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Registration No. 33-89188
Registration No. 811-3989
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-6
| REGISTRATION STATEMENT UNDER THE SECURITIES | ||||
| ACT OF 1933 | ¨ | |||
| Pre-Effective Amendment No. | ¨ | |||
| Post-Effective Amendment No. 19 | x | |||
| and/or | ||||
| REGISTRATION STATEMENT UNDER THE INVESTMENT | ||||
| COMPANY ACT OF 1940 | ¨ | |||
| Amendment No. 31 | x | |||
(Check appropriate box or boxes.)
NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT
(Exact Name of Registrant)
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
(Name of Depositor)
| 720 East Wisconsin Avenue, Milwaukee, Wisconsin | 53202 | |
| (Address of Depositor’s Principal Executive Offices) | (Zip Code) |
Depositor’s Telephone Number, including Area Code 414-271-1444
RAYMOND J. MANISTA, General Counsel and Secretary
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)
Copy to:
Chad E. Fickett, Assistant General Counsel
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
414-665-1209
Approximate Date of Proposed Public Offering Continuous
It is proposed that this filing will become effective (check appropriate space)
| ¨ | immediately upon filing pursuant to paragraph (b) of Rule 485 |
| ¨ | on (DATE) pursuant to paragraph (b) of Rule 485 |
| ¨ | 60 days after filing pursuant to paragraph (a)(1) of Rule 485 |
| x | on May 1, 2010 pursuant to paragraph (a)(1) of Rule 485 |
| ¨ | this post-effective amendment designates a new effective date for a previously filed post-effective amendment. |
Title of Securities Being Registered: Interests in the Northwestern Mutual Variable Life Account under individual scheduled premium variable whole life insurance policies.
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Prospectus
May 1, 2010
Variable CompLife®
Issued by The Northwestern Mutual Life Insurance Company
and the Northwestern Mutual Variable Life Account
This prospectus describes an individual scheduled premium Variable Whole Life Insurance Policy that combines a minimum guaranteed death benefit with additional protection in an integrated policy design (the “Policy”). You may choose to invest your Net Premiums in up to ten Divisions of the Northwestern Mutual Variable Life Account (the “Separate Account”), each of which invests in one of the corresponding Portfolios listed below:
| Northwestern Mutual Series Fund, Inc. | ||
| Growth Stock Portfolio | Small Cap Growth Stock Portfolio | |
| Focused Appreciation Portfolio | Small Cap Value Portfolio | |
| Large Cap Core Stock Portfolio | International Growth Portfolio | |
| Index 500 Stock Portfolio | International Equity Portfolio | |
| Domestic Equity Portfolio | Money Market Portfolio | |
| Equity Income Portfolio | Select Bond Portfolio | |
| Mid Cap Growth Stock Portfolio | High Yield Bond Portfolio | |
| Index 400 Stock Portfolio | Balanced Portfolio | |
| Mid Cap Value Portfolio | Asset Allocation Portfolio | |
| Fidelity® Variable Insurance Products | ||
| VIP Mid Cap Portfolio | ||
| Russell Investment Funds | ||
| Multi-Style Equity Fund | ||
| Aggressive Equity Fund | ||
| Real Estate Securities Fund | ||
| Non-U.S. Fund | ||
| Core Bond Fund | ||
Please note that the Policy and the Portfolios are not guaranteed to achieve their goals
and are not federally insured. The Policy and the Portfolios have not been endorsed by any bank or government
agency and are subject to risks, including loss of the principal amount invested.
This Policy is subject to the law of the state in which it is issued. Some of the terms of the Policy may differ from the terms of the Policy delivered in another state because of state specific legal requirements. Areas where state specific Policy provisions may apply include, but are not limited to:
| • | certain investment options and certain Policy features; and |
| • | fund transfer rights. |
Please read carefully this prospectus and the accompanying
prospectuses for the corresponding Portfolios and keep them for future reference. These prospectuses
provide information that you should know before investing in the Policy. No person is authorized to make any
representation in connection with the offering of the Policy other than those contained in these prospectuses.
The Securities and Exchange Commission (“SEC”) has not approved or disapproved
the Policy or determined that this prospectus is accurate or complete.
It is a criminal offense to state otherwise.
We no longer issue the Policy described in this prospectus. The variable life insurance policies we presently
offer are described in separate prospectuses.
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PROSPECTUS
Variable CompLife®
| — | Variable Whole Life Policy |
| — | Minimum Guaranteed Death Benefit with Additional Protection |
The following summary identifies some of the benefits and risks of the Policy. It omits important information which is included elsewhere in this prospectus, in the attached mutual fund prospectuses, and in the terms of the Policy. Unless clear from their context or otherwise appropriate, all of the capitalized terms used in this prospectus are defined herein or at the end of this prospectus in the Glossary of Terms.
Death Benefit The primary benefit of your Policy is the life insurance protection that it provides. The Policy combines a Minimum Guaranteed Death Benefit with Additional Protection. We guarantee the Minimum Guaranteed Death Benefit for the lifetime of the Insured so long as premiums are paid when due and no Policy Debt is outstanding. We guarantee the Additional Protection for a period of years defined in the Policy. Your Policy may also include variable paid-up additional insurance. Any Excess Amount or any adjustment required for certain tax purposes may also increase your Death Benefit. (See “Death Benefit.”)
Access to Your Values The Policy provides access to Cash Value during the lifetime of the Insured. You may surrender your Policy for the Cash Value at any time during the lifetime of the Insured. We will permit partial surrenders so long as the Policy that remains meets our minimum size requirements. You may make a withdrawal from the Policy if the Excess Amount is sufficient. You may borrow up to 90% of your Policy’s Cash Value using the Policy as security. (See “Policy Loans, Automatic Premium Loans, and Withdrawals.”)
Flexibility You may increase the scheduled premium, or pay optional unscheduled additional premiums, at any time before the Policy Anniversary nearest to the Insured’s 85th birthday, subject to our insurability requirements and issue limits. You may reduce or suspend payment of premiums within the limits provided in the Policy. You may direct the allocation of your premiums and apportion the Separate Account assets supporting your Policy among the various Divisions of the Separate Account, using as many as 10 Divisions at any time. Subject to certain limits, you may transfer accumulated amounts from one Division to another as often as 12 times in a Policy Year.
Optional Benefits You may select two optional benefits for purchase under the Policy, a Waiver of Premium Benefit and an Additional Purchase Benefit. These optional benefits may not be available in all states.
Payment Plan Options There are several ways of receiving proceeds under the Death Benefit and surrender provisions of the Policy, other than in a lump sum. More detailed information concerning these payment plan options is included elsewhere in this prospectus. You may also call our Income Benefits Department at 1-866-269-2950 for more information.
Tax Benefits You are generally not taxed on your Policy’s investment gains until you surrender the Policy or make a withdrawal. (See “Tax Treatment of Life Insurance.”)
Investment Risk Your Policy allows you to participate in the investment experience of the Divisions you select. You bear the corresponding investment risks. You will be subject to the risk that the investment performance of the Divisions will be unfavorable and that, due both to the unfavorable performance and the resulting higher insurance charges, the Cash Value and Policy Value will decrease. You could lose everything you invest. You may find a comprehensive discussion of these investment risks in the attached mutual fund prospectuses. You will also be subject to the risk that the investment performance of the Divisions you choose may be less favorable than that of other Divisions, and in order to keep the Additional Protection from decreasing, you may be required to pay more premiums than originally planned.
Default Risk Because certain guarantees under the Policy are guaranteed by the Company’s General Account assets, the ability to make good on these guarantees depends on the financial strength and claims-paying ability of the Company. Therefore, guaranteed
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benefits in excess of Invested Assets in the Separate Account are subject to the risk of default to the extent the Company is unable to satisfy some or all of these guarantees.
Policy for Long-Term Protection Your Policy is designed to serve your need for long-term life insurance protection. It is not a suitable vehicle for short-term goals. We have not designed the Policy for frequent trading.
Policy Lapse Your Policy will lapse if you do not pay sufficient premium to keep it in force. Favorable investment experience may reduce the amount of premium you need to pay to keep the Policy in force, but we do not guarantee investment experience. Policy loans or withdrawals may increase the premium required to keep the Policy in force.
Policy Loan Risks A loan, whether or not repaid, will affect your Cash Value and Policy Value over time because the amounts borrowed do not participate in the investment performance of the Divisions; in addition, a charge is deducted from your Policy Value while there is Policy Debt. The effect of a loan may be either favorable or unfavorable, depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions. The Death Benefit is reduced by the amount of any Policy Debt outstanding. If you surrender the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan, to the extent it has not previously been taxed, will be considered as an amount you received and taxed accordingly.
Limitations on Access to Your Values We will deduct a surrender charge if you request a surrender or partial surrender of your Policy, or the Policy becomes paid-up insurance before the payment of the premium due at the start of the 15th Policy Year. We permit withdrawals only if the Excess Amount is sufficient. The minimum amount for a withdrawal is $250. A maximum of four withdrawals is permitted per Policy Year. A partial surrender or withdrawal will reduce the Death Benefit.
Adverse Tax Consequences Our understanding of the principal tax considerations for the Policy under current tax law is set forth in this prospectus. There are areas of some uncertainty under current law, and we do not address the likelihood of future changes in the law or interpretations thereof. Among other risks, your Policy may become a MEC if the total amount of premiums you have paid exceeds a defined limit; surrenders, withdrawals, and loans under the Policy will then be taxable as ordinary income to the extent there are earnings in the Policy, and a 10% penalty will apply to these distributions. Moreover, if excessive Policy loans cause a Policy to terminate, or if the Policy otherwise lapses out of force before the Insured dies, a tax liability may arise as a result with no value in the Policy with which to pay the tax liability. In addition, please note that you may no longer change Insureds on your Policy, unless you exchange your Policy for a new policy with the mortality tables recognized by the Internal Revenue Service when satisfying the definitional test for life insurance. (See “Tax Treatment of Policy Benefits.”) Death Benefit proceeds may be subject to state and/or inheritance taxes.
Risk of an Increase in Current Fees and Expenses Certain fees and expenses are currently assessed at less than their maximum levels. We may increase these current charges in the future up to the guaranteed maximum levels. If fees and expenses are increased, you may need to increase the amount of premiums to keep the Additional Protection from decreasing.
The following tables describe the fees and expenses that are payable when a Policy is bought, owned, or surrendered. (See “Deductions and Charges” for a more detailed description.)
The first table describes the fees and expenses that are payable when you pay premiums, withdraw Excess Amount, surrender the Policy, make partial surrenders, or transfer amounts between the Divisions.
| Charge | When Charge is Deducted | Current Charge | Maximum Guaranteed Charge
| |||
| State Premium Tax Charge |
Upon each Premium Payment | 2.25% of the premium for scheduled premiums due (or unscheduled premiums paid) prior to the Policy Anniversary in 2010. 2.00% of subsequent premiums.1 | 3.5% of the premium (includes both “State Premium Tax Charge” and “OBRA Expense Charge”) | |||
| OBRA Expense Charge2 | Upon each Premium Payment | 1.25% of the premium for scheduled premiums due (or unscheduled premiums paid) prior to the Policy Anniversary in 2010. 1.00% of subsequent premiums. | ||||
| Sales Load | Upon each Premium Payment | 4.5% of the premium | 4.5% of the premium | |||
| Administrative Charge | Upon a withdrawal of Excess | Currently waived | $25 |
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| for Withdrawals | Amount | |||||
| Administrative Surrender Charge | Upon surrender, change to paid-up insurance, or partial surrender | $216 plus $1.08 per $1,000 of Minimum Guaranteed Death Benefit and Additional Protection for the first Policy Year, graded down linearly each year to zero at the beginning of the tenth Policy Year | Same as current charge | |||
| Premium Surrender Charge | Upon surrender, change to paid-up insurance, or partial surrender before payment of a scheduled premium that is due at the beginning of the fifteenth Policy Year | Up to 40% of the sum of an annual premium for the Minimum Guaranteed Death Benefit (exclusive of the Policy Fee and exclusive of any charge for extra mortality) plus a term insurance premium for the initial amount of Additional Protection3 Minimum: $0.264 per $1000 of Minimum Guaranteed Death Benefit (for a female, Issue Age 1, after the year 14 Premium Payment) + $0.0824 per $1000 of Additional Protection Maximum: $38.16 per $1000 of Minimum Guaranteed Death Benefit + $26.304 per $1000 of Additional Protection (for a male, Issue Age 75, Premier Tobacco or Preferred Tobacco, after 5-10 years of Premium Payments) Representative: $5.052 per $1000 of Minimum Guaranteed Death Benefit + $0.756 per $1000 of Additional Protection (for a male, Issue Age 35, Premier Non-Tobacco or Preferred Non-Tobacco, after 5-10 years of Premium Payments) |
Same as current charge | |||
| Fee for Transfer of Assets | Upon transfer of assets among the Divisions | Currently waived | $25 | |||
| Expedited Delivery Charge4 | When express mail delivery is requested | $15 per delivery (up to $45 for next day, a.m. delivery) | $50 per delivery (up to $75 for next day, a.m. delivery) adjusted for inflation5 | |||
| Wire Transfer Fee4 | When a wire transfer is requested | $25 per transfer (up to $50 for international wires) | $50 per transfer (up to $100 for international wires) adjusted for inflation5 |
| 1 | See “Information about the Policy – Premiums” for more information. |
| 2 | Due to a 1990 federal tax law change under the Omnibus Budget Reconciliation Act of 1990 (“OBRA”), as amended, insurance companies are generally required to capitalize and amortize certain acquisition expenses rather than currently deduct such expenses. Due to this capitalization and amortization, the corporate income tax burden on insurance companies has been affected. To compensate us for corporate taxes, we make a charge of 1.25% of the premium for scheduled premiums due (or unscheduled premiums paid) prior to the Policy Anniversary in 2010 and 1.00% of subsequent premiums. |
| 3 | The premium surrender charge is a percentage of the surrender charge base, the amount of which will vary depending upon whether you suspended the payment of scheduled premiums at any time during the first five Policy Years. The premium surrender charge percentage varies by Issue Age and typically increases between Policy Years one through five, remains levels in Policy Years five through ten, and declines in Policy Years eleven through fifteen to zero. For more information on the calculation of the premium surrender charge, see “Surrender Charges” in this prospectus. |
| 4 | This fee may increase over time to cover our administrative or other costs but will not exceed the maximum charge. We may discontinue this service at any time, with or without notice. |
| 5 | The maximum charges are subject to a consumer price index adjustment. The maximum charge will equal the maximum charge shown above multiplied by the CPI for the fourth month prior to the time of the charge, divided by the CPI for April, 2009. “CPI” means the Consumer Price Index for All Urban Consumers, United States City Average, All Items, as published by the United States Bureau of Labor Statistics. If the method for determining the CPI is changed, or it is no longer published, it will be replaced by some other index found by the Company to serve the same purpose. |
Periodic Charges (Other than Portfolio Operating Expenses)1
The next table describes the fees and expenses, other than operating expenses for the Portfolios, that you will pay periodically during the time that you own the Policy.
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| Charge | When Charge is Deducted | Current Charge | Maximum
Guaranteed Charge | |||
| Charge for Administrative Costs | At Policy Date and annually on the Policy Anniversary | $60 | $84 plus $0.12 per $1,000 of both the Minimum Guaranteed Death Benefit and the Additional Protection | |||
| Charge for Issuance Expenses | At Policy Date and annually on the Policy Anniversary for each of the first ten Policy Years | $24 plus $0.12 per $1,000 of Minimum Guaranteed Death Benefit and Additional Protection | Same as current amount | |||
| Charge for Guarantee of the Minimum Guaranteed Death Benefit | At Policy Date and annually on the Policy Anniversary | $0.12 per $1,000 of Minimum Guaranteed Death Benefit | Same as current amount | |||
| Charge for Cost of Insurance—Minimum and Maximum 2
Charge for Cost of Insurance—Representative2 |
At Policy Date and annually on the Policy Anniversary | Minimum: $0.69 per $1,000 of net amount at risk (for a female Insured age 10) 2 Maximum: $1,000 per $1,000 of net amount at risk (at age 99)2 Representative: $3.07 per $1,000 of net amount at risk (for a male Insured age 44 in the Premier Non-Tobacco or Preferred Non-Tobacco underwriting classification)2 |
Same as current amount | |||
| Charge for Mortality and Expense Risks | Daily | Annual rate of .45% of the assets of the Separate Account2 | Annual rate of .60% of the assets of the Separate Account2 | |||
| Charge for Waiver of Premium Rider—Minimum and Maximum3
Charge for Waiver of Premium Rider—Representative3 |
At Policy Date and annually on the Policy Anniversary to age 65 | Minimum: 1.3% of premium (at Issue Age 0-9) Maximum: 5.1% of premium (at Issue Age 57) Representative: 2.5% of premium (at Issue Age 35) |
Same as current amount | |||
| Charge for Additional Purchase Benefit3 | At Policy Date and annually on the Policy Anniversary to age 40 | Minimum: $0.54 per $1,000 of the benefit (at Issue Age 0)4 Maximum: $2.21 per $1,000 of the benefit (at Issue Age 38)4 Representative: $0.54 per $1,000 of the benefit (the most common Issue Age is 0) |
Same as current amount | |||
| Extra Premium for Insureds Who Qualify as Sub-Standard Risks3 | At Policy Date and annually on the Policy Anniversary and with each unscheduled premium | Up to $53.63 per $1,000 of Minimum Guaranteed Death Benefit and Additional Protection plus up to 37.2% of any (optional) additional premium5 Minimum: $0.66 per $1,000 of the Minimum Guaranteed Death Benefit and Additional Protection + 5.6% of additional premium paid (for a female, Issue Ages 0-3, Class 1 Non-Tobacco, with additional premium paid at ages 0-15) Maximum: $53.63 per $1,000 of the Minimum Guaranteed Death Benefit and Additional Protection + 10.3% of additional premium paid (for a male, Issue Age 75, Class 9 Non-Tobacco or Class 7 Tobacco, with additional premium paid at age 75) Representative: $3.76 per $1,000 of the Minimum Guaranteed Death Benefit and Additional Protection+ 10.1% of additional premium paid (for a male, Issue Age 35, Class 2 Non-Tobacco or Standard Plus Tobacco, with additional premium paid at age 44) |
Same as current amount |
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| Charge for Mortality and Expense Risks and Expenses for Loans | Daily | Annual rate of 0.90% of the borrowed amount2 | Annual rate of 1.00% of the borrowed amount |
| 1 | Some fees and expenses may no longer apply because the Policy is no longer issued. |
| 2 | See “Deductions and Charges – Charges Against the Policy Value” for more information about how we determine cost of insurance rates. The amounts of these deductions may be effectively reduced by the dividends we may pay on in-force Policies. The dividends we currently pay are reflected in illustrations we provide. You may request an illustration from your Financial Representative. We do not guarantee future dividends. (See “Annual Dividends.”) The cost of insurance rate shown in the table may not be representative of the charge that a particular Owner may pay. Request an illustration for personalized information from your Financial Representative. (See “Illustrations.”) |
| 3 | The charges shown in the table may not be representative of the charge that a particular Owner may pay. |
| 4 | The maximum benefit amount is $100,000. |
| 5 | Varies by age and underwriting classification. |
Annual Portfolio Operating Expenses
The table below shows the range (minimum and maximum) of total operating expenses, including investment advisory fees, distribution (12b-1) fees and other expenses of the Portfolios offered by Northwestern Mutual Series Fund, Inc., Fidelity® Variable Insurance Products, and the Russell Investment Funds that are available for investment under the Policy. The first line of this table lists expenses that do not reflect fee waivers or expense limits and reimbursements, nor do they reflect short-term trading redemption fees, if any, charged by the Portfolios. The information is based on operations for the year ended December 31, 2009. More details concerning these fees and expenses are contained in the attached prospectuses for the Funds.
| Minimum | Maximum | |||
| Range of Total Annual Portfolio Operating Expenses (expenses include investment advisory fees, distribution (12b-1) fees, and other expenses as a percentage of average Portfolio assets)* | % | % | ||
| Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement** |
% | % |
* For certain Portfolios, certain expenses were reimbursed or fees waived during 2009. It is anticipated that these voluntary expense reimbursement and fee waiver arrangements will continue past the current year, although certain arrangements may be terminated at any time. After taking into account these arrangements and any contractual fee waiver or expense reimbursement arrangements, Annual Portfolio Operating Expenses would have ranged from a minimum of % to a maximum of %.
** The “Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement” line in the above table shows the minimum and maximum fees and expenses charged by all of the Portfolios after taking into account contractual fee waiver or reimbursement arrangements in place. Those contractual arrangements are designed to reduce Total Annual Portfolio Operating Expenses for Owners and will continue for at least one year from the date of this prospectus. For more information about which Portfolios currently have such contractual reimbursement or fee waiver arrangements in place, see the prospectuses of the underlying Funds.
The following table shows total annual operating expenses of each Portfolio available for investment under the Policy. Operating expenses are expressed as a percentage of average net assets for the year ended December 31, 2009, except as otherwise set forth in the notes to the table. The Portfolio expenses used to prepare the table were provided to the Company by the Portfolios. The Company has not independently verified such information. Current or future expenses may be higher or lower than those shown, especially in periods of market volatility. For more information about the Portfolios’ expenses, see the prospectuses of the underlying Funds.
| Portfolio |
Investment Advisory Fees |
12b-1 Fees |
Other Expenses |
Acquired Fund Fees and |
Total Operating Expenses |
Fee Waivers & Reimbursements |
Total Net Operating Expenses | |||||||
| Northwestern Mutual Series Fund, Inc. | ||||||||||||||
| Growth Stock Portfolio |
% | % | % | % | % | % | % | |||||||
| Focused Appreciation Portfolio(1) |
% | % | % | % | % | % | % | |||||||
| Large Cap Core Stock Portfolio |
% | % | % | % | % | % | % | |||||||
| Index 500 Stock Portfolio |
% | % | % | % | % | % | % | |||||||
| Domestic Equity Portfolio(1) |
% | % | % | % | % | % | % | |||||||
| Equity Income Portfolio(1) |
% | % | % | % | % | % | % | |||||||
| Mid Cap Growth Stock Portfolio |
% | % | % | % | % | % | % | |||||||
| Index 400 Stock Portfolio |
% | % | % | % | % | % | % | |||||||
| Mid Cap Value Portfolio(1) |
% | % | % | % | % | % | % | |||||||
| Small Cap Growth Stock Portfolio |
% | % | % | % | % | % | % | |||||||
| Small Cap Value Portfolio(1) |
% | % | % | % | % | % | % | |||||||
| International Growth Portfolio(1) |
% | % | % | % | % | % | % | |||||||
| International Equity Portfolio(2) |
% | % | % | % | % | % | % | |||||||
| Money Market Portfolio(3) |
% | % | % | % | % | % | % | |||||||
| Select Bond Portfolio |
% | % | % | % | % | % | % | |||||||
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| High Yield Bond Portfolio |
% | % | % | % | % | % | % | |||||||
| Balanced Portfolio |
% | % | % | % | % | % | % | |||||||
| Asset Allocation Portfolio(4) |
% | % | % | % | % | % | % | |||||||
| Fidelity® Variable Insurance Products |
||||||||||||||
| Mid Cap Portfolio(5) |
% | % | % | % | % | % | % | |||||||
| Russell Investment Funds |
% | % | % | % | % | % | % | |||||||
| Multi-Style Equity Fund |
% | % | % | % | % | % | % | |||||||
| Aggressive Equity Fund(6) |
% | % | % | % | % | % | % | |||||||
| Real Estate Securities Fund |
% | % | % | % | % | % | % | |||||||
| Non-U.S. Fund(6) |
% | % | % | % | % | % | % | |||||||
| Core Bond Fund(6) |
% | % | % | % | % | % | % | |||||||
[Footnotes to be provided in subsequent filing]
The Northwestern Mutual Life Insurance Company is a mutual life insurance company organized by a special act of the Wisconsin Legislature in 1857. It is licensed to conduct a conventional life insurance business in the District of Columbia and in all states of the United States. The total assets of Northwestern Mutual exceeded $166.7 billion as of December 31, 2009. The Home Office of Northwestern Mutual is located is at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
“Northwestern Mutual,” “Company,” “we,” “us” and “our” in this prospectus mean The Northwestern Mutual Life Insurance Company.
General Account assets are used to guarantee the payment of certain benefits under the Policy, including death benefits. To the extent that we are required to pay you amounts under these benefits that are in addition to Invested Assets in the Separate Account, such amounts will come from General Account assets. Thus, Owners must look to the strength of the Company and its General Account with regard to guarantees under the Policy. The General Account is exposed to the risks normally associated with the operation of a life insurance company, including insurance pricing, asset liability management and interest rate risk, operational risks, and the investment risks of a portfolio of securities that consists largely, though not exclusively, of fixed-income securities. Some of the risks associated with such a portfolio include interest rate, option, liquidity, and credit risk. The financial statements contained in the Statement of Additional Information include a further discussion of risks inherent within the General Account investments.
We established the Separate Account by action of our Trustees on November 23, 1983, in accordance with the provisions of Wisconsin insurance law. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940 (the “1940 Act”). We own the assets in the Separate Account and we are obligated to pay all benefits under the Policies. We may use the Separate Account to support other variable life insurance policies we issue. We have divided the Separate Account into Divisions, each of which invests in shares of one Portfolio of the Funds.
Under Wisconsin law, Separate Account assets are held separate from our other assets and are not part of our General Account. Income, gains, and losses, whether or not realized, from assets allocated to the Separate Account will be credited to or charged against the Separate Account without regard to our other income, gains, or losses. Income, gains, and losses credited to, or charged against, a Division reflect that Division’s own investment performance and not the investment performance of our other assets. We may not use the Separate Account’s assets to pay any of our liabilities other than those arising from the Policies and any other variable life insurance Policies funded by the Separate Account. We may, however, use all of our assets (except those held in certain other separate accounts) to satisfy our obligations under your Policy.
Where permitted by law and subject to any required regulatory approvals or votes by Owners, we reserve the right to:
| — | operate the Separate Account or a Division either as a unit investment trust or a management investment company under the 1940 Act, or in any other form permitted by law, if deemed by the Company to be in the best interest of Owners; |
| — | invest current and future assets of a Division in securities of another Portfolio as a substitute for shares of a Portfolio already purchased or to be purchased; |
| — | transfer cash from time to time between the General Account and the Separate Account as deemed necessary or appropriate and consistent with the terms of the Policy, including but not limited to transfers for the deduction of charges and in support of payment options; |
| — | transfer assets of the Separate Account in excess of reserve requirements applicable to the Policies supported by the Separate Account to the General Account (Invested Assets remaining in the Separate Account necessary to fulfill its obligations under |
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| the Policy are not subject to claims against or losses in the General Account); |
| — | register or deregister the Separate Account under the 1940 Act or change its classification under that Act; |
| — | create new separate accounts; |
| — | add, delete or make substitutions for the securities and other assets held or purchased by the Separate Account; |
| — | restrict or eliminate any voting rights of Owners or other persons having voting rights as to the Separate Account; and |
| — | make any changes to the Separate Account to conform with, or required by any change in, federal tax law, the 1940 Act and regulations promulgated thereunder, or any other applicable federal or state laws. |
In the event that we take any of these actions, we may make an appropriate endorsement of your Policy and take other actions necessary to comply with applicable law.
A variety of investment options are offered under the Policy for the allocation of your premiums. However, the Company does not endorse or recommend a particular option, nor does it provide asset allocation or investment advice. You are responsible for choosing your investment options and should make your choices based on your individual situation and risk tolerances. After making your initial allocation decisions, you should monitor your allocations and periodically review the options you select and the amounts allocated to each to ensure your selections continue to be appropriate. The amounts you invest in a particular Division are not guaranteed and, because both principal and any return on the investment are subject to market risk, you can lose money.
The assets of each Division are invested in a corresponding Portfolio that is a series of one of the following mutual funds: Northwestern Mutual Series Fund, Inc.; Fidelity® Variable Insurance Products; and the Russell Investment Funds. The Separate Account buys shares of the Portfolios at their respective net asset values without sales charge. The Portfolios are available for investment only by separate accounts supporting variable insurance products and are not publicly traded. Their performance can differ substantially from publicly traded mutual funds with similar names. The specific Portfolios available under your Policy may change from time to time, and not all Portfolios in which assets of the Separate Account are invested may be available under your Policy. Your ability to invest in a Portfolio may be affected by the actions of such Portfolio, such as when a Portfolio closes.
The investment objectives of each Portfolio are set forth below. There is no assurance that any of the Portfolios will achieve its stated objective(s). You can find more detailed information about the Portfolios, including a description of each Portfolio, in the attached Portfolio prospectuses. Read the prospectuses for the Portfolios carefully before investing.
Northwestern Mutual Series Fund, Inc.
The principal investment adviser for the Portfolios of the Northwestern Mutual Series Fund is Mason Street Advisors, LLC (“MSA”), our wholly-owned company. The investment advisory agreements for the respective Portfolios provide that MSA will provide services and bear certain expenses of the Fund. MSA employs a staff of investment professionals to manage the assets of the Fund and the other advisory clients of MSA. We provide related facilities and personnel, which MSA uses in performing its investment advisory functions. MSA has retained and oversees Templeton Investment Counsel, LLC, Capital Guardian Trust Company, T. Rowe Price Associates, Inc., American Century Investment Management, Inc. and Janus Capital Management LLC under investment sub-advisory agreements to provide day-to-day management of the Portfolios as indicated below. Templeton Investment Counsel, LLC has appointed Franklin Templeton Investments (Asia) Limited as an additional sub-adviser for the International Equity Portfolio. Each such sub-adviser may be replaced without the approval of shareholders. Please see the attached prospectus for the Northwestern Mutual Series Fund for more information.
| Portfolio | Investment Objective | Sub-adviser (if applicable) | ||
| Growth Stock Portfolio | Long-term growth of capital; current income is a secondary objective |
N/A | ||
| Focused Appreciation Portfolio | Long-term growth of capital | Janus Capital Management LLC | ||
| Large Cap Core Stock Portfolio | Long-term growth of capital and income | N/A | ||
| Index 500 Stock Portfolio | Investment results that approximate the performance of the S&P 500® Index |
N/A | ||
| Domestic Equity Portfolio | Long-term growth of capital and income | Capital Guardian Trust Company | ||
| Equity Income Portfolio | Long-term growth of capital and income | T. Rowe Price Associates, Inc. | ||
| Mid Cap Growth Stock Portfolio | Long-term growth of capital | N/A | ||
| Index 400 Stock Portfolio | Investment results that approximate the performance of the S&P® MidCap 400 Index |
N/A | ||
| Mid Cap Value Portfolio | Long-term capital growth; current income is a secondary objective |
American Century Investment Management, Inc. |
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| Small Cap Growth Stock Portfolio | Long-term growth of capital | N/A | ||
| Small Cap Value Portfolio | Long-term growth of capital | T. Rowe Price Associates, Inc. | ||
| International Growth Portfolio | Long-term growth of capital | Janus Capital Management LLC | ||
| International Equity Portfolio | Long-term growth of capital | Templeton Investment Counsel, LLC; Franklin Templeton Investments (Asia) Limited | ||
| Money Market Portfolio | Maximum current income to the extent consistent with liquidity and stability of capital* |
N/A | ||
| Select Bond Portfolio | To provide as high a level of total return as is consistent with prudent investment risk; a secondary objective is to seek preservation of shareholders’ capital |
N/A | ||
| High Yield Bond Portfolio | High current income and capital appreciation** |
N/A | ||
| Balanced Portfolio | To realize as high a level of total return as is consistent with prudent investment risk, through income and capital appreciation |
N/A | ||
| Asset Allocation Portfolio | To realize as high a level of total return as is consistent with reasonable investment risk |
N/A |
| * | Although the Money Market Portfolio seeks to preserve its value at $1.00 per share, it is possible to lose money by investing in the Money Market Portfolio. An investment in a money market portfolio is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any government agency. During extended periods of low interest rates, the yield of a money market portfolio may also become extremely low and possibly negative. |
| ** | High yield bonds are commonly referred to as junk bonds. |
Fidelity® Variable Insurance Products
The Fidelity® VIP Mid Cap Portfolio is a series of Variable Insurance Products III. The Separate Account buys Service Class 2 shares of the Portfolio, the investment adviser for which is the Fidelity Management & Research Company.
| Portfolio | Investment Objective | Sub-adviser | ||
| VIP Mid Cap Portfolio | Long-term growth of capital |
Fidelity Management & Research Company, Inc. & Fidelity Research & Analysis Company | ||
The assets of each of the Portfolios comprising the Russell Investment Funds are invested by one or more investment management organizations researched and recommended by Frank Russell Company (“Russell”), and an affiliate of Russell, the Russell Investment Management Company (“RIMCo”). RIMCo is the investment adviser of the Russell Investment Funds. Russell is our majority-owned subsidiary.
| Portfolio | Investment Objective | |
| Multi-Style Equity Fund | Long-term growth of capital | |
| Aggressive Equity Fund | Long-term growth of capital | |
| Real Estate Securities Fund | Current income and long-term growth of capital | |
| Non-U.S. Fund | Long-term growth of capital | |
| Core Bond Fund | Current income and, as a secondary objective, capital appreciation | |
We select the Portfolios offered through this Policy based on several criteria, including asset class coverage, the strength of the investment adviser’s or sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Portfolio’s investment adviser or an affiliate will make payments to us or our affiliates. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premiums and/or transfers of accumulated amounts if we determine that the Portfolio no longer meets one or more of the selection criteria, and/or if the Portfolio has not attracted significant allocations from Owners. The Northwestern Mutual Series Fund, Inc. and the Russell Investment Funds have been included in part because they are managed by subsidiaries of the Company.
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We do not provide any investment advice and do not recommend or endorse any particular Portfolio. You bear the risk of any decline in the Policy Value of your Policy resulting from the performance of the Portfolios you have chosen.
Owners, through their indirect investment in the Portfolios, bear the costs of the investment advisory or management fees that the Portfolios pay to their respective investment advisors. (See the Portfolios’ prospectuses for more information.) As described above, an investment adviser of a Portfolio, or its affiliates, may make payments to the Company and/or certain of our affiliates. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. The amount of the compensation is based on a percentage of assets of the Portfolios attributable to the Policies and certain other variable insurance products that the Company issues. The percentages differ and some investment advisers (or other affiliates) may pay more than others. The percentages currently range up to 0.25%. These payments may be used for any corporate purpose, including payment of expenses that the Company and/or its affiliates incur for services performed on behalf of the Policies and the Portfolios. The Company and its affiliates may profit from these payments.
Certain Portfolios have adopted a Distribution (and/or Shareholder Servicing) Plan under Rule 12b-1 of the 1940 Act, which is described in more detail in the Portfolios’ prospectuses. These payments, which may be up to 0.25%, are deducted from assets of the Portfolios and are paid to our distributor, Northwestern Mutual Investment Services, LLC. These payments decrease a Portfolio’s investment return.
Additionally, an investment adviser or sub-adviser of a Portfolio or its affiliate may provide the Company with wholesaling services that assist in the distribution of the Policies and may pay the Company and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the investment adviser or sub-adviser (or their affiliate) with increased access to persons involved in the distribution of the Policies.
We are no longer issuing this Policy.
This prospectus describes the material provisions of the Policy. Since it is not intended to address all situations, the actual provisions of your Policy will control. You should consult your Policy for more information about its terms and conditions, and for any state specific variations that may apply to your Policy.
The Policy combines a Minimum Guaranteed Death Benefit with Additional Protection in an integrated policy design. The Minimum Guaranteed Death Benefit represents permanent life insurance guaranteed for the lifetime of the Insured if premiums are paid when due and no Policy Debt is outstanding. The Additional Protection is guaranteed for a period of years which depends on the sex and underwriting classification and age of the Insured when the Policy is issued and the relative proportions of Minimum Guaranteed Death Benefit and Additional Protection. For an Insured aged less than 43, the guaranteed period is not less than ten years. The guaranteed period is stated in the Policy. It is generally longer for younger Insureds and shorter for older Insureds, but will not be less than six years, or more than 46 years.
We place Net Premiums in the Divisions you select. The Net Premiums increase the Policy Value. The Policy Value is the cumulative amount invested, adjusted for investment results, reduced by any charges, including the cost of insurance, which is based on the net amount at risk. The net amount at risk is the Projected Insurance Amount divided by 1.04, less the Policy Value. The Projected Insurance Amount is what the insurance amount would be at the end of the year assuming a 4% annual effective interest rate on invested amounts. The cost of insurance also reflects the Attained Age of the Insured each year. If you pay premiums when they are due, and investment experience is favorable, the Policy Value will increase year by year.
We have designed the Policy so that the increase in Policy Value over time should reduce the net amount at risk. The reduction in the net amount at risk offsets the rising cost of the mortality risk as the age of the Insured increases, reducing the total cost of insurance which we subtract from the Policy Value each year. The change in the Policy Value will depend, in part, on the investment performance of the Divisions you choose. Investment experience is not guaranteed. If investment experience does not produce a sufficient rate of return, the amount of Additional Protection will be reduced in later Policy Years, or you will need to pay additional premium to keep the Additional Protection from falling.
For a typical Policy the average annual net investment rate of return required to maintain the initial amount of Additional Protection, without additional premium, should be between 4% and 6%, based on the current charges and dividend scale as of the year the Policy was issued. You may request a sales illustration to show the impact on the Additional Protection of a particular average annual net investment rate of return. (See “Illustrations.”) Any excess Policy Value (“Excess Amount”) is simply added to the Death Benefit and the Cash Value, dollar for dollar, unless a greater increase in the Death Benefit is required to meet tax requirements for life insurance. (See “Excess Amount” and “Tax Treatment of Policy Benefits.”)
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The Policy also allows you to pay additional premiums that may be used to increase Policy Value or, subject to the insurability of the Insured, to purchase variable paid-up additional insurance. We calculate the values for the additional insurance separately from those which support the initial amount of insurance. The values for the variable paid-up additional insurance do not affect the Policy Value.
The minimum amount required for the Minimum Guaranteed Death Benefit is $100,000, reduced to $50,000 if the Insured was below age 15 or over age 59 at issue. If the initial premium was at least $10,000 ($5,000 for ages below 15), the required minimum for the Minimum Guaranteed Death Benefit was $1,000. A lower minimum also may have applied in some other circumstances and would apply if the Policy was purchased for an employer-sponsored benefit plan. (See “Special Policy for Employers.”) In all cases, the Minimum Guaranteed Death Benefit must be at least $1,000.
Before issuing a Policy, we required satisfactory evidence of insurability. Non-smokers who meet underwriting requirements for the best three classifications were considered Premier Non-Tobacco, Preferred Non-Tobacco, and Standard Plus Non-Tobacco, respectively. The best two classes of smokers were considered Premier Tobacco and Preferred Tobacco, respectively. The premium depends in part on the underwriting classification. We charged a higher premium for Insureds who qualified as substandard risks, i.e., for Insureds who did not qualify for the underwriting classifications mentioned above. The amount of extra premium depends in part on the underwriting classification in which we placed the Insured.
For Policies issued prior to January 1, 2005, we used a different underwriting classification system. Risks which would be considered Premier Non-Tobacco or Preferred Non-Tobacco under the current system were called Select. Risks which would be considered Premier Tobacco or Preferred Tobacco under the current system were called Standard.
The Policy provides for a level scheduled premium to be paid annually at the beginning of each Policy Year. Premiums are payable at our Home Office. You may send Premium Payments to our Home Office or to a payment center designated by us. All payments must be made in U.S. Dollars payable through a U.S. financial institution. We accept Premium Payments by check or electronic funds transfer (“EFT”). We do not accept third-party checks at the Home Office as part of the initial Premium Payment. We generally will not accept cash, money orders, traveler’s checks or “starter” checks; however, in limited circumstances, we may accept some cash equivalents in accord with our anti-money laundering procedures. If you make a Premium Payment with a check or bank draft and, for whatever reason, it is later returned unpaid or uncollected, or if a Premium Payment by EFT is reversed, we reserve the right to reverse the transaction. We also reserve the right to recover any resulting losses incurred by us by withdrawing a sufficient amount of Policy Value. If mandated under applicable law, we may be required to reject a Premium Payment. We may also be required to provide information about you and your account to government regulators.
We accept Premium Payments via our website if eligible. Electronic payments via our website must be made in accordance with our current procedures. However, we are not required to accept electronic payments, and we will not be responsible for losses resulting from transactions based on unauthorized electronic payments, provided we follow procedures reasonably designed to verify the authenticity of electronic payments.
Although we do not anticipate delays in our receipt and processing of premiums, we may experience such delays to the extent premiums are not received at our Home Office on a timely basis. Such delays could result in delays in the allocation of premiums. (See “Allocations to the Separate Account.”)
By administrative practice, we accept premiums on a monthly, quarterly or semi-annual schedule, and we permit Premium Payment under an authorized payment plan by electronic funds transfer from your bank. Even if you pay premiums more frequently than annually, we place the scheduled net annual premium in the Separate Account at the beginning of each Policy Year. We advance this amount on this date and we are reimbursed as we receive your Premium Payments during the Policy Year. You have no obligation to repay the amount that we have advanced, but failure to pay the premiums when due will cause (a) Premium Payments to be suspended (subject to the conditions described later in this section), (b) if previously chosen by you, the Policy to continue in force as a reduced amount of paid-up insurance, (c) if the Automatic Premium Loan provision is currently in effect, an automatic premium loan (see “Policy Loans, Automatic Premium Loans, and Withdrawals”) to pay an overdue premium if the premium is less than the maximum amount available for a new loan, or (d) the Policy to terminate. If you do not pay premiums when they are due, we will reduce the Separate Account assets supporting the Policy to reflect the premiums due later in the Policy Year.
Premiums you pay other than on an annual basis are increased to (1) reflect the time value of money, based on an 8% per annum interest rate, and (2) cover the administrative costs to process the additional Premium Payments. A monthly premium is currently equal to the annual premium times .0863 plus 50 cents. You may pay monthly premiums only through an automatic payment plan arranged with your bank. A quarterly premium is currently equal to the annual premium times .2573 plus $2.00. A semi-annual premium is equal to the annual premium times .5096 plus $1.35. For any frequency other than annual, the annual percentage rate (“APR”) will depend on the amount of the annual premium and the Premium Payment frequency. For monthly premiums, the APR
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will be between 7.71% and 12.88%. For quarterly premiums, the APR will be between 7.81% and 16.48%. For semi-annual premiums, the APR will be between 7.83% and 12.38%. You may obtain information about APR calculations for premiums paid other than annually from your Northwestern Mutual Financial Representative. The APR calculation is also available through www.northwesternmutual.com.
If the Insured dies after payment of the premium for the period which includes the date of death, we will refund the portion of the premium for the remainder of that period as part of the Policy proceeds.
The following table shows examples of annual and periodic premiums, the excess of the annual sum of the periodic premiums over the annual premiums and the APR.
| Annual Premium |
Periodic Premium | Annual Sum of Periodic Premiums |
Excess of Annual Sum of Periodic Premiums Over Annual Premium |
Annual Percentage Rate (APR) | ||||
| MONTHLY PREMIUMS | ||||||||
| $1,000.00 | $ 86.80 | $ 1,041.60 | $ 41.60 | 9.00% | ||||
| 5,000.00 | 432.00 | 5,184.00 | 184.00 | 7.97% | ||||
| 10,000.00 | 863.50 | 10,362.00 | 362.00 | 7.84% | ||||
| QUARTERLY PREMIUMS | ||||||||
| 1,000.00 | 259.30 | 1,037.20 | 37.20 | 9.96% | ||||
| 5,000.00 | 1,288.50 | 5,154.00 | 154.00 | 8.24% | ||||
| 10,000.00 | 2,575.00 | 10,300.00 | 300.00 | 8.03% | ||||
| SEMIANNUAL PREMIUMS | ||||||||
| 1,000.00 | 510.95 | 1,021.90 | 21.90 | 8.96% | ||||
| 5,000.00 | 2,549.35 | 5,098.70 | 98.70 | 8.06% | ||||
| 10,000.00 | 5,097.35 | 10,194.70 | 194.70 | 7.94% | ||||
The scheduled premium includes the premium for the Minimum Guaranteed Death Benefit and the premium for any Additional Protection. The amount of the premium depends on the amount of the Minimum Guaranteed Death Benefit and the amount of Additional Protection, as well as the Insured’s age and underwriting classification. The amount of the premium also reflects the sex of the Insured except where state or federal law requires that premiums and other charges and values be determined without regard to sex. We send a notice to you not less than two weeks before each premium is due.
Policies that include Additional Protection are subject to a minimum premium that is equal to 70% of the premium for a Policy that consists solely of Minimum Guaranteed Death Benefit. The premium for the Additional Protection is two times the cost of term insurance (for the Insured’s age when the Policy was issued) as long as this amount in combination with the premium for the Minimum Guaranteed Death Benefit meets the 70% requirement. If this combination does not meet the 70% requirement, the premium for Additional Protection is increased to bring the total up to the 70% level. We apply the amount by which the premium is increased, after deductions, to increase the Policy Value. In most cases we will also guarantee the Additional Protection for a longer period. The premium rates for term insurance are set forth in the Policy. In addition to the premium required for the Minimum Guaranteed Death Benefit and any Additional Protection, the scheduled premium may include additional premium to purchase paid-up additional insurance or to increase the Policy Value. The scheduled premium will also include the premium required for any additional benefit included as part of the Policy.
We will reduce the additional premium included in the scheduled premium at any time upon your request. You may increase the additional premium included in the scheduled premium, or you may pay optional unscheduled additional premiums, at any time before the Policy Anniversary nearest to the Insured’s 85th birthday, subject to our insurability requirements and issue limits.
If the Policy includes Additional Protection, we may require an increased premium after the guaranteed period to prevent a reduction of the amount of Additional Protection. We determine the increased premium, if required, each year as of the date 25 days before the Policy Anniversary. You are entitled to pay the increased premium required to keep the Additional Protection from falling until the Insured reaches age 80, but this right terminates as of the first Policy Anniversary on which you do not pay the increased premium when it is due.
You may suspend payment of scheduled premiums, at your option, if, as of 25 days prior to the Policy Anniversary on or before the due date of the premium, (1) the Excess Amount equals or exceeds one year’s minimum premium, plus the premium for any additional benefit, and (2) the Policy Value exceeds the sum of the net single premium for the amount of insurance then in force, plus the present value of future charges for expenses, additional benefits, and any extra mortality. In addition, no withdrawals may have been made after a date 25 days prior to the previous Policy Anniversary. (See “Excess Amount.”) The minimum premium is the sum of the premiums for the Minimum Guaranteed Death Benefit and the Additional Protection. We will calculate the net single premium and the present value of future charges using the mortality basis for the cost of insurance charges with 6% interest. (See “Charges Against the Policy Value.”) While payment of premiums is suspended, certain charges ordinarily deducted from premiums will reduce the Policy Value instead. These charges are set forth in your Policy in the Table of Charges under Premium Suspension. You may
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resume payment of scheduled premiums as of any Policy Anniversary. You must resume payment of scheduled premiums as of a Policy Anniversary if the Excess Amount, as of 25 days prior to the Policy Anniversary, is determined to be less than one year’s minimum premium plus the premium for any additional benefit. You may pay unscheduled additional premiums while suspension of scheduled premiums is in effect, subject to our insurability requirements and issue limits.
The Policy provides for a grace period of 31 days for any premium that is not paid when due. The Policy remains in force during this period. If you pay a premium during the grace period, the values for the Policy will be the same as if you had paid the premium when it was due. If you do not pay the premium within the grace period, and the Policy does not qualify for premium suspension, the Policy will terminate as of the date when the premium was due and will no longer be in force, unless it is continued as paid-up insurance. (See “Paid-Up Insurance.”)
The following table shows representative annual premiums for a Policy with an initial Death Benefit amount of $400,000, divided equally between Minimum Guaranteed Death Benefit and Additional Protection, for males at three ages, where insureds are not substandard risks.
| Age at Issue |
Minimum Guaranteed Death Benefit |
Premium for Minimum Guaranteed Death Benefit |
Additional Protection |
Premium for Additional Protection |
Total Premium | ||||||||||
| SELECT or PREMIER NON-TOBACCO or PREFERRED NON-TOBACCO | |||||||||||||||
| 15 |
$ | 200,000 | $ | 1,292 | $ | 200,000 | $ | 588 | $ | 1,880 | |||||
| 35 |
200,000 | 2,610 | 200,000 | 1,010 | 3,620 | ||||||||||
| 55 |
200,000 | 6,618 | 200,000 | 3,320 | 9,938 | ||||||||||
| STANDARD PLUS or STANDARD PLUS NON-TOBACCO | |||||||||||||||
| 15 |
$ | 200,000 | $ | 1,406 | $ | 200,000 | $ | 608 | $ | 2,014 | |||||
| 35 |
200,000 | 2,874 | 200,000 | 1,118 | 3,992 | ||||||||||
| 55 |
200,000 | 7,196 | 200,000 | 4,428 | 11,624 | ||||||||||
| STANDARD or PREMIER TOBACCO or PREFERRED TOBACCO | |||||||||||||||
| 15 |
$ | 200,000 | $ | 1,612 | $ | 200,000 | $ | 740 | $ | 2,352 | |||||
| 35 |
200,000 | 3,362 | 200,000 | 1,310 | 4,672 | ||||||||||
| 55 |
200,000 | 8,650 | 200,000 | 6,380 | 15,030 | ||||||||||
The Death Benefit for a Policy includes the Minimum Guaranteed Death Benefit, any Additional Protection in effect, any Excess Amount, and any paid-up additional insurance. The amount payable under the Death Benefit is reduced by the amount of any Policy Debt outstanding and, if premiums are not paid on an annual basis, an adjustment for premiums used to purchase paid-up additional insurance that are due later in the Policy Year.
The Minimum Guaranteed Death Benefit you select when the Policy is issued will neither increase nor decrease, regardless of the investment experience of the Divisions where assets for the Policy are held, so long as you pay scheduled premiums when they are due and no Policy Debt is outstanding. In setting the premium rates for the Minimum Guaranteed Death Benefit, we have assumed that the Separate Account assets will grow at a net annual rate of 4% after adjusting for the Separate Account charges and the expenses of the Portfolios in which you invest. (See “Charges Against the Separate Account Assets.”) We bear the risk that the rate of growth will be less. A higher rate of growth results in an increase in the Policy Value.
The Additional Protection included in a Policy when it is issued will not increase by reason of investment experience more favorable than the assumed 4% net annual rate of growth. It will not decrease, regardless of investment experience, until expiration of the guaranteed period, so long as you pay scheduled premiums when they are due and no Policy Debt is outstanding. A condition for this guarantee is that you must use any dividends paid on the Policy to increase Policy Value unless the Policy has an Excess Amount. (See “Excess Amount.”) After the guaranteed period, the Additional Protection may be reduced unless the Policy Value exceeds the amount defined by the formula in the Policy. We calculate the amount of Policy Value, and the amount of increased premium required to prevent a reduction in the Additional Protection, 25 days before each Policy Anniversary. You may pay any increased premium required to prevent a reduction in the Additional Protection each year until the Policy Anniversary nearest the Insured’s 80th birthday, but this right terminates the first time you do not pay any required increased premium when it is due.
The Policy Value represents the cumulative Net Premiums for the Minimum Guaranteed Death Benefit and the Additional Protection, including any additional Net Premiums or Policy dividends which have been used to increase the Policy Value, adjusted for investment experience, less the cost of insurance which we deduct from the Policy Value on each Policy Anniversary, and any other charges. The investment performance of the Portfolios, as well as the charges and expenses under your Policy, may decrease your Policy Value and/or your Death Benefit. The Policy Value may exceed the amount required to support the Minimum Guaranteed Death Benefit and the Additional Protection. This may result from favorable investment experience or from additional premium or
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Policy dividends used to increase the Policy Value. The amount by which the Policy Value exceeds the amount needed to support the Minimum Guaranteed Death Benefit and the Additional Protection under a specified set of assumptions is called the Excess Amount. (See “Excess Amount.”) Any Excess Amount will increase the Death Benefit for the Policy, dollar-for-dollar, except as described in the next paragraph. The Policy Value and any Excess Amount change daily. The Policy Value and Excess Amount on the date of death will be used in the calculation of the Death Benefit.
We have designed the Policy to meet the definitional requirements for life insurance in Section 7702 of the Internal Revenue Code. (See “Tax Treatment of Policy Benefits.”) These rules require that the Death Benefit will never be less than the Policy Value divided by the net single premium per dollar of Death Benefit. The required difference between the Death Benefit and the Policy Value is larger at younger ages than at older ages. The Policy provides for an increase in the Death Benefit to the extent required to meet this requirement. After the Death Benefit has been increased to meet this requirement, an increase in the Policy Value will cause a greater than dollar-for-dollar increase in the Death Benefit, and a decrease in the Policy Value will cause a greater than dollar-for-dollar decrease in the Death Benefit.
The Death Benefit is increased by the amount of any paid-up additional insurance purchased with additional premium or Policy dividends. The amount and value of the paid-up additional insurance vary daily to reflect investment experience and are not guaranteed. The amount of any paid-up additional insurance is its value used as a net single premium at the Attained Age of the Insured.
The amount payable under the Death Benefit will be reduced by the amount of any Policy Debt. Subject to the terms and conditions of the Policy, the proceeds will be paid to a beneficiary or other payee after proof of the death of the Insured is received in our Home Office. The amount of proceeds will be determined as of the date of death. We will pay interest on the proceeds from that date until payment is made.
If the Company pays the Death Benefit in a lump sum, and the amount meets our criteria, the Company will pay the Death Benefit by establishing an interest-bearing account, called the Northwestern Access Fund, for beneficiaries in the amount of the Death Benefit less any Policy Debt. Account information, along with a book of drafts (which will function like a checkbook), will be sent to the beneficiary, and the beneficiary will have access to funds in the account simply by writing a draft for all or part of the amount of the Death Benefit (or other available balance), and depositing or using the draft as desired. When the draft is paid through the bank that administers the account for Northwestern Mutual, the bank will receive the amount the beneficiary requests as a transfer from the Company’s General Account. The Northwestern Access Fund is part of the Company’s General Account. Any interest paid within a Northwestern Access Fund may be taxable, so please consult your tax advisor. The Northwestern Access Fund is not a bank account, and it is not insured by the FDIC or any other government agency. As part of our General Account, the Northwestern Access Fund is backed by the financial strength of the Company, although it is subject to the claims of our creditors. The Company may make a profit on all amounts held in the Northwestern Access Fund. We may discontinue the Northwestern Access Fund at any time, with or without notice.
If a payment plan was not previously elected by the Owner and in lieu of a lump sum payment, Death Benefits, less any Policy Debt, may be paid under a payment plan selected by your beneficiary after the death of the Insured. Available payment plans include an interest income plan, installment income plans, and life income plans. The Owner may elect the payment plan while the Insured is living or, if the Insured is not the Owner, during the first 60 days after the Insured’s date of death. A payment plan that is elected by the Policy Owner will take effect on the date of death of the Insured if notice of election is received in our Home Office while the Insured is living. In all other cases, the payment plan will take effect on the date of receipt of the notice of election. If no payment plan is elected, the benefit is paid to the beneficiary with interest based on rates declared by the Company or as required by applicable state law on the date of death of the Insured.
Policy Value and Paid-Up Additional Insurance
We determine the Policy Value and the value of any paid-up additional insurance daily by separate calculations. An increase or decrease in the Policy Value has no effect on the value of any paid-up additional insurance, and an increase or decrease in the value of any paid-up additional insurance has no effect on the Policy Value. You may increase or decrease the amount of scheduled additional premium which you are paying to increase the Policy Value or to increase the amount of paid-up additional insurance, and you may change the allocation for applying this additional premium. You must make changes in the scheduled additional premium and its allocation by written request. We may require evidence of insurability if you increase the scheduled additional premium. We do not permit increases in the scheduled additional premium after the Policy Anniversary nearest the Insured’s 85th birthday.
You may transfer the value of paid-up additional insurance to increase the Policy Value by written request. This will generally result in a decrease in the total Death Benefit. You may not transfer Policy Value to the value of paid-up additional insurance.
Allocations to the Separate Account
We place the net scheduled annual premium in the Separate Account on each Policy Anniversary even if you are paying premiums other than on an annual frequency. With respect to those Premium Payments, we will process the premiums based upon the value of
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the units in the Divisions determined at the close of trading on the New York Stock Exchange (“NYSE”) (typically, 4:00 pm Eastern Time) for that day.
We will place net unscheduled premiums in the Separate Account as of the date they are received at a Network Office or at our Home Office, provided the request is received in good order prior to the close of trading on the NYSE. “Good order” means that your request meets all the requirements necessary for us to process it, including, but not limited to, insurability, underwriting, and MEC-limit requirements. We will generally process the net unscheduled premiums based upon the value of the units in the Divisions as of the close of trading on the NYSE. If we receive the net unscheduled premiums on or after the close of trading on the NYSE, we will process the net unscheduled premiums using the value of the units in the Divisions determined at the close of the next regular trading session of the NYSE. Net premiums are premiums less the deductions from premiums. (See “Deductions from Premiums.”)
You may change the allocation for future Net Premiums at any time by written request and the change will be effective for premiums placed in the Separate Account thereafter. Eligible Owners may also submit allocation requests via Northwestern Mutual Express (1-800-519-4665) or via our website at www.northwesternmutual.com. If you allocate any portion of a premium to a Division, the Division must receive at least 1% of that premium.
You may apportion the Separate Account assets supporting your Policy among as many as ten Divisions at any one time. We count the Money Market Division as one of the ten available Divisions if you are using it for any purpose, including dollar cost averaging.
Transfers Between Divisions Subject to the short-term and excessive trading limitations described below, you may change your allocation between Divisions and transfer accumulated amounts from one Division to another so long as you are invested in no more than ten Divisions at a time. In order to take full advantage of these features, you should carefully consider, on a continuing basis, which investment options are best suited to your long-term investment needs. See “Owner Inquiries” for more information on how you may change your allocation among Divisions. Your Financial Representative may provide us with instructions on your behalf involving the allocation and transfer of accumulated amounts among available Divisions, subject to our rules and requirements, including the restrictions on short-term and excessive trading discussed below.
We will make the transfer based upon the net valuation of units in the affected Division after our receipt of your request for transfer at our Home Office, provided it is in good order. “Good order” means that your request meets all the requirements necessary for us to process it. You may request the transfer in writing at our Home Office, via Northwestern Mutual Express (1-800-519-4665) or, if eligible, via our website at (www.northwesternmutual.com). The submission of transfer instructions by telephone or through our website (“Electronic Instructions”) must be made in accordance with our current procedures for Electronic Instructions. However, we are not required to accept Electronic Instructions, and we will not be responsible for losses resulting from transactions based on unauthorized Electronic Instructions, provided we follow procedures reasonably designed to verify the authenticity of Electronic Instructions. Please note that the telephone and/or electronic devices may not always be available. Any telephone or electronic device, whether it is yours, your service provider’s or your agent’s or ours, can experience outages or slowdowns for a variety of reasons, which may delay or prevent our processing of your request. Although we have taken precautions to limit these problems, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your transfer request by writing to our Home Office. We reserve the right to limit, modify, suspend or terminate the ability to make transfers via Electronic Instructions.
If we receive your request in good order for transfer before the close of trading on the NYSE (typically, 4:00 pm Eastern Time), your request will receive same-day pricing. If we receive your request for transfer on or after the close of trading on the NYSE, we will process the order using the value of the units in the Divisions determined at the close of the next regular trading session of the NYSE. Although no fee is presently charged, we reserve the right where allowed by state law to charge a fee that will cover the administrative costs of transfers. In addition, certain Portfolios in which the Divisions invest may impose redemption fees. These fees are described in the Portfolios’ prospectuses. Transfer requests must be in whole percentages and in amounts greater than or equal to 1% of Invested Assets or the request will not be processed. When a transfer is made from any Division, the resulting allocation of Invested Assets must be in whole percentages in all Divisions that have any Invested Assets as a result of the transfer.
Short-Term and Excessive Trading Short-term and excessive trading (sometimes referred to as “market timing”) may present risks to a Portfolio’s long-term investors, such as Owners and other persons who may have material rights under the Policy (e.g., beneficiaries), because it can, among other things, disrupt Portfolio investment strategies, increase Portfolio transaction and administrative costs, require higher than normal levels of cash reserves to fund unusually large or unexpected redemptions, and adversely affect investment performance. These risks may be greater for Portfolios that invest in securities that may be more vulnerable to arbitrage trading, including foreign securities and thinly traded securities, such as small cap stocks and non-investment grade bonds. These types of trading activities also may dilute the value of long-term investors’ interests in a Portfolio if it calculates its net asset value using closing prices that are no longer accurate. Accordingly, we discourage market timing activities.
To deter short-term and excessive trading, we have adopted and implemented policies and procedures which are designed to control abusive trading practices. We seek to apply these policies and procedures uniformly to all Owners. Any exceptions must be either expressly permitted by our policies and procedures or subject to an approval process described in them. We may also be prevented from uniformly applying these policies and procedures under applicable state or federal law or regulation. Because exceptions are
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permitted, it is possible that investors may be treated differently and, as a result, some may be allowed to engage in trading activity that might be viewed as market timing.
Among the steps we have taken to reduce the frequency and effect of these practices are monitoring trading activity and imposing trading restrictions, including the prohibition of more than twelve transfers among Divisions under a single Policy during a Policy Year. Multiple transfers with the same effective date made by the same Owner will be counted as a single transfer for purposes of applying the twelve transfer limitation. Further, an investor who is identified as having made a transfer in and out of the same Division, excluding the Money Market Division, (“round trip transfer”) in an amount in excess of $10,000 within fourteen calendar days will be restricted from making additional transfers after the third such round trip transfer until the next Policy Anniversary date, and sent a letter informing him or her of the restriction. Thereafter, the same investor will be similarly restricted after the second such round trip transfer. An Owner who is identified as having made one or more round trip transfers within thirty calendar days aggregating more than one percent (1%) of the total assets of the Portfolio underlying a Division, excluding the Money Market Division, will be sent a warning letter after the first such round trip transfer and will be restricted from making additional transfers until the next Policy Anniversary date after the second such round trip transfer. Thereafter, the same investor will be similarly restricted after the first such round trip transfer. These limitations do not apply to automatic asset transfers, scheduled or systematic transactions involving portfolio rebalancing, dollar cost averaging, to initial allocations or changes in future allocations. Once a Policy is restricted, we will allow one additional transfer into the Money Market Division until the next Policy Anniversary.
Policies such as yours (or other Policies supported by the Separate Account) may be purchased by a corporation or other entity as a means to informally fund the liabilities created by the entity’s employee benefit or similar plan. These Policies may be aggregately managed to match liabilities under such plans. Policies sold under these circumstances may be subject to special transfer restrictions. Namely, transactions involving portfolio rebalancing programs may be exempt from the twelve transfers per Policy year limitation where: (1) the purpose of the portfolio rebalancing program is to match the Policy to the entity’s employee benefit or similar plan; (2) the portfolio rebalancing program adequately protects against short-term or excessive trading; and (3) the portfolio rebalancing program is managed by a third party administrator that meets our requirements. We reserve the right to monitor or limit transactions involving portfolio rebalancing programs where we believe such transactions may be potentially harmful to a Portfolio.
We may change these policies and procedures from time to time in our sole discretion without notice; provided, however, Owners will be given advance, written notice if the policies and procedures are revised to accommodate market timing. Additionally, the Funds may have their own policies and procedures described in their prospectuses that are designed to limit or restrict frequent trading. Such policies may be different from our policies and procedures, and may be more or less restrictive. As the Funds may accept purchase payments from other investors, including other insurance company separate accounts on behalf of their variable product customers and retirement plans, we cannot guarantee that the Funds will not be harmed by any abusive market timing activity relating to the retirement plans and/or other insurance companies that may invest in the Funds. The Funds’ policies and procedures may provide for the imposition of a redemption fee and, upon request from the Fund, require us to provide transaction information to the Fund (including an Owner’s tax identification number) and to restrict or prohibit transfers and other transactions that involve the purchase of shares of a Portfolio. In the event a Fund instructs us to restrict or prohibit transfers or other transactions involving shares of a Portfolio, you may not be able to make additional purchases in a Division until the restriction or prohibition ends. If you submit a request that includes a purchase or transfer into such a restricted Division, we will consider the request “not in good order” and it will not be processed. You may, however, submit a new transfer request.
If we believe your trading activity is in violation of, or inconsistent with, our policies and procedures or otherwise is potentially disruptive to the interests of other investors, you may be asked to stop such activities, and future investments and allocations or transfers by you may be rejected without prior notice. Because we retain discretion to determine what action is appropriate in a given situation, investors may be treated differently and some may be allowed to engage in activities that might be viewed as market timing.
We intend to monitor events and the effectiveness of our policies and procedures in order to identify whether instances of potentially abusive trading practices are occurring. However, we may not be able to identify all instances of abusive trading practices, nor completely eliminate the possibility of such activities, and there may be technological limitations on our ability to impose restrictions on the trading practices of Owners.
Deductions from Premiums We deduct a charge from each premium for state premium taxes and a portion of our federal corporate taxes. Premium taxes vary from state to state and currently range from 0.0% to 3.5% of life insurance premiums. The charge is currently 2.25% of scheduled premiums due (or unscheduled premiums paid) prior to the Policy Anniversary in 2010, and 2.00% of subsequent premiums. We will charge the same percentage regardless of the state in which you live, which may be more or less than the percentage charged by your state of residence.
Due to a 1990 federal tax law change under the OBRA, as amended, insurance companies are generally required to capitalize and amortize certain acquisition expenses rather than currently deducting such expenses. Due to this capitalization and amortization, the corporate income tax burden on insurance companies has been affected. We make a charge of up to 1.25% against each Premium
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Payment to compensate us for corporate taxes. Currently, this charge is 1.25% for scheduled premiums due (or unscheduled premiums paid) prior to your Policy Anniversary in 2010, and 1.00% for subsequent premiums. We believe that this charge does not exceed a reasonable estimate of an increase in our federal income taxes resulting from a change in the Internal Revenue Code relating to deferred acquisition costs. The state premium tax charge and the OBRA expense charge may each vary in amount.
We deduct a charge, or sales load, of 4.5% for sales costs from each premium. We expect to recover our expenses of selling and advertising (“distribution expenses”) from this amount, over the period while the Policies are in force, and from the surrender charges described below. The amounts we deduct for costs in a Policy Year are not specifically related to distribution expenses incurred that year. To the extent that distribution expenses exceed the amounts deducted, we will pay the expenses from our other assets. These assets may include, among other things, any gain realized from the charge against the assets of the Separate Account for the mortality and expense risks we have assumed. (See “Charges Against the Separate Account Assets.”) To the extent that the amounts deducted for distribution expenses exceed the amounts needed, we will realize a gain.
We deduct an annual charge of $60 from premiums each year for administrative costs to maintain the Policy. These expenses include costs of premium billing and collection, processing claims, keeping records and communicating with Owners. We retain the right to increase this charge after 10 years, but it is guaranteed not to exceed $84 plus $0.12 per $1,000 of both the Minimum Guaranteed Death Benefit and the Additional Protection. We do not expect to profit from this charge.
We deduct an annual charge from premiums each of the first 10 years to compensate us for expenses, other than distribution expenses, incurred in issuing the Policy. These expenses include the costs of processing applications, medical examinations, determining insurability and establishing records. The annual amount of this charge is $24 plus $0.12 per $1,000 of Minimum Guaranteed Death Benefit and Additional Protection. If you surrender the Policy before these charges have been deducted for 10 years, the remaining charges will be reflected in the administrative surrender charge. (See “Surrender Charges.”)
We deduct an annual charge of $0.12 per $1,000 of Minimum Guaranteed Death Benefit from premiums each year to compensate us for the risk we have assumed by guaranteeing the Minimum Guaranteed Death Benefit.
To determine the net annual premium, we will also deduct any extra amounts we charge for Insureds who qualify as substandard risks, plus the cost of any additional benefits purchased with the Policy.
Charges Against the Policy Value We deduct a cost of insurance charge from the Policy Value on each Policy Anniversary. We determine the amount by multiplying the net amount at risk by the cost of insurance rate. The net amount at risk is the Projected Insurance Amount, discounted at a net annual rate of 4%, less the Policy Value. The Projected Insurance Amount is the amount of insurance at the end of the Policy Year, assuming that the Policy Value increases by the 4% net annual growth rate assumed in constructing the Policy. The cost of insurance rate reflects the Attained Age of the Insured. For Select, Premier Non-Tobacco and Preferred Non-Tobacco risks, the cost of insurance rate is based on the Commissioners 1980 Standard Ordinary Non-Smoker Mortality Tables. For Standard, Premier Tobacco and Preferred Tobacco risks, the cost of insurance rate is based on the Commissioners 1980 Standard Ordinary Smoker Mortality Tables. For other risks, the cost of insurance rate is based on the Commissioners 1980 Standard Ordinary Mortality Tables. The cost of insurance rates are included in the Policy. All things being equal, higher Issue Ages and/or worse underwriting classifications will result in higher cost of insurance rates, and men will pay higher rates than women. We also deduct a cost of insurance charge from the Cash Value of any paid-up additional insurance on each Policy Anniversary. If we receive an unscheduled premium on a day other than a Policy Anniversary and the net amount at risk increases as a result, we will deduct a cost of insurance charge on that day, reflecting the increase in the net amount at risk and the portion of the Policy Year remaining. Our revenues attributable to this charge may exceed our costs attributable to this charge.
While payment of premiums is suspended, a portion of the annual charges which we would ordinarily deduct from premiums will be deducted from the Policy Value instead. We will also make this deduction on the Policy Anniversary each year.
We will also reduce the Policy Value by any surrender charges, administrative charges or decrease in Policy Debt that may result from a withdrawal, a decrease in the face amount of insurance, or a change to variable benefit paid-up insurance.
Charges Against the Separate Account Assets There is a daily charge to the Separate Account for the mortality and expense risks that we have assumed. The current charge is at the annual rate of .45% of the assets of the Separate Account, not to exceed a maximum annual rate of .60%. The mortality risk is that Insureds may not live as long as we estimated. The expense risk is that expenses of issuing and administering the Policies may exceed the estimated costs, including other costs such as those related to marketing and distribution. We will realize a gain from this charge to the extent it is not needed to provide benefits and pay expenses under the Policies, in which case the gain may be used for any Company purpose. The actual mortality and expense experience under the Policies will be a factor used in determining dividends. (See “Annual Dividends.”)
The Policies provide that a charge for taxes may be made against the assets of the Separate Account. We are not currently making a separate daily charge on assets for such taxes. The Portfolios in which the assets that support your Policy are invested also bear expenses which reduce the investment rate of return. (See “Fee and Expense Tables—Annual Portfolio Operating Expenses” and attached Fund prospectuses.)
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Transaction Charges The Policy provides for a fee of up to $25 for a transfer of assets among the Divisions and for a fee of up to $25 for a withdrawal of Excess Amount. We are currently waiving these charges.
You may have the option of receiving funds via wire transfer or priority mail. Currently, a fee of $25 is charged for wire transfers (up to $50 for international wires) and a $15 fee (up to $45 for next day, a.m. delivery) for priority mail. These fees are to cover our administrative costs or other expenses. We may discontinue the availability of these options at any time, with or without notice.
Surrender Charges If you surrender the Policy before you have paid the premium that is due at the beginning of the fifteenth Policy Year, we will deduct a surrender charge from the Policy Value. Similarly, we will deduct a surrender charge on a change to paid-up insurance. (See “Paid-Up Insurance.”) A table of surrender charges is in the Policy.
The surrender charge consists of an administrative surrender charge and a premium surrender charge. The administrative surrender charge is equal to the sum of the issue expense charges which we have not deducted. The administrative surrender charge in the first Policy Year is $216, plus $1.08 per $1,000 of Minimum Guaranteed Death Benefit and Additional Protection. This charge grades down linearly each year as you pay the premium (or payment of premiums is suspended) and is zero after you have paid the premium that is due at the beginning of the tenth Policy Year (or it is suspended).
The premium surrender charge is a percentage (shown in the table below) of the surrender charge base. If payment of the premium for a Policy Year has been suspended, the premium surrender charge percentage will be as if you had paid the annual premium. During the first five Policy Years, if you pay premiums more frequently than annually, we will adjust the premium surrender charge percentages to reflect the actual period for which you have paid premiums.
If none of the Premium Payments during the first five Policy Years have been suspended, the surrender charge base equals the sum of an annual premium for the Minimum Guaranteed Death Benefit (exclusive of the Policy fee and exclusive of any charge for extra mortality) plus a term insurance premium for the initial amount of Additional Protection.
If any of the Premium Payments during the first five Policy Years have been suspended, the surrender charge base equals the lesser of (1) the sum of an annual premium for the Minimum Guaranteed Death Benefit (exclusive of the Policy fee and exclusive of any charge for extra mortality) plus a term insurance premium for the initial amount of Additional Protection, and (2) the sum of the total premiums paid (exclusive of any premiums for additional benefits purchased with the Policy, and premiums for extra mortality, and any extra amount for premiums paid more often than annually) divided by the number of years (including fractions), but not more than five, for which premiums have been paid or suspended.
| For Policies surrendered after payment at the beginning of year |
Premium Surrender Charge Percentage | |||||
| Issue age 65 and under |
Issue age 75 | |||||
| 1 | 24% | 24% | ||||
| 2 | 28% | 25.5% | ||||
| 3 | 32% | 27% | ||||
| 4 | 36% | 28.5% | ||||
| 5 through 10 | 40% | 30% | ||||
| 11 | 32% | 24% | ||||
| 12 | 24% | 18% | ||||
| 13 | 16% | 12% | ||||
| 14 | 8% | 6% | ||||
| 15 and later | 0% | 0% | ||||
For Issue Ages 66 through 74, the percentages are determined by linear interpolation between the percentages shown.
For a Policy that has a Minimum Guaranteed Death Benefit of $50,000 or more, the surrender charge will not exceed $41.16 per $1,000 of Minimum Guaranteed Death Benefit. For a Policy that has a Minimum Guaranteed Death Benefit of $100,000 or more, issued for an Insured ages 15-59, the surrender charge will not exceed $22.86 per $1,000 of Minimum Guaranteed Death Benefit. The surrender charge could equal or exceed the Policy Value but we will not apply the surrender charge to the value of any paid-up additional insurance.
Partial Surrenders We will permit partial surrenders of a Policy so long as the Policy that remains meets the regular minimum size requirements. A partial surrender will cause the Policy to be split into two Policies. One Policy will be surrendered; the other will continue in force on the same terms as the original Policy, except that the premiums will be based on the reduced amount of insurance. You will receive a new Policy document. The Cash Value and the Death Benefit will be proportionately reduced. We will allocate reductions among the Divisions in proportion to the amounts in the Divisions. We will make a deduction from the Policy proceeds for a proportionate part of the surrender charge (based on the change in the face amounts) if a partial surrender takes place before you have paid the scheduled premium that is due at the beginning of the fifteenth Policy Year.
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Expenses of the Portfolios The investment performance of each Division reflects all expenses borne by the corresponding Portfolio. (See “Fee and Expense Tables— Range of Total Annual Portfolio Operating Expenses” and the attached mutual fund prospectuses.)
Guarantee of Premiums, Deductions and Charges
We guarantee that the premiums for the Minimum Guaranteed Death Benefit and the maximum charge for mortality and expense risks will not increase over time. These amounts will not increase regardless of future changes in longevity or increases in expenses.
The Cash Value for the Policy will change daily in response to investment results. No minimum Cash Value is guaranteed. The Cash Value is equal to the Policy Value plus the value of any paid-up additional insurance, reduced by any Policy Debt outstanding and the surrender charge. If you are not paying premiums on an annual basis, we reduce the Cash Value for any premiums due later in the Policy Year.
We determine the Cash Value for a Policy at the end of each valuation period (typically 4:00 pm Eastern Time each business day). Each business day, together with any non-business days before it, is a valuation period. A business day is any day on which the NYSE is open for trading. In accordance with the requirements of the 1940 Act, we may also determine the Cash Value for a Policy on any other day on which there is sufficient trading in securities to materially affect the value of the securities held by the Portfolios.
You may surrender your Policy for the Cash Value at any time during the lifetime of the Insured. Alternatively, you may stop paying premiums when due and request that we apply the Cash Value to provide a reduced amount of fixed or variable paid-up insurance. (See “Paid-Up Insurance.”) Surrender proceeds may be paid under a payment plan requested by the Owner at the time of surrender. Available payment plans include an interest income plan, installment income plans, and life income plans.
The Policy is eligible to share in the divisible surplus, if any, of the Company. Each year we determine, in our sole discretion, the amount and appropriate allocation of divisible surplus. Divisible surplus added to your Policy is referred to as a “dividend”. The Policy’s share, if any, will be credited as a dividend on the Policy Anniversary. There is no guaranteed method or formula for the determination or allocation of divisible surplus. The Company’s approach is subject to change. There is no guarantee of a divisible surplus. Even if there is a divisible surplus, the payment of a dividend on the Policy is not guaranteed.
Dividend illustrations published at the time a life insurance policy is issued reflect the actual recent experience of the issuing company with respect to investment earnings, mortality and expenses. State law generally prohibits a company from projecting or estimating future results.
If you receive dividends, you may use them to increase the Policy Value. If the Policy has Additional Protection in force, the dividends will be used to increase the Policy Value unless the Policy has Excess Amount. (See “Excess Amount.”) If the Policy has Excess Amount, or if no Additional Protection is in force, you may use dividends to purchase variable benefit paid-up additional insurance or to pay premiums, or you may receive the dividend in cash. We will use dividends to increase the Policy Value if you give us no direction. If the Policy is in force as fixed benefit paid-up insurance, you may use dividends to purchase fixed benefit paid-up additional insurance or you may receive the dividend in cash. If the Policy is in force as variable benefit paid-up insurance, you may use the dividends to increase Policy Value or you may receive the dividend in cash.
Policy Loans, Automatic Premium Loans, and Withdrawals
Described below are certain terms and conditions that apply when you borrow or withdraw amounts under the Policy. For information on the tax treatment of loans and withdrawals, see “Tax Treatment of Policy Benefits” and consult with your tax advisor.
Policy Loans You may borrow an amount that, when added to existing Policy Debt, is not more than the loan value. The loan value is 90% of the sum of the Cash Value and any existing Policy Debt on the date of the loan. You may take loan proceeds in cash or you may apply them to pay premiums on the Policy. We normally pay the loan proceeds within seven days after we receive a proper loan request at our Home Office. Eligible Owners may also submit loan requests via the Variable Life Service Center (1-866-424-2609). Written and telephone requests will be processed based on the date and time they are received in the Home Office, provided the request is received in good order. Based on our administrative procedures, you may have the option of receiving funds via wire transfer or priority mail, and we may charge a fee for this service to cover our administrative costs. We may postpone payments of loans under certain conditions described in the “Deferral of Determination and Payment” section of this prospectus.
Automatic Premium Loans If you have chosen the Automatic Premium Loan provision or it is currently in effect for your Policy, and your Policy does not qualify for suspension of Premium Payments, a premium loan will automatically be made to pay an overdue
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premium if the premium is less than the maximum amount available for a new loan. Automatic premium loans are effective as of the premium due date. A confirmation statement will be sent each time an automatic premium loan occurs.
Interest on a loan accrues at an annualized rate of interest. We add unpaid interest to the amount of the loan. The Policy’s Cash Value is reduced by the amount of the loan. If the Cash Value decreases to zero, the Policy will terminate unless a sufficient portion of the loan is repaid. We will send you a notice at least 31 days before the termination date. The notice will show how much you must repay to keep the Policy in force.
General Loan Terms You select the loan interest rate. A specified annual effective rate of 5% is one choice. The other choice is a variable rate based on a corporate bond yield index. We will adjust the variable rate annually, but it will not be less than 5%.
We will take the amount of a loan, including interest as it accrues, from the Divisions in proportion to the amounts in the Divisions. We will transfer the amounts withdrawn to our General Account and will credit those amounts on a daily basis with an annual earnings rate equal to the loan interest rate less a charge for the mortality and expense risks we have assumed and for expenses, including taxes. The aggregate charge is currently at the annual rate of .90% for the 5% specified loan interest rate and .90% for the variable loan interest rate. For example, the earnings rate corresponding to the specified 5% loan interest rate is currently 4.10%.
A loan, even if it is repaid, will have a permanent effect on the Policy Value and Cash Value because the amounts borrowed will not participate in the Separate Account’s investment results while the loan is outstanding. The effect may be either favorable or unfavorable depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions.
The Death Benefit will also be reduced by the amount of any Policy Debt outstanding. If you surrender or exchange the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan, to the extent it has not previously been taxed, will be considered as an amount you received and taxed accordingly.
Except when the Policy is in force as fixed benefit paid-up insurance, we will allocate a loan between Policy Value and variable paid-up additional insurance in proportion to the amount of Cash Value attributable to each.
You may repay a loan, and any accrued interest outstanding, in whole or in part, at any time while the Insured is alive. If we receive a payment without specific instructions, we will first apply the payment to any premium due, with any remaining amount being applied to any outstanding loans. Payments in excess of outstanding debt and premiums due will be returned. Except as described below, if we receive your loan payments before the close of trading on the NYSE, we will credit payments as of the date we receive them and transfer them from our General Account to the Divisions, in proportion to the amounts in the Divisions, as of the same date. If we receive your loan payments on or after the close of trading on the NYSE, we will credit payments as of the close of the next regular trading session of the NYSE and transfer them from our General Account to the Divisions, in proportion to the amounts in the Divisions, as of the date we credit the payment. Policy loan payments received within 34 days after the loan interest billing date will be credited as of the loan interest billing date. Automatic premium loan payments received up to 66 days after the loan interest billing date will be credited as of the Policy Anniversary, depending on your premium payment schedule. We will send you a notice indicating your loan interest billing date.
Withdrawals You may make a withdrawal if the Excess Amount is sufficient. (See “Excess Amount.”) A withdrawal may neither decrease the Excess Amount to less than the surrender charge which would apply if the Policy were surrendered nor reduce the loan value to less than any Policy Debt outstanding. A maximum of four withdrawals are permitted per Policy Year. The minimum amount for withdrawals is $250. An administrative charge of up to $25 may apply, but we are currently waiving that charge. We will allocate withdrawals in proportion to the amounts in the Divisions.
A withdrawal of Policy Value decreases the Death Benefit by the same amount. If the Death Benefit for a Policy has been increased to meet the federal tax requirements for life insurance, the decrease in the Death Benefit caused by a subsequent withdrawal may be larger than the amount of the withdrawal.
Required Unscheduled Additional Premium If cumulative withdrawals exceed the cumulative additional premiums which have been used to increase the Policy Value, with both withdrawals and premiums increased by 4% annual interest, subsequent unfavorable investment experience may require you to pay an unscheduled additional premium to increase Policy Value. If the additional premium is not paid and there is sufficient Policy Value, the Paid-Up or Automatic Premium Loan provision on your Policy will take effect. (See “Paid-Up Insurance” and “Policy Loans, Automatic Premium Loans and Withdrawals.”) If the required unscheduled additional premium is greater than the maximum premium loan available, you may request a partial loan and submit a premium payment for the remaining balance due. The due date for any unscheduled additional premium is the Policy Anniversary following written notice to you. Required unscheduled additional premium payments will be credited the date they are received if the date/time stamp is before market close (typically, 4:00 p.m. Eastern Time). Automatic Premium Loans used to pay Required Unscheduled Additional Premium will be credited as of the Policy Anniversary.
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The policy will lapse to fixed-benefit paid-up insurance (see “Paid-Up Insurance”) if the required premium is not received, if the Automatic Premium Loan provision is not in effect, or if there is insufficient Policy Value for an automatic premium loan. If you meet our requirements, the Death Benefit may be reduced in lieu of payment of the unscheduled additional premium.
The Excess Amount is the amount by which the Policy Value exceeds the Tabular Value for the sum of the Minimum Guaranteed Death Benefit and any Additional Protection in effect. The Tabular Value is an amount equal to a Policy Value calculated assuming (1) a whole life Policy with a face amount equal to the sum of the Minimum Guaranteed Death Benefit and the Additional Protection, (2) all premiums are paid when due, (3) no additional premiums or dividends are used to increase Policy Value, (4) a 4% level annual net rate of return, and (5) maximum Policy charges apply. If you are not paying premiums on an annual basis, the Excess Amount is reduced for any premiums due later in the Policy Year. Among other things, the Excess Amount determines amounts available for withdrawals. (See “Policy Loans, Automatic Premium Loans, and Withdrawals.”)
The Paid-Up Insurance provision on your Policy will take effect automatically if you do not pay a premium when due or within the 31-day grace period and do not qualify for suspension of Premium Payments or you have elected to have premiums paid by Automatic Premium Loan and your Policy no longer has sufficient value for the loan. The Policy will continue in force as a reduced amount of fixed benefit paid-up insurance. Alternatively you may select a reduced amount of variable benefit paid-up insurance. You must make this selection before or during the grace period. If the Paid-Up provision on your Policy takes effect before you have paid the Premium that is due at the beginning of the fifteenth year, we will deduct surrender changes from the Policy Value. (See “Deductions and Charges – Surrender Charges.”)
If the Policy is in force as a reduced amount of fixed benefit paid-up insurance, we will transfer the amount of the Cash Value from the Separate Account to our General Account at the conclusion of the 31 day grace period. Thereafter the Policy will not participate in the Separate Account’s investment results unless the Policy is subsequently reinstated. (See “Reinstatement.”) The minimum Cash Value for fixed benefit paid-up insurance is $1,000. If the Cash Value is less than $1,000 as of the last day of the grace period, we will treat the Policy as surrendered. You may select variable benefit paid-up insurance only if the Cash Value of the Policy is at least $5,000.
We determine the amount of paid-up insurance by applying the amount of Cash Value plus any Policy Debt as a net single premium at the Attained Age of the Insured. Paid-up insurance has cash and loan values. For fixed benefit paid-up insurance, these amounts are guaranteed. For variable paid-up insurance, neither the Death Benefit nor the Cash Value is guaranteed. Paid-up insurance remains in force for the lifetime of the Insured unless you surrender the Policy or the Policy terminates. While the Policy is in force as either fixed or variable benefit paid-up insurance, the Minimum Guaranteed Death Benefit and any Additional Protection will not be in effect. Any Policy Debt and the Policy loan interest rate will continue, and interest on the Policy loan will continue to accrue. (See “Policy Loans, Automatic Premium Loans, and Withdrawals.”)
If a premium is due and remains unpaid at the end of the grace period, and the Policy does not qualify for premium suspension, the Policy will lapse (i.e., terminate as of the date the premium was due and no longer be in force), unless it is continued as paid-up insurance. The Policy may be reinstated after lapse while the Insured is alive within three years after the premium due date. The Insured must provide satisfactory evidence of insurability unless reinstatement takes place within 31 days after the end of the grace period and while the Insured is alive. We may require a substantial payment. Upon reinstatement, your Policy Date will not change. Therefore, fees and charges that vary by Policy year will take into account the period of time your Policy was terminated. In addition, following reinstatement the Policy will have the same Minimum Guaranteed Death Benefit, Additional Protection, Policy Value and variable paid-up additional insurance as if: minimum premiums had been paid when due; investment earnings for all Divisions, less charges against the Separate Account, had been credited at an annual effective rate of 4% for the period from the due date of the overdue premium to the date of reinstatement; and loan interest, less charges by the Company for expenses and taxes, had been credited to the Policy Value and to the Cash Value of variable paid-up additional insurance at an annual effective interest rate of 4% from the due date of the overdue premium until the date of reinstatement. We will make an adjustment for any Policy Debt or the debt may be reinstated. If a surrender charge was assessed at the time of lapse, the Policy Value when a Policy is reinstated will not reflect a reduction for such surrender charge. The same surrender charge schedule in your Policy will apply upon reinstatement.
A reinstatement may have important tax consequences. If you contemplate any such transaction you should consult a qualified tax adviser.
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Reinvestments after Surrender or Withdrawal
While Owners have no right to reinvestment after a surrender or withdrawal, we may, at our sole discretion, permit such reinvestments as described in this paragraph. In special limited circumstances, we may allow payments into the Policy in the form of returned surrender proceeds in connection with a request to void a surrender or a withdrawal if the request is received by the Company within a reasonable time after the surrender or withdrawal proceeds are mailed. These payments may be processed with a refund of any surrender charge or withdrawal fee previously assessed at the time of surrender or withdrawal and without a sales load. The period for which we will accept requests for the return of surrender or withdrawal proceeds may vary in accordance with our administrative procedures. The returned surrender or withdrawal proceeds will be reinvested at the unit value next determined for each Division after our receipt of the reinvestment request in good order at our Home Office, including, among other things, the return of surrender or withdrawal proceeds, satisfactory evidence of insurability, and any Premium Payments due. If we receive your request before the close of trading on the NYSE (typically, 4:00 pm Eastern Time), your request will receive same-day pricing. If we receive your request on or after the close of trading on the NYSE, we will process the order using the value of the units in the Divisions determined at the close of the next regular trading session of the NYSE. Proceeds will be applied to the same Divisions from which the surrender or withdrawal was made. Depending on the Insured’s underwriting classification, we may not accept the reinvestment or we may accept the reinvestment with different charges and expenses under the Policy. We may refuse to process reinvestments where it is not administratively feasible. Decisions regarding requests for reinvestment will take into consideration differences in costs and services and will not be unfairly discriminatory. Policies with reinvested surrender or withdrawal proceeds will have the same Minimum Guaranteed Death Benefit, Additional Protection, Policy Value, variable paid-up additional insurance, and surrender charge schedule as if the proceeds had not been surrendered or withdrawn, except that values will reflect the fact that amounts were not invested in the Separate Account during the period of time the surrender or withdrawal proceeds were not in the Policy as well as any changes in charges and expenses due to a change in underwriting classification. We will make an adjustment for any Policy Debt or the debt may be reinstated.
Right to Exchange for a Fixed Benefit Policy
You may exchange a Policy for a whole life insurance policy with benefits that do not vary with the investment experience of the Separate Account (“Fixed Benefit Policy”). You may elect the exchange at any time within twenty-four months after the issue date of the Policy provided premiums are duly paid. We do not require evidence of insurability. The Fixed Benefit Policy will be on the life of the same Insured and will have the same initial guaranteed Death Benefit, Policy Date and Issue Age. The exchange will be subject to an equitable cash adjustment, which will recognize the investment performance of the Policy through the effective date of the exchange, and may have tax consequences. An exchange will be effective when we receive a proper written request, as well as the Policy, and any amount due on the exchange.
In addition, you may exchange a Policy for a Fixed Benefit Policy if, at any time, a Fund changes its investment adviser or if there is a material change in the investment policies of a Portfolio. You will be given notice of any such change and will have 60 days to make the exchange.
Any Policy change that you request is subject to our then current insurability and processing requirements. Processing requirements may include, for example, completion of certain forms and satisfying certain evidentiary requirements.
If the Policy is changed or modified, we may make appropriate endorsements to the Policy, and we may require you to send your Policy to our Home Office for endorsement. Any modification or waiver of our rights or requirements under the Policy must be in writing and signed by an officer of the Company. No agent or other person may bind us by waiving or changing any provision contained in the Policy.
Upon notice to you, we may modify the Policy:
| • | to conform the Policy, our operations, or the Separate Account’s operations to the requirements of any law (including any regulation issued by a government agency) to which the Policy, the Company, or the Separate Account is subject; |
| • | to assure continued qualification of the Policy as a life insurance contract under the federal tax laws; |
or
| • | to reflect a change in the Separate Account’s operation. |
Owner The Owner is identified in the Policy. The Owner may exercise all rights under the Policy while the Insured is living. Ownership may be transferred to another. Written proof of the transfer must be received by Northwestern Mutual at its Home Office.
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In this prospectus “you” means the Owner or prospective purchaser of a Policy. Generally, only Owners are entitled to important information about the Policy. Other persons, such as beneficiaries or payors, are entitled to only limited information.
Beneficiary The beneficiary is the person to whom the Death Benefit is payable. The beneficiary is named in the Application. You may change the beneficiary in accordance with the Policy provisions.
Incontestability We will not contest insurance under the Policy after the insurance has been in force during the lifetime of the Insured for two years from the Date of Issue or two years from the effective date of a reinstatement. If there is an increase in insurance because of an increase in scheduled premiums or payment of an unscheduled premium, and the increase was subject to insurability requirements, the increase will not be contestable after it has been in force during the lifetime of the Insured for two years from the date of issuance of the increase.
Suicide If the Insured dies by suicide within one year from the Date of Issue, the amount payable under the Policy will be limited to the premiums paid, less the amount of any Policy Debt and withdrawals and less the Cash Value of any variable paid-up insurance surrendered.
Misstatement of Age or Sex If the age or sex of the Insured has been misstated, we will adjust benefits under a Policy to reflect the correct age and sex.
Collateral Assignment You may assign a Policy as collateral security. We are not responsible for the validity or effect of a collateral assignment and will not be deemed to know of an assignment before receipt of the assignment in writing at our Home Office.
Optional Benefits If available in your state, there are two optional benefits available for purchase under the Policy: (1) a Waiver of Premium Benefit; and (2) an Additional Purchase Benefit.
Subject to the terms and conditions of the benefit, the Waiver of Premium Benefit waives the payment of all premiums that come due during the total disability of the Insured if the disability is due to accident or sickness and it begins on or before the Policy Anniversary nearest the Insured’s 60th birthday. If the disability occurs after the Policy Anniversary nearest the Insured’s 60th birthday, the benefit waives the payment of all premiums that come due during the total disability of the Insured until the Policy Anniversary nearest the Insured’s 65th birthday.
Subject to the terms and conditions of the benefit, the Additional Purchase Benefit guarantees the right to buy more insurance without proof of insurability. If you select one or both of these optional benefits, you will be subject to a separate charge. (See “Periodic Charges Other than Fund Operating Expenses.”) Any charge will continue to be assessed (1) as long as the benefit remains in force; or (2) until you decide you no longer need the benefit and let us know in writing at our Home Office. Once the Policy has been issued, an optional benefit may be issued only upon mutual agreement.
Benefit Payment Plans The Policy provides a variety of payment plans for Policy benefits. A Northwestern Mutual Financial Representative authorized to sell the Policies can explain these provisions on request.
Deferral of Determination and Payment So long as premiums have been paid when due, we will ordinarily pay Policy benefits within seven days after we receive all required documents at our Home Office. However, we may defer determination and payment of benefits during any period when it is not reasonably practicable to value securities because the NYSE is closed, or the SEC, by order, either has determined that an emergency exists or permits deferral of the determination and payment of benefits for the protection of Owners.
If you have submitted a check or draft to our Home Office, we have the right to defer payment of surrender, partial surrender, withdrawal, Death Benefit or loan proceeds, or payment plan benefits until the check or draft has been honored.
If a Policy is in force as fixed benefit paid-up insurance, we have the right to defer payment of the Cash Value for up to six months from the date of a Policy loan or surrender. If payment on surrender is deferred for 30 days or more, we will pay interest at an annual effective rate of 4%.
If mandated under applicable law, we may be required to block an Owner’s account and thereby refuse to pay any requests for transfer, withdrawal, partial surrender, surrender, loans, or Death Benefits, until instructions are received from the appropriate regulator. We may also be required to provide additional information about an Owner and an Owner’s account to government regulators.
As long as the Separate Account continues to be registered as a unit investment trust under the 1940 Act, and as long as Separate Account assets of a particular Division are invested in shares of a given Portfolio, we will vote the shares of that Portfolio held in the Separate Account in accordance with instructions we receive from Owners. Periodic reports relating to the Portfolios, proxy material,
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and a form on which one can give instructions with respect to the proportion of shares of the Portfolio held in the Separate Account corresponding to the Owner’s Policy Value, will be made available to the Owner(s). We will vote shares for which no instructions have been received and shares held in our General Account in the same proportion as the shares for which instructions have been received from Owners. The effect of such proportional voting is that a small number of Owners may control the outcome of a particular vote.
Substitution of Fund Shares and Other Changes
If, in our judgment, a Portfolio or Fund becomes unsuitable for continued use with the Policies because of a change in investment objectives or restrictions, we may substitute shares of another Portfolio or Fund or another mutual fund. Any substitution of shares will be subject to any required approval of the SEC, the Wisconsin Commissioner of Insurance or other regulatory authority. We have also reserved the right, subject to applicable federal and state law, to operate the Separate Account or any of its Divisions as a management company under the 1940 Act, or in any other form permitted, or to terminate registration of the Separate Account if registration is no longer required, and to change the provisions of the Policies to comply with any applicable laws.
If we take any of these actions, we may make an appropriate endorsement of your Policy and take other actions to carry out what we have done.
Reports and Financial Statements
For each Policy Year, you will receive a statement showing the Death Benefit, Cash Value and any Policy loan (including interest charged) as of the anniversary date. We will also send you a confirmation statement when you pay the annual premium. These statements will show your apportioned amounts among the Divisions. The Invested Assets may exceed the Cash Value of your Policy, because the Cash Value is reduced by the amount of any applicable surrender charge and any premiums due later in the Policy Year. We will also send you a confirmation statement when you transfer among Divisions, take a Policy loan, or surrender the Policy. The annual statement and confirmation statements will show the apportionment of Invested Assets among the Divisions. If the Policy is in force as fixed benefit paid-up insurance, statements and reports will be limited to an annual Policy statement showing the Death Benefit, Cash Value and any Policy loan.
Annually, we will send you a report containing financial statements of the Separate Account and, semi-annually, we will send you reports containing financial information and schedules of investments for the Portfolios underlying the Divisions to which your Invested Assets are allocated. The financial statements of the Company appear in the Statement of Additional Information. To receive a copy of the Annual Report, Semi-Annual Report and/or the Statement of Additional Information, call 1-866-424-2609.
A reduced minimum amount applied for Policies where the insurance involved an employer-sponsored benefit plan or arrangement. The sum of the Minimum Guaranteed Death Benefit and the Additional Protection was required to be at least $10,000, of which the Minimum Guaranteed Death Benefit must have been at least $1,000. The premium for the Additional Protection is two times the cost of term insurance for the Insured’s age when the Policy was issued. Premium rates for term insurance are set forth in the Policy.
These Policies for employers may include a provision to permit the amount of Additional Protection to increase after issue. Any such increase amount must be based on the terms of the benefit plan or arrangement and may not be subject to the discretion of the Insured or the Insured’s beneficiary. A description of the method of determining the amount of any increase is included in the Policy. Changes to the amount of Additional Protection will be effective on Policy anniversaries. The surrender charge and all charges for issue and administrative expenses will be based on the Minimum Guaranteed Death Benefit and the initial amount of Additional Protection.
For certain situations where the insurance involves an employer-sponsored benefit plan or arrangement, federal law and the laws of certain states may require that premiums and annuity rates be determined without regard to sex. Special Policies were available for this purpose. You are urged to review any questions in this area with qualified counsel.
To reduce costs, we may send only a single copy of the same disclosure document(s) (such as prospectuses, prospectus supplements, reports, announcements, proxy statements, notices, and information statements) to each consenting household (rather than sending copies to each Owner residing in a household). If you are or become a member of such a household, you can revoke your consent to “householding” at any time, and can begin receiving your own copy of such disclosure documents by calling us at 1-866-424-2609.
Northwestern Mutual, like other life insurance companies, is generally involved in litigation at any given time. Although the outcome of any litigation cannot be predicted with certainty, we believe that, as of the date of this prospectus, there are no pending or threatened lawsuits that will have a materially adverse impact on the ability of Northwestern Mutual to meet its obligations under the
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Policy, on the Separate Account, or on Northwestern Mutual Investment Services, LLC, the principal underwriter for the Separate Account, and its ability to perform its duties as underwriter for the Separate Account.
If eligible, you may get up-to-date information about your Policy at your convenience with your Policy number and your Personal Identification Number (“PIN”). Call Northwestern Mutual Express toll-free at 1-800-519-4665 to review Policy values and unit values, transfer among Divisions, change the allocation and obtain performance information. With your ID and password, you can also visit our website (www.northwesternmutual.com) to access performance information, forms for routine service, and daily Policy and unit values for Policies you own. Eligible Owners may also set up certain electronic payments, transfer accumulated amounts among Divisions and change the allocation of future contributions online, subject to our administrative procedures. For enrollment information, please visit our website (www.northwesternmutual.com). If you have questions about surrendering your Policy, please call your Financial Representative or the Variable Life Service Center at 1-866-424-2609. To file a claim, please call your Financial Representative or Life Benefits at 1-800-635-8855.
Automatic Dollar-Cost Averaging
With Dollar-Cost Averaging, you can arrange to have a regular amount of money (either a fixed dollar amount or a fractional amount) automatically transferred monthly from the Money Market Division into the Division(s) you have chosen. Transferred amounts must be allocated in whole percentages. (See “Allocations to the Separate Account – Transfers Between Divisions.”) Transfers will end either when the amount in the Money Market Division is depleted or when you submit the appropriate form to our Home Office to stop such transfers, whichever is earlier. There is no charge for the Dollar-Cost Averaging. We reserve the right to modify or terminate the Dollar-Cost Averaging Plan at any time.
Dollar-cost averaging does not assure a profit or protect against loss in a declining market. Carefully consider your willingness to continue payments during periods of low prices.
Allocation models may be offered. Each model is comprised of a combination of Portfolios representing various asset classes. The models are static or fixed allocation models that do not change. We do not provide investment advice regarding whether a model should be revised or whether it remains appropriate to invest in accordance with any particular model due to performance, a change in your investment needs or for other reasons. Please note that investment according to an allocation model may result in an increase in assets allocated to Portfolios managed by an affiliated investment adviser, and therefore a corresponding increase in Portfolio management fees collected by such adviser. We reserve the right to modify, suspend or terminate the models at any time.
Your Northwestern Mutual Financial Representative will provide you with an illustration for your Policy upon request. The illustration will reflect the performance of your Policy to date and will show how the Death Benefit minus Policy Debt, Invested Assets and Cash Value would vary based on hypothetical investment results.
Illustrations for variable life insurance policies do not project or predict investment results. The illustrated values assume that non-guaranteed elements such as dividends, Policy charges and level investment returns will not change. Given the volatility of the securities markets over time, the illustrated scenario is unlikely to occur and the Policy’s actual Cash Value, Death Benefit, and certain expenses (which will vary with the investment performance of the Portfolios) will be more or less than those illustrated. In addition, the actual timing and amounts of payments, deductions, expenses and any values removed from the Policy will also impact product performance. Due to these variations, even a Portfolio that averaged the same return as illustrated will produce values which will be more or less than those which were illustrated.
General The following discussion provides a general description of federal income tax considerations relating to your Policy. The discussion is based on current provisions of the Internal Revenue Code (“Code”) as currently interpreted by the Treasury and the Internal Revenue Service (“IRS”). The discussion is not exhaustive, it does not address the likelihood of future changes in federal income tax law or interpretations thereof, and it does not address state or local tax considerations which may be significant in the purchase and ownership of a Policy.
This tax discussion is intended to describe the tax consequences associated with your Policy. It does not constitute legal or tax advice, and is not intended to be used and cannot be used to avoid any penalties that may be imposed on a taxpayer. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.
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Life Insurance Qualification Section 7702 of the Code defines life insurance for federal income tax purposes. The Code provides two alternative tests for determining whether the Death Benefit is a sufficient multiple of the Policy Value. We have designed your Policy to comply with these rules. We may take any action that may be necessary for the Policy to qualify as life insurance for tax purposes.
The definitional tests under the Code are based on the 1980 Commissioner’s Standard Ordinary (CSO) mortality tables. For Policies materially changed after 2008, the tests must be based on the 2001 CSO mortality tables. Because, in some circumstances, Policies issued based on the 1980 CSO mortality tables will not satisfy the definitional tests using the 2001 CSO mortality tables, you may not be permitted to make certain changes to your Policy (as defined by IRS Notices 2004-61 and 2006-95).
As provided by Section 817(h) of the Code, the Secretary of the Treasury has set standards for diversification of the investments underlying variable life insurance policies. Failure to meet the diversification requirements would disqualify your Policy as life insurance for purposes of Section 7702 of the Code. We believe that your Policy complies with the provisions of Sections 7702 and 817(h) of the Code, but the application of these rules is not entirely clear. We may make changes to your Policy if necessary for the Policy to qualify as life insurance for tax purposes.
IRS Rev. Ruls. 2003-91 and 2003-92 provide guidance on when an Owner’s control of Separate Account assets will cause the Owner, and not the life insurance company, to be treated as the owner of those assets. Important indicators of investor control are the ability of the Owner to select the investment advisor, the investment strategy or the particular investments of the Separate Account. If the Owner of a Policy were treated as the owner of the mutual fund shares held in the Separate Account, the income and gains related to those shares would be included in the Owner’s gross income for federal income tax purposes. We believe that we own the assets of the Separate Account under current federal income tax law.
Tax Treatment of Life Insurance While your Policy is in force, increases due to investment experience are not subject to federal income tax until there is a distribution as defined by the Code. The Death Benefit received by a beneficiary will generally not be subject to federal income tax.
Unless the Policy is a MEC, as described below, a loan received under your Policy will not be treated as a distribution subject to current federal income tax. Interest paid by individual Owners of a Policy will ordinarily not be deductible. You should consult a qualified tax advisor as to the deductibility of interest paid, or accrued, by business Owners of a Policy. (See “Business-Owned Life Insurance.”)
So long as your Policy is not classified as a MEC (see “Modified Endowment Contract”), as a general rule, the proceeds from a surrender or withdrawal will be taxable only to the extent that the proceeds exceed the basis of the Policy. The basis of the Policy is generally equal to the premiums paid less any amounts previously received as tax-free distributions. Dividends, whether paid in cash, applied to the Policy, used to purchase additional insurance or used to pay premiums, are taxed as withdrawals with a resulting reduction in basis. However, the reduction in the basis of the Policy is offset by a corresponding increase in basis when the dividend is applied to the Policy and not paid in cash. In certain circumstances, a withdrawal of Cash Value during the first 15 Policy Years may be taxable to the extent that the Cash Value exceeds the basis of the Policy. This means that the amount withdrawn may be taxable even if that amount is less than the basis of the Policy.
Caution must be used when taking cash out of a Policy through policy loans. If interest is not paid annually, it is added to the principal amount and the total amount will continue to accrue for as long as the loan is maintained on the Policy. If the Policy remains in force until the death of the Insured or, in the case of joint life insurance, the second death, the loan will be repaid from the tax-free Death Benefit. However, if the Policy terminates by any method other than death, the loan will be repaid from the Cash Value of the Policy, and the total Cash Value, including the total amount of the loan, will be taxable to the extent it exceeds the basis of the Policy. If the extended term insurance nonforfeiture option is available in your Policy, and it lapses to the extended term insurance, the loan will be repaid from Cash Value of the Policy and the loan repayment will be treated as income and taxable to the extent it exceeds the amount of premiums paid. In extreme situations, Owners can face what is called the “surrender squeeze”. The surrender squeeze occurs when the unborrowed value remaining in the Policy is insufficient to cover the interest payment required to keep the Policy in force or to cover the tax due if the Policy terminates. Either the interest would have to be paid annually or it would be added to the Policy loan, causing the Policy to terminate and any income tax due on the loan amount to be payable with other assets of the Owner.
Subject to the agreement of the Company, and the Owner meeting any conditions set by the Company, a Policy may be exchanged tax-free for another life insurance policy or an annuity contract covering the same Insured (or, in the case of joint life insurance, covering the Insureds or a surviving Insured). The Code also allows certain policies to be exchanged for stand-alone and combination long-term care policies on a tax-free basis. Policies that are exchanged for life insurance policies after 2008 may only be exchanged for life insurance policies using 2001 CSO mortality tables. Any cash received or loan repaid in an exchange will be taxed to the extent of the gain in the Policy (i.e., on gain-first basis).
Ownership of a Policy may be transferred to a new owner and is taxable to the extent the sales proceeds exceed the basis of the Policy. In Rev. Rul. 2009-13, the IRS ruled that, when a life insurance policy is sold to a person with no insurable interest in the insured, the taxable gain is calculated by reducing the basis of the policy by the annual cost of the insurance protection provided by the policy.
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The death benefit of a policy in excess of the basis also may become taxable as a result of a transfer, unless the new owner is the insured, a partner of the insured, a partnership in which the insured is a partner or a corporation in which the insured is a shareholder or officer. You should seek qualified tax advice if you plan a transfer of ownership.
Modified Endowment Contracts (MEC) A Policy may be classified as a MEC if the cumulative premiums paid at any time during the first seven Policy Years exceed a defined “seven-pay” limit. The seven-pay limit is the sum of the premiums (net of expense and administrative charges) that would have to be paid in order for the Policy to be fully paid for after seven level annual payments based on defined interest and mortality assumptions. A Policy will be treated as a MEC unless any excess premiums are withdrawn from the Policy with interest within 60 days after the end of the Policy Year in which they are paid.
Whenever there is a “material change” under a Policy, it will generally be treated as a new contract for purposes of determining whether the Policy is a MEC, and it will be subjected to a new seven-pay period and a new seven-pay limit. The new seven-pay limit would be determined taking into account the value of the Policy at the time of such change. A materially changed Policy would be considered a MEC if it failed to satisfy the new seven-pay limit. A material change could occur as a result of certain changes to the benefits or terms of the Policy, such as a change in a death benefit option or a change in the Insured, if allowable under your Policy. A material change could occur as a result of an increase in the death benefit, the addition of a benefit or the payment of a premium that is considered “unnecessary” under the Code.
If the benefits under the Policy are reduced during the first seven Policy Years after entering into the Policy (or within seven years after a material change) or, in the case of joint life Policies, the lifetime of either Insured, for example, by requesting a decrease in the amount of insurance coverage, by making a withdrawal, by taking any other action resulting in a surrender of Cash Value to you according to the terms of your Policy, by electing the fixed-paid up option, if available, under your Policy or, in some cases, by lapsing the Policy, the seven-pay premium limit will be redetermined based on the reduced level of benefits and applied retroactively for purposes of the seven-pay test. If the premiums previously paid are greater than the recalculated seven-pay premium level limit, the Policy will become a MEC. A life insurance policy which is received in exchange for a MEC will also be considered a MEC.
If a Policy is a MEC, any distribution from the Policy will be taxed on a gain-first basis. Distributions for this purpose include a loan (including any increase in the loan amount to pay interest on an existing loan or an assignment or a pledge to secure a loan), a withdrawal of Cash Value or a surrender of the Policy. Distributions taken within the two-year period prior to the Policy becoming a MEC may also be taxed under the MEC tax rules. If a Policy terminates while there is a Policy loan, the cancellation of the loan and accrued loan interest also will be treated as a distribution to the extent not previously treated as such. Any such distributions will be considered taxable income to the extent the Cash Value exceeds the basis in the Policy. For MECs, the basis would be increased by the amount of any prior loan under the Policy that was considered taxable income. For purposes of determining the taxable portion of any distribution, all MECs issued by Northwestern Mutual to the same Owner (excluding certain qualified plans) during any calendar year are to be aggregated. The Secretary of the Treasury has authority to prescribe additional rules to prevent avoidance of gain-first taxation on distributions from MECs.
A 10% penalty tax will apply to the taxable portion of a distribution from a MEC. The penalty tax will not, however, apply to distributions (i) to taxpayers 59 1/2 years of age or older, (ii) in the case of a disability (as defined in the Code) or (iii) received as part of a series of substantially equal periodic annuity payments for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and the taxpayer’s beneficiaries. The exceptions generally do not apply to life insurance policies owned by corporations or other entities.
Estate and Generation Skipping Taxes The amount of the Death Benefit will generally be includible in the Owner’s estate for federal estate tax purposes and any applicable state inheritance tax. If your Policy is a joint life Policy, the Life Insurance Benefit will be includible in the Owner’s estate if the second of the Insureds to die owns the Policy, and the fair market value of the Policy will be includible in the Owner’s estate if the Owner is not the last surviving Insured. An unlimited marital deduction permits deferral of federal estate and gift taxes until the death of the Owner’s surviving spouse.
If ownership of a Policy is transferred, either directly or in trust, to a person two or more generations younger than the Owner, the value of the Policy may be subject to a generation skipping transfer tax.
During 2010, the estate tax and generation skipping transfer tax are repealed and the gift tax is subject to a $1million exemption amount and a 35% maximum rate. Unless these rules are extended or made permanent, they will be sunsetted or repealed in 2011 and the rules in effect in 2001 ($1 million exclusion amount and 50% maximum tax rate) will be reinstated.
Business-Owned Life Insurance Business-owned life insurance may be subject to certain additional rules. Section 264(a)(1) of the Code generally disallows a deduction for premiums paid on Policies by anyone who is directly or indirectly a beneficiary under the Policy. Increases in Policy or Cash Value may also be subject to tax under the corporation alternative minimum tax provisions.
Section 264(a)(4) of the Code limits the Owner’s deduction for interest on loans taken against life insurance policies to interest on an aggregate total of $50,000 of loans per covered life only with respect to life insurance policies covering key persons. Generally, a key person means an officer or a 20% owner. However, the number of key persons will be limited to the greater of (a) five individuals, or
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(b) the lesser of 5% of the total officers and employees of the taxpayer or 20 individuals. Deductible interest for these Policies will be subject to limits based on current market rates.
In addition, Section 264(f) of the Code disallows a proportionate amount of a business’s interest deduction on non-life insurance indebtedness based on the amount of unborrowed Cash Value of non-exempt life insurance policies held in relation to other business assets. Exempt policies include policies held by natural persons unless the business is a direct or indirect beneficiary under the policy and policies owned by a business and insuring employees, directors, officers and 20% owners (as well as joint policies insuring 20% owners and their spouses).
Section 101(j) of the Code provides that the Death Benefit payable under business-owned life insurance in which the business is also the beneficiary will be taxable unless (i) the Insured is an eligible employee and (ii) the employee is given notice of the insurance and the maximum face amount and consents to be insured and to the continuation of the insurance after the employee terminates service with the employer. Generally, an eligible employee is an officer, a director, a person who owns more than 5% of the business, an employee earning more than $100,000 annually (increased for cost of living after 2006) or an employee who is among the highest paid 35% of employees. The law also imposes an annual reporting and record-keeping obligation on the employer.
The IRS ruled privately in 2009 that losses in business-owned life insurance could be deducted upon the surrender of the policy if there was no reasonable prospect of recovery, but that the losses would be calculated by reducing the basis of the policy by the annual cost of the insurance protection provided by the policy. Private rulings apply only to the taxpayer who receives the ruling but may be indicative of the IRS’s thinking on an issue.
IRS Notice 2007-61 has established a safe harbor under which the annual increase in the cash value of life insurance policies owned by life insurance companies is not taxable provided the policies cover no more than 35% of the company’s employees, directors, officers and 20% owners. The Notice adds that there is an unresolved issue whether cash value increases of other policies owned by life insurance companies may be taxable.
Policy Split Right If your Policy is a joint life Policy, your Policy permits the Owner to exchange the Policy for two policies, one on the life of each Insured, without evidence of insurability, if a change in the federal estate tax law results in either the repeal of the unlimited marital deduction or a 50% or greater reduction in the estate tax rate. The exchange must be made while both Insureds are alive (and neither Insured is classified as a Joint Insurable). The request for exchange must be received no later than 180 days after the earlier of the enactment of the law repealing the unlimited marital deduction or the enactment of the law reducing the estate tax rate by at least 50%.
The IRS has ruled with respect to one taxpayer that such a transaction would be treated as a non-taxable exchange. If not so treated, such a split of the Policy could result in the recognition of taxable income.
Split Dollar Arrangements Life insurance purchased under a split dollar arrangement is subject to special tax rules. IRS Notice 2002-8 provides that (1) the value of the current life insurance protection provided to the employee under the arrangement is taxed to the employee each year and, until the issuance of further guidance, can be determined using the government’s Table 2001 rates or the insurer’s lower one year term rates (which, for arrangements entered into after January 28, 2002, must satisfy additional sales requirements); and (2) for split dollar arrangements entered into on or before September 17, 2003, taxation of the equity (cash surrender value in excess of the amount payable to the employer) is governed by prior law and is subject to the following three safe harbors: (a) the annual accrual of income will not, by itself, be enough to trigger a taxable transfer; (b) equity will not be taxed regardless of the level of the employer’s economic interest in the life insurance policy as long as the value of the life insurance protection is treated and reported as an economic benefit; and (c) the employee can elect loan treatment at any time, provided all premiums paid by the employer are treated as a loan entered into at the beginning of the first year in which payments are treated as loans.
The Treasury and IRS regulations regarding the taxation of split dollar arrangements apply only to arrangements entered into or materially changed after September 17, 2003. The regulations provide that such split dollar arrangements must be taxed under one of two mutually exclusive tax regimes depending on the ownership of the underlying life insurance policy. Collateral assignment split dollar arrangements, in which the employee owns the policy, must be taxed under a loan regime. Where such an arrangement imposes a below market interest rate or no interest rate, the employee is taxed on the imputed interest under Section 7872 of the Code. Endorsement split dollar arrangements, in which the employer owns the policy, must be taxed under an economic benefit regime. Under this regime, the employee is taxed each year on (i) the value of the current life insurance protection provided to the employee, (ii) the amount of policy Cash Value to which the employee has current access, and (iii) the value of any other economic benefits provided to the employee during the taxable year.
Under the Sarbanes-Oxley Act of 2002, it is a criminal offense for an employer with publicly traded stock to extend or arrange a personal loan to a director or executive officer after July 30, 2002. One issue that has not been clarified is whether each premium paid by such an employer under a split dollar arrangement with a director or executive officer is a personal loan subject to the new law.
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Section 409A of the Code imposes requirements for nonqualified deferred compensation plans with regard to the timing of deferrals, distribution triggers, funding mechanisms and reporting requirements. Nonqualified deferred compensation plans that fail to meet these conditions are taxed currently on all compensation previously deferred and interest earned thereon and assessed an additional 20% penalty. The law does not limit the use of life insurance as an informal funding mechanism for nonqualified deferred compensation plans, but IRS Notice 2007-34 treats certain split dollar arrangements as nonqualified deferred compensation plans that must comply with the new rules. The effective date of these rules was December 31, 2008. Congress is also considering limiting an individual’s annual aggregate deferrals to a nonqualified deferred compensation plan to $1,000,000.
Valuation of Life Insurance Special valuation rules apply to life insurance contracts distributed from a qualified plan to a participant or transferred by an employer to an employee. IRS Notice 2005-25 provides a safe harbor formula for valuing variable life insurance under which the value is the greater of the interpolated terminal reserve or the cash value (adjusted by a surrender factor for policies distributed from qualified plans), both increased by a pro rata portion of the estimated dividends for the Policy Year. These rules do not apply to split dollar arrangements entered into on or before September 17, 2003 and not materially modified thereafter.
Other Tax Considerations Taxpayers are required by regulation to annually report all “reportable transactions” as defined in the regulations. “Reportable transactions” include transactions that are offered under conditions of confidentiality as to tax treatment and involve an advisor who receives a fee of $250,000 or more, or transactions that include a tax indemnity. Rev. Proc. 2003-25 further held that the purchase of life insurance policies by a business does not, by itself, constitute a “reportable transaction”.
Depending on the circumstances, the exchange of a Policy, a Policy loan (including the addition of unpaid loan interest to a Policy loan), or a change in ownership or an assignment of the Policy may have federal income tax consequences. In addition, federal, state and local transfer, estate, inheritance, and other tax consequences of Policy ownership, premium payments and receipt of Policy proceeds depend on the circumstances of each Owner or beneficiary. If you contemplate any such transaction you should consult a qualified tax adviser. In addition, a Death Benefit under the Policy may be subject to federal estate tax and state inheritance taxes.
We sell the Policy through our Financial Representatives who also are registered representatives of Northwestern Mutual Investment Services, LLC (“NMIS”). NMIS, our wholly-owned company, was organized under Wisconsin law in 1998 and is located at 611 East Wisconsin Avenue, Milwaukee, Wisconsin 53202. NMIS is a registered broker-dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority. NMIS is the principal underwriter and distributor of the Policy, and has entered into a Distribution Agreement with us.
Northwestern Mutual variable insurance and annuity products are available exclusively through NMIS and its registered representatives and cannot be held with or transferred to an unaffiliated broker-dealer. Except in limited circumstances, NMIS registered representatives are required to offer Northwestern Mutual variable insurance and annuity products. The amount and timing of sales compensation paid by insurance companies varies. The commissions, benefits, and other sales compensation that NMIS and its registered representatives receive for the sale of a Northwestern Mutual variable insurance or annuity product might be more or less than that received for the sale of a comparable product from another company.
The maximum commission payable to the registered representative who sold the Policy is 40% of the premium paid during the first Policy Year; 6% of the premium paid in Policy Years 2-10; and 2.75% of Premium Payments thereafter. We may pay new registered representatives differently during a training period. The entire amount of the sales commissions is passed through NMIS to the registered representative who sold the Policy and to his or her managers. The Company pays compensation and bonuses for the management team of NMIS, and other expenses of distributing the Policies.
Because registered representatives of NMIS are also our appointed agents, they may be eligible for various cash benefits, such as bonuses, insurance benefits, retirement benefits, and non-cash compensation programs that we offer, such as conferences, achievement recognition, prizes, and awards. In addition, registered representatives of NMIS who meet certain productivity, persistency, and length of service standards and/or their managers may be eligible for additional compensation. For example, registered representatives who meet certain annual sales production requirements with respect to their sales of Northwestern Mutual insurance and annuity products may qualify to receive additional cash compensation for their other sales of investment products and services. Sales of the Policies may help registered representatives and/or their managers qualify for such compensation and benefits. Certain registered representatives of NMIS may receive other payments from us for the recruitment, training, development, and supervision of financial representatives, production of promotional literature and similar services.
Commissions and other incentives and payments described above are not charged directly to Owners or to the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Policy.
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ADDITIONAL PROTECTION
The additional coverage provided by the Policy, guaranteed for a certain number of years provided Premium Payments are made when due and dividends are used to increase Policy Value.
ATTAINED AGE
The Insured’s Issue Age listed in the Policy, plus the number of complete Policy Years that have elapsed since the Policy Date.
CASH VALUE
The amount available in cash if the Policy is surrendered.
DATE OF ISSUE
The date on which insurance coverage takes effect as shown in the Policy.
DEATH BENEFIT
The gross amount payable to the Beneficiary upon the death of the Insured, before the deduction of Policy Debt and other adjustments.
DIVISION
A subdivision of the Separate Account. We invest each Division’s assets exclusively in shares of one Portfolio.
FINANCIAL REPRESENTATIVE
An individual who is authorized to sell you the Policy and who is both licensed as a Northwestern Mutual insurance agent and registered as a representative of our affiliate, Northwestern Mutual Investment Services, LLC, the principal underwriter of the Policy.
FUND
Each Fund is registered under the 1940 Act as an open-end management investment company or as a unit investment trust, or is not required to be registered under the Act. Each Fund is available as an investment option under the Policy. The assets of each of the Divisions of the Separate Account are used to purchase shares of the corresponding Portfolio of a Fund.
GENERAL ACCOUNT
All assets of the Company, other than those held in the Separate Account or in other separate accounts that have been or may be established by the Company.
HOME OFFICE
Our office at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-4797.
INSURED
The person named as the Insured on the application and in the Policy.
INVESTED ASSETS
The sum of all amounts in the Divisions of the Separate Account.
ISSUE AGE
The Insured’s age on his or her birthday nearest the Policy Date.
MEC
Modified endowment contract as described in section 7702A of the Internal Revenue Code.
NET PREMIUM
The amount of Premium Payment remaining after premium charges have been deducted.
NETWORK OFFICE
A principal office of a general agent of the Company.
OWNER (You, Your)
The person named in the Application as the Owner, or the person who becomes Owner of a Policy by transfer or succession.
POLICY ANNIVERSARY
The same day and month as the Policy Date in each year following the first Policy Year.
POLICY DATE
The date shown in the Policy from which the following are computed, among other things:
1. Policy Year;
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2. Policy Anniversary;
3. the Issue Age of Insured; and
4. the Attained Age of the Insured.
POLICY DEBT
The total amount of all outstanding Policy loans, including both principal and accrued interest.
POLICY VALUE
The sum of Invested Assets and Policy Debt, and excluding any cash value of variable paid-up insurance.
POLICY YEAR
A year that starts on the Policy Date or on a Policy Anniversary.
PORTFOLIO
A series of a Fund available for investment under the Policy which corresponds to a particular Division of the Separate Account.
PREMIUM PAYMENTS
All payments you make under the Policy other than loan repayments and transaction charges.
PROJECTED INSURANCE AMOUNT
An estimated annual amount of insurance that assumes a 4% interest rate on invested amounts.
SEPARATE ACCOUNT
Northwestern Mutual Variable Life Account.
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More information about the Separate Account is included in a Statement of Additional Information (“SAI”), which is dated the same day as this prospectus, is incorporated by reference in this prospectus, and is available free of charge from the Company. To request a free copy of the Separate Account’s SAI, or current annual report, call us toll-free at 1-866-424-2609. Information about the Separate Account (including the SAI) can be reviewed and copied at the Public Reference Room of the SEC in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-551-8090. Reports and other information about the Separate Account are available on the SEC’s Internet site at http://www.sec.gov, or they may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street, NE, Washington, DC 20549-0102.
Your Northwestern Mutual Financial Representative will provide you with illustrations for a Variable CompLife® Policy free of charge upon your request. The illustrations show how the Death Benefit, Invested Assets and cash surrender value for a Policy would vary based on hypothetical investment results. Your Northwestern Mutual Financial Representative will also respond to other inquiries you may have regarding the Policy, or you may contact the Variable Life Service Center at 1-866-424-2609.
Investment Company Act File No. 811-3989
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STATEMENT OF ADDITIONAL INFORMATION
May 1, 2010
VARIABLE COMPLIFE®
An individual scheduled premium Variable Whole Life Policy that combines a Minimum Guaranteed
Death Benefit with Additional Protection in an integrated policy design (the “Policy”).
Issued by The Northwestern Mutual Life Insurance Company
and
Northwestern Mutual Variable Life Account
We no longer issue the Policy described in this Statement of Additional Information. The Policies we currently offer are described in separate Prospectuses and Statements of Additional Information.
This Statement of Additional Information (“SAI”) is not a prospectus, but supplements, and should be read in conjunction with, the prospectus for the Policy identified above and dated the same date as this SAI. The prospectus may be obtained by writing The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”), 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, or by calling telephone number 1-866-424-2609.
The (i) statement of assets and liabilities as of the end of the most recent fiscal year, (ii) the statement of operations for the most recent fiscal year, and (iii) the changes in net assets for the two most recent fiscal years from the audited financial statements of the Northwestern Mutual Variable Life Account (“the Account”), and the related notes to the financial statements and the report of the independent registered public accounting firm thereon from the Account’s Annual Report to Policy Owners for the year ended December 31, 2009, are incorporated by reference into this SAI. See “Financial Statements of the Account.” No other information is incorporated by reference.
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| Page | ||
| B-3 | ||
| B-3 | ||
| B-3 | ||
| FINANCIAL STATEMENTS OF NORTHWESTERN MUTUAL |
F-1 | |
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The Policy is offered on a continuous basis exclusively through individuals who, in addition to being life insurance agents of Northwestern Mutual, are registered representatives of Northwestern Mutual Investment Services, LLC (“NMIS”). NMIS is our wholly-owned company. The principal business address of NMIS is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
NMIS is the principal underwriter of the Policies for purposes of the federal securities laws. We paid the following amounts to NMIS with respect to sales of variable life insurance policies issued in connection with the Account during each of the last three fiscal years representing commission payments NMIS made to our agents and related benefits. None of these amounts was retained by NMIS and no amounts were paid to other underwriters or broker-dealers. We also paid additional amounts to NMIS in reimbursement for other expenses related to the distribution of variable life insurance policies.
| Year |
Amount | ||
| 2009 |
$ | 27,055,697 | |
| 2008 |
$ | 43,654,229 | |
| 2007 |
$ | 56,984,188 | |
NMIS also provides certain services related to the administration of payment plans under the Policy pursuant to an administrative services contract with Northwestern Mutual. In exchange for these services, NMIS receives compensation to cover the actual costs incurred by NMIS in performing these services.
The financial statements of the Account, and the related notes and report of , an independent registered public accounting firm, contained in the Annual Report to Policy Owners for the fiscal year ended December 31, 2009, that are incorporated by reference in this Statement of Additional Information, and the financial statements of Northwestern Mutual, and the related notes and report of , for the fiscal year ended on the same date that have been included in this Statement of Additional Information are so included in reliance on the reports of , an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. provides audit services for the Account. The address of is .
FINANCIAL STATEMENTS OF THE ACCOUNT
FINANCIAL STATEMENTS WILL BE ADDED BY AMENDMENT
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Page F-1 through F- are reserved for the December 31, 2009 Consolidated Financial Statements of The
Northwestern Mutual Life Insurance Company.
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PART C
OTHER INFORMATION
| Item 26. | Exhibits |
| Exhibit | Description | Filed Herewith/Incorporated Herein By Reference To | ||
| (a)(1) |
Resolution of the Board of Trustees of The Northwestern Mutual Life Insurance Company amending Northwestern Mutual Variable Life Account Operating Authority | Exhibit (a)(1) to Form N-6 Post-Effective Amendment No. 30 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed February 21, 2006
| ||
| (a)(2) |
Resolution of Board of Trustees of The Northwestern Mutual Life Insurance Company establishing the Account | Exhibit A(1) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-36865, filed on October 1, 1997
| ||
| (b) |
Not Applicable | |||
| (c) |
Distribution Agreement Between The Northwestern Life Insurance Company and Northwestern Mutual Investment Services, LLC, dated May 1, 2006 | Exhibit (c) to Form N-6 Registration Statement for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on July 28, 2006
| ||
| (d)(a) |
Form of Policies -
(1) Variable Whole Life Insurance Policy With Additional Protection, QQ.VCL, including Policy amendment (sex distinct)
(2) Variable Whole Life Insurance Policy With Additional Protection, QQ.VCL, including Policy amendment (sex neutral for employers)
(3) Forms of Optional Riders to Variable Whole Life Insurance Policy QQ.VCL:
(i) Waiver of Premium Benefit
(ii) Additional Purchase Benefit
|
Exhibits A(5)(a), A(5)(b), A(5)(c), and A(5)(d) to Form S-6 Post-Effective Amendment No. 7 for Northwestern Mutual Variable Life Account, File No. 33-89188, filed May 31, 2001 | ||
| (d)(b) |
Form of Policies –
(Referenced to Exhibits 1.A.(5)(a), 1.A.(5)(b), 1.A.(13)(i), and 1.A.(13)(ii) filed with Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 33-89188 on February 8, 1995)
(1) Variable Life Insurance Policy, QQ.VCL (sex distinct)
(2) Variable Life Insurance Policy, QQ.VCL, including an Amendment to Variable Whole Life with Additional Protection. (sex neutral: for employers)
(3) Forms of Optional Riders to Variable Whole Life Insurance Policy QQ.VCL:
(i) Waiver of Premium Benefit
(ii) Additional Purchase Benefit
|
Exhibit (d)(b) to Form N-6 Post-Effective Amendment No. 14 for Northwestern Mutual Variable Life Account, File No. 33-89188, filed March 24, 2006 | ||
| (e) |
Form of Life Insurance Application 90-1 L.I.(0198) WISCONSIN and Application Supplement (1003) | Exhibit (e) to Form N-6 Post-Effective Amendment No. 12 for Northwestern Mutual Variable Life Account, File No. 33-89188, filed April 28, 2005
|
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| (f)1 |
Restated Articles of Incorporation of The Northwestern Mutual Life Insurance Company (adopted July 26, 1972) | Exhibit A(6)(a) to Form S-6 Post-Effective Amendment No. 18 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed April 26, 1996
| ||
| (f)2 |
Amended By-Laws of The Northwestern Mutual Life Insurance Company dated December 4, 2002 | Exhibit (f) to Form N-6 Post-Effective Amendment No. 9 for Northwestern Mutual Variable Life Account, File No. 33-89188, filed February 28, 2003
| ||
| (g) |
Form of Reinsurance Agreement | Exhibit (g) to Form S-6 Post-Effective Amendment No. 9 for Northwestern Mutual Variable Life Account, File No. 33-89188, filed February 28, 2003
| ||
| (h)(a)(1) |
Participation Agreement dated March 16, 1999 Among Russell Insurance Funds, Russell Fund Distributors, Inc. and The Northwestern Mutual Life Insurance Company
|
Exhibit (b)(8)(a) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005 | ||
| (h)(a)(2) |
Amendment No. 1 dated August 7, 2000 to the Participation Agreement dated March 16, 1999 Among Russell Insurance Funds, Russell Fund Distributors, Inc. and The Northwestern Mutual Life Insurance Company
|
Exhibit (h)1(a)(2) to Form N-6 Registration Statement for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on July 28, 2006 | ||
| (h)(a)(3) |
Amendment No. 2 dated October 13, 2006 to Participation Agreements dated March 16, 1999 and August 7, 2000, respectively, by and among The Northwestern Mutual Life Insurance Company, Russell Investment Funds, f/k/a “Russell Insurance Funds,” and Russell Fund Distributors, Inc.
|
Exhibit (h)1(a)(3) to Form N-6 Pre-Effective Amendment No. 1, for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed December 13, 2006 | ||
| (h)(b)(1) |
Participation Agreement dated May 1, 2003 among Variable Insurance Products Funds, Fidelity Distributors Corporation and The Northwestern Mutual Life Insurance Company
|
Exhibit (b)(8)(b) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005 | ||
| (h)(b)(2) |
Amendment No. 1 dated October 18, 2006 to Participation Agreement dated May 1, 2003, by and among The Northwestern Mutual Life Insurance Company, Fidelity Distributors Corporation, and each of Variable Insurance Products Fund, Variable Insurance Products Fund II, and Variable Insurance Products Fund III
|
Exhibit (h)1(b)(2) to Form N-6 Pre-Effective Amendment No. 1, for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed December 13, 2006 | ||
| (h)(c)(1) |
Administrative Service Fee Agreement dated February 28, 1999 between The Northwestern Mutual Life Insurance Company and Frank Russell Company | Exhibit (b)(8)(c) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005
| ||
| (h)(c)(2) |
Form of Administrative Services Agreement | Exhibit (b)(8)(f) to Form N-4 Post-Effective Amendment No. 17 for NML Variable Annuity Account A, File No. 333-72913, filed on April 20, 2007
| ||
| (h)(d)(1) |
Service Agreement dated May 1, 2003 between Fidelity Investments Institutional Operations Company, Inc. and The Northwestern Mutual Life Insurance Company | Exhibit (b)(8)(c)(2) to Form N-4 Pre-Effective Amendment No. 1 for NML Variable Annuity Account A, File No. 333-133380, filed on August 8, 2006
|
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| (h)(d)(2) |
Amendment dated August 1, 2004 to the Service Agreement dated May 1, 2003 between Fidelity Investments Institutional Operations Company, Inc. and The Northwestern Mutual Life Insurance Company
|
Exhibit (b)(8)(c)(3) to Form N-4 Pre-Effective Amendment No. 1 for NML Variable Annuity Account A, File No. 333-133380, filed on August 8, 2006 | ||
| (i) |
Not Applicable
|
|||
| (j)(a) |
Agreement entered into on February 13, 1984 among Northwestern Mutual Variable Life Account, The Northwestern Mutual Life Insurance Company and NML Equity Services, Inc. (n/k/a Northwestern Mutual Investment Services, LLC)
|
Exhibit A(8) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-36865, filed October 1, 1997 | ||
| (j)(b) |
Form of Shareholder Information Agreement | Exhibit (b)(8)(g) to Form N-4 Post-Effective Amendment No. 17 for NML Variable Annuity Account A, File No. 333-72913, filed on April 20, 2007
| ||
| (j)(c) |
Power of Attorney | Filed herewith.
| ||
| (j)(d) |
NMIS/NM Annuity Operations Admin Agreement | Exhibit (b)(8)(i) to Form N-4 Post-Effective Amendment No. 19 for NML Variable Annuity Account A, File No. 333-72913, filed on April 22, 2008
| ||
| (k) |
Opinion and Consent of Raymond J. Manista, Esq. dated February 4, 2010
|
Filed herewith. | ||
| (l) |
Not Applicable
|
|||
| (m) |
Not Applicable
|
|||
| (n) |
Consent of PricewaterhouseCoopers LLP dated ___________ 2010
|
To be filed by amendment. | ||
| (o) |
Not Applicable
|
|||
| (p) |
Not Applicable
|
|||
| (q) |
Memorandum describing Issuance, Transfer and Redemption Procedures for Variable Life Insurance Contracts Pursuant to Rule 6e-2(b)(12)(ii) | Exhibit (q) to Form N-6 Pre-Effective Amendment No. 18, for Northwestern Mutual Variable Life Account, File No. 333-89188, filed April 23, 2009.
|
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| Item 27. | Directors and Officers of the Depositor |
The following lists include all of the Trustees, executive officers and other officers of The Northwestern Mutual Life Insurance Company without regard to their activities relating to variable life insurance policies or their authority to act or their status as “officers” as that term is used for certain purposes of the federal securities laws and rules thereunder.
TRUSTEES – As of February 1, 2010
| Name | Business Address | |
| Facundo L. Bacardi |
Chairman Bacardi Limited c/o Apache Capital 133 Sevilla Coral Gables, FL 33134 | |
| John N. Balboni |
Senior Vice President & CIO International Paper 6400 Poplar Avenue Memphis, TN 38197 | |
| Robert C. Buchanan |
Retired Chairman Fox Valley Corporation P. O. Box 727 Appleton, WI 54912-0727 | |
| David J. Drury |
President Poblocki Sign Company LLC 922 South 70th Street Milwaukee, WI 53214 | |
| Connie K. Duckworth |
Founder & CEO Arzu 77 Stone Gate Lane Lake Forest, IL 60045 | |
| David A. Erne |
Attorney Reinhart Boerner Van Deuren, sc 1000 North Water Street Suite 2100 Milwaukee, WI 53202 |
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| James P. Hackett |
President and CEO Steelcase, Inc. 901 - 44th Street Grand Rapids, MI 49508 | |
| Hans Helmerich |
President & CEO Helmerich & Payne, Inc. 1437 S. Boulder Tulsa, OK 74119 | |
| Dale E. Jones |
Vice Chairman Heidrick & Struggles 2001 Pennsylvania Avenue, NW Suite 925 Washington, DC 20006 | |
| Margery Kraus |
President & CEO APCO Worldwide 700 12th Street, NW Suite 800 Washington, DC 20005 | |
| David J. Lubar |
President & CEO Lubar & Co. 700 N. Water Street Suite 1200 Milwaukee, WI 53202 | |
| Ulice Payne, Jr. |
President & CEO Addison-Clifton, LLC 13555 Bishops Court Suite 245 Brookfield, WI 53005 | |
| Gary A. Poliner |
Executive Vice President Northwestern Mutual 720 E. Wisconsin Avenue Milwaukee, WI 53202 | |
| John E. Schlifske |
President Northwestern Mutual 720 E. Wisconsin Avenue Milwaukee, WI 53202 | |
| H. Mason Sizemore, Jr. |
2054 N.W. Blue Ridge Drive Seattle, WA 98177 | |
| Peter M. Sommerhauser |
Attorney Godfrey & Kahn, SC 780 North Water Street Milwaukee, WI 53202-3590 |
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| Mary Ellen Stanek |
Managing Director & Chief Investment Officer Baird Advisors Robert W. Baird & Co. President-Baird Funds Inc. 777 E. Wisconsin Avenue 21st Floor Milwaukee, WI 53202 | |
| John J. Stollenwerk |
10941 North Range Line Road Mequon, WI 53092 | |
| Timothy W. Sullivan |
President & CEO Bucyrus International 1100 Milwaukee Avenue South Milwaukee, WI 53172 | |
| S. Scott Voynich |
Managing Partner Robinson, Grimes & Company, PC 5637 Whitesville Road (31904) P. O. Box 4299 (31914) Columbus, GA | |
| Barry L. Williams |
Retired Managing General Partner Williams Pacific Ventures, Inc. 4 Embarcadero Center, Suite 3700 San Francisco, CA 94111 | |
| Edward J. Zore |
Chairman and CEO Northwestern Mutual 720 E. Wisconsin Avenue Milwaukee, WI 53202 |
EXECUTIVE OFFICERS – As of February 1, 2010
| Name | Title | |
| Edward J. Zore | Chairman and Chief Executive Officer | |
| John E. Schlifske | President | |
| Sandra L. Botcher | Vice President (Enterprise Risk Assurance) | |
| Michael G. Carter | Vice President & Chief Financial Officer | |
| Eric P. Christophersen | Vice President (Compliance/Best Practices) | |
| David D. Clark | Senior Vice President (Real Estate) | |
| Jefferson V. DeAngelis | Senior Vice President (Public Markets) | |
| Mark G. Doll | Executive Vice President & Chief Investment Officer | |
| Christina H. Fiasca | Senior Vice President (Agency Services) |
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| Timothy J. Gerend | Vice President (Field Compensation and Planning) | |
| Kimberley Goode | Vice President (Communications & Corporate Affairs) | |
| Karl G. Gouverneur | Vice President (Information Systems) | |
| John M. Grogan | Vice President (Wealth Management) | |
| Thomas G. Guay | Vice President (New Business) | |
| Gary M. Hewitt | Vice President & Treasurer (Treasury & Investment Operations) | |
| J. Chris Kelly | Vice President and Controller | |
| John L. Kordsmeier | Vice President (Disability Income) | |
| Susan A. Lueger | Vice President (Human Resources) | |
| Jeffrey J. Lueken | Senior Vice President (Securities) | |
| Jean M. Maier | Executive Vice President (Enterprise Operations and Technology) | |
| Raymond J. Manista | General Counsel & Secretary | |
| Meridee J. Maynard | Senior Vice President (Product Distribution) | |
| Gregory C. Oberland | Executive Vice President (Insurance and Investment Products) | |
| Kathleen A. Oman | Vice President (Policyowner Services) | |
| Gary A. Poliner | Executive Vice President and Chief Risk Officer | |
| David R. Remstad | Vice President and Chief Actuary | |
| Marcia Rimai | Executive Vice President and Chief Administrative Officer | |
| Bethany M. Rodenhuis | Vice President (Corporate Planning) | |
| Timothy G. Schaefer | Chief Information Officer | |
| Calvin R. Schmidt | Vice President (Investment Product Operations) | |
| Todd M. Schoon | Executive Vice President (Agencies) | |
| David W. Simbro | Vice President (Life Product) | |
| Paul J. Steffen | Vice President (Agencies) | |
| Donald G. Tyler | Vice President (IPS Products and Sales) | |
| Martha M. Valerio | Vice President | |
| Conrad C. York | Vice President (Marketing) | |
| Michael L. Youngman | Vice President (Government Relations) |
OTHER OFFICERS – As of December 1, 2009
| Employee | Title | |
| Gregory A. Gurlik | Senior Actuary | |
| Donald C. Kiefer | VP Actuary | |
| Kenneth M. Latus | Actuary | |
| James Lodermeier | Senior Actuary | |
| Robert G. Meilander | VP Corporate Actuary | |
| Ted A. Matchulat | Director Product Compliance | |
| Jon K. Magalska | Senior Actuary | |
| Arthur V. Panighetti | VP Actuary | |
| P. Andrew Ware | VP Actuary | |
| Mark S. Bishop | Regional VP Field Supv | |
| Jennifer L. Brase | VP Agency Dev | |
| Somayajulu Durvasula | Regional VP Field Supv | |
| Michael S. Ertz | VP Field Administration | |
| Mark J. Gmach | Regional VP Field Supv | |
| David D. Kiecker | Regional VP Field Supv | |
| Steven C. Mannebach | VP Agency Dev | |
| Daniel J. O’Meara | Regional VP Field Supv | |
| Charles J. Pendley | VP Agency Dev | |
| Robert J. Johnson | Director Compliance Oversight and Review | |
| James M. Makowski | Asst. Director-Marketing Materials Compliance | |
| Timothy Nelson | Director Market Conduct | |
C-7
Table of Contents
| Employee | Title | |
| Jason T. Anderson | Assistant Director Tax | |
| Gwen C. Canady | Director Corporate Reporting | |
| Barbara E. Courtney | Director Mutual Fund Accounting | |
| Walter M. Givler | VP Accounting Policy | |
| David K. Nunley | VP-Tax | |
| Stephen R. Stone | Director Investment Accounting | |
| John M. Abbott | Director-Field Investigations | |
| Carl E. Amick | VP-Risk Management Operations | |
| Maryann Bialo | Asst. Director DI Benefits | |
| Pamela C. Bzdawka | Assistant Director-SIU | |
| Stephen J. Frankl | Director-Sales Strategy and Support | |
| Sharon A. Hyde | Asst. Director DI Benefits | |
| Cynthia Lubbert | Asst. Director-DI Underwriting | |
| Steven J. Stribling | Director-DI Benefits | |
| Cheryl L. Svehlek | Director-Administration | |
| Laila V. Hick | Director of Field Supervision | |
| Karla D. Hill | Asst. Director of Distribution Operations | |
| Joanne M. Migliaccio | Director of Distribution Operations | |
| Daniel A. Riedl | VP Distribution Policies and Operations | |
| Sandra L. Botcher | VP Enterprise Risk Assurance | |
| Linda A. Schaefer | Director Operations Strategy | |
| Anne C. Wills | Director BCP | |
| Todd O. Zinkgraf | VP Enterprise Solutions | |
| Christen L. Partleton | VP Facility Operations | |
| Robyn S. Cornelius | Director Dist Planning | |
| David J. Dorshorst | Director of Field Comp | |
| Allen M. Kluz | Director of Field Benefits | |
| Kim M. Althaus | Director of FCP Systems | |
| Richard P. Snyder | Director Distribution Planning | |
| William H. Taylor | Vice President Financial Security Planning | |
| Troy M. Burbach | Director - Field Development Systems | |
| Pency P. Byhardt | VP-Field Development | |
| Sharen L. King | Director-Practice Management and Field Training | |
| Douglas P. Bates | VP Federal Relations | |
| Steven M. Radke | VP Leg & Reg Relations | |
| Blaise C. Beaulier | VP Information Systems | |
| Robert J. Kowalsky | VP Information Systems | |
| Rachel L. Taknint | VP Information Risk Management | |
| David A. Eurich | Director – IPS Training, Marketing & Communications | |
| Martha M. Kendler | Director – IPS Annuity Products | |
| Arleen J. Llewellyn | Director – Business Integration | |
| Mac McAuliffe | National Sales Director – IPS - Sales | |
| Michael J. Mihm | Director – IPS Business Development | |
| Ronald C. Nelson | Director – IPS Research & Product Support | |
| Jeffrey J. Niehaus | Director – IPS Business Retirement Markets |
C-8
Table of Contents
| Employee | Title | |
| David G. Stoeffel | VP IPS Investment Product Lines | |
| Kellen A. Thiel | Director – IPS Advisory Products | |
| Brian D. Wilson | Director – IPS Marketing & Sales | |
| Robert J. Wright | Director – IPS Strategic Partnerships Product Support | |
| Meg E. Jansky | Director-Annuity Operations | |
| Lisa A. Myklebust | Director-Business Systems Team | |
| Mark J. Backe | Asst. General Counsel & Asst. Secretary | |
| Beth M. Berger | Asst. General Counsel & Asst. Secretary | |
| Frederick W. Bessette | Asst. General Counsel & Asst. Secretary | |
| Melissa J. Bleidorn | Asst. General Counsel & Asst. Secretary | |
| Anne T. Brower | Asst. General Counsel & Asst. Secretary | |
| Michael S. Bula | Asst. General Counsel & Asst. Secretary | |
| M. Christine Cowles | Asst. General Counsel & Asst. Secretary | |
| Domingo G. Cruz | Asst. General Counsel & Asst. Secretary | |
| Mark S. Diestelmeier | Asst. General Counsel & Asst. Secretary | |
| John E. Dunn | VP & Investment Products & Services Counsel | |
| James R. Eben | Asst. General Counsel & Asst. Secretary | |
| Marcia E. Facey | Asst. General Counsel & Asst. Secretary | |
| Chad E. Fickett | Asst. General Counsel & Asst. Secretary | |
| Gerald E. Fradin | Asst. General Counsel & Asst. Secretary | |
| James C. Frasher | Asst. General Counsel & Asst. Secretary | |
| Matthew E. Gabrys | Asst. General Counsel & Asst. Secretary | |
| John K. Garofani | Asst. General Counsel & Asst. Secretary | |
| Sheila M. Gavin | Asst. General Counsel & Asst. Secretary | |
| Kevin M. Gleason | Asst. General Counsel & Asst. Secretary | |
| C. Claibourne Greene | Asst. General Counsel & Asst. Secretary | |
| Elizabeth S. Idleman | Asst. General Counsel & Asst. Secretary | |
| Gregory Johnson | Asst. General Counsel & Asst. Secretary | |
| James A. Koelbl | Asst. General Counsel & Asst. Secretary | |
| Abimbola O. Kolawole | Asst. General Counsel & Asst. Secretary | |
| Carol L. Kracht | VP & Deputy General Counsel & Board Relations | |
| Elizabeth J. Lentini | Asst. General Counsel & Asst. Secretary | |
| George R. Loxton | Asst. General Counsel & Asst. Secretary | |
| Stephanie Lyons | Asst. General Counsel & Asst. Secretary | |
| Dean E. Mabie | Asst. General Counsel & Asst. Secretary | |
| Steve Martinie | Asst. General Counsel & Asst. Secretary | |
| Michael J. Mazza | Asst. General Counsel & Asst. Secretary | |
| James L. McFarland | Asst. General Counsel & Asst. Secretary | |
| Lesli H. McLinden | Asst. General Counsel & Asst. Secretary | |
| Larry S. Meihsner | Asst. General Counsel & Asst. Secretary | |
| Christopher J. Menting | Asst. General Counsel & Asst. Secretary | |
| Richard E. Meyers | Asst. General Counsel & Asst. Secretary | |
| Scott J. Morris | Asst. General Counsel & Asst. Secretary | |
| Jennifer W. Murphy | Asst. General Counsel & Asst. Secretary | |
| David K. Nelson | Asst. General Counsel & Asst. Secretary | |
| Mary S. Nelson | Asst. General Counsel & Asst. Secretary | |
| Michelle Nelson | Asst. General Counsel & Asst. Secretary | |
| Timothy A. Otto | Asst. General Counsel & Asst. Secretary | |
| Randy M. Pavlick | Asst. General Counsel & Asst. Secretary | |
| David W. Perez | Asst. General Counsel & Asst. Secretary | |
| Judith L. Perkins | Asst. General Counsel & Asst. Secretary | |
| William C. Pickering | Asst. General Counsel & Asst. Secretary | |
| Nora M. Platt | Asst. General Counsel & Asst. Secretary |
C-9
Table of Contents
| Employee | Title | |
| Harvey W. Pogoriler | Asst. General Counsel & Asst. Secretary | |
| Zhibin Ren | Asst. General Counsel & Asst. Secretary | |
| Peter K. Richardson | Asst. General Counsel & Asst. Secretary | |
| Tammy M. Roou | VP & Ins & Distr Counsel | |
| Thomas F. Scheer | Asst. General Counsel & Asst. Secretary | |
| Kathleen H. Schluter | VP & Tax Counsel | |
| Rodd Schneider | VP & Litigation Counsel | |
| Sarah E. Schott | Asst. General Counsel & Asst. Secretary | |
| Catherine L. Shaw | Asst. General Counsel & Asst. Secretary | |
| David Silber | Asst. General Counsel & Asst. Secretary | |
| Mark W. Smith | Assoc. General Counsel & Asst. Secretary | |
| Karen J. Stevens | Asst. General Counsel & Asst. Secretary | |
| Brenda J. Stugelmeyer | Asst. General Counsel & Asst. Secretary | |
| John M. Thompson | Asst. General Counsel & Asst. Secretary | |
| Douglas D. Timmer | Asst. General Counsel & Asst. Secretary | |
| Andrew T. Vedder | Asst. General Counsel & Asst. Secretary | |
| Warren, John W. | Asst. General Counsel & Asst. Secretary | |
| Catherine A. Wilbert | Asst. General Counsel & Asst. Secretary | |
| Catherine M. Young | Asst. General Counsel & Asst. Secretary | |
| Terry R. Young | Asst. General Counsel & Asst. Secretary | |
| Jason R. Handal | Director-Speciality Markets | |
| Todd L. Laszewski | Director Life Product Development | |
| Jane Ann Schiltz | VP Business Markets | |
| Terese J. Capizzi | Director Long Term Care Administration | |
| Julie K. Flaa | Director Long Term Care Product Development | |
| Mollie A. Kenny | Regulatory Consultant | |
| Steve P. Sperka | VP Long Term Care | |
| John K. Wilson | Director Long Term Care Sales Support | |
| Carrie L. Bleck | Director Policyowner Services | |
| Sherri L. Schickert | Director Policyowner Services | |
| Diane P. Smith | Asst. Director Policyowner Services | |
| Natalie J. Versnik | Director Policyowner Services | |
| Michael D. Zelinski | Director Policyowner Services | |
| Donna L. Lemanczyk | Asst. Secretary | |
| Warren L. Smith | Asst. Secretary | |
| Karla J. Adams | Director Investment Risk Management | |
| James A. Brewer | Director Investment Planning | |
| Donald Forecki | Director Investment Operations, Asst. Secretary | |
| Karen A. Molloy | Director Banking & Cash Management, Asst. Treasurer | |
| Patricia A. Zimmermann | Director Investment Technology & Development, Asst. Secretary | |
| Shanklin B. Cannon | Medical Director | |
| Kurt P. Carbon | Director Life Lay Standards | |
| Wayne F. Heidenreich | Medical Director | |
| Paul W. Skalecki | VP Underwriting Standards | |
The business addresses for all of the executive officers and other officers is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
C-10
Table of Contents
| Item 28. | Persons Controlled By or Under Common Control with the Depositor or Registrant |
The subsidiaries of The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”), as of February 1, 2010 are set forth on pages C-11 through C-12. In addition to the subsidiaries set forth on pages C-11 through C-12, the following separate investment accounts (which include the Registrant) may be deemed to be either controlled by, or under common control with, Northwestern Mutual:
| 1. | NML Variable Annuity Account A |
| 2. | NML Variable Annuity Account B |
| 3. | NML Variable Annuity Account C |
| 4. | Northwestern Mutual Variable Life Account |
| 5. | Northwestern Mutual Variable Life Account II |
Northwestern Mutual Series Fund, Inc. and Russell Investment Funds (the “Funds”), shown below as subsidiaries of Northwestern Mutual, are investment companies, registered under the Investment Company Act of 1940, offering their shares to the separate accounts identified above; and the shares of the Funds held in connection with certain of the accounts are voted by Northwestern Mutual in accordance with voting instructions obtained from the persons who own, or are receiving payments under, variable annuity contracts or variable life insurance policies issued in connection with the separate accounts, or in the same proportions as the shares which are so voted.
NORTHWESTERN MUTUAL CORPORATE STRUCTURE1
(as of February 1, 2010)
| Name of Subsidiary |
Jurisdiction of Incorporation | |
| Amber, LLC - 100% ownership |
Delaware | |
| AMLI at Cambridge Square, LLC - 100% ownership |
Delaware | |
| Baraboo, Inc. - 100% ownership |
Delaware | |
| Bayridge, LLC - 100% ownership |
Delaware | |
| Bradford, Inc. - 100% ownership |
Delaware | |
| Brendan International Sales, Inc. - 100% ownership |
U.S. Virgin Islands | |
| Burgundy, LLC - 100% ownership |
Delaware | |
| Carlisle Ventures, Inc. - 100% ownership |
Delaware | |
| Chateau, LLC - 100% ownership |
Delaware | |
| Coral, Inc. - 100% ownership |
Delaware | |
| Cortona Holdings, LLC - 100% ownership |
Delaware | |
| Fairfield West Deer Park LLC - 100% ownership |
Delaware | |
| Frank Russell Company - 92.86% ownership |
Washington | |
| Foxkirk, LLC - 100% ownership |
Delaware | |
| Group Liquidation Corp. - 100% ownership |
New Mexico | |
| Hazel, Inc. - 100% ownership |
Delaware | |
| Health Invest, LLC - 100% ownership |
Delaware | |
| Higgins, Inc. - 100% ownership |
Delaware | |
| Highbrook International Sales, Inc. - 100% ownership |
U.S. Virgin Islands | |
| Hobby, Inc. - 100% ownership |
Delaware | |
| Hollenberg 1, Inc. - 100% ownership |
Delaware | |
| Hollenberg 2, Inc. - 100% ownership |
Delaware | |
| Jerusalem Avenue Property, LLC - 100% ownership |
Delaware | |
| Justin International FSC, Inc. - 100% ownership |
U.S. Virgin Islands | |
| JYD Assets LLC - 100% ownership |
Delaware | |
| Klode, Inc. - 100% ownership |
Delaware | |
| Kristiana International Sales, Inc. - 100% ownership |
U.S. Virgin Islands | |
| Ladak, Inc. - 100% ownership |
California |
C-11
Table of Contents
| Lake Bluff, Inc. - 100% ownership |
Delaware | |
| Logan, Inc. - 100% ownership |
Delaware | |
| Lydell, Inc. - 100% ownership |
Delaware | |
| Maroon, Inc. - 100% ownership |
Delaware | |
| Mason & Marshall, Inc. - 100% ownership |
Delaware | |
| Mason Street Advisors, LLC - 100% ownership |
Delaware | |
| Mitchell, Inc. - 100% ownership |
Delaware | |
| Model Portfolios, LLC - 100% ownership |
Delaware | |
| N.M. Albuquerque, Inc. - 100% ownership |
New Mexico | |
| New Arcade, LLC - 100% ownership |
Wisconsin | |
| Nicolet, Inc. - 100% ownership |
Delaware | |
| NM DFW Lewisville, LLC - 100% ownership |
Delaware | |
| NM F/X, LLC - 100% ownership |
Delaware | |
| NM GP Holdings, LLC - 100% ownership |
Delaware | |
| NM Harrisburg, Inc. - 100% ownership |
Pennsylvania | |
| NM Imperial, LLC - 100% ownership |
Delaware | |
| NM Lion, LLC - 100% ownership |
Delaware | |
| NM Majestic Holdings, LLC - 100% ownership |
Delaware | |
| NM Pebble Valley LLC - 100% ownership |
Delaware | |
| NM RE Funds, LLC - 100% ownership |
Delaware | |
| NM Regal, LLC - 100% ownership |
Delaware | |
| NM-Exchange Three, LLC - 100% ownership |
Delaware | |
| NM-Exchange, LLC - 100% ownership |
Delaware | |
| NML Clubs Associated, Inc. - 100% ownership |
Wisconsin | |
| NML Development Corporation - 100% ownership |
Delaware | |
| NML Real Estate Holdings, LLC - 100% ownership |
Wisconsin | |
| NML Securities Holdings, LLC - 100% ownership |
Wisconsin | |
| NML-CBO, LLC - 100% ownership |
Delaware | |
| NMRM Holdings, LLC - 100% ownership |
Delaware | |
| North Van Buren, Inc. - 100% ownership |
Delaware | |
| Northwestern Investment Management Company, LLC - 100% ownership |
Delaware | |
| Northwestern Long Term Care Insurance Company - 100% ownership |
Wisconsin | |
| Northwestern Mutual Capital GP II, LLC - 100% ownership |
Delaware | |
| Northwestern Mutual Capital GP, LLC - 100% ownership |
Delaware | |
| Northwestern Mutual Capital Limited - 100% ownership |
United Kingdom | |
| Northwestern Mutual Investment Services, LLC - 100% ownership |
Wisconsin | |
| Northwestern Mutual Life International, Inc. - 100% ownership |
Delaware | |
| Northwestern Mutual Series Fund, Inc. - 100% ownership |
Maryland | |
| Northwestern Mutual Wealth Management Company - 100% ownership |
||
| NW Pipeline, Inc. - 100% ownership |
Texas | |
| Olive, Inc. - 100% ownership |
Delaware | |
| PPF AMLI 460 SW Longview Boulevard, LLC - 100% ownership |
Delaware | |
| RE Corp. - 100% ownership |
Delaware | |
| Regina International Sales, Inc. - 100% ownership |
U.S. Virgin Islands | |
| Russet, Inc. - 100% ownership |
Delaware | |
| Scotty, LLC - 100% ownership |
Delaware | |
| Solar Resources, Inc. - 100% ownership |
Wisconsin | |
| Stadium and Arena Management, Inc. - 100% ownership |
Delaware | |
| Travers International Sales, Inc. - 100% ownership |
U.S. Virgin Islands | |
| Tupelo, Inc. - 100% ownership |
Delaware |
C-12
Table of Contents
| Walden OC, LLC - 100% ownership |
Delaware | |
| White Oaks, Inc. - 100% ownership |
Delaware |
| (1) | Certain subsidiaries are omitted on the basis that, considered in the aggregate at year end 2006, they did not constitute a significant subsidiary as defined by Regulation S-X. Except for certain Real Estate Partnerships/LLCs/Equity Interests, includes general account NM investments where NM’s ownership interest is greater than 50%. Excluded is the entire corporate structure under Frank Russell Company. |
| (2) | Growth Stock Portfolio, Focused Appreciation Portfolio, Large Cap Core Stock Portfolio, Large Cap Blend Portfolio, Index 500 Stock Portfolio, Large Company Value Portfolio, Domestic Equity Portfolio, Equity Income Portfolio, Mid Cap Growth Stock Portfolio, Index 400 Stock Portfolio, Mid Cap Value Portfolio, Small Cap Growth Stock Portfolio, Index 600 Stock Portfolio, Small Cap Value Portfolio, International Growth Portfolio, Research International Core Portfolio, International Equity Portfolio, Emerging Markets Equity Portfolio, Money Market Portfolio, Short-Term Bond Portfolio, Select Bond Portfolio, Long-Term U.S. Government Bond Portfolio, Inflation Protection Portfolio, High Yield Bond Portfolio, Multi-Sector Bond Portfolio, Balanced Portfolio, Asset Allocation Portfolio. |
| Item 29. | Indemnification |
(a) That portion of the By-laws of the Depositor, Northwestern Mutual, relating to indemnification of Trustees and officers is set forth in full in Article VII of the By-laws of Northwestern Mutual, amended by resolution and previously filed as Exhibit A(6)(b) to the registration statement of Northwestern Mutual Variable Life Account (File No. 333-59103) on July 15, 1998.
(b) Section 10 of the Distribution Agreement dated May 1, 2006 between Northwestern Mutual and Northwestern Mutual Investment Services, LLC (“NMIS”) provides substantially as follows:
B. Indemnification by Company. The Company agrees to indemnify, defend and hold harmless NMIS, its successors and assigns, and their respective officers, directors, and employees (together referred to as “NMIS Related Persons”), from any and all joint or several losses, claims, damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which NMIS and/or any NMIS Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by the Company and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of NMIS or for which NMIS is responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material.
This indemnification shall be in addition to any liability that the Company may otherwise have; provided, however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.
C. Indemnification by NMIS. NMIS agrees to indemnify, defend and hold harmless the Company, its successors and assigns, and their respective officers, trustees or directors, and employees (together referred to as “Company Related Persons”), from any and all joint or several losses, claims, damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which the Company and/or any Company Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by NMIS and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of the Company or for which the Company is responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon information furnished in writing by NMIS to the Company specifically for use in the preparation of the aforesaid material.
C-13
Table of Contents
This indemnification shall be in addition to any liability that NMIS may otherwise have; provided however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.
D. Indemnification Generally. Any person seeking indemnification under this section shall promptly notify the indemnifying party in writing after receiving notice of the commencement of any action as to which a claim for indemnification will be made; provided, however, that failure to so notify the indemnifying party shall not relieve such party from any liability which it may have to such person otherwise than on account of this section.
The indemnifying party shall be entitled to participate in the defense of the indemnified person but 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 party in defending himself, herself or itself.
| Item 30. | Principal Underwriters |
(a) NMIS is the principal underwriter of the securities of the Registrant. NMIS is also the principal underwriter for the NML Variable Annuity Account A (811-21887), the NML Variable Annuity Account B (811-1668), the NML Variable Annuity Account C (811-21886), and the Northwestern Mutual Variable Life Account II (811-21933).
(b) As of January 31, 2010, the directors and officers of NMIS are as follows:
| Name |
Position | |
| Jason T. Anderson |
Assistant Treasurer | |
| Mark S. Bishop |
Regional Vice President, Field Supervision | |
| Christine Bordner |
Assistant Director, Market Conduct | |
| Pency Byhardt |
Vice President, Field Development | |
| Michael G. Carter |
Director | |
| Eric P. Christophersen |
Vice President, Compliance/Best Practices | |
| David J. Dorshorst |
Director, Compensation Services | |
| Somayajulu V. Durvasula |
Regional Vice President, Field Supervision | |
| Michael S. Ertz |
Vice President, Agency Administration | |
| David A. Eurich |
Director, Field Training | |
| Christina H. Fiasca |
Senior Vice President, Field Compensation, Training & Development | |
| Anne A. Frigo |
Director, Insurance Products Compliance | |
| Don P. Gehrke |
Director, Retail Investment Operations | |
| Timothy J. Gerend |
Vice President, Field Compensation & Planning | |
| Mark J. Gmach |
Regional Vice President, Field Supervision | |
| David A. Granger |
Assistant Director, Human Resources | |
| Mark A. Gregory |
Assistant Director, NMIS Compliance | |
| Thomas C. Guay |
Vice President, Variable Underwriting & Issue | |
| Rhonda K. Haight |
Assistant Director, IPS Platforms | |
| David P. Harley |
Director, Retail Investment Operations | |
| Laila V. Hick |
Director, Field Supervision Standards | |
| Karla D. Hill |
Assistant Director, Contract, License and Registration Operations | |
| Patricia J. Hillman |
Director, Annuity Customer Services | |
| Dean M. Hopp |
Assistant Director, IPS Product Lines and Municipal Funds Securities Limited Principal | |
| Diane B. Horn |
NMIS Anti-Money Laundering Compliance Officer | |
| Robert J. Johnson |
Director, Compliance/Best Practices | |
| Todd M. Jones |
Treasurer, Financial and Operations Principal | |
| Martha M. Kendler |
Director, Annuity Products |
C-14
Table of Contents
| Sharen L. King |
Director, Field Training & Development | |
| Steven J. LaFore |
Assistant Secretary | |
| Mary J. Lange |
Field Education Consultant | |
| Dwight Larkin |
Assistant Director - Retail Investment Services & ROSFP, Municipal Securities Principal, MSRB Contact | |
| Arleen J. Llewellyn |
Director, IPS Business Integration | |
| Jean M. Maier |
Director; Senior Vice President, Insurance Operations | |
| James M. Makowski |
Assistant Director, Marketing Materials Compliance | |
| Steven C. Mannebach |
Vice President, Recruiting & Leadership Development | |
| Jeffrey S. Marks |
Director, Sales Development | |
| Meridee J. Maynard |
Senior Vice President, Life Product | |
| Mac McAuliffe |
National Sales Director | |
| Allan J. McDonell |
Assistant Director, Annuity Operations and Municipal Securities Principal | |
| Mark E. McNulty |
Assistant Director, Compliance Assurance | |
| Joanne M. Migliaccio |
Director, Contract, License and Registration | |
| Michael J. Mihm |
Director, Business Development | |
| Benjamin N. Moen |
Regional Vice President, Sales | |
| Jennifer W. Murphy |
Secretary | |
| Timothy D. Nelson |
Director, Compliance/Best Practices | |
| Jeffrey J. Niehaus |
Director, Business Markets | |
| Jennifer O’Leary |
Assistant Treasurer | |
| Kathleen A. Oman |
Vice President, Variable Life Servicing | |
| Michael J. Patkunas |
Regional Vice President, Sales | |
| John J. Piazza |
Regional Vice President, Sales | |
| Georganne K. Prom |
New Business Variable Life Compliance Coordinator | |
| Michael A. Reis |
Assistant Treasurer | |
| Daniel A. Riedl |
Senior Vice President and Chief Operating Officer | |
| Marcia Rimai |
Director | |
| Robin E. Rogers |
Assistant Director, Contract, License & Registration | |
| Russell R. Romberger |
Regional Vice President, Sales | |
| Jeffrey P. Schloemer |
Assistant Director, Compliance Oversight & Review | |
| Calvin R. Schmidt |
Director, President and CEO | |
| Alexander D. Schneble |
Director, NMIS Administration | |
| Todd M. Schoon |
Director, Senior Vice President, Agencies | |
| Todd W. Smasal |
Director, Human Resources | |
| Michael C. Soyka |
Regional Vice President, Sales | |
| Paul J. Steffen |
Vice President, Agencies | |
| Steven H. Steidinger |
Director, Variable Life Products | |
| Carol A. Stilwell |
POS Variable Life Compliance Coordinator | |
| David G. Stoeffel |
Vice President - Product Line | |
| William H. Taylor |
Vice President, Advanced Financial Security Planning | |
| Kellen A. Thiel |
Director, Personal Investment Markets | |
| Donald G. Tyler |
Vice President, IPS Products and Sales | |
| Gwendolyn K. Weithaus |
Assistant Director, NMIS Compliance | |
| Alan M. Werth |
Third Party Sales Consultant | |
| Jeffrey B. Williams |
Vice President and Chief Compliance Officer, NMIS Compliance, FINRA Executive Representative | |
| Brian D. Wilson |
Director, Marketing and Sales | |
| Robert J. Wright |
Director, Strategic Partnerships and Product Support |
The address for each director and officer of NMIS is 611 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
(c) NMIS, the principal underwriter, received $27,055,697 of commissions and other compensation, directly or indirectly, from Registrant during the last fiscal year.
C-15
Table of Contents
| Item 31. | Location of Accounts and Records |
All accounts, books or other documents required to be maintained in connection with the Registrant’s operations are maintained in the physical possession of Northwestern Mutual at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
| Item 32. | Management Services |
There are no management-related service contracts, other than those referred to in Part A or Part B of this Registration Statement, under which management-related services are provided to the Registrant and pursuant to which total payments of $5,000 or more were made during any of the last three fiscal years.
| Item 33. | Fee Representation |
The Northwestern Mutual Life Insurance Company hereby represents that the fees and charges deducted under the variable life insurance policies which are the subject of this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company under the policies.
C-16
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, Northwestern Mutual Variable Life Account has duly caused this Amended Registration Statement to be signed on its behalf, in the City of Milwaukee, and State of Wisconsin, on the 18th day of February, 2010.
| NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT (Registrant) | ||||||||
| By | THE NORTHWESTERN MUTUAL LIFE | |||||||
| INSURANCE COMPANY (Depositor) | ||||||||
| Attest: | /s/ RAYMOND J. MANISTA |
By: | /s/ EDWARD J. ZORE | |||||
| Raymond J. Manista, |
Edward J. Zore, Chief Executive Officer | |||||||
| General Counsel and Secretary |
||||||||
Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed by the Depositor on the 18th day of February, 2010.
| THE NORTHWESTERN MUTUAL LIFE | ||||||||
| INSURANCE COMPANY (Depositor) | ||||||||
| Attest: | /s/ RAYMOND J. MANISTA |
By: | /s/ EDWARD J. ZORE | |||||
| Raymond J. Manista, |
Edward J. Zore, Chief Executive Officer | |||||||
| General Counsel and Secretary |
||||||||
Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed below by the following persons in the capacities with the Depositor and on the dates indicated:
| Signature |
Title |
|||
| /s/ EDWARD J. ZORE Edward J. Zore |
Trustee, Chief Executive Officer and Principal Executive Officer |
|||
| /s/ MICHAEL G. CARTER Michael G. Carter |
Chief Financial Officer and Principal Financial Officer |
|||
| /s/ JOHN C. KELLY John C. Kelly |
Vice President and Controller and Principal Accounting Officer |
|||
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|
Facundo L. Bacardi |
Trustee |
|||
| /s/ John N. Balboni* John N. Balboni |
Trustee |
|||
| /s/ Robert C. Buchanan* Robert C. Buchanan |
Trustee |
|||
| /s/ David J. Drury* David J. Drury |
Trustee |
|||
| /s/ Connie K. Duckworth* Connie K. Duckworth |
Trustee |
|||
| /s/ David A. Erne* David A. Erne |
Trustee |
|||
| /s/ James P. Hackett* James P. Hackett |
Trustee |
|||
| /s/ Hans Helmerich* Hans Helmerich |
Trustee |
|||
| /s/ Dale E. Jones* Dale E. Jones |
Trustee |
|||
| /s/ Margery Kraus* Margery Kraus |
Trustee |
|||
| /s/ David J. Lubar* David J. Lubar |
Trustee |
|||
| /s/ Ulice Payne, Jr.* Ulice Payne, Jr. |
Trustee |
|||
| /s/ Gary A. Poliner Gary A. Poliner |
Trustee |
|||
| /s/ John E. Schlifske John E. Schlifske |
Trustee |
|||
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| /s/ H. Mason Sizemore, Jr.* H. Mason Sizemore, Jr. |
Trustee |
|||
| /s/ Peter M. Sommerhauser* Peter M. Sommerhauser |
Trustee |
|||
| /s/ Mary Ellen Stanek* Mary Ellen Stanek |
Trustee |
|||
| /s/ John J. Stollenwerk* John J. Stollenwerk |
Trustee |
|||
| /s/ S. Scott Voynich S. Scott Voynich |
Trustee |
|||
| /s/ Barry L. Williams Barry L. Williams |
Trustee |
|||
| *By: | /s/ Edward J. Zore | |
| Edward J. Zore, Attorney in fact, | ||
| pursuant to the Power of Attorney filed herewith. |
Each of the signatures is affixed as of February 18, 2010
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EXHIBIT INDEX
EXHIBITS FILED WITH FORM N-6
POST-EFFECTIVE AMENDMENT NO. 19 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FOR
NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT
| Exhibit | Description | |||||||
| (j)(c) |
Power of Attorney |
Filed herewith | ||||||
| (k) |
Opinion and Consent of Raymond J. Manista, Esq. dated February 4, 2010 |
Filed herewith |
C-20
