-----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, VSJN/EKsxNthkKK+wf1gY4XzljPjDdKZ7RFK8Geg5C76+MaW3v9AaFl3pu0hI4Mp cRnzjcdzhHNYwfIWob89jg== 0000950144-04-001966.txt : 20040304 0000950144-04-001966.hdr.sgml : 20040304 20040304154246 ACCESSION NUMBER: 0000950144-04-001966 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040304 EFFECTIVENESS DATE: 20040304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSAMERICA OCCIDENTALS SEPARATE ACCOUNT FUND B CENTRAL INDEX KEY: 0000073710 IRS NUMBER: 951060502 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-01902 FILM NUMBER: 04648868 BUSINESS ADDRESS: STREET 1: 1150 S OLIVE ST CITY: LOS ANGELES STATE: CA ZIP: 90015 BUSINESS PHONE: 2137423131 MAIL ADDRESS: STREET 1: 1150 SOUTH OLIVE ST CITY: LOS ANGELES STATE: CA ZIP: 90015 FORMER COMPANY: FORMER CONFORMED NAME: OCCIDENTALS SEPARATE ACCOUNT FUND B DATE OF NAME CHANGE: 19811209 N-CSR 1 g87586nvcsr.txt TRANSAMERICA OCCIDENTAL'S SEPERATE ACCOUNT FUND B As filed with the SEC on March 4, 2004. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-1902 TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B (Exact Name of Registrant as Specified in Charter) 570 Carillon Parkway, St. Petersburg, Florida 33716 --------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: (727) 299-1800 John K. Carter, Esq. P.O. Box 5068, Clearwater, Florida 33758-5068 ------------------------------------------------------------------ (Name and Address of Agent for Service) Date of fiscal year end: December 31 Date of reporting period: January 1, 2003 - December 31, 2003 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 507. Item 1: Report(s) to Shareholders. The Annual Report is attached. TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ANNUAL REPORT Dear Investor: PERFORMANCE For the year ended December 31, 2003, Transamerica Occidental's Separate Account Fund B returned 30.58%. By comparison its benchmark, the S&P 500 returned 28.67%. PORTFOLIO COMMENTS After a disappointing start, U.S. equity markets began a broad rally in March that ultimately embraced all but a few industries. Initially, the rebound was fueled primarily by anticipation of a stronger economy and earnings improvements. Much of corporate America has spent the past several years cutting operating costs and removing debt from its balance sheet. As the economic expansion picked up steam, investors expected to see the fruits of this corporate restructuring, in the form of more revenues flowing to the bottom line. By the final quarter of the year, earnings by and large met or exceeded expectations. Investors concluded that corporate profitability had finally turned the proverbial corner, and the market surged. The Standard and Poor's 500 Composite Stock Index ("S&P 500") rose more than 28% for the year, led by industries associated with electronics, the Internet and telecommunications and, to a lesser extent, by economically sensitive industries like metals and mining, hotels/restaurants, and automobiles. MARKET OUTLOOK After several years of corporate deleveraging and cost reduction, revenues are increasingly becoming profits, making for a positive earnings trend. We believe that trend will continue in 2004, aided in part by increased capital spending. At the same time, we also believe the market has factored much of the rise in earnings into current stock prices. Therefore, we anticipate more moderate returns than those garnered in 2003. We will be watchful of overvaluation as the year unfolds and careful to divest overpriced securities in favor of better opportunities. /s/ Gary U. Rolle Gary U. Rolle President and Chairman, Board of Managers Transamerica Occidental's Separate Account Fund B PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. VALUE WILL FLUCTUATE; CAN LOSE PRINCIPAL. 1 TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND I Comparison of change in value of $10,000 in Fund B and its comparative index. (CHART) AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED 12/31/2003
1 YEAR 5 YEARS 10 YEARS ----------------------------------------------------------- Fund B 30.58% 0.31% 16.49% S&P 500 28.67% -0.57% 11.06%
NOTES: The Standard & Poors 500 Composite Stock (S&P 500) Index is an unmanaged index used as a general measure of market performance. The performance data presented represents past performance; future results may vary. The value of the FUND B Variable Annuity will fluctuate so that when surrendered, it may be worth more or less than the total of premium payments. Taxes are due upon distribution of earnings. Distribution of earnings made prior to age 59 1/2 may be subject to a 10% federal tax penalty. Benefits may change if the age or sex of the annuitant has been misstated. 2 TABLE OF ACCUMULATION UNIT VALUES
Accumulation End of Quarter Unit Value -------------- ------------ December, 1993................. 6.851062 March, 1994.................... 6.629959 June, 1994..................... 6.325672 September, 1994................ 6.905430 December, 1994................. 7.364882 March, 1995.................... 8.376121 June, 1995..................... 9.806528 September, 1995................ 11.275672 December, 1995................. 11.163517 March, 1996.................... 11.495829 June, 1996..................... 12.356950 September, 1996................ 13.007681 December, 1996................. 14.289273 March, 1997.................... 14.574090 June, 1997..................... 18.948025 September, 1997................ 22.762719 December, 1997................. 20.822981 March, 1998.................... 24.769837 June, 1998..................... 26.122076 September, 1998................ 24.532238 December, 1998................. 31.039623
Accumulation End of Quarter Unit Value -------------- ------------ March, 1999.................... 36.274720 June, 1999..................... 36.182643 September, 1999................ 33.766134 December, 1999................. 43.812753 March, 2000.................... 49.902772 June, 2000..................... 46.517366 September, 2000................ 45.550563 December, 2000................. 38.753772 March, 2001.................... 32.935996 June, 2001..................... 34.566512 September, 2001................ 27.939022 December, 2001................. 31.800123 March, 2002.................... 31.249545 June, 2002..................... 26.102110 September, 2002................ 21.962538 December, 2002................. 24.139846 March, 2003.................... 24.392041 June, 2003..................... 27.210522 September, 2003................ 28.193742 December, 2003................. 31.521091
The table above covers the period from December, 1993, to December, 2003. The results shown should not be considered a representation of the gain or loss which may be realized from an investment made in the Fund today. 3 TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 ASSETS: Investment in Transamerica Equity II -- at market value (cost $68,374,182; shares 8,560,516.677).................. $85,776,377 Cash and cash equivalents................................... -- Dividends and interest receivable........................... -- ----------- TOTAL ASSETS........................................... 85,776,377 LIABILITIES: Accrued asset charges and management fee.................... -- ----------- NET ASSETS.................................................. $85,776,377 =========== Net assets attributed to variable annuity contractholders -- 2,721,238 units at $31.521091 per unit...................................................... $85,776,377 ===========
See notes to financial statements. STATEMENTS OF CHANGES IN NET ASSETS
Year ended Year ended December 31, December 31, 2003 2002 ------------ ------------ Net investment loss......................................... $ (541,128) $ (594,145) Net realized gain/loss from security transactions........... 1,666,032 (5,465,983) Net change in unrealized appreciation/depreciation on investments............................................... 19,022,799 (16,193,424) ----------- ------------ Net increase (decrease) in net assets resulting from operations................................................ 20,147,703 (22,253,552) Variable annuity deposits (net of sales and administration expenses and applicable state premium taxes).............. 42,884 42,923 Payments to Contract Owners: Annuity payments.......................................... (14,038) (22,185) Terminations and withdrawals.............................. (1,946,161) (3,579,701) ----------- ------------ Total increase (decrease) in net assets..................... 18,230,388 (25,812,515) Balance at beginning of period.............................. 67,545,989 93,358,503 ----------- ------------ Balance at end of period.................................... $85,776,377 $ 67,545,989 =========== ============
See notes to financial statements. 4 TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B STATEMENT OF OPERATIONS DECEMBER 31, 2003 NET INVESTMENT LOSS INCOME: Dividends.............................................. $ 411,642 Interest............................................... 12,799 ----------- Total investment income.............................. 442,441 ----------- EXPENSES: Investment management services......................... 222,824 Mortality and expense risk charges..................... 742,745 ----------- Total expenses....................................... 965,569 ----------- Net investment loss....................................... (541,128) ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions.............. 1,666,032 Net change in unrealized appreciation/depreciation on investments............................................ 19,022,799 ----------- Net realized and unrealized gain on investments........... 20,688,831 ----------- Net increase in net assets resulting from operations.......................................... $20,147,703 ===========
See notes to financial statements. 5 TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B NOTES TO FINANCIAL STATEMENTS NOTE A -- SIGNIFICANT ACCOUNTING POLICIES Transamerica Occidental's Separate Account Fund B (the Fund) is registered under the Investment Company Act of 1940 as an open-end diversified investment company. The Fund's investment objective is long-term capital growth. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as additional information becomes known which could impact the amounts reported and disclosed herein. Security valuations Investments traded on an exchange are valued at the closing price on the day of valuation on the exchange where the security is principally traded. With respect to securities traded on the NASDAQ INMS, such closing price may be the last quoted price or the NASDAQ Official Closing Price. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last quoted bid price. Investment company securities are valued at the net asset value ("NAV") of the underlying portfolio. Other securities for which quotations are not readily available are valued at fair value determined in good faith, in accordance with procedures established by and under the supervision of the Board of Managers of the Fund's Valuation Committee. Security transactions and investment income The cost of securities purchased (excluding short-term investments) and proceeds from sales aggregated $18,204,736 and $20,792,162, respectively, in December 2003. The Fund had net unrealized gains of $17,402,195 at December 31, 2003 related to these investments. Realized gains and losses on investments are determined using the average cost method. Security transactions are recorded on the trade date. Dividend income is recorded on the ex-dividend date or, in the case of foreign securities, as soon as the Fund is informed of the ex-dividend date. Interest income, including accretion of discounts and amortization of premiums, is recorded on the accrual basis commencing on settlement date. Cash Equivalents Cash equivalents consist of money market funds invested daily from excess cash balances on deposit. Federal Income Taxes Operations of the Fund form a part of, and are taxed with, those of Transamerica Occidental Life Insurance Company (Transamerica Occidental Life), which is taxed as a "life insurance 6 company" under the Internal Revenue Code. Under the current Internal Revenue Code law, the investment income of the Fund, including realized and unrealized capital gains is not taxable to Transamerica Occidental Life as long as the earnings are credited under the Contract. Accordingly, no provision for Federal income taxes has been made. Expenses The value of the Fund has been reduced by charges on each valuation date for investment management services on the basis of an annual rate of 0.3% and mortality and expense risks on the basis of an annual rate of 1.0%. NOTE B -- RELATED PARTY TRANSACTIONS As of December 31, 2003, Transamerica Occidental Life had deposited $2,000,000 (current fund value of $67,374,975) in the Fund under an amendment to the California Insurance Code which permits domestic life insurers to allocate amounts to such accounts. Transamerica Occidental Life is entitled to withdraw all but $100,000 of its proportionate share of the Fund, in whole or in part, at any time. AEGON/Transamerica Fund Advisers, Inc ("ATFA") is the Fund's investment adviser. ATFA is a directly owned subsidiary of Western Reserve Life Assurance Co. of Ohio (78%) ("WRL") and AUSA (22%). AUSA and WRL are wholly owned indirect subsidiaries of AEGON NV a Netherlands corporation. Transamerica Investment Management, LLC is both an affiliate of the fund and the sub-adviser to the Fund. The Fund pays management fees to ATFA based on average daily net assets at the stated rate of 0.30%. NOTE C -- INVESTMENT ADVISORY ARRANGEMENTS No remuneration was paid during 2003 by Transamerica Occidental's Separate Account Fund B to any member of the Board of Managers or officer of Fund B or any affiliated person of such members or officers. At a meeting of Fund B Contract Owners held on December 16, 2003, Contract Owners approved an Agreement and Plan of Reorganization providing for the reorganization of Fund B as a unit investment trust that invests all of its assets in Transamerica Equity II, a mutual fund with investment objectives, policies, strategies and restrictions that are substantially similar to those of Fund B. As an initial step toward effecting the reorganization of Fund B, effective as of immediately after the close of business on December 30, 2003, all of the assets and liabilities (other than liabilities attributable to insurance charges) of Fund B were transferred, free and clear of all liens and encumbrances, to Transamerica Equity II in exchange for shares of Transamerica Equity II equivalent in value to the assets received from Fund B, less the liabilities assumed. Accordingly, Fund B now pursues its investment objective by investing substantially all of its investable assets in Transamerica Equity II which, in turn, invests directly in a portfolio of securities and other investments formerly held directly by Fund B. 7 NOTE D -- SUBSEQUENT EVENTS Fund B completed the reorganization by converting from a management investment company to a unit investment trust January 29, 2004. As a unit investment trust, Fund B will continue to invest exclusively in shares of Transamerica Equity II, which is a series of AEGON/Transamerica Series Fund, Inc. 8 SUPPLEMENTAL INFORMATION Section 270.30d-1 under the Investment Company Act of 1940, as amended, titled "Reports to Stockholders of Management Companies," requires regulated investment companies to report on all subject matters put to the vote of shareholders and provide final results. Accordingly, the Board of Managers of the Fund solicited a vote by the shareholders for the following items. Each vote reported represents one outstanding dollar held on the record date for the meeting. At a special meeting of shareholders held on December 16, 2003, the results of Proposal 1 were as follows: PROPOSAL 1: Approval of an Agreement and Plan of Reorganization providing for the reorganization of Fund B as a unit investment trust that will invest in Transamerica Equity II, a series of AEGON/Transamerica Series Fund, Inc.
FOR AGAINST ABSTAIN --- ------- ------- 98.296% .997% .707%
9 FINANCIAL HIGHLIGHTS Selected data for an accumulation unit outstanding throughout each period are as follows:
Year Ended December 31, 2003 2002 2001 2000 1999 ------------ ------- ------- ------- ------- Investment income.......................... $ 0.154 $ 0.139 $ 0.141 $ 0.096 $ 0.097 Expenses................................... 0.351 0.345 0.436 0.598 0.456 ------- ------- ------- ------- ------- Net investment loss........................ (0.196) (0.206) (0.295) (0.502) (0.359) Net realized and unrealized gain (loss) on investments.............................. 7.578 (7.454) (6.659) (4.558) 13.132 ------- ------- ------- ------- ------- Net increase (decrease) in accumulation unit value........................... 7.381 (7.660) (6.954) (5.059) 12.773 Accumulation unit value: Beginning of period...................... 24.140 31.800 38.754 43.813 31.040 ------- ------- ------- ------- ------- End of period............................ $31.521 $24.140 $31.800 $38.754 $43.813 ======= ======= ======= ======= ======= Total Return............................... 30.58 % (24.09)% (17.94)% (11.55)% 41.15 % Ratio of expenses to average accumulation fund balance............................. 1.30 % 1.28 % 1.29 % 1.33 % 1.29 % Ratio of net investment loss to average accumulation fund balance................ (0.73)% (0.77)% (0.87)% (1.12)% (1.02)% Portfolio turnover......................... 27.50 % 32.69 % 58.91 % 49.87 % 34.45 % Number of accumulation units outstanding at end of period (000's omitted)............ 2,721 2,798 2,936 3,028 3,084
10 TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B REPORT OF INDEPENDENT AUDITORS Contractholders and Board of Managers, Transamerica Occidental's Separate Account Fund B Board of Directors, Transamerica Occidental Life Insurance Company We have audited the accompanying statement of assets and liabilities of Transamerica Occidental's Separate Account Fund B, as of December 31, 2003, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2003 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Transamerica Occidental's Separate Account Fund B at December 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States. -S- ERNST & YOUNG LLP Des Moines, Iowa January 31, 2004 11 TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B MANAGERS AND OFFICERS PETER R. BROWN, Vice Chairman, Director DANIEL CALABRIA, Director JANICE B. CASE, Director CHARLES C. HARRIS, Director (LOGO) LEO J. HILL, Director RUSSELL A. KIMBALL, JR., Director LARRY N. NORMAN, Director WILLIAM W. SHORT, JR., Director BRIAN C. SCOTT, President and Chief Executive Officer KIM D. DAY, Vice President, Treasurer and Principal Financial Officer JOHN K. CARTER, Senior Vice President, Secretary & General Counsel TRANSAMERICA OCCIDENTAL'S Transamerica Occidental SEPARATE Life Insurance Company Annuity Service Center ACCOUNT FUND B 4333 Edgewood Road NE Cedar Rapids, IA 52499 877-717-8861 ANNUAL (LOGO) FINANCIAL Must be preceded by a current Separate REPORT Account B prospectus. DECEMBER 31, 2003 TFM 1036 Ed. 2-98 Item 2: Code of Ethics. (a) Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other officers who serve a similar function. (c) During the period covered by the report, no amendments were made to the provisions of this code of ethics. (d) During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics. (f) (1) Registrant has filed this code of ethics as an exhibit pursuant to Item 10(a)(1) of Form N-CSR. Item 3: Audit Committee Financial Expert. Registrant's Board of Managers has determined that Peter Brown and William Short are "audit committee financial experts," as such term is defined in Item 3 of Form N-CSR. Mr. Brown and Mr. Short are "independent" under the standards set forth in Item 3 of Form N-CSR. The designation of Mr. Brown and Mr. Short as "audit committee financial experts" pursuant to Item 3 of Form N-CSR does not (i) impose upon them any duties, obligations, or liabilities that are greater than the duties, obligations and liabilities imposed upon them as members of the Registrant's audit committee or Board of Managers in the absence of such designation; or (ii) affect the duties, obligations or liabilities of any other member of the registrant's audit committee or Board of Managers. Item 4: Principal Accountant Fees and Services.
Fiscal Year Ended 12/31 ----------------------- 2002 2003 ---- ---- (a) Audit Fees -- -- (b) Audit-related Fees -- -- (c) Tax Fees -- -- (d) All Other Fees N/A N/A (e) (1) Pre-approval policy * (see below) (e) (2) % of above that were pre-approved 0% 0% (f) If greater than 50%, disclose hours N/A N/A (g) Non-audit fees rendered to Adviser (or affiliate that provided services to Registrant) N/A N/A (h) Disclose whether the Audit Committee has considered whether the provisions of non-audit services rendered to the Adviser that were NOT pre-approved is Compatible with maintaining the auditor's Independence. Yes Yes
* (e) (1) The Audit Committee may delegate any portion of its authority, including the authority to grant pre-approvals of audit and permitted non-audit services, to one or more members or a subcommittee. Any decision of the subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next regularly scheduled meeting. 2 Item 5: [Reserved]. Item 6: [Reserved]. Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8: [Reserved]. Item 9: Controls and Procedures. (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of December 31, 2003, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to be appropriately designed to ensure that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls or in other factors that could significantly affect registrant's internal controls subsequent to the date of the most recent evaluation as indicated, including no significant deficiencies or material weaknesses that required corrective action. Item 10: Exhibits. (a) (1) Registrant's code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached. (2) Separate certifications for Registrant's principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. (b) A certification for Registrant's principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSR with the Commission. Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Transamerica Occidental's Separate Account Fund B (Registrant) By: /s/ Brian C. Scott ------------------ President and Chief Executive Officer Date: March 4, 2004 3 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Brian C. Scott ------------------ President and Chief Executive Officer Date: March 4, 2004 By: /s/ Kim D. Day -------------- Vice President, Treasurer and Principal Financial Officer Date: March 4, 2004 4 EXHIBIT INDEX
Exhibit No. Description of Exhibit - ----------- ---------------------- 10(b)(1) Code of Ethics for Principal Executive and Senior Financial Officers 10(b)(2) Section 302 N-CSR Certification of Principal Executive Officer 10(b)(3) Section 302 N-CSR Certification of Principal Financial Officer 10(b)(4) Section 906 N-CSR Certification of Principal Executive Officer, Principal Financial Officer & General Counsel
5 EX-99.10 (B)(1) 3 g87586exv99w10xbyx1y.txt CODE OF ETHICS EXHIBIT 10(b)(1) TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ("FUND B") CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS Approved by the Board of Managers as of December 2, 2003 In accordance with the Sarbanes-Oxley Act of 2002 ("Act") and the rules promulgated thereunder by the U.S. Securities and Exchange Commission ("SEC"), Transamerica Index Funds, Inc. (the "Fund") is required to file reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and must disclose whether it has adopted a code of ethics that is applicable to certain specified senior officers and that addresses certain matters specified in the Act and related SEC Rules (a "Sarbanes-Oxley Code"). The Fund's Board of Managers ("Board"), including a majority of the Managers that are not interested persons of the Fund, as defined in Section 2(a)(19) of the Investment Company Act of 1940 ("Investment Company Act"), has approved the Fund's Sarbanes-Oxley Code. I. COVERED OFFICERS/PURPOSE OF THE CODE THIS CODE OF ETHICS ("CODE") OF THE FUND APPLIES TO THE FUND'S PRINCIPAL EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING OFFICER, OR PERSONS PERFORMING SIMILAR FUNCTIONS ("COVERED OFFICERS," EACH OF WHOM IS SET FORTH IN EXHIBIT A), FOR THE PURPOSE OF PROMOTING: - honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; - full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by the Fund; - compliance with applicable laws and governmental rules and regulations; - the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and - accountability for adherence to the Code. II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST GENERAL POLICY: Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. Each Covered Officer has a duty to exercise his or her authority and responsibility for the benefit of the Fund and its shareholders, to place the interests of the Fund and its shareholders first, and to refrain from having outside interests that conflict with the interests of the Fund and its shareholders. Each Covered Officer must avoid any circumstances that might adversely affect, or appear to affect, his or her duty of loyalty to the Fund and its shareholders in discharging his or her responsibilities, including the protection of confidential information and corporate integrity. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, the Fund. For example, a conflict of interest would arise if a Covered Officer receives improper personal benefits as a result of his or her position with the Fund. Certain conflicts of interest may arise out of the relationships between Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as "affiliated persons" of the Fund. The Fund's and certain of its service providers' compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between the Fund and its investment adviser, AEGON/Transamerica Fund Advisers, Inc. ("ATFA"), of which the Covered Officers may be officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether for the Fund or ATFA), be involved in establishing policies and implementing decisions that will have different effects on ATFA and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationships between the Fund and ATFA and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities normally will be deemed to have been handled ethically. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes of ethics. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. THE OVERARCHING PRINCIPLE IS THAT THE PERSONAL INTEREST OF A COVERED OFFICER SHOULD NOT BE PLACED IMPROPERLY BEFORE THE INTEREST OF THE FUND. Each Covered Officer must: - not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund; - not cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; - not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; and - report at least annually the information elicited in the Fund's Director and Officer Questionnaire relating to potential conflicts of interest. There are some conflict of interest situations that must be discussed with the Fund's Compliance Officer if material. Some examples of such situations include: - service as a director on the board of any company (public or private), other than a management investment company; - the receipt of any non-nominal gifts from someone or a company that has current or prospective business dealings with the Fund; 2 - the receipt of any entertainment from any company with which the Fund has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; - any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than ATFA or any affiliated person thereof; and - a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. DISCLOSURE AND COMPLIANCE Each Covered Officer: - should familiarize himself or herself with the disclosure requirements generally applicable to the Fund; - should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Managers and auditors, governmental regulators or self-regulatory organizations; - should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Fund, ATFA, and other service providers, with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and - has the responsibility to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. REPORTING AND ACCOUNTABILITY BY COVERED OFFICERS Each Covered Officer must: - upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing (in the form attached hereto as Exhibit B) to the Board that he or she has received, read, and understands the Code; - annually thereafter affirm (in the form attached hereto as Exhibit B) to the Board that he or she has complied with the requirements of the Code; - not retaliate against any other Covered Officer or any employee or agent of an affiliated person of the Fund for reports of potential violations that are made in good faith; and - NOTIFY THE FUND'S COMPLIANCE OFFICER PROMPTLY IF HE OR SHE KNOWS OF ANY VIOLATION OF THIS CODE. FAILURE TO DO SO IS ITSELF A VIOLATION OF THIS CODE. V. Enforcement The Fund's Board has appointed a Compliance Officer to be responsible for applying this Code to specific situations in which questions are presented under it, and who has the authority to interpret this Code in any particular situation. The Compliance Officer is authorized to consult, as appropriate, with counsel to the Fund. Any approvals or waivers sought by a Covered Officer will be considered by the Compliance Officer. The Fund will follow these procedures in investigating and enforcing this Code: - The Compliance Officer will take all appropriate action to investigate any potential violations reported to the Compliance Officer; 3 - if, after such investigation, the Compliance Officer believes that no violation has occurred, the Compliance Officer is not required to take any further action; - any matter that the Compliance Officer believes is a material violation will be promptly reported to the Board. The Managers shall take such actions as they consider appropriate, including imposition of any sanctions that they consider appropriate; - no person shall participate in a determination of whether he or she has committed a violation of this Code or in the imposition of any sanction against himself or herself. - the Compliance Officer will be responsible for granting waivers, as appropriate; and - any amendments to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. VI. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Fund for purposes of Section 406 of the Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Fund, ATFA or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Fund's and ATFA's codes of ethics under Rule 17j-1 of the Investment Company Act and ATFA's more detailed policies and procedures set forth in the Code of Ethics and Insider Trading Policy are separate requirements applying to the Covered Officers and others, and are not part of this Code. VII. AMENDMENT; INTERPRETATION OF PROVISIONS The Managers may from time to time amend this Code of Ethics or adopt such interpretations of this Code of Ethics as they deem appropriate. In connection with any amendment to the Code, a brief description of the amendment will be prepared so that the necessary disclosure may be made with the next Form N-CSR to be filed, or otherwise disclosed in accordance with applicable law. VIII. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code shall be treated as confidential and shall not be disclosed to any one other than the Board, the Covered Officers and Fund counsel, except as otherwise requested by applicable law. IX. Internal Use The Code is intended solely for the internal use by the Fund and does not constitute an admission, by or on behalf of the Fund, as to any fact, circumstance, or legal conclusion. X. SANCTIONS Compliance by Covered Officers with the provisions of the Code is required. Covered Officers should be aware that in response to any violation, the Fund will take whatever action is deemed necessary under the circumstances, including, but not limited to, the imposition of appropriate sanctions. These sanctions may include, among others, the reversal of trades, reallocation of trades to client accounts, fines, disgorgement of profits, suspension or termination. 4 EXHIBIT A PERSONS COVERED BY TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ("FUND B") CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS ("Covered Officers")
NAME TITLE ---- ----- Brian C. Scott Chief Executive Officer Kim D. Day Principal Financial Officer
5 EXHIBIT B INITIAL AND ANNUAL CERTIFICATION OF COMPLIANCE WITH TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ("FUND B") CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS TO: THE BOARD OF MANAGERS /s/ BCS [Initial] I hereby certify that I have received Fund B's Code of Ethics for Principal Executive and Senior Financial Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the "Code") and that I have read and understood the Code. I further certify that I am subject to the Code and will comply with each of the Code's provisions to which I am subject. /s/ BCS [Annual] I hereby certify that I have received Fund B's Code of Ethics for Principal Executive and Senior Financial Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the "Code") and that I have read and understood the Code. I further certify that I have complied with and will continue to comply with each of the provisions of the Code to which I am subject. /s/ Brian C. Scott ------------------ (Signature) Name: Brian C. Scott, Chief Executive Officer Date: March 4, 2004 6 INITIAL AND ANNUAL CERTIFICATION OF COMPLIANCE WITH TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ("FUND B") CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS TO: THE BOARD OF MANAGERS /s/ KDD [Initial] I hereby certify that I have received Fund B's Code of Ethics for Principal Executive and Senior Financial Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the "Code") and that I have read and understood the Code. I further certify that I am subject to the Code and will comply with each of the Code's provisions to which I am subject. /s/ KDD [Annual] I hereby certify that I have received Fund B's Code of Ethics for Principal Executive and Senior Financial Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the "Code") and that I have read and understood the Code. I further certify that I have complied with and will continue to comply with each of the provisions of the Code to which I am subject. /s/ Kim D. Day -------------- (Signature) Name: Kim D. Day, Principal Financial Officer Date: March 4, 2004 7 EX-99.10 (B)(2) 4 g87586exv99w10xbyx2y.txt SECTION 302 CERTIFICATION OF PEO EXHIBIT 10(b)(2) TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ("FUND B") FOR THE PERIOD ENDING DECEMBER 31, 2003 FORM N-CSR CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Brian C. Scott, certify that: 1. I have reviewed the report on Form N-CSR of Fund B; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the fund's financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c. presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions regarding significant deficiencies and material weaknesses. Date: March 4, 2004 By: /s/ Brian C. Scott ------------------ Brian C. Scott Title: President and Chief Executive Officer EX-99.10 (B)(3) 5 g87586exv99w10xbyx3y.txt SECTION 302 CERTIFICATION OF PFO EXHIBIT 10(b)(3) TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ("FUND B") FOR THE PERIOD ENDING DECEMBER 31, 2003 FORM N-CSR CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Kim D. Day, certify that: 1. I have reviewed the report on Form N-CSR of Fund B; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the fund's financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c. presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions regarding significant deficiencies and material weaknesses. Date: March 4, 2004 By: /s/ Kim D. Day -------------- Kim D. Day Title: Vice President, Treasurer & Principal Financial Officer EX-99.10 (B)(4) 6 g87586exv99w10xbyx4y.txt SECTION 906 CERTIFICATION OF PEO & PFO EXHIBIT 10(b)(4) TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B ("FUND B") FOR THE PERIOD ENDING DECEMBER 31, 2003 FORM N-CSR CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Certified Shareholder Report of Fund B (the "Fund") on Form N-CSR for the period ended December 31, 2003, as filed with the Securities and Exchange Commission on the date hereof ("the Report"), each of the undersigned hereby certifies that, to his knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. /s/ Brian C. Scott Date: March 4, 2004 ------------------ Brian C. Scott President and Chief Executive Officer /s/ Kim D. Day Date: March 4, 2004 -------------- Kim D. Day Vice President, Treasurer and Principal Financial Officer /s/ John K. Carter Date: March 4, 2004 ------------------ John K. Carter Senior Vice President, Secretary and General Counsel A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----