497 1 wrlfwpsai497.htm wrlfwpsai497.htm
STATEMENT OF ADDITIONAL INFORMATION


May 1, 2011, as supplemented May 17, 2011
WRL FREEDOM WEALTH PROTECTORâ
issued through
WRL Series Life Account
by
Western Reserve Life Assurance Co. of Ohio

Administrative Office:
570 Carillon Parkway
St. Petersburg, Florida 33716
Please direct transactions, claim forms, payments and other correspondence and notices as follows:
Transaction Type
Direct or Send to
Telephonic Transaction
1-727- 299-1800 or 1-800-851-9777 (toll free)
Facsimile Transaction
1-727-299-1648 (subaccount transfers only)
1-727-299-1620 (all other facsimile transactions)
Electronic Transaction
www.westernreserve.com
Claim Forms
Administrative Office:
P.O. Box 9008, Clearwater, FL  33758-9008
(street address—570 Carillon Parkway, St. Petersburg, FL 33716)
All payments made by check, all other correspondence and notices (except claim forms)
Mailing Address:  4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499


This Statement of Additional Information (“SAI”) expands upon subjects discussed in the current prospectus for the WRL Freedom Wealth Protectorâ joint survivorship flexible premium variable life insurance policy offered by Western Reserve Life Assurance Co. of Ohio.  You may obtain a copy of the prospectus dated May 1, 2011, by calling our administrative office at 1-800-851-9777 (Monday – Friday from 8:30 a.m. – 7:00 p.m. Eastern time), or by writing to the mailing address at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.  The prospectus sets forth information that a prospective investor should know before investing in a Policy. Terms used in this SAI have the same meanings as in the prospectus for the Policy.

This SAI is not a prospectus and should be read only in conjunction with the prospectuses for the Policy and theTransamerica Series Trust – Initial Class, the Fidelity Variable Insurance Products - Service
Class 2 Shares, the ProFunds, the Access One Trust, the AllianceBernstein Variable Products Series Fund, and the Franklin Templeton Variable Insurance Products Trust.








WRL00187-05/2011

 
 
 

Table of Contents          
 
 
The Policy – General Provisions                                                      
Ownership Rights                                
Our Right to Contest the Policy                                                      
Suicide Exclusion                                
Misstatement of Age or Gender                                                      
Modifying the Policy                                           
Mixed and Shared Funding                                                      
Addition, Deletion, or Substitution of Portfolios                                                                                     
Additional Information                                           
Additional Information about Western Reserve and the Separate Account                                                                                                                     
Legal Matters                                
Variations in Policy Provisions                                                      
Personalized Illustrations of Policy Benefits                                                                           
Sale of the Policies                                
Reports to Owners                                
Records                                
Independent Registered Public Accounting Firm                                                                                     
Experts                                
Underwriters                      
Underwriting Standards                                           
Performance Data                                
Other Performance Data in Advertising Sales Literature                                                                                                
Western Reserve's Published Ratings                                                                
Hypothetical In Force Illustration
Financial Statements                                           
WRL Series Life Account
Western Reserve Life Assurance Co. of Ohio
Appendix A
 
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S-1
G-1
 
 
 
 
 
 
In order to supplement the description in the prospectus, the following provides additional information about Western Reserve and the Policy, which may be of interest to a prospective purchaser.

The Policy – General Provisions                                                                                                                                        

Ownership Rights

The Policy belongs to the owner named in the application. The owner may exercise all of the rights and options described in the Policy. If two owners are named, the Policy will be owned jointly, and each owner’s consent will be required to exercise ownership rights.  If the owner dies before the surviving insured and no contingent owner is named, then ownership of the Policy will pass to the owner's estate. The owner may exercise certain rights described below.

Changing the Owner
·
Change the owner by providing written notice, in good order, to us at our mailing address at any time while the surviving insured is alive and the Policy is in force.
 
·
Change is effective as of the date that the written notice is accepted by us in good order, at our mailing address.
 
·
Changing the owner does not automatically change the beneficiary.
 
·
Changing the owner may have tax consequences. You should consult a tax advisor before changing the owner.
 
·
We are not liable for payments we made before we received the written notice at our mailing address.

Choosing the Beneficiary
·
The owner designates the beneficiary (the person to receive the death benefit when the surviving insured dies) in the application.
 
·
If the owner designates more than one beneficiary, then each beneficiary shares equally in any death benefit proceeds unless the beneficiary designation states otherwise.
 
·
If the beneficiary dies before the surviving insured, then any contingent beneficiary becomes the surviving beneficiary.
 
·
If both the beneficiary and contingent beneficiary die before the surviving insured, then the death benefit will be paid to the owner or the owner's estate upon the surviving insured's death.

Changing the Beneficiary
·
The owner changes the beneficiary by providing written notice to us, in good order, at our mailing address.
 
·
Change is effective as of the date the owner signs the written notice.
 
·
We are not liable for any payments we made before we received the written notice at our mailing address.

Assigning the Policy
·
The owner may assign Policy rights while either or both joint insureds are alive.
 
·
The owner retains any ownership rights that are not assigned.
 
·
Assignee may not change the owner or the beneficiary, and may not elect or change an optional method of payment. Any amount payable to the assignee will be paid in a lump sum.
 
·
Claims under any assignment are subject to proof of interest and the extent of the assignment.
 
·
We are not:
   
>
bound by any assignment unless we receive a written notice of the assignment at our mailing address;
   
>
responsible for the validity of any assignment;
   
>
liable for any payment we made before we received written notice of the assignment at our mailing address; or
   
>
bound by any assignment which results in adverse tax consequences to the owner, joint insureds or beneficiary(ies).
 
·
Assigning the Policy may have tax consequences. You should consult a tax advisor before assigning the Policy.


 
1
 
Our Right to Contest the Policy

In issuing the Policy, we rely on all statements made by or for the joint insureds in the application or in a supplemental application. Therefore, if you make any material misrepresentation of a fact in the application (or any supplemental application), then we may contest the Policy's validity or may resist a claim under the Policy for two years from the Policy date. For any portion of the specified amount that is issued as a result of a conversion, the contestability period is measured from the later of the policy date of the policy that was converted or the latest effective date of reinstatement of the converted policy.

In the absence of fraud, we cannot bring any legal action to contest the validity of the Policy after the Policy has been in force, while both joint insureds are still alive, for two years from the Policy date, or if reinstated, for two years from the date of reinstatement.  At the end of the second Policy year, we will send you a notice asking you whether either joint insured has died.  We can still contest the Policy’s validity even if you do not notify us that a joint insured has died and even if the Policy is still in force.

Suicide Exclusion

If either joint insured commits suicide, while sane or insane, within two years of the Policy date (or two years from the reinstatement date, if the Policy lapses and is reinstated), the Policy will terminate and our liability is limited to an amount equal to the premiums paid within such two year period, less any outstanding loan amount, and less any cash withdrawals. We will pay this amount to the beneficiary in one sum. For any portion of the specified amount that is issued as a result of a conversion, the suicide period is measured from the later of the policy date of the policy that was converted or the latest effective date of reinstatement of the converted policy.

Misstatement of Age or Gender

If the age or gender of either joint insured was stated incorrectly in the application or any supplemental application, then the death benefit will be adjusted based on what the cost of insurance charge for the most recent monthly deduction would have purchased based on the joint insured's correct age and gender.

Modifying the Policy

Only our President or Secretary may modify the Policy or waive any of our rights or requirements under the Policy. Any modification or waiver must be in writing. No agent may bind us by making any promise not contained in the Policy.

If we modify the Policy, we will provide you notice and we will make appropriate endorsements to the Policy.

Mixed and Shared Funding

    Shares of the portfolios are sold to other separate accounts that we (or our affiliates) establish to support other variable annuity contracts and variable life insurance policies we (or our affiliates) issue.  Shares of some portfolios are also sold to separate accounts of unaffiliated life insurance companies.  It is possible in the future that you may be disadvantaged when the separate account invests in a portfolio that also (1) invests in separate accounts of unaffiliated life insurance companies, and (2) invests in separate accounts (including those of our affiliates) funding variable annuity contracts.

Neither we nor the funds currently foresee that you would be disadvantaged in this manner.  Each fund’s board of directors/trustees monitors its fund to identify any material conflicts that may arise between the interests of owners of variable annuity contracts and those of owners of variable life insurance policies, as well as between the interests of owners of contracts issued by different unaffiliated life insurance companies (“material conflicts”).  Such boards of directors/trustees are obligated to determine what action, if any, must be taken to resolve any material conflicts that arise.  Such action could include requiring the separate account, or separate accounts of affiliated or unaffiliated insurance companies, to withdraw their investments in a portfolio and such withdrawals could have adverse consequences to owners.  In addition, we have entered into an agreement with each fund on behalf of the separate account governing the separate account’s investment in that fund’s portfolios (the “participation agreement”).  The participation agreement contains provisions designed to protect owners in the event of material conflicts.

Material conflicts affecting owners could result in a number of situations including: (1) differences in state insurance law applicable to different life insurance companies whose separate accounts are invested in a portfolio; (2) changes in tax law or regulations that result in changes to a portfolio that have a disparate effect on different life insurance companies whose separate accounts are invested in the portfolio, or on different types of variable contracts invested in the portfolio; (3) actions or omissions by a fund that operate to the advantage of one group of variable contract owners at the expense of another group or groups; (4) changes to a portfolio approved at a shareholders’ meeting as a result of voting by one group of variable contract owners to the disadvantage of another group or groups;  and (5) disparate provisions in the participation agreements of different unaffiliated insurance companies or the pursuit of remedies under such an agreement by one insurance company to the detriment of one or more other insurance companies.

 
2
 
    Notwithstanding our reasonable efforts and those of the funds, there is the risk that actions or omissions of the fund in response to material conflicts may disadvantage our policyowners.  If we believe that a fund’s response to any of these events or conflicts is insufficient to protect our policyowners, we will undertake appropriate actions on our own, which may include withdrawing the separate account’s investments in the fund.

If a fund's Board of Directors/Trustees were to conclude that separate funds should be established for variable life insurance and variable annuity separate accounts, Western Reserve will bear the attendant expenses, but variable life insurance policyowners and variable annuity contract owners would no longer have the economies of scale resulting from a larger combined fund.

Addition, Deletion, or Substitution of Portfolios

We do not guarantee that each portfolio will always be available for investment through the Policy.  We reserve the right, subject to compliance with applicable law, to add new portfolios, close existing portfolios, or substitute portfolio shares that are held by any subaccount for shares of a different portfolio.  New or substitute portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers.  We will only add, delete or substitute shares of another portfolio of a fund (or of another open-end, registered investment company) if the shares of a portfolio are no longer available for investment, or if in our judgment further investment in any portfolio would become inappropriate in view of the purposes of the separate account.  We will not add, delete or substitute any shares attributable to your interest in a subaccount without notice to you and prior approval of the SEC, to the extent required by the 1940 Act or other applicable law.  We may also decide to purchase securities from other portfolios for
the separate account.  We reserve the right to transfer separate account assets to another separate account that we determine to be associated with the class of contracts to which the Policy belongs.

We also reserve the right to establish additional subaccounts of the separate account, each of which would invest in a new portfolio of a fund, or in shares of another investment company, with specified investment objectives.  We may establish new subaccounts when, in our sole discretion, marketing, tax or investment conditions warrant.  We will make any new subaccounts available to existing owners on a basis we determine.  We may also eliminate one or more subaccounts for the same reasons as stated above.

In the event of any such substitution or change, we may make such changes in this and other policies as may be necessary or appropriate to reflect such substitution or change.  If we deem it to be in the best interests of persons having voting rights under the Policies, and when permitted by law, the separate account may be (1) operated as a management company under the 1940 Act, (2) deregistered under the 1940 Act in the event such registration is no longer required, (3) managed under the direction of a committee, or (4) combined with one or more other separate accounts, or subaccounts.
 
Additional Information                                                                                                                                        

Additional Information about Western Reserve and the Separate Account

Western Reserve is a stock life insurance company is a wholly-owned indirect subsidiary of Transamerica Corporation, which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services.   All of the stock of Transamerica Corporation is indirectly owned by AEGON N.V. of the Netherlands, a public company under Dutch law.  Western Reserve's administrative office is located at 570 Carillon Parkway, St. Petersburg, Florida 33716 and the mailing address is 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.

Western Reserve was initially incorporated in 1957 under the laws of Ohio and is subject to regulation by the Insurance Department of the State of Ohio, as well as by the insurance departments of all other states and jurisdictions in which it does business. Western Reserve is licensed to sell insurance in all states (except New York), Puerto Rico, Guam and in the District of Columbia. Western Reserve submits annual statements on its operations and finances to insurance officials in all states and jurisdictions in which it does business. The Policy described in the prospectus has been filed with, and where required, approved by, insurance officials in those jurisdictions in which it is sold.

Western Reserve established the separate account as a separate investment account under Ohio law in 1985. We own the assets in the separate account and are obligated to pay all benefits under the Policies. The separate account is used to support other life insurance policies of Western Reserve, as well as for other purposes permitted by law. The separate account is registered with the SEC as a unit investment trust under the 1940 Act and qualifies as a "separate account" within the meaning of the federal securities laws.

Western Reserve holds the assets of the separate account physically segregated and apart from the general account. Western Reserve maintains records of all purchases and sales of portfolio shares by each of the subaccounts. A blanket bond was issued to AEGON USA, Inc. ("AEGON USA") in the aggregate amount of $12 million, covering all of the employees of AEGON USA and its affiliates, including Western Reserve. A Stockbrokers Blanket Bond, issued to AEGON U.S.A. Securities, Inc. providing fidelity coverage, covers the activities of registered representatives of AFSG to a limit of $10 million.

 
3
 
Legal Matters

Arthur D. Woods, Vice President and Senior Counsel of Western Reserve, has provided legal advice on certain matters in connection with issuance of the Policy.

Variations in Policy Provisions

Certain provisions of the Policy may vary from the descriptions in the prospectus, depending on when and where the Policy was issued, in order to comply with different state laws.  These variations may include differences in charges, or Policy features may be unavailable or known by a different name.  Please refer to your Policy; any variations will be included in your Policy or in rider or endorsements attached to your Policy.

Personalized Illustrations of Policy Benefits

In order to help you understand how your Policy values would vary over time under different sets of assumptions, we will provide you with certain personalized illustrations upon request. These will be based on the age and insurance risk characteristics of the insured persons under your Policy and such factors as the specified amount, death benefit option, premium payment amounts, and rates of return (within limits) that you request.

The illustrations are not a representation or guarantee of investment returns or cash value.  You may request illustrations that reflect the expenses of the portfolios in which you intend to invest.

Sale of the Policies
 
We currently offer the Policies on a continuous basis. We anticipate continuing to offer the Policies, but reserve the right to discontinue the offering.

Our affiliate, TCI serves as principal underwriter for the Policies. TCI’s home office is located at 4600 S. Syracuse Street, Suite 1100, Denver, Colorado 80237.  TCI is an affiliate of Western Reserve and, like Western Reserve, is an indirect, wholly owned subsidiary of AEGON USA.  TCI is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of Financial Industry Regulatory Authority (“FINRA”).  TCI is not a member of the Securities Investor Protection Corporation.

The Policies are offered to the public through sales representatives of broker-dealers ("selling firms") that have entered into selling agreements with us and with TCI.  Sales representatives are appointed as our insurance agents.

During fiscal years 2010, 2009 and 2008, the amounts paid to TCI in connection with all Policies sold through the separate account were $20,084,068, $22,399,793 and $47,040,038, respectively. TCI  passes through to selling firms commissions it receives to selling firms for their sales and does not retain any portion of any commissions.   Our parent company provides paid-in capital to TCI  and pays for TCI's  operating and other expenses, including overhead, legal and accounting fees.

We and/or TCI or TFA may pay certain selling firms additional cash amounts for:  (1) “preferred product” treatment of the Policies in their marketing programs, which may include marketing services and increased access to their sales representatives; (2) sales promotions relating to the Policies; (3) costs associated with sales conferences and educational seminars for their sales representatives; and (4) other expenses incurred by them.  These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms.

Reports to Owners

At least once each year, or more often as required by law, we will mail to policyowners at their last known address a report showing the following information as of the end of the report period:

>
the current cash value
>
any activity since the last report
>
the current net surrender value
>
projected values
>
the current death benefit
>
investment experience of each subaccount
>
outstanding loans
>
any other information required by law

 
4
 
You may request additional copies of reports, but we may charge a fee for such additional copies. In addition, we will send written confirmations of any premium payments and other financial transactions you request including: changes in specified amount, changes in death benefit option, transfers, partial withdrawals, increases in loan amount, loan interest payments, loan repayments, lapses and reinstatements. We also will send copies of the annual and semi-annual report to shareholders for each portfolio in which you are indirectly invested.

Records

We will maintain all records relating to the separate account and the fixed account.

Independent Registered Public Accounting Firm

The financial statements of the separate account at December 31, 2010, and for the periods disclosed in the financial statements, and the statutory-basis financial statements and schedules of Western Reserve at December 31, 2010 and 2009, and for each of the three years in the period ended December 31, 2010, appearing herein, have been audited by Ernst & Young LLP, 801 Grand Avenue, Suite 3000, Des Moines, Iowa 50309, independent registered public accounting firm, as set forth in the firm’s respective reports thereon appearing elsewhere herein, and are included in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.

Experts

Actuarial matters included in this SAI have been examined by Lorne Schinbein,  Vice President and Managing Actuary of Western Reserve, located at 570 Carillon Parkway, St. Petersburg, Florida  33716, as stated in the consent filed as an exhibit to the registration statement.

Underwriters                                                                                                                                        

Underwriting Standards

The Policy uses mortality tables that distinguish between men and women. As a result, the Policy pays different benefits to men and women of the same age.  Montana prohibits our use of actuarial tables that distinguish between males and females to determine premiums and policy benefits for policies issued on the lives of its residents.  Therefore, we will base the premiums and benefits in Policies that we issue in Montana, to insure residents of that state, on actuarial tables that do not differentiate on the basis of gender.

Your cost of insurance charge is based on a number of factors, including, but not limited to each joint insured's gender, issue age on the Policy date, specified amount band, length of time from the Policy date, and underwriting class. We currently place each joint insured into one the following underwriting classes:

·
ultimate select (preferred) non-tobacco use;
·
select (non-preferred) non-tobacco use;
·
ultimate standard (preferred) tobacco use;
·
standard (non-preferred) tobacco use.

We then place the joint insureds into one of the following non-sub-standard underwriting classes:

·
combination of two non-tobacco users;
·
combination of two tobacco users; and
·
combination of a tobacco user and a non-tobacco user.

We also place joint insureds in various sub-standard underwriting classes, which involve a higher mortality risk and higher charges. We generally charge higher rates for insureds who use tobacco.

 
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Performance Data                                                                                                                                        

Other Performance Data in Advertising Sales Literature

We may compare each subaccount's performance to the performance of:
·
other variable life issuers in general;
·
variable life insurance policies which invest in mutual funds with similar investment objectives and policies, as reported by Lipper Analytical Services, Inc. ("Lipper") and Morningstar, Inc. ("Morningstar"); and other services, companies, individuals, or industry or financial publications (e.g., Forbes, Money, The Wall Street Journal, Business Week, Barron's, Kiplinger's Personal Finance, and Fortune);
 
>
Lipper and Morningstar rank variable annuity contracts and variable life policies. Their performance analysis ranks such policies and contracts on the basis of total return, and assumes reinvestment of distributions; but it does not show sales charges, redemption fees or certain expense deductions at the separate account level.

·
the Standard & Poor's Index of 500 Common Stocks, or other widely recognized indices;
 
>
unmanaged indices may assume the reinvestment of dividends, but usually do not reflect deductions for the expenses of operating or managing an investment portfolio; or
·
other types of investments, such as:
 
>
certificates of deposit;
 
>
savings accounts and U.S. Treasuries;
 
>
certain interest rate and inflation indices (e.g., the Consumer Price Index); or
 
>
indices measuring the performance of a defined group of securities recognized by investors as representing a particular segment of the securities markets (e.g., Donoghue Money Market Institutional Average, Lehman Brothers Corporate Bond Index, or Lehman Brothers Government Bond Index).

Western Reserve's Published Ratings

We may publish in advertisements, sales literature, or reports we send to you the ratings and other information that an independent ratings organization assigns to us. These organizations include: A.M. Best Company, Moody's Investors Service, Inc., Standard & Poor's Insurance Rating Services, and Fitch Ratings. These ratings are opinions regarding an operating insurance company's financial capacity to meet the obligations of its insurance policies in accordance with their terms. These ratings do not apply to the separate account, the subaccounts, the funds or their portfolios, or to their performance.
 
Hypothetical In  Force Illustration

Appendix A contains a sample hypothetical  In Force illustration that shows how the selected death benefit option, specified amount, cost of insurance rates, hypothetical rates of return, withdrawals and loans affect the policyowner’s death benefit levels, cash and surrender values.
Financial Statements

Western Reserve's statutory-basis financial statements and schedules, which include the Report of Independent Registered Public Accounting Firm, appear on the following pages. These statutory-basis financial statements and schedules should be distinguished from the separate account's financial statements and you should consider these statutory-basis financial statements and schedules only as bearing upon Western Reserve's ability to meet its obligations under the Policies. You should not consider our statutory-basis financial statements and schedules as bearing upon the investment performance of the assets held in the separate account.

Western Reserve's statutory-basis financial statements and schedules at December 31, 2010 and 2009 and for each of the three years in the period ended December 31, 2010, have been prepared on the basis of statutory accounting principles rather than U.S. generally accepted accounting principles.

The separate account’s financial statements dated December 31, 2010, which include the Report of Independent Registered Public Accounting Firm, also appear on the following pages.


 
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Report of Independent Registered Public Accounting Firm
 
The Board of Directors and Contract Owners
of the WRL Series Life Account
 
Western Reserve Life Assurance Co. of Ohio
 
We have audited the accompanying statements of assets and liabilities of each of the subaccounts constituting the WRL Series Life Account (the Separate Account) (comprised of the Transamerica JPMorgan Core Bond VP, Transamerica Asset Allocation – Conservative VP, Transamerica Asset Allocation – Growth VP, Transamerica Asset Allocation – Moderate Growth VP, Transamerica Asset Allocation – Moderate VP, Transamerica MFS International Equity VP, Transamerica Clarion Global Real Estate Securities VP, Transamerica Federated Market Opportunity VP, Transamerica International Moderate Growth VP, Transamerica JPMorgan Mid Cap Value VP, Transamerica JPMorgan Enhanced Index VP, Transamerica BlackRock Large Cap Value VP, Transamerica AEGON High Yield Bond VP, Transamerica PIMCO Total Return VP, Transamerica Focus VP, Transamerica T. Rowe Price Small Cap VP, Transamerica Diversified Equity, Transamerica Third Avenue Value VP, Transamerica Balanced VP, Transamerica AllianceBernstein Dynamic Allocation VP, Transamerica WMC Diversified Growth VP, Transamerica Growth Opportunities VP, Transamerica Money Market VP, Transamerica Small/MidCap Value VP, Transamerica U.S. Government Securities VP, Transamerica Morgan Stanley Mid-Cap Growth VP, Transamerica Index 50 VP, Transamerica Index 75 VP, Transamerica Efficient Markets VP, Transamerica Hanlon Balanced VP, Transamerica Hanlon Growth & Income VP, Transamerica Hanlon Growth VP, Transamerica Hanlon Managed Income VP, Transamerica Multi Managed Large Cap Core VP, Transamerica Foxhall Emerging Markets/Pacific Rim VP, Transamerica Foxhall Global Conservative VP, Transamerica Foxhall Global Growth VP, Transamerica Foxhall Global Hard Asset VP, Transamerica Jennison Growth VP, Fidelity VIP Contrafund®, Fidelity VIP Equity-Income, Fidelity VIP Growth Opportunities, Fidelity VIP Index 500, ProFund VP Bull, ProFund VP Money Market, ProFund VP NASDAQ-100, ProFund VP Short Small-Cap, ProFund VP Small-Cap, Access VP High Yield, ProFund VP Europe 30, ProFund VP Oil & Gas, ProFund VP Ultra Small-Cap, ProFund VP Utilities, ProFund VP Consumer Services, ProFund VP Pharmaceuticals, ProFund VP Small-Cap Value, ProFund VP Falling U.S. Dollar, ProFund VP Emerging Markets, ProFund VP International, ProFund VP Asia 30, ProFund VP Japan, ProFund VP Short NASDAQ-100, ProFund VP U.S. Government Plus, ProFund VP Basic Materials, ProFund VP Financials, ProFund VP Precious Metals, ProFund VP Telecommunications, ProFund VP Mid-Cap, ProFund VP Short Emerging Markets, ProFund VP Short International, Franklin Templeton VIP Founding Funds Allocation, and AllianceBernstein Balanced Wealth Strategy Portfolio subaccounts) as of December 31, 2010, and the related
 

 

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statements of operations and changes in net assets for the periods indicated thereon. These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Separate Account’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2010 by correspondence with the mutual funds’ transfer agents. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts constituting the WRL Series Life Account at December 31, 2010, and the results of their operations and changes in net assets for the periods indicated thereon, in conformity with U.S. generally accepted accounting principles.
 
/s/Ernst & Young LLP

Des Moines, Iowa
April 18, 2011

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Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010



     
Transamerica JPMorgan Core Bond VP
Transamerica Asset Allocation - Conservative VP
Transamerica Asset Allocation - Growth VP
Transamerica Asset Allocation - Moderate Growth VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
         4,357,400.690
         4,334,290.831
       30,623,864.336
       28,431,442.468
   
Cost
 $           52,801,822
 $           41,282,466
 $         313,744,731
 $         318,697,761
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           54,990,397
 $           44,599,853
 $         266,427,620
 $         300,804,661
 
 Receivable for units sold
                               -
                            21
                               -
                               -
Total assets
              54,990,397
              44,599,874
            266,427,620
            300,804,661
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                          342
                               -
     
 $           54,990,397
 $           44,599,874
 $         266,427,278
 $         300,804,661
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           54,990,397
 $           44,599,874
 $         266,427,278
 $         300,804,661
Total net assets
 $           54,990,397
 $           44,599,874
 $         266,427,278
 $         300,804,661
       
Accumulation units outstanding:
      
 
M&E - 0.90%
                1,267,689
                2,671,136
              13,174,874
              14,562,166
 
M&E - 0.75%
                   221,209
                   319,239
                5,337,616
                5,512,897
 
M&E - 0.00%
                       2,973
                       9,777
                   102,287
                   120,995
 
M&E - 1.50%
                       6,027
                       4,657
                     94,691
                     56,023
         
Accumulation unit value:
        
 
M&E - 0.90%
 $            40.801716
 $            14.933358
 $            14.220420
 $            14.913463
 
M&E - 0.75%
 $            14.263144
 $            14.239866
 $            14.443704
 $            14.826103
 
M&E - 0.00%
 $            13.485759
 $            11.680909
 $            10.130455
 $            10.843925
 
M&E - 1.50%
 $            11.826668
 $            10.890181
 $              9.967937
 $            10.451190
See accompanying notes.
        


 
S-3
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica Asset Allocation - Moderate VP
Transamerica MFS International Equity VP
Transamerica Clarion Global Real Estate Securities VP
Transamerica Federated Market Opportunity VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
         8,765,509.191
         6,315,832.035
         4,004,431.262
         5,090,548.111
   
Cost
 $           93,254,319
 $           51,004,907
 $           62,577,875
 $           73,151,276
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           91,599,571
 $           44,273,983
 $           45,250,073
 $           59,508,507
 
 Receivable for units sold
                          854
                               -
                               -
                               -
Total assets
              91,600,425
              44,273,983
              45,250,073
              59,508,507
Liabilities
        
 
Payable for units redeemed
                               -
                          108
                          409
                            16
     
 $           91,600,425
 $           44,273,875
 $           45,249,664
 $           59,508,491
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           91,600,425
 $           44,273,875
 $           45,249,664
 $           59,508,491
Total net assets
 $           91,600,425
 $           44,273,875
 $           45,249,664
 $           59,508,491
       
Accumulation units outstanding:
      
 
M&E - 0.90%
                4,793,772
                3,093,519
                1,566,134
                1,741,454
 
M&E - 0.75%
                1,262,605
                     50,854
                   210,991
                   394,612
 
M&E - 0.00%
                     23,460
                       4,404
                       7,412
                       2,270
 
M&E - 1.50%
                     13,108
                       3,562
                       8,210
                       4,229
         
Accumulation unit value:
        
 
M&E - 0.90%
 $            15.142828
 $            14.132434
 $            26.317191
 $            31.441152
 
M&E - 0.75%
 $            14.730540
 $              9.373539
 $            18.414956
 $            11.895347
 
M&E - 0.00%
 $            11.486617
 $              9.562341
 $              8.956515
 $            10.026168
 
M&E - 1.50%
 $            10.743590
 $            10.146362
 $              9.944816
 $              9.072599
See accompanying notes.
        


 
S-4
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica International Moderate Growth VP
Transamerica JPMorgan Mid Cap Value VP
Transamerica JPMorgan Enhanced Index VP
Transamerica BlackRock Large Cap Value VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
         1,187,426.843
            593,108.600
            172,022.200
         4,261,494.588
   
Cost
 $           10,667,374
 $             7,894,710
 $             1,958,415
 $           63,191,390
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           10,841,207
 $             7,977,311
 $             2,022,981
 $           58,169,401
 
 Receivable for units sold
                            18
                              1
                              4
                              1
Total assets
              10,841,225
                7,977,312
                2,022,985
              58,169,402
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                               -
     
 $           10,841,225
 $             7,977,312
 $             2,022,985
 $           58,169,402
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           10,841,225
 $             7,977,312
 $             2,022,985
 $           58,169,402
Total net assets
 $           10,841,225
 $             7,977,312
 $             2,022,985
 $           58,169,402
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   654,899
                   441,730
                   131,027
                2,439,928
 
M&E - 0.75%
                   392,651
                       1,892
                     28,260
                   226,898
 
M&E - 0.00%
                     16,833
                               -
                            26
                       9,887
 
M&E - 1.50%
                     21,749
                               -
                               -
                       4,059
         
Accumulation unit value:
        
 
M&E - 0.90%
 $              9.951938
 $            17.994494
 $            12.609119
 $            22.443425
 
M&E - 0.75%
 $            10.021311
 $            15.121606
 $            13.113574
 $            14.468586
 
M&E - 0.00%
 $            10.451223
 $                            -
 $            10.115638
 $              9.012661
 
M&E - 1.50%
 $              9.788806
 $                            -
 $            10.483723
 $              9.129667
See accompanying notes.
        


 
S-5
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica AEGON High Yield Bond VP
Transamerica PIMCO Total Return VP
Transamerica Focus VP
Transamerica T. Rowe Price Small Cap VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
         2,407,107.553
         2,649,036.101
         2,696,199.369
         2,958,038.645
   
Cost
 $           18,873,335
 $           30,182,592
 $           32,241,666
 $           23,128,610
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           18,462,515
 $           30,675,838
 $           31,572,495
 $           27,953,465
 
 Receivable for units sold
                               -
                               -
                               -
                          209
Total assets
              18,462,515
              30,675,838
              31,572,495
              27,953,674
Liabilities
        
 
Payable for units redeemed
                              5
                               -
                          936
                               -
     
 $           18,462,510
 $           30,675,838
 $           31,571,559
 $           27,953,674
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           18,462,510
 $           30,675,838
 $           31,571,559
 $           27,953,674
Total net assets
 $           18,462,510
 $           30,675,838
 $           31,571,559
 $           27,953,674
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   966,021
                1,799,857
                1,819,525
                1,560,737
 
M&E - 0.75%
                   188,165
                   234,502
                     64,806
                   229,383
 
M&E - 0.00%
                       3,588
                       7,071
                       4,002
                       3,746
 
M&E - 1.50%
                       4,851
                       3,344
                          432
                       1,760
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            16.013764
 $            15.130336
 $            16.817580
 $            15.491636
 
M&E - 0.75%
 $            15.343954
 $            14.117442
 $            14.237118
 $            16.147516
 
M&E - 0.00%
 $            12.982461
 $            13.233177
 $            10.987536
 $            13.245498
 
M&E - 1.50%
 $            12.182474
 $            11.740749
 $            11.379777
 $            12.341400
See accompanying notes.
        


 
S-6
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica Diversified Equity VP
Transamerica Third Avenue Value VP
Transamerica Balanced VP
Transamerica AllianceBernstein Dynamic Allocation VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
       10,699,169.341
         6,210,415.228
         9,054,610.058
            417,384.749
   
Cost
 $         238,685,330
 $           94,181,237
 $         100,097,089
 $             3,627,216
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $         216,230,212
 $           74,462,879
 $         114,812,456
 $             3,384,990
 
 Receivable for units sold
                               -
                               -
                               -
                            97
Total assets
            216,230,212
              74,462,879
            114,812,456
                3,385,087
Liabilities
        
 
Payable for units redeemed
                          820
                            27
                            17
                               -
     
 $         216,229,392
 $           74,462,852
 $         114,812,439
 $             3,385,087
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $         216,229,392
 $           74,462,852
 $         114,812,439
 $             3,385,087
Total net assets
 $         216,229,392
 $           74,462,852
 $         114,812,439
 $             3,385,087
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                7,610,727
                2,619,049
                7,183,160
                   209,836
 
M&E - 0.75%
                   370,286
                   276,783
                     94,640
                     17,283
 
M&E - 0.00%
                     18,092
                     21,719
                       6,579
                       1,038
 
M&E - 1.50%
                       8,155
                       8,108
                       1,214
                          247
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            27.709441
 $            26.640440
 $            15.765975
 $            14.941095
 
M&E - 0.75%
 $            13.714278
 $            15.894578
 $            15.516557
 $            13.659312
 
M&E - 0.00%
 $            10.142600
 $              9.642694
 $            12.238425
 $            11.040270
 
M&E - 1.50%
 $              9.649885
 $            10.047920
 $            11.465585
 $              9.613727
See accompanying notes.
        


 
S-7
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica WMC Diversified Growth VP
Transamerica Growth Opportunities VP
Transamerica Money Market VP
Transamerica Small/MidCap Value VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
       27,217,699.174
         4,277,852.160
       55,702,981.710
         1,730,825.505
   
Cost
 $         680,017,503
 $           58,565,288
 $           55,702,982
 $           29,511,081
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $         611,309,523
 $           61,258,843
 $           55,702,982
 $           36,122,328
 
 Receivable for units sold
                               -
                               -
                          331
                               -
Total assets
            611,309,523
              61,258,843
              55,703,313
              36,122,328
Liabilities
        
 
Payable for units redeemed
                            21
                            42
                               -
                              5
     
 $         611,309,502
 $           61,258,801
 $           55,703,313
 $           36,122,323
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $         611,309,502
 $           61,258,801
 $           55,703,313
 $           36,122,323
Total net assets
 $         611,309,502
 $           61,258,801
 $           55,703,313
 $           36,122,323
             
Accumulation units outstanding:
      
 
M&E - 0.90%
              41,382,661
                3,087,879
                2,409,589
                1,469,355
 
M&E - 0.75%
                   470,230
                   196,160
                   452,997
                   317,081
 
M&E - 0.00%
                       9,543
                       2,739
                     13,247
                       6,338
 
M&E - 1.50%
                       9,080
                       2,501
                       3,975
                     16,246
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            14.609215
 $            18.599507
 $            20.951152
 $            20.035690
 
M&E - 0.75%
 $            13.954017
 $            19.148249
 $            11.119634
 $            20.234037
 
M&E - 0.00%
 $              9.733001
 $            13.842380
 $            10.852231
 $            14.356106
 
M&E - 1.50%
 $              9.562861
 $            12.685780
 $              9.740774
 $            10.832412
See accompanying notes.
        


 
S-8
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica U.S. Government Securities VP
Transamerica Morgan Stanley Mid-Cap Growth VP
Transamerica Index 50 VP
Transamerica Index 75 VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
            940,910.278
       10,827,686.586
              22,667.204
            126,857.778
   
Cost
 $           12,017,581
 $         257,271,805
 $                229,933
 $             1,120,222
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           11,996,606
 $         315,951,895
 $                237,099
 $             1,263,503
 
 Receivable for units sold
                            75
                               -
                               -
                              4
Total assets
              11,996,681
            315,951,895
                   237,099
                1,263,507
Liabilities
        
 
Payable for units redeemed
                               -
                              4
                               -
                               -
     
 $           11,996,681
 $         315,951,891
 $                237,099
 $             1,263,507
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           11,996,681
 $         315,951,891
 $                237,099
 $             1,263,507
Total net assets
 $           11,996,681
 $         315,951,891
 $                237,099
 $             1,263,507
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   717,048
                5,851,284
                     17,212
                     99,331
 
M&E - 0.75%
                   163,484
                   248,493
                       3,872
                     26,673
 
M&E - 0.00%
                       7,676
                       6,098
                          969
                          192
 
M&E - 1.50%
                          865
                       5,789
                          527
                          184
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            13.618051
 $            53.240320
 $            10.471993
 $              9.987900
 
M&E - 0.75%
 $            13.006631
 $            17.158073
 $            10.513637
 $            10.027627
 
M&E - 0.00%
 $            12.494600
 $            14.729391
 $            10.725383
 $            10.229644
 
M&E - 1.50%
 $            11.083135
 $            12.812519
 $            10.947179
 $            10.667079
See accompanying notes.
        


 
S-9
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica Efficient Markets VP
Transamerica Hanlon Balanced VP
Transamerica Hanlon Growth & Income VP
Transamerica Hanlon Growth VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
              25,540.711
            972,428.905
            863,636.203
         1,262,664.811
   
Cost
 $                320,193
 $           10,594,543
 $             9,348,047
 $           13,653,273
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $                344,544
 $           10,667,545
 $             9,594,998
 $           14,255,486
 
 Receivable for units sold
                              1
                               -
                               -
                              1
Total assets
                   344,545
              10,667,545
                9,594,998
              14,255,487
Liabilities
        
 
Payable for units redeemed
                               -
                              5
                              1
                               -
     
 $                344,545
 $           10,667,540
 $             9,594,997
 $           14,255,487
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $                344,545
 $           10,667,540
 $             9,594,997
 $           14,255,487
Total net assets
 $                344,545
 $           10,667,540
 $             9,594,997
 $           14,255,487
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                     17,568
                   769,426
                   561,536
                   796,461
 
M&E - 0.75%
                       6,515
                   195,412
                   297,722
                   444,942
 
M&E - 0.00%
                          502
                       8,672
                       2,331
                       1,738
 
M&E - 1.50%
                          837
                       7,980
                       5,838
                     17,533
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            13.545563
 $            10.862756
 $            11.052295
 $            11.299234
 
M&E - 0.75%
 $            13.579197
 $            10.889768
 $            11.079765
 $            11.327317
 
M&E - 0.00%
 $            13.749328
 $            11.026315
 $            11.218687
 $            11.469334
 
M&E - 1.50%
 $            13.412374
 $            10.755873
 $            10.943541
 $            11.188060
See accompanying notes.
        


 
S-10
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica Hanlon Managed Income VP
Transamerica Multi Managed Large Cap Core VP
Transamerica Foxhall Emerging Markets/Pacific Rim VP
Transamerica Foxhall Global Conservative VP
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
         2,556,049.264
            164,951.853
         1,450,194.200
            217,399.474
   
Cost
 $           27,921,805
 $             2,091,569
 $           15,230,953
 $             2,156,977
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           28,321,026
 $             2,560,053
 $           16,285,681
 $             2,063,121
 
 Receivable for units sold
                            76
                          433
                              7
                               -
Total assets
              28,321,102
                2,560,486
              16,285,688
                2,063,121
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                              1
     
 $           28,321,102
 $             2,560,486
 $           16,285,688
 $             2,063,120
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           28,321,102
 $             2,560,486
 $           16,285,688
 $             2,063,120
Total net assets
 $           28,321,102
 $             2,560,486
 $           16,285,688
 $             2,063,120
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                1,621,132
                   147,958
                   870,816
                   152,240
 
M&E - 0.75%
                   926,008
                     14,499
                   565,364
                     66,695
 
M&E - 0.00%
                          879
                       1,482
                       1,866
                          285
 
M&E - 1.50%
                     32,132
                          346
                     15,097
                          606
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            10.968039
 $            15.580376
 $            11.198319
 $              9.378940
 
M&E - 0.75%
 $            10.995277
 $            15.619083
 $            11.223325
 $              9.399918
 
M&E - 0.00%
 $            11.133190
 $            15.815004
 $            11.349811
 $              9.505947
 
M&E - 1.50%
 $            10.860099
 $            15.427028
 $            11.099171
 $              9.295837
See accompanying notes.
        


 
S-11
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Transamerica Foxhall Global Growth VP
Transamerica Foxhall Global Hard Asset VP
Transamerica Jennison Growth VP
Fidelity VIP Contrafund®
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
         1,494,740.548
            904,112.819
         1,341,627.334
            754,394.297
   
Cost
 $           15,978,448
 $             9,079,345
 $             9,874,727
 $           19,098,908
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           17,249,306
 $             9,619,760
 $           10,598,856
 $           17,720,722
 
 Receivable for units sold
                               -
                              2
                               -
                          124
Total assets
              17,249,306
                9,619,762
              10,598,856
              17,720,846
Liabilities
        
 
Payable for units redeemed
                              8
                               -
                              5
                               -
     
 $           17,249,298
 $             9,619,762
 $           10,598,851
 $           17,720,846
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           17,249,298
 $             9,619,762
 $           10,598,851
 $           17,720,846
Total net assets
 $           17,249,298
 $             9,619,762
 $           10,598,851
 $           17,720,846
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   898,332
                   524,811
                   915,618
                1,277,562
 
M&E - 0.75%
                   591,805
                   379,439
                     66,008
                               -
 
M&E - 0.00%
                       1,237
                       2,180
                       1,688
                               -
 
M&E - 1.50%
                       8,840
                       4,728
                          252
                               -
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            11.488245
 $            10.548065
 $            10.775127
 $            13.870829
 
M&E - 0.75%
 $            11.513904
 $            10.571639
 $            10.785897
 $                            -
 
M&E - 0.00%
 $            11.643684
 $            10.690813
 $            10.840103
 $                            -
 
M&E - 1.50%
 $            11.386512
 $            10.454647
 $            10.732349
 $                            -
See accompanying notes.
        


 
S-12
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Fidelity VIP Equity-Income
Fidelity VIP Growth Opportunities
Fidelity VIP Index 500
ProFund VP Bull
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
            437,564.337
            207,205.124
              71,727.519
            334,886.066
   
Cost
 $             9,859,775
 $             3,350,933
 $             8,448,611
 $             7,671,037
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $             8,204,331
 $             3,684,107
 $             9,418,541
 $             8,807,504
 
 Receivable for units sold
                          301
                               -
                               -
                               -
Total assets
                8,204,632
                3,684,107
                9,418,541
                8,807,504
Liabilities
        
 
Payable for units redeemed
                               -
                          194
                              2
                          318
     
 $             8,204,632
 $             3,683,913
 $             9,418,539
 $             8,807,186
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $             8,204,632
 $             3,683,913
 $             9,418,539
 $             8,807,186
Total net assets
 $             8,204,632
 $             3,683,913
 $             9,418,539
 $             8,807,186
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   656,922
                   451,620
                   346,258
                   608,072
 
M&E - 0.75%
                               -
                               -
                   405,622
                   271,393
 
M&E - 0.00%
                               -
                               -
                       4,630
                            24
 
M&E - 1.50%
                               -
                               -
                          745
                       1,005
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            12.489513
 $              8.157107
 $            12.022936
 $              9.981954
 
M&E - 0.75%
 $                            -
 $                            -
 $            12.825188
 $            10.049777
 
M&E - 0.00%
 $                            -
 $                            -
 $              9.891483
 $              9.314134
 
M&E - 1.50%
 $                            -
 $                            -
 $            10.108425
 $              9.733080
See accompanying notes.
        


 
S-13
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
ProFund VP Money Market
ProFund VP NASDAQ-100
ProFund VP Short Small-Cap
ProFund VP Small-Cap
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
       13,069,723.690
            195,521.193
            158,920.449
              45,506.399
   
Cost
 $           13,069,724
 $             3,385,434
 $             1,497,393
 $             1,177,856
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $           13,069,724
 $             3,763,783
 $             1,346,056
 $             1,271,449
 
 Receivable for units sold
                               -
                            97
                               -
                              4
Total assets
              13,069,724
                3,763,880
                1,346,056
                1,271,453
Liabilities
        
 
Payable for units redeemed
                              1
                               -
                          198
                               -
     
 $           13,069,723
 $             3,763,880
 $             1,345,858
 $             1,271,453
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $           13,069,723
 $             3,763,880
 $             1,345,858
 $             1,271,453
Total net assets
 $           13,069,723
 $             3,763,880
 $             1,345,858
 $             1,271,453
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                1,035,612
                   240,634
                   228,584
                     93,205
 
M&E - 0.75%
                   218,963
                     36,245
                     23,701
                     22,364
 
M&E - 0.00%
                     12,775
                       2,912
                            50
                       1,057
 
M&E - 1.50%
                       1,972
                       1,007
                       1,619
                       1,180
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            10.282976
 $            13.410639
 $              5.297199
 $            10.780650
 
M&E - 0.75%
 $            10.352643
 $            13.501733
 $              5.333190
 $            10.853899
 
M&E - 0.00%
 $            10.540551
 $            12.323946
 $              6.119371
 $            10.175417
 
M&E - 1.50%
 $              9.656691
 $            11.491614
 $              5.126884
 $            11.153660
See accompanying notes.
        


 
S-14
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
Access VP High Yield
ProFund VP Europe 30
ProFund VP Oil & Gas
ProFund VP UltraSmall-Cap
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
              76,300.417
              13,356.497
            114,674.783
            422,704.189
   
Cost
 $             1,905,400
 $                262,866
 $             4,619,629
 $             5,476,087
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $             2,027,302
 $                284,093
 $             5,331,231
 $             6,826,673
 
 Receivable for units sold
                          158
                            10
                          852
                               -
Total assets
                2,027,460
                   284,103
                5,332,083
                6,826,673
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                            26
     
 $             2,027,460
 $                284,103
 $             5,332,083
 $             6,826,647
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $             2,027,460
 $                284,103
 $             5,332,083
 $             6,826,647
Total net assets
 $             2,027,460
 $                284,103
 $             5,332,083
 $             6,826,647
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   134,182
                     27,974
                   535,947
                   600,320
 
M&E - 0.75%
                     17,905
                       6,831
                     87,666
                   217,828
 
M&E - 0.00%
                          674
                          405
                       1,749
                          805
 
M&E - 1.50%
                          370
                          206
                       2,895
                     10,655
             
Accumulation unit value:
        
 
M&E - 0.90%
 $            13.232887
 $              8.011662
 $              8.484823
 $              8.204820
 
M&E - 0.75%
 $            13.288892
 $              8.045648
 $              8.520813
 $              8.239676
 
M&E - 0.00%
 $            13.573803
 $              8.218422
 $              8.703759
 $              8.416896
 
M&E - 1.50%
 $            12.879878
 $              8.220961
 $              7.757800
 $              9.340285
See accompanying notes.
        


 
S-15
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
ProFund VP Utilities
ProFund VP Consumer Services
ProFund VP Pharmaceuticals
ProFund VP Small-Cap Value
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
              49,719.001
              25,504.069
              28,239.273
              19,116.394
   
Cost
 $             1,351,056
 $                768,842
 $                607,828
 $                445,595
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $             1,410,031
 $                816,385
 $                623,806
 $                521,878
 
 Receivable for units sold
                              9
                              1
                              4
                              6
Total assets
                1,410,040
                   816,386
                   623,810
                   521,884
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                               -
     
 $             1,410,040
 $                816,386
 $                623,810
 $                521,884
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $             1,410,040
 $                816,386
 $                623,810
 $                521,884
Total net assets
 $             1,410,040
 $                816,386
 $                623,810
 $                521,884
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   110,632
                     52,238
                     52,949
                     41,166
 
M&E - 0.75%
                     49,594
                     21,772
                       8,903
                       4,677
 
M&E - 0.00%
                       1,442
                               -
                          690
                       4,022
 
M&E - 1.50%
                       1,725
                            37
                          112
                            60
             
Accumulation unit value:
        
 
M&E - 0.90%
 $              8.621316
 $            11.011015
 $              9.946639
 $            10.426440
 
M&E - 0.75%
 $              8.657830
 $            11.057672
 $              9.988791
 $            10.470641
 
M&E - 0.00%
 $              8.843611
 $            11.295002
 $            10.203113
 $            10.695509
 
M&E - 1.50%
 $              8.183713
 $            12.142554
 $            10.483939
 $            11.238451
See accompanying notes.
        


 
S-16
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
ProFund VP Falling U.S. Dollar
ProFund VP Emerging Markets
ProFund VP International
ProFund VP Asia 30
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
              17,159.905
            626,460.032
            355,820.300
            100,794.457
   
Cost
 $                507,803
 $           17,817,540
 $             7,403,252
 $             5,487,536
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $                503,986
 $           19,013,062
 $             7,742,650
 $             6,160,557
 
 Receivable for units sold
                          244
                          330
                            44
                            94
Total assets
                   504,230
              19,013,392
                7,742,694
                6,160,651
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                               -
     
 $                504,230
 $           19,013,392
 $             7,742,694
 $             6,160,651
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $                504,230
 $           19,013,392
 $             7,742,694
 $             6,160,651
Total net assets
 $                504,230
 $           19,013,392
 $             7,742,694
 $             6,160,651
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                     41,441
                1,635,691
                   708,607
                   559,115
 
M&E - 0.75%
                     14,451
                   503,226
                   267,416
                     82,543
 
M&E - 0.00%
                            44
                     12,950
                          178
                       1,764
 
M&E - 1.50%
                          177
                       5,426
                          829
                       3,172
             
Accumulation unit value:
        
 
M&E - 0.90%
 $              8.976807
 $              8.801091
 $              7.915055
 $              9.514688
 
M&E - 0.75%
 $              9.014846
 $              8.838374
 $              7.948611
 $              9.555064
 
M&E - 0.00%
 $              9.208323
 $              9.028196
 $              8.119284
 $              9.760190
 
M&E - 1.50%
 $              8.706261
 $              9.749570
 $              8.441846
 $            11.007732
See accompanying notes.
        


 
S-17
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
ProFund VP Japan
ProFund VP Short NASDAQ-100
ProFund VP U.S. Government Plus
ProFund VP Basic Materials
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
              24,939.590
              61,511.307
            168,118.085
            156,825.547
   
Cost
 $                316,152
 $                670,515
 $             3,585,290
 $             6,868,366
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $                317,481
 $                581,282
 $             3,296,796
 $             8,181,589
 
 Receivable for units sold
                              2
                            72
                          255
                            48
Total assets
                   317,483
                   581,354
                3,297,051
                8,181,637
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                               -
     
 $                317,483
 $                581,354
 $             3,297,051
 $             8,181,637
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $                317,483
 $                581,354
 $             3,297,051
 $             8,181,637
Total net assets
 $                317,483
 $                581,354
 $             3,297,051
 $             8,181,637
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                     44,001
                     90,569
                   261,946
                   668,630
 
M&E - 0.75%
                       4,147
                       8,633
                     37,876
                   170,023
 
M&E - 0.00%
                            25
                               -
                            75
                       1,513
 
M&E - 1.50%
                            70
                          591
                       1,565
                       2,657
             
Accumulation unit value:
        
 
M&E - 0.90%
 $              6.578325
 $              5.822893
 $            10.932154
 $              9.698557
 
M&E - 0.75%
 $              6.606213
 $              5.847570
 $            10.978423
 $              9.739699
 
M&E - 0.00%
 $              6.748067
 $              5.973129
 $            11.213825
 $              9.948914
 
M&E - 1.50%
 $              6.713699
 $              5.913237
 $            10.703545
 $              9.733837
See accompanying notes.
        


 
S-18
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
ProFund VP Financials
ProFund VP Precious Metals
ProFund VP Telecommunications
ProFund VP Mid-Cap
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
            100,141.663
            199,734.989
              49,842.070
              99,065.839
   
Cost
 $             1,811,577
 $             9,062,503
 $                341,967
 $             2,384,784
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $             1,983,806
 $           11,151,204
 $                376,806
 $             2,750,068
 
 Receivable for units sold
                            22
                          342
                            89
                            19
Total assets
                1,983,828
              11,151,546
                   376,895
                2,750,087
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                               -
     
 $             1,983,828
 $           11,151,546
 $                376,895
 $             2,750,087
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $             1,983,828
 $           11,151,546
 $                376,895
 $             2,750,087
Total net assets
 $             1,983,828
 $           11,151,546
 $                376,895
 $             2,750,087
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                   219,742
                   883,621
                     33,958
                   206,629
 
M&E - 0.75%
                     77,493
                   160,489
                       5,321
                     53,437
 
M&E - 0.00%
                          394
                       5,967
                            14
                       1,453
 
M&E - 1.50%
                          188
                     12,383
                          659
                       1,196
             
Accumulation unit value:
        
 
M&E - 0.90%
 $              6.652541
 $            10.480043
 $              9.420419
 $            10.455891
 
M&E - 0.75%
 $              6.680791
 $            10.524502
 $              9.460310
 $            10.500215
 
M&E - 0.00%
 $              6.824549
 $            10.750709
 $              9.663252
 $            10.725662
 
M&E - 1.50%
 $              8.434194
 $            11.138926
 $              9.907565
 $            10.802430
See accompanying notes.
        


 
S-19
 

Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2010




     
ProFund VP Short Emerging Markets
ProFund VP Short International
Franklin Templeton VIP Founding Funds Allocation
AllianceBernstein Balanced Wealth Strategy
     
Subaccount
Subaccount
Subaccount
Subaccount
Assets
        
 
Investment in securities:
        
   
Number of shares
              26,010.626
              29,659.588
              59,174.622
              53,519.142
   
Cost
 $                397,845
 $                725,437
 $                436,228
 $                562,891
 
Investments in mutual funds,
        
   
Level 1 quoted prices
        
   
 at net asset value
 $                351,404
 $                609,505
 $                456,236
 $                609,048
 
 Receivable for units sold
                          111
                       1,110
                               -
                               -
Total assets
                   351,515
                   610,615
                   456,236
                   609,048
Liabilities
        
 
Payable for units redeemed
                               -
                               -
                               -
                              1
     
 $                351,515
 $                610,615
 $                456,236
 $                609,047
Net Assets:
        
 
Deferred annuity contracts
        
   
terminable by owners
 $                351,515
 $                610,615
 $                456,236
 $                609,047
Total net assets
 $                351,515
 $                610,615
 $                456,236
 $                609,047
             
Accumulation units outstanding:
      
 
M&E - 0.90%
                     56,911
                     69,659
                     23,808
                     33,726
 
M&E - 0.75%
                       7,939
                     11,703
                       6,441
                       9,860
 
M&E - 0.00%
                              4
                          150
                          316
                              8
 
M&E - 1.50%
                          258
                          190
                       1,962
                       1,115
             
Accumulation unit value:
        
 
M&E - 0.90%
 $              5.397558
 $              7.470146
 $            14.025866
 $            13.618288
 
M&E - 0.75%
 $              5.420452
 $              7.501822
 $            14.060683
 $            13.652085
 
M&E - 0.00%
 $              5.536890
 $              7.662889
 $            14.236836
 $            13.823118
 
M&E - 1.50%
 $              4.957076
 $              6.911812
 $            13.887977
 $            13.484387
See accompanying notes.
        


 
S-20
 



 
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted


       
Transamerica JPMorgan Core Bond VP
Transamerica Asset Allocation - Conservative VP
Transamerica Asset Allocation - Growth VP
Transamerica Asset Allocation - Moderate Growth VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $       3,234,359
 $       1,422,355
 $       2,683,966
 $       6,210,089
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
             486,150
             377,351
          2,091,099
          2,414,064
     
expense risk charge
          2,748,209
          1,045,004
             592,867
          3,796,025
Net investment income (loss)
        
       
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
             122,121
                         -
                         -
 
Realized gain distributions
        11,762,049
          8,150,279
        25,378,730
        28,845,756
 
Proceeds from sales
        10,922,314
          9,147,674
        37,505,718
        33,888,935
 
Cost of investments sold
             839,735
           (875,274)
      (12,126,988)
        (5,043,179)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
          1,944,414
               71,262
      (91,842,639)
      (50,746,300)
 
Beginning of period
          2,188,575
          3,317,387
      (47,317,111)
      (17,893,100)
 
End of period
        
Net change in unrealized appreciation/depreciation
             244,161
          3,246,125
        44,525,528
        32,853,200
 
of investments
        
               
Net realized and unrealized capital gains (losses)
          1,083,896
          2,370,851
        32,398,540
        27,810,021
 
on investments
        
       
 $       3,832,105
 $       3,415,855
 $     32,991,407
 $     31,606,046
Increase (decrease) in net assets from operations
      
         
See accompanying notes.
        


 
S-21
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica Asset Allocation - Moderate VP
Transamerica MFS International Equity VP
Transamerica Clarion Global Real Estate Securities VP
Transamerica Federated Market Opportunity VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $       2,553,530
 $          575,980
 $       2,602,653
 $       2,390,884
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
             745,444
             376,418
             368,076
             567,466
     
expense risk charge
          1,808,086
             199,562
          2,234,577
          1,823,418
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
        13,654,537
          8,346,176
          5,422,487
        11,061,271
 
Proceeds from sales
        15,192,477
        10,760,611
          9,368,279
        13,875,091
 
Cost of investments sold
        (1,537,940)
        (2,414,435)
        (3,945,792)
        (2,813,820)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
        (9,175,077)
      (12,493,950)
      (24,706,124)
      (14,059,857)
 
Beginning of period
        (1,654,748)
        (6,730,924)
      (17,327,802)
      (13,642,769)
 
End of period
        
Net change in unrealized appreciation/depreciation
          7,520,329
          5,763,026
          7,378,322
             417,088
 
of investments
        
               
Net realized and unrealized capital gains (losses)
          5,982,389
          3,348,591
          3,432,530
        (2,396,732)
 
on investments
        
       
 $       7,790,475
 $       3,548,153
 $       5,667,107
 $        (573,314)
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-22
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica International Moderate Growth VP
Transamerica JPMorgan Mid Cap Value VP
Transamerica JPMorgan Enhanced Index VP
Transamerica BlackRock Large Cap Value VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $          266,687
 $          140,445
 $            24,020
 $          404,456
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
               83,059
               69,624
               15,435
             451,820
     
expense risk charge
             183,628
               70,821
                 8,585
             (47,364)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
          1,624,263
          1,673,309
             260,668
          8,244,194
 
Proceeds from sales
          2,071,643
          1,862,937
             390,907
        10,065,525
 
Cost of investments sold
           (447,380)
           (189,628)
           (130,239)
        (1,821,331)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
        (1,016,548)
        (1,577,048)
           (306,656)
      (10,575,927)
 
Beginning of period
             173,833
               82,601
               64,566
        (5,021,989)
 
End of period
        
Net change in unrealized appreciation/depreciation
          1,190,381
          1,659,649
             371,222
          5,553,938
 
of investments
        
               
Net realized and unrealized capital gains (losses)
             743,001
          1,470,021
             240,983
          3,732,607
 
on investments
        
       
 $          926,629
 $       1,540,842
 $          249,568
 $       3,685,243
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-23
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica AEGON High Yield Bond VP
Transamerica PIMCO Total Return VP
Transamerica Focus VP
Transamerica T. Rowe Price Small Cap VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $       2,001,857
 $       1,290,530
 $          236,021
 $                      -
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
             118,376
             284,709
             240,665
             174,181
     
expense risk charge
          1,883,481
          1,005,821
               (4,644)
           (174,181)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
               44,170
                         -
                         -
 
Realized gain distributions
        11,604,168
        14,389,116
          4,181,356
          5,561,740
 
Proceeds from sales
        10,415,588
        13,982,272
          5,405,447
          7,246,462
 
Cost of investments sold
          1,188,580
             451,014
        (1,224,091)
        (1,684,722)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
          1,278,099
                 3,990
        (8,473,828)
        (3,255,143)
 
Beginning of period
           (410,820)
             493,246
           (669,171)
          4,824,855
 
End of period
        
Net change in unrealized appreciation/depreciation
        (1,688,919)
             489,256
          7,804,657
          8,079,998
 
of investments
        
               
Net realized and unrealized capital gains (losses)
           (500,339)
             940,270
          6,580,566
          6,395,276
 
on investments
        
       
 $       1,383,142
 $       1,946,091
 $       6,575,922
 $       6,221,095
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-24
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica Diversified Equity VP
Transamerica Third Avenue Value VP
Transamerica Balanced VP
Transamerica AllianceBernstein Dynamic Allocation VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $       1,965,717
 $       1,990,139
 $          507,932
 $          170,900
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
          1,698,029
             622,549
             636,251
               28,224
     
expense risk charge
             267,688
          1,367,590
           (128,319)
             142,676
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
        25,861,105
        12,479,829
          8,328,038
          1,001,030
 
Proceeds from sales
        34,688,417
        20,584,447
          8,435,986
          1,433,804
 
Cost of investments sold
        (8,827,312)
        (8,104,618)
           (107,948)
           (432,774)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
      (59,338,236)
      (36,048,746)
           (394,810)
           (778,771)
 
Beginning of period
      (22,455,118)
      (19,718,358)
        14,715,367
           (242,226)
 
End of period
        
Net change in unrealized appreciation/depreciation
        36,883,118
        16,330,388
        15,110,177
             536,545
 
of investments
        
               
Net realized and unrealized capital gains (losses)
        28,055,806
          8,225,770
        15,002,229
             103,771
 
on investments
        
       
 $     28,323,494
 $       9,593,360
 $     14,873,910
 $          246,447
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-25
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica WMC Diversified Growth VP
Transamerica Growth Opportunities VP
Transamerica Money Market VP
Transamerica Small/MidCap Value VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $       2,993,270
 $            16,933
 $              3,157
 $          233,942
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
          5,031,913
             431,544
             546,005
             250,922
     
expense risk charge
        (2,038,643)
           (414,611)
           (542,848)
             (16,980)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
        61,783,787
          6,683,034
        30,370,326
          8,053,589
 
Proceeds from sales
        79,592,247
          9,865,424
        30,370,326
        10,345,424
 
Cost of investments sold
      (17,808,460)
        (3,182,390)
                         -
        (2,291,835)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
    (177,572,158)
      (15,913,977)
                         -
        (3,497,763)
 
Beginning of period
      (68,707,980)
          2,693,555
                         -
          6,611,247
 
End of period
        
Net change in unrealized appreciation/depreciation
      108,864,178
        18,607,532
                         -
        10,109,010
 
of investments
        
               
Net realized and unrealized capital gains (losses)
        91,055,718
        15,425,142
                         -
          7,817,175
 
on investments
        
       
 $     89,017,075
 $     15,010,531
 $        (542,848)
 $       7,800,195
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-26
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica U.S. Government Securities VP
Transamerica Morgan Stanley Mid-Cap Growth VP
Transamerica Index 50 VP
Transamerica Index 75 VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $          335,903
 $          326,997
 $              2,015
 $            11,401
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
               92,461
          2,455,057
                 1,293
                 7,822
     
expense risk charge
             243,442
        (2,128,060)
                    722
                 3,579
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
             240,868
                         -
                 1,709
                 8,886
 
Realized gain distributions
          3,449,731
        28,770,313
             146,131
               91,032
 
Proceeds from sales
          3,218,874
        28,420,298
             137,341
               75,138
 
Cost of investments sold
             471,725
             350,015
               10,499
               24,780
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
             375,995
      (22,614,119)
                 3,236
               59,056
 
Beginning of period
             (20,975)
        58,680,090
                 7,166
             143,281
 
End of period
        
Net change in unrealized appreciation/depreciation
           (396,970)
        81,294,209
                 3,930
               84,225
 
of investments
        
               
Net realized and unrealized capital gains (losses)
               74,755
        81,644,224
               14,429
             109,005
 
on investments
        
       
 $          318,197
 $     79,516,164
 $            15,151
 $          112,584
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-27
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica Efficient Markets VP
Transamerica Hanlon Balanced VP
Transamerica Hanlon Growth & Income VP
Transamerica Hanlon Growth VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $              1,885
 $            31,027
 $            51,896
 $          118,264
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
                 1,848
               72,244
               70,559
             107,897
     
expense risk charge
                      37
             (41,217)
             (18,663)
               10,367
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                 4,572
               15,072
               29,883
               78,365
 
Realized gain distributions
             106,612
          1,661,281
          1,773,368
          1,977,571
 
Proceeds from sales
             100,750
          1,560,093
          1,628,150
          1,839,411
 
Cost of investments sold
               10,434
             116,260
             175,101
             216,525
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
                 3,139
             364,571
             535,535
             891,536
 
Beginning of period
               24,351
               73,002
             246,951
             602,213
 
End of period
        
Net change in unrealized appreciation/depreciation
               21,212
           (291,569)
           (288,584)
           (289,323)
 
of investments
        
               
Net realized and unrealized capital gains (losses)
               31,646
           (175,309)
           (113,483)
             (72,798)
 
on investments
        
       
 $            31,683
 $        (216,526)
 $        (132,146)
 $          (62,431)
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-28
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica Hanlon Managed Income VP
Transamerica Multi Managed Large Cap Core VP
Transamerica Foxhall Emerging Markets/Pacific Rim VP
Transamerica Foxhall Global Conservative VP
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $            48,351
 $            13,734
 $            43,257
 $              2,190
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
             212,049
               18,895
             120,670
               16,649
     
expense risk charge
           (163,698)
               (5,161)
             (77,413)
             (14,459)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
               80,817
                         -
             103,595
                 1,236
 
Realized gain distributions
          5,062,493
          1,031,895
          2,746,530
             696,578
 
Proceeds from sales
          4,581,274
             772,147
          2,645,751
             714,411
 
Cost of investments sold
             562,036
             259,748
             204,374
             (16,597)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
             922,185
             368,633
             646,180
                 4,646
 
Beginning of period
             399,221
             468,484
          1,054,728
             (93,856)
 
End of period
        
Net change in unrealized appreciation/depreciation
           (522,964)
               99,851
             408,548
             (98,502)
 
of investments
        
               
Net realized and unrealized capital gains (losses)
               39,072
             359,599
             612,922
           (115,099)
 
on investments
        
       
 $        (124,626)
 $          354,438
 $          535,509
 $        (129,558)
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-29
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Transamerica Foxhall Global Growth VP
Transamerica Foxhall Global Hard Asset VP
Transamerica Jennison Growth VP
Fidelity VIP Contrafund®
       
Subaccount
Subaccount
Subaccount(1)
Subaccount
               
Net investment income (loss)
        
 
Income:
 $            38,180
 $            11,407
 $              3,697
 $          165,029
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
             129,061
               67,275
               59,463
             146,298
     
expense risk charge
             (90,881)
             (55,868)
             (55,766)
               18,731
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
               97,402
               26,531
                         -
                 7,506
 
Realized gain distributions
          2,228,506
          1,347,806
          2,190,625
          2,197,719
 
Proceeds from sales
          2,040,263
          1,350,910
          2,320,604
          2,526,768
 
Cost of investments sold
             285,645
               23,427
           (129,979)
           (321,543)
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
             669,014
             174,021
                         -
        (4,132,569)
 
Beginning of period
          1,270,858
             540,415
             724,129
        (1,378,186)
 
End of period
        
Net change in unrealized appreciation/depreciation
             601,844
             366,394
             724,129
          2,754,383
 
of investments
        
               
Net realized and unrealized capital gains (losses)
             887,489
             389,821
             594,150
          2,432,840
 
on investments
        
       
 $          796,608
 $          333,953
 $          538,384
 $       2,451,571
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-30
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Fidelity VIP Equity-Income
Fidelity VIP Growth Opportunities
Fidelity VIP Index 500
ProFund VP Bull
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $          123,544
 $                      -
 $          149,387
 $            12,521
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
               68,538
               30,447
               64,737
               77,043
     
expense risk charge
               55,006
             (30,447)
               84,650
             (64,522)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
             149,359
                         -
 
Realized gain distributions
             908,374
          1,186,377
          2,400,855
          7,423,836
 
Proceeds from sales
          1,176,764
          1,608,647
          2,776,440
          6,577,251
 
Cost of investments sold
           (268,390)
           (422,270)
           (226,226)
             846,585
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
        (2,881,656)
           (825,048)
           (258,905)
             855,723
 
Beginning of period
        (1,655,444)
             333,174
             969,930
          1,136,467
 
End of period
        
Net change in unrealized appreciation/depreciation
          1,226,212
          1,158,222
          1,228,835
             280,744
 
of investments
        
               
Net realized and unrealized capital gains (losses)
             957,822
             735,952
          1,002,609
          1,127,329
 
on investments
        
       
 $       1,012,828
 $          705,505
 $       1,087,259
 $       1,062,807
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-31
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
ProFund VP Money Market
ProFund VP NASDAQ-100
ProFund VP Short Small-Cap
ProFund VP Small-Cap
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $              4,957
 $                      -
 $                      -
 $                      -
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
             211,787
               41,488
               14,006
               20,845
     
expense risk charge
           (206,830)
             (41,488)
             (14,006)
             (20,845)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
        72,271,788
        14,786,698
        30,483,797
        27,278,660
 
Proceeds from sales
        72,271,788
        14,032,899
        30,884,461
        27,269,303
 
Cost of investments sold
                         -
             753,799
           (400,664)
                 9,357
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
                         -
             404,638
             (89,212)
               40,223
 
Beginning of period
                         -
             378,349
           (151,337)
               93,593
 
End of period
        
Net change in unrealized appreciation/depreciation
                         -
             (26,289)
             (62,125)
               53,370
 
of investments
        
               
Net realized and unrealized capital gains (losses)
                         -
             727,510
           (462,789)
               62,727
 
on investments
        
       
 $        (206,830)
 $          686,022
 $        (476,795)
 $            41,882
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-32
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
Access VP High Yield
ProFund VP Europe 30
ProFund VP Oil & Gas
ProFund VP UltraSmall-Cap
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $          150,319
 $              4,814
 $            18,060
 $                      -
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
               18,998
                 2,659
               37,025
               37,128
     
expense risk charge
             131,321
                 2,155
             (18,965)
             (37,128)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
          8,284,602
             481,409
          2,122,905
        23,051,516
 
Proceeds from sales
          7,437,858
             482,132
          2,028,788
        22,705,278
 
Cost of investments sold
             846,744
                  (723)
               94,117
             346,238
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
          1,038,003
               13,079
             101,252
             289,593
 
Beginning of period
             121,902
               21,227
             711,602
          1,350,586
 
End of period
        
Net change in unrealized appreciation/depreciation
           (916,101)
                 8,148
             610,350
          1,060,993
 
of investments
        
               
Net realized and unrealized capital gains (losses)
             (69,357)
                 7,425
             704,467
          1,407,231
 
on investments
        
       
 $            61,964
 $              9,580
 $          685,502
 $       1,370,103
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-33
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
ProFund VP Utilities
ProFund VP Consumer Services
ProFund VP Pharmaceuticals
ProFund VP Small-Cap Value
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $            41,306
 $                      -
 $            29,511
 $              2,227
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
               12,500
                 3,448
                 5,444
               14,577
     
expense risk charge
               28,806
               (3,448)
               24,067
             (12,350)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
          1,500,268
             802,853
             860,126
          4,900,170
 
Proceeds from sales
          1,440,558
             813,260
             828,830
          4,614,193
 
Cost of investments sold
               59,710
             (10,407)
               31,296
             285,977
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
             110,957
               17,483
               82,511
             135,433
 
Beginning of period
               58,975
               47,543
               15,978
               76,283
 
End of period
        
Net change in unrealized appreciation/depreciation
             (51,982)
               30,060
             (66,533)
             (59,150)
 
of investments
        
               
Net realized and unrealized capital gains (losses)
                 7,728
               19,653
             (35,237)
             226,827
 
on investments
        
       
 $            36,534
 $            16,205
 $          (11,170)
 $          214,477
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-34
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
ProFund VP Falling U.S. Dollar
ProFund VP Emerging Markets
ProFund VP International
ProFund VP Asia 30
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $                      -
 $                      -
 $                      -
 $              4,020
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
                 3,896
               85,858
               38,135
               46,363
     
expense risk charge
               (3,896)
             (85,858)
             (38,135)
             (42,343)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
             149,781
             248,805
                         -
 
Realized gain distributions
             492,226
          8,935,407
          9,444,302
          4,344,642
 
Proceeds from sales
             514,921
          8,225,607
          9,924,034
          4,129,871
 
Cost of investments sold
             (22,695)
             859,581
           (230,927)
             214,771
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
               (4,257)
          1,281,354
             525,187
             200,284
 
Beginning of period
               (3,817)
          1,195,522
             339,398
             673,021
 
End of period
        
Net change in unrealized appreciation/depreciation
                    440
             (85,832)
           (185,789)
             472,737
 
of investments
        
               
Net realized and unrealized capital gains (losses)
             (22,255)
             773,749
           (416,716)
             687,508
 
on investments
        
       
 $          (26,151)
 $          687,891
 $        (454,851)
 $          645,165
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-35
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
ProFund VP Japan
ProFund VP Short NASDAQ-100
ProFund VP U.S. Government Plus
ProFund VP Basic Materials
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $                      -
 $                      -
 $            15,855
 $            27,850
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
                 1,207
                 7,340
               30,965
               42,978
     
expense risk charge
               (1,207)
               (7,340)
             (15,110)
             (15,128)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
                         -
 
Realized gain distributions
             381,016
          3,080,477
          5,173,865
          5,746,147
 
Proceeds from sales
             383,995
          3,302,459
          5,298,085
          5,214,126
 
Cost of investments sold
               (2,979)
           (221,982)
           (124,220)
             532,021
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
                 3,220
             (78,085)
           (610,723)
             626,720
 
Beginning of period
                 1,329
             (89,233)
           (288,494)
          1,313,223
 
End of period
        
Net change in unrealized appreciation/depreciation
               (1,891)
             (11,148)
             322,229
             686,503
 
of investments
        
               
Net realized and unrealized capital gains (losses)
               (4,870)
           (233,130)
             198,009
          1,218,524
 
on investments
        
       
 $            (6,077)
 $        (240,470)
 $          182,899
 $       1,203,396
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-36
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
ProFund VP Financials
ProFund VP Precious Metals
ProFund VP Telecommunications
ProFund VP Mid-Cap
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $              4,770
 $                      -
 $            11,304
 $                      -
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
               17,473
               63,134
                 2,453
               39,147
     
expense risk charge
             (12,703)
             (63,134)
                 8,851
             (39,147)
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                         -
             474,386
 
Realized gain distributions
          2,610,484
          3,528,242
             649,475
        10,057,076
 
Proceeds from sales
          2,522,349
          2,589,704
             642,261
          9,805,348
 
Cost of investments sold
               88,135
             938,538
                 7,214
             726,114
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
             150,979
             709,592
                 4,752
             425,885
 
Beginning of period
             172,229
          2,088,701
               34,839
             365,284
 
End of period
        
Net change in unrealized appreciation/depreciation
               21,250
          1,379,109
               30,087
             (60,601)
 
of investments
        
               
Net realized and unrealized capital gains (losses)
             109,385
          2,317,647
               37,301
             665,513
 
on investments
        
       
 $            96,682
 $       2,254,513
 $            46,152
 $          626,366
Increase (decrease) in net assets from operations
      
               
See accompanying notes.
        


 
S-37
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Operations
Year Ended December 31, 2010, Except as Noted



       
ProFund VP Short Emerging Markets
ProFund VP Short International
Franklin Templeton VIP Founding Funds Allocation
AllianceBernstein Balanced Wealth Strategy
       
Subaccount
Subaccount
Subaccount
Subaccount
               
Net investment income (loss)
        
 
Income:
 $                      -
 $                      -
 $              9,333
 $              9,445
   
Dividends
        
 
Expenses:
        
   
Administrative, mortality and
                 7,872
                 6,514
                 3,325
                 4,158
     
expense risk charge
               (7,872)
               (6,514)
                 6,008
                 5,287
Net investment income (loss)
        
               
Net realized and unrealized capital gains (losses)
      
 
on investments
        
Net realized capital gains (losses) on investments:
                         -
                         -
                      35
                         -
 
Realized gain distributions
          3,046,198
          2,371,380
             380,601
             382,557
 
Proceeds from sales
          3,325,477
          2,598,638
             378,344
             368,797
 
Cost of investments sold
           (279,279)
           (227,258)
                 2,292
               13,760
Net realized capital gains (losses) on investments
      
               
Net change in unrealized appreciation/depreciation
      
 
of investments:
             (93,249)
           (190,281)
                 8,328
               10,450
 
Beginning of period
             (46,441)
           (115,932)
               20,008
               46,157
 
End of period
        
Net change in unrealized appreciation/depreciation
               46,808
               74,349
               11,680
               35,707
 
of investments
        
               
Net realized and unrealized capital gains (losses)
           (232,471)
           (152,909)
               13,972
               49,467
 
on investments
        
       
 $        (240,343)
 $        (159,423)
 $            19,980
 $            54,754
Increase (decrease) in net assets from operations
      
               
               
               
See accompanying notes.
        

 
S-38
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted


       
Transamerica JPMorgan Core Bond VP
Transamerica Asset Allocation - Conservative VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $          2,748,209
 $          1,967,964
 $          1,045,004
 $          1,325,382
 
Net realized capital gains (losses)
        
   
on investments
                839,735
                617,304
              (875,274)
           (3,147,909)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                244,161
             1,821,102
             3,246,125
           10,013,034
Increase (decrease) in net assets
        
 
from operations
             3,832,105
             4,406,370
             3,415,855
             8,190,507
               
Contract transactions
        
 
Net contract purchase payments
             4,950,673
             6,931,655
             6,062,921
                617,626
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (351,823)
                731,520
              (398,442)
                771,449
 
Contract terminations, withdrawals,
        
 
  and other deductions
           (3,674,792)
           (3,073,074)
           (2,092,334)
           (2,085,596)
 
Contract maintenance charges
           (4,657,943)
           (4,890,646)
           (3,599,279)
           (3,582,168)
Increase (decrease) in net assets
        
 
from contract transactions
           (3,733,885)
              (300,545)
                (27,134)
           (4,278,689)
Net increase (decrease) in net assets
                  98,220
             4,105,825
             3,388,721
             3,911,818
               
Net assets:
          
 
Beginning of the period
           54,892,177
           50,786,352
           41,211,153
           37,299,335
 
End of the period
 $        54,990,397
 $        54,892,177
 $        44,599,874
 $        41,211,153
               
See accompanying notes.
        


 
S-39
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted



       
Transamerica Asset Allocation - Growth VP
Transamerica Asset Allocation - Moderate Growth VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             592,867
 $          4,005,063
 $          3,796,025
 $          6,181,636
 
Net realized capital gains (losses)
        
   
on investments
         (12,126,988)
              (685,306)
           (5,043,179)
             3,435,396
 
Net change in unrealized appreciation/
      
   
depreciation of investments
           44,525,528
           51,966,862
           32,853,200
           50,995,801
Increase (decrease) in net assets
        
 
from operations
           32,991,407
           55,286,619
           31,606,046
           60,612,833
               
Contract transactions
        
 
Net contract purchase payments
           32,224,127
           38,254,977
           39,679,446
           40,493,778
 
Transfer payments from (to) other
        
   
subaccounts or general account
           (6,667,157)
           (3,862,454)
           (6,725,801)
           (4,368,199)
 
Contract terminations, withdrawals,
        
 
  and other deductions
         (15,085,701)
         (13,343,642)
         (18,379,007)
         (15,511,796)
 
Contract maintenance charges
         (22,410,694)
         (25,323,768)
         (26,908,482)
         (29,625,327)
Increase (decrease) in net assets
        
 
from contract transactions
         (11,939,425)
           (4,274,887)
         (12,333,844)
           (9,011,544)
Net increase (decrease) in net assets
           21,051,982
           51,011,732
           19,272,202
           51,601,289
               
Net assets:
          
 
Beginning of the period
         245,375,296
         194,363,564
         281,532,459
         229,931,170
 
End of the period
 $      266,427,278
 $      245,375,296
 $      300,804,661
 $      281,532,459
               
See accompanying notes.
        


 
S-40
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted



       
Transamerica Asset Allocation - Moderate VP
Transamerica MFS International Equity VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $          1,808,086
 $          2,586,278
 $             199,562
 $             710,219
 
Net realized capital gains (losses)
        
   
on investments
           (1,537,940)
           (2,652,289)
           (2,414,435)
           (3,354,983)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
             7,520,329
           17,489,168
             5,763,026
           13,347,504
Increase (decrease) in net assets
        
 
from operations
             7,790,475
           17,423,157
             3,548,153
           10,702,740
               
Contract transactions
        
 
Net contract purchase payments
           13,838,788
             7,414,397
             4,485,493
             2,889,824
 
Transfer payments from (to) other
        
   
subaccounts or general account
           (1,616,467)
             2,190,581
           (2,644,537)
              (918,100)
 
Contract terminations, withdrawals,
        
 
  and other deductions
           (5,091,369)
           (5,455,579)
           (2,923,762)
           (2,057,026)
 
Contract maintenance charges
           (9,335,289)
           (9,759,529)
           (2,953,763)
           (3,135,234)
Increase (decrease) in net assets
        
 
from contract transactions
           (2,204,337)
           (5,610,130)
           (4,036,569)
           (3,220,536)
Net increase (decrease) in net assets
             5,586,138
           11,813,027
              (488,416)
             7,482,204
               
Net assets:
          
 
Beginning of the period
           86,014,287
           74,201,260
           44,762,291
           37,280,087
 
End of the period
 $        91,600,425
 $        86,014,287
 $        44,273,875
 $        44,762,291
               
See accompanying notes.
        


 
S-41
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Clarion Global Real Estate Securities VP
Transamerica Federated Market Opportunity VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $          2,234,577
 $           (313,744)
 $          1,823,418
 $          1,670,454
 
Net realized capital gains (losses)
        
   
on investments
           (3,945,792)
           (7,896,625)
           (2,813,820)
             4,995,299
 
Net change in unrealized appreciation/
      
   
depreciation of investments
             7,378,322
           18,572,978
                417,088
           (4,277,548)
Increase (decrease) in net assets
        
 
from operations
             5,667,107
           10,362,609
              (573,314)
             2,388,205
               
Contract transactions
        
 
Net contract purchase payments
             3,696,329
             3,514,173
             2,473,611
             6,051,402
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (563,480)
              (990,258)
           (1,609,175)
           (4,138,195)
 
Contract terminations, withdrawals,
        
 
  and other deductions
           (2,421,353)
           (2,340,042)
           (4,075,611)
           (4,682,450)
 
Contract maintenance charges
           (3,626,232)
           (3,851,310)
           (6,007,056)
           (6,939,362)
Increase (decrease) in net assets
        
 
from contract transactions
           (2,914,736)
           (3,667,437)
           (9,218,231)
           (9,708,605)
Net increase (decrease) in net assets
             2,752,371
             6,695,172
           (9,791,545)
           (7,320,400)
               
Net assets:
          
 
Beginning of the period
           42,497,293
           35,802,121
           69,300,036
           76,620,436
 
End of the period
 $        45,249,664
 $        42,497,293
 $        59,508,491
 $        69,300,036
               
See accompanying notes.
        


 
S-42
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica International Moderate Growth VP
Transamerica JPMorgan Mid Cap Value VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             183,628
 $             158,090
 $               70,821
 $               64,457
 
Net realized capital gains (losses)
        
   
on investments
              (447,380)
              (915,912)
              (189,628)
              (440,201)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
             1,190,381
             2,939,115
             1,659,649
             1,992,121
Increase (decrease) in net assets
        
 
from operations
                926,629
             2,181,293
             1,540,842
             1,616,377
               
Contract transactions
        
 
Net contract purchase payments
             1,881,407
             2,095,058
                            -
                            -
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (215,069)
              (238,271)
              (281,141)
              (629,305)
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (611,573)
              (408,700)
           (1,045,921)
              (491,774)
 
Contract maintenance charges
           (1,025,697)
           (1,216,022)
              (259,423)
              (274,076)
Increase (decrease) in net assets
        
 
from contract transactions
                  29,068
                232,065
           (1,586,485)
           (1,395,155)
Net increase (decrease) in net assets
                955,697
             2,413,358
                (45,643)
                221,222
               
Net assets:
          
 
Beginning of the period
             9,885,528
             7,472,170
             8,022,955
             7,801,733
 
End of the period
 $        10,841,225
 $          9,885,528
 $          7,977,312
 $          8,022,955
               
See accompanying notes.
        


 
S-43
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica JPMorgan Enhanced Index VP
Transamerica BlackRock Large Cap Value VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $                 8,585
 $               15,290
 $             (47,364)
 $             216,743
 
Net realized capital gains (losses)
        
   
on investments
              (130,239)
              (261,638)
           (1,821,331)
           (3,051,850)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                371,222
                571,059
             5,553,938
             7,216,947
Increase (decrease) in net assets
        
 
from operations
                249,568
                324,711
             3,685,243
             4,381,840
               
Contract transactions
        
 
Net contract purchase payments
                260,516
                166,930
             2,513,718
             2,828,121
 
Transfer payments from (to) other
        
   
subaccounts or general account
                  11,245
                  42,242
           18,029,742
             1,790,309
 
Contract terminations, withdrawals,
        
 
  and other deductions
                (29,558)
                (56,901)
           (3,633,762)
           (2,218,266)
 
Contract maintenance charges
                (99,951)
                (89,818)
           (4,368,928)
           (3,648,145)
Increase (decrease) in net assets
        
 
from contract transactions
                142,252
                  62,453
           12,540,770
           (1,247,981)
Net increase (decrease) in net assets
                391,820
                387,164
           16,226,013
             3,133,859
               
Net assets:
          
 
Beginning of the period
             1,631,165
             1,244,001
           41,943,389
           38,809,530
 
End of the period
 $          2,022,985
 $          1,631,165
 $        58,169,402
 $        41,943,389
               
See accompanying notes.
        


 
S-44
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica AEGON High Yield Bond VP
Transamerica PIMCO Total Return VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $          1,883,481
 $             757,253
 $          1,005,821
 $          1,428,021
 
Net realized capital gains (losses)
        
   
on investments
             1,188,580
                122,196
                451,014
                595,193
 
Net change in unrealized appreciation/
      
   
depreciation of investments
           (1,688,919)
             1,617,590
                489,256
             1,391,900
Increase (decrease) in net assets
        
 
from operations
             1,383,142
             2,497,039
             1,946,091
             3,415,114
               
Contract transactions
        
 
Net contract purchase payments
           10,665,346
             7,905,447
             3,034,892
             8,887,871
 
Transfer payments from (to) other
        
   
subaccounts or general account
           (4,007,560)
             1,483,398
             1,334,641
             1,370,256
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (664,060)
              (267,242)
           (2,293,902)
           (1,237,782)
 
Contract maintenance charges
              (942,798)
              (509,019)
           (2,310,665)
           (1,946,199)
Increase (decrease) in net assets
        
 
from contract transactions
             5,050,928
             8,612,584
              (235,034)
             7,074,146
Net increase (decrease) in net assets
             6,434,070
           11,109,623
             1,711,057
           10,489,260
               
Net assets:
          
 
Beginning of the period
           12,028,440
                918,817
           28,964,781
           18,475,521
 
End of the period
 $        18,462,510
 $        12,028,440
 $        30,675,838
 $        28,964,781
               
See accompanying notes.
        


 
S-45
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Focus VP
Transamerica T. Rowe Price Small Cap VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               (4,644)
 $             399,401
 $           (174,181)
 $           (136,530)
 
Net realized capital gains (losses)
        
   
on investments
           (1,224,091)
           (2,757,812)
           (1,684,722)
           (3,495,029)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
             7,804,657
             8,047,934
             8,079,998
             8,975,129
Increase (decrease) in net assets
        
 
from operations
             6,575,922
             5,689,523
             6,221,095
             5,343,570
               
Contract transactions
        
 
Net contract purchase payments
             2,491,535
             1,882,255
             5,745,780
             2,185,411
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (408,082)
              (577,174)
                  28,190
              (634,141)
 
Contract terminations, withdrawals,
        
 
  and other deductions
           (1,554,403)
           (1,609,068)
           (1,016,893)
              (942,558)
 
Contract maintenance charges
           (2,430,457)
           (2,575,249)
           (1,475,314)
           (1,445,885)
Increase (decrease) in net assets
        
 
from contract transactions
           (1,901,407)
           (2,879,236)
             3,281,763
              (837,173)
Net increase (decrease) in net assets
             4,674,515
             2,810,287
             9,502,858
             4,506,397
               
Net assets:
          
 
Beginning of the period
           26,897,044
           24,086,757
           18,450,816
           13,944,419
 
End of the period
 $        31,571,559
 $        26,897,044
 $        27,953,674
 $        18,450,816
               
See accompanying notes.
        


 
S-46
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Diversified Equity VP
Transamerica Third Avenue Value VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             267,688
 $             933,958
 $          1,367,590
 $           (572,759)
 
Net realized capital gains (losses)
        
   
on investments
           (8,827,312)
         (10,834,074)
           (8,104,618)
           (6,225,520)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
           36,883,118
           48,776,860
           16,330,388
           25,804,258
Increase (decrease) in net assets
        
 
from operations
           28,323,494
           38,876,744
             9,593,360
           19,005,979
               
Contract transactions
        
 
Net contract purchase payments
           11,594,889
           15,855,294
             1,190,972
             5,134,109
 
Transfer payments from (to) other
        
   
subaccounts or general account
           27,337,150
           (2,097,348)
           (2,117,273)
           (1,423,521)
 
Contract terminations, withdrawals,
        
 
  and other deductions
         (11,331,036)
           (9,122,147)
           (3,799,216)
           (3,601,012)
 
Contract maintenance charges
         (18,896,002)
         (18,109,997)
           (5,391,423)
           (5,887,863)
Increase (decrease) in net assets
        
 
from contract transactions
             8,705,001
         (13,474,198)
         (10,116,940)
           (5,778,287)
Net increase (decrease) in net assets
           37,028,495
           25,402,546
              (523,580)
           13,227,692
               
Net assets:
          
 
Beginning of the period
         179,200,897
         153,798,351
           74,986,432
           61,758,740
 
End of the period
 $      216,229,392
 $      179,200,897
 $        74,462,852
 $        74,986,432
               
See accompanying notes.
        


 
S-47
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Balanced VP
Transamerica AllianceBernstein Dynamic Allocation VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $           (128,319)
 $               36,918
 $             142,676
 $               80,008
 
Net realized capital gains (losses)
        
   
on investments
              (107,948)
              (193,334)
              (432,774)
              (646,110)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
           15,110,177
             1,121,198
                536,545
             1,331,877
Increase (decrease) in net assets
        
 
from operations
           14,873,910
                964,782
                246,447
                765,775
               
Contract transactions
        
 
Net contract purchase payments
             4,940,149
                682,941
                457,794
                140,645
 
Transfer payments from (to) other
        
   
subaccounts or general account
         101,113,125
                  61,182
                  67,098
              (144,335)
 
Contract terminations, withdrawals,
        
 
  and other deductions
           (4,324,136)
              (182,181)
              (340,537)
              (108,732)
 
Contract maintenance charges
           (6,587,212)
              (438,427)
              (237,710)
              (255,185)
Increase (decrease) in net assets
        
 
from contract transactions
           95,141,926
                123,515
                (53,355)
              (367,607)
Net increase (decrease) in net assets
         110,015,836
             1,088,297
                193,092
                398,168
               
Net assets:
          
 
Beginning of the period
             4,796,603
             3,708,306
             3,191,995
             2,793,827
 
End of the period
 $      114,812,439
 $          4,796,603
 $          3,385,087
 $          3,191,995
               
See accompanying notes.
        


 
S-48
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica WMC Diversified Growth VP
Transamerica Growth Opportunities VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $        (2,038,643)
 $             270,596
 $           (414,611)
 $           (211,894)
 
Net realized capital gains (losses)
        
   
on investments
         (17,808,460)
         (29,955,541)
           (3,182,390)
           (7,369,828)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
         108,864,178
         158,010,875
           18,607,532
           20,050,496
Increase (decrease) in net assets
        
 
from operations
           89,017,075
         128,325,930
           15,010,531
           12,468,774
               
Contract transactions
        
 
Net contract purchase payments
           52,815,025
           57,863,152
             8,553,405
             2,983,973
 
Transfer payments from (to) other
        
   
subaccounts or general account
           (8,750,279)
           (4,250,838)
              (170,673)
              (545,836)
 
Contract terminations, withdrawals,
        
 
  and other deductions
         (34,792,246)
         (29,991,106)
           (2,835,704)
           (2,283,087)
 
Contract maintenance charges
         (61,058,455)
         (64,605,293)
           (3,845,185)
           (3,938,092)
Increase (decrease) in net assets
        
 
from contract transactions
         (51,785,955)
         (40,984,085)
             1,701,843
           (3,783,042)
Net increase (decrease) in net assets
           37,231,120
           87,341,845
           16,712,374
             8,685,732
               
Net assets:
          
 
Beginning of the period
         574,078,382
         486,736,537
           44,546,427
           35,860,695
 
End of the period
 $      611,309,502
 $      574,078,382
 $        61,258,801
 $        44,546,427
               
See accompanying notes.
        


 
S-49
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Money Market VP
Transamerica Small/MidCap Value VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $           (542,848)
 $           (609,621)
 $             (16,980)
 $             449,598
 
Net realized capital gains (losses)
        
   
on investments
                            -
                            -
           (2,291,835)
           (1,774,200)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                            -
                            -
           10,109,010
             7,963,885
Increase (decrease) in net assets
        
 
from operations
              (542,848)
              (609,621)
             7,800,195
             6,639,283
               
Contract transactions
        
 
Net contract purchase payments
             5,732,883
                            -
             8,829,511
             4,526,645
 
Transfer payments from (to) other
        
   
subaccounts or general account
           (1,090,488)
         (21,883,560)
           (1,102,804)
                (17,758)
 
Contract terminations, withdrawals,
        
 
  and other deductions
           (7,668,830)
           (9,497,729)
           (1,021,465)
              (778,778)
 
Contract maintenance charges
           (6,731,279)
           (8,470,520)
           (2,149,332)
           (1,899,910)
Increase (decrease) in net assets
        
 
from contract transactions
           (9,757,714)
         (39,851,809)
             4,555,910
             1,830,199
Net increase (decrease) in net assets
         (10,300,562)
         (40,461,430)
           12,356,105
             8,469,482
               
Net assets:
          
 
Beginning of the period
           66,003,875
         106,465,305
           23,766,218
           15,296,736
 
End of the period
 $        55,703,313
 $        66,003,875
 $        36,122,323
 $        23,766,218
               
See accompanying notes.
        


 
S-50
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica U.S. Government Securities VP
Transamerica Morgan Stanley Mid-Cap Growth VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             243,442
 $             270,912
 $        (2,128,060)
 $        (1,878,639)
 
Net realized capital gains (losses)
        
   
on investments
                471,725
                666,022
                350,015
           (8,840,119)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
              (396,970)
              (364,976)
           81,294,209
         108,780,897
Increase (decrease) in net assets
        
 
from operations
                318,197
                571,958
           79,516,164
           98,062,139
               
Contract transactions
        
 
Net contract purchase payments
             3,856,164
                            -
           21,791,568
           21,853,738
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (298,826)
           (9,340,656)
           (3,713,245)
           (1,633,244)
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (703,475)
           (1,230,069)
         (16,310,755)
         (11,988,360)
 
Contract maintenance charges
              (921,425)
           (1,542,093)
         (21,685,565)
         (21,909,027)
Increase (decrease) in net assets
        
 
from contract transactions
             1,932,438
         (12,112,818)
         (19,917,997)
         (13,676,893)
Net increase (decrease) in net assets
             2,250,635
         (11,540,860)
           59,598,167
           84,385,246
               
Net assets:
          
 
Beginning of the period
             9,746,046
           21,286,906
         256,353,724
         171,968,478
 
End of the period
 $        11,996,681
 $          9,746,046
 $      315,951,891
 $      256,353,724
               
See accompanying notes.
        


 
S-51
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Index 50 VP
Transamerica Index 75 VP
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $                    722
 $                  (471)
 $                 3,579
 $               (1,386)
 
Net realized capital gains (losses)
        
   
on investments
                  10,499
                    2,979
                  24,780
                (18,143)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                    3,930
                  (2,266)
                  84,225
                  86,677
Increase (decrease) in net assets
        
 
from operations
                  15,151
                       242
                112,584
                  67,148
               
Contract transactions
        
 
Net contract purchase payments
                106,991
                    8,538
                442,247
                592,046
 
Transfer payments from (to) other
        
   
subaccounts or general account
                  49,219
                (12,189)
                  (1,157)
                    5,193
 
Contract terminations, withdrawals,
        
 
  and other deductions
                  (4,659)
                  (2,958)
                  (8,370)
                  (2,697)
 
Contract maintenance charges
                (24,810)
                  (6,066)
                (58,373)
                (25,098)
Increase (decrease) in net assets
        
 
from contract transactions
                126,741
                (12,675)
                374,347
                569,444
Net increase (decrease) in net assets
                141,892
                (12,433)
                486,931
                636,592
               
Net assets:
          
 
Beginning of the period
                  95,207
                107,640
                776,576
                139,984
 
End of the period
 $             237,099
 $               95,207
 $          1,263,507
 $             776,576
               
See accompanying notes.
        


 
S-52
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Efficient Markets VP
Transamerica Hanlon Balanced VP
       
Subaccount
Subaccount
       
2010
2009(1)
2010
2009(1)
Operations
          
 
Net investment income (loss)
 $                      37
 $                  (217)
 $             (41,217)
 $             (15,444)
 
Net realized capital gains (losses)
        
   
on investments
                  10,434
                       658
                116,260
                  20,086
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                  21,212
                    3,139
              (291,569)
                364,571
Increase (decrease) in net assets
        
 
from operations
                  31,683
                    3,580
              (216,526)
                369,213
               
Contract transactions
        
 
Net contract purchase payments
                209,141
                119,801
             4,518,547
             3,807,413
 
Transfer payments from (to) other
        
   
subaccounts or general account
                    1,992
                    8,956
             2,840,987
                827,793
 
Contract terminations, withdrawals,
        
 
  and other deductions
                            -
                            -
              (269,963)
                (90,287)
 
Contract maintenance charges
                (28,178)
                  (2,430)
              (894,871)
              (224,766)
Increase (decrease) in net assets
        
 
from contract transactions
                182,955
                126,327
             6,194,700
             4,320,153
Net increase (decrease) in net assets
                214,638
                129,907
             5,978,174
             4,689,366
               
Net assets:
          
 
Beginning of the period
                129,907
                            -
             4,689,366
                            -
 
End of the period
 $             344,545
 $             129,907
 $        10,667,540
 $          4,689,366
               
See accompanying notes.
        


 
S-53
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Hanlon Growth & Income VP
Transamerica Hanlon Growth VP
       
Subaccount
Subaccount
       
2010
2009(1)
2010
2009(1)
Operations
          
 
Net investment income (loss)
 $             (18,663)
 $             (21,876)
 $               10,367
 $             (37,543)
 
Net realized capital gains (losses)
        
   
on investments
                175,101
                  19,450
                216,525
                  55,369
 
Net change in unrealized appreciation/
      
   
depreciation of investments
              (288,584)
                535,535
              (289,323)
                891,536
Increase (decrease) in net assets
        
 
from operations
              (132,146)
                533,109
                (62,431)
                909,362
               
Contract transactions
        
 
Net contract purchase payments
             3,412,696
             5,208,018
             5,261,055
             8,723,063
 
Transfer payments from (to) other
        
   
subaccounts or general account
                857,305
             1,254,000
                457,383
             1,256,340
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (193,882)
                (69,537)
              (393,890)
                (91,320)
 
Contract maintenance charges
              (990,799)
              (283,767)
           (1,324,364)
              (479,711)
Increase (decrease) in net assets
        
 
from contract transactions
             3,085,320
             6,108,714
             4,000,184
             9,408,372
Net increase (decrease) in net assets
             2,953,174
             6,641,823
             3,937,753
           10,317,734
               
Net assets:
          
 
Beginning of the period
             6,641,823
                            -
           10,317,734
                            -
 
End of the period
 $          9,594,997
 $          6,641,823
 $        14,255,487
 $        10,317,734
               
See accompanying notes.
        


 
S-54
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Hanlon Managed Income VP
Transamerica Multi Managed Large Cap Core VP
       
Subaccount
Subaccount
       
2010
2009(1)
2010
2009(1)
Operations
          
 
Net investment income (loss)
 $           (163,698)
 $             (53,899)
 $               (5,161)
 $                 1,595
 
Net realized capital gains (losses)
        
   
on investments
                562,036
                  27,984
                259,748
                  16,575
 
Net change in unrealized appreciation/
      
   
depreciation of investments
              (522,964)
                922,185
                  99,851
                368,633
Increase (decrease) in net assets
        
 
from operations
              (124,626)
                896,270
                354,438
                386,803
               
Contract transactions
        
 
Net contract purchase payments
           15,511,088
           14,529,480
                249,216
                567,723
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (925,957)
             2,727,309
                  75,480
             1,245,207
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (884,590)
              (184,353)
                (65,418)
                (36,894)
 
Contract maintenance charges
           (2,559,419)
              (664,100)
              (144,346)
                (71,723)
Increase (decrease) in net assets
        
 
from contract transactions
           11,141,122
           16,408,336
                114,932
             1,704,313
Net increase (decrease) in net assets
           11,016,496
           17,304,606
                469,370
             2,091,116
               
Net assets:
          
 
Beginning of the period
           17,304,606
                            -
             2,091,116
                            -
 
End of the period
 $        28,321,102
 $        17,304,606
 $          2,560,486
 $          2,091,116
               
See accompanying notes.
        


 
S-55
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Foxhall Emerging Markets/Pacific Rim VP
Transamerica Foxhall Global Conservative VP
       
Subaccount
Subaccount
       
2010
2009(1)
2010
2009(1)
Operations
          
 
Net investment income (loss)
 $             (77,413)
 $             (31,560)
 $             (14,459)
 $               (5,226)
 
Net realized capital gains (losses)
        
   
on investments
                204,374
                  17,663
                (16,597)
                    2,638
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                408,548
                646,180
                (98,502)
                    4,646
Increase (decrease) in net assets
        
 
from operations
                535,509
                632,283
              (129,558)
                    2,058
               
Contract transactions
        
 
Net contract purchase payments
             5,603,007
           10,012,448
                882,832
             1,579,853
 
Transfer payments from (to) other
        
   
subaccounts or general account
                388,445
             1,645,355
                  74,480
                102,400
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (664,067)
                (91,086)
              (129,719)
                (15,300)
 
Contract maintenance charges
           (1,414,752)
              (361,454)
              (237,200)
                (66,726)
Increase (decrease) in net assets
        
 
from contract transactions
             3,912,633
           11,205,263
                590,393
             1,600,227
Net increase (decrease) in net assets
             4,448,142
           11,837,546
                460,835
             1,602,285
               
Net assets:
          
 
Beginning of the period
           11,837,546
                            -
             1,602,285
                            -
 
End of the period
 $        16,285,688
 $        11,837,546
 $          2,063,120
 $          1,602,285
               
See accompanying notes.
        


 
S-56
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Foxhall Global Growth VP
Transamerica Foxhall Global Hard Asset VP
       
Subaccount
Subaccount
       
2010
2009(1)
2010
2009(1)
Operations
          
 
Net investment income (loss)
 $             (90,881)
 $             (31,282)
 $             (55,868)
 $             (17,180)
 
Net realized capital gains (losses)
        
   
on investments
                285,645
                  20,043
                  23,427
                    2,210
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                601,844
                669,014
                366,394
                174,021
Increase (decrease) in net assets
        
 
from operations
                796,608
                657,775
                333,953
                159,051
               
Contract transactions
        
 
Net contract purchase payments
             6,224,293
           10,222,693
             3,454,375
             5,829,931
 
Transfer payments from (to) other
        
   
subaccounts or general account
                273,916
             1,502,286
                417,102
                967,816
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (558,514)
                (61,823)
              (453,817)
                (44,307)
 
Contract maintenance charges
           (1,470,793)
              (337,143)
              (843,074)
              (201,268)
Increase (decrease) in net assets
        
 
from contract transactions
             4,468,902
           11,326,013
             2,574,586
             6,552,172
Net increase (decrease) in net assets
             5,265,510
           11,983,788
             2,908,539
             6,711,223
               
Net assets:
          
 
Beginning of the period
           11,983,788
                            -
             6,711,223
                            -
 
End of the period
 $        17,249,298
 $        11,983,788
 $          9,619,762
 $          6,711,223
               
See accompanying notes.
        


 
S-57
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Transamerica Jennison Growth VP
Fidelity VIP Contrafund®
       
Subaccount
Subaccount
       
2010(1)
  
2010
2009
Operations
          
 
Net investment income (loss)
 $             (55,766)
  
 $               18,731
 $               40,265
 
Net realized capital gains (losses)
        
   
on investments
              (129,979)
  
              (321,543)
              (926,165)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                724,129
  
             2,754,383
             5,170,139
Increase (decrease) in net assets
        
 
from operations
                538,384
  
             2,451,571
             4,284,239
               
Contract transactions
        
 
Net contract purchase payments
                            -
  
             1,007,726
                906,024
 
Transfer payments from (to) other
        
   
subaccounts or general account
           11,696,333
  
              (295,189)
                  44,028
 
Contract terminations, withdrawals,
        
 
  and other deductions
           (1,090,032)
  
              (872,885)
              (754,312)
 
Contract maintenance charges
              (545,834)
  
           (1,152,007)
           (1,176,567)
Increase (decrease) in net assets
        
 
from contract transactions
           10,060,467
  
           (1,312,355)
              (980,827)
Net increase (decrease) in net assets
           10,598,851
  
             1,139,216
             3,303,412
               
Net assets:
          
 
Beginning of the period
                            -
  
           16,581,630
           13,278,218
 
End of the period
 $        10,598,851
  
 $        17,720,846
 $        16,581,630
               
See accompanying notes.
        


 
S-58
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Fidelity VIP Equity-Income
Fidelity VIP Growth Opportunities
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               55,006
 $               80,927
 $             (30,447)
 $             (18,104)
 
Net realized capital gains (losses)
        
   
on investments
              (268,390)
              (743,307)
              (422,270)
              (421,592)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
             1,226,212
             2,456,348
             1,158,222
             1,506,210
Increase (decrease) in net assets
        
 
from operations
             1,012,828
             1,793,968
                705,505
             1,066,514
               
Contract transactions
        
 
Net contract purchase payments
                440,411
                596,386
                            -
                657,772
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (101,139)
              (145,658)
                (35,654)
                  75,980
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (321,405)
              (400,334)
              (267,153)
              (154,081)
 
Contract maintenance charges
              (631,116)
              (656,833)
              (326,276)
              (312,275)
Increase (decrease) in net assets
        
 
from contract transactions
              (613,249)
              (606,439)
              (629,083)
                267,396
Net increase (decrease) in net assets
                399,579
             1,187,529
                  76,422
             1,333,910
               
Net assets:
          
 
Beginning of the period
             7,805,053
             6,617,524
             3,607,491
             2,273,581
 
End of the period
 $          8,204,632
 $          7,805,053
 $          3,683,913
 $          3,607,491
               
See accompanying notes.
        


 
S-59
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Fidelity VIP Index 500
ProFund VP Bull
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               84,650
 $             103,552
 $             (64,522)
 $               28,154
 
Net realized capital gains (losses)
        
   
on investments
              (226,226)
              (640,033)
                846,585
                516,535
 
Net change in unrealized appreciation/
      
   
depreciation of investments
             1,228,835
             2,164,818
                280,744
                817,138
Increase (decrease) in net assets
        
 
from operations
             1,087,259
             1,628,337
             1,062,807
             1,361,827
               
Contract transactions
        
 
Net contract purchase payments
             1,989,687
             1,659,809
                931,549
                            -
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (546,883)
                (26,648)
           (1,421,357)
             7,864,184
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (362,680)
              (320,472)
              (724,844)
              (216,846)
 
Contract maintenance charges
              (618,105)
              (600,068)
              (622,576)
              (291,455)
Increase (decrease) in net assets
        
 
from contract transactions
                462,019
                712,621
           (1,837,228)
             7,355,883
Net increase (decrease) in net assets
             1,549,278
             2,340,958
              (774,421)
             8,717,710
               
Net assets:
          
 
Beginning of the period
             7,869,261
             5,528,303
             9,581,607
                863,897
 
End of the period
 $          9,418,539
 $          7,869,261
 $          8,807,186
 $          9,581,607
               
See accompanying notes.
        


 
S-60
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Money Market
ProFund VP NASDAQ-100
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $           (206,830)
 $           (254,514)
 $             (41,488)
 $             (25,215)
 
Net realized capital gains (losses)
        
   
on investments
                            -
                            -
                753,799
                727,676
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                            -
                            -
                (26,289)
                479,428
Increase (decrease) in net assets
        
 
from operations
              (206,830)
              (254,514)
                686,022
             1,181,889
               
Contract transactions
        
 
Net contract purchase payments
                            -
                            -
                164,595
                            -
 
Transfer payments from (to) other
        
   
subaccounts or general account
           14,299,677
         (12,198,716)
                  48,208
             1,169,469
 
Contract terminations, withdrawals,
        
 
  and other deductions
         (17,400,511)
           (2,202,616)
              (389,599)
              (142,074)
 
Contract maintenance charges
           (1,611,394)
           (2,085,818)
              (278,333)
              (219,762)
Increase (decrease) in net assets
        
 
from contract transactions
           (4,712,228)
         (16,487,150)
              (455,129)
                807,633
Net increase (decrease) in net assets
           (4,919,058)
         (16,741,664)
                230,893
             1,989,522
               
Net assets:
          
 
Beginning of the period
           17,988,781
           34,730,445
             3,532,987
             1,543,465
 
End of the period
 $        13,069,723
 $        17,988,781
 $          3,763,880
 $          3,532,987
               
See accompanying notes.
        


 
S-61
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Short Small-Cap
ProFund VP Small-Cap
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             (14,006)
 $               (6,280)
 $             (20,845)
 $             (10,218)
 
Net realized capital gains (losses)
        
   
on investments
              (400,664)
           (1,256,688)
                    9,357
                122,830
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                (62,125)
                (38,813)
                  53,370
                  41,372
Increase (decrease) in net assets
        
 
from operations
              (476,795)
           (1,301,781)
                  41,882
                153,984
               
Contract transactions
        
 
Net contract purchase payments
                            -
                            -
             1,772,610
                            -
 
Transfer payments from (to) other
        
   
subaccounts or general account
              (964,144)
                134,913
           (1,369,872)
              (376,266)
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (176,510)
              (119,360)
                (65,796)
                (38,526)
 
Contract maintenance charges
              (134,233)
              (236,489)
              (155,595)
                (87,180)
Increase (decrease) in net assets
        
 
from contract transactions
           (1,274,887)
              (220,936)
                181,347
              (501,972)
Net increase (decrease) in net assets
           (1,751,682)
           (1,522,717)
                223,229
              (347,988)
               
Net assets:
          
 
Beginning of the period
             3,097,540
             4,620,257
             1,048,224
             1,396,212
 
End of the period
 $          1,345,858
 $          3,097,540
 $          1,271,453
 $          1,048,224
               
See accompanying notes.
        


 
S-62
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Access VP High Yield
ProFund VP Europe 30
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             131,321
 $             453,506
 $                 2,155
 $                 7,874
 
Net realized capital gains (losses)
        
   
on investments
                846,744
              (539,329)
                     (723)
                (22,837)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
              (916,101)
             1,013,822
                    8,148
                  23,141
Increase (decrease) in net assets
        
 
from operations
                  61,964
                927,999
                    9,580
                    8,178
               
Contract transactions
        
 
Net contract purchase payments
                702,701
             9,441,671
                            -
                108,267
 
Transfer payments from (to) other
        
   
subaccounts or general account
           (6,184,584)
         (12,105,635)
                (10,285)
                128,259
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (247,071)
              (243,227)
              (123,174)
                  (5,011)
 
Contract maintenance charges
              (134,815)
              (333,510)
                (23,568)
                (27,799)
Increase (decrease) in net assets
        
 
from contract transactions
           (5,863,769)
           (3,240,701)
              (157,027)
                203,716
Net increase (decrease) in net assets
           (5,801,805)
           (2,312,702)
              (147,447)
                211,894
               
Net assets:
          
 
Beginning of the period
             7,829,265
           10,141,967
                431,550
                219,656
 
End of the period
 $          2,027,460
 $          7,829,265
 $             284,103
 $             431,550
               
See accompanying notes.
        


 
S-63
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Oil & Gas
ProFund VP UltraSmall-Cap
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             (18,965)
 $             (28,124)
 $             (37,128)
 $             (12,498)
 
Net realized capital gains (losses)
        
   
on investments
                  94,117
              (556,289)
                346,238
                757,711
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                610,350
             1,094,508
             1,060,993
                228,814
Increase (decrease) in net assets
        
 
from operations
                685,502
                510,095
             1,370,103
                974,027
               
Contract transactions
        
 
Net contract purchase payments
                461,332
             1,823,236
             3,276,509
             1,038,134
 
Transfer payments from (to) other
        
   
subaccounts or general account
                372,567
                692,390
              (393,535)
                547,707
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (191,325)
              (130,719)
                (71,541)
                (34,225)
 
Contract maintenance charges
              (367,860)
              (350,007)
              (230,925)
                (81,870)
Increase (decrease) in net assets
        
 
from contract transactions
                274,714
             2,034,900
             2,580,508
             1,469,746
Net increase (decrease) in net assets
                960,216
             2,544,995
             3,950,611
             2,443,773
               
Net assets:
          
 
Beginning of the period
             4,371,867
             1,826,872
             2,876,036
                432,263
 
End of the period
 $          5,332,083
 $          4,371,867
 $          6,826,647
 $          2,876,036
               
See accompanying notes.
        


 
S-64
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Utilities
ProFund VP Consumer Services
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               28,806
 $               28,427
 $               (3,448)
 $               (1,046)
 
Net realized capital gains (losses)
        
   
on investments
                  59,710
                (91,919)
                (10,407)
                  21,078
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                (51,982)
                194,081
                  30,060
                  13,891
Increase (decrease) in net assets
        
 
from operations
                  36,534
                130,589
                  16,205
                  33,923
               
Contract transactions
        
 
Net contract purchase payments
                            -
                933,252
                459,256
                  14,871
 
Transfer payments from (to) other
        
   
subaccounts or general account
                  12,584
                423,309
                210,220
                  (6,835)
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (367,429)
                (32,898)
                (16,182)
                  (2,863)
 
Contract maintenance charges
              (109,921)
                (72,512)
                (23,464)
                  (8,805)
Increase (decrease) in net assets
        
 
from contract transactions
              (464,766)
             1,251,151
                629,830
                  (3,632)
Net increase (decrease) in net assets
              (428,232)
             1,381,740
                646,035
                  30,291
               
Net assets:
          
 
Beginning of the period
             1,838,272
                456,532
                170,351
                140,060
 
End of the period
 $          1,410,040
 $          1,838,272
 $             816,386
 $             170,351
               
See accompanying notes.
        


 
S-65
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Pharmaceuticals
ProFund VP Small-Cap Value
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               24,067
 $                 6,177
 $             (12,350)
 $               (6,122)
 
Net realized capital gains (losses)
        
   
on investments
                  31,296
              (434,125)
                285,977
                  28,184
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                (66,533)
                102,503
                (59,150)
                136,186
Increase (decrease) in net assets
        
 
from operations
                (11,170)
              (325,445)
                214,477
                158,248
               
Contract transactions
        
 
Net contract purchase payments
                  93,878
             4,917,811
                            -
                913,638
 
Transfer payments from (to) other
        
   
subaccounts or general account
                  28,920
           (4,284,194)
                132,192
                622,708
 
Contract terminations, withdrawals,
        
 
  and other deductions
                (30,083)
                (58,889)
           (1,447,009)
                (41,904)
 
Contract maintenance charges
                (57,503)
                (94,585)
              (112,299)
                (73,163)
Increase (decrease) in net assets
        
 
from contract transactions
                  35,212
                480,143
           (1,427,116)
             1,421,279
Net increase (decrease) in net assets
                  24,042
                154,698
           (1,212,639)
             1,579,527
               
Net assets:
          
 
Beginning of the period
                599,768
                445,070
             1,734,523
                154,996
 
End of the period
 $             623,810
 $             599,768
 $             521,884
 $          1,734,523
               
See accompanying notes.
        


 
S-66
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Falling U.S. Dollar
ProFund VP Emerging Markets
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               (3,896)
 $               15,914
 $             (85,858)
 $             (38,607)
 
Net realized capital gains (losses)
        
   
on investments
                (22,695)
                (48,059)
                859,581
                712,359
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                       440
                  41,880
                (85,832)
             1,296,857
Increase (decrease) in net assets
        
 
from operations
                (26,151)
                    9,735
                687,891
             1,970,609
               
Contract transactions
        
 
Net contract purchase payments
                  29,095
                            -
             6,840,347
             4,599,865
 
Transfer payments from (to) other
        
   
subaccounts or general account
                (15,808)
                (37,807)
             1,533,657
             4,379,484
 
Contract terminations, withdrawals,
        
 
  and other deductions
                (42,101)
                (52,476)
              (489,370)
              (202,066)
 
Contract maintenance charges
                (49,630)
                (70,729)
              (670,775)
              (363,872)
Increase (decrease) in net assets
        
 
from contract transactions
                (78,444)
              (161,012)
             7,213,859
             8,413,411
Net increase (decrease) in net assets
              (104,595)
              (151,277)
             7,901,750
           10,384,020
               
Net assets:
          
 
Beginning of the period
                608,825
                760,102
           11,111,642
                727,622
 
End of the period
 $             504,230
 $             608,825
 $        19,013,392
 $        11,111,642
               
See accompanying notes.
        


 
S-67
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP International
ProFund VP Asia 30
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             (38,135)
 $             (26,013)
 $             (42,343)
 $                 7,249
 
Net realized capital gains (losses)
        
   
on investments
              (230,927)
                119,113
                214,771
                682,738
 
Net change in unrealized appreciation/
      
   
depreciation of investments
              (185,789)
                644,052
                472,737
                461,097
Increase (decrease) in net assets
        
 
from operations
              (454,851)
                737,152
                645,165
             1,151,084
               
Contract transactions
        
 
Net contract purchase payments
             2,540,119
                            -
                            -
             4,162,493
 
Transfer payments from (to) other
        
   
subaccounts or general account
                732,018
             4,766,406
              (398,295)
             1,272,743
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (275,810)
              (145,984)
              (592,480)
                (70,858)
 
Contract maintenance charges
              (325,299)
              (219,533)
              (360,734)
              (266,978)
Increase (decrease) in net assets
        
 
from contract transactions
             2,671,028
             4,400,889
           (1,351,509)
             5,097,400
Net increase (decrease) in net assets
             2,216,177
             5,138,041
              (706,344)
             6,248,484
               
Net assets:
          
 
Beginning of the period
             5,526,517
                388,476
             6,866,995
                618,511
 
End of the period
 $          7,742,694
 $          5,526,517
 $          6,160,651
 $          6,866,995
               
See accompanying notes.
        


 
S-68
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Japan
ProFund VP Short NASDAQ-100
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               (1,207)
 $                  (238)
 $               (7,340)
 $               (5,481)
 
Net realized capital gains (losses)
        
   
on investments
                  (2,979)
                  10,013
              (221,982)
              (471,284)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                  (1,891)
                    1,470
                (11,148)
                (58,391)
Increase (decrease) in net assets
        
 
from operations
                  (6,077)
                  11,245
              (240,470)
              (535,156)
               
Contract transactions
        
 
Net contract purchase payments
                  62,059
                147,447
                315,926
                123,237
 
Transfer payments from (to) other
        
   
subaccounts or general account
                146,228
                (85,685)
                (97,843)
                  22,825
 
Contract terminations, withdrawals,
        
 
  and other deductions
                  (1,678)
                     (100)
                (53,875)
                (34,363)
 
Contract maintenance charges
                  (8,854)
                  (5,716)
                (75,100)
                (89,897)
Increase (decrease) in net assets
        
 
from contract transactions
                197,755
                  55,946
                  89,108
                  21,802
Net increase (decrease) in net assets
                191,678
                  67,191
              (151,362)
              (513,354)
               
Net assets:
          
 
Beginning of the period
                125,805
                  58,614
                732,716
             1,246,070
 
End of the period
 $             317,483
 $             125,805
 $             581,354
 $             732,716
               
See accompanying notes.
        


 
S-69
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP U.S. Government Plus
ProFund VP Basic Materials
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             (15,110)
 $             (24,816)
 $             (15,128)
 $                    771
 
Net realized capital gains (losses)
        
   
on investments
              (124,220)
              (196,988)
                532,021
              (141,611)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                322,229
           (1,532,913)
                686,503
             1,155,542
Increase (decrease) in net assets
        
 
from operations
                182,899
           (1,754,717)
             1,203,396
             1,014,702
               
Contract transactions
        
 
Net contract purchase payments
             1,361,159
                339,906
                601,915
             3,171,975
 
Transfer payments from (to) other
        
   
subaccounts or general account
                  92,603
                  54,875
             1,314,899
             1,109,286
 
Contract terminations, withdrawals,
        
 
  and other deductions
              (309,377)
              (280,593)
              (190,585)
                (97,709)
 
Contract maintenance charges
              (318,232)
              (325,400)
              (348,487)
              (205,366)
Increase (decrease) in net assets
        
 
from contract transactions
                826,153
              (211,212)
             1,377,742
             3,978,186
Net increase (decrease) in net assets
             1,009,052
           (1,965,929)
             2,581,138
             4,992,888
               
Net assets:
          
 
Beginning of the period
             2,287,999
             4,253,928
             5,600,499
                607,611
 
End of the period
 $          3,297,051
 $          2,287,999
 $          8,181,637
 $          5,600,499
               
See accompanying notes.
        


 
S-70
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Financials
ProFund VP Precious Metals
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $             (12,703)
 $               13,195
 $             (63,134)
 $                    443
 
Net realized capital gains (losses)
        
   
on investments
                  88,135
                  62,655
                938,538
                  52,748
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                  21,250
                315,058
             1,379,109
                686,357
Increase (decrease) in net assets
        
 
from operations
                  96,682
                390,908
             2,254,513
                739,548
               
Contract transactions
        
 
Net contract purchase payments
                  74,112
                802,269
             3,220,293
             6,970,839
 
Transfer payments from (to) other
        
   
subaccounts or general account
                221,272
                177,898
                640,698
           (3,445,629)
 
Contract terminations, withdrawals,
        
 
  and other deductions
                (53,302)
                (32,092)
              (271,852)
              (178,130)
 
Contract maintenance charges
              (143,933)
              (105,602)
              (573,328)
              (371,109)
Increase (decrease) in net assets
        
 
from contract transactions
                  98,149
                842,473
             3,015,811
             2,975,971
Net increase (decrease) in net assets
                194,831
             1,233,381
             5,270,324
             3,715,519
               
Net assets:
          
 
Beginning of the period
             1,788,997
                555,616
             5,881,222
             2,165,703
 
End of the period
 $          1,983,828
 $          1,788,997
 $        11,151,546
 $          5,881,222
               
See accompanying notes.
        


 
S-71
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Telecommunications
ProFund VP Mid-Cap
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $                 8,851
 $                 7,269
 $             (39,147)
 $             (15,341)
 
Net realized capital gains (losses)
        
   
on investments
                    7,214
                  (9,671)
                726,114
                  29,686
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                  30,087
                  (2,482)
                (60,601)
                497,716
Increase (decrease) in net assets
        
 
from operations
                  46,152
                  (4,884)
                626,366
                512,061
               
Contract transactions
        
 
Net contract purchase payments
                114,936
                            -
                            -
             4,453,118
 
Transfer payments from (to) other
        
   
subaccounts or general account
                  14,628
              (168,705)
              (451,269)
                301,335
 
Contract terminations, withdrawals,
        
 
  and other deductions
                (22,616)
                (17,020)
           (2,985,268)
                (69,377)
 
Contract maintenance charges
                (19,686)
                (14,415)
              (287,916)
              (132,664)
Increase (decrease) in net assets
        
 
from contract transactions
                  87,262
              (200,140)
           (3,724,453)
             4,552,412
Net increase (decrease) in net assets
                133,414
              (205,024)
           (3,098,087)
             5,064,473
               
Net assets:
          
 
Beginning of the period
                243,481
                448,505
             5,848,174
                783,701
 
End of the period
 $             376,895
 $             243,481
 $          2,750,087
 $          5,848,174
               
See accompanying notes.
        


 
S-72
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
ProFund VP Short Emerging Markets
ProFund VP Short International
       
Subaccount
Subaccount
       
2010
2009
2010
2009
Operations
          
 
Net investment income (loss)
 $               (7,872)
 $               (8,256)
 $               (6,514)
 $             (13,890)
 
Net realized capital gains (losses)
        
   
on investments
              (279,279)
              (918,285)
              (227,258)
              (688,509)
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                  46,808
                248,470
                  74,349
                       (97)
Increase (decrease) in net assets
        
 
from operations
              (240,343)
              (678,071)
              (159,423)
              (702,496)
               
Contract transactions
        
 
Net contract purchase payments
                  51,508
                            -
                  44,007
                224,990
 
Transfer payments from (to) other
        
   
subaccounts or general account
                154,630
              (319,382)
                  18,948
              (168,759)
 
Contract terminations, withdrawals,
        
 
  and other deductions
                (23,232)
                (81,994)
                (51,847)
              (126,448)
 
Contract maintenance charges
                (75,923)
              (122,465)
              (100,693)
              (205,347)
Increase (decrease) in net assets
        
 
from contract transactions
                106,983
              (523,841)
                (89,585)
              (275,564)
Net increase (decrease) in net assets
              (133,360)
           (1,201,912)
              (249,008)
              (978,060)
               
Net assets:
          
 
Beginning of the period
                484,875
             1,686,787
                859,623
             1,837,683
 
End of the period
 $             351,515
 $             484,875
 $             610,615
 $             859,623
               
See accompanying notes.
        


 
S-73
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Statements of Changes in Net Assets
Years Ended December 31, 2010 and 2009, Except as Noted




       
Franklin Templeton VIP Founding Funds Allocation
AllianceBernstein Balanced Wealth Strategy
       
Subaccount
Subaccount
       
2010
2009(1)
2010
2009(1)
Operations
          
 
Net investment income (loss)
 $                 6,008
 $                 3,570
 $                 5,287
 $                  (444)
 
Net realized capital gains (losses)
        
   
on investments
                    2,292
                    4,385
                  13,760
                  11,616
 
Net change in unrealized appreciation/
      
   
depreciation of investments
                  11,680
                    8,328
                  35,707
                  10,450
Increase (decrease) in net assets
        
 
from operations
                  19,980
                  16,283
                  54,754
                  21,622
               
Contract transactions
        
 
Net contract purchase payments
                225,896
                151,357
                332,499
                154,771
 
Transfer payments from (to) other
        
   
subaccounts or general account
                  79,555
                  33,928
                  43,853
                104,350
 
Contract terminations, withdrawals,
        
 
  and other deductions
                (38,059)
                            -
                (47,262)
                  (2,504)
 
Contract maintenance charges
                (28,564)
                  (4,140)
                (47,646)
                  (5,390)
Increase (decrease) in net assets
        
 
from contract transactions
                238,828
                181,145
                281,444
                251,227
Net increase (decrease) in net assets
                258,808
                197,428
                336,198
                272,849
               
Net assets:
          
 
Beginning of the period
                197,428
                            -
                272,849
                            -
 
End of the period
 $             456,236
 $             197,428
 $             609,047
 $             272,849
               
See accompanying notes.
        

 
S-74
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010


1.
Organization and Summary of Significant Accounting Policies
  

Organization

WRL Series Life Account (the Separate Account) is a segregated investment account of Western Reserve Life Assurance Co. of Ohio (WRL), an indirect wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands.
The Separate Account is registered with the Securities and Exchange Commission as a Unit Investment Trust pursuant to provisions of the Investment Company Act of 1940.  The Separate Account consists of multiple investment subaccounts.  Each subaccount invests exclusively in the corresponding portfolio of a Mutual Fund.  Each Mutual Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended.  Activity in these specified investment subaccounts is available to contact owners of WRL Freedom Builder, WRL Freedom Elite, WRL Freedom Equity Protector, WRL Freedom Wealth Protector, WRL Freedom Elite Builder, WRL Freedom Elite Advisor, WRL Freedom Excelerator, and WRL For Life.

Subaccount Investment by Mutual Fund:
Transamerica Series Trust - Initial Class
 
Transamerica JPMorgan Core Bond VP
 
Transamerica Asset Allocation - Conservative Portfolio VP
 
Transamerica Asset Allocation - Growth Portfolio VP
 
Transamerica Asset Allocation - Moderate Growth Portfolio VP
 
Transamerica Asset Allocation - Moderate Portfolio VP
 
Transamerica MFS International Equity VP
 
Transamerica Clarion Global Real Estate Securities VP
 
Transamerica Federated Market Opportunity VP
 
Transamerica International Moderate Growth Fund VP
 
Transamerica JPMorgan Mid Cap Value VP
 
Transamerica JPMorgan Enhanced Index VP
 
Transamerica BlackRock Large Cap Value VP
 
Transamerica AEGON High Yield Bond VP
 
Transamerica PIMCO Total Return VP
 
Transamerica Focus VP
 
Transamerica T. Rowe Price Small Cap VP
 
Transamerica Diversified Equity VP
 
Transamerica Third Avenue Value VP
 
Transamerica Balanced VP
 
Transamerica AllianceBernstein Dynamic Allocation VP
 
Transamerica WMC Diversified Growth VP
 
Transamerica Growth Opportunities VP
 
Transamerica Money Market VP
 
Transamerica Small/Mid-Cap Value VP
 
Transamerica U.S. Government Securities VP
 
Transamerica Morgan Stanley Mid-Cap Growth VP
 
Transamerica Index 50 VP
 
Transamerica Index 75 VP
 
Transamerica Efficient Markets VP


 
S-75
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010




 
1. Organization and Summary of Significant Accounting Policies (continued)
 
  
 
Subaccount Investment by Mutual Fund (continued):
Transamerica Series Trust - Initial Class
 
Transamerica Hanlon Balanced VP
 
Transamerica Hanlon Growth & Income VP
 
Transamerica Hanlon Growth VP
 
Transamerica Hanlon Managed Income VP
 
Transamerica Multi Managed Large Cap Core VP
 
Transamerica Foxhall Emerging Markets/Pacific Rim VP
 
Transamerica Foxhall Global Conservative VP
 
Transamerica Foxhall Global Growth VP
 
Transamerica Foxhall Global Hard Asset VP
 
Transamerica Jennison Growth VP
Fidelity® Variable Insurance Products Fund - Service Class 2
 
Fidelity VIP Contrafund® Portfolio
 
Fidelity VIP Equity-Income Portfolio
 
Fidelity VIP Growth Opportunities Portfolio
 
Fidelity VIP Index 500 Portfolio
ProFunds
 
ProFund VP Bull
 
ProFund VP NASDAQ-100
 
ProFund VP Small-Cap
 
ProFund VP Short Small-Cap
 
ProFund VP Money Market
 
Access VP High Yield
 
ProFund VP Europe 30
 
ProFund VP Oil & Gas
 
ProFund VP UltraSmall-Cap
 
ProFund VP Utilities
 
ProFund VP Consumer Services
 
ProFund VP Pharmaceuticals
 
ProFund VP Small-Cap Value
 
ProFund VP Falling U.S. Dollar
 
ProFund VP Emerging Markets
 
ProFund VP International
 
ProFund VP Asia 30
 
ProFund VP Japan
 
ProFund VP Short NASDAQ-100
 
ProFund VP U.S. Government Plus
 
ProFund VP Basic Materials
 
ProFund VP Financials
 
ProFund VP Precious Metals
 
ProFund VP Telecommunications


 
S-76
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



 
1. Organization and Summary of Significant Accounting Policies (continued)
 
Subaccount Investment by Mutual Fund (continued):
  
ProFunds
    
 
ProFund VP Mid-Cap
    
 
ProFund VP Short Emerging Markets
    
 
ProFund VP Short International
    
Franklin Templeton Variable Insurance Products Trust
    
 
Franklin Templeton VIP Founding Funds Allocation Fund
    
AllianceBernstein Variable Products Series Fund
    
 
AllianceBernstein Balanced Wealth Strategy Portfolio
    

 
Each period reported on reflects a full twelve month period except as follows:
  
Subaccount
        
Inception Date
    
Transamerica International Moderate Growth Fund VP
  
May 1, 2006
    
ProFund VP Bull
        
June 12, 2006
    
ProFund VP Money Market
      
June 12, 2006
    
ProFund VP NASDAQ-100
      
June 12, 2006
    
ProFund VP Short Small-Cap
      
June 12, 2006
    
ProFund VP Small-Cap
        
June 12, 2006
    
Access VP High Yield
        
February 28, 2008
    
ProFund VP Europe 30
        
February 28, 2008
    
ProFund VP Oil & Gas
        
February 28, 2008
    
ProFund VP Ultra Small-Cap
      
February 28, 2008
    
ProFund VP Utilities
        
February 28, 2008
    
ProFund VP Consumer Services
      
February 28, 2008
    
ProFund VP Pharmaceuticals
      
February 28, 2008
    
ProFund VP Small-Cap Value
      
February 28, 2008
    
ProFund VP Falling U.S. Dollar
      
February 28, 2008
    
ProFund VP Emerging Markets
      
February 28, 2008
    
ProFund VP International
        
February 28, 2008
    
ProFund VP Asia 30
        
February 28, 2008
    
ProFund VP Japan
        
February 28, 2008
    
ProFund VP Short NASDAQ-100
      
February 28, 2008
    
ProFund VP U.S. Government Plus
      
February 28, 2008
    
ProFund VP Basic Materials
      
February 28, 2008
    
ProFund VP Financials
        
February 28, 2008
    
ProFund VP Precious Metals
      
February 28, 2008
    
ProFund VP Telecommunications
      
February 28, 2008
    
ProFund VP Mid-Cap
        
February 28, 2008
    
ProFund VP Short Emerging Markets
      
February 28, 2008
    
ProFund VP Short International
      
February 28, 2008
    
Transamerica Index 50 VP
      
May 1, 2008
    
Transamerica Index 75 VP
      
May 1, 2008
    


 
S-77
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



 
1. Organization and Summary of Significant Accounting Policies (continued)
 
Each period reported on reflects a full twelve month period except as follows:
    
Subaccount
        
Inception Date
      
Transamerica Efficient Markets VP
      
May 1, 2009
      
Transamerica Hanlon Balanced VP
      
May 1, 2009
      
Transamerica Hanlon Growth & Income VP
    
May 1, 2009
      
Transamerica Hanlon Growth VP
      
May 1, 2009
      
Transamerica Hanlon Managed Income VP
    
May 1, 2009
      
Transamerica Multi Managed Large Cap Core VP
    
May 1, 2009
      
Franklin Templeton VIP Founding Funds Allocation Fund
  
May 1, 2009
      
AllianceBernstein Balanced Wealth Strategy Portfolio
    
May 1, 2009
      
Transamerica Foxhall Emerging Markets/Pacific Rim VP
  
July 1, 2009
      
Transamerica Foxhall Global Conservative VP
    
July 1, 2009
      
Transamerica Foxhall Global Growth VP
      
July 1, 2009
      
Transamerica Foxhall Global Hard Asset VP
    
July 1, 2009
      
Transamerica Jennison Growth VP
      
April 29, 2010
      

The following Portfolio name changes were made effective during the fiscal year ended December 31, 2010:
Portfolio
      
Formerly
    
Transamerica WMC Diversified Growth VP
Transamerica Equity VP
  
Transamerica Diversified Equity VP
  
Transamerica Templeton Global VP
Transamerica Multi Managed Large Cap Core VP
Transamerica Van Kampen Large Cap Core VP
Transamerica Morgan Stanley Mid-Cap Growth VP
Transamerica Van Kampen Mid Cap Growth VP
Transamerica AllianceBernstein Dynamic Allocation VP
Transamerica Convertible Securities VP

The following Portfolio mergers were made effective during the fiscal year ended December 31, 2010:
Portfolio
      
Formerly
    
Transamerica BlackRock Large Cap Value VP
Transamerica T. Rowe Price Equity Income VP
Transamerica Jennison Growth VP
  
Transamerica Marsico Growth VP
Transamerica Balanced VP
  
Transamerica Value Balanced VP
Transamerica Diversified Equity VP
  
Transamerica Science and Technology VP
Transamerica Diversified Equity VP
  
Transamerica Munder Net50 VP

Investments

Net purchase payments received by the Separate Account are invested in the portfolios of the Mutual Funds as selected by the contract owner. Investments are stated at the closing net asset values per share on December 31, 2010.
Realized capital gains and losses from sales of shares in the Separate Account are determined on the first-in, first-out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. Unrealized gains or losses from investments in the Mutual Funds are included in the Statements of Operations.

 
S-78
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



1. Organization and Summary of Significant Accounting Policies (continued)
  

Dividend Income

Dividends received from the Mutual Fund investments are reinvested to purchase additional mutual fund shares.

Accounting Policy

On July 1, 2009, the FASB Accounting Standards CodificationTM (ASC or the Codification) was launched as the single source of authoritative nongovernmental accounting principles generally accepted in the United States (GAAP). Guidance in the Codification is organized by Topic, each representing a collection of related guidance (e.g., Financial Services—Insurance). Topics are further subdivided into Subtopics (e.g., Insurance Activities), and Sections (e.g., Recognition, Measurement, or Disclosure). All guidance contained in the Codification carries an equal level of authority. The Separate Account adopted guidance that establishes the Codification as the source of authoritative GAAP for the period ended September 30, 2009. The adoption required updates to the Separate Account’s financial statement disclosures, but did not impact the results of operations or financial position.
As of December 31, 2009 the Separate Account adopted ASC 855, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. See Note 9 to the financial statements for additional disclosure.
The financial statements included herein have been prepared in accordance with GAAP for variable life separate accounts registered as unit investment trusts.  The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions regarding matters that affect the reported amount of assets and liabilities.  Actual results could differ from those estimates.


 
S-79
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



2. Investments

The aggregate cost of purchases and proceeds from sales of investments for the period ended December 31, 2010 were as follows:
       
Purchases
Sales
Transamerica Series Trust - Initial Class
        
 
Transamerica JPMorgan Core Bond VP
  
 $   10,776,377
 $ 11,762,049
 
Transamerica Asset Allocation - Conservative Portfolio VP
        9,290,248
      8,150,279
 
Transamerica Asset Allocation - Growth Portfolio VP
      14,032,170
    25,378,730
 
Transamerica Asset Allocation - Moderate Growth Portfolio VP
      20,310,684
    28,845,756
 
Transamerica Asset Allocation - Moderate Portfolio VP
      13,258,226
    13,654,537
 
Transamerica MFS International Equity VP
  
        4,509,153
      8,346,176
 
Transamerica Clarion Global Real Estate Securities VP
        4,742,386
      5,422,487
 
Transamerica Federated Market Opportunity VP
  
        3,663,708
    11,061,271
 
Transamerica International Moderate Growth Fund VP
        1,836,949
      1,624,263
 
Transamerica JPMorgan Mid Cap Value VP
  
           156,362
      1,673,309
 
Transamerica JPMorgan Enhanced Index VP
  
           411,504
         260,668
 
Transamerica BlackRock Large Cap Value VP
  
      20,734,684
      8,244,194
 
Transamerica AEGON High Yield Bond VP
  
      18,538,579
    11,604,168
 
Transamerica PIMCO Total Return VP
  
      15,202,395
    14,389,116
 
Transamerica Focus VP
    
        2,275,488
      4,181,356
 
Transamerica T. Rowe Price Small Cap VP
  
        8,669,269
      5,561,740
 
Transamerica Diversified Equity VP
    
      34,832,137
    25,861,105
 
Transamerica Third Avenue Value VP
  
        3,730,489
    12,479,829
 
Transamerica Balanced VP
    
    103,342,730
      8,328,038
 
Transamerica AllianceBernstein Dynamic Allocation VP
        1,090,344
      1,001,030
 
Transamerica WMC Diversified Growth VP
  
        7,956,492
    61,783,787
 
Transamerica Growth Opportunities VP
  
        7,966,473
      6,683,034
 
Transamerica Money Market VP
    
      20,069,769
    30,370,326
 
Transamerica Small/Mid-Cap Value VP
  
      12,594,060
      8,053,589
 
Transamerica U.S. Government Securities VP
  
        5,866,476
      3,449,731
 
Transamerica Morgan Stanley Mid-Cap Growth VP
  
        6,719,785
    28,770,313
 
Transamerica Index 50 VP
    
           275,303
         146,131
 
Transamerica Index 75 VP
    
           477,843
           91,032
 
Transamerica Efficient Markets VP
    
           294,176
         106,612
 
Transamerica Hanlon Balanced VP
    
        7,829,840
      1,661,281
 
Transamerica Hanlon Growth & Income VP
  
        4,869,910
      1,773,368
 
Transamerica Hanlon Growth VP
    
        6,066,485
      1,977,571


 
S-80
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



 
2.
Investments (continued)
          
       
Purchases
Sales
Transamerica Series Trust - Initial Class
        
 
Transamerica Hanlon Managed Income VP
    
 $ 16,120,653
 $   5,062,493
 
Transamerica Multi Managed Large Cap Core VP
    
      1,141,597
      1,031,895
 
Transamerica Foxhall Emerging Markets/Pacific Rim VP
    
      6,685,339
      2,746,530
 
Transamerica Foxhall Global Conservative VP
    
      1,273,749
         696,578
 
Transamerica Foxhall Global Growth VP
    
      6,703,938
      2,228,506
 
Transamerica Foxhall Global Hard Asset VP
    
      3,893,051
      1,347,806
 
Transamerica Jennison Growth VP
    
    12,195,331
      2,190,625
Fidelity® Variable Insurance Products Fund - Service Class 2
        
 
Fidelity VIP Contrafund® Portfolio
    
         911,573
      2,197,719
 
Fidelity VIP Equity-Income Portfolio
    
         350,094
         908,374
 
Fidelity VIP Growth Opportunities Portfolio
    
         526,885
      1,186,377
 
Fidelity VIP Index 500 Portfolio
    
      3,096,883
      2,400,855
ProFunds
        
 
ProFund VP Bull
    
      5,522,126
      7,423,836
 
ProFund VP NASDAQ-100
    
    14,290,068
    14,786,698
 
ProFund VP Small-Cap
    
    27,442,954
    27,278,660
 
ProFund VP Short Small-Cap
    
    29,195,666
    30,483,797
 
ProFund VP Money Market
    
    67,354,324
    72,271,788
 
Access VP High Yield
    
      2,552,132
      8,284,602
 
ProFund VP Europe 30
    
         326,538
         481,409
 
ProFund VP Oil & Gas
    
      2,378,525
      2,122,905
 
ProFund VP UltraSmall-Cap
    
    25,606,308
    23,051,516
 
ProFund VP Utilities
    
      1,064,307
      1,500,268
 
ProFund VP Consumer Services
    
      1,429,235
         802,853
 
ProFund VP Pharmaceuticals
    
         919,404
         860,126
 
ProFund VP Small-Cap Value
    
      3,460,703
      4,900,170
 
ProFund VP Falling U.S. Dollar
    
         409,892
         492,226
 
ProFund VP Emerging Markets
    
    16,213,158
      8,935,407
 
ProFund VP International
    
    12,325,998
      9,444,302
 
ProFund VP Asia 30
    
      2,950,777
      4,344,642
 
ProFund VP Japan
    
         577,564
         381,016
 
ProFund VP Short NASDAQ-100
    
      3,162,264
      3,080,477
 
ProFund VP U.S. Government Plus
    
      5,984,485
      5,173,865
 
ProFund VP Basic Materials
    
      7,109,848
      5,746,147
 
ProFund VP Financials
    
      2,695,927
      2,610,484



 
S-81
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



2.  Investments (continued)


       
Purchases
Sales
ProFunds
        
 
ProFund VP Precious Metals
    
 $   6,480,834
 $   3,528,242
 
ProFund VP Telecommunications
    
         745,576
         649,475
 
ProFund VP Mid-Cap
    
      6,767,857
    10,057,076
 
ProFund VP Short Emerging Markets
    
      3,145,335
      3,046,198
 
ProFund VP Short International
    
      2,275,473
      2,371,380
Franklin Templeton Variable Insurance Products Trust
        
 
Franklin Templeton VIP Founding Funds Allocation Fund
    
         625,472
         380,601
AllianceBernstein Variable Products Series Fund
        
 
AllianceBernstein Balanced Wealth Strategy Portfolio
    
         669,288
         382,557





 
S-82
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding

A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
Transamerica JPMorgan Core Bond VP
Transamerica Asset Allocation - Conservative VP
Transamerica Asset Allocation - Growth VP
Transamerica Asset Allocation - Moderate Growth VP
Transamerica Asset Allocation - Moderate VP
 Transamerica MFS International Equity VP
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
     1,572,007
     3,364,944
   19,983,377
   21,947,519
     6,756,498
     3,801,070
       Units purchased
        896,991
     1,564,449
     7,170,419
     6,503,158
     2,790,806
        977,992
       Units redeemed and
            
            transferred to/from
       (878,081)
    (1,932,253)
    (7,531,879)
    (7,287,962)
    (3,290,016)
    (1,301,496)
 Units outstanding at
            
   December 31, 2009
     1,590,917
     2,997,140
   19,621,917
   21,162,715
     6,257,288
     3,477,566
       Units purchased
        498,331
        929,542
     4,237,589
     4,524,291
     1,761,290
        758,249
       Units redeemed and
            
            transferred to/from
       (591,350)
       (921,873)
    (5,150,038)
    (5,434,925)
    (1,925,633)
    (1,083,476)
 Units outstanding at
            
   December 31, 2010
     1,497,898
     3,004,809
   18,709,468
   20,252,081
     6,092,945
     3,152,339
             


 
S-83
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Transamerica Clarion Global Real Estate Securities VP
 Transamerica Federated Market Opportunity VP
 Transamerica International Moderate Growth VP
 Transamerica JPMorgan Mid Cap Value VP
 Transamerica JPMorgan Enhanced Index VP
 Transamerica BlackRock Large Cap Value VP
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
     2,120,392
     2,776,710
     1,054,957
        662,629
        143,853
     2,180,067
       Units purchased
        739,041
     1,002,599
        674,116
          24,446
          58,081
        731,798
       Units redeemed and
            
            transferred to/from
       (940,938)
    (1,323,754)
       (643,827)
       (143,223)
         (55,050)
       (815,592)
 Units outstanding at
            
   December 31, 2009
     1,918,495
     2,455,555
     1,085,246
        543,852
        146,884
     2,096,273
       Units purchased
        390,938
        359,548
        373,176
            1,782
          44,830
     1,306,326
       Units redeemed and
            
            transferred to/from
       (516,686)
       (672,538)
       (372,290)
       (102,012)
         (32,401)
       (721,827)
 Units outstanding at
            
   December 31, 2010
     1,792,747
     2,142,565
     1,086,132
        443,622
        159,313
     2,680,772



 
S-84
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Transamerica AEGON High Yield Bond VP
 Transamerica PIMCO Total Return VP
 Transamerica Focus VP
 Transamerica T. Rowe Price Small Cap VP
 Transamerica Diversified Equity VP
 Transamerica Third Avenue Value VP
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
          94,690
     1,501,811
     2,303,251
     1,643,169
     8,271,349
     3,678,782
       Units purchased
     1,180,276
     1,893,853
        505,723
        996,943
     1,562,195
     1,040,099
       Units redeemed and
            
            transferred to/from
       (431,529)
    (1,345,674)
       (780,938)
    (1,059,429)
    (2,242,045)
    (1,363,191)
 Units outstanding at
            
   December 31, 2009
        843,437
     2,049,990
     2,028,036
     1,580,683
     7,591,499
     3,355,690
       Units purchased
     1,287,398
     1,480,908
        427,967
        941,251
     2,510,540
        504,836
       Units redeemed and
            
            transferred to/from
       (968,210)
    (1,486,124)
       (567,238)
       (726,308)
    (2,094,779)
       (934,867)
 Units outstanding at
            
   December 31, 2010
     1,162,625
     2,044,774
     1,888,765
     1,795,626
     8,007,260
     2,925,659
             



 
S-85
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Transamerica Balanced VP
 Transamerica AllianceBernstein Dynamic Allocation VP
 Transamerica WMC Diversified Growth VP
 Transamerica Growth Opportunities VP
 Transamerica Money Market VP
 Transamerica Small/MidCap Value VP
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
        362,719
        266,164
   49,835,316
     3,512,963
     5,511,162
     1,401,587
       Units purchased
        189,191
        101,575
     9,401,184
     1,115,145
     3,253,870
        999,795
       Units redeemed and
            
            transferred to/from
       (176,859)
       (134,497)
  (13,326,851)
    (1,410,933)
    (5,369,540)
       (864,624)
 Units outstanding at
            
   December 31, 2009
        375,051
        233,242
   45,909,649
     3,217,175
     3,395,492
     1,536,758
       Units purchased
     8,063,047
          90,861
     6,385,066
     1,020,141
     2,207,227
     1,192,376
       Units redeemed and
            
            transferred to/from
    (1,152,505)
         (95,699)
  (10,423,201)
       (948,037)
    (2,722,911)
       (920,114)
 Units outstanding at
            
   December 31, 2010
     7,285,593
        228,404
   41,871,514
     3,289,279
     2,879,808
     1,809,020
             


 
S-86
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Transamerica U.S. Government Securities VP
 Transamerica Morgan Stanley Mid-Cap Growth VP
 Transamerica Index 50 VP
 Transamerica Index 75 VP
 Transamerica Efficient Markets VP
 Transamerica Hanlon Balanced VP
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount(1)
Subaccount(1)
Units outstanding at
            
   January 1, 2009
     1,695,537
     6,901,583
          13,078
          19,265
                    -
                    -
       Units purchased
        914,893
     1,598,559
          31,212
          86,400
          12,940
        498,581
       Units redeemed and
            
            transferred to/from
    (1,862,687)
    (1,994,203)
         (34,308)
         (18,492)
           (2,235)
         (84,898)
 Units outstanding at
            
   December 31, 2009
        747,743
     6,505,939
            9,982
          87,173
          10,705
        413,683
       Units purchased
        530,962
     1,065,369
          29,239
          54,682
          25,585
        895,957
       Units redeemed and
            
            transferred to/from
       (389,632)
    (1,459,644)
         (16,641)
         (15,475)
         (10,868)
       (328,150)
 Units outstanding at
            
   December 31, 2010
        889,073
     6,111,664
          22,580
        126,380
          25,422
        981,490
             



 
S-87
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Transamerica Hanlon Growth & Income VP
 Transamerica Hanlon Growth VP
 Transamerica Hanlon Managed Income VP
 Transamerica Multi Managed Large Cap Core VP
 Transamerica Foxhall Emerging Markets/Pacific Rim VP
 Transamerica Foxhall Global Conservative VP
 
Subaccount(1)
Subaccount(1)
Subaccount(1)
Subaccount(1)
Subaccount(1)
Subaccount(1)
Units outstanding at
            
   January 1, 2009
                    -
                    -
                    -
                    -
                    -
                    -
       Units purchased
        694,889
     1,183,663
     1,867,162
        201,631
     1,263,801
        198,162
       Units redeemed and
            
            transferred to/from
       (110,464)
       (282,900)
       (297,871)
         (43,121)
       (179,151)
         (38,678)
 Units outstanding at
            
   December 31, 2009
        584,425
        900,763
     1,569,291
        158,510
     1,084,650
        159,484
       Units purchased
        611,894
        806,976
     2,109,605
          99,284
     1,005,251
        172,434
       Units redeemed and
            
            transferred to/from
       (328,892)
       (447,065)
    (1,098,745)
         (93,509)
       (636,758)
       (112,092)
 Units outstanding at
            
   December 31, 2010
        867,427
     1,260,674
     2,580,151
        164,285
     1,453,143
        219,826
             


 
S-88
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Transamerica Foxhall Global Growth VP
 Transamerica Foxhall Global Hard Asset VP
 Transamerica Jennison Growth VP
 Fidelity VIP Contrafund®
 Fidelity VIP Equity-Income
 Fidelity VIP Growth Opportunities
 
Subaccount(1)
Subaccount(1)
Subaccount(1)
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
                    -
                    -
                    -
     1,489,388
        776,801
        491,716
       Units purchased
     1,237,967
        746,838
                    -
        348,635
        198,440
        306,282
       Units redeemed and
            
            transferred to/from
       (146,889)
         (95,050)
                    -
       (452,706)
       (263,494)
       (256,805)
 Units outstanding at
            
   December 31, 2009
     1,091,078
        651,788
                    -
     1,385,317
        711,747
        541,193
       Units purchased
        947,134
        594,050
     1,290,452
        207,847
          94,729
        137,775
       Units redeemed and
            
            transferred to/from
       (537,998)
       (334,680)
       (306,886)
       (315,602)
       (149,554)
       (227,348)
 Units outstanding at
            
   December 31, 2010
     1,500,214
        911,158
        983,566
     1,277,562
        656,922
        451,620
             


 
S-89
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Fidelity VIP Index 500
 ProFund VP Bull
 ProFund VP Money Market
 ProFund VP NASDAQ-100
 ProFund VP Short Small-Cap
 ProFund VP Small-Cap
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
        631,997
        118,938
     3,316,146
        203,103
        410,993
        199,978
       Units purchased
        441,376
     2,395,456
   19,298,431
     1,349,562
   13,561,712
     7,553,912
       Units redeemed and
            
            transferred to/from
       (355,544)
    (1,445,045)
  (20,882,590)
    (1,243,030)
  (13,561,073)
    (7,633,750)
 Units outstanding at
            
   December 31, 2009
        717,829
     1,069,349
     1,731,987
        309,635
        411,632
        120,140
       Units purchased
        346,059
        886,959
     9,166,921
     1,505,895
     4,757,080
     3,286,344
       Units redeemed and
            
            transferred to/from
       (306,633)
    (1,075,814)
    (9,629,586)
    (1,534,732)
    (4,914,758)
    (3,288,678)
 Units outstanding at
            
   December 31, 2010
        757,255
        880,494
     1,269,322
        280,798
        253,954
        117,806
             


 
S-90
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 Access VP High Yield
 ProFund VP Europe 30
 ProFund VP Oil & Gas
 ProFund VP UltraSmall-Cap
 ProFund VP Utilities
 ProFund VP Consumer Services
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
     1,024,119
          36,559
        287,574
        107,616
          61,007
          19,837
       Units purchased
     1,534,177
        574,713
     1,049,560
   18,221,991
        395,387
          70,136
       Units redeemed and
            
            transferred to/from
    (1,876,098)
       (556,539)
       (735,939)
  (17,814,864)
       (232,585)
         (71,370)
 Units outstanding at
            
   December 31, 2009
        682,198
          54,733
        601,195
        514,743
        223,809
          18,603
       Units purchased
        229,327
          54,344
        500,783
     4,719,679
        174,384
        151,057
       Units redeemed and
            
            transferred to/from
       (758,394)
         (73,661)
       (473,721)
    (4,404,814)
       (234,800)
         (95,613)
 Units outstanding at
            
   December 31, 2010
        153,131
          35,416
        628,257
        829,608
        163,393
          74,047
             


 
S-91
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 ProFund VP Pharmaceuticals
 ProFund VP Small-Cap Value
 ProFund VP Falling U.S. Dollar
 ProFund VP Emerging Markets
 ProFund VP International
 ProFund VP Asia 30
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
          51,607
          21,460
          83,658
        144,687
          64,766
        112,114
       Units purchased
        759,394
        587,797
        257,616
     2,823,166
     1,708,210
     1,777,409
       Units redeemed and
            
            transferred to/from
       (751,004)
       (408,076)
       (275,851)
    (1,595,340)
    (1,027,621)
    (1,075,481)
 Units outstanding at
            
   December 31, 2009
          59,997
        201,181
          65,423
     1,372,513
        745,355
        814,042
       Units purchased
        107,557
        447,147
          54,090
     2,394,263
     2,020,875
        560,632
       Units redeemed and
            
            transferred to/from
       (104,900)
       (598,403)
         (63,400)
    (1,609,483)
    (1,789,200)
       (728,080)
 Units outstanding at
            
   December 31, 2010
          62,654
          49,925
          56,113
     2,157,293
        977,030
        646,594
             



 
S-92
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 ProFund VP Japan
 ProFund VP Short NASDAQ-100
 ProFund VP U.S. Government Plus
 ProFund VP Basic Materials
 ProFund VP Financials
 ProFund VP Precious Metals
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount
Units outstanding at
            
   January 1, 2009
            9,022
          98,269
        283,538
        129,552
        104,586
        365,031
       Units purchased
          69,637
        576,960
        751,229
     1,351,279
        763,504
     2,305,622
       Units redeemed and
            
            transferred to/from
         (60,957)
       (576,971)
       (806,417)
       (739,019)
       (572,710)
    (1,931,880)
 Units outstanding at
            
   December 31, 2009
          17,702
          98,258
        228,350
        741,812
        295,380
        738,773
       Units purchased
          93,550
        558,410
        690,923
     1,240,020
        569,587
     1,056,771
       Units redeemed and
            
            transferred to/from
         (63,009)
       (556,875)
       (617,811)
    (1,139,009)
       (567,150)
       (733,084)
 Units outstanding at
            
   December 31, 2010
          48,243
          99,793
        301,462
        842,823
        297,817
     1,062,460
             


 
S-93
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



3. Accumulation Units Outstanding
          
             
A summary of changes in equivalent accumulation units outstanding follows:
            
             
             
 
 ProFund VP Telecommunications
 ProFund VP Mid-Cap
 ProFund VP Short Emerging Markets
 ProFund VP Short International
 Franklin Templeton VIP Founding Funds Allocation
 AllianceBernstein Balanced Wealth Strategy
 
Subaccount
Subaccount
Subaccount
Subaccount
Subaccount(1)
Subaccount(1)
Units outstanding at
            
   January 1, 2009
          58,055
        121,297
        128,412
        143,672
                    -
                    -
       Units purchased
          97,255
     1,114,900
        426,409
        596,330
          18,037
          32,224
       Units redeemed and
            
            transferred to/from
       (125,696)
       (549,094)
       (482,222)
       (642,792)
           (2,657)
         (10,326)
 Units outstanding at
            
   December 31, 2009
          29,614
        687,103
          72,599
          97,210
          15,380
          21,898
       Units purchased
          96,316
        926,642
        574,392
        298,721
          48,877
          54,744
       Units redeemed and
            
            transferred to/from
         (85,978)
    (1,351,030)
       (581,879)
       (314,229)
         (31,730)
         (31,933)
 Units outstanding at
            
   December 31, 2010
          39,952
        262,715
          65,112
          81,702
          32,527
          44,709
             


 
S-94
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights
The Separate Account offers various death benefit options, which have differing fees that are charged against the contract owner's account balance.  These charges are discussed in more detail in the individual's policy.  Differences in the fee structures for these units result in different unit values, expense ratios, and total returns.
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Invest
ment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
Expense Ratio***
Transamerica JPMorgan Core Bond VP
                    
 
12/31/2010
1,497,898
$13.49
 to
$11.83
$54,990,397
5.90%
0.00%
to
1.50%
8.24%
to
6.64%
 
12/31/2009
1,590,917
12.46
 to
11.09
54,892,177
      4.57
0.00
to
1.50
     9.58
to
        7.96
 
12/31/2008
1,572,007
11.37
 to
10.27
50,786,352
      4.47
0.00
to
1.50
     5.58
to
        2.72
 
12/31/2007
1,502,535
10.77
 to
33.47
47,127,749
      5.18
0.00
to
0.90
     6.94
to
        5.98
 
12/31/2006
1,495,262
10.07
 to
31.58
45,300,971
      5.23
0.00
to
0.90
     0.69
to
        2.99
Transamerica Asset Allocation - Conservative VP
                
 
12/31/2010
3,004,809
11.68
 to
10.89
44,599,874
      3.33
0.00
to
1.50
     8.93
to
        7.32
 
12/31/2009
2,997,140
10.72
 to
10.15
41,211,153
      4.38
0.00
to
1.50
   25.22
to
      23.37
 
12/31/2008
3,364,944
8.56
 to
8.22
37,299,335
      3.14
0.00
to
1.50
 (21.18)
to
    (17.75)
 
12/31/2007
2,022,246
10.86
 to
14.27
28,741,879
      3.22
0.00
to
0.90
     6.38
to
        5.43
 
12/31/2006
1,859,642
10.21
 to
13.53
25,092,450
      3.28
0.00
to
0.90
     2.12
to
        8.47
Transamerica Asset Allocation - Growth VP
                  
 
12/31/2010
18,709,468
10.13
 to
9.97
266,427,278
      1.10
0.00
to
1.50
   14.95
to
      13.25
 
12/31/2009
19,621,917
8.81
 to
8.80
245,375,296
      2.77
0.00
to
1.50
   29.82
to
      27.90
 
12/31/2008
19,983,377
6.79
 to
6.88
194,363,564
      2.92
0.00
to
1.50
 (39.63)
to
    (31.18)
 
12/31/2007
20,795,625
11.25
 to
16.22
337,873,349
      2.30
0.00
to
0.90
     7.76
to
        6.79
 
12/31/2006
17,905,414
10.44
 to
15.19
272,418,228
      0.96
0.00
to
0.90
     4.36
to
      14.59
Transamerica Asset Allocation - Moderate Growth VP
                
 
12/31/2010
20,252,081
10.84
 to
10.45
300,804,661
      2.21
0.00
to
1.50
   12.73
to
      11.06
 
12/31/2009
21,162,715
9.62
 to
9.41
281,532,459
      3.37
0.00
to
1.50
   28.16
to
      26.26
 
12/31/2008
21,947,519
7.51
 to
7.45
229,931,170
      3.02
0.00
to
1.50
 (32.76)
to
    (25.47)
 
12/31/2007
23,093,759
11.16
 to
15.77
363,338,011
      2.40
0.00
to
0.90
     7.81
to
        6.84
 
12/31/2006
20,972,352
10.35
 to
14.76
308,893,207
      1.64
0.00
to
0.90
     3.55
to
      12.82
Transamerica Asset Allocation - Moderate VP
                
 
12/31/2010
6,092,945
11.49
 to
10.74
91,600,425
      2.97
0.00
to
1.50
   10.38
to
        8.75
 
12/31/2009
6,257,288
10.41
 to
9.88
86,014,287
      4.21
0.00
to
1.50
   26.40
to
      24.53
 
12/31/2008
6,756,498
8.23
 to
7.93
74,201,260
      3.46
0.00
to
1.50
 (25.96)
to
    (20.67)
 
12/31/2007
6,903,785
11.12
 to
15.06
103,347,293
      3.01
0.00
to
0.90
     7.96
to
        6.99
 
12/31/2006
6,462,891
10.30
 to
14.08
90,505,789
      2.68
0.00
to
0.90
     3.01
to
      10.49
Transamerica MFS International Equity VP
                  
 
12/31/2010
3,152,339
9.56
 to
10.15
44,273,875
      1.38
0.00
to
1.50
   10.49
to
        8.86
 
12/31/2009
3,477,566
8.65
 to
9.32
44,762,291
      2.77
0.00
to
1.50
   32.68
to
      30.72
 
12/31/2008
3,801,070
6.52
 to
7.13
37,280,087
      5.17
0.00
to
1.50
 (34.78)
to
    (28.70)
 
12/31/2007
4,520,343
15.30
 to
15.30
69,174,582
      0.96
0.90
to
0.90
     8.17
to
        8.17
 
12/31/2006
4,545,134
14.15
 to
14.15
64,298,334
      1.45
0.90
to
0.90
   21.97
to
      21.97
Transamerica Clarion Global Real Estate Securities VP
                
 
12/31/2010
1,792,747
8.96
 to
9.94
45,249,664
      6.28
0.00
to
1.50
   15.67
to
      13.96
 
12/31/2009
1,918,495
7.74
 to
8.73
42,497,293
          -
0.00
to
1.50
   33.42
to
      31.45
 
12/31/2008
2,120,392
5.80
 to
6.64
35,802,121
      6.51
0.00
to
1.50
 (42.38)
to
    (33.61)
 
12/31/2007
2,640,827
10.07
 to
30.40
78,152,720
      6.51
0.00
to
0.90
   (6.70)
to
      (7.54)
 
12/31/2006
3,092,917
10.80
 to
32.88
99,559,341
      1.41
0.00
to
0.90
     7.96
to
      41.01


 
S-95
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights (continued)
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Invest
ment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
 
Expense Ratio***
 
Transamerica Federated Market Opportunity VP
                  
 
12/31/2010
2,142,565
$10.03
 to
$9.07
$59,508,491
3.72%
0.00%
to
1.50%
(0.11)%
to
(1.59)%
 
12/31/2009
2,455,555
10.04
 to
9.22
69,300,036
     3.15
0.00
to
1.50
      4.20
to
     2.65
 
12/31/2008
2,776,710
9.63
 to
8.98
76,620,436
     4.63
0.00
to
1.50
    (4.53)
to
 (10.19)
 
12/31/2007
3,025,316
10.09
 to
32.50
90,239,892
     3.71
0.00
to
0.90
    (0.48)
to
   (1.37)
 
12/31/2006
3,472,419
10.14
 to
32.96
107,177,707
     1.66
0.00
to
0.90
      1.38
to
     1.84
Transamerica International Moderate Growth VP
                  
 
12/31/2010
1,086,132
10.45
 to
9.79
10,841,225
     2.70
0.00
to
1.50
    10.50
to
     8.87
 
12/31/2009
1,085,246
9.46
 to
8.99
9,885,528
     2.72
0.00
to
1.50
    29.69
to
   27.78
 
12/31/2008
1,054,957
7.29
 to
7.04
7,472,170
     2.39
0.00
to
1.50
  (36.12)
to
 (29.63)
 
12/31/2007
779,229
11.42
 to
11.17
8,709,877
     1.27
0.00
to
0.90
      8.69
to
     7.72
 
12/31/2006 (1)
199,220
10.50
 to
10.37
2,065,761
         -
0.00
to
0.90
      5.04
to
     3.67
Transamerica JPMorgan Mid Cap Value VP
                  
 
12/31/2010
443,622
15.12
 to
17.99
7,977,312
     1.82
0.75
to
0.90
    22.07
to
   21.89
 
12/31/2009
543,852
12.39
 to
14.76
8,022,955
     1.78
0.75
to
0.90
    25.47
to
   25.28
 
12/31/2008
662,629
9.87
 to
11.78
7,801,733
     1.39
0.75
to
0.90
  (33.38)
to
 (33.48)
 
12/31/2007
853,180
14.82
 to
17.71
15,098,211
     0.97
0.75
to
0.90
      2.06
to
     1.91
 
12/31/2006
1,072,445
14.52
 to
17.38
18,616,424
     0.80
0.75
to
0.90
    16.37
to
   16.20
Transamerica JPMorgan Enhanced Index VP
                  
 
12/31/2010
159,313
10.12
 to
10.48
2,022,985
     1.37
0.00
to
1.50
    15.17
to
   13.47
 
12/31/2009
146,884
8.78
 to
9.24
1,631,165
     2.05
0.00
to
1.50
    29.59
to
   27.68
 
12/31/2008
143,853
6.78
 to
7.24
1,244,001
     5.56
0.00
to
1.50
  (37.35)
to
 (27.64)
 
12/31/2007
162,659
10.82
 to
13.85
2,265,492
     1.28
0.00
to
0.90
      4.54
to
     3.60
 
12/31/2006
124,431
10.35
 to
13.37
1,668,793
     1.10
0.00
to
0.90
      3.48
to
   14.29
Transamerica BlackRock Large Cap Value VP
                  
 
12/31/2010
2,680,772
9.01
 to
9.13
58,169,402
     0.80
0.00
to
1.50
    10.44
to
     8.81
 
12/31/2009
2,096,273
8.16
 to
8.39
41,943,389
     1.48
0.00
to
1.50
    13.99
to
   12.31
 
12/31/2008
2,180,067
7.16
 to
7.47
38,809,530
     0.93
0.00
to
1.50
  (33.89)
to
 (25.29)
 
12/31/2007
2,530,736
10.83
 to
27.70
68,941,852
     0.95
0.00
to
0.90
      4.64
to
     3.70
 
12/31/2006
2,711,207
10.35
 to
26.71
71,712,502
     0.50
0.00
to
0.90
      3.48
to
   15.88
Transamerica AEGON High Yield Bond VP
                  
 
12/31/2010
1,162,625
12.98
 to
12.18
18,462,510
   14.76
0.00
to
1.50
    12.44
to
   10.78
 
12/31/2009
843,437
11.55
 to
11.00
12,028,440
   11.92
0.00
to
1.50
    47.24
to
   45.06
 
12/31/2008
94,690
7.84
 to
7.58
918,817
   10.45
0.00
to
1.50
  (25.20)
to
 (24.19)
 
12/31/2007
102,108
10.48
 to
13.28
1,336,203
     5.62
0.00
to
0.90
      1.85
to
     0.94
 
12/31/2006
176,750
10.29
 to
13.16
2,297,300
   11.44
0.00
to
0.90
      2.93
to
     9.96
Transamerica PIMCO Total Return VP
                    
 
12/31/2010
2,044,774
13.23
 to
11.74
30,675,838
     3.99
0.00
to
1.50
      7.19
to
     5.61
 
12/31/2009
2,049,990
12.35
 to
11.12
28,964,781
     6.81
0.00
to
1.50
    16.03
to
   14.32
 
12/31/2008
1,501,811
10.64
 to
9.72
18,475,521
     6.05
0.00
to
1.50
    (2.79)
to
   (2.76)
 
12/31/2007
1,060,366
10.94
 to
12.85
13,571,965
     2.52
0.00
to
0.90
      8.95
to
     7.97
 
12/31/2006
912,999
10.05
 to
11.91
10,849,149
     3.78
0.00
to
0.90
      0.46
to
     3.28
Transamerica Focus VP
                      
 
12/31/2010
1,888,765
10.99
 to
11.38
31,571,559
     0.88
0.00
to
1.50
    27.44
to
   25.55
 
12/31/2009
2,028,036
8.62
 to
9.06
26,897,044
     2.57
0.00
to
1.50
    27.91
to
   26.02
 
12/31/2008
2,303,251
6.74
 to
7.19
24,086,757
     2.08
0.00
to
1.50
  (36.36)
to
 (28.08)
 
12/31/2007
2,656,984
10.59
 to
16.66
44,097,690
     1.32
0.00
to
0.90
      1.04
to
     0.13
 
12/31/2006
2,868,843
10.48
 to
16.63
47,616,609
     1.00
0.00
to
0.90
      4.84
to
   17.50


 
S-96
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights (continued)
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Invest
ment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
 
Expense Ratio***
 
Transamerica T. Rowe Price Small Cap VP
                  
 
12/31/2010
1,795,626
$13.25
 to
$12.34
$27,953,674
0.00%
0.00%
to
1.50%
34.42%
to
32.44%
 
12/31/2009
1,580,683
9.85
 to
9.32
18,450,816
       -
0.00
to
1.50
        38.70
to
     36.65
 
12/31/2008
1,643,169
7.10
 to
6.82
13,944,419
   1.72
0.00
to
1.50
      (36.25)
to
   (31.81)
 
12/31/2007
1,727,599
11.14
 to
13.39
23,180,179
       -
0.00
to
0.90
          9.61
to
       8.63
 
12/31/2006
1,776,439
10.17
 to
12.33
21,921,541
       -
0.00
to
0.90
          1.67
to
       2.67
Transamerica Diversified Equity VP
                    
 
12/31/2010
8,007,260
10.14
 to
9.65
216,229,392
   1.04
0.00
to
1.50
        16.85
to
     15.12
 
12/31/2009
7,591,499
8.68
 to
8.38
179,200,897
   1.49
0.00
to
1.50
        28.32
to
     26.42
 
12/31/2008
8,271,349
6.76
 to
6.63
153,798,351
   1.91
0.00
to
1.50
      (43.67)
to
   (33.70)
 
12/31/2007
9,194,475
12.01
 to
33.70
306,677,582
   1.54
0.00
to
0.90
        15.25
to
     14.21
 
12/31/2006
9,611,118
10.42
 to
29.51
282,192,209
   1.27
0.00
to
0.90
          4.21
to
     17.73
Transamerica Third Avenue Value VP
                    
 
12/31/2010
2,925,659
9.64
 to
10.05
74,462,852
   2.85
0.00
to
1.50
        15.43
to
     13.73
 
12/31/2009
3,355,690
8.35
 to
8.83
74,986,432
       -
0.00
to
1.50
        34.88
to
     32.89
 
12/31/2008
3,678,782
6.19
 to
6.65
61,758,740
   5.00
0.00
to
1.50
      (41.15)
to
   (33.52)
 
12/31/2007
4,281,762
10.52
 to
29.87
123,946,756
   3.90
0.00
to
0.90
          1.20
to
       0.29
 
12/31/2006
4,620,302
10.40
 to
29.78
134,550,407
   0.80
0.00
to
0.90
          3.99
to
     15.04
Transamerica Balanced VP
                      
 
12/31/2010
7,285,593
12.24
 to
11.47
114,812,439
   0.69
0.00
to
1.50
        24.12
to
     22.29
 
12/31/2009
375,051
9.86
 to
9.38
4,796,603
   1.77
0.00
to
1.50
        26.30
to
     24.43
 
12/31/2008
362,719
7.81
 to
7.54
3,708,306
   1.79
0.00
to
1.50
      (32.40)
to
   (24.65)
 
12/31/2007
440,115
11.55
 to
15.28
6,717,223
   1.12
0.00
to
0.90
        13.61
to
     12.59
 
12/31/2006
379,220
10.17
 to
13.58
5,142,053
   1.00
0.00
to
0.90
          1.66
to
       8.15
Transamerica AllianceBernstein Dynamic Allocation VP
              
 
12/31/2010
228,404
11.04
 to
9.61
3,385,087
   5.37
0.00
to
1.50
          9.29
to
       7.67
 
12/31/2009
233,242
10.10
 to
8.93
3,191,995
   3.68
0.00
to
1.50
        31.30
to
     29.36
 
12/31/2008
266,164
7.69
 to
6.90
2,793,827
   5.78
0.00
to
1.50
      (36.87)
to
   (30.98)
 
12/31/2007
279,677
12.19
 to
16.94
4,705,341
   1.85
0.00
to
0.90
        18.63
to
     17.57
 
12/31/2006
203,694
10.27
 to
14.41
2,910,028
   1.55
0.00
to
0.90
          2.74
to
       9.91
Transamerica WMC Diversified Growth VP
                  
 
12/31/2010
41,871,514
9.73
 to
9.56
611,309,502
   0.54
0.00
to
1.50
        17.81
to
     16.07
 
12/31/2009
45,909,649
8.26
 to
8.24
574,078,382
   0.95
0.00
to
1.50
        29.20
to
     27.29
 
12/31/2008
49,835,316
6.39
 to
6.47
486,736,537
   0.23
0.00
to
1.50
      (46.00)
to
   (35.27)
 
12/31/2007
54,982,922
11.84
 to
18.26
1,003,665,346
   0.02
0.00
to
0.90
        16.29
to
     15.24
 
12/31/2006
60,255,025
10.18
 to
15.85
954,551,153
       -
0.00
to
0.90
          1.84
to
       7.75
Transamerica Growth Opportunities VP
                  
 
12/31/2010
3,289,279
13.84
 to
12.69
61,258,801
   0.04
0.00
to
1.50
        35.66
to
     33.66
 
12/31/2009
3,217,175
10.20
 to
9.49
44,546,427
   0.35
0.00
to
1.50
        36.86
to
     34.84
 
12/31/2008
3,512,963
7.46
 to
7.04
35,860,695
   3.63
0.00
to
1.50
      (40.90)
to
   (29.61)
 
12/31/2007
4,037,636
12.62
 to
17.41
70,373,607
   0.05
0.00
to
0.90
        23.09
to
     21.98
 
12/31/2006
4,058,333
10.25
 to
14.28
57,967,034
   0.23
0.00
to
0.90
          2.50
to
       4.16
Transamerica Money Market VP
                    
 
12/31/2010
2,879,808
10.85
 to
9.74
55,703,313
   0.01
0.00
to
1.50
          0.01
to
     (1.47)
 
12/31/2009
3,395,492
10.85
 to
9.89
66,003,875
   0.15
0.00
to
1.50
          0.13
to
     (1.35)
 
12/31/2008
5,511,162
10.84
 to
10.02
106,465,305
   2.29
0.00
to
1.50
          2.39
to
       0.22
 
12/31/2007
3,033,916
10.58
 to
20.99
60,281,924
   4.86
0.00
to
0.90
          5.03
to
       4.09
 
12/31/2006
2,564,345
10.08
 to
20.17
50,440,206
   4.68
0.00
to
0.90
          0.78
to
       3.80


 
S-97
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights (continued)
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Investment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
 
Expense Ratio***
 

Transamerica Small/MidCap Value VP
                    
 
12/31/2010
1,809,020
$14.36
 to
$10.83
$36,122,323
0.82%
0.00%
to
1.50%
30.41%
to
28.49%
 
12/31/2009
1,536,758
11.01
 to
8.43
23,766,218
   3.32
0.00
to
1.50
      43.21
to
41.10
 
12/31/2008
1,401,587
7.69
 to
5.98
15,296,736
   1.93
0.00
to
1.50
    (40.87)
to
(40.25)
 
12/31/2007
1,276,888
13.00
 to
18.64
23,810,752
   1.00
0.00
to
0.90
      24.74
to
23.62
 
12/31/2006
741,989
10.42
 to
15.07
11,194,015
   0.97
0.00
to
0.90
        4.20
to
17.00
Transamerica U.S. Government Securities VP
                  
 
12/31/2010
889,073
12.49
 to
11.08
11,996,681
   3.14
0.00
to
1.50
        4.40
to
2.86
 
12/31/2009
747,743
11.97
 to
10.77
9,746,046
   2.39
0.00
to
1.50
        4.47
to
2.92
 
12/31/2008
1,695,537
11.46
 to
10.47
21,286,906
   2.86
0.00
to
1.50
        7.66
to
4.69
 
12/31/2007
117,328
10.64
 to
11.91
1,376,520
   4.45
0.00
to
0.90
        6.05
to
5.10
 
12/31/2006
58,559
10.03
 to
11.34
662,140
   3.52
0.00
to
0.90
        0.34
to
2.35
Transamerica Morgan Stanley Mid-Cap Growth VP
                
 
12/31/2010
6,111,664
14.73
 to
12.81
315,951,891
   0.12
0.00
to
1.50
      33.90
to
31.92
 
12/31/2009
6,505,939
11.00
 to
9.71
256,353,724
       -
0.00
to
1.50
      60.56
to
58.19
 
12/31/2008
6,901,583
6.85
 to
6.14
171,968,478
   2.07
0.00
to
1.50
    (46.29)
to
(38.60)
 
12/31/2007
7,648,279
12.76
 to
47.36
358,556,956
       -
0.00
to
0.90
      22.53
to
21.43
 
12/31/2006
7,997,423
10.41
 to
39.00
310,555,164
       -
0.00
to
0.90
        4.10
to
8.93
Transamerica Index 50 VP
                      
 
12/31/2010
22,580
10.73
 to
10.95
237,099
   1.34
0.00
to
1.50
      11.07
to
9.43
 
12/31/2009
9,982
9.66
 to
10.00
95,207
   0.20
0.00
to
1.50
      16.62
to
14.90
 
12/31/2008 (1)
13,078
8.28
 to
8.71
107,640
       -
0.00
to
1.50
    (17.20)
to
(12.93)
Transamerica Index 75 VP
                      
 
12/31/2010
126,380
10.23
 to
10.67
1,263,507
   1.27
0.00
to
1.50
      13.15
to
11.48
 
12/31/2009
87,173
9.04
 to
9.57
776,576
   0.36
0.00
to
1.50
      23.68
to
21.85
 
12/31/2008 (1)
19,265
7.31
 to
7.85
139,984
       -
0.00
to
1.50
    (26.90)
to
(21.47)
Transamerica Efficient Markets VP
                    
 
12/31/2010
25,422
13.75
 to
13.41
344,545
   0.86
0.00
to
1.50
      12.67
to
11.01
 
12/31/2009 (1)
10,705
12.20
 to
12.08
129,907
   0.02
0.00
to
1.50
      22.03
to
20.82
Transamerica Hanlon Balanced VP
                    
 
12/31/2010
981,490
11.03
 to
10.76
10,667,540
   0.37
0.00
to
1.50
      (3.28)
to
(4.71)
 
12/31/2009 (1)
413,683
11.40
 to
11.29
4,689,366
       -
0.00
to
1.50
      14.00
to
12.87
Transamerica Hanlon Growth & Income VP
                  
 
12/31/2010
867,427
11.22
 to
10.94
9,594,997
   0.63
0.00
to
1.50
      (1.85)
to
(3.30)
 
12/31/2009 (1)
584,425
11.43
 to
11.32
6,641,823
       -
0.00
to
1.50
      14.30
to
13.17
Transamerica Hanlon Growth VP
                    
 
12/31/2010
1,260,674
11.47
 to
11.19
14,255,487
   0.94
0.00
to
1.50
      (0.44)
to
(1.91)
 
12/31/2009 (1)
900,763
11.52
 to
11.41
10,317,734
       -
0.00
to
1.50
      15.20
to
14.06
Transamerica Hanlon Managed Income VP
                  
 
12/31/2010
2,580,151
11.13
 to
10.86
28,321,102
   0.20
0.00
to
1.50
        0.39
to
(1.09)
 
12/31/2009 (1)
1,569,291
11.09
 to
10.98
17,304,606
       -
0.00
to
1.50
      10.90
to
9.80
Transamerica Multi Managed Large Cap Core VP
                
 
12/31/2010
164,285
15.82
 to
15.43
2,560,486
   0.65
0.00
to
1.50
      19.17
to
17.41
 
12/31/2009 (1)
158,510
13.27
 to
13.14
2,091,116
   0.77
0.00
to
1.50
      32.71
to
31.39


 
S-98
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights (continued)
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Invest
ment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
 
Expense Ratio***
 
Transamerica Foxhall Emerging Markets/Pacific Rim VP
                
 
12/31/2010
1,453,143
$11.35
 to
$11.10
$16,285,688
0.31%
0.00%
to
1.50%
3.56%
to
2.03%
 
12/31/2009 (1)
1,084,650
10.96
 to
10.88
11,837,546
         -
0.00
to
1.50
       9.60
to
       8.79
Transamerica Foxhall Global Conservative VP
                  
 
12/31/2010
219,826
9.51
 to
9.30
2,063,120
      0.11
0.00
to
1.50
      (5.79)
to
      (7.18)
 
12/31/2009 (1)
159,484
10.09
 to
10.01
1,602,285
         -
0.00
to
1.50
       0.90
to
       0.15
Transamerica Foxhall Global Growth VP
                    
 
12/31/2010
1,500,214
11.64
 to
11.39
17,249,298
      0.25
0.00
to
1.50
       5.56
to
       4.00
 
12/31/2009 (1)
1,091,078
11.03
 to
10.95
11,983,788
         -
0.00
to
1.50
     10.30
to
       9.48
Transamerica Foxhall Global Hard Asset VP
                  
 
12/31/2010
911,158
10.69
 to
10.45
9,619,762
      0.14
0.00
to
1.50
       3.39
to
       1.87
 
12/31/2009 (1)
651,788
10.34
 to
10.26
6,711,223
         -
0.00
to
1.50
       3.40
to
       2.63
Transamerica Jennison Growth VP
                    
 
12/31/2010 (1)
983,566
10.84
 to
10.73
10,598,851
      0.05
0.00
to
1.50
       8.40
to
       7.32
Fidelity VIP Contrafund®
                      
 
12/31/2010
1,277,562
13.87
 to
13.87
17,720,846
      1.02
0.90
to
0.90
     15.88
to
     15.88
 
12/31/2009
1,385,317
11.97
 to
11.97
16,581,630
      1.18
0.90
to
0.90
     34.26
to
     34.26
 
12/31/2008
1,489,388
8.92
 to
8.92
13,278,218
      0.76
0.90
to
0.90
    (43.20)
to
    (43.20)
 
12/31/2007
1,662,224
15.70
 to
15.70
26,091,850
      0.74
0.90
to
0.90
     16.25
to
     16.25
 
12/31/2006
1,791,909
13.50
 to
13.50
24,195,515
      0.98
0.90
to
0.90
     10.44
to
     10.44
Fidelity VIP Equity-Income
                      
 
12/31/2010
656,922
12.49
 to
12.49
8,204,632
      1.63
0.90
to
0.90
     13.89
to
     13.89
 
12/31/2009
711,747
10.97
 to
10.97
7,805,053
      2.09
0.90
to
0.90
     28.73
to
     28.73
 
12/31/2008
776,801
8.52
 to
8.52
6,617,524
      2.18
0.90
to
0.90
    (43.32)
to
    (43.32)
 
12/31/2007
892,431
15.03
 to
15.03
13,414,208
      1.52
0.90
to
0.90
       0.36
to
       0.36
 
12/31/2006
1,015,129
14.98
 to
14.98
15,203,106
      3.03
0.90
to
0.90
     18.86
to
     18.86
Fidelity VIP Growth Opportunities
                    
 
12/31/2010
451,620
8.16
 to
8.16
3,683,913
         -
0.90
to
0.90
     22.37
to
     22.37
 
12/31/2009
541,193
6.67
 to
6.67
3,607,491
      0.26
0.90
to
0.90
     44.16
to
     44.16
 
12/31/2008
491,716
4.62
 to
4.62
2,273,581
      0.11
0.90
to
0.90
    (55.54)
to
    (55.54)
 
12/31/2007
661,082
10.40
 to
10.40
6,874,952
         -
0.90
to
0.90
     21.80
to
     21.80
 
12/31/2006
446,408
8.54
 to
8.54
3,811,402
      0.47
0.90
to
0.90
       4.18
to
       4.18
Fidelity VIP Index 500
                      
 
12/31/2010
757,255
9.89
 to
10.11
9,418,539
      1.86
0.00
to
1.50
     14.73
to
     13.03
 
12/31/2009
717,829
8.62
 to
8.94
7,869,261
      2.41
0.00
to
1.50
     26.30
to
     24.43
 
12/31/2008
631,997
6.83
 to
7.19
5,528,303
      2.38
0.00
to
1.50
    (37.16)
to
    (28.13)
 
12/31/2007
457,757
10.86
 to
13.56
6,471,158
      3.39
0.00
to
0.90
       5.18
to
       4.24
 
12/31/2006
344,135
10.33
 to
13.01
4,682,372
      1.24
0.00
to
0.90
       3.27
to
     14.41
ProFund VP Bull
                      
 
12/31/2010
880,494
9.31
 to
9.73
8,807,186
      0.14
0.00
to
1.50
     12.58
to
     10.91
 
12/31/2009
1,069,349
8.27
 to
8.78
9,581,607
      1.38
0.00
to
1.50
     24.34
to
     22.51
 
12/31/2008
118,938
6.65
 to
7.16
863,897
         -
0.00
to
1.50
    (37.67)
to
    (28.37)
 
12/31/2007
99,749
10.67
 to
11.75
1,172,564
      0.21
0.00
to
0.90
       3.55
to
       2.62
 
12/31/2006 (1)
736,714
10.31
 to
11.45
8,437,699
      0.07
0.00
to
0.90
       3.09
to
     14.52


 
S-99
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights (continued)
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Invest
ment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
 
Expense Ratio***
 
ProFund VP Money Market
                      
 
12/31/2010
1,269,322
$10.54
 to
$9.66
$13,069,723
0.02%
0.00%
to
1.50%
0.02%
to
(1.46)%
 
12/31/2009
1,731,987
10.54
 to
9.80
17,988,781
      0.04
0.00
to
1.50
       0.03
to
      (1.45)
 
12/31/2008
3,316,146
10.53
 to
9.94
34,730,445
      0.80
0.00
to
1.50
       0.84
to
      (0.57)
 
12/31/2007
2,531,148
10.45
 to
10.47
26,514,159
      3.20
0.00
to
0.90
       3.77
to
       2.84
 
12/31/2006 (1)
144,185
10.07
 to
10.18
1,467,986
      2.09
0.00
to
0.90
       0.68
to
       1.81
ProFund VP NASDAQ-100
                      
 
12/31/2010
280,798
12.32
 to
11.49
3,763,880
          -
0.00
to
1.50
     18.24
to
     16.50
 
12/31/2009
309,635
10.42
 to
9.86
3,532,987
          -
0.00
to
1.50
     52.01
to
     49.76
 
12/31/2008
203,103
6.86
 to
6.59
1,543,465
          -
0.00
to
1.50
   (42.48)
to
    (34.13)
 
12/31/2007
956,045
11.92
 to
13.33
12,749,323
          -
0.00
to
0.90
     17.62
to
     16.57
 
12/31/2006 (1)
80,871
10.13
 to
11.43
924,473
          -
0.00
to
0.90
       1.34
to
     14.31
ProFund VP Short Small-Cap
                      
 
12/31/2010
253,954
6.12
 to
5.13
1,345,858
          -
0.00
to
1.50
   (28.94)
to
    (30.00)
 
12/31/2009
411,632
8.61
 to
7.32
3,097,540
      0.65
0.00
to
1.50
   (32.37)
to
    (33.37)
 
12/31/2008
410,993
12.73
 to
10.99
4,620,257
      2.41
0.00
to
1.50
     24.08
to
       9.92
 
12/31/2007
154,615
10.26
 to
9.13
1,411,173
      6.97
0.00
to
0.90
       4.53
to
       3.59
 
12/31/2006 (1)
18,450
9.82
 to
8.81
162,543
      0.15
0.00
to
0.90
     (1.82)
to
    (11.90)
ProFund VP Small-Cap
                      
 
12/31/2010
117,806
10.18
 to
11.15
1,271,453
          -
0.00
to
1.50
     24.79
to
     22.95
 
12/31/2009
120,140
8.15
 to
9.07
1,048,224
          -
0.00
to
1.50
     26.07
to
     24.21
 
12/31/2008
199,978
6.47
 to
7.30
1,396,212
          -
0.00
to
1.50
   (35.40)
to
    (26.96)
 
12/31/2007
160,363
10.01
 to
10.90
1,748,012
      0.23
0.00
to
0.90
     (2.21)
to
      (3.09)
 
12/31/2006 (1)
303,258
10.24
 to
11.25
3,410,298
          -
0.00
to
0.90
       2.39
to
     12.45
Access VP High Yield
                      
 
12/31/2010
153,131
13.57
 to
12.88
2,027,460
      6.13
0.00
to
1.50
     16.37
to
     14.66
 
12/31/2009
682,198
11.66
 to
11.23
7,829,265
      8.96
0.00
to
1.50
     16.91
to
     15.19
 
12/31/2008 (1)
1,024,119
9.98
 to
9.75
10,141,967
      7.35
0.00
to
1.50
     (0.23)
to
      (2.47)
ProFund VP Europe 30
                      
 
12/31/2010
35,416
8.22
 to
8.22
284,103
      1.53
0.00
to
1.50
       2.63
to
       1.12
 
12/31/2009
54,733
8.01
 to
8.13
431,550
      3.65
0.00
to
1.50
     32.30
to
     30.34
 
12/31/2008 (1)
36,559
6.05
 to
6.24
219,656
      2.60
0.00
to
1.50
   (39.47)
to
    (37.62)
ProFund VP Oil & Gas
                      
 
12/31/2010
628,257
8.70
 to
7.76
5,332,083
      0.43
0.00
to
1.50
     17.76
to
     16.02
 
12/31/2009
601,195
7.39
 to
6.69
4,371,867
          -
0.00
to
1.50
     15.50
to
     13.79
 
12/31/2008 (1)
287,574
6.40
 to
5.88
1,826,872
          -
0.00
to
1.50
   (36.01)
to
    (41.24)
ProFund VP UltraSmall-Cap
                      
 
12/31/2010
829,608
8.42
 to
9.34
6,826,647
          -
0.00
to
1.50
     48.44
to
     46.25
 
12/31/2009
514,743
5.67
 to
6.39
2,876,036
      0.09
0.00
to
1.50
     40.18
to
     38.10
 
12/31/2008 (1)
107,616
4.05
 to
4.62
432,263
      0.70
0.00
to
1.50
   (59.55)
to
    (53.76)
ProFund VP Utilities
                      
 
12/31/2010
163,393
8.84
 to
8.18
1,410,040
      2.82
0.00
to
1.50
       5.95
to
       4.38
 
12/31/2009
223,809
8.35
 to
7.84
1,838,272
      4.24
0.00
to
1.50
     10.73
to
       9.10
 
12/31/2008 (1)
61,007
7.54
 to
7.19
456,532
      1.49
0.00
to
1.50
   (24.62)
to
    (28.14)


 
S-100
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights (continued)
  
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Invest
ment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
 
Expense Ratio***
 
ProFund VP Consumer Services
                    
 
12/31/2010
74,047
$11.30
 to
$12.14
$816,386
        -
0.00%
to
1.50%
21.39%
to
19.60%
 
12/31/2009
18,603
9.30
 to
10.15
170,351
        -
0.00
to
1.50
       30.80
to
28.87
 
12/31/2008 (1)
19,837
7.11
 to
7.88
140,060
        -
0.00
to
1.50
     (28.86)
to
(21.22)
ProFund VP Pharmaceuticals
                      
 
12/31/2010
62,654
10.20
 to
10.48
623,810
4.80%
0.00
to
1.50
         0.48
to
(1.01)
 
12/31/2009
59,997
10.15
 to
10.59
599,768
    1.75
0.00
to
1.50
       16.90
to
15.17
 
12/31/2008 (1)
51,607
8.69
 to
9.20
445,070
    2.58
0.00
to
1.50
     (13.13)
to
(8.04)
ProFund VP Small-Cap Value
                      
 
12/31/2010
49,925
10.70
 to
11.24
521,884
    0.13
0.00
to
1.50
       22.10
to
20.30
 
12/31/2009
201,181
8.76
 to
9.34
1,734,523
    0.18
0.00
to
1.50
       20.40
to
18.62
 
12/31/2008 (1)
21,460
7.28
 to
7.88
154,996
        -
0.00
to
1.50
     (27.25)
to
(21.24)
ProFund VP Falling U.S. Dollar
                    
 
12/31/2010
56,113
9.21
 to
8.71
504,230
        -
0.00
to
1.50
       (2.59)
to
(4.03)
 
12/31/2009
65,423
9.45
 to
9.07
608,825
    3.24
0.00
to
1.50
         3.32
to
1.79
 
12/31/2008 (1)
83,658
9.15
 to
8.91
760,102
        -
0.00
to
1.50
         8.51
to
10.88
ProFund VP Emerging Markets
                    
 
12/31/2010
2,157,293
9.03
 to
9.75
19,013,392
        -
0.00
to
1.50
         9.77
to
8.15
 
12/31/2009
1,372,513
8.22
 to
9.02
11,111,642
    0.13
0.00
to
1.50
       62.36
to
59.96
 
12/31/2008 (1)
144,687
5.07
 to
5.64
727,622
    0.75
0.00
to
1.50
     (49.34)
to
(43.64)
ProFund VP International
                      
 
12/31/2010
977,030
8.12
 to
8.44
7,742,694
        -
0.00
to
1.50
         7.80
to
6.21
 
12/31/2009
745,355
7.53
 to
7.95
5,526,517
    0.03
0.00
to
1.50
       24.65
to
22.80
 
12/31/2008 (1)
64,766
6.04
 to
6.47
388,476
    1.25
0.00
to
1.50
     (39.58)
to
(35.28)
ProFund VP Asia 30
                      
 
12/31/2010
646,594
9.76
 to
11.01
6,160,651
    0.07
0.00
to
1.50
       13.90
to
12.22
 
12/31/2009
814,042
8.57
 to
9.81
6,866,995
    1.14
0.00
to
1.50
       54.20
to
51.92
 
12/31/2008 (1)
112,114
5.56
 to
6.46
618,511
    1.21
0.00
to
1.50
     (44.43)
to
(35.44)
ProFund VP Japan
                      
 
12/31/2010
48,243
6.75
 to
6.71
317,483
        -
0.00
to
1.50
       (6.53)
to
(7.91)
 
12/31/2009
17,702
7.22
 to
7.29
125,805
    0.60
0.00
to
1.50
       10.33
to
8.70
 
12/31/2008 (1)
9,022
6.54
 to
6.71
58,614
  18.13
0.00
to
1.50
     (34.56)
to
(32.93)
ProFund VP Short NASDAQ-100
                    
 
12/31/2010
99,793
5.97
 to
5.91
581,354
        -
0.00
to
1.50
     (21.18)
to
(22.35)
 
12/31/2009
98,258
7.58
 to
7.62
732,716
    0.31
0.00
to
1.50
     (40.66)
to
(41.54)
 
12/31/2008 (1)
98,269
12.77
 to
13.03
1,246,070
    2.44
0.00
to
1.50
       27.72
to
30.26
ProFund VP U.S. Government Plus
                    
 
12/31/2010
301,462
11.21
 to
10.70
3,297,051
    0.45
0.00
to
1.50
       10.11
to
8.49
 
12/31/2009
228,350
10.18
 to
9.87
2,287,999
    0.05
0.00
to
1.50
     (32.62)
to
(33.62)
 
12/31/2008 (1)
283,538
15.11
 to
14.86
4,253,928
    1.06
0.00
to
1.50
       51.14
to
48.62
ProFund VP Basic Materials
                      
 
12/31/2010
842,823
9.95
 to
9.73
8,181,637
    0.55
0.00
to
1.50
       29.69
to
27.78
 
12/31/2009
741,812
7.67
 to
7.62
5,600,499
    0.90
0.00
to
1.50
       62.37
to
59.97
 
12/31/2008 (1)
129,552
4.72
 to
4.76
607,611
    0.21
0.00
to
1.50
     (52.76)
to
(52.38)


 
S-101
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



4.Financial Highlights (continued)
Sub
account
Year
Ended
Units
Unit FairValue
Corresponding to
Lowest to Highest
 
Expense Ratio
 
Net
Assets
Invest
ment
Income
Ratio*
Expense
Ratio
Lowest to
Highest**
Total Return
Corresponding to
Lowest to Highest
 
Expense Ratio***
 
ProFund VP Financials
                      
 
12/31/2010
297,817
$6.82
 to
$8.43
$1,983,828
0.24%
0.00%
to
1.50%
10.93%
to
9.29%
 
12/31/2009
295,380
6.15
 to
7.72
1,788,997
       1.87
0.00
to
1.50
      15.01
to
13.31
 
12/31/2008 (1)
104,586
5.35
 to
6.81
555,616
       1.56
0.00
to
1.50
    (46.51)
to
(31.89)
ProFund VP Precious Metals
                      
 
12/31/2010
1,062,460
10.75
 to
11.14
11,151,546
          -
0.00
to
1.50
      32.93
to
30.97
 
12/31/2009
738,773
8.09
 to
8.51
5,881,222
       0.91
0.00
to
1.50
      35.33
to
33.33
 
12/31/2008 (1)
365,031
5.98
 to
6.38
2,165,703
       3.70
0.00
to
1.50
    (40.24)
to
(36.21)
ProFund VP Telecommunications
                    
 
12/31/2010
39,952
9.66
 to
9.91
376,895
       3.94
0.00
to
1.50
      15.68
to
13.98
 
12/31/2009
29,614
8.35
 to
8.69
243,481
       3.96
0.00
to
1.50
        7.32
to
5.73
 
12/31/2008 (1)
58,055
7.78
 to
8.22
448,505
       1.66
0.00
to
1.50
    (22.17)
to
(17.79)
ProFund VP Mid-Cap
                      
 
12/31/2010
262,715
10.73
 to
10.80
2,750,087
          -
0.00
to
1.50
      24.05
to
22.22
 
12/31/2009
687,103
8.65
 to
8.84
5,848,174
          -
0.00
to
1.50
      32.88
to
30.91
 
12/31/2008 (1)
121,297
6.51
 to
6.75
783,701
       0.70
0.00
to
1.50
    (34.93)
to
(32.48)
ProFund VP Short Emerging Markets
                    
 
12/31/2010
65,112
5.54
 to
4.96
351,515
          -
0.00
to
1.50
    (18.42)
to
(19.63)
 
12/31/2009
72,599
6.79
 to
6.17
484,875
          -
0.00
to
1.50
    (48.71)
to
(49.47)
 
12/31/2008 (1)
128,412
13.23
 to
12.21
1,686,787
       0.08
0.00
to
1.50
      32.34
to
22.07
ProFund VP Short International
                    
 
12/31/2010
81,702
7.66
 to
6.91
610,615
          -
0.00
to
1.50
    (14.69)
to
(15.96)
 
12/31/2009
97,210
8.98
 to
8.22
859,623
          -
0.00
to
1.50
    (30.28)
to
(31.31)
 
12/31/2008 (1)
143,672
12.88
 to
11.97
1,837,683
       0.05
0.00
to
1.50
      28.85
to
19.73
Franklin Templeton VIP Founding Funds Allocation
                
 
12/31/2010
32,527
14.24
 to
13.89
456,236
       2.63
0.00
to
1.50
      10.24
to
8.61
 
12/31/2009 (1)
15,380
12.91
 to
12.79
197,428
       4.77
0.00
to
1.50
      29.14
to
27.87
AllianceBernstein Balanced Wealth Strategy
                  
 
12/31/2010
44,709
13.82
 to
13.48
609,047
       2.05
0.00
to
1.50
      10.30
to
8.67
 
12/31/2009 (1)
21,898
12.53
 to
12.41
272,849
       0.28
0.00
to
1.50
      25.33
to
24.09

*These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the Mutual Fund, net of management fees assessed by the fund manager, divided by the average net assets.  These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units.  The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the Mutual Fund in which the subaccounts invest.
**These amounts represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated.  These ratios include only those expenses that result in a direct reduction to unit values.  Charges made directly to contract owner accounts through the redemption of units and expenses of the Mutual Fund have been excluded.
***These amounts represent the total return for the periods indicated, including changes in the value of the Mutual Fund, and expenses assessed through the reduction of unit values.  These ratios do not include any expenses assessed through the redemption of units.  Investment options with a date notation indicate the effective date of that investment option in the variable account.  The total return is calculated for each period indicated or from the effective date through the end of the reporting period.
 
 

 
S-102
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



5. Administrative and Mortality and Expense Risk Charges

Under some forms of the contracts, a sales charge and premium taxes are deducted by WRL prior to allocation of policy owner payments to the subaccounts.  Contingent surrender charges may also apply.

Under all forms of the contracts, monthly charges against policy cash values are made to compensate WRL
 for costs of insurance provided.

A daily charge equal to an annual rate from 0.00% and 1.50% of average daily net assets is assessed to compensate WRL for assumption of mortality and expense risks in connection with the issuance and administration of the Contracts.  This charge (not assessed at the individual contract level) effectively reduces the value of a unit outstanding during the year.

6. Income Taxes

Operations of the Separate Account form a part of WRL, which is taxed as a life insurance company under Subchapter L of the Internal Revenue Code of 1986, as amended (the Code). The operations of the Separate Account are accounted for separately from other operations of WRL for purposes of federal income taxation. The Separate Account is not separately taxable as a regulated investment company under Subchapter M of the Code and is not otherwise taxable as an entity separate from WRL. Under existing federal income tax laws, the income of the Separate Account is not taxable to WRL, as long as earnings are credited under the variable life contracts.

7. Dividend Distributions

Dividends are not declared by the Separate Account, since the increase in the value of the underlying investment in the Mutual Funds is reflected daily in the accumulation unit price used to calculate the equity value within the Separate Account.  Consequently, a dividend distribution by the Mutual Funds does not change either the accumulation unit price or equity values within the Separate Account.

 
S-103
 
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
Notes to Financial Statements
December 31, 2010



 
8. Fair Value Measurements and Fair Value Hierarchy

ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the nature of inputs used to measure fair value and enhances disclosure requirements for fair value measurements.

The Separate Account has categorized its financial instruments into a three level hierarchy which is based on the priority of the inputs to the valuation technique.  The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded at fair value on the Statements of Assets and Liabilities are categorized as follows:

Level 1. Unadjusted quoted prices for identical assets or liabilities in an active market.

Level 2. Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
 
 
         a) Quoted prices for similar assets or liabilities in active markets
         b) Quoted prices for identical or similar assets or liabilities in non-active markets
         c) Inputs other than quoted market prices that are observable
         d) Inputs that are derived principally from or corroborated by observable market
             data through correlation or other means.

Level 3. Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.
All investments in the Mutual Funds included in the Statements of Assets and Liabilities are stated at fair value and are based upon daily unadjusted quoted prices, therefore are considered Level 1.


9. Subsequent Events


The Separate Account has evaluated the financial statements for subsequent events through the date which the financial statements were issued.  During this period, there were no subsequent events requiring recognition or disclosure in the financial statements.

                                                                                                                                                             S-104
 
 
 

 
Report of Independent Registered Public Accounting Firm
 
The Board of Directors
 
Western Reserve Life Assurance Co. of Ohio
 
We have audited the accompanying statutory-basis balance sheets of Western Reserve Life Assurance Co. of Ohio (the Company) as of December 31, 2010 and 2009, and the related statutory-basis statements of operations, changes in capital and surplus, and cash flow for each of the three years in the period ended December 31, 2010. Our audits also included the statutory-basis financial statement schedules required by Regulation S-X, Article 7. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
As described in Note 1 to the financial statements, the Company presents its financial statements in conformity with accounting practices prescribed or permitted by the Ohio Department of Insurance, which practices differ from U.S. generally accepted accounting principles. The variances between such practices and U.S. generally accepted accounting principles also are described in Note 1. The effects on the financial statements of these variances are not reasonably determinable but are presumed to be material.
 
In our opinion, because of the effects of the matter described in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with U.S. generally accepted accounting principles, the financial position of Western Reserve Life Assurance Co. of Ohio at December 31, 2010 and 2009, or the results of its operations or its cash flow for each of the three years in the period ended December 31, 2010.
 

 
WRL 2010 SEC (2)
 
G-1
 
However, in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Western Reserve Life Assurance Co. of Ohio at
 
December 31, 2010 and 2009, and the results of its operations and its cash flow for each of the three years in the period ended December 31, 2010, in conformity with accounting practices prescribed or permitted by the Ohio Department of Insurance. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic statutory-basis financial statements taken as a whole, present fairly in all material respects the information set forth therein.
 
As discussed in Note 1 to the financial statements, in 2010, 2009, and 2008 in response to new accounting standards, the Company changed its method of accounting for collateral received related to certain financial transactions, deferred income taxes, and investments in loan-backed and structured securities. Also, as discussed in Note 2 to the financial statements, at
 
December 31, 2008 Western Reserve Life Assurance Co. of Ohio, with the permission of the Ohio Superintendent of Insurance, changed its policy for deferred income taxes.
 
/s/Ernst & Young LLP

April 5, 2011



 
WRL 2010 SEC (2)
 
G-2
 

Western Reserve Life Assurance Co. of Ohio

Balance Sheets – Statutory Basis
(Dollars in Thousands, Except per Share Amounts)

 
G-3
 
Western Reserve Life Assurance Co. of Ohio

Balance Sheets – Statutory Basis
(Dollars in Thousands, Except per Share Amounts)







 See accompanying notes.

 
WRL 2010 SEC (2)

 
G-4
 


Western Reserve Life Assurance Co. of Ohio

Statements of Operations – Statutory Basis
(Dollars in Thousands, Except per Share Amounts)


 
WRL 2010 SEC (2)
 
G-5
 

Western Reserve Life Assurance Co. of Ohio

Statements of Changes in Capital and Surplus – Statutory Basis
 (Dollars in Thousands)

See accompanying notes.

 
WRL 2010 SEC (2)
 
G-6
 

Western Reserve Life Assurance Co. of Ohio

Statements of Changes in Capital and Surplus – Statutory Basis (continued)
(Dollars in Thousands)

See accompanying notes.

 
WRL 2010 SEC (2)
 
G-7
 

Western Reserve Life Assurance Co. of Ohio

Statements of Cash Flow – Statutory Basis
 (Dollars in Thousands)



 
WRL 2010 SEC (2)
 
G-8
 

Western Reserve Life Assurance Co. of Ohio

Statements of Cash Flow – Statutory Basis (continued)
(Dollars in Thousands)

See accompanying notes.
 
 
G-9
 
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis
 (Dollars in Thousands)


December 31, 2010

1. Organization and Summary of Significant Accounting Policies

Organization

Western Reserve Life Assurance Co. of Ohio (the Company) is a stock life insurance company and is a wholly owned subsidiary of AEGON USA, LLC (AEGON). AEGON is an indirect, wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands.

Nature of Business

The Company operates predominantly in the variable universal life and variable annuity areas of the life insurance business. The Company is licensed in 49 states, District of Columbia, Puerto Rico and Guam. Sales of the Company’s products are through financial planners, independent representatives, financial institutions and stockbrokers. The majority of the Company’s new life insurance, and a portion of new annuities, are written through an affiliated marketing organization.

Basis of Presentation

The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Ohio Department of Insurance, which practices differ from accounting principles generally accepted in the United States (GAAP). The more significant variances from GAAP are:









 
WRL 2010 SEC (2)
 
G-10
 
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)


1. Organization and Summary of Significant Accounting Policies (continued)

Investments: Investments in bonds and mandatory redeemable preferred stocks are reported at amortized cost or fair value based on their National Association of Insurance Commissioners (NAIC) rating; for GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in operations for those designated as trading and as a separate component of other comprehensive income (OCI) for those designated as available-for-sale.  Fair value for GAAP is based on indexes, third party pricing services, brokers, external fund managers and internal models.  For statutory reporting, the NAIC allows insurance companies to report the fair value determined by the Securities Valuation Office of the NAIC (SVO) or determine the fair value by using a permitted valuation method.

All single class and multi-class mortgage-backed/asset-backed securities (e.g., CMOs) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using either the retrospective or prospective methods. If the fair value of the mortgage-backed/asset-backed security is less than amortized cost, an entity shall assess whether the impairment is other-than-temporary. An other-than-temporary impairment is considered to have occurred if the discounted estimated future cash flows are less than the amortized cost basis of the security. An other-than-temporary impairment is also considered to have occurred if the fair value of the mortgage-backed/asset-backed security is less than its amortized cost basis and the entity intends to sell the security or the entity does not have the intent and ability to hold the security for a period of time sufficient to recover the amortized cost basis.

If it is determined an other-than-temporary impairment has occurred as a result of the cash flow analysis, the security is written down to the discounted estimated future cash flows.  If an other-than-temporary impairment has occurred due to intent to sell or lack of intent and ability to hold, the security is written down to fair value.  Prior to 2009, if it was determined that a decline in fair value was other-than-temporary, the cost basis of the security was written down to the undiscounted estimated future cash flows.



 
G-11
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 







1. Organization and Summary of Significant Accounting Policies (continued)

For GAAP, all securities, purchased or retained, that represent beneficial interests in securitized assets (e.g., CMO, CBO, CDO, CLO, MBS and ABS securities), other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows.  If it is determined that a decline in fair value is other-than-temporary and the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the other-than-temporary impairment should be recognized in earnings equal to the entire difference between the amortized cost basis and its fair value at the impairment date.  If the entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery, the other-than-temporary impairment should be separated into a) the amount representing the credit loss, which is recognized in earnings, and b) the amount related to all other factors, which is recognized in OCI, net of applicable taxes.  Prior to 2009, if it was determined that a decline in fair value was other-than-temporary, the cost basis of the security was written down to fair value.  If high credit quality securities are adjusted, the retrospective method is used.

Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability. Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains and losses.  Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and risk of the host contract is accounted for separately from the host contract and valued and reported at fair value, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of capital and surplus rather than to income as required for fair value hedges.

Derivative instruments are also used in replication transactions.  In these transactions, the derivative is valued in a manner consistent with the cash investment and replicated asset.  For GAAP, the derivative is reported at fair value with the changes in the fair value reported in income.



 
G-12
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 





1. Organization and Summary of Significant Accounting Policies (continued)

Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Company’s occupancy of those properties. Changes between depreciated cost and admitted amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.

Valuation allowances are established for mortgage loans, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, such allowances are based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, if foreclosure is probable, on the estimated fair value of the collateral.

The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.

Valuation Reserves: Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. That net deferral is reported as the interest maintenance reserve (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses would be reported in the statement of operations on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.

The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.



 
G-13
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 






1. Organization and Summary of Significant Accounting Policies (continued)

Securities Lending Assets and Liabilities:  Beginning December 31, 2010, for securities lending programs, cash collateral received which may be sold or repledged by the Company is reflected as a one-line entry on the balance sheet (securities lending reinvested collateral assets) and a corresponding liability is established to record the obligation to return the cash collateral. Collateral received which may not be sold or repledged is not recorded on the Company’s balance sheet.  Prior to 2010, cash collateral received from securities lending was not recorded on the Company’s balance sheet because the cash collateral was restricted.  Under GAAP the reinvested collateral is included within invested assets (i.e. it is not one-line reported).

Subsidiaries: The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP.

Policy Acquisition Costs: The costs of acquiring and renewing business are expensed when incurred. Under GAAP, acquisition costs related to traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, would be deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves; for universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.

Nonadmitted Assets: Certain assets designated as “nonadmitted”, primarily net deferred tax assets and agent debit balances, and other assets not specifically identified as an admitted asset within the NAIC Accounting Practices and Procedures Manual (NAIC SAP), are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheet to the extent they are not impaired.





 
G-14
 

Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)







1. Organization and Summary of Significant Accounting Policies (continued)

Universal Life and Annuity Policies:  Revenues for universal life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received.  Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Premiums received and benefits incurred for annuity policies without mortality or morbidity risk and guaranteed interest in group annuity contracts are recorded directly to a policy reserve account using deposit accounting, without recognizing premium income or benefits expense. Interest on these policies is reflected in other benefits. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability.

Benefit Reserves: Certain policy reserves are calculated based on statutorily required interest and mortality assumptions rather than on estimated expected experience or actual account balances as would be required under GAAP.

Reinsurance: Any reinsurance amounts deemed to be uncollectible have been written off through a charge to operations.  In addition, a liability for reinsurance balances would be established for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.

Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.

Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.




 
G-15
 

Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)







1. Organization and Summary of Significant Accounting Policies (continued)

Deferred Income Taxes:  Effective December 31, 2009, the Company began computing deferred income taxes in accordance with Statement of Statutory Accounting Principles (SSAP) No. 10R, Income Taxes – Revised, A Temporary Replacement of SSAP No. 10, discussed in further detail in the Recent Accounting Pronouncement section of this note.  Under SSAP 10R, deferred income tax assets are limited to 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse during a timeframe corresponding with the Internal Revenue Service tax loss carryback provisions, not to exceed three years, plus 2) the lesser of the remaining gross deferred income tax assets expected to be realized within three years of the balance sheet date or 15% of capital and surplus excluding any net deferred income tax assets, electronic data processing equipment and operating software and any net positive goodwill, plus 3) the amount of remaining gross deferred income tax assets that can be offset against existing gross deferred income tax liabilities after considering the character (i.e., ordinary versus capital) of the deferred tax assets and liabilities. The remaining deferred income tax assets are nonadmitted.

Deferred income taxes do not include amounts for state taxes. Under GAAP, state taxes are included in the computation of deferred income taxes, a deferred income tax asset is recorded for the amount of gross deferred income tax assets expected to be realized in all future years, and a valuation allowance is established for deferred income tax assets not realizable.

Policyholder Dividends:  Policyholder dividends are recognized when declared rather than over the term of the related policies.

Statements of Cash Flow: Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year or less. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.

The effects of the foregoing variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material.



 
G-16
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)





1. Organization and Summary of Significant Accounting Policies (continued)

Other significant accounting policies are as follows:

Investments

Investments in bonds, except those to which the SVO has ascribed an NAIC designation of 6, are reported at amortized cost using the interest method.

Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method, including anticipated prepayments, except for those with an initial NAIC designation of 6, which are valued at the lower of amortized cost or fair value. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. The retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.

Investments in both affiliated and unaffiliated preferred stocks in good standing are reported at cost or amortized cost. Investments in preferred stocks not in good standing are reported at the lower of cost or fair value, and the related net unrealized capital gains (losses) are reported in unassigned surplus along with any adjustment for federal income taxes.  Non-redeemable preferred stocks are reported at fair value or lower of cost or fair value, and the related net unrealized gains (losses) are reported in unassigned surplus with any adjustment for federal income taxes.

Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuer’s senior note holders.  These securities meet the definition of a bond, in accordance with SSAP No. 26, Bonds, excluding Loan-backed and Structured Securities and therefore, are reported at amortized cost or fair value based upon their NAIC rating.

Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity.  The net change in the subsidiaries’ equity is included in the change in net unrealized capital gains or losses.

There are no restrictions on common or preferred stock.

Home office properties are reported at cost less allowances for depreciation. Depreciation of home office properties is computed principally by the straight-line method.

Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.


 
G-17
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Cash equivalents are short-term highly liquid investments with original maturities of three months or less and are principally stated at amortized cost.

Mortgage loans are reported at unpaid principal balances, less an allowance for impairment.  A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement.  When management determines that the impairment is other-than-temporary, the mortgage loan is written down to realizable value and a realized loss is recognized.

Investments in Low Income Housing Tax Credit (LIHTC) Properties are valued at amortized cost.  Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company.

Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes.  Changes in admitted asset carrying amounts of bonds, mortgage loans, preferred and common stocks are credited or charged directly to unassigned surplus.

For dollar repurchase agreements, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date.  Cash received as collateral will be invested as needed or used for general corporate purposes of the Company.

The carrying values of all investments are reviewed on an ongoing basis for credit deterioration or changes in estimated cash flows. If this review indicates a decline in fair value that is other-than-temporary, the carrying value of the investment is reduced to its fair value, and a specific writedown is taken for all investments other than loan-backed or structured securities, which are reduced to the present value of expected cash flows where
the Company has the ability and intent to hold the security until recovery. Such reductions in carrying value are recognized as realized losses on investments.

Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Further, income is not accrued when collection is uncertain. At December 31, 2010 and 2009, the Company did not exclude any investment income due and accrued with respect to such practices.


 
G-18
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)



1. Organization and Summary of Significant Accounting Policies (continued)

Derivative Instruments

Futures are marked to market on a daily basis and a cash payment is made or received by the Company.  These payments are recognized as realized gains or losses in the financial statements.

Interest rate swaps are the primary derivative financial instruments used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability.  These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount.  Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date.  Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally amortized cost, in the financial statements.  If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract.   These gains and losses may be included in IMR or
AVR if the hedged instrument receives that treatment.  Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.

Premiums and Annuity Considerations

Revenues for policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received and are recognized over the premium paying periods of the related policies. Premiums received for annuity policies without mortality or morbidity risk are recorded using deposit accounting, and recorded directly to an appropriate policy reserve account, without recognizing premium income.

Aggregate Reserves for Policies and Contracts

Life, annuity and accident and health benefit reserves are developed by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum required by law.

The Company waives deduction of deferred fractional premiums upon death of the insured and refunds portions of premiums beyond the date of death. Surrender values on policies do not exceed the corresponding benefit reserves.



 
G-19
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)



1. Organization and Summary of Significant Accounting Policies (continued)

Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification.  Additional reserves are established when the results of cash flow testing under various interest rate scenarios indicate the need for such reserves or the net premiums exceed the gross premiums on any insurance in force.

Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula. Tabular interest on funds not involving life contingencies has also been determined by formula.

The aggregate policy reserves for life insurance policies are based principally upon the 1941, 1958, 1980 and 2001 Commissioners’ Standard Ordinary Mortality Tables. The reserves are calculated using interest rates ranging from 2 to 5.5 percent and are computed principally on the Net Level Premium Valuation and the Commissioners’ Reserve Valuation Methods. Reserves for universal life policies are based on account balances adjusted for the Commissioners’ Reserve Valuation Method.

Deferred annuity reserves are calculated according to the Commissioners’ Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest. Reserves for immediate annuities and supplementary contracts with life contingencies are equal to the present value of future payments assuming interest rates ranging from 4 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.

Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.

The liabilities related to guaranteed investment contracts and policyholder funds left on deposit with the Company generally are equal to fund balances less applicable surrender charges.

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the statement date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.

 
G-20
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)
 
Liability for Deposit-Type Contracts
 

Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include supplemental contracts and certain annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance, and are not reflected as premiums, benefits or changes in reserve in the statement of operations.

Reinsurance

Coinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of inforce blocks of business are included in unassigned surplus and amortized into income over the estimated life of the policies. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.

Separate Accounts

Separate accounts held by the Company primarily represent funds which are administered for individual variable universal life and variable annuity contracts. Assets held in trust for purchases of variable universal life and variable annuity contracts and the Company’s corresponding obligation to the contract owners are shown separately in the balance sheet. The assets in the accounts, carried at estimated fair value, consist of underlying mutual fund shares, common stocks, long-term bonds and short-term investments. The separate accounts, held for individual policyholders, do not have any minimum guarantees, and the investment risks associated with the fair value changes are borne entirely by the policyholder.

The Company received variable contract premiums of $378,162, $456,377 and $732,493, in 2010, 2009 and 2008, respectively. All variable account contracts are subject to discretionary withdrawal by the policyholder at the fair value of the underlying assets less the current surrender charge. Separate account contract holders have no claim against the assets of the general account.



 
G-21
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)



1. Organization and Summary of Significant Accounting Policies (continued)

Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements. The Company received $319,607, $342,329 and $113,994, in 2010, 2009 and 2008, respectively, related to fees associated with investment management, administration and contractual guarantees for separate accounts.

Stock Option Plan, Long-Term Incentive Compensation and Stock Appreciation Rights Plans

Prior to 2002 and in 2005 through 2008, AEGON N.V. sponsored a stock option plan for eligible employees of the Company. Pursuant to the plan, the option price at the date of grant is equal to the fair value of the stock. Under statutory accounting principles, the Company does not record any expense related to this plan.  No stock options were issued during 2010 or 2009.

The Company's employees participate in various stock appreciation rights (SAR) plans issued by AEGON.  In accordance with Statement of SSAP No. 13, Stock Options and Stock Purchase Plans, the expense related to these plans for the Company's employees has been charged to the Company, with an offsetting amount credited to paid-in surplus.    No benefit or expense relating to these plans was recorded by the company for the year ended December 31, 2010. The Company recorded a benefit of $7 and $1,628 for the years ended December 31, 2009 and 2008, respectively.  In addition, the Company recorded an adjustment to paid-in surplus for the income tax effect related to these plans over and above the amount reflected in the statement of operations in the amount of $3 for the year ended December 31, 2008.  The Company did not record an adjustment to paid-in surplus for the income tax effect related to these plans for the years ended December 31, 2010 or 2009.

Recent Accounting Pronouncements

Effective December 31, 2010, the Company adopted modifications made to SSAP No. 91R, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.  As a result of these modifications, for securities lending programs, collateral received by the Company’s agent that can be sold or re-pledged is reported on the balance sheet.  Collateral received and reinvestment of that collateral by the Company are reflected as a one-line entry on the balance sheet (securities lending reinvested collateral asset).  A separate liability is also established to record the obligation to return the cash collateral (payable for securities lending).  This change in accounting principle increased assets and liabilities by $193,926 with no impact to surplus.


 
G-22
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Effective December 31, 2010, the Company adopted SSAP No. 100, Fair Value Measurements, including recent modifications and clarifications made to the standard.  This statement defines fair value, establishes a framework for measuring fair value and establishes disclosure requirements about fair value, and it applies under other statutory accounting pronouncements that require or permit fair value measurements.  The adoption of this new accounting principle had no impact to the Company’s results of operations or financial position.  See Note 4 for further details.

During 2010, revisions were adopted to certain paragraphs of SSAP No. 43R, Loan-backed and Structured Securities to clarify the accounting for gains and losses between AVR and IMR.  The revisions clarify that an AVR / IMR bifurcation analysis should be performed when SSAP No. 43R securities are sold (not just as a result of impairment).  These changes have an effective date of January 1, 2011 and are to be applied on a prospective basis.

During 2010, revisions were made to SSAP No. 43R to clarify the definitions of loan-backed and structured securities.  The revised definitions will most likely result in more securities being accounted for under SSAP No. 43R.  Companies are to prospectively apply the clarified guidance effective January 1, 2011.  The Company is in the process of determining the impact of these changes.



 
G-23
 
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Effective September 30, 2009, the Company adopted SSAP No. 43R.  This statement establishes statutory accounting principles for investments in loan-backed and structured securities.  The SSAP supersedes SSAP No. 98, Treatment of Cash Flows When Quantifying Changes in Valuation and Impairments and paragraph 13 of SSAP No. 99, Accounting for Certain Securities Subsequent to an Other-Than-Temporary Impairment.  SSAP No. 43R changes the accounting for other-than-temporary impairments (OTTI).  If the Company intends to sell a security or lacks the intent or ability to hold the security until it recovers to its amortized cost basis, the security shall be written down to its fair value.  If the Company does not expect to recover the entire amortized cost basis of a security, an  OTTI shall be recognized as a realized loss equal to the difference between the security’s amortized cost basis and the present value of cash flows expected to be collected, discounted at the effective interest rate as outlined in the SSAP.  Prior to the adoption of SSAP No. 43R, loan-backed and structured securities were accounted for in accordance with SSAP No. 43, which called for those securities to be impaired and written down using undiscounted cash flows.  The cumulative effect of the adoption of this standard is the difference between the present value of expected cash flows for securities identified as having an OTTI compared with their amortized cost basis as of July 1, 2009.  This change in accounting principle reduced surplus by a net amount of $10 ($6 net of tax), which includes impairments of $4,270 offset by NAIC 6 rated securities that were already reported at lower of cost or market at the time of the implementation of SSAP No. 43R of $4,260, which have been removed from the component of change in net unrealized gains/losses.




 
G-24
 

Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)



1. Organization and Summary of Significant Accounting Policies (continued)

Effective December 31, 2009, the Company began computing deferred income taxes in accordance with SSAP No. 10R.  This statement establishes statutory accounting principles for current and deferred federal and foreign income taxes and current state income taxes.  This statement temporarily replaces SSAP No. 10, Income Taxes.  Under SSAP No. 10R, gross deferred tax assets (DTAs) shall be admitted in an amount equal to the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year and the lesser of the amount of adjusted gross DTAs, expected to be realized within one year of the balance sheet date or 10% of capital and surplus excluding any net deferred income tax assets, electronic data processing equipment and operating system software and any net positive goodwill that can be offset against existing gross deferred income tax liabilities (DTLs) after considering the character.  If the Company’s risk-based capital level (RBC) is above 250% where an action level could occur as a result of a trend test, the Company may elect to admit a higher amount of adjusted gross DTAs.  When elected, additional DTAs are admitted for taxes paid in prior years that can be recovered through loss carryback provisions  for existing temporary differences that reverse within three years of the balance sheet date and the lesser of the remaining gross
DTAs expected to be realized within three years of the balance sheet date or 15% of capital and surplus excluding any net deferred income tax assets, electronic data processing equipment and operating software and any positive net goodwill plus the amount of remaining gross DTAs that can be offset against gross DTLs after considering the character (i.e., ordinary versus capital) of the DTAs and DTLs.  Prior to the adoption of SSAP No. 10R, the Company obtained permission from the state of Ohio to compute deferred income taxes using a permitted practice, which is discussed in detail in Note 2 – Prescribed and Permitted Statutory Accounting Practices.  The election of the permitted practice at December 31, 2008 resulted in an increase to surplus of $45,322, which has been reflected as an aggregate write-in for other than special surplus funds.  At December 31, 2009, the Company elected to admit additional deferred tax assets pursuant to SSAP No. 10R. The cumulative effect of the election of this statement is the difference between the calculation of the admitted DTA per SSAP No. 10R and the SSAP No. 10 methodology at December 31, 2009 as the use of the permitted practice expired as of December 15, 2009.  As a result of this election, surplus increased by $70,527 and $46,066 at December 31, 2010 and 2009 respectively, which has been reflected as an aggregate write-in for other than special surplus funds on the 2010 financial statements.




 
G-25
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)


1. Organization and Summary of Significant Accounting Policies (continued)

Effective December 31, 2009 the Company adopted amendments to SSAP No. 9, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The guidance requires the disclosure of the date through which an entity has evaluated subsequent events and whether that date represents the date the financial statements were issued or were available to be issued. The adoption did not impact the Company’s results of operations or financial position. See Note 13 for further discussion of the Company’s consideration of subsequent events.

In September 2008, the NAIC issued SSAP No. 99.  This statement establishes the statutory accounting principles for the treatment of premium or discount applicable to certain securities subsequent to the recognition of an OTTI.  Prior to SSAP No. 99, the Company’s previously impaired investments were reported in accordance with SSAP No. 26, Bonds, excluding Loan-backed and Structured Securities, SSAP No. 32, Investments in Preferred Stock and SSAP No. 43, Loan-backed and Structured Securities.  The Company adopted SSAP No. 99 on January 1, 2009.  The adoption of this statement was accounted for prospectively and therefore there was no impact to the Company’s financial statements at adoption.

Reclassifications

Certain reclassifications have been made to the 2009 and 2008 financial statements to conform to the 2010 presentation.

2. Prescribed and Permitted Statutory Accounting Practices

The financial statements of the Company are presented on the basis of accounting practices prescribed by the Insurance Department of the State of Ohio.  The Insurance Department of the State of Ohio recognizes only statutory accounting practices prescribed or permitted by the State of Ohio for determining and reporting the financial condition and results of operation of an insurance company for determining its solvency under Ohio Insurance Law.  The NAIC Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed or permitted practices by the State of Ohio.



 
G-26
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)






2. Prescribed and Permitted Statutory Accounting Practices (continued)

At December 31, 2008, the Company, with the permission of the Ohio Superintendent of Insurance, determined the admitted amount of deferred income tax assets pursuant to Ohio Bulletin 2009-04.  Bulletin 2009-04 increased the realization period for purposes of determining the admissibility of deferred tax assets in accordance with the requirements of SSAP No. 10, Paragraph 10(b)(i) from one year to three years from the balance sheet date and expanded the limit on net deferred tax assets for Paragraph 10(b)(ii) from 10% of adjusted capital and surplus to 15%.  The Company did not utilize this permitted practice during 2010 or 2009 and instead opted to calculate deferred income taxes using the provisions of SSAP No. 10R.

A reconciliation of the Company's net income (loss) and capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Ohio is shown below:


 
G-27
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 
 
3. Fair Values of Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash, Cash Equivalents and Short-Term Investments: The carrying amounts reported in the accompanying balance sheets for these financial instruments approximate their fair values.

Bonds and Stocks:  The NAIC allows insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method.  The fair values of bonds and stocks are reported or determined using the following pricing sources:  indexes, third party pricing services, brokers, external fund managers and internal models.


 
G-28
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)




3. Fair Values of Financial Instruments (continued)

For fixed maturity securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from independent pricing services, or, in the case of private placements, estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.

Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.

Policy Loans:  Carrying value of policy loans approximates their fair value.

Securities Lending Reinvested Collateral: The cash collateral from securities lending is reinvested in various short term and long term debt instruments.  The fair values of these investments are determined using the methods described above under Cash, Cash Equivalents and Short - Term Investments and Bonds and Stocks.

Derivative Financial Instruments: The estimated fair values of interest rate swaps, including interest rate and currency swaps, are based on pricing models or formulas using current assumptions.

Short-Term Notes Receivable from Affiliates:  The carrying amounts reported in the accompanying balance sheets for these financial instruments approximate their fair value.

Deposit-Type Contracts:  The carrying amounts of deposit-type contracts reported in the accompanying balance sheets approximate their fair values.

Separate Account Assets: The fair value of separate account assets are based on quoted market prices.

Separate Account Annuity Liabilities: Separate account annuity liabilities are based upon the fair value of the related separate account assets.

Investment Contract Liabilities: Fair values for the Company’s liabilities under investment contracts are estimated using discounted cash flow calculations, based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for the contracts being valued.

Receivable from/Payable to Parent, Subsidiaries, and Affiliates: The carrying amount of receivable from/payable to affiliates approximates their fair value.

 
G-29
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

3. Fair Values of Financial Instruments (continued)

Fair values for the Company’s insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, which minimizes exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

The following sets forth a comparison of the estimated fair values and carrying amounts of the Company’s financial instruments:




 
 
 
G-30
 
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)


3. Fair Values of Financial Instruments (continued)

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair values are based on quoted market prices when available.  When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality (matrix pricing).  In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that management believes market participants would use to determine a current transaction price.  These valuation techniques involve some level of management estimation and judgment which becomes significant with increasingly complex instruments or pricing models.  Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input employed.

The Company's financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100.  The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement.  For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).   The levels of the fair value hierarchy are as follows:

 Level 1 -                 Unadjusted quoted prices for identical assets or liabilities in active marketsaccessible at the measurement date.

 
Level 2 -
Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.  Level 2 inputs include the following:

a)  
Quoted prices for similar assets or liabilities in active markets
b)  
Quoted prices for identical or similar assets or liabilities in non-active markets
c)  
Inputs other than quoted market prices that are observable




 
G-31
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)


3. Fair Values of Financial Instruments (continued)

d)  
Inputs that are derived principally from or corroborated by observable market data through correlation or other means

 
Level 3 -
Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.  They reflect the Company’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The Company accounts for its investments in affiliated common stock using the equity method of accounting; as such, they are not included in the following disclosures as they are not carried at fair value on the balance sheet.




 
 
G-32
 

Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)



3. Fair Values of Financial Instruments (continued)

Fair Value Measurements

During 2010, amendments were made to SSAP No. 100 to eliminate the requirement to differentiate and report fair value measurements on separate recurring and non-recurring schedules.  Instead, for December 31, 2010, all fair value measurements will be reported on a single schedule by class.  The 2009 schedules were not required to be restated.

The following table provides information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2010:






 
 
G-33
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

3. Fair Values of Financial Instruments (continued)

Bonds classified in Level 2 are valued using inputs from third party pricing or corroborated broker quotes.  Level 3 measurements for bonds are primarily those valued using non-corroborated broker quotes or internal modeling.

Short-term investments are classified as Level 2 as they are carried at amortized cost, which approximates fair value.

For derivatives, those classified as Level 2 represent over-the-counter (OTC) contracts valued using pricing models based on the net present value of estimated future cash flows, directly observed prices from exchange-traded derivatives, other OTC trades, or external pricing services.

The following table summarizes the changes in assets and liabilities classified in Level 3 for 2010:
The Company’s policy is to recognize transfers in and out of Level 3 as of the beginning of the reporting period.

The following table provides information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2009:

 
 
G-34
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

3. Fair Values of Financial Instruments (continued)

The following table summarizes the changes in assets and liabilities classified in Level 3 for 2009:
 
 
 
Assets measured at fair value on a non-recurring basis

For the year ended December 31, 2009, the Company reported certain assets at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  The Company reported the following financial instruments at fair value on a non-recurring basis:



 

 
G-35
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)



4. Investments

The carrying amount and estimated fair value of investments in bonds are as follows:


 


 

 
G-36
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

4. Investments (continued)

At December 31, 2010 and 2009, respectively, for bonds that have been in a continuous loss position for greater than or equal to twelve months, the Company held 31 and 61 with a carrying amount of $105,753 and $157,040 and an unrealized loss of $16,109 and $33,409, with an average price of 84.8 and 78.7 (fair value/amortized cost).  Of this portfolio, 79.3% and 81.0% were investment grade with associated unrealized losses of $9,864 and $23,639, respectively.

At December 31, 2010 and 2009, respectively, for bonds that have been in a continuous loss position for less than twelve months, the Company held 52 and 63  securities with a carrying amount of $147,068 and $290,130 and an unrealized loss of $5,653 and $7,985 with an average price of 96.2 and 97.3 (fair value/amortized cost).  Of this portfolio, 100.0% and 99.40% were investment grade with associated unrealized losses of $5,653 and $7,808, respectively.

The estimated fair value of bonds with gross unrealized losses at December 31, 2010 and 2009 are as follows:





 
G-37
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 
 
4. Investments (continued)

The carrying amount and estimated fair value of bonds at December 31, 2010, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalties.

The Company closely monitors below investment grade holdings and those investment grade issuers where the Company has concerns. The Company also regularly monitors industry sectors. Non-structured securities in unrealized loss positions that are considered other-than-temporary are written down to fair value. Structured securities considered other-than-temporarily impaired are written down to discounted estimated cash flows if the impairment is the result of cash flow analysis.  If the Company has an intent to sell or lack of ability to hold a structured security, it is written down to fair value. The Company considers relevant facts and circumstances in evaluating whether the impairment is other-than-temporary including: (1) the probability of the Company collecting all amounts due according to the contractual terms of the security in effect at the date of acquisition; (2) the Company’s decision to sell a security prior to its maturity at an amount below its carrying amount; and (3) the Company’s ability to hold a structured security for a period of time to allow for recovery of the value to its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored.  For asset-backed securities, cash flow trends and underlying levels of collateral are monitored.  The Company will record a charge to the statement of operations to the extent that these securities are subsequently determined to be other-than-temporarily impaired.

Asset-backed securities (ABS), Commercial mortgage-backed securities (CMBS), and Residential mortgage-backed securities (RMBS) are securitizations of underlying pools of assets. At December 31, 2010, the Company’s ABS, CMBS, and RMBS portfolios had fair values less than the carrying amounts of $12,243, $1,555 and $1,872, respectively. 



 
G-38
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

4. Investments (continued)

All ABS, CMBS and RMBS assets are monitored and reviewed at least quarterly. Where ratings have declined to below investment grade on nonhousing related ABS, the individual debt securities have been modeled to determine if cash flow models indicate a credit event will impact future cash flows and resulting impairments have been taken.  For non-conduit CMBS, the Company’s internal asset specialist works closely with the Company’s real estate valuation group to determine underlying asset valuation and risk. For housing related ABS, conduit CMBS and RMBS, detailed cash flow models using the current collateral pool and capital structure on the portfolio are performed. Model output is generated under base and several stress-case scenarios. The Company’s internal asset specialists utilize widely recognized industry modeling software to perform a loan-by-loan, bottom-up approach to modeling. Key assumptions used in the models are projected defaults, loss severities and prepayments. Each of these key assumptions varies greatly based on the significantly diverse characteristics of the current collateral pool for each security. Once the entire pool is modeled, results are then closely analyzed by the Company’s internal asset specialist to determine whether or not our particular tranche or holding is at risk for not collecting all contractual cash flows, taking into account the seniority and other terms of the tranches held.  If cash flow models indicate a credit event will impact future cash flows and the Company does not have the intent to sell the tranche or holding and does have the intent and ability to hold the security, the security is impaired to discounted cash flows.

As the remaining unrealized losses in the ABS, CMBS and RMBS portfolios relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be impaired as of December 31, 2010.

Subprime mortgages are loans to homebuyers who have weak or impaired credit histories, are loans that are non-conforming or are loans that are second in priority.  The Company does not sell or buy subprime mortgages directly.   The Company's exposure to subprime mortgages is through ABS.  These securities are pools of mortgages that have been securitized and offered to investors as asset-backed securities, where the mortgages are collateral.  Most of the underlying mortgages within the pool have FICO scores below 660 at issuance.  Therefore, the ABS has been classified by the Company as a subprime mortgage position.  Also included in the Company's total subprime mortgage position are ABS with second lien mortgages as collateral.  The second lien mortgages may not necessarily have subprime FICO scores; however, the Company has included these ABS in its subprime position as it is the second priority in terms of repayment.  The Company does not have any "direct" residential mortgages to subprime borrowers outside of the ABS structures.




 
G-39
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

4. Investments (continued)

The actual cost, carrying amount and fair value of the Company's subprime residential mortgage-backed ABS holdings at December 31, 2010 are $45,281, $40,139 and $34,206, respectively.  At December 31, 2009, the actual cost, carrying amount and fair value of the Company’s subprime residential mortgage-backed ABS holdings were $48,205, $43,240 and $33,365, respectively.

The following table provides the aggregate totals for loan-backed securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold, in which the security is written down to fair value. There were no securities other-than-temporary impaired during 2010 due to intent to sell or lack of intent and ability to hold.

The following tables provide the aggregate totals for loan-backed securities with a recognized OTTI due to the Company’s cash flow analysis, in which the security is written down to estimated future cash flows discounted at the security’s effective yield.


 


 
G-40
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
4. Investments (continued)

The following loan-backed and structured securities were held at December 31,2010, for which an OTTI had been previously recognized:



 
 
G-41
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

 
 
4. Investments (continued)

The unrealized losses of loan-backed and structured securities where fair value is less than cost or amortized cost for which an OTTI has not been recognized in earnings as of December 31, 2010 and 2009 is as follows:





Detail of net investment income is presented below:



 
 
G-42
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 
 
4. Investments (continued)

Proceeds from sales and other disposals of bonds and preferred stock and related gross realized capital gains and losses were as follows:



 
The Company had gross realized losses of $468, $8,814 and $4,739 in 2010, 2009 and 2008, respectively, which relate to losses recognized on other-than-temporary declines in fair values of bonds.


 
 
G-43
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 
 
4. Investments (continued)

Net realized capital gains (losses) on investments are summarized below:

The Company did not have any recorded investments in restructured securities at December 31, 2010.  At December 31, 2009,  the Company had recorded investments in restructured securities of $740.  The capital losses taken as a direct result of restructures in 2009 were $782. The Company often has impaired a security prior to the restructure date.  These impairments are not included in the calculation of restructure-related losses and are accounted for as a realized loss, reducing the cost basis of the security involved.

The changes in net unrealized capital gains and losses on investments were as follows:


 
 
G-44
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 
 
4. Investments (continued)

At December 31, 2010 and 2009, bonds with an aggregate carrying value of $3,973 and $4,013, respectively, were on deposit with certain state regulatory authorities or were restrictively held in bank custodial accounts for benefit of such state regulatory authorities, as required by statute.

During 2010 and 2009, the Company did not issue any mortgage loans.

During 2010, 2009 and 2008, no mortgage loans were foreclosed and transferred to real estate. At December 31, 2010 and 2009, the Company held a mortgage loan loss reserve in the asset valuation reserve of $85 and $48, respectively.

At December 31, 2010, the Company had five LIHTC investments.  The remaining years of unexpired tax credits ranged from one to eleven and none of the properties were subject to regulatory review.  The length of time remaining for holding periods ranged from five to sixteen years.  The amount of contingent equity commitments expected to be paid during the years 2011 to 2012 is $1,024.  The Company has no contingent equity commitments related to LIHTC beyond the year 2012.  There were no impairment losses, write-downs or reclassifications during 2010 related to these credits.

At December 31, 2009, the Company had four LIHTC investments.  The remaining years of unexpired tax credits ranged from two to eleven and none of the properties were subject to regulatory review.  The length of time remaining for holding periods ranged from six to fifteen years.  The amount of contingent equity commitments expected to be paid during the years 2010 to 2012 is $1,056.  The Company has no contingent equity commitments related to LIHTC beyond the year 2012.  There were no impairment losses, write-downs or reclassifications during 2009 related to these credits.

The following tables provide the carrying value of state transferable tax credits gross of any related tax liabilities and total unused transferable tax credits by state and in total as of December 31, 2010 and 2009:

 
G-45
 
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
 
4. Investments (continued)
      
*The unused amount reflects credits that the Company deems will be realizable in the period from 2011 to 2014.

The Company estimated the utilization of the remaining state transferable tax credits by projecting a future tax liability based on projected premium, tax rates and tax credits and comparing the projected future tax liability to the availability of remaining state transferable tax credits.  The Company had no impairment losses related to state transferable tax credits as of December 31, 2010 and 2009.

The Company issues products providing the customer a return based on various global equity market indices.  The Company uses global future contracts and/or options to hedge the liability option risk associated with these products.

The Company is exposed to credit related losses in the event of nonperformance by counterparties to financial instruments, but it does not expect any counterparty to fail to meet their obligations given their high credit ratings of ‘A’ or better.  The credit exposure of swaps is represented by the fair value contracts, aggregated at a counterparty level, with a positive fair value at the reporting date.

The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Company’s behalf.  The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating of the counterparty.  Inversely, if the net fair value of all contracts with this counterparty is negative, the Company is required to post assets instead.  At December 31, 2010, the Company does not have any contracts, aggregated at a counterparty level, with a positive fair value.  At December 31, 2010, the fair value of all contracts, aggregated at a counterparty level, with a negative fair value amount to $971.

At December 31, 2010 and 2009, respectively, the Company has recorded $(971) and $(748) for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting.  This has been recorded directly to unassigned surplus as an unrealized loss.


 
G-46
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)


4. Investments (continued)

The Company did not recognize any unrealized gains or losses during 2010 or 2009 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.

The Company uses variance swaps to reduce market risk in minimum guarantee equity index contracts arising from mismatches between assets and liabilities.  A variance swap is an arrangement whereby two parties (counterparties) enter into an agreement to pay a specified amount linked to the underlying index upon termination.  The final fair value is calculated using a combination of the value of the underlying at termination, and the value of the variance swap at initiation multiplied by an underlying notional amount.  Generally, no cash is exchanged at the outset of the contract. Periodic interest payments and a final payout upon termination can be made by either party.

Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable.  The Company uses derivatives as hedges, consequently, when the value of the derivative changes, the value of a corresponding hedged asset or liability will move in the opposite direction.  Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.

At December 31, 2010 and 2009, respectively, the Company had outstanding receive fixed - pay fixed swaps with a notional amount of $4 and $5.

Under exchange traded futures and options, the Company agrees to purchase a specified number of contracts from other parties and to post a variation margin on a daily basis in an amount equal to the difference in the daily fair values of those contracts.  The parties with whom the Company enters into exchange traded futures and options are regulated futures commissions merchants who are members of a trading exchange.  The Company recognized net realized gains (losses) from futures contracts in the amount of $(9,000), $(22,205) and $9,756 for the years ended December 31, 2010, 2009 and 2008, respectively.








 
G-47
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)


4. Investments (continued)

Open futures contracts at December 31, 2010 and 2009, are as follows:



5. Reinsurance

The Company reinsures portions of certain insurance policies which exceed its established limits, thereby providing a greater diversification of the risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligations under the reinsurance treaty.

Premiums earned reflect the following reinsurance amounts:




 
G-48
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
5. Reinsurance (continued)

The Company received reinsurance recoveries in the amount of $76,107, $69,659 and $40,858 during 2010, 2009 and 2008, respectively. At December 31, 2010 and 2009, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $18,652 and $18,173, respectively. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2010 and 2009 of $332,318 and $315,335, respectively.  As of December 31, 2010 and 2009, the amount of reserve credits for reinsurance ceded that represented unauthorized affiliated companies were $280,574 and $265,816, respectively.

The Company would experience no reduction in surplus at December 31, 2010 if all reinsurance agreements were cancelled.

Effective December 31, 2010, the Company entered into a reinsurance agreement with Transamerica Life Insurance Company (TLIC), an affiliate, to cede on a 100% quota share basis a block of variable universal life business on a modified coinsurance basis.  Reserves on the block were $1,013,110, with assets backing the block comprised of $853,669 of separate account assets and $159,441 of general account assets.  The Company received consideration of $193,000, resulting in a pre-tax gain of $193,000.  The net of tax gain of $125,450 was credited to surplus in accordance with SSAP No. 61, Life, Deposit-Type and Accident and Health Reinsurance.

The Company entered into an indemnity reinsurance agreement effective December 31, 2008, with Transamerica International Re (Bermuda) Ltd. (TIRe), an affiliate of the Company, to cede on a 100% quota share basis the net liabilities associated with certain of the Company's variable annuity products on a coinsurance and modified coinsurance basis.  The Company ceded reserves on a coinsurance basis of $133,875, received consideration of $12,780 and established a funds withheld liability of $121,095.  The pre-tax gain of $12,780 ($8,307 on a net of tax basis) has been reclassified to equity in accordance with SSAP 61. The Company ceded general account and separate account reserves on a modified coinsurance basis of $303,642 and $1,703,276, respectively. An initial reinsurance premium equal to the reserves ceded was recorded, resulting in no gain or loss on the modified coinsurance portion on this transaction. The Company amortized $8,307 into earnings with a corresponding charge to unassigned surplus during 2009. At December 31, 2010 and 2009, the Company holds collateral in the form of letters of credit of $27,000 and $26,000, respectively, from the assuming company.







 
G-49
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

5. Reinsurance (continued)

Effective October 1, 2008 the Company recaptured various guaranteed minimum death benefit riders included in certain of its variable annuity contracts that were previously ceded to TIRe, an affiliate, under a 2001 reinsurance agreement.  The Company released a funds withheld liability of $14,716 associated with this business and paid recapture consideration of $36,703.   Reserves recaptured included $71,423 of GMDB reserves and $1,927 of claim reserves.  The resulting pre-tax loss of $95,337 was included in the statement of operations in accordance with SSAP No. 61.  In addition, the unamortized pre-tax ceded gain held by the Company in unassigned surplus resulting from the original reinsurance transaction was released into income in the amount of $5,925 ($3,851 net of tax).  Prior to this transaction, the Company had amortized $1,367 on a pre-tax basis ($889 on a net of tax basis) into earnings for 2008, with a corresponding charge to unassigned surplus.

During 2010, 2009 and 2008, the Company amortized deferred gains from reinsurance transactions occurring prior to 2008 of $24, for each respective year, into earnings on a net of tax basis with a corresponding charge to unassigned surplus.

Letters of credit held for all unauthorized reinsurers as of December 31, 2010 and 2009 were $107,200 and $77,700, respectively.

6. Income Taxes

The net deferred income tax asset at December 31, 2010 and 2009 and the change from the prior year are comprised of the following components:



 
 
G-50
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)



 
 
G-51
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)

The main components of deferred income tax amounts are as follows:





 
 
G-52
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)


The Company did not record a valuation allowance for deferred tax assets as of December 31, 2010. The valuation allowance for deferred tax assets as of December 31, 2009 was $4,817.  The valuation allowance is primarily related to deferred tax assets of a capital character that in the judgment of management, are not more likely than not to be realized.


 
 
G-53
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)

As discussed in Note 1, the Company has elected to admit deferred tax assets pursuant to SSAP No. 10R, paragraph 10.e. for the 2010 and 2009 reporting periods.  The amount of admitted adjusted gross deferred income tax assets under each component of SSAP No. 10R is as follows:



 
 
G-54
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)




 
 
G-55
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)


·  
10.a. – Federal income taxes paid in prior year that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year
·  
10.b.i. – Adjusted gross DTAs, after the application of 10.a., expected to be realized within one year
·  
10.b.ii. – 10% of adjusted statutory capital and surplus as shown on most recently filed statement
·  
10.c. – Adjusted gross DTAs, after the application of 10.a. and 10.b., that can be offset against gross DTLs after considering the character of the DTAs and DTLs
·  
10.d. – If the reporting entity’s financial statements and risk-based capital (RBC) calculated using an admitted adjusted gross DTA as the sum of 10.a., 10.b., and 10.c. results in the Company’s RBC level being above the maximum RBC level where an action level could occur as a result of the trend test (i.e., 250%); then the Company may elect to admit a higher amount of adjusted gross DTAs as calculated in paragraph 10.e.
·  
10.e.i. – Federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse during a timeframe corresponding with IRS tax loss carryback provisions, not to exceed three years
·  
10.e.ii.(a) – Adjusted gross DTAs, after the application of 10.e.i, expected to be realized within three years
·  
10.e
·  
.ii.(b) – 15% of adjusted statutory capital and surplus as shown on most recently filed statement
·  
10.e.iii. – Adjusted gross DTAs, after the application of 10.e.i. and 10.e.ii., that can be offset against DTLs after considering the character of the DTAs and DTLs



 
G-56
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)

Total increased admitted adjusted gross DTAs as the result of the application of paragraph 10.e. SSAP No. 10R, Income Taxes - A Temporary Replacement of SSAP No. 10:



 

 
G-57
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
6. Income Taxes (continued)
*As reported on the statutory balance sheet for the most recently filed statement with the domiciliary state commissioner adjusted in accordance with SSAP No. 10R, Paragraph 10.b.ii

·  
XXX denotes breakout between ordinary and capital is not applicable to this information.

 
 
G-58
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)

The impact of tax planning strategies at December 31, 2010 was as follows:


Current year income taxes incurred consist of the following major components:





 
 
G-59
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)

The Company's current income tax incurred and change in deferred income tax differs from the amount obtained by applying the federal statutory rate of 35% to income before tax as follows:






 
 
G-60
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

6. Income Taxes (continued)

For federal income tax purposes, the Company joins in a consolidated income tax return filing with its indirect parent company, Transamerica Corporation, and other affiliated companies. The method of allocation between the companies is subject to a written tax allocation agreement.  Under the terms of the tax allocation agreement, allocations are based on separate income tax return calculations.  The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Company's separately computed income tax liability or the consolidated group's income tax liability in the year generated.  The Company is also entitled to recoup federal income taxes paid in the event the losses and credits reduce the greater of the Company's separately computed income tax liability or the consolidated group's income tax liability in any carryback or carryforward year when so applied.  Intercompany income tax balances are settled within thirty days of payment to or filing with the Internal Revenue Service. A tax return has not yet been filed for 2010.

The Company incurred income taxes during 2010 and 2009 of $112,172 and $44,526, respectively, which will be available for recoupment in the event of future net losses.  The Company did not incur income taxes during 2008 which will be available for recoupment in the event of future net losses.

The amount of tax contingencies calculated for the Company as of December 31, 2010 and 2009 is $2,144 and $1,573, respectively.  The total amount of tax contingencies that, if recognized, would affect the effective income tax rate is $2,144.  The Company classifies interest and penalties related to income taxes as interest expense and penalty expense, respectively.  The Company’s interest expense related to income taxes for the years ending December 31, 2010, 2009 and 2008 is $87, $61 and $36, respectively.  The total interest payable balance as of December 31, 2010 and 2009 is $184 and $97, respectively.  The Company recorded no liability for penalties.  It is not anticipated that the total amounts of unrecognized tax benefits will significantly increase within twelve months of the reporting date.

The Company’s federal income tax returns have been examined by the Internal Revenue Service and closing agreements have been executed through 2000. The examination for the years 2001 through 2004 and 2005 through 2006 have been completed and resulted in tax return adjustments that are currently being appealed.  The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions.  An examination is currently underway for the years 2007 and 2008.




 
G-61
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)


7. Policy and Contract Attributes

A portion of the Company’s policy reserves and other policyholders’ funds relate to liabilities established on a variety of the Company’s products, primarily separate accounts that are not subject to significant mortality or morbidity risk; however, there may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on these products, by withdrawal characteristics, is summarized as follows:




 
 
G-62
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

7. Policy and Contract Attributes (continued)

Information regarding the separate accounts of the Company is as follows:



 
WRL 2010 SEC (2)
 
G-63
 
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)



7. Policy and Contract Attributes (continued)




 
 
G-64
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
7. Policy and Contract Attributes (continued)

A reconciliation of the amounts transferred to and from the separate accounts is presented below:

The legal insulation of separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account.  At December 31, 2010 and 2009, the Company’s separate account statement included legally insulated assets of $7,401,665 and $7,156,201, respectively.  The assets legally insulated from general account claims at December 31, 2010 are attributed to the following products:


Some separate account liabilities are guaranteed by the general account.  In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account.  As of December 31, 2010, the general account of the Company had a maximum guarantee for separate account liabilities of $667,392.  To compensate the general account for the risk taken, the separate account paid risk charges of $12,187 to the general account in 2010.  As of December 31, 2010, the general account of the Company had paid $20,835 toward separate account guarantees.

The Company does not participate in securities lending transactions within the separate account.

 
G-65
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
7. Policy and Contract Attributes (continued)

Effective December 31, 2009, the Company adopted Actuarial Guideline XLIII (AG 43) which replaces Actuarial Guidelines 34 and 39.  AG 43 specifies statutory reserve requirements for variable annuity contracts with benefit guarantees (VACARVM) and without benefit guarantees and related products.  The AG 43 reserve calculation includes variable annuity products issued after January 1, 1981. Examples of covered guaranteed benefits include guaranteed minimum accumulation benefits, return of premium death benefits, guaranteed minimum income benefits, guaranteed minimum withdrawal benefits and guaranteed payout annuity floors.  The Aggregate Reserve for contracts falling within the scope of AG 43 is equal to the Conditional Tail Expectation (CTE) Amount, but not less than the Standard Scenario Amount (SSA). The Company reported a decrease in reserves and an increase in net income of $11,412 at December 31, 2009, related to the adoption of AG 43 and changes in the underlying assumptions.

To determine the CTE Amount, the Company used 1,000 of the pre-packaged scenarios developed by the American Academy of Actuaries (AAA) produced in October 2005 and prudent estimate assumptions based on Company experience. The SSA was determined using the assumptions and methodology prescribed in AG 43 for determining the SSA.

At December 31, 2010 and 2009, the Company had variable and separate account annuities with minimum guaranteed benefits as follows:






 
 
G-66
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
7. Policy and Contract Attributes (continued)

Reserves on the Company’s traditional life insurance products are computed using mean reserving methodologies.  These methodologies result in the establishment of assets for the amount of the net valuation premiums that are anticipated to be received between the policy’s paid-through date to the policy’s next anniversary date. At December 31, 2010 and 2009, the gross premium and loading amounts related to these assets (which are reported as premiums deferred and uncollected), are as follows:

At December 31, 2010 and 2009, the Company had insurance in force aggregating $4,531,669 and $5,012,732 respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the Ohio Department of Insurance.  The Company established policy reserves of $25,534 and $28,044 to cover these deficiencies at December 31, 2010 and 2009, respectively.

The Company anticipates investment income as a factor in the premium deficiency calculation, in accordance with SSAP No. 54, Individual and Group Accident and Health Contracts.

8. Capital and Surplus

The Company is subject to limitations, imposed by the Ohio Department of Insurance, on the payment of dividends to its parent company, AEGON. Generally, dividends during any twelve month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of statutory surplus as of the preceding December 31, or (b) net income for the preceding year. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2011, without the prior approval of insurance regulatory authorities, is $123,139.




 
G-67
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

8. Capital and Surplus (continued)

On December 23, 2010, the Company paid a common stock dividend of $100,000 to its parent company, AEGON.  The entire amount was considered an extraordinary dividend.  On December 30, 2009, the Company paid a common stock dividend of $65,000 to its parent company.  Of this amount, $23,400 was considered an ordinary dividend and $41,600 was considered an extraordinary dividend.  On December 29, 2008 the Company paid a $200,000 common stock dividend to its parent company.  Of this amount, $131,600 was considered an ordinary cash dividend and $68,400 was considered an extraordinary dividend.  The Company received approval from the Ohio Department of Insurance to make these dividend payments.

Life and health insurance companies are subject to certain risk-based capital (RBC) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on the various risk factors related to it. At December 31, 2010, the Company meets the minimum RBC requirements.

9. Securities Lending

The Company participates in an agent-managed securities lending program.  The Company receives collateral equal to 102% of the fair value of the loaned government/other domestic securities as of the transaction date.  If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government/other domestic securities.  In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair value of the loaned security.

At December 31, 2010 and 2009, respectively, securities in the amount of $187,773 and $31,795 were on loan under securities lending agreements.  The collateral the Company received from securities lending was in the form of cash and on open terms. This cash collateral is reinvested and is not available for general corporate purposes. The reinvested cash collateral had a fair value of $193,683 and $32,264 at December 31, 2010 and 2009, respectively.







 
G-68
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
9. Securities Lending (continued)

The Company did not participate in repurchase or dollar repurchase agreements at December 31, 2010 or 2009.

The contractual maturities of the securities lending collateral positions are as follows:


The maturity dates of the reinvested securities lending collateral are as follows:



 
 
G-69
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)
9. Securities Lending (continued)

The Company’s sources of cash that it uses to return the cash collateral is dependent upon the liquidity of the current market conditions.  Under current conditions, the Company has securities with a par value of $193,956 (fair value of $193,683) that are currently tradable securities that could be sold and used to pay for the $193,824 in collateral calls that could come due under a worst-case scenario.

10. Retirement and Compensation Plans

The Company’s employees participate in a qualified defined benefit plan sponsored by AEGON. The Company has no legal obligation for the plan. The Company recognizes pension expense equal to its allocation from AEGON. The pension expense is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits as a percent of salaries. The benefits are based on years of service and the employee’s compensation during the highest five consecutive years of employment. Pension expense allocated to the Company aggregated $1,442, $1,518 and $1,444 for the years ended December 31, 2010, 2009 and 2008, respectively. The plan is subject to the reporting and disclosure requirements of the Employee Retirement and Income Security Act of 1974.

The Company’s employees also participate in a defined contribution plan sponsored by AEGON which is qualified under Section 401(k) of the Internal Revenue Service Code. Employees of the Company who customarily work at least 1,000 hours during each calendar year and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to twenty-five percent of their salary to the plan. The Company will match an amount up to three percent of the participant’s salary. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement and Income Security Act of 1974. Expense related to this plan was $­­­­702, $736 and $793 for the years ended December 31, 2010, 2009 and 2008, respectively.












 
G-70
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

10. Retirement and Compensation Plans (continued)

AEGON sponsors supplemental retirement plans to provide the Company’s senior management with benefits in excess of normal pension benefits. The plans are noncontributory and benefits are based on years of service and the employee’s compensation level. The plans are unfunded and nonqualified under the Internal Revenue Code. In addition, AEGON has established incentive deferred compensation plans for certain key employees of the Company. The Company’s allocation of expense for these plans for 2010, 2009 and 2008 was insignificant. AEGON also sponsors an employee stock option plan/stock appreciation rights for employees of the Company and a stock purchase plan for its producers, with the participating affiliated companies establishing their own eligibility criteria, producer contribution limits and company matching formula. These plans have been funded as deemed appropriate by management of AEGON and the Company.

In addition to pension benefits, the Company participates in plans sponsored by AEGON that provide postretirement medical, dental and life insurance benefits to employees meeting certain eligibility requirements. Portions of the medical and dental plans are contributory. The postretirement plan expenses are charged to affiliates in accordance with an intercompany cost sharing arrangement. The Company expensed $192, $201 and $143 for the years ended 2010, 2009 and 2008, respectively.

11. Related Party Transactions

The Company shares certain officers, employees and general expenses with affiliated companies.

The Company is party to a Cost Sharing agreement between AEGON companies, providing for services needed.  The Company is also party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors, Inc. whereby the Advisor serves as the administrator and advisor for the Company’s mortgage loan operations by administering the day-to-day real estate and mortgage loan operations of the Company.  AEGON USA Investment Management, LLC acts as a discretionary investment manager under an Investment Management Agreement with the Company.  The Company provides office space, marketing and administrative services to certain affiliates. The net amount received by the Company as a result of being a party to these agreements was $18,600, $13,174 and $113 during 2010, 2009 and 2008, respectively. The Company has an administration service agreement with Transamerica Asset Management, Inc. to provide administrative services to the AEGON/Transamerica Series Trust.  The Company received $23,672, $21,446 and $30,230 from this agreement during 2010, 2009 and 2008, respectively.



 
G-71
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

11. Related Party Transactions (continued)

Receivables from and payables to affiliates and intercompany borrowings bear interest at the thirty-day commercial paper rate. At December 31, 2010, and 2009, the Company reported a net amount of $(7,123),  and $(4,361), respectively, due (to) from affiliates.  Terms of settlement require that these amounts are settled within 90 days.  During 2010, 2009 and 2008, the Company paid net interest of $38, $132 and $924, respectively, to affiliates.

At December 31, 2009 the Company had a short-term intercompany note receivable of $27,000 from AEGON due by September 29, 2010 at .25% interest.  In accordance with SSAP No. 25, Accounting for and Disclosures about Transactions with Affiliates and Other Related Parties, this note was reported on the balance sheet as a short-term investment. The note was repaid prior to its due date.

In prior years, the Company purchased life insurance policies covering the lives of certain employees of the Company from an affiliate. At December 31, 2010 and 2009, the cash surrender value of these policies was $71,167 and $68,798, respectively.

12. Commitments and Contingencies

The Company is a party to legal proceedings involving a variety of issues incidental to its business.  Lawsuits may be brought in nearly any federal or state court in the United States or in an arbitral forum.  In addition, there continues to be significant federal and state regulatory activity relating to financial services companies.  The Company’s legal proceedings are subject to many variables, and given its complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes include substantial demands for compensatory and punitive damages, and injunctive relief, it is management’s opinion that damages arising from such demands will not be material to the Company’s financial position or results of operations.



 
 
G-72
Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements – Statutory Basis (continued)
 (Dollars in Thousands)

12. Commitments and Contingencies (continued)

The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Company’s balance sheet. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Association. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for financial reporting purposes. The Company has established a reserve of $3,448 and $3,330 with no offsetting premium tax benefit at December 31, 2010 and 2009, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund expense was $95, $58 and $36 for 2010, 2009 and 2008, respectively.

The Company has contingent commitments of $1,151 and $1,056 at December 31, 2010 and 2009, respectively, for joint ventures, partnerships and limited liability companies, which includes commitments for LIHTC’s of $1,024 and $1,056, respectively, at December 31, 2010 and 2009.

The Company is required by the Commodity Futures Trading Commission (CFTC) to maintain assets on deposit with brokers for futures trading activity done on behalf of the Company.  The broker has a secured interest with priority in the pledged assets, however, the Company has the right to recall and substitute the pledged assets.  At December 31, 2010 and 2009 respectively, the Company pledged assets in the amount of $16,342 and $14,394 to satisfy the requirements of futures trading accounts.

13. Subsequent Events

The financial statements are adjusted to reflect events that occurred between the balance sheet date and the date when the financial statements are available to be issued, April 5, 2011, provided they give evidence of conditions that existed at the balance sheet date (Type I).  Events that are indicative of conditions that arose after the balance sheet date are disclosed, but do not result in an adjustment of the financial statements themselves (Type II).  As of April 5, 2011, the Company has not identified any Type I or Type II subsequent events for the year ended December 31, 2010.





 
WRL 2010 SEC (2)
 
G-73
 


 



Statutory-Basis Financial
Statement Schedules

WRL 2010 SEC (2)
 
G-74
 

Western Reserve Life Assurance Co. of Ohio

Summary of Investments – Other Than
Investments in Related Parties
 (Dollars in Thousands)

December 31, 2010

Schedule I

 (1)           Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accruals of discounts.

 
WRL 2010 SEC (2)
 
G-75
 

Western Reserve Life Assurance Co. of Ohio

Supplementary Insurance Information
(Dollars in Thousands)

Schedule III

 
*Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied.

 
WRL 2010 SEC (2)
 
G-76
 

 Western Reserve Life Assurance Co. of Ohio

Reinsurance
(Dollars in Thousands)

Schedule IV


 
WRL 2010 SEC (2)
 
G-77
 

APPENDIX A
 
Hypothetical In Force Illustration