidental to claims processing. Maintain claims procedural manuals and other instructions. Monitor claims for possible fraud. Page 2 Schedule A 6. Licensing and Commission Payment Process and issue licenses and commission agreements, and pay applicable fees. Calculate and pay commissions. Maintain commission payment information, and report such information as required by applicable laws. 7. Separate Accounts Provide services necessary for the maintenance of separate accounts, including but not limited to state and federal regulations as applicable. EX-99.1(10) 20 APPLICATION & QUESTIONNAIRE Pacific Life & Annuity Company [Logo of PL&A] Service Center 700 Newport Center Drive Newport Beach, CA 92660 APPLICATION FOR LIFE INSURANCE INSTRUCTIONS TO SOLICITING AGENT(S) GENERAL INSTRUCTIONS . Every appropriate section of the application must be fully completed prior to signing the application. A blank application must never be signed. . The application is color coded for easy completion. The following indicates who must complete the various colored sections: Blue Applicant Gray Applicant or Agent must complete for NON-VARIABLE life products only Green Applicant or Agent must complete for VARIABLE life products only Burgundy Agent . Changes noted on this application must be lined out and the new information must be indicated and initialed by the Applicant in Sections A-E, Proposed Insured(s) in Section F and Agent in Sections G-J. Changes made any other way will be amended. . The DISCLOSURE NOTICE TO APPLICANTS must be detached and given to the Applicant. If the DISCLOSURE NOTICE TO APPLICANTS is not detached when the application is received at PL&A, written verification that the Notice was given to the Applicant will be required before the underwriting process can begin. . For "Survivor Life" type policies, the Second Insured is considered the Additional Insured. All Additional Insured sections must be completed. IMPORTANT SIGNATURE REQUIREMENTS . The party initiating the application for life insurance is considered the Applicant. Depending on the situation, the Applicant may also be the Insured or Owner. . The following parties must sign page 6 of the application: Applicant Proposed Insured (if other than Applicant) Other Adult Proposed Insured (if applicable) Child of age 18 and older (required in Pennsylvania) Owner (if other than Proposed Insured or Applicant) Soliciting Agent . The Authorization on page 7 must be signed and dated by the Proposed Insured and Other Adult Proposed Insured (if applicable). Underwriting cannot begin without a signed Authorization. . The Soliciting Agent(s) must sign on pages 6 and 10. . If multiple Owners, then all Owners must sign on page 6 of the application. . For corporate signatures, the signature and title of any authorized officer other than the Proposed Insured is required and the full name of the corporation must be shown on page 6. . If policy is trust owned, trustee(s) must sign on page 6 of application on the Signature of Applicant line indicating the title "Trustee" after the signature. Owner designation, on page 1, must include name of trust, date of trust, trustee(s) name, with the wording "successor or successors in trust". UNDERWRITING REQUIREMENTS . Underwriting requirements are based on the age of the Proposed Insured(s) and amount applied for. Refer to the Life Underwriting Requirements Chart (not attached) to determine the appropriate requirements. . The Non-Medical is NOT part of this application. APPLICATION, PART II, Non- Medical (AP9500-P2-NY) must be obtained separately. Note: Certain states will have their own version. AP9500-NY 85-21245-00 9/98 INSTRUCTIONS TO SOLICITING AGENT(S) ________________________________________________________________________________ SECTION A - CLIENT INFORMATION . Complete all Questions, unless a Question does not apply. . If submitting money with the application, complete question 31A, B and C on page 1. Also submit a Temporary Insurance Agreement (TIA) with the application. The date on the application, check and TIA must all be the same date. . Money and the TIA must not be taken if: (a) any health question on the TIA is answered "yes;" (b) the proposed insured is under 15 days of age or is over 70 years old (nearest birthday) on the date of the application. If the face amount applied for is greater than the TIA maximum binding limit, complete the application in the following manner: 1) Indicate the total face amount as applied for in question 31C. Also indicate all applied for Optional Benefits here. If additional space is needed, use Remarks section on page 2 or 3. 2) On page 2 (for non-variable products) or page 3 (for variable products), question 3, complete with the maximum binding limit as noted on the TIA. Leave question 5 "Optional Benefits" blank. SECTION B - POLICY INFORMATION FOR NON-VARIABLE LIFE PRODUCTS . Indicate product desired, base face amount, initial APB amount (if applied for) and Total Initial Coverage in question 3. Whether APB is level or varying, always indicate initial APB amount. This information can be found on the Producer/Home Office Administration Worksheet page of the illustration. . Indicate all other optional benefits in question 5. . Complete only those questions that relate to the product (term/fixed or flexible premium) applied for. . If requesting an alternate or additional policy, complete the Alternate/Additional Policy section on page 2. SECTION C - POLICY INFORMATION FOR VARIABLE LIFE PRODUCTS . Indicate product desired, base face amount, initial APB amount (if applied for) and Total Initial Coverage in question 3. Whether APB is level or varying, always indicate initial APB amount. This information can be found on the Producer/Home Office Administration Worksheet page of the illustration. . Indicate all other optional benefits in question 5. . Answer all Suitability questions and include the date of the current Separate Account Prospectus and Fund prospectus. . If requesting an alternate or additional policy, complete the Alternate/Additional Policy section on page 3. All suitability questions must also be completed. SECTION D - MEDICAL CERTIFICATION . Complete only when submitting a medical examination from another insurance company. SECTION E - ADDITIONAL INSURED . Complete if requesting an optional benefit such as APB, ART or SITR on an Additional Insured. This section is also completed for "Survivor Life" type policies. SECTION F - GENERAL INFORMATION . Complete every question of this section for the Proposed Insured and Additional Insured (if applicable). . If proposed Insured or Additional Insured (if applicable) participates in a hazardous occupation/sport, complete a General Questionnaire form (not attached) for each Insured that participates. SECTION G - UNI-CHECK (AUTOMATIC BANK WITHDRAWAL) . The Uni-Check billing method is available on a monthly payment frequency for automatic checking account deductions. Complete this section if electing Uni- Check. Also complete Uni-Check method and monthly mode on page 1, questions 30A and 30B. A voided check must be submitted with the application. SECTION H - BUSINESS INSURANCE . Complete only if applying for Business Insurance. SECTION I - FOR PROPOSED INSURED UNDER THE AGE OF 16 . Complete this section if the application is submitted on a non-medical basis and the Proposed Insured is under age 16. If the application is submitted on a medical basis, a medical exam is necessary. Refer to the Life Underwriting Requirements Chart to determine the appropriate requirements. SECTION J - AGENT INFORMATION . Complete every question of this section. . The signature of the Soliciting Agent(s) is required at the bottom of page 10. . Commissions are paid in accordance with the information presented at the bottom of page 10. The Agent listed first is the Servicing Agent, unless indicated otherwise in the remarks section. Always include Agent Code for prompt payment of commission. ________________________________________________________________________________ AP9500-NY 85-21245-00 9/98 APPLICATION FOR LIFE INSURANCE, PART I NEWBSAPPLC Any person who knowingly and with intent to defraud [Logo of PL&A] any insurance company or other person files an Service Center application for insurance or statement of claim 700 Newport Center Drive containing any materially false information or Newport Beach, CA 92660 conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties. NO.
- ------------------------------------------------------------------------------------------------------------------------------------ SECTION A CLIENT INFORMATION - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSED INSURED - ------------------------------------------------------------------------------------------------------------------------------------ 1. Full Name (PRINT AS TO APPEAR IN POLICY/FIRST,MIDDLE,LAST) 2. Sex: 3. State of Birth 4. Date of Birth ___ Male MO. DAY YR. ___ Female - ------------------------------------------------------------------------------------------------------------------------------------ 5. Insurance Age 6. Drivers License No. & State 7. Social Security No. or Taxpayer I.D. No. 8. Telephone No. ( ) - ------------------------------------------------------------------------------------------------------------------------------------ 9. Address (STREET, CITY, COUNTY, STATE, ZIP CODE) 10. How Long - ------------------------------------------------------------------------------------------------------------------------------------ 11. Employer Name and Address (STREET, CITY, COUNTY, STATE, ZIP CODE) 12. How Long - ------------------------------------------------------------------------------------------------------------------------------------ 13. Occupation 14. Type of Business - ------------------------------------------------------------------------------------------------------------------------------------ OWNER IF OTHER THAN PROPOSED INSURED - ------------------------------------------------------------------------------------------------------------------------------------ 15. Full Name (PRINT AS TO APPEAR IN POLICY/FIRST,MIDDLE,LAST) 16. Date of Birth 17. Relationship 18. Telephone No. ( ) - ------------------------------------------------------------------------------------------------------------------------------------ 19. Address (STREET, CITY, COUNTY, STATE, ZIP CODE) 20. Social Security No. or Taxpayer I.D. No. - ------------------------------------------------------------------------------------------------------------------------------------ BENEFICIARY - ------------------------------------------------------------------------------------------------------------------------------------ 21. Primary Beneficiary (PRINT FULL NAME/FIRST, MIDDLE, LAST) 22. Relationship - ------------------------------------------------------------------------------------------------------------------------------------ 23. Address (STREET, CITY, COUNTY, STATE, ZIP CODE) - ------------------------------------------------------------------------------------------------------------------------------------ 24. Contingent Beneficiary (PRINT FULL NAME/FIRST, MIDDLE, LAST) 25. Relationship - ------------------------------------------------------------------------------------------------------------------------------------ 26. Address (STREET, CITY, COUNTY, STATE, ZIP CODE) - ------------------------------------------------------------------------------------------------------------------------------------ PREMIUM NOTICES - ------------------------------------------------------------------------------------------------------------------------------------ 27. Send to: ___ Insured ___ Owner at ___ Residence ___ Business or Other (INDICATE BELOW) - ------------------------------------------------------------------------------------------------------------------------------------ 28. Name 29. Address (STREET, CITY, COUNTY, STATE, ZIP CODE) - ------------------------------------------------------------------------------------------------------------------------------------ BILLING INFORMATION - ------------------------------------------------------------------------------------------------------------------------------------ 30A. Method 30B. Frequency of Premium Reminder Notice ___ Single Premium or Premium Payment ___ Direct (annual, semi-annual or quarterly only) ___ Annual ___ List Bill (3 or more lives) ___ Semi-Annual ___ Uni-Check - Attach a Voided Check and complete Uni-check Section on Page 6. ___ Quarterly (monthly only.) ___ Monthly - ------------------------------------------------------------------------------------------------------------------------------------ AMOUNT PAID WITH THIS APPLICATION - ------------------------------------------------------------------------------------------------------------------------------------ 31A. Is cash or check tendered with this application? ___ Yes ___ No If Yes, show amount $______________________ If No, do not complete question below B. Do you understand, accept and agree to the terms of the Temporary Insurance Agreement (TIA)? ___ Yes ___ No C. If Yes, and a policy face amount is applied for which is larger than that which PL&A will insure under the TIA, complete the following statement: If approved, please issue a policy for a face amount of $______________________ - ------------------------------------------------------------------------------------------------------------------------------------ SPECIAL DATING REQUEST - ------------------------------------------------------------------------------------------------------------------------------------ 32. ___ Date To Save Age ___ Specific Date Month ____________________ Day _______________ Year __________ - ------------------------------------------------------------------------------------------------------------------------------------
AP9500-NY -1- 85-21245-00 9/98
- ------------------------------------------------------------------------------------------------------------------------------------ SECTION B POLICY INFORMATION (COMPLETE FOR NON-VARIABLE LIFE INSURANCE) - ------------------------------------------------------------------------------------------------------------------------------------ Check one: ___ TERM/FIXED PREMIUM ___ FLEXIBLE PREMIUM - ------------------------------------------------------------------------------------------------------------------------------------ 1. Policy Name 2. Total Modal Premium or Expected Annual Premium $ - ------------------------------------------------------------------------------------------------------------------------------------ 3. Face Amount (Base only) $ _________ Plus Initial APB Amount $ _________ = Total Initial Coverage $_________ - ------------------------------------------------------------------------------------------------------------------------------------ FIXED PREMIUM LIFE INSURANCE ONLY FLEXIBLE PREMIUM LIFE INSURANCE ONLY Yes No 4A. Automatic Premium Loan: ___ ___ 4A. Check one: ___ Option A (Level) ___ Option B (Increasing) B. Variable Loan Interest Rate: ___ ___ B. Dividend Option (Check one): ___ Cash ___ Increase Accumulated Value ___ Other C. Dividend Option (Check one): ___ Cash ___ Add to Policy Value ___ Other 5. OPTIONAL BENEFITS 5. OPTIONAL BENEFITS A. ___ ADB $________________ A. ___ ADB $________________ B. ___ AVR/AVP $________________ B. ___ ART/APB/SITR on Other Covered Person for $__________ C. ___ ART on Other Covered Person $_____________ C. ___ ART on Proposed Insured for $___________ for ____ years D. ___ Children's Term (units) _____ D. ___ Children's Term (units) _____ (Complete Part 11, Section C) (Complete Part 11, Section C) E. ___ Exchange of Insured E. ___ Exchange of Insured F. ___ Guaranteed Insurability $_________________ F. ___ Guaranteed Insurability $_________________ G. ___ Disability Benefit $____________ G. ___ Increasing Death Benefit H. ___ Preliminary Term ___ 1 Yr. ___ 2 Yr. ______ No. of Months H. ___ Preliminary Term ___ 1 Yr. ___ 2 Yr. Effective Date __________________ ______ No. of Months I. ___ Waiver of Charges Effective Date __________________ J. ___ Payor Waiver of Charges (Complete Part 11, Section C) I. ___ Premium Waiver K. ___ Owner Waiver of Charges (Complete Part 11, Section C) J. ___ Payor Premium Waiver (Complete Part 11, Section C) L. ___ Other _______________________________ K. ___ Owner Premium Waiver (Complete Part 11, Section C) M. ___ Other _______________________________ L. ___ Other _______________________________ N. ___ Other _______________________________ M. ___ Other _______________________________ O. ___ Other _______________________________ N. ___ Other _______________________________ O. ___ Other _______________________________ - ------------------------------------------------------------------------------------------------------------------------------------ 6. If any optional benefit applied for cannot be approved, should the policy be issued without it? ___ Yes ___ No - ------------------------------------------------------------------------------------------------------------------------------------ COMPLETE THIS SECTION IF APPLYING FOR (Check one): ___ ADDITIONAL POLICY or ___ ALTERNATE POLICY - ------------------------------------------------------------------------------------------------------------------------------------ 7. Policy Name 8. Total Modal Premium or Expected Annual Premium $ - ------------------------------------------------------------------------------------------------------------------------------------ 9. Face amount (Base only) $ _____________ Plus Initial APB Amount $ _____________ = Total Initial Coverage $ _____________ - ------------------------------------------------------------------------------------------------------------------------------------ 10. Optional Benefits: A. __________________________________ B. _________________________________ C. ________________________________ B. - ------------------------------------------------------------------------------------------------------------------------------------ 11. Complete for FIXED PREMIUM LIFE INSURANCE ONLY 12. Complete for FLEXIBLE PREMIUM INSURANCE ONLY Yes No A. Check one: ___ Option A (Level) A. Automatic Premium Loan: ___ ___ ___ Option B (Increasing) B. Variable Loan Interest Rate: ___ ___ C. Dividend Option: ___________________ B. Dividend Option: ___________________ - ------------------------------------------------------------------------------------------------------------------------------------ REMARKS - ------------------------------------------------------------------------------------------------------------------------------------ AP9500-NY -2- 85-21245-00 9/98
- ------------------------------------------------------------------------------------------------------------------------------------ SECTION C POLICY INFORMATION (COMPLETE FOR VARIABLE LIFE INSURANCE) - ------------------------------------------------------------------------------------------------------------------------------------ VARIABLE LIFE - ------------------------------------------------------------------------------------------------------------------------------------ 1. Policy Name 2. Planned Annual Premium $ - ------------------------------------------------------------------------------------------------------------------------------------ 3. Face Amount (Base only) $ _____________ Plus Initial APB Amount $ _____________ = Total Initial Coverage $ _____________ - ------------------------------------------------------------------------------------------------------------------------------------ 4. Check one: ___ Option A (Level) ___ Option B (Increasing) - ------------------------------------------------------------------------------------------------------------------------------------ 5. A. ___ ART on Other Covered Person for $ _____________ E. ___ Guaranteed Insurability $ _____________ B. ___ ADB $ _____________ F. ___ Waiver of Charges C. ___ Children's Term (units) _____________ (Complete Part 11, Section C) G. ___ Other ____________________ D. ___ Disability Benefit $ _____________ H. ___ Other ____________________ - ------------------------------------------------------------------------------------------------------------------------------------ 6. If any optional benefit applied for cannot be approved, should the policy be issued without it? ___ Yes ___ No PREMIUM ALLOCATIONS - ------------------------------------------------------------------------------------------------------------------------------------ 7. INDICATE ALLOCATIONS. THE TOTAL OF THE PERCENTAGES MUST BE 100%. USE WHOLE NUMBERS. - ------------------------------------------------------------------------------------------------------------------------------------ Equity: _______% Growth LT: _______% Multi-Strategy: _______% Small-Cap Index: _______% Equity Income: _______% High Yield Bond: _______% Emerging Markets: _______% Mid-Cap Value: _______% Equity Index: _______% International: _______% Aggressive Equity: _______% Large-Cap Value: _______% Gov. Securities: _______% Managed Bond: _______% Bond & Income: _______% Fixed: _______% Growth: _______% Money Market: _______% REIT: _______% Fixed LT: _______% Other: _______% Other: _______% Other: _______% Other: _______%
- ------------------------------------------------------------------------------------------------------------------------------------ SUITABILITY - ------------------------------------------------------------------------------------------------------------------------------------ Yes No 8. DO YOU BELIEVE THAT THIS POLICY WILL MEET YOUR INSURANCE NEEDS AND FINANCIAL OBJECTIVES?___________________ _____ _____ 9. DO YOU UNDERSTAND THAT THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY VARY, DEPENDING ON THE INVESTMENT PERFORMANCE OF THE VARIABLE ACCOUNTS IN THE SEPARATE ACCOUNT?______________________________________________ _____ _____ 10. DO YOU UNDERSTAND THAT THE POLICY VALUES MAY INCREASE OR DECREASE, DEPENDING ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNTS IN THE SEPARATE ACCOUNT?_______________________________________________ _____ _____ 11. DID YOU RECEIVE THE SEPARATE ACCOUNT PROSPECTUS AND THE FUND PROSPECTUS FOR THE POLICY APPLIED FOR?________ If Yes, give date shown on prospectuses: Separate Account Fund _____ _____ - ------------------------------------------------------------------------------------------------------------------------------------ POLICY VALUES MAY INCREASE OR DECREASE, AND MAY EVEN BE REDUCED TO ZERO, IN ACCORDANCE WITH THE EXPERIENCE OF THE VARIABLE ACCOUNTS IN THE SEPARATE ACCOUNT (SUBJECT TO ANY SPECIFIED MINIMUM GUARANTEES). THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS. CURRENT ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS AND CASH SURRENDER VALUES, ARE AVAILABLE UPON REQUEST. - ------------------------------------------------------------------------------------------------------------------------------------ COMPLETE THIS SECTION IF APPLYING FOR (Check one): ___ ADDITIONAL POLICY or ___ ALTERNATE POLICY (COMPLETE SUITABILITY QUESTIONS ABOVE) - ------------------------------------------------------------------------------------------------------------------------------------ 12. Policy Name 13. Planned Annual Premium $ - ------------------------------------------------------------------------------------------------------------------------------------ 14. Face Amount (Base only) $_____________ Plus Initial ART Amount $_____________ = Total Initial Coverage $_____________ - ------------------------------------------------------------------------------------------------------------------------------------ 15. Optional Benefits 16. Death Benefit Options (Check one): A. __________________________________________ Option A (Level) __________ B. __________________________________________ Option B (Includes Account Value) __________ C. __________________________________________ Option C (Includes Premiums less Distributions) __________ - ------------------------------------------------------------------------------------------------------------------------------------ REMARKS - ------------------------------------------------------------------------------------------------------------------------------------
AP9500-NY -3- 85-21245-00 9/98
- ------------------------------------------------------------------------------------------------------------------------------------ SECTION D MEDICAL CERTIFICATION (NOT APPLICABLE IN THE STATE OF PENNSYLVANIA) - ------------------------------------------------------------------------------------------------------------------------------------ COMPLETE WHEN SUBMITTING MEDICAL EXAMINATION OF ANOTHER INSURANCE COMPANY 1. The attached examination is on the life of: - ------------------------------------------------------------------------------------------------------------------------------------ Proposed Insured Name Name of the other Insurance Company Date of Examination - ------------------------------------------------------------------------------------------------------------------------------------ Additional Insured Name Name of the other Insurance Company Date of Examination - ------------------------------------------------------------------------------------------------------------------------------------ Additional Insured Name Name of the other Insurance Company Date of Examination - ------------------------------------------------------------------------------------------------------------------------------------ Additional Insured Name Name of the other Insurance Company Date of Examination - ------------------------------------------------------------------------------------------------------------------------------------ Proposed Insured Additional Insured 2. To the best of your knowledge and belief, are the statements in the examination true as of today? ___ Yes ___ No ___ Yes ___ No 3. Has the person who was examined consulted a doctor or their practitioner or received medical or surgical advice since the date of the examination: (If yes, explain in remarks) ___ Yes ___ No ___ Yes ___ No - ------------------------------------------------------------------------------------------------------------------------------------ SECTION E ADDITIONAL INSURED - ------------------------------------------------------------------------------------------------------------------------------------ 1. Full Name (PRINT AS TO APPEAR IN POLICY/FIRST, MIDDLE, LAST) 2. Sex: ___ Male 3. State of Birth 4. Date of Birth ___ Female MO. DAY YR. - ------------------------------------------------------------------------------------------------------------------------------------ 5. Insurance Age 6. Drivers License No. & State 7. Social Security No. or Taxpayer I.D. No. 8. Telephone No. ( ) - ------------------------------------------------------------------------------------------------------------------------------------ 9. Address (STREET, CITY, COUNTY, STATE, ZIP CODE) 12. How Long - ------------------------------------------------------------------------------------------------------------------------------------ 10. Employer Name and Address (STREET, CITY, COUNTY, STATE, ZIP CODE) 14. How Long - ------------------------------------------------------------------------------------------------------------------------------------ 13. Occupation 14. Type of Business - ------------------------------------------------------------------------------------------------------------------------------------ 15. Relationship to Primary Insured - ------------------------------------------------------------------------------------------------------------------------------------ BENEFICIARY TO ADDITIONAL INSURED - ------------------------------------------------------------------------------------------------------------------------------------ 16. Primary Beneficiary (PRINT FULL NAME/FIRST, MIDDLE, LAST) 17. Relationship - ------------------------------------------------------------------------------------------------------------------------------------ 18. Contingent Beneficiary (PRINT FULL NAME/FIRST, MIDDLE, LAST) 19. Relationship - ------------------------------------------------------------------------------------------------------------------------------------ SECTION F GENERAL INFORMATION - ------------------------------------------------------------------------------------------------------------------------------------ 1. Give details of life insurance in force in other companies on PROPOSED INSURED. If none (or if conversion application) check this box ___ Company Year Taken Plan Life Amount Acc. Death Amount - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 1. Give details of life insurance in force in other companies on ADDITIONAL INSURED. If none (or if conversion application) check this box ___ Company Year Taken Plan Life Amount Acc. Death Amount - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ REMARKS - ------------------------------------------------------------------------------------------------------------------------------------
AP9500-NY -4- 85-21245-00 9/98
- ------------------------------------------------------------------------------------------------------------------------------------ SECTION F GENERAL INFORMATION CONTINUED - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSED INSURED 3. COMPLETE EACH QUESTION BELOW FOR THE PROPOSED INSURED AND ANY ADDITIONAL INSURED YES NO ADDITIONAL INSURED. YES NO - ------------------------------------------------------------------------------------------------------------------------------------ $ A. Is the Proposed/Additional Insured married? $ - ------------------------------------------------------------------------------------------------------------------------------------ $ B. Income of spouse, if any. $ - ------------------------------------------------------------------------------------------------------------------------------------ $ C. Amount of insurance in force on spouse. $ - ------------------------------------------------------------------------------------------------------------------------------------ $ D. Annual earned income from occupation (after deduction of business expenses). $ - ------------------------------------------------------------------------------------------------------------------------------------ $ E. Other Income (state source in remarks). $ - ------------------------------------------------------------------------------------------------------------------------------------ $ F. Net Worth $ - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSED INSURED ADDITIONAL INSURED YES NO 4. Does any Proposed Insured/Additional Insured contemplate leaving the U.S.A. for YES NO ___ ___ travel or residence? (If yes, explain in remarks) ___ ___ - ------------------------------------------------------------------------------------------------------------------------------------ 5. Within the last 2 years has any Proposed/Additional Insured: ___ ___ A. Flown or plan to fly as a pilot, student pilot or crew member? ___ ___ B. Engaged in parachute jumping, scuba diving, auto, motor boat or motorcycle racing, ___ ___ hang gliding, mountain climbing or other hazardous sport? ___ ___ (if yes to A or B, complete a separate General Questionnaire for each Proposed/ Additional Insured) - ------------------------------------------------------------------------------------------------------------------------------------ 6. Has any Proposed/Additional Insured ever had insurance declined, rated, modified ___ ___ canceled or not renewed: (DO NOT ANSWER THIS QUESTION IN MISSOURI) ___ ___ (If yes, explain in remarks) - ------------------------------------------------------------------------------------------------------------------------------------ ___ ___ 7. Has any Proposed/Additional Insured been convicted of a felony within the past 5 ___ ___ years? (If yes, explain in remarks) - ------------------------------------------------------------------------------------------------------------------------------------ 8. Has any Proposed/Additional Insured had a drivers license restricted or revoked or ___ ___ been charged with 3 or more moving violations within the past 5 years? ___ ___ (If yes, explain in remarks) - ------------------------------------------------------------------------------------------------------------------------------------ 10. Will the policy applied for replace or change any existing insurance or annuity ___ ___ on any Proposed/Additional Insured? (If yes, agent must complete state replacement ___ ___ notice, if applicable) - ----------------------- ----------------- ___ ___ A. Is this a 1035 Exchange? ___ ___ - ----------------------- ----------------- ___ ___ B. Will a loan be carried over? ___ ___ - ------------------------------------------------------------------------------------------------------------------------------------ ___ ___ 11. Have you smoked a cigarette(s) in the last 12 months? ___ ___ Date: ____________ If yes, give date last smoked. Date: ____________ - ------------------------------------------------------------------------------------------------------------------------------------ ___ ___ 12. Have you used tobacco in any other form within the last 24 months? ___ ___ Type: ___________ If yes, specify type and date last used. Type: ____________ --------------------------------------------------------------------------------------------- Date: ___________ Date: ____________ - ------------------------------------------------------------------------------------------------------------------------------------ REMARKS - ------------------------------------------------------------------------------------------------------------------------------------
AP9500-NY -5- 85-21245-00 - -------------------------------------------------------------------------------- SECTION G UNI-CHECK - -------------------------------------------------------------------------------- 1. ___ Bank Account No. ____________ 1. Bank Account in Name of ____________ 3. ___ If other than policy date, complete day of the month you want draft to draw from bank account. (Must be between the 4th and 28th) ____________ As a convenience to me, I request and authorize you to pay and charge to the above account any debit entries on that account by and payable to the order of Pacific Life & Annuity Company, provided there are sufficient collected funds in said account to pay the same upon presentation. I agree that your rights in respect to each such debit shall be the same as if it were a debit drawn on you and signed personally by me. This authority is to remain in effect until revoked by me in writing, and until you actually receive such notice I agree that you shall be fully protected in honoring any such debit. - -------------------------------------------------------------------------------- REMARKS - -------------------------------------------------------------------------------- HOME OFFICE ENDORSEMENT (NOT APPLICABLE IN KENTUCKY, PENNSYLVANIA, WEST VIRGINIA) - -------------------------------------------------------------------------------- DECLARATIONS - -------------------------------------------------------------------------------- I represent that the foregoing answers and statements contained in Parts I and II are correctly recorded, complete, and true to the best of my knowledge and belief. I understand that: 1. EXCEPT AS OTHERWISE PROVIDED IN ANY TEMPORARY INSURANCE AGREEMENT, NO INSURANCE WILL TAKE EFFECT BEFORE THE POLICY FOR SUCH INSURANCE IS DELIVERED AND THE FIRST PREMIUM PAID DURING THE LIFETIME(S) AND BEFORE ANY CHANGE IN THE HEALTH OF THE PROPOSED INSURED(S). UPON SUCH DELIVERY AND PAYMENT, INSURANCE WILL TAKE EFFECT IF THE ANSWERS AND STATEMENTS IN THIS APPLICATION ARE THEN TRUE. 2. Acceptance of a life insurance policy will be ratification of any administrative change with respect to such policy made by Pacific Life & Annuity Company, the "Company", in the space entitled "Home Office Endorsements," where permitted by state law. All other changes, including policy type and amount of insurance, benefits, classification or age at issue, must be accepted in writing. 3. No agent or medical examiner is authorized to make or modify contracts or to waive any of the Company's rights or requirements. Signed and Dated by Applicant in: On - --------------------------------- ----------------------------------------- City State Mo. Day Year Signature of Applicant ----------------------------------------- Signature of Proposed Insured (IF OTHER THAN APPLICANT OR PARENT IF PROPOSED INSURED IS UNDER AGE 16 OR AGE 18 IN PENNSYLVANIA) ----------------------------------------- Signature of Other Adult Proposed Insured ----------------------------------------- Signature of Child age 18 and older (REQUIRED IN PENNSYLVANIA) ----------------------------------------- Signature of Owner (IF OTHER THAN PROPOSED INSURED OR APPLICANT) IF OWNER IS A CORPORATION THE SIGNATURE AND TITLE OF ANY AUTHORIZED OFFICER OTHER THAN THE PROPOSED INSURED IS REQUIRED AND THE FULL NAME OF THE CORPORATION MUST BE SHOWN. I certify that I have truly and accurately recorded hereon the information supplied. - --------------------- ------------------------- --------------------------- Signature of Please Print State License ID Soliciting Agent Soliciting Agent Name Number (Required in Florida) AP9500-NY -6- 85-21245-00 9/98 AUTHORIZATION TO OBTAIN INFORMATION I authorize any physician, medical practitioner, hospital, clinic, other medical or medically related facility, insurance company, the Medical Information Bureau, consumer reporting agency or employer to release to Pacific Life & Annuity Company, its subsidiaries, its reinsurer(s) or its legal representative any information they may have as to diagnosis, treatment and prognosis of any physical or mental condition including drug and/or alcohol abuse and/or any other information of me, my spouse and my minor children. I understand that any information obtained will be used to determine eligibility for insurance and will not be released to any person or organization except reinsurer(s), the Medical Information Bureau, and other persons or organizations performing business or legal services in connection with my application, or as may be otherwise lawfully required, or as I may further authorize. I also understand that I may revoke this authorization as it applies to drug and/or alcohol abuse information at anytime, except to the extent it will not affect any action taken or information released prior to the revocation. Such revocation may cause the denial of this application. I know that I may request to receive a copy of this authorization. I also acknowledge receipt of Disclosure Notice to Applicants for Insurance. A photographic copy of this Authorization shall be as valid as the original and shall be valid for two years from the date shown below. Signed and Dated by Proposed Insured in: On - --------------------------------- ----------------------------------------- City State Mo. Day Year Signature of Proposed Insured (OR PARENT IF PROPOSED INSURED IS UNDER AGE 16 OR AGE 18 IN PENNSYLVANIA) ----------------------------------------- Signature of Other Adult Proposed Insured ----------------------------------------- Signature of Child age 18 and older (REQUIRED IN PENNSYLVANIA) AP9500-NY - ---- (DETACH-LEAVE WITH APPLICANT) DISCLOSURE NOTICE TO APPLICANTS FOR INSURANCE This brief description of our underwriting process is designed to help you to understand how an application for insurance is handled, the types and sources of information we may collect about you, the circumstances under which we may disclose that information to others and your right to learn the nature and substance of that information upon written request. The purpose of the underwriting process is to make sure you qualify for insurance under our rules, and assuming you do, establish the proper premium charge for that insurance. This process - the evaluation of risks - assures that the cost of insurance is distributed equitably among all policyowners, and that each individual pays his or her fair share. To determine your insurability, we must consider such factors as your medical history, physical condition, occupation and hazardous avocations. We get this information from various sources. SOURCES OF INFORMATION APPLICATION AND MEDICAL RECORDS - Your application, including the medical history, is the primary source of information in the evaluation process. In addition, we may ask you to take a physical examination or other special test such as an electrocardiogram. We may also ask for a report from your doctor or hospital, another insurance company, or the Medical Information Bureau. When we do so, we will use the authorization form you signed with your application. MEDICAL INFORMATION BUREAU, INC. (MIB) is a non-profit corporation which operates an information exchange on behalf of member life insurance companies. As a member company, we will ask MIB if it has a record concerning you. If you previously applied to a member company for insurance, MIB may have information about you in its file. The purpose of the MIB is to protect member companies and their policyowners from those who would conceal significant facts relevant to their insurability. The information which is obtained from MIB may be used only as an alert to the possible need for further independent investigation. It cannot be used as a basis in making a final underwriting decision. Information regarding your insurability will be treated as confidential. PL, its subsidiaries or its reinsurer(s) may, however, make a brief report to the MIB. If you later apply to another MIB member company for life or health insurance coverage, or a claim for benefits is submitted to such a company, the MIB, upon request, will supply the company with the information it may have about you in its file. PL&A, its subsidiaries or its reinsurer(s) may also release information in its file to other life insurance companies to whom you may apply for life or health insurance, or to whom a claim for benefits may be submitted. At your request, the MIB will arrange disclosure of any information it may have about you in its file. If you question the accuracy of information on file, you may contact the MIB and seek a correction in accordance with the procedures set forth in the federal Fair Credit Reporting Act. The address of the information office of MIB, Inc. is Post Office Box 105, Essex Station, Boston, Massachusetts 02112, telephone number (617) 426-3660. INVESTIGATIVE CONSUMER REPORT - As part of our underwriting procedure, we may request an investigative consumer report from a consumer reporting agency. Because you may want to know more about the nature and scope of such a report, we are providing this information on the reverse side as part of this Notice. (Continued on reverse side) AP9500-NY -7- 85-21245-00 9/98 ___ DISCLOSURE NOTICE TO APPLICANTS FOR INSURANCE (CONTINUED) A consumer report confirms and supplements the information of your application pertaining to employment and residence verification, smoking habits, marital status, occupation, hazardous avocations and general health. This report may also cover information concerning your general reputation, personal characteristics and mode of living (except as may be related directly or indirectly to your sexual orientation) including drug and alcohol use, motor vehicle driving record and any criminal activity. This information may be obtained through personal interviews with you, your family, friends, neighbors and business associates. If a report is required and you wish to be personally interviewed, please let us know and we will notify the consumer reporting agency. The information contained in the report may be retained by the consumer reporting agency and subsequently disclosed to other companies to the extent permitted by the Fair Credit Reporting Act. Investigative consumer reports are held in strict confidence and used only to evaluate your application on a fair and equitable basis. You have a right to inspect and obtain a copy of the report from the consumer reporting agency. These reports may have an adverse affect on an individual's eligibility for insurance. If it should, however, we will notify you in writing and identify the reporting agency. DISCLOSURE TO OTHERS Personal information obtained about you during the underwriting process is confidential and will not be disclosed to other persons or organizations without your written authorization except to the extent necessary for the conduct of our business. Examples of situations where we may share information about you are as follows: 1. The agent may retain a copy of your application. 2. If reinsurance is required, the reinsurance company would have access to our application file. 3. We may release information to another life insurance company to whom you have applied for life or health insurance or to whom you have submitted a claim for benefits, if you have authorized it to obtain such information. 4. As stated earlier, we may report information to the Medical Information Bureau. 5. We will disclose information to government regulatory officials, law enforcement authorities and others where required by law. DISCLOSURE TO YOU In general, you have a right to learn the nature and substance of any personal information about you in our file upon written request. Whenever an adverse underwriting decision is made, we will notify you of the reason(s) for the decision and the source of the information upon which our action is based. Medical record information, however, will normally be given only to a licensed physician of your choice. Please refer to the section on MIB, Inc., for that organization's disclosure procedure. Should you feel that any information we have is inaccurate or incomplete, please write to the Manager, Risk Selection Department, Pacific Life & Annuity Company, Service Center, 700 Newport Center Drive, Newport Beach, California 92660. Your comments will be carefully considered and corrections made where justified. We hope this Notice will help you to understand how we obtain and use personal information in the underwriting process, and the ways you can learn about this information. We are concerned with insuring privacy as well as lives, and the collection, use and disclosure of personal information is limited to those specified in this Notice. AP9500-NY -8- 85-21245-00 9/98
- ---------------------------------------------------------------------------------------------------------------------------------- SECTION H BUSINESS INSURANCE (COMPLETE THIS SECTION IF APPLYING FOR BUSINESS INSURANCE) - ---------------------------------------------------------------------------------------------------------------------------------- Purpose of this Insurance: A. ___ Buy & Sell D. ___ Split Dollar B. ___ Employee Fringe Benefit E. ___ Key Employee C. ___ Deferred Compensation F. ___ Other (Explain in remarks) - ---------------------------------------------------------------------------------------------------------------------------------- 2. Name of Principal Officers, Amount of Insurance Partners or Key Employees Position % of Business Owned Owned By Business - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- 3. What is the current fair market value of the business? $ ------------------- 4. What was the annual net profit (before taxes) of business? Last Year $ 2 Years Ago $ 5. Are other officers, partners or key employees proportionately insured? ___ Yes ___ No (If no, explain in remarks) - ---------------------------------------------------------------------------------------------------------------------------------- SECTION I COMPLETE THIS SECTION IF PROPOSED INSURED IS UNDER AGE 16 - ---------------------------------------------------------------------------------------------------------------------------------- 1. Did you personally observe the Proposed Insured? ___ Yes ___ No (If no, explain in remarks) - ---------------------------------------------------------------------------------------------------------------------------------- 2. Are Proposed Insured's brothers and sisters insured for equal amounts? ___ Yes ___ No (If no, explain in remarks) - ---------------------------------------------------------------------------------------------------------------------------------- 3. Person on whom Proposed Insured depends for support: A. Name B. Relationship - ---------------------------------------------------------------------------------------------------------------------------------- C. Estimated annual income D. Estimated net worth E. Estimated amount of life insurance $ $ $ - ---------------------------------------------------------------------------------------------------------------------------------- 4. Information on Applicant: A. Name B. Relationship - ---------------------------------------------------------------------------------------------------------------------------------- C. Purpose of Insurance D. Amount of life insurance in force $ - ---------------------------------------------------------------------------------------------------------------------------------- REMARKS - ----------------------------------------------------------------------------------------------------------------------------------
AP9500-NY -9- 85-21245-00 9/98
- ----------------------------------------------------------------------------------------------------------------------------- SECTION J COMPLETE FOR ALL APPLICATIONS - AGENT INFORMATION - ----------------------------------------------------------------------------------------------------------------------------- 1. How well do you know proposed insured? 2. How well do you know Additional Insured? (or Applicant if Proposed Insured is under age 16) - ----------------------------------------------------------------------------------------------------------------------------- 3. Have you personally asked all applicable questions in this application? Proposed Insured Additional Insured (If no, explain in remarks) ___ Yes ___ No ___ Yes ___ No - ----------------------------------------------------------------------------------------------------------------------------- 4. Are you aware of any information not given in the application which might affect the insurability of: Proposed Insured ___ Yes ___ No Additional Insured ___ Yes ___ No (If yes, explain in remarks) - ----------------------------------------------------------------------------------------------------------------------------- 5. Did the Proposed Insured or Applicant make the initial inquiry which led to the sale of this insurance? ___ Yes ___ No (If yes, explain in remarks) - ----------------------------------------------------------------------------------------------------------------------------- 6. Has the Proposed Insured changed name within the last 5 years? ___ Yes ___ No 7. Has the Additional Insured changed name within the last 5 years? ___ Yes ___ No (If yes, give former name in remarks) - ----------------------------------------------------------------------------------------------------------------------------- 8. To the best of your knowledge, does any policy applied for either replace, involve a change in, or involve use of value from any existing life insurance policy or annuity? (IF "YES" GIVE COMPANY AND POLICY NUMBER IN "REMARKS" ON PAGE 5. IF PMG POLICY, Proposed Insured Additional Insured THEN GIVE POLICY NUMBER AND HOW VALUES ARE TO BE APPLIED IN REMARKS".) ___ Yes ___ No ___ Yes ___ No - ----------------------------------------------------------------------------------------------------------------------------- 9. If this policy is a tax qualified plan indicate type: ___ Pension/Profit sharing ___ HR-10 ___ Other - ----------------------------------------------------------------------------------------------------------------------------- 10. If application submitted on a* Proposed Insured Additional Insured Yes No Yes No (A) Medical Basis? ___ ___ ___ ___ (B) Non-Medical Basis? (Submit Part 2) ___ ___ ___ ___ (C) Guaranteed Issue Basis? ___ ___ ___ ___ (D) Guaranteed to Issue Basis? ___ ___ ___ ___ - ----------------------------------------------------------------------------------------------------------------------------- 11. Check appropriate items which have been ordered: Proposed Insured Additional Insured Proposed Insured Additional Insured Yes No Yes No Yes No Yes No Medical Exam ___ ___ ___ ___ H.O. Specimen ___ ___ ___ ___ Paramedical Exam ___ ___ ___ ___ APS ____________ ___ ___ ___ ___ EKG ___ ___ ___ ___ ________________ ___ ___ ___ ___ Blood Profile ___ ___ ___ ___ ________________ ___ ___ ___ ___ - ----------------------------------------------------------------------------------------------------------------------------- REMARKS - ----------------------------------------------------------------------------------------------------------------------------- I certify that to the best of my knowledge and belief: Yes No A. I have presented to the Company all pertinent facts and have correctly and completely recorded all required answers.____________________________________________________________________________________ ___ ___ - ----------------------------------------------------------------------------------------------------------------------------- B. I have given the Proposed Insured (or Parent for Juvenile insurance) a copy of the Fair Credit Reporting Act and MIB Disclosure Notice, and any other disclosure notice or statement required by state or federal law.________________________________________________________________________________ ___ ___ - ----------------------------------------------------------------------------------------------------------------------------- C. I have fully explained the terms and conditions of the Temporary Insurance Agreement(s) to the Proposed Insured (or Applicant) and have given it to him/her (them)._________________________________ ___ ___ - ----------------------------------------------------------------------------------------------------------------------------- D. I have complied with state and federal laws on disclosure, cost comparison and replacement.__________ ___ ___ - ----------------------------------------------------------------------------------------------------------------------------- E. I have reviewed the purchase of this insurance policy as to suitability._____________________________ ___ ___ - ----------------------------------------------------------------------------------------------------------------------------- Signature(s) Of Soliciting Agent(s). Pay Commission as Indicated Below. - ----------------------------------------------------------------------------------------------------------------------------- X X - ----------------------------------------------------------------- ----------------------------------------------------- First Name Listed Below Will Be The Servicing Agent - ----------------------------------------------------------------------------------------------------------------------------- PHONE FAX AGENCY AGENT AGENT NAME NUMBER NUMBER NUMBER CODE COMM% - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- Broker/Dealer Name (IF APPLICABLE): ____________________________________________
AP9500-NY -10- 85-21245-00 9/98 APPLICATION, PART II RS NONMED TO PACIFIC LIFE & ANNUITY COMPANY [LOGO OF PL&A] NON-MEDICAL SERVICE CENTER 700 Newport Center Drive, Newport Beach, California 92660 SECTION A COMPLETE ON PROPOSED INSURED (AGE 16 OR OVER) - -------------------------------------------------------------------------------- 1. Full Name 2a. Date of Birth 2b. Height 2c. Weight MO. DAY YR. FT. IN. LBS. - -------------------------------------------------------------------------------- 3.a. Name and address of personal physician, practitioner or health facility last visited: --------------------------------------------------------------------------- (IF NONE, SO STATE) b. Date: _______________________ c. Reason consulted: ___________________ MO. YR.
Yes No Details of "Yes" answers. (Identify question, and include diagnoses, dates, duration and d. Did any symptoms prompt consultation?________________________ ___ ___ names and addresses of all attending e. Was any treatment given or medication prescribed?____________ ___ ___ physicians and medical facilities. Use an (IF "D" OR "E" ANSWERED "YES", GIVE DETAILS) additional sheet if necessary.) 4. To the best of your knowledge and belief, during the past 10 years, have you had, or been told that you had, or been treated by a member of the medical profession for: (CIRCLE APPLICABLE ITEMS AND GIVE DETAILS) a. Disorder of the eyes, ears, nose, or throat?_________________ ___ ___ b. Dizziness, fainting, convulsions, headaches, speech defect, paralysis or stroke, or mental or nervous condition?_________ ___ ___ c. Hoarseness or cough, blood spitting, asthma, pneumonia, emphysema, tuberculosis, or other respiratory system disorder? ___________________________________________________ ___ ___ d. Chest pain, high blood pressure, rheumatic fever, murmur, heart attack or other disorder of the heart or blood vessels? ____________________________________________________ ___ ___ e. Jaundice, intestinal bleeding, ulcer, colitis, diverticulitis, hepatitis, or other disorder of the liver, gallbladder, stomach or intestines? _________________________ ___ ___ f. Sugar, albumin, or blood in urine, venereal disease, stone or other disorder of kidney, bladder, prostate, breasts or reproductive organs? ________________________________________ ___ ___ g. Diabetes; thyroid or other endocrine disorders?______________ ___ ___ h. Neuritis, sciatica, arthritis, gout, or disorder of the muscles or bones, including the spine, back or joints?_______ ___ ___ i. Cancer, cyst, tumor or disorder of skin, blood or lymph glands? _____________________________________________________ ___ ___ j. Any disorder(s) of the Immune System, including AIDS (Acquired Immune Deficiency Syndrome) and ARC (AIDS Related Complex)? ___________________________________________ ___ ___ 5.a. Have you within the past 5 years been a patient in a hospital, clinic, sanitarium or other medical facility?______ ___ ___ b. Are you now under regular medical observation or taking treatment? __________________________________________________ ___ ___ 6.a. Except as prescribed by a physician, have you used heroin, morphine or other narcotic drugs in the last 10 years?_______ ___ ___ b. Except as prescribed by a physician, have you used cocaine, LSD, marijuana or other hallucinogenic agents, or barbiturates, sedatives, tranquilizers or any amphetamines in the last 5 years? ________________________________________ ___ ___ c. In the last 5 years have you received treatment for or joined an organization because of alcoholism or drug addiction? __________________________________________________ ___ ___ 7. Other than as stated in answers above, have you within the past 5 years: a. Had a checkup, consultation, illness, injury or operation?_ ___ ___ b. Had an electrocardiogram, blood test, other test or X-ray?_ ___ ___ c. Been advised to have any diagnostic test, hospitalization or surgery which was not completed? _______________________ ___ ___ 8. Have you had any change in weight in the past year? __________ ___ ___ 9. Have either of your parents, brothers or sisters had diabetes, cancer, high blood pressure, heart disease, or mental illness? ______________________________________________ ___ ___ (IF "YES", STATE CONDITION, GIVE RELATIONSHIP AND AGE AT ONSET) 10. Parents' Record (COMPLETE BELOW) - ------------------------------------------------------------------------------------------------------------------------------ IF LIVING IF DECEASED - ---------------------------------------------------------------------------------- AGE AT AGE STATE OF HEALTH DEATH CAUSE OF DEATH - ---------------------------------------------------------------------------------- Father - ---------------------------------------------------------------------------------- Mother - ---------------------------------------------------------------------------------- Yes No 11.a. Do you currently smoke cigarettes?__________________________ ___ ___ b. If "Yes", how many a day?___________________________________ ____________ c. Did you ever smoke cigarettes?______________________________ ___ ___ d. If "Yes" on 11(c), give date last cigarette smoked: ____________ e. Do you use tobacco in any other form?_______________________ ___ ___ (If "Yes", specify type in "Remarks") f. Have you used tobacco in any other form within the last 24 months?_____________________________________________ ___ ___ (If "Yes", specify type in "Remarks")
The above statements are true and complete to the best of my knowledge and belief. I agree that such statements and answers shall be a part of the application. Dated at on X ------------------- ------------- ------------------------------ CITY STATE MO. DAY YR. SIGNATURE OF PROPOSED INSURED - --------------------------------------------- WITNESS Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties. AP9500-P2-NY -1- 85-21246-00 9/98 APPLICATION, PART II RS NONMED TO PACIFIC LIFE & ANNUITY COMPANY [LOGO OF PL&A] NON-MEDICAL SERVICE CENTER 700 Newport Center Drive, Newport Beach, California 92660 SECTION B COMPLETE ON ADDITIONAL INSURED (AGE 16 OR OVER) - -------------------------------------------------------------------------------- 1. Full Name 2a. Date of Birth 2b. Height 2c. Weight MO. DAY YR. FT. IN. LBS. - -------------------------------------------------------------------------------- 3.a. Name and address of personal physician, practitioner or health facility last visited: --------------------------------------------------------------------------- (IF NONE, SO STATE) b. Date: _______________________ c. Reason consulted: ___________________ MO. YR.
Yes No Details of "Yes" answers. (Identify question and include diagnoses, dates, duration and d. Did any symptoms prompt consultation?________________________ ___ ___ names and addresses of all attending e. Was any treatment given or medication prescribed?____________ ___ ___ physicians and medical facilities. Use an (IF "D" OR "E" ANSWERED "YES", GIVE DETAILS) additional sheet if necessary.) 4. To the best of your knowledge and belief, during the past 10 years, have you had, or been told that you had, or been treated by a member of the medical profession for: (CIRCLE APPLICABLE ITEMS AND GIVE DETAILS) a. Disorder of the eyes, ears, nose, or throat?_________________ ___ ___ b. Dizziness, fainting, convulsions, headaches, speech defect, paralysis or stroke, or mental or nervous disorder?__________ ___ ___ c. Hoarseness or cough, blood spitting, asthma, pneumonia, emphysema, tuberculosis, or other respiratory system disorder? ___________________________________________________ ___ ___ d. Chest pain, high blood pressure, rheumatic fever, murmur, heart attack or other disorder of the heart or blood vessels? ____________________________________________________ ___ ___ e. Jaundice, intestinal bleeding, ulcer, colitis, diverticulitis, hepatitis, or other disorder of the liver, gallbladder, stomach or intestines? _________________________ ___ ___ f. Sugar, albumin, or blood in urine, venereal disease, stone or other disorder of kidney, bladder, prostate, breasts or reproductive organs? ________________________________________ ___ ___ g. Diabetes; thyroid or other endocrine disorders?______________ ___ ___ h. Neuritis, sciatica, arthritis, gout, or disorder of the muscles or bones, including the spine, back or joints?_______ ___ ___ i. Cancer, cyst, tumor or disorder of skin, blood or lymph glands? _____________________________________________________ ___ ___ j. Any disorder(s) of the Immune System, including AIDS (Acquired Immune Deficiency Syndrome) and ARC (AIDS Related Complex)? ___________________________________________ ___ ___ 5.a. Have you within the past 5 years been a patient in a hospital, clinic, sanitarium or other medical facility?______ ___ ___ b. Are you now under regular medical observation or taking treatment? __________________________________________________ ___ ___ 6.a. Except as prescribed by a physician, have you used heroin, morphine or other narcotic drugs in the last 10 years?_______ ___ ___ b. Except as prescribed by a physician, have you used cocaine, LSD, marijuana or other hallucinogenic agents, or barbiturates, sedatives, tranquilizers or any amphetamines in the last 5 years? ________________________________________ ___ ___ c. In the last 5 years have you received treatment for or joined an organization because of alcoholism or drug addiction? __________________________________________________ ___ ___ 7. Other than as stated in answers above, have you within the past 5 years: a. Had a checkup, consultation, illness, injury or operation?_ ___ ___ b. Had an electrocardiogram, blood test, other test or X-ray?_ ___ ___ c. Been advised to have any diagnostic test, hospitalization or surgery which was not completed? _______________________ ___ ___ 8. Have you had any change in weight in the past year? __________ ___ ___ 9. Have either of your parents, brothers or sisters had diabetes, cancer, high blood pressure, heart disease, or mental illness? ______________________________________________ ___ ___ (IF "YES", STATE CONDITION, GIVE RELATIONSHIP AND AGE AT ONSET) 10. Parents' Record (COMPLETE BELOW) - ------------------------------------------------------------------------------------------------------------------------------ IF LIVING IF DECEASED - ---------------------------------------------------------------------------------- AGE AT AGE STATE OF HEALTH DEATH CAUSE OF DEATH - ---------------------------------------------------------------------------------- Father - ---------------------------------------------------------------------------------- Mother - ---------------------------------------------------------------------------------- Yes No 11.a. Do you currently smoke cigarettes?__________________________ ___ ___ b. If "Yes", how many a day?___________________________________ ____________ c. Did you ever smoke cigarettes?______________________________ ___ ___ d. If "Yes" on 11(c), give date last cigarette smoked: ____________ e. Do you use tobacco in any other form?_______________________ ___ ___ (If "Yes", specify type in "Remarks") f. Have you used tobacco in any other form within the last 24 months?__________________________________________________ ___ ___ (If "Yes", specify type in "Remarks")
The above statements are true and complete to the best of my knowledge and belief. I agree that such statements and answers shall be a part of the application. Dated at on X ------------------- ------------- ------------------------------ CITY STATE MO. DAY YR. SIGNATURE OF PROPOSED INSURED - --------------------------------------------- WITNESS Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties. AP9500-P2-NY -2- 85-21246-00 9/98
APPLICATION, PART II RS NONMED TO PACIFIC LIFE & ANNUITY COMPANY [Logo of PL&A] NON-MEDICAL SERVICE CENTER 700 Newport Center Drive, Newport Beach, California 92660 - ------------------------------------------------------------------------------------------------------------------------------------ SECTION C COMPLETE IF APPLYING FOR OWNER PREMIUM WAIVER, PAYOR WAIVER, CHILDREN'S TERM RIDER OR IF PROPOSED INSURED IS UNDER AGE 16. - ------------------------------------------------------------------------------------------------------------------------------------ RELATIONSHIP AMOUNT OF AMT. OF INS. 1. NAME OF PERSON TO TO PROPOSED DATE OF BIRTH STATE OF HEIGHT WEIGHT INSURANCE CURRENTLY BE COVERED INSURED (MO./DAY/YR.) BIRTH (FT/IN.) (POUNDS) NOW IN FORCE APPLIED FOR - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Note: If payor or owner waiver of charges is being applied for, please indicate the individual's occupation and the employer's name and address: _______________________________________________________________________________________________________________ _______________________________________________________________________________________________________________ - --------------------------------------------------------------------------------------------------------------------------------- 2a. Name and address of your personal physician, practitioner or health facility - --------------------------------------------------------------------------------------------------------------------------------- b. Date: c. Reason for and results of last visit - ------------------------------------------------------------------------------------------------------------------------------------ 3. Has any person named in Question 1 during the past 10 years had or been told that he or she had, or been treated for: (CIRCLE APPLICABLE ITEMS AND GIVE DETAILS) Yes No A. Diabetes, cancer or epilepsy? _____________________________________________________________ ___ ___ B. Heart murmur, high blood pressure or any heart condition? _________________________________ ___ ___ C. Any disorder(s) of the Immune System, including AIDS (Acquired Immune Deficiency Syndrome) and ARC (AIDS Related Complex)? ___________________________________________________________ ___ ___ 4. Has any person named in Question 1: A. Been in a hospital, sanitarium or other institution for diagnosis, treatment or a surgical operation within the past 5 years? ________________________________________________________ ___ ___ B. Had any medical consultation or treatment within the past 3 years, other than as stated in any answer above? _________________________________________________________________________ ___ ___ GIVE DETAILS BELOW FOR EACH "YES" ANSWER IN QUESTIONS 3 and 4: - ------------------------------------------------------------------------------------------------------------------------------------ QUESTION NO. FIRST NAME REASON FOR CONSULTATION DATE DURATION-RESULT NAME AND ADDRESS OF PHYSICIAN - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ DECLARATIONS - ------------------------------------------------------------------------------------------------------------------------------------ I represent that the foregoing answers and statements are correctly recorded, complete, and true to the best of my knowledge and belief. I understand that: 1. EXCEPT AS OTHERWISE PROVIDED IN ANY TEMPORARY INSURANCE AGREEMENT, NO INSURANCE WILL TAKE EFFECT BEFORE THE POLICY FOR SUCH INSURANCE IS DELIVERED AND THE FIRST PREMIUM PAID DURING THE LIFETIME(S) AND BEFORE ANY CHANGE IN THE HEALTH OF THE PROPOSED INSURED(S). UPON SUCH DELIVERY AND PAYMENT, INSURANCE WILL TAKE EFFECT IF THE ANSWERS AND STATEMENTS IN THIS APPLICATION ARE THEN TRUE. 2. Acceptance of a life insurance policy will be ratification of any administrative change with respect to such policy made by the Company in the space entitled "Home Office Endorsements," where permitted by state law. All other changes, including policy type and amount of insurance, benefits, classification or age at issue, must be accepted in writing. 3. No agent or medical examiner is authorized to make or modify contracts or to waive any of the Company's rights or requirements. Signed and Dated in: On - ------------------------------------------------------- ------------------------------------------------------------------------- City State Mo. Day Year Signature of Proposed Insured (OR PARENT, IF PROPOSED INSURED IS UNDER AGE 16) ------------------------------------------------------------------------- Signature of Owner/Payor IF OWNER IS A CORPORATION THE SIGNATURE AND TITLE OF AN AUTHORIZED OFFICER OTHER THAN THE PROPOSED INSURED IS REQUIRED AND THE FULL NAME OF THE CORPORATION MUST BE SHOWN. I certify that I have truly and accurately recorded hereon the information supplied. - --------------------------------------------- --------------------------------------- --------------------------------------- Signature of Soliciting Agent Please Print Soliciting Agent Name State License ID Number (Required in Florida) Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.
AP9500-P2-NY -3- 85-21246-00 9/98
GENERAL QUESTIONNAIRE RISK AVOC PM GROUP LIFE INSURANCE COMPANY [Logo of PL&A] Service Center 700 Newport Center Drive Newport Beach, CA 92660 - ------------------------------------------------------------------------------------------------------------------------------------ FULL NAME (Print) DATE OF BIRTH Mo. ____________ Day ____________ Yr. _____________ - ------------------------------------------------------------------------------------------------------------------------------------ SECTION A AUTOMOBILE, MOTORCYCLE AND/OR POWER BOAT RACING - ------------------------------------------------------------------------------------------------------------------------------------ 1. Type of racing? ___ Midget ___ Go-Kart ___ Sports Car ___ Modified Stock ___ Drag Racing ___ Motorcycle ___ Powerboat ___ Other (explain) ___________________________________________________________________________________________ 2. Make? ___________________________ Model ? _____________________________ Displacement? __________________________________ Class? __________________________ Engine Make & Model? _____________________________ HP? ________________________________ 3. (a) Number of races 12-24 months ago? ____________________________________ (b) Past 12 months? __ ___________________________ (c) Date of last race? ______________________________ (d) Est. next 12 months? _________________________________________________ 4. Type of race? ___ Midget ___ Sports Car ___ Stock Car ___ Championship ___ Drag ___ Kart ___ Hillclimb ___ Cross Country ___ Hound & Hare ___ Moto-Cross ___ Other (explain) ______________________________________________ --------------------------------------------------------------------------------------------------------------------------------- 5. Type of course? ___ Paved ___ Dirt ___ Drag Strip ___ Oval ___ Other (explain) ______________________________ _________________________________________________________________________________________________________________________________ 6. Where do you race? ___ Local? If not, where? ____________________________________________________________________________ 7. Competition against? ___ Other Cars ___ Clock ___ Straightaway __________________________________________________ 8. Average Speed? ______________________ Top Speed? _________________________ Average miles per race? ______________________ 9. Is your racing? ___ Professional ___ Amateur ___ Other (explain) ____________________________________________________ - ------------------------------------------------------------------------------------------------------------------------------------ SECTION B UNDERWATER DIVING (SKIN OR SCUBA) - ------------------------------------------------------------------------------------------------------------------------------------ 1. What type of equipment do you use? ______________________________________________________________________________________________ 2. Location of diving activities? _________________________ Diving for pleasure? ______________________ Pay? __________________ 3. Do you belong to club or association? _____________________ Do you ever dive alone? _________________________________________ --------------------------------------------------------------------------------------------- 4. Depth of Dives During Past 12 Months Expected Next 12 Months -------------- --------------------------------------------------------------------------------------------- No. Dives Average Time No. Dives Average Time --------------------------------------------------------------------------------- a. Less than 40 feet --------------------------------------------------------------------------------- b. 40 feet to 60 feet --------------------------------------------------------------------------------- c. 60 feet & over --------------------------------------------------------------------------------- d. Maximum depth obtained - ------------------------------------------------------------------------------------------------------------------------------------ SECTION C PARACHUTE JUMPING AND SKY DIVING - ------------------------------------------------------------------------------------------------------------------------------------ 1. Are you now a member of any parachute or sky diving club or association? ________________________________________________________ 2. Are all of your jumps made under auspices of your club or association? __________________________________________________________ 3. (a) Number of jumps 12 - 24 months ago? ________________ (b) Past 12 months? _________________ (c) Next 12 months? __________ 4. Do you participate in delayed chute opening competition or other stunts? ________________________________________________________ 5. Location of jump areas? _______________________________________ Date of last jump? __________________________________________ - ------------------------------------------------------------------------------------------------------------------------------------ REMARKS IDENTIFY SECTION AND QUESTION - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ I represent that the foregoing answers and statements are correctly recorded, complete, and true to the best of my knowledge and belief. Date X ---------------------------------- ----------------------------------------------------------------------------------------- Mo. Day Year Signature of Proposed Insured (or Parent if Proposed Insured is under age 15) _______________________________________ Signature of Soliciting Agent _______________________________________ Agency No.
AP7503-NY 85-21364-00 GENERAL QUESTIONNAIRE RISK AVIA PACIFIC LIFE & ANNUITY COMPANY [Logo of PL&A] Service Center 700 Newport Center Drive Newport Beach, CA 92660 - -------------------------------------------------------------------------------- FULL NAME (Print) DATE OF BIRTH Mo. ______ Day _____ Yr. _____ - -------------------------------------------------------------------------------- SECTION D AVIATION - --------------------------------------------------------------------------------
FOR CIVILIAN AND MILITARY PILOTS: 1. Type of aviation activity HOURS FLOWN 5.A. Type of license/certificate/rating LAST 12 12-24 MO. ALL PRIOR EST. NEXT held (CHECK APPROPRIATE BOXES): MONTHS AGO YEARS 12 MO. ___ Student ___ Private Civilian Pilot ___ Commercial ___ ATR ___ IFR Military Pilot ___ Instructor ___ Other Member of Crew (SPECIFY "REMARKS") B. Date of last renewal: ______________________________ 2. Have you ever done or do C. Purpose of flights: you intend to engage in ______________________________ flying for the purpose of exhibition, endurance tests, ______________________________ racing, stunt flying, D. Total flying hours to date: testing, air cargo ______________________________ operations, crop dusting or E. Date of last flight: spraying, or instruction of Yes No ______________________________ student pilots? ____________ ___ __ FOR CREW MEMBERS: 3.A. Have you ever flown or do 6.A. Duties aboard aircraft: you intend to fly outside ______________________________ of the United States? ____ ___ __ B. Have you ever been involved _____________________________ in any accident due to B. Purpose of flights: flying activities? _______ ___ __ ______________________________ C. Have you ever been charged with any violation of air _____________________________ regulations? _____________ ___ __ C. Date of last flight: (IF "YES" TO QUESTIONS 2, 3A, 3B OR 3C, ______________________________ EXPLAIN IN "REMARKS") D. Do you plan to take instructions FOR PILOTS AND CREW MEMBERS OF MILITARY as a pilot? ___ Yes ___ No AIRCRAFT: (IF "YES", EXPLAIN IN "REMARKS".) 4. Describe type of aircraft flown in 7. If aviation activity does not (including alphabetic & numeric code). permit standard unrestricted coverage, please issue as follows: ___ Full aviation coverage, if available, with appropriate extra premium. ___ Aviation exclusion rider.
- -------------------------------------------------------------------------------- REMARKS IDENTIFY SECTION & AND QUESTION - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- I represent that the foregoing answers and statements are correctly recorded, complete, and true to the best of my knowledge and belief. Date X -------------------------------------- ---------------------------------- Mo. Day Year Signature of Proposed Insured (or Parent if Proposed Insured is under age 15) - ------------------------------------------- Signature of Soliciting Agent - ------------------------------------------- Agency No. AP7503-NY 85-21364-00 EX-99.2 21 FORM OF OPINION AND CONSENT OF LEGAL OFFICER EXHIBIT 99.2 [Letterhead of Pacific Life & Annuity Company] June 14, 1999 Pacific Life & Annuity Company 700 Newport Center Drive Newport Beach, CA 92660 Dear Sirs: In my capacity as Senior Vice President and General Counsel of Pacific Life & Annuity Company ("PL&A") I, or attorneys employed by PL&A under my general supervision, have supervised the establishment of Pacific Select Exec Separate Account of Pacific Life & Annuity Company on September 24, 1998, which has been authorized by resolutions of the Board of Directors of PL&A adopted July 1, 1998, concerning Pacific Select Exec Separate Account as the separate account for assets applicable to Pacific Select Exec II-NY Flexible Premium Variable Universal Life Insurance Policies ("Policies"), pursuant to the provisions of A.R.S. Sections 20-2606, 250-651, 20-515, and 20-536.01 of the Insurance Code of the State of Arizona. Moreover, I have been associated with the preparation of the Registration Statement on Form S-6 ("Registration Statement") filed by PL&A and Pacific Select Exec Separate Account (File No. pending) with the Securities and Exchange Commission under the Securities Act of 1933, as amended, for the registration of interests in the Pacific Select Exec Separate Account funding the Policies. I have made such examination of the law and examined such corporate records and such other documents as in my judgment are necessary and appropriate to enable me to render the following opinion that: 1. PL&A has been duly organized under the laws of the State of Arizona and is a validly existing corporation. 2. Pacific Select Exec Separate Account is duly created and validly existing as a separate account, pursuant to the aforesaid provisions of Arizona law. 3. The portion of the assets to be held in Pacific Select Exec Separate Account equal to the reserves and other liabilities under the Policies and any other policies issued by PL&A that are supported by Pacific Select Exec Separate Account is not chargeable with liabilities arising out of any other business PL&A may conduct. 4. The Policies have been duly authorized by PL&A and, when issued as contemplated by the Registration Statement, will constitute legal, validly issued and binding obligations of PL&A, except as limited by bankruptcy and insolvency laws affecting the right of creditors generally. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/DAVID R. CARMICHAEL David R. Carmichael Senior Vice President and General Counsel DRC/kjh EX-99.6(A) 22 CONSENT OF DELOITTE & TOUCHE LLP INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement of Pacific Select Exec Separate Account of Pacific Life & Annuity Company (formerly PM Group Life Insurance Company) on Form S-6 of our report dated February 22, 1999, related to the financial statements - statutory basis of PM Group Life Insurance Company as of December 31, 1998 and 1997, and for each of the two years in the period ended December 31, 1998, appearing in the Prospectus of Pacific Select Exec II-NY, which is part of such Registration Statement. We also consent to the reference to us under the heading "Experts" appearing in such Prospectus. DELOITTE & TOUCHE LLP Costa Mesa, California June 16, 1999 EX-99.6(B) 23 CONSENT OF DECHERT PRICE & RHOADS [Letterhead of Dechert Price & Rhoads] June 16, 1999 Pacific Life & Annuity Company 700 Newport Center Drive Newport Beach, CA 92660 Re: Registration Statement for Interests in Pacific Select Exec Separate Account of Pacific Life & Annuity Company Under Pacific Select Exec II-NY Flexible Premium Variable Life Insurance Policy Dear Gentlepersons: We hereby consent to the reference to our firm under the caption "Legal Proceedings and Legal Matters" in the prospectus comprising a part of the above- referenced Registration Statement. Very truly yours, /s/ DECHERT PRICE & RHOADS Dechert Price & Rhoads EX-99.7 24 OPINION OF ACTUARY EXHIBIT 99.7 [Letterhead of Pacific Life & Annuity Company] June 9, 1999 PACIFIC LIFE & ANNUITY COMPANY 700 Newport Center Drive Newport Beach, CA 92660 RE: Pacific Select Exec II-NY Flexible Premium Variable Life Insurance Policy To whom it may concern: In my capacity as Vice President, Individual Insurance of Pacific Life & Annuity Company, I have provided actuarial advice concerning: The preparation of the Registration Statement on Form S-6 filed by Pacific Life & Annuity Company with the Securities and Exchange Commission under the Securities Act of 1933 with respect to variable life insurance policies (the "Registration Statement") and the preparation of the policy forms for the variable life insurance policies described in the Registration Statement (the "Policies"). It is my professional opinion that: The illustration of death benefits, cash values and accumulated premiums shown in the Appendix to the prospectus, based on the assumptions stated in the illustrations and on the page immediately preceding the illustrations, are consistent with the provisions of the Policies. The rate structure of the Policies has not been designed so as to make the relationship between premiums and benefits, as shown in the illustrations, appear to be correspondingly more favorable to the prospective purchaser of the policies at age 45 in the underwriting classes illustrated than to prospective purchasers of Policies at other ages or underwriting classes. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Sincerely, /s/GARY FALDE Gary Falde, FSA, MAAA Vice President EX-99.8 25 MEMORANDUM DESCRIBING ISSUANCE PACIFIC LIFE & ANNUITY COMPANY'S DESCRIPTION OF ISSUANCE, TRANSFER AND REDEMPTION PROCEDURES FOR POLICIES PURSUANT TO RULE 6e-3(T)(b)(12)(iii) This document sets forth the administrative procedures that will be followed by Pacific Life & Annuity Company ("PL&A") in connection with the issuance of its Pacific Select Exec II-NY Flexible Premium Variable Life Insurance Policy ("Policy"), the transfer of assets held under the Policies, and the redemption by Policy owners of their interests in said Policies. I. PURCHASE AND RELATED TRANSACTIONS A. Premium Schedules and Underwriting Standards -------------------------------------------- The Policy is a flexible premium variable life insurance policy. The Policy provides lifetime insurance protection for the insured named in the Policy, with a death benefit payable when the insured dies while the Policy is in force. A Policy owner may elect one of two death benefit qualification tests and one of three options to calculate the amount of death benefit payable under the Policy. The Policy will be offered and sold pursuant to an established mortality structure and underwriting standards in accordance with state insurance laws which prohibit unfair discrimination among Policy owners, but allow cost of insurance rates to be based upon factors such as age, health or occupation. A Policy owner may choose the amount and frequency of premium payments, subject to a minimum of $50 per payment. B. Application and Initial Premium Processing ------------------------------------------ Upon receipt of a completed application for a Policy, PM Group will follow certain insurance underwriting (i.e., evaluation of risk) procedures designed to determine whether the proposed insured is insurable. This process may involve verification procedures and may require that further information be provided by the applicant before a determination can be made. PL&A will first become obligated under a Policy when the total initial premium is received or on the date the application is accepted by PL&A, whichever is later. After the Policy is issued, insurance coverage under the Policy will be deemed to have begun as of the Policy Date. The Policy Date is usually the date that the Policy is issued. The Policy Date is the date used to determine Policy years, Policy months, and Policy monthly, quarterly, semi-annual and annual anniversaries. C. Additional Premium Payments --------------------------- The Policy is a flexible premium policy, and it provides flexibility to pay premiums at the Policy owner's discretion. When applying for a Policy, a Policy owner will determine a planned periodic premium that provides for the payment of level premiums of fixed intervals over a specified period of time. Each Policy owner will receive a premium reminder notice or listbill on either an annual, semi-annual, or quarterly basis (or monthly (listbill only)), at the option of the Policy owner; however, the Policy owner is not required to pay planned periodic premiums. Payment of the planned periodic premium will not guarantee that a Policy will remain in force. Instead, the duration of the Policy depends upon the Policy's accumulated value. Even if planned periodic premiums are paid, the Policy will lapse any time accumulated value less Policy debt is insufficient to pay the current monthly deduction and a grace period expires without sufficient payment. Any premium payment must be for at least $50. PL&A also may reject or limit any premium payment that would result in an immediate increase in the net amount at risk under the Policy, although such a premium may be accepted with satisfactory evidence of insurability. D. Premium Allocation ------------------ A Policy owner may allocate net premiums among the variable accounts and/or the fixed accounts. When a Policy is issued and all delivery requirements are received at PL&A's Service Center, the Accumulated Value will be automatically allocated according to the Policy owner's instructions in the application or more recent instructions if any (except for amounts allocated to the Loan Account to secure any Debt). The initial allocation must be made in the application for the Policy. All net premiums are allocated to the Policy owner's instructions the later of 15 days after the Policy is issued or when all requirements for the Policy to be considered in force are delivered to the Service Center (the Free-Look Transfer Date). Additional net premium payments will be allocated among the investment alternatives according to the Policy owner's instructions (after the Free-Look Transfer Date). A Policy owner may change the allocation of accumulated value by submitting a proper written request to PL&A's Service Center. PL&A reserves the right to limit the amount allocated to the Fixed LT Account to $1,000,000 during the most recent 12 months for all of a Policy owner's policies. Allocations include net premium payments, transfers and loan repayments. Any excess over $1,000,000 would be transferred to a Policy owner's other Investment Options according to the Policy owner's most recent instructions. E. Reinstatement ------------- PL&A will reinstate a lapsed Policy (see "Policy Lapsation", Section III.C. of this document) at any time within five years after the end of the grace period, provided PL&A receives the following: (1) a written application of the Policy owner; (2) evidence of insurability satisfactory to PL&A for each insured; and (3) payment of all monthly charges and deductions that were due and unpaid during the grace period, and payment of a premium at least equal to three times the most recent monthly deduction. When the Policy is reinstated, the accumulated value will be equal to the accumulated value on the date of the lapse subject to the following: (1) if the Policy is reinstated after the first monthly payment date following lapse, the accumulated value will be reduced by the amount of the Policy debt on the date of lapse and no Policy debt will exist on the date of reinstatement; (2) if the Policy is reinstated on the monthly payment date next following lapse, any Policy debt on the date of lapse will also be reinstated; and (3) no interest on amounts held in PL&A's Loan Account so secure Policy debt will be paid or credited between lapse and reinstatement. Reinstatement will be effective as of the monthly payment date on or next following the date of approval by PL&A, and accumulated value minus Policy debt will be allocated among the variable accounts and the fixed options in accordance with the Policy owner's current premium allocation instructions. F. Policy Loans ------------ A Policy owner may borrow from PL&A an amount up to the greater of 90% of the Policy's accumulated value, less any outstanding Policy debt and any surrender charges, or (2) 100% of the product of (a x b/c - d) where (a) equals the Policy's accumulated value less 12 times the current monthly deduction; (b) equals 1 plus the annual loan interest rate credited; (c) equals 1 plus the annual loan interest rate currently charged; and (d) equals any existing Policy debt. The minimum loan that may be taken is $200. A Policy is the only security required for a loan. When a Policy owner takes a loan, an amount equal to the loan is transferred out of the Policy owner's accumulated value in the variable accounts and the fixed options on a proportional basis, unless the Policy owner instructs PL&A otherwise. The interest rate on loans is 3.55% annually for all years. PL&A will credit interest monthly on amounts held in the Loan Account to secure the loan at an annual rate of 3.00% in Policy years 1 through 10, and 3.3% in Policy year 11 and thereafter. The owner may repay all or a part of the loan at any time while the Policy is in force. If not repaid, the Policy debt will reduce the amount of death proceeds paid upon the death of the insured, the cash surrender value paid upon surrender, or the refund of premium upon exercise of the Free- Look Right. A loan may affect the length of time the Policy remains in force. The Policy will lapse when accumulated value minus Policy debt is insufficient to cover the monthly deduction against the Policy's accumulated value on any monthly payment date and the minimum payment required is not made during the grace period. Moreover, the Policy may enter the grace period more quickly when a loan is outstanding, because the loaned amount is not available to cover monthly deductions. II. TRANSFER AMONG INVESTMENT OPTIONS The Pacific Select Exec Separate Account (the "Separate Account") is a separate investment account of PL&A used to support the variable death benefits and policy values of PL&A's life insurance policies. The Separate Account currently is made up of eighteen variable accounts which invest in shares of a corresponding portfolio of Pacific Select Fund (the "Fund"), the investment vehicle of the Separate Account. The Fund is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 as an open-end management investment company of the series type. The portfolios of the Fund, each of which has a different investment objective, are the Money Market Portfolio, the High Yield Bond Portfolio, the Managed Bond Portfolio, the Government Securities Portfolio, the Growth Portfolio, the Aggressive Equity Portfolio, the Growth LT Portfolio, the Equity Income Portfolio, the Multi- Strategy Portfolio, the Mid-Cap Value Portfolio, the Large-Cap Value Portfolio, the Equity Portfolio, the Bond and Income Portfolio, the Equity Index Portfolio, the Small-Cap Index Portfolio, the REIT Portfolio, the International Portfolio, and the Emerging Markets Portfolio. A Policy owner may allocate accumulated value from the variable accounts to the fixed options. However, such a transfer will only be permitted in the Policy month preceding a Policy anniversary, except that such a transfer may be made at any time during the first 18 Policy months. Transfers from the fixed options to the variable accounts are also permitted, subject to the following restrictions: (1) the Policy owner may not make more than one transfer from the fixed options to the variable accounts in any 12-month period; and (2) the Policy owner may transfer no more than the greater of 25% of the Accumulated Value in the Fixed Account or $5,000 to the Variable Accounts in any 12-month period, and no more than the greater of 10% of the Accumulated Value in the Fixed LT Account or $5,000 to the Variable Accounts. PL&A reserves the right to limit the amount allocated to the Fixed LT Account to $1,000,000 during the most recent 12 months for all of a Policy owner's policies. Allocations include net premium payments, transfers and loan repayments. Any excess over $1,000,000 would be transferred to a Policy owner's other Investment Options according to the Policy owner's most recent instructions. III. REDEMPTION PROCEDURES: SURRENDER AND RELATED TRANSACTIONS A. Surrender for Net Cash Surrender Value -------------------------------------- A Policy owner can make partial withdrawals of the net cash surrender value of the Policy starting on the first Policy anniversary. During the first fifteen Policy years, the portion of a partial withdrawal of up to the lesser of $10,000 or 10% of premium paid will not reduce the face amount under the Policy. The excess of any withdrawal over this amount may cause a reduction in Face Amount if the Death Benefit Option is Option A, as described below. A partial withdrawal must be for at least $200, and the Policy's net cash surrender value after the withdrawal must be at least $500. If there is any Policy debt, the maximum partial withdrawal amount is limited to the excess, if any, of the cash surrender value immediately prior to the withdrawal over the result of the Policy debt divided by 90%. When a partial withdrawal is made on a Policy on which the owner has selected Death benefit Option A, the face amount under the Policy is decreased by the excess, if any, of the face amount over the result of the death benefit immediately prior to the partial withdrawal minus the amount of the partial withdrawal. A partial withdrawal will not change the face amount of a Policy on which the owner has selected Death Benefit Option B or Death Benefit Option C. However, assuming that the death benefit is not equal to accumulated value times a death benefit percentage, the partial withdrawal will reduce the death benefit by the amount of the partial withdrawal. To the extent the death benefit is based upon the accumulated value times the death benefit percentage applicable to the insureds, a partial withdrawal may cause the death benefit to decrease by an amount greater than the amount of the partial withdrawal. B. Death Claims ------------ Upon the death of the insured, PL&A will pay to a named beneficiary death benefit proceeds, either in a lump sum or under a payment plan offered under the Policy. The proceeds will be the death benefit under the Policy, plus any insurance proceeds provided by rider, reduced by adjustments for any outstanding Policy debt (and, if in the grace period, any overdue charges). The death benefit will be the greater of the Guideline Minimum Death Benefit or one of the following three options: (1) Death Benefit Option A -- the face amount of the Policy; (2) Death Benefit Option B -- the face amount of the Policy plus the accumulated value; or (3) Death Benefit Option C -- the face amount of the Policy plus the total premiums paid minus total withdrawals. Because of the Guideline Minimum Death Benefit, an increase in accumulated value may increase the death benefit. The face amount of the Policy may be decreased by the Policy owner. Such a change may change the death benefit, depending, among other things, upon the death benefit option chosen by the owner and whether, and the degree to which, the death benefit under a Policy exceeds the face amount prior to the change. A change in the face amount may affect the net amount at risk under a Policy, which may affect a Policy owner's cost of insurance charge. For these purposes, the net amount at risk is equal to the death benefit less the policy owner's accumulated value. Any request for a change in face amount must be by written application to PL&A's Service Center. A Policy owner may make only one such request per Policy year. C. Policy Lapsation ---------------- If the accumulated value less Policy debt of a Policy is insufficient to cover deductions and charges on a monthly payment date, PL&A will give written notice to the Policy owner that if the amount shown in the notice (which will be sufficient to cover the deduction amount(s) due) is not paid within 61 days (the "grace period"), the Policy owner faces a danger of lapse. The Policy will remain in force through the grace period, but if no payment is forthcoming, it will terminate at the end of the grace period. In order to avoid termination, the Policy owner must pay an amount equal to three times the charges and deductions due on the monthly payment date in which the insufficiency occurred. If the required payment is made during the grace period, such payment will be allocated among the variable accounts and the fixed options in accordance with the Policy owner's allocation instructions. If the survivor dies during the grace period, the death benefit proceeds will equal the amount of the death benefit immediately prior to the commencement of the grace period, reduced by any unpaid monthly deductions and charges due and any Policy debt. A lapsed Policy may be reinstated at any time within five years after the end of the grace period but before the maturity date. See "Reinstatement", Section I.E. above. D. Policy Loans ------------ See Section I.F. above. EX-99.9 26 POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger, Jeffrey S. Puretz and Robin Yonis Sandlaufer his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: March 23, 1999 /s/ DAVID R. CARMICHAEL ------------------------------- David R. Carmichael POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger and Jeffrey S. Puretz his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: 6/15/99 /s/ BRIAN D. KLEMENS ------------------------------- Brian D. Klemens POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger, Jeffrey S. Puretz and Robin Yonis Sandlaufer his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: 3/23/99 /s/ WILLIAM L. FERRIS ------------------------------- William L. Ferris POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger, Jeffrey S. Puretz and Robin Yonis Sandlaufer his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: 3/23/99 /s/ AUDREY L. MILFS ------------------------------- Audrey L. Milfs POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger, Jeffrey S. Puretz and Robin Yonis Sandlaufer his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: 4/7/99 /s/ LYNN C. MILLER ------------------------------- Lynn C. Miller POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger, Jeffrey S. Puretz and Robin Yonis Sandlaufer his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: 3/23/99 /s/ GLENN S. SCHAFER ------------------------------- Glenn S. Schafer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger, Jeffrey S. Puretz and Robin Yonis Sandlaufer his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: 22 MAR 99 /s/ TC SUTTON ------------------------------- Thomas C. Sutton POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N. Ledger, Jeffrey S. Puretz and Robin Yonis Sandlaufer his/her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution for him/her in his/her name, place, and stead, in any and all Registration Statements applicable to Pacific Select Exec Separate Account of Pacific Life & Annuity Company and Separate Account A of Pacific Life & Annuity Company and any amendments or supplements thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated: 3/23/99 /s/ KHANH T. TRAN ------------------------------- Khanh T. Tran -----END PRIVACY-ENHANCED MESSAGE-----