-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CuX0M9EiYTDRkF6GvAeTvAJjPKQ+TfGAM5PB9zfAzJl9eA1Otc9M4374poUxWPTR xkaw0hOY1u8tHYe1kSSO7w== 0000890041-99-000003.txt : 19990226 0000890041-99-000003.hdr.sgml : 19990226 ACCESSION NUMBER: 0000890041-99-000003 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEPARATE ACCOUNT VA-2L OF TRANSAMERICA OCCIDENTAL LIFE INS C CENTRAL INDEX KEY: 0000890041 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 951060502 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 033-49998 FILM NUMBER: 99550328 BUSINESS ADDRESS: STREET 1: 1150 SOUTH OLIVE ST CITY: LOS ANGELES STATE: CA ZIP: 90015 BUSINESS PHONE: 2137424454 MAIL ADDRESS: STREET 1: 1150 S OLIVE ST CITY: LOS ANGELES STATE: CA ZIP: 90015 485APOS 1 FILING PURSUANT TO RULE 485(A). As filed with the Securities and Exchange Commission on February 25, 1999 Registration No. 33-49998 811-7042 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933|_| Pre-Effective Amendment No. |_| Post-Effective Amendment No. 10 |X| and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_| Amendment No. 12 |X| SEPARATE ACCOUNT VA-2L (Exact Name of Registrant) TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY (Name of Depositor) 1150 South Olive, Los Angeles, CA 90015 (Address of Depositor's Principal Executive Offices) Depositor's Telephone Number, including Area Code: (213) 742-2111 Name and Address of Agent for Service: Copy to: James W. Dederer, Esquire Frederick R. Bellamy, Esquire Executive Vice President, General Counsel and Sutherland, Asbill & Brennan, LLP Corporate Secretary 1275 Pennsylvania Avenue, N.W. Transamerica Occidental Life Insurance Co. Washington, D.C. 20004-2404 1150 South Olive Los Angeles, CA 90015 Approximate date of proposed sale to the public: As soon as practicable after effectiveness of the Registration Statement. Title of Securities being registered: Variable Annuity Contracts It is proposed that this filing will become effective: |_| immediately upon filing pursuant to paragraph (b) |_| on pursuant to paragraph (b) |_| 60 days after filing pursuant to paragraph (a)(i) |X| on May 1, 1999 pursuant to paragraph (a)(i) If appropropriate, check the following box: _____ This Post-Effective Amendment designates a new effective date for a previously filed Post-Effective Amendment. CROSS REFERENCE SHEET Pursuant to Rule 495 Showing Location in Part A (Prospectus), Part B (Statement of Additional Information) and Part C of Registration Statement Information Required by Form N-4 PART A
Item of Form N-4 Prospectus Caption 1. Cover Page............................................... Cover Page 2. Definitions.............................................. Definitions 3. Synopsis................................................. Summary 4. Condensed Financial Information.......................... Not Applicable 5. General (a) Depositor Transamerica Occidental Life Insurance Company; Additional Information about Transamerica Occidental Life Insurance Company; (b) Registrant The Variable Account (c) Portfolio Company The Funds (d) Fund Prospectus The Funds (e) Voting Rights Voting Rights 6. Deductions and Expenses.................................. (a) General Charges and Deductions (b) Sales Load % Contingent Deferred Sales Load (c) Special Purchase Plan Not Applicable (d) Commissions Distribution of the Contracts (e) Fund Expenses The Funds (f) Operating Expenses Variable Account Fee Table 7. Contracts (a) Persons with Rights The Contract; Cash Withdrawals; Death Benefit; Voting Rights (b) (i) Allocation of Premium Payments..................................... Allocation of Purchase Payments (ii) Transfers.................................... Transfers (iii) Exchanges.................................... Federal Tax Matters (c) Changes Addition, Deletion, or Substitution (d) Inquiries Summary; Available Information 8. Annuity Period........................................... Annuity Payments 9. Death Benefit............................................ Death Benefit 10. Purchase and Contract Balances (a) Purchases Contract Application and Purchase Payments (b) Valuation Participant Account Value (c) Daily Calculation Variable Accumulated Value (d) Underwriter Distribution of the Contracts 11. Redemptions (a) By Contract Owners Withdrawals; Systematic Withdrawal Option; Automatic Payout Option By Annuitant....................................... Not Applicable (b) Texas ORP Not Applicable (c) Check Delay Cash Withdrawals (d) Lapse Not Applicable (e) Free Look Definitions; Summary; Contract Application and ................................................... Purchase Payments 12. Taxes.............................................. Federal Tax Matters 13. Legal Proceedings.................................. Legal Proceedings 14. Table of Contents for the Statement of Additional Information................................... Statement of Additional Information Table of Contents PART B Item of Form N-4 Statement of Additional Information Caption 15. Cover Page......................................... Cover Page 16. Table of Contents.................................. Table of Contents 17. General Information and History.............................................. (Prospectus) Transamerica Occidental Life Insurance Company; (Prospectus) Additional Information About Transamerica Occidental Life Insurance Company 18. Services........................................... (a) Fees and Expenses of Registrant...................................... (Prospectus) Variable Account Fee Table; (Prospectus) The Funds (b) Management Contracts (Prospectus) Third Party Administration (c) Custodian Records and Reports; Safekeeping of Account Assets Independent Auditors ............................. (Prospectus) Accountants (d) Assets of Registrant Not Applicable (e) Affiliated Person Not Applicable (f) Principal Underwriter Not Applicable 19. Purchase of Securities Being Offered............................................ (Prospectus) The Contract Offering Sales Load...................................... (Prospectus) Contingent Deferred Sales Load 20. Underwriters....................................... (Prospectus) Distribution of the Contracts 21. Calculation of Performance Data..................................................... (Prospectus) Performance Data; Calculation of Yields and Total Returns 22. Annuity Payments................................... (Prospectus) Annuity Payments; Annuity Period 23. Financial Statements............................... Financial Statements PART C -- OTHER INFORMATION Item of Form N-4 Part C Caption 24. Financial Statements and Exhibits............................................. Financial Statements and Exhibits (a) Financial Statements Financial Statements (b) Exhibits Exhibits 25. Directors and Officers of the Depositor............................................ Directors and Officers of the Depositor 26. Persons Controlled By or Under Common Control with the Depositor or Registrant Persons Controlled By or Under Common Control with the Depositor or Registrant 27. Number of Contract Owners.......................... Number of Contract Owners 28. Indemnification.................................... Indemnification 29. Principal Underwriters............................. Principal Underwriters 30. Location of Accounts and Records.............................................. Location of Accounts and Records 31. Management Services................................ Management Services 32. Undertakings....................................... Undertakings Signature Page........................................... Signature Page
1 PROFILE OF THE DREYFUS/TRANSAMERICATRIPLE ADVANTAGE(R)VARIABLE AND FIXED ANNUITY Issued by TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY May 1, 1999 This Profile is a summary of some of the more important points that you should know and consider before purchasing a Contract. The Contract is more fully described in the full Prospectus which accompanies this Profile. Please read the Prospectus carefully. 1. The Annuity Contract. The Dreyfus/Transamerica Triple Advantage is a contract between you and Transamerica Occidental Life Insurance Company with both "variable" and "guaranteed" investment options. In the Contract, you can invest, in your choice of eighteen Sub-Accounts corresponding to eighteen funds ("Portfolios") in the Variable Account or in the Guaranteed Periods of the Fixed Account from Transamerica. You could gain or lose money you invest in the Portfolios, but you could also earn more than investing in the Fixed Account options. Transamerica guarantees the safety of money invested in the Fixed Account options. The Fixed Account and some of the Portfolios may not be available in all states. The Contract is a deferred annuity, which means it has two phases: the accumulation phase and the annuity phase. During the accumulation phase you can make additional purchase payments to the Contract, transfer your money among the investment options, and withdraw some or all of your investment. During this phase earnings accumulate on a tax-deferred basis for individuals, but if you withdraw money some or all of it may be taxable. Tax deferral is not available for corporations and some trusts. During the annuity phase Transamerica will make periodic payments to you. The dollar amount of the payments may depend on the amount of money invested and earned during the accumulation phase (and other factors, such as age and sex). 2. The Annuity Payments. You can generally decide when to end the accumulation phase and begin receiving annuity payments from Transamerica. You can choose fixed annuity payments, where the dollar amount of each payment generally stays the same, or variable payments that go up or down in dollar amount based on the investment performance of the Portfolios you select. You can choose among payments for the lifetime of an individual, or payments for the longer of one lifetime or a guaranteed period of 10, 15, or 20 years, or payments for one lifetime and the lifetime of another individual. 3. Purchasing a Contract. Generally, you must invest at least $5,000 to purchase a Contract, and then you can make more investments of at least $500 each ($100 each if made under the automatic payment plan and deducted from your bank account). You may cancel your Contract during the Free Look Period. This right is explained in item 10 on page 4 of this Profile. The Triple Advantage variable annuity is designed for long-term tax-deferred accumulation of assets, generally for retirement or other long-term goals. Individuals in high tax brackets get the most benefit from the tax deferral feature. You should not make an investment in the Contract for short-term purposes or if you cannot take the risk of losing some of your investment. 4. Investment Options. VARIABLE ACCOUNT: You can invest in any of the Sub-Accounts corresponding to the following eighteen Portfolios:
Money Market Capital Appreciation International Value Transamerica Growth Special Value Stock Index Disciplined Stock Core Value Zero Coupon 2000 Socially Responsible Growth Small Company Stock MidCap Stock Quality Bond Growth and Income Balanced Small Cap International Equity Limited Term High Income
These Portfolios are described in their own prospectuses. You can earn or lose money in any of these Portfolios. All Portfolios may not be available in all states. FIXED ACCOUNT: In most states, you can also invest in a Fixed Account option, where Transamerica guarantees the principal invested plus at least 3% annual interest. 5. Expenses. The Contract provides many benefits and features that you do not get with a regular mutual fund. It costs Transamerica money to provide these benefits, so there are charges in connection with this Contract. If you withdraw your money within seven years of investing it, there may be a withdrawal charge of up to 6% of the amount invested. Once each Contract Year we deduct an Account Fee of no more than $30 (there is no fee if your Account Value is over $50,000). Insurance and administrative charges of 1.40% per year are charged against your average daily value in the Variable Account and a $10 fee for transfers over 18 in one year. Advisory fees are also deducted by the Portfolios' manager, and the Portfolios pay other expenses which, in total, vary from 0. 28% to 1.42% per year of the amounts in the Portfolios. Finally, there might be premium taxes ranging from 0 to 3.5% of your investment and/or on amounts you use to purchase annuity benefits (depending on your state's law). The following chart shows these charges (except transfer fees premium taxes). The $30 annual Account Fee is not included in the first column because the fee is waived for Account Values over $50,000 and the approximate average Account Value is over $50,000. The third column is the sum of the first two. The examples in the last two columns show the total amounts you would be charged, in dollars, if you invested $1000, the investment grew 5% each year, and you withdrew your entire investment after one year or ten years. Year one includes the withdrawal charge and year ten does not.
EXAMPLES: Annual Annual Total Expenses Total Expenses Portfolio/ Insurance Portfolio Total Annual at end of at end of Sub-Account Charges Charges Charges One Year Ten Years - ----------- ------- ------- ------- -------- --------- Money Market 1.40% 0.61% 2.01% $74.40 $233.76 Special Value 1.40% 0.99% 2.39% $78.21 $272.63 Zero Coupon 2000 1.40% 0.61% 2.01% $74.40 $233.76 Quality Bond 1.40% 0.75% 2.15% $75.81 $248.27 Small Cap 1.40% 0.78% 2.18% $76.11 $251.35 Capital Appreciation 1.40% 0.80% 2.20% $76.31 $253.39 Stock Index 1.40% 0.28% 1.68% $71.08 $198.70 Socially Responsible 1.40% 0.82% 2.22% $76.51 $255.44 Growth and Income 1.40% 0.80% 2.20% $76.31 $253.39 International Equity 1.40% 1.06% 2.46% $78.91 $279.62 International Value 1.40% 1.42% 2.82% $82.51 $314.73 Disciplined Stock 1.40% 1.02% 2.42% $78.51 $275.63 Small Company 1.40% 1.12% 2.52% $79.51 $285.56 Balanced 1.40% 1.00% 2.40% $78.31 $273.63 Limited Term High Income 1.40% 0.89% 2.29% $77.21 $262.55 Transamerica Growth 1.40% 0.85% 2.25% $76.84 $261.67 CoreValue 1.40% 1.00% 2.40% $78.36 $279.12 MidCap Stock 1.40% 1.00% 2.40% $78.36 $279.12
The Annual Portfolio Charges above are for 1998 and do not reflect expense reimbursements or fee waivers, except for the Limited Term High Income and Transamerica Growth Portfolios. Expenses may be higher or lower in the future. See the Variable Account Fee Table on page 12 of the Triple Advantage prospectus for more detailed information. 6. Federal Income Taxes. Individuals generally are not taxed on increases in the contract value until a distribution occurs (e.g., a withdrawal or annuity payment) or is deemed to occur (e.g., a pledge, loan, or assignment of the contract). If you withdraw money, earnings come out first and are taxed. Generally, some portion (sometimes all) of any distribution or deemed distribution is taxable as ordinary income. In some cases, income taxes will be withheld from distributions. If you are under age 59 1/2 when you withdraw money, an additional 10% federal tax penalty may apply on the withdrawn earnings. Certain owners that are not individuals may be currently taxed on increases in the contract, whether distributed or not. 7. Access to Your Money. You can generally take money out at any time during the accumulation phase. A withdrawal charge of up to 6% of a purchase payment may be assessed by Transamerica, but no withdrawal charge will be assessed on money that has been in the Contract for seven years. In certain cases, the withdrawal charge may be waived if you are in a hospital or nursing home for a long period or, in some states, if you are diagnosed with a terminal illness. After the first Contract Year, for only the first withdrawal in a Contract Year, you may withdraw the greater of accumulated earnings or 15% of Purchase Payments received at least one but less than seven years ago. Additionally, at any time you can withdraw accumulated earnings on your purchase payments not previously withdrawn without a withdrawal charge. (See Page 33 of the prospectus for a more detailed discussion.) You may have to pay income taxes on amounts you withdraw and there may also be a 10% tax penalty if you make withdrawals before you are 59 1/2 years old. If you withdraw money from the Fixed Account option prematurely, you will generally forfeit some of the interest that you earned, but you will always receive the principal you invested plus 3% interest. 8. Past Investment Performance. The value of the money you allocate to the Sub-Account(s) will go up or down, depending on the investment performance of the Portfolios you pick. The following chart shows the past investment performance on a year by year basis for each Sub-Account. These figures have already been reduced by the insurance charges, the account fee, the fund manager's fee and all the expenses of the mutual fund portfolio, but these figures do not include the withdrawal charge, which would reduce performance if it applied. Remember, past performance is no guarantee of future performance or earnings.
CALENDAR YEAR PORTFOLIO/ SUB-ACCOUNT 1997 1996 1995 1994 1993 1992 1991 1990 - ----------- ---- ---- ---- ---- ---- ---- ---- ---- Money Market(1) 3.66% 3.53% 4.21% 3.00% 1.86% 2.71% 4.54% N/A Special Value(1) 21.36% (5.67%) (0.48%) (3.48%) 26.74% (0.41%) 8.99% N/A Zero Coupon 2000(1) 5.45% 1.10% 16.35% (5.41%) 13.52% 7.29% 17.14% 6.28% Quality Bond(1) 7.83% 1.63% 18.91% (6.17%) 13.66% 10.45% 12.47% N/A Small Cap(1) 15.06% 15.06% 28.84% 4.95% 65.77% 68.98% 156.07% N/A Capital Appreciation(2) 26.21% 22.71% 32.82% 1.45% N/A N/A N/A N/A Stock Index(3) 31.05% 19.80% 35.92% (0.60%) 7.75% 5.55% 27.98% (6.52%) Socially Responsible(4) 26.59% 19.00% 33.67% (0.08%) N/A N/A N/A N/A Growth and Income(5) 14.53% 18.63% 59.58% N/A N/A N/A N/A N/A International Equity(5) 8.02% 9.82% 6.62% N/A N/A N/A N/A N/A International Value(6) 7.13% N/A N/A N/A N/A N/A N/A N/A Disciplined Stock(6) 29.62% N/A N/A N/A N/A N/A N/A N/A Small Company Stock(6) 20.01% N/A N/A N/A N/A N/A N/A N/A Balanced Limited Term High Income Transamerica Growth(7) 50.34% 26.63% 53.02% 7.71% 27.73% 13.58% 41.47% (12.58%) Core Value MidCap Stock
12-15-94fo (7)Portfolio Inception 2-26-69ortfolio Inception 9-29-89 (5) Portfolio Inception (2) Portfolio Inception 4-5-93 (4) Portfolio Inception 10-7-93 (6) Portfolio Inception 5-1-96 Data is for full years only. The figures for the Money Market, Special Value, Zero Coupon 2000, Quality Bond, Small Cap, Stock Index and Transamerica Growth Sub-Accounts include data for periods before the Sub-Accounts commenced operations, based on the actual performance of the corresponding Portfolios since they commenced operations. 9. Death Benefit. If you or the Annuitant die during the accumulation phase, the beneficiary is guaranteed by Transamerica to receive a death benefit of at least the amount you invested (less any amounts you have already withdrawn), even if your investment has lost money because of the investment performance of the Portfolios you picked. The death benefit will be the greatest of: (1), the Account Value; (2) a seven-year step-up death benefit, which is the highest Account Value on the most recent seven year anniversary of your purchase of the Contract (adjusted for additional investments and any withdrawals since that anniversary less premium taxes applicable to those withdrawals); or (3) your investments, less withdrawals and any premium taxes applicable to that withdrawal, compounded at 5% annual effective interest (the 5% interest stops when you, your joint Owner, or the Annuitant reaches age 75, or when it has doubled the amount of your investment, whichever is earlier). 10. Other Information. The Contract offers other features you might be interested in. These features may not be available in all states and may not be suitable for your particular situation. Some of these features include: FREE LOOK. After you get your Contract, you have ten days to look it over and decide if it is really right for you (this period may be longer in certain states). If you decide not to keep the Contract, you can cancel it during this period, and you will get back the amount of your investment that you allocated to the Fixed Account and the current value of the amounts you allocated to the Variable Account (without any withdrawal charges). Certain laws may require that if you cancel during this period, you are entitled to get back the greater of your full investment or the Account Value. If one of these laws apply, then during this "free look" period your investment allocated to the Variable Account, may be placed in the Money Market Portfolio (depending upon the state in which the Contract is sold). TELEPHONE TRANSFERS. You can generally arrange to transfer money between the investments in your contract by telephone. DOLLAR COST AVERAGING. You can instruct Transamerica to automatically transfer amounts from the Purchase Payments you allocated to the Money Market, Limited Term High Income or Quality Bond Sub-Accounts, or possibly from another Sub-Account or a Guarantee Period of the Fixed Account, to any of the other Sub-Accounts each month. Dollar Cost Averaging is intended to give you a lower average cost per share or unit than a single, one time investment, but it does not assure a profit or protect against loss and is intended to continue for some time. AUTOMATIC ASSET REBALANCING. The performance of each Sub-Account may cause the allocation of value among the Sub-Accounts to change. You may instruct Transamerica to periodically automatically rebalance the amounts in the Sub-Accounts by reallocating amounts among them. SYSTEMATIC WITHDRAWAL OPTION. You can arrange to have Transamerica send you money automatically each month out of your Contract during the accumulation phase. There are limits on the amounts, but the withdrawal charge will not apply (the payments may be taxable and subject to the penalty tax if you are under age 59 1/2). AUTOMATIC PAYOUT OPTION. If you have certain Qualified Contract (for example: a non-Roth IRA), you can arrange to have the minimum distributions required by the IRS to be automatically paid to you. 11. INQUIRIES. You can get more information and have your questions answered by writing or calling: Transamerica Annuity Service Center P.O. Box 31848 Charlotte, North Carolina 28231-1848 800-258-4260 PROSPECTUS FOR THE Dreyfus/Transamerica Triple Advantage(r) Variable Annuity A Flexible Purchase Payment Deferred Variable Annuity Issued By Transamerica Occidental Life Insurance Company Offering 18 Sub-Accounts within the Variable Account Designated as Separate Account VA-2L In Addition to: A Fixed Account * This prospectus contains information you should Variable Account Options Money Market know before investing. Special Value Zero Coupon 2000 Quality Bond * Please keep this prospectus Small Cap for future reference. Capital Appreciation Stock Index * You can obtain more information about the contract by requesting a copy of the Statement of Additional Information or SAI dated May 1, 1999. The SAI is Growth and Income International Equity International Value Disciplined Stock available free by writing to Transamerica Occidental Life Insurance Company, Annuity Service Center, P.O. Box 31848, Charlotte, NC 28231-1848 or by calling 800-258-4260. Small Company Stock Balanced Limited Term High Income Portfolios of Dreyfus Variable Investment Fund Dreyfus Stock Index Fund The Dreyfus Socially Responsible Growth Fund, Inc. Core Value and MidCap Stock Portfolios of Dreyfus Investment Portfolios Growth Portfolio of Transamerica Variable Insurance Fund, Inc. The current SAI has been filed with the Securities and Exchange Commission and is incorporated by reference into this prospectus. The table of contents of the SAI is included on page _____ of this prospectus. * The SEC's web site is http://www.sec.gov * Transamerica's web site is http://www.transamerica.com Neither the SEC nor any state securities commission has approved this investment offering or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. May 1, 1999 TABLE OF CONTENTS Page SUMMARY 6 PERFORMANCE DATA 15 TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND THE VARIABLE ACCOUNT 16 Transamerica Occidental Life Insurance Company 16 Published Ratings 16 The Variable Account 16 THE FUNDS 17 Addition, Deletion or Substitution 20 THE FIXED ACCOUNT 20 THE CONTRACT 21 CONTRACT APPLICATION AND PREMIUMS 21 Purchase Payments 21 Allocation of Purchase Payments 22 Investment Option Limit 22 ACCOUNT VALUE 22 TRANSFERS 23 Before the Annuity Date 23 Possible Restrictions 23 Dollar Cost Averaging 23 Automatic Asset Rebalancing 24 After the Annuity Date 24 CASH WITHDRAWALS 24 Withdrawals 24 Systematic Withdrawal Option 25 Automatic Payout Option 26 DEATH BENEFIT 26 Payment of Death Benefit 26 Designation of Beneficiaries 26 Death of Annuitant Prior to the Annuity Date 27 Death of Owner Prior to the Annuity Date 27 Death of Annuitant or Owner After the Annuity Date 27 CHARGES AND DEDUCTIONS 27 Contingent Deferred Sales Load 27 Administrative Charges 28 Mortality and Expense Risk Charge 28 Purchase Payment Taxes 29 Transfer Fee 29 Systematic Withdrawal Option 29 Taxes 29 Portfolio Expenses 29 Sales in Special Situations 29 ANNUITY PAYMENTS 30 Annuity Date 30 Annuity Payment 30 Election of Annuity Forms and Payment Options 30 Annuity Payment Options 30 Fixed Annuity Payment Option 31 Variable Annuity Payment Option 31 Annuity Forms 31 Alternate Fixed Annuity Rates 32 QUALIFIED CONTRACTS 32 Automatic Payout Option 32 Restrictions under 403(b) Programs 33 FEDERAL TAX MATTERS 33 Introduction 33 Purchase Payments 33 Taxation of Annuities 34 Qualified Policies 36 Possible Change in Taxation 37 Other Tax Consequences 37 DISTRIBUTION OF THE CONTRACT 38 PREPARING FOR THE YEAR 2000 38 LEGAL PROCEEDINGS 38 LEGAL MATTERS 38 ACCOUNTANTS 38 VOTING RIGHTS 39 AVAILABLE INFORMATION 39 APPENDIX A 41 Statement of Additional Information - Table of Contents 41 APPENDIX B 41 Example of Variable Accumulation Unit Value Calculations 41 Example of Variable Annuity Unit Value Calculations 41 Example of Variable Annuity Payment Calculations 41 APPENDIX C 41 Definitions 41 APPENDIX D 41 Condensed Financial Information 41 SUMMARY You will find a list of definitions of the terms used in this prospectus in Appendix C on page 44. The Contract We designed the flexible premium deferred variable annuity, the contract, described in this prospectus to aid individuals in long-term financial planning for retirement or other purposes. You may use the contract: * with non-qualified plans; * as an individual retirement annuity that qualifies for special tax treatment under Code Section 408 and whose initial purchase payment is a rollover or transfer from a qualified retirement plan receiving special tax treatment under Code Sections 401(a), 403(b) and 408, a rollover IRA; or * as an individual retirement annuity that qualifies for special tax treatment under Code Section 408A and whose initial purchase payment is a rollover, transfer or conversion from other individual retirement plans issued under Sections 408 or 408A of the Code, a rollover Roth IRA. Additionally, with Transamerica's prior permission, you may use the contract: * as an IRA or Roth IRA whose initial purchase payment is limited to the contribution limitations of the Code with respect to contributory IRAs or contributory Roth IRAs under Sections 408 or 408A of the Code; * as an annuity under Section 403(b) of the Code; and * with various types of qualified pension and profit-sharing plans under Section 401(a) of the Code. The Issuer The contract is issued by Transamerica Occidental Life Insurance Company, Transamerica, a wholly-owned subsidiary of Transamerica Insurance Corporation of California, which in turn is a direct subsidiary of Transamerica Corporation. Our principal office is at 1150 South Olive Street, Los Angeles, California 90015, telephone 213-742-2111. We will issue the contract as a certificate under a group annuity contract in some states and as an individual annuity contract in other states. This contract is not available in all states. This prospectus does not offer the sub-accounts or the fixed account in any jurisdiction where they are not allowed to be sold. We do not authorize any dealer, salesman or other person to give information or make representations not contained in this prospectus. You should not rely on any information or representation that is not in this prospectus. Account Value We will establish and maintain an account for each individual annuity contract and for each certificate issued under a group contract. You, as owner, will receive either an individual annuity contract, or a certificate evidencing your coverage under a group annuity contract. Prior to the annuity date, the account value will depend on the investment experience of each sub-account of the variable account selected by the owner. This does not apply to the fixed account. All payments and values provided under the contract when based on the investment experience of the variable account are variable and are not guaranteed as to dollar amount. Therefore, prior to the annuity date you, as the owner, bear the entire investment risk for amounts you allocate to the variable account. There is no guaranteed or minimum cash surrender value, so the proceeds of a surrender could be less than the total purchase payments. Initial Purchase Payment The initial purchase payment for each contract must generally be at least $5,000. We will waive this minimum if the contract is sold as a qualified contract to certain retirement plans. Generally, each additional purchase payment must be at least $500. We will waive this minimum if you select an automatic payment plan. In no event, however, may the total of all purchase payments under a contract exceed $1,000,000 without our prior approval. The minimum net purchase payment that you may allocate to an sub-account with no current allocations is $500. The minimum amount that you can allocate to a new guarantee period is $1,000. See Contract Application and Purchase Payments on page 21. The Variable Account The variable account is a separate account, designated as Separate Account VA-2L, divided into sub-accounts. Assets of each sub-account are invested in a specified mutual fund portfolio. Each sub-account uses its assets to purchase, at their net asset value, shares of a specific series or portfolio of the following funds: * Dreyfus Variable Investment Fund; * Dreyfus Investment Portfolios; * Growth Portfolio of Transamerica Variable Insurance Fund, Inc.; * Dreyfus Stock Index Fund; or * The Dreyfus Socially Responsible Growth Fund, Inc. The Sub-Accounts The following eighteen sub-accounts are currently available for investment in the variable account: * Money Market * Special Value * Zero Coupon 2000 * Quality Bond * Small Cap * Capital Appreciation * Stock Index * Socially Responsible Growth * Growth and Income * International Equity * International Value * Disciplined Stock * Small Company Stock * Balanced * Limited Term High Income * Transamerica Growth * Core Value * MidCap Stock Each portfolio has distinct investment objectives and policies. These are described in the accompanying prospectuses for the funds. The funds pay their investment adviser and administrators certain fees charged against the assets of each portfolio. The account value, if any, and the amount of any variable annuity payments will vary to reflect the investment performance of all of the sub-accounts you select and the deduction of the charges. See Charges and Deductions on page 27. Each portfolio has distinct investment objectives and policies, which are described in the accompanying prospectuses for the funds. See Charges and Deductions on page 27. For more information about the funds see The Funds on page 17 and the accompanying fund's prospectuses. The Fixed Account Each amount you initially allocate or transfer to the fixed account will establish a new guarantee period. Each guarantee period will have its own guaranteed interest rate with its own expiration date. The minimum interest rate will be 3% per year. You must allocate at least $1,000 to a new guarantee period. If you withdraw or transfer amounts from a guarantee period prior to its expiration date, you will generally be subject to an interest adjustment. This will reduce the interest credited to the amount withdrawn to 3%, which is the minimum annual rate. Investment Option Limit Currently, you may not elect more than a total of eighteen investment options over the life of the contract. Investment options include sub-accounts of the variable account and the fixed account. Transfers Before the Annuity Date Prior to the annuity date, you may make transfers between and among the sub-accounts and the guarantee periods of the fixed account. A "transfer" is the reallocation of amounts between the guaranteed periods of the fixed account and the sub-accounts, among the guarantee periods of the fixed account, and among sub-accounts. We charge a fee of $10 for each transfer in excess of 18 per contract year. We exclude transfers under certain programs, which will not count towards the 18 free transfers per contract year. If you transfer amounts from a guarantee period prior to its expiration date, it will generally be subject to an interest adjustment. This will reduce the interest credited to 3%, the minimum annual rate. Withdrawals You may withdraw all or part of the cash surrender value on or before the annuity date. However, amounts you withdraw may be subject to a contingent deferred sales load, depending on how long the withdrawn purchase payments have been held under the contract. Amounts you withdraw may be subject to a premium tax or similar tax, depending upon the state in which the you live. Withdrawals may further be subject to any federal, state or local income tax, and a penalty tax. Withdrawals from qualified contracts may be subject to severe restrictions. Except for rollover IRA's, qualified contracts are sold only with Transamerica's prior permission. We will generally deduct the annual account fee on a full surrender of a contract. We will permit only one, and in some states no, partial withdrawal while the systematic withdrawal option is in effect. If you transfer amounts from a guarantee period prior to its expiration date, it will generally be subject to an interest adjustment. This will reduce the interest credited to 3%, the minimum annual rate. See Cash Withdrawals on page 24. The Contingent Deferred Sales Load Transamerica does not deduct a sales charge from purchase payments, although we may deduct premium taxes. However, if any part of the account value is withdrawn, a contingent deferred sales load of up to 6% of purchase payments withdrawn may be assessed by Transamerica to cover certain expenses relating to the sale of the contracts, including commissions to registered representatives and other promotional expenses. Transamerica guarantees that the total contingent deferred sales load will never exceed 6% of the purchase payments. After we have held a purchase payment for seven contract years, you, as the owner, may withdraw the remaining purchase payment without a contingent deferred sales load. You may make withdrawals up to the allowed amount described below without incurring a contingent deferred sales load each contract year before the annuity date. The allowed amount is equal to: * during the first contract year, the accumulated earnings not previously withdrawn; * after you have held your contract for at least one full contract year, for the first withdrawal, and only the first withdrawal, the sum of 1 100% of purchase payments not previously withdrawn and received at least seven contract years before the date of withdrawal; plus, 2 the greater of a) the accumulated earnings not previously withdrawn; or, b) 15% of purchase payments received at least one but less than seven complete contract years before the date of withdrawal not reduced to take into account any withdrawals deemed to be made from such purchase payments. * after the first contract year, after the first withdrawal in a contract year, the sum of 1 100% of purchase payments not previously withdrawn and received at least seven complete contract years before the date of withdrawal; plus, 2 accumulated earnings not previously withdrawn. Withdrawals will always be made first from accumulated earnings, and then from purchase payments on a first-in, first-out basis. So, accumulated earnings could be withdrawn as part of the first withdrawal in a contract year and, therefore, not be available for withdrawals made later that contract year. The accumulated earnings, if any, in your account value are always available as the allowed amount. You cannot withdraw any purchase payment deposited by check until that check clears. We will waive the contingent deferred sales load on a withdrawal if the owner is confined to a hospital or nursing care facility for 45 days (30 days in Pennsylvania) out of a continuous 60 day period, and if other conditions are met. Additionally, we will waive the contingent deferred sales load in some states if the owner is diagnosed with a terminal illness after the first contract year. The illness must reasonably be expected to result in death within twelve months. See Contingent Deferred Sales Load on page 27 and Cash Withdrawals on page 24. Other Charges and Deductions We deduct a daily charge referred to as the Mortality and Expense Risk Charge. This charge is equal to a percentage of the value of the net assets in the variable account for the mortality and expense risks assumed. The effective annual rate of this charge is 1.25% of the value of the net assets in the variable account attributable to your contract. See Mortality and Expense Risk Charge on page 28. We guarantee that this mortality and expense risk charge will not be increased. Transamerica also deducts a daily charge referred to as the Administrative Expense Charge equal to a percentage of the value of the net assets in the variable account corresponding to an effective annual rate of 0.15% to help cover some of the costs of administering the contract and the variable account. This charge may change, but it is guaranteed not to exceed a maximum effective annual rate of 0.25%. See Administrative Charges on page 28. There is also an administrative charge each year for contract maintenance referred to as the Account Fee. This fee is currently $30, or 2% of the account value, if less. It will not be assessed for contract years in which the account value exceeds $50,000 on the last business day of the contract year or as of the date the contract is surrendered. We will deduct the account fee at the end of the contract year or when you surrender the contract, if earlier. We may change the account fee for any contract year. But we guarantee it will not exceed the lesser of $60 or 2% of the account value. After the annuity date this fee is referred to as the annuity fee. The annuity fee is $30 and will not change. Currently we impose no fee for the systematic withdrawal option. But we reserve the right to charge for this option in the future. A $10 charge is imposed for each transfer in excess of eighteen during a contract year. See Transfer Fee on page 29. Charges for state premium taxes, including retaliatory premium taxes will be imposed in some states. Depending on the applicability of such state taxes, we could deduct the charges from premiums, from amounts withdrawn, and/or from the annuity purchase amount upon annuitization. See Premium Taxes on page 38. In addition, if you withdraw or transfer amounts out of a guarantee period of the fixed account prior to its expiration date, it will generally be subject to an interest adjustment. This will reduce the interest earned on that amount to 3%, the minimum annual rate. Variable Account Fee Table The purpose of this table is to help you understand the various costs and expenses that the owner will bear directly and indirectly. The table reflects expenses of the variable account as well as of the portfolios. The table assumes that the entire account value is in the variable account. The information set forth should be considered together with the narrative provided under the heading Charges and Deductions on page 27 of this prospectus, and with the funds' prospectuses. In addition to the expenses listed below, premium taxes may be applicable. Contract Transaction Expenses(1) Sales Charge Imposed on Purchase Payments 0 Maximum Contingent deferred sales load(2) 6% Range of Contingent Deferred Sales Load Over Time Contract Years Since Purchase Payments Receipt Contingent Deferred Sales Load Less than 2 years 6% 2 years but less than 4 years 5% 4 years but less than 6 years 4% 6 years but less than 7 years 2% 7 or more 0% Other Contract Expenses Transfer Fee (first 18 per Contract Year)3 0 Systematic Withdrawal Fee 0 Account Fee4 $30 Variable Account Annual Expenses1 Mortality and Expense Risk Charges 1.25% Adminitrative Expense Charge5 0.15% Other Fees and Expenses of the Variable Account 0.00% Total Variable Account Annual Expenses 1.40% Portfolio Annual Expenses (as a percentage of assets after fee waiver and/or expense reimbursement)(6) Portfolios Management Fee Other Expenses Total Portfolio Annual Expense Money Market 0.50% 0.11% 0.61% Special Value 0.75% 0.24% 0.99% Zero Coupon 2000 0.45% 0.16% 0.61% Quality Bond 0.65% 0.10% 0.75% Small Cap 0.75% 0.03% 0.78% Capital Appreciation 0.75% 0.05% 0.80% Stock Index Fund 0.25% 0.03% 0.28% Socially Responsible Growth Fund 0.75% 0.07% 0.82% Growth and Income 0.75% 0.05% 0.80% International Equity 0.75% 0.31% 1.06% International Value 1.00% 0.42% 1.42% Disciplined Stock 0.75% 0.27% 1.02% Small Company Stock 0.75% 0.37% 1.12% Balanced 0.75% 0.25% 1.00% Limited Term High Income 0.65% 0.24% 0.89% Transamerica Growth 0.75% 0.10% 0.85% Core Value 0.75% 0.25% 1.00% MidCap Stock 0.75% 0.25% 1.00% Expense information regarding the portfolios has been provided by the funds. Transamerica has no reason to doubt the accuracy of the information, but has not verified those figures. In preparing the table above and the examples that follow, Transamerica has relied on the figures provided by the funds. These figures are for the year ended December 31, 1998. Actual expenses in future years may be higher or lower than the figures above. Notes to Fee Table: 1. The contract transaction expenses apply to each contract, regardless of how account value is allocated between the variable account and the fixed account. The variable account annual expenses do not apply to the fixed account. 2. You may withdraw a portion of the purchase payments each year after the first contract year without any contingent deferred sales load, or CDSL. After we have held a purchase payment for seven contract years, you may withdraw the remaining purchase payments without any contingent deferred sales load. You may always withdraw accumulated earnings without a CDSL. 3. We will charge a transfer fee of $10 for each transfer in excess of 18 in a contract year. We may also charge a fee of up to $25 per year if you elect the systematic withdrawal option. 4. The current annual account fee per contract year is the lesser of $30 or 2% of the account value. We may change the fee annually, but it will not exceed the lesser of $60, or 2% of the account value. The current annual administrative expense charge is 0.15%. We may increase it to 0.25%. 5. From time to time, each portfolio's investment adviser, in its sole discretion, may waive all or part of its fees and/or voluntarily assume certain portfolio expenses. The expenses shown in the above portfolio annual expenses table reflect the portfolio's adviser's waiver of fees or reimbursement of expenses, if applicable, for calendar year 1998. We anticipate that such waivers and reimbursements will continue for calendar year 1999. Without such waivers or reimbursements, the management fee, other expenses and total portfolio annual expenses for 1998 would have been, as a percentage of assets, _____%, ____% and _____% for Transamerica Growth Portfolio and _____%, ______%, and _____% for Limited Term High Income Portfolio, respectively. Examples* * The following three examples reflect no account fee deduction because the approximate average account value is more than $50,000. The account fee is waived for account values over $50,000. The examples assume that the entire account value is allocated to the variable account. * These examples all assume that no transfer fees, systematic withdrawal fee or premium tax have been assessed. Purchase Payment taxes may be applicable. See Purchase Payment Taxes on page 29. * These examples show expenses without reflecting fee waivers and reimbursements for 1998. Except for the Limited Term High Income and Transamerica Growth Portfolios, it is not anticipated that there will be any fee waivers or expense reimbursements in the future. Example 1 If you surrender the contract at the end of the applicable time period, you would pay the following expenses on a $1,000 initial purchase payment assuming a 5% annual return on assets: Variable Sub-Accounts 1 Year 3 Years 5 Years 10 Years Money Market $71.40 $105.05 $141.94 $233.76 Special Value $75.21 $117.05 $161.55 $272.63 Zero Coupon 2000 $71.40 $105.55 $141.94 $233.76 Quality Bond $72.81 $109.80 $149.39 $248.27 Small Capital $73.11 $110.71 $150.95 $251.35 Capital Appreciation $73.31 $111.32 $151.96 $253.39 Stock Index $68.08 $ 95.46 $124.16 $198.70 Socially Responsible Growth $73.51 $111.92 $152.98 $255.44 Growth Income $73.31 $111.32 $151.96 $253.39 International Equity $75.91 $119.15 $165.05 $279.62 International Value $79.51 $129.90 $182.89 $314.73 Disciplined Stock $75.51 $117.95 $163.05 $275.63 Small Company Stock $76.51 $120.95 $168.05 $285.56 Balanced Fund $75.31 $117.35 $162.05 $273.63 Limited Term High Income $74.21 $114.03 $156.51 $262.55 Transamerica Growth Fund $73.84 $113.08 $154.87 $261.67 Core Value $75.36 $117.78 $162.95 $279.12 MidCap Stock $75.36 $117.78 $162.95 $279.12 Example 2 If you do not surrender and you do not annuitize the contract, you would pay the following expenses on a $1,000 initial purchase payment assuming a 5% annual return on assets: Variable Sub-Accounts 1 Year 3 Years 5 Years 10 Years Money Market $20.40 $63.05 $108.29 $233.76 Special Value $24.21 $74.55 $127.55 $272.63 Zero Coupon 2000 $20.40 $63.05 $108.29 $233.76 Quality Bond $21.81 $67.30 $115.43 $248.27 Small Capital $22.11 $68.21 $116.95 $251.35 Capital Appreciation $22.31 $68.82 $117.96 $253.39 Stock Index $17.08 $52.96 $91.26 $198.70 Socially Responsible Growth $22.51 $69.42 $118.98 $255.44 Growth Income $22.31 $68.82 $117.96 $253.39 International Equity $24.91 $76.65 $131.05 $279.62 International Value $28.51 $87.40 $148.89 $314.73 Disciplined Stock $24.51 $75.45 $129.05 $275.63 Small Company Stock $25.51 $78.45 $134.05 $285.56 Balanced Fund $24.31 $74.85 $128.05 $273.63 Limited Term High Income $23.21 $71.53 $122.51 $262.55 Transamerica Growth Fund $22.84 $70.58 $121.22 $261.67 Core Value $24.36 $75.28 $129.30 $279.12 MidCap Stock $24.36 $75.28 $129.30 $279.12 Example 3 If you elect to annuitize at the end of the applicable period under an annuity form with life contingencies,** you would pay the following expenses on a $1,000 initial purchase payment assuming a 5% annual return on assets: Variable Sub-Accounts 1 Year 3 Years 5 Years 10 Years Money Market $71.40 $63.05 $108.29 $233.76 Special Value $75.21 $74.55 $127.55 $272.63 Zero Coupon 2000 $71.40 $63.05 $108.29 $233.76 Quality Bond $72.81 $67.30 $115.43 $248.27 Small Capital $73.11 $68.21 $116.95 $251.35 Capital Appreciation $73.31 $68.82 $117.96 $253.39 Stock Index $68.08 $52.96 $91.26 $198.70 Socially Responsible. Growth $73.51 $69.42 $118.98 $255.44 Growth Income $73.31 $68.82 $117.96 $253.39 International Equity $75.91 $76.65 $131.05 $279.62 International Value $79.51 $87.40 $148.89 $314.73 Disciplined Stock $75.51 $75.45 $129.05 $275.63 Small Company Stock $76.51 $78.45 $134.05 $285.56 Balanced Fund $75.31 $74.85 $128.05 $273.63 Limited Term High Income $74.21 $71.53 $122.51 $262.55 Transamerica Growth Fund $73.84 $70.58 $121.22 $261.67 Core Value $75.36 $75.28 $129.30 $279.12 MidCap Stock $75.36 $75.28 $129.30 $279.12 *In preparing the examples above, we have relied on the data provided by the funds. Transamerica has no reason to doubt the accuracy of that information. However, we have not verified those figures. **For annuitizations before the third contract anniversary, or for annuitization under a form that does not include life contingencies, a contingent deferred sales load may apply. You should not consider these examples to represent past or future expenses. Actual expenses paid may be greater or less than those shown, subject to the guarantees in the contract. The assumed 5% annual return is only hypothetical. It is not a representation of past or future returns. Actual returns could be greater or less than this assumed rate. Annuity Payments We will make annuity payments either on a fixed basis or a variable basis, or a combination of a fixed and variable basis, as you select. You have flexibility in choosing the annuity date. In no event may the annuity date be later than the first day of the month immediately preceding the month of your 85th birthday or the first day of the month coinciding with or next following the tenth contract anniversary, whichever occurs last. This extension of the annuity date to the tenth contract anniversary may not be available in all states. The annuity date cannot be earlier than the first day of the month coinciding with or immediately following the third contract anniversary, except for qualified contracts. We will begin annuity payments on the first day of the calendar month following the annuity date. You have a choice of four annuity forms: (1) Life Annuity; (2) Life and Contingent Annuity; (3) Life Annuity with Period Certain; and (4) Joint and Survivor Annuity. Payments on Death Before the Annuity Date The death benefit will be equal to the greatest of: 1. the Account Value; 2. a seven-year step-up benefit, which is the greatest account value determined as of the seventh contract anniversary and at each succeeding contract anniversary occurring at seven year intervals thereafter (adjusted for additional purchase payments and withdrawals since that anniversary, less premium taxes applicable to those withdrawals); or 3. purchase payments, less withdrawals and premium taxes applicable to those withdrawals, compounded at 5% annual effective interest rate (the 5% interest stops when an owner or the annuitant reaches age 75, or when it has doubled the amount of your investment, less withdrawals and any premium taxes applicable to those withdrawals, whichever is earlier). We will generally pay the death benefit within seven days of receipt of the required proof of death of the owner or the annuitant. We must have sufficient information about the beneficiary to make the payment. We must receive the beneficiary's election of the method of settlement. If we receive no election of the settlement method, we will pay the death benefit no later than one year from the date of death. We do not charge a contingent deferred sales load or interest adjustment. The beneficiary may elect to receive the death benefit as either a lump sum or as an annuity. Federal Income Tax Consequences An owner who is a natural person, meaning an individual, rather than a corporation or trust, generally should not be taxed on increases in the account value until a distribution under the contract occurs. A withdrawal or annuity payment, for example, would qualify as a distribution, thereby triggering a taxable event. A deemed distribution would also trigger a taxable event. Deemed distributions occur when owners pledge, loan, or assign a contract as collateral. Generally, a portion, up to 100%, of any distribution or deemed distribution is taxable as ordinary income. The taxable portion of distributions is generally subject to income tax withholding unless the recipient elects otherwise. Mandatory withholding may apply for certain qualified contracts. In addition, a federal penalty tax may apply to certain distributions or deemed distributions. Right to Cancel You have the right to examine the contract for a limited period, known as a free look period. You can cancel the contract by delivering or mailing a written notice of cancellation, or sending a telegram to the service center. You must return the contract before midnight of the tenth day (or longer if required by state law) after you receive the contract. If you give us notice and return the contract by mail, notice will be effective on the date we receive the mail. The amount of the refund may depend on the state of issuance. In most cases, we will refund the purchase payments allocated to the fixed account plus the variable accumulated value as of the date we receive the written notice and the contract. In other cases, including all IRAs or when the owner is a certain age in certain states, we will refund the greater of the purchase payments or the account value as of the date we receive the written notice and the contract. In certain situations, we will allocate the purchase payments received before or during the free look period among the guarantee periods of the fixed account and sub-accounts of the variable account in accordance with your instructions. In certain situations, when we receive the purchase payments before or during the free look period which you have allocated to the fixed account, we will allocate the purchase payments to the guarantee periods as you instructed. But if you allocate the purchase payments to the sub-accounts of the variable account, we will hold them in the money market sub-account until the estimated end of the free look period (allowing 5 days for delivery of the contract by mail). You should consult your registered representative or investment adviser (or see their contract) for the applicable provision. See Application and Purchase Payments page 28 and Account Value page 30. You may request more information by writing: Transamerica Annuity Service Center P.O. Box 31848 Charlotte, North Carolina 28231-1848 or Call 1-800-258-4260 with any questions concerning your contract. You should be able to provide the contract number and the owner's and annuitant's names when requesting information regarding a specific contract. NOTE: The foregoing summary is qualified in its entirety by the detailed information in the remainder of this prospectus and in the prospectuses for the funds. They should be referred to for more detailed information. With respect to qualified contracts, limits or restrictions may be imposed on purchase payments, withdrawals, distributions, benefits or other contract provisions due to: * the requirements of a particular retirement plan; * an endorsement to the contract; or * limitations or penalties imposed by the Code or the Employee Retirement Income Security Act of 1974, as amended. This prospectus does not describe such limitations or restrictions. CONDENSED FINANCIAL INFORMATION You will find condensed financial information on each sub-account in Appendix D on page 45. You will find the full financial statements and reports of independent auditors for the variable account in the Statement of Additional Information. PERFORMANCE DATA Advertising of Yields From time to time, we may advertise yields and average annual total returns for the sub-accounts of the variable account. In addition, we may advertise the effective yield of the Money Market Sub-Account. These figures will be based on historical information and are not intended to indicate future performance. Yield Calculations The yield of the Money Market Sub-Account refers to the annualized income generated by an investment in that sub-account over a specified seven-day period. The yield is calculated by assuming: * the income generated for that seven-day period is generated each seven-day period over a 52-week period; and * it is shown as a percentage of the investment. The effective yield is calculated similarly but, when annualized, the income earned by an investment in that sub-account is assumed to be reinvested. The effective yield will be slightly higher than the yield because of the com-pounding effect of this assumed reinvestment. The yield of a sub-account, other than that of the Money Market Sub-Account, refers to the annualized income generated by an investment in the sub-account over a specified thirty-day period. The yield is calculated by assuming that the income generated by the investment during that thirty-day period is generated each thirty-day period over a twelve-month period and is shown as a percentage of the investment. The yield calculations do not reflect the effect of any contingent deferred sales load or premium taxes that may apply to a particular contract. When the contingent deferred sales load is applies to a particular contract, the yield of that contract will be reduced. For additional information about how yields and total returns are calculated, please refer to the Statement of Additional Information. Total Returns Average annual total returns for each sub-account are based on performance data compiled since the sub-account commenced operations. Performance results are also measured over 1, 5 and 10 year time periods. When average annual total returns for these periods are available, you will be provided with this information. Each return will represent the average annual compounded rates of return that would equate an initial investment of $1,000 to the redemption value of that investment. This will include the deduction of any applicable contingent deferred sales load, but exclude the deduction of any premium taxes. These returns will represent the periods for which total return quotations are provided up to the last day of the period. Performance information Performance information for any sub-account reflects only the performance of a hypothetical contract under which account value is allocated to a sub-account during a particular time period on which the calculations are based. It should be considered in light of: * the investment objectives; * investment contracts; * characteristics of the portfolios in which the sub-account invests; and * the market conditions during the given time period. You should not consider it as a representation of what may be achieved in the future. For a description of the methods used to determine yield and total returns, see the Statement of Additional Information. Reports and promotional literature may also contain other information including: 1. the ranking of any sub-account derived from rankings of variable annuity separate accounts or their investment products tracked by: * Lpper Analytical Services, Inc., * VARDS, * IBC/Donoghue's Money Fund Report, * Financial Planning Magazine, * Money Magazine, * Bank Rate Monitor, * Standard and Poor's Indices, and * The Dow Jones Industrial Average. It may also include other rating services, companies, publications, or other persons who rank separate accounts or other investment products on overall performance or other criteria; and 2. the effect of tax deferred compounding on sub-account investment returns, or returns in general, which may be illustrated by graphs, charts, or otherwise. These may include a comparison, at various points in time, of the return from an investment, or returns in general, on a tax-deferred basis, assuming one or more tax rates, with the return on a currently taxable basis. We may also use other ranking services and indices. In our advertisements and sales literature, we may use charts and graphs to discuss and illustrate: * the implications of longer life expectancy for retirement planning; * the tax and other consequences of long-term investments; * the effects of the lifetime payout option; * the operation of certain special investment features in the policy - such as the dollar cost averaging option; * the effects of certain investment strategies, such as allocating purchase payments between the fixed account and an equity sub-account; and * the Social Security system and its projected payout levels and retirement plans generally. We may, from time to time, disclose average annual total returns and cumulative total returns for the sub-accounts in non-standard formats. We will assume that no contingent deferred sales load is applicable to these returns. Whenever we show non-standard performance, we will also show standardized performance. You will find additional information about the calculation of performance data in the statement of additional information. We may also advertise performance figures for the sub-accounts based on their performance prior to the time the variable account started. TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND THE VARIABLE ACCOUNT Transamerica Occidental Life Insurance Company Transamerica Occidental Life Insurance Company, Transamerica, is a stock life insurance company incorporated under the laws of the State of California in 1906. It is mainly engaged in the sale of life insurance and annuity contracts. Transamerica is a wholly-owned subsidiary of Transamerica Insurance Corporation of California, which in turn is a direct subsidiary of Transamerica Corporation. The address for Transamerica Occidental Life Insurance Company is 1150 South Olive Street, Los Angeles, California 90015. Published Ratings Transamerica may from time to time publish in advertisements, sales literature and reports to owners, the ratings and other information assigned to it by one or more independent rating organizations such as A.M. Best Company, Standard & Poor's, Moody's and Duff & Phelps. The purpose of the ratings is to reflect the financial strength and/or claims-paying ability of Transamerica. These ratings should not be considered as bearing on the safety or investment performance of assets held in the variable account. Each year the A.M. Best Company reviews the financial status of thousands of insurers. Once it has completed its analysis of each insurer's financial strength, A.M. Best assigns the insurer a Best Rating. These ratings reflect their current opinion of the relative financial strength and operating performance of an insurance company in comparison to the norms of the life/health insurance industry. In addition, other rating companies, such as by Standard & Poor's Insurance Ratings Services, Moody's or Duff & Phelps assess our claims-paying ability. They also may be referred to in advertisements or sales literature or in reports to owners. These ratings are opinions of an operating insurance company's financial capacity to meet the obligations of its insurance and annuity contracts in accordance with their terms, including its obligations under the fixed account provisions of this contract. Such ratings do not reflect the investment performance of the variable account or the degree of risk associated with an investment in the variable account. The Variable Account On May 22, 1992, Transamerica's Board of Directors passed resolutions to establish the Separate Account VA-2L of Transamerica, also referred to as the Variable Account, under the laws of the State of California. The variable account is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 as a unit investment trust. It meets the definition of a separate account under the federal securities laws. However, the Commission does not supervise the management or the investment practices or contracts of the variable account. The assets of the variable account are owned by Transamerica but they are held separately from the other assets of Transamerica. Section 10506 of the California Insurance Law provides that the assets of a separate account are not chargeable with liabilities incurred in any other business operation of the insurance company, except to the extent that assets in the separate account exceed the reserves and other liabilities of the separate account. Income, gains and losses incurred on the assets in the variable account, whether or not realized, are credited to or charged against the variable account without regard to other income, gains or losses of Transamerica. Therefore, the investment performance of the variable account is entirely independent of the investment performance of Transamerica's general account assets or any other separate account maintained by Transamerica. The variable account has eighteen sub-accounts, each of which invests solely in a specific corresponding portfolio. Changes to the sub-accounts may be made at the discretion of Transamerica. THE FUNDS The variable account invests exclusively in the: * Series of Dreyfus Variable Investment Fund * Dreyfus Stock Index Fund * The Dreyfus Socially Responsible Growth Fund, Inc. * Portfolios of Dreyfus Investment Portfolios * the Growth Portfolio of Transamerica Variable Insurance Fund, Inc. The Dreyfus Variable Investment Fund was organized as an unincorporated business trust under Massachusetts law pursuant to an Agreement and Declaration of Trust dated October 29, 1986. It commenced operations on August 31, 1990, and is registered with the Commission as an open-end management investment company under the 1940 Act. Currently, thirteen series, or portfolios, of the variable fund are available for the contracts. Each portfolio has separate investment objectives and contracts. As a result, each portfolio operates as a separate investment portfolio and the investment performance of one portfolio has no effect on the investment performance of any other portfolio. The Stock Index Fund was incorporated under Maryland law on January 24, 1989, and commenced operations on September 29, 1989. It is registered with the Commission as an open-end, non-diversified, management investment company. The Socially Responsible Fund was incorporated under Maryland law on July 20, 1992, and commenced operations on October 7, 1993. It is registered with the Commission as an open-end, diversified, management investment company. Dreyfus Investment Portfolios organized as an investment business trust under Massachusetts law pursuant to an Agreement and Declaration of Trust dated May 14, 1993. It is registered with the Commission as an open-end management company under the 1940 Act and commenced operations May 1, 1998. Currently, two portfolios of Dreyfus Investment Portfolios are available for the contract. Transamerica Variable Insurance Fund, Inc., was incorporated under Maryland law on June 23, 1995. It commenced operations on November 1, 1996. It is registered with the SEC as a management investment company. One of its portfolios is the Growth Portfolio. The Commission does not supervise the management or the investment practices and contracts of any of the portfolios. The assets of the portfolios are each separate from the assets of the other portfolios. Service Providers to The Funds * The Dreyfus Corporation provides investment advisory and administrative services to the Dreyfus Variable Investment Fund and the Socially Responsible Fund. * Mellon Equity Associates provides index fund management services to the Stock Index Fund, with The Dreyfus Corporation serving as the manager, in accordance with applicable agreements with the fund. * Fayez Sarofim & Co. provides sub-investment advisory services for the Capital Appreciation Portfolio. * NCM Capital Management Group, Inc., provides sub-investment advisory services for the Socially Responsible Fund. * Transamerica provides investment advisory services to Transamerica VIF, with Transamerica Investment Services, Inc., providing sub-investment advisory services. Transamerica receives fees from the Dreyfus Corporation and its affiliates for providing certain administrative and or other services. The portfolios are described below. Please see the Variable Fund, the Stock Index Fund, the Socially Responsible Fund, Dreyfus Investment Portfolio and Transamerica VIF prospectuses for more information. Money Market Portfolio The Money Market Portfolio's investment objective is to achieve as high a level of current income while preserving invested capital and maintaining liquidity. It seeks to achieve this objective by investing in short-term money market instruments. The investment advisory fee is payable monthly at the annual rate of 0.50 of 1% of the value of the portfolio's average daily net assets. An investment in this portfolio is not insured or guaranteed by the FDIC or any other government agency. Although this portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in this portfolio. Special Value Portfolio The Special Value Portfolio's investment objective is to maximize total return on your investment capital. Total return consists of capital appreciation and current income. It seeks to achieve its objective by investing in a wide range of equity and debt securities and money market instruments. An investment advisory fee is payable monthly to The Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the portfolio's average daily net assets. Zero Coupon 2000 Portfolio The Zero Coupon 2000 Portfolio's investment objective is to provide as high an investment return as is possible while preserving capital. It seeks to achieve its objective by investing primarily in: * debt obligations of the U.S. Treasury bonds that have been stripped of their unmatured interest coupons; * interest coupons that have been stripped from debt obligations issued by the U.S. Treasury; * receipts and certificates for stripped debt obligations and stripped coupons, including U.S. Government trust certificates. Collectively, we refer to these as Stripped Treasury Securities. The portfolio also may purchase certain other types of stripped government or corporate securities. The portfolio's assets will consist primarily of portfolio securities which will mature on or about December 31, 2000. The investment advisory fee is payable monthly at the annual rate of 0.45 of 1% of the value of the portfolio's average daily net assets. Quality Bond Portfolio The Quality Bond Portfolio's investment objective is to provide the maximum amount of current income possible while preserving capital and the maintaining liquidity. It seeks to achieve its objective by investing mainly in: debt obligations of corporations, the U.S. Government and its agencies and instrumentalities, and major banking institutions. The investment advisory fee is payable monthly at the annual rate of 0.65 of 1% of the value of the portfolio's average daily net assets. Small Cap Portfolio The Small Cap Portfolio's investment objective is to maximize capital appreciation. It seeks to achieve its objective by investing mainly in common stocks. Under normal market conditions, the portfolio will invest at least 65% of its total assets in companies with market capitalizations of less than $1.5 billion at the time of purchase. The Dreyfus Corporation will invest in companies it believes to be characterized by new or innovative products, services or processes which should enhance prospects for growth in the future earnings. The investment advisory fee is payable monthly at the annual rate of 0.75 of 1% of the value of the portfolio's average daily net assets. Capital Appreciation Portfolio The Capital Appreciation Portfolio's primary investment objective is to provide as much long-term capital growth as possible while preserving capital. Current income is a secondary goal. It seeks to achieve its goals by investing in common stocks of domestic and foreign issuers. An investment advisory fee is payable to The Dreyfus Corporation and a sub-investment advisory fee is payable monthly to Fayez Sarofim & Co. at the total annual rate of 0.75 of 1% of the value of the portfolio's average daily net assets. Growth and Income Portfolio The Growth and Income Portfolio's investment objective is to provide as much long-term capital growth, current income and growth of income as possible while undertaking reasonable investment risk. This portfolio invests primarily in equity and debt securities and money market instruments of domestic and foreign issuers. The proportion of the portfolio's assets invested in each type of security will vary from time to time in accordance with The Dreyfus Corporation's assessment of economic conditions and investment opportunities. An investment advisory fee is payable monthly to The Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the portfolio's average daily net assets. International Equity Portfolio The International Equity Portfolio's investment objective is to maximize capital appreciation. This portfolio's invests primarily in the equity securities of foreign issuers located throughout the world. An investment advisory fee at an annual rate of 0.75 of 1% of the value of the portfolio's average daily net assets is payable monthly to The Dreyfus Corporation. International Value Portfolio The International Value Portfolio's investment objective is long-term capital growth. This portfolio invests primarily in a portfolio of publicly traded equity securities of foreign issuers. Each equity within the portfolio would be characterized as value companies according to criteria established by the portfolio's investment adviser. An investment advisory fee is payable monthly to The Dreyfus Corporation at the annual rate of 1.00% of the value of the portfolio's average daily net assets. Disciplined Stock Portfolio The Disciplined Stock Portfolio's investment objective is to provide investment results that are greater than the total return performance of publicly traded common stocks as a group, as presented by the Standard & Poor's 500 Composite Stock Price Index. This portfolio will use quantitative statistical modeling techniques to build a portfolio in an attempt to achieve its investment objective. It will do so without assuming risk greater than that found in the broad stock market. An investment advisory fee is payable monthly to The Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the Portfolio's average daily net assets. Small Company Stock Portfolio The Small Company Stock Portfolio's investment objective is to provide investment results that are greater than the total return performance of publicly traded common stocks as a group, as represented by the Russell 2500 Index. This portfolio invests primarily in a portfolio of equity securities of small to medium sized domestic companies. While investing in these companies, the portfolio will attempt to maintain volatility and diversification similar to that of the Russell 2500 Index. An investment advisory fee is payable monthly to the Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the portfolio's average daily net assets. Balanced Portfolio The Balanced Portfolio's investment objective is to provide investment results that are greater than the total return performance of common stocks and bonds as a group, as represented by a hybrid index. 60% of the portfolio is composed of the common stocks in the Standard & Poor's 500 Composite Stock Price Index. 40% of the portfolio is composed of the bonds in the Lehman Brothers Intermediate Government/Corporate Bond Index. This Series invests primarily in common stocks and bonds. The Dreyfus Corporation selects the proportion of each, based on their expected returns and risks. An investment advisory fee is payable monthly to the Dreyfus Corporation at the annual rate of 0.75 of 1% of the value of the portfolio's average daily net assets. Limited Term High Income Portfolio The Limited Term High Income Portfolio's investment objective is to maximize total return, through capital appreciation and current income. This portfolio seeks to achieve its objective by investing up to all of its assets in a portfolio of lower rated fixed-income securities, commonly known as junk bonds. Under normal market conditions, these bonds will have an effective duration of three and one-half years or less and an effective average portfolio maturity of four years or less. Investments of this type are subject to a greater risk of loss of principal and non-payment of interest. Investors should carefully assess the risks associated with an investment in the portfolio. Those risks are described in the portfolio's prospectus. An investment advisory fee is payable monthly to the Dreyfus Corporation at the annual rate of 0.65of 1% of the value of the portfolio's average daily net assets. Stock Index Fund The Stock Index Fund's investment objective is to provide investment results that correspond to the price and yield performance of publicly traded common stocks as a group, as represented by the Standard & Poor's 500 Composite Stock Price Index. The Stock Index Fund is not sponsored by or affiliated with Standard & Poor's Corporation in any way. The Stock Index Fund pays a monthly management fee to The Dreyfus Corporation at the annual rate of 0.245 of 1% of the value of the Stock Index Fund's average daily net assets. Socially Responsible Fund The Socially Responsible Fund's primary goal is to provide capital growth. It seeks to achieve this goal by investing principally in common stocks, or securities convertible into common stock. Stocks selected for this fund will be issued by companies which, in the opinion of the fund's management, must meet traditional investment standards. They must also show evidence that they conduct their business in a manner that contributes to the enhancement of the quality of life in America. Current income is a secondary goal. A management fee is payable monthly to The Dreyfus Corporation and a sub-investment advisory fee is payable monthly to NCM Capital Management Group, Inc. at the total annual rate of 0.75 of 1% of the value of the Socially Responsible Fund's average daily net assets. Core Value Portfolio The Core Value Portfolio is a diversified portfolio. Its primary investment objective is to provide long-term growth of capital. Current income is a secondary investment objective. The portfolio anticipates that at least 65% of the value of its total assets, except when maintaining a temporary defensive position, will be invested in equity securities, such as common stocks, preferred stock and securities convertible into common stocks, including depository receipts. All of these would be characterized as equity securities issued by "value" companies according to criteria established by The Dreyfus Corporation. In general, the portfolio's investments are broadly diversified over a number of industries. As a matter of operating contract, the portfolio will not invest more than 25% of its total assets in any one industry. A management fee is payable monthly to The Dreyfus Corporation at the annual rate of 0.75 of 1% of the portfolio's average daily net assets. MidCap Stock Portfolio The MidCap Stock Portfolio is a diversified portfolio. Its investment objective is to provide investment results that are greater than the total return performance of publicly-traded common stocks as a group, as represented by the Standard & Poor's MidCap 400 Index. Medium-size issuers will include those U.S. companies with market capitalizations generally ranging in value from $200 million to $5 billion. Market capitalization is defined as market price per share times the number of shares outstanding. The portfolio also may invest in large and small capitalization companies, including emerging and cyclical growth companies. Emerging and cyclical growth companies are firms which, while they may not have a history of stable long-term growth, are nonetheless expected to represent attractive investments. The equity securities in which the portfolio invests consist of common stocks, preferred stocks and securities convertible into common stocks, including those in the form of Depositary Receipts. The portfolio is not an index fund and its investments are not limited to securities of issuers included in the S&P 400 Index. A management fee is payable monthly to The Dreyfus Corporation at the annual rate of 0.75 of 1 of the portfolio's average daily net assets. Growth Portfolio of the Transamerica Variable Insurance Fund, Inc. seeks long-term capital growth. Common stock (listed and unlisted) is the basic form of investment. The Growth Portfolio invests primarily in common stocks of growth companies that are considered by the manager to be premier companies. In the Manager's view, characteristics of premier companies include one or more of the following: * dominant market share; * leading brand recognition; * proprietary products or technology; * low-cost production capability; and/or * excellent management with shareholder orientation. The manager of the portfolio believes in long-term investing and places great emphasis on each company's ability to sustain the above competitive advantages. Unless market conditions indicate otherwise, the manager also tries to keep the portfolio fully invested in equity-type securities. It also does not try to invest or divest based on stock market movements. When, in the judgment of the manager, and market conditions warrant, the portfolio may, for temporary defensive purposes, hold part or all of its assets in cash, debt or money market instruments. The portfolio may invest up to 10% of its assets in debt securities having a call on common stocks that are rated below investment grade. A management fee of 0.75 of 1% of the average daily net assets is payable monthly to Transamerica Occidental Life Insurance Company, as adviser. The adviser pays Transamerica Investment Services, Inc. a monthly fee of at the annual rate of 0.30 of 1% of the first $50 million, .25 of 1% of the next $150 million and .20 of 1% of the assets in excess of $200 million. Variable Account Objectives Meeting objectives depends on various factors, including, but not limited to, how well the portfolio managers anticipate changing economic and market conditions. You should be aware of the following risks: * There is no assurance that any of these portfolios will achieve their stated objectives. . * An investment in the contract is not insured or guaranteed by the FDIC or any other government agency. * Investing in the contract involves certain investment risks, including possible loss of principal. Portfolios Not Publicly Available The portfolios are open-end management investment companies or portfolios of series, open-end management companies registered with the SEC under the 1940 Act that are often referred to as mutual funds. This SEC registration does not involve SEC supervision of the investments or investment policies of the portfolios. Shares of the portfolios are not offered to the public but solely to the insurance company separate accounts and other qualified purchasers as limited by federal tax laws. These portfolios are not the same as mutual funds that may have very similar names that are sold directly to the public. The assets of each portfolio are held separate from the assets of the other portfolios. Each portfolio operates as a separate investment vehicle. The income or losses of one portfolio have no effect on the investment performance of another portfolio. The sub-accounts reinvest dividends and/or capital gains distributions received from a portfolio in more shares of that portfolio as retained assets. Resolution of Possible Conflicts Since variable insurance products from other companies as well as Transamerica can invest in all of the portfolios, there is a possibility that a material conflict may arise between the interests of the variable account and other companies. If conflict occurs, the affected insurance companies will take the needed steps to resolve the matter. This may include stopping their separate account from investing in the portfolios. Sources of Additional Information You will find additional information in the current prospectuses for the portfolios, which accompany this prospectus, including: * the investment objectives; * the investment policies; * the investment advisory services; * the administrative services; and * charges You should read the portfolios' prospectuses carefully before you make any decision concerning the allocation of purchase payments to, or transfers among, the sub-accounts. Addition, Deletion or Substitution Transamerica does not control the portfolios. We therefore cannot guarantee that any of the sub-accounts of the variable account or any of the portfolios will always be available to investors for allocation of purchase payments or transfers. Transamerica retains the right to make changes in the variable account and in its investments. Transamerica reserves the right to: * eliminate the shares of any portfolio held by a sub-account; or * substitute shares of another portfolio or of another investment company for the shares of any portfolio. If the shares of a portfolio are no longer available for investment or if, in our judgement, a portfolio is not fulfilling its intended purpose within the variable account, we reserve the right to remove it. To the extent required by the 1940 Act, we will inform shareholders in advance of any substitutions. We will also see the Commission's advance approval before making substitutions. These potentially necessary substitutions should not be construed in any way as preventing or limiting the variable account from purchasing other securities for other series or classes of variable annuity contracts, or from effecting an exchange between series or classes of variable contracts on the basis of requests made by owners. The Establishment of New Sub-Accounts At Transamerica's discretion, based on marketing, tax, investment or other conditions, we can elect to establish new sub-accounts. We will make these new sub-accounts available to our existing contract owners on a basis which we will determine at that time. Each additional sub-account will purchase shares in a portfolio or in another mutual fund or investment vehicle. Transamerica may also eliminate one or more sub-accounts if, in its sole discretion, marketing, tax, investment or other conditions so warrant. In the event any sub-account is eliminated, Transamerica will notify owners and request a re-allocation of the amounts invested in the eliminated sub-account. In the event of any substitution or change, Transamerica may change the contracts in a way that appropriately reflects substitutions or changes. Furthermore, if we believe it to be in the best interests of persons having voting rights under the contracts, the variable account may be operated as a management company under the 1940 Act or any other form permitted by law. It may also be deregistered under this act in the event such registration is no longer required, or may be combined with one or more other separate accounts. THE FIXED ACCOUNT This prospectus is generally intended to serve owners as a disclosure document only for the contract and the variable account. For complete details regarding the fixed account, see the contract itself. The fixed account is not available in all states. Purchase Payments allocated to and amounts transferred to the fixed account become part of the general account of Transamerica, which supports insurance and annuity obligations. Because of exemptive and exclusionary provisions, interests in the general account have not been registered under the Securities Act of 1933, hereafter referred to simply as the 1933 Act. Nor is the general account registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interests therein are generally subject to the provisions of the 1933 Act or the 1940 Act. Therefore the Securities and Exchange Commission has not reviewed the disclosures in this prospectus which relate to the fixed account. The guarantee periods of the fixed account are part of the general account of Transamerica. The general account of Transamerica consists of all the general assets of Transamerica, other than those in the variable account, or assets in any other segregated asset account. Instead of the owner bearing the investment risk as with the variable account, we bear the full investment risk for all values in the fixed account. We have the sole right to determine how we will invest the assets of our general account while adhering to applicable laws. The Interest Rate of the Fixed Account As owner, you bear the risk that, after the initial guarantee period, we will not credit interest in excess of 3% per year to amounts you allocate to the fixed account. The allocation or transfer of funds to the fixed account does not entitle you to share in the overall investment returns of Transamerica's general account. Instead, we guarantee that the funds you allocate or transfer to the fixed account will accrue a specified annual rate of interest for a specific duration. The rate of interest we credit will always be at least 3% per year. Consequently, if you allocate all net purchase payments only to the fixed account and make no transfers or withdrawals, the minimum amount of the account value will be determinable and guaranteed. We will establish a new guarantee period of a duration you select from those we are offering on net purchase payments you allocate to the fixed account. Every guarantee period we offer will have a duration of at least one year. The minimum amount you may allocate or transfer to a guarantee period is $1,000. We will credit net purchase payments you allocate to the fixed account on the date we receive the payment at the service center. We will establish a new guarantee period as of the effective date of the transfer for any amount you transfer from another guarantee period, or from a sub-account of the variable account to the fixed account. We may delay payment of any withdrawal from the fixed account for up to six months after we receive the request. If we delay payment for more than 30 days, we will pay interest on the withdrawal amount up to the date of payment. Guarantee Periods Each guarantee period will have its own guaranteed interest rate and expiration date. The guaranteed interest rate applicable to a guarantee period will depend on the date it is established and the duration you choose. The guarantee period you choose may not extend beyond the annuity date. We reserve the right to change the maximum number of guarantee periods that may be in effect at any one time. We will establish effective annual rates of interest for each guarantee period. The effective annual rate of interest we establish for a guarantee period will remain in effect for the duration of the guarantee period. We will credit Interest to a guarantee period based on its daily balance at a daily rate which is equivalent to the guaranteed interest rate applicable to that guarantee period for amounts held during the entire guarantee period. Amounts withdrawn or transferred from a guarantee period prior to its expiration date will be subject to an interest adjustment as described below. In no event will the effective annual rate of interest applicable to a guarantee period be less than 3% per year. Interest Adjustment Except in certain circumstances, an interest adjustment will be made to any amount withdrawn or transferred from a guarantee period before its expiration date Any such amount withdrawn or transferred from a guarantee period will be credited with interest at a rate of only 3% per year from the date the guarantee period was established to the date of payment or transfer, regardless of the guaranteed interest rate. This means that any interest in excess of 3% will be forfeited on the amount withdrawn or transferred. Exceptions to the interest adjustment include: 1. amounts withdrawn within 30 days before the expiration date of the guarantee period; 2. amounts withdrawn from a guarantee period serving as the source account, if available, for dollar cost averaging transfers; and 3. amounts paid as part of a death benefit. A contingent deferred sales load may apply to withdrawals made at the end of a guarantee period even if there is no interest adjustment made. Expiration of Guarantee Period At least 45 days, but not more than 60 days, prior to the expiration date of a guarantee period, we will notify you of the options available when a guarantee period expires. You may elect one of the following options: 1. transfer the guarantee amount of that guarantee period to a new guarantee period from among those being offered by us. The new Guarantee Period will be established on the later of: a) the date selected by the Owner, or b) the date the notice, in a form and manner acceptable to us, is received at the service center, but in no event later than the day immediately following the expiration date of the previous guarantee period; or 2. transfer the guarantee amount of that guarantee period to one or more sub-accounts of the variable account. We must receive your notice electing one of these options at the service center by the expiration date of the guarantee period. If such election has not been received by us at the service center, the guarantee amount of that guarantee period will remain in the fixed account. A new guarantee period of the same duration as the expiring guarantee period, if offered, will automatically be established by us with a new guaranteed interest rate. The new guarantee period will start on the day following the expiration date of the previous guarantee period. If we are not currently offering guarantee periods having the same duration as the expiring guarantee period, the new guarantee period will be the next longer duration. If we are not offering guarantee periods longer than the duration of the expiring guarantee period, the new guarantee period will be the next shorter duration. If the guarantee amount of an expiring guarantee period is less than $1,000, we reserve the right to transfer such amount to the Money Market Sub-Account of the variable account. If you make a transfer from a guarantee period within the 30-day period ending on its expiration date, it will not be counted for the purpose of determining the eighteen free transfers per contract year. This transfer will not be subject to any interest adjustment. THE CONTRACT The Contract is a Flexible Purchase Payment Multi-Funded Individual Deferred Annuity Contract. The rights and benefits under the contract, or in the certificate and group contract, are described below and in the contract. Transamerica reserves the right to modify the individual contract, and the group contract and its certificates, so that it conforms to any federal or state statute, rule or regulation. Such modifications will give contract owners the benefits of these changes. Transamerica is responsible for the obligations stated in the contract. The contracts may be used for rollover IRAs and for rollover Roth IRAs that qualify for special federal income tax treatment. With Transamerica's prior permission, the contracts may also be available as a contributory IRAs, as contributory Roth IRAs, as Section 403(b) annuities and for use in Section 401(a) qualified pension and profit sharing plans established by corporate employers. Generally, qualified contracts contain restrictive provisions limiting the timing and amount of payments and distributions from the qualified contract. The owner designates the annuitant. The annuitant can be the same person as the owner and must be the same person in the case of certain qualified contracts. Annuity payments will be made to the annuitant after the annuity date unless, in the case of a non-qualified contract, the owner changes the payee after the annuity date. For each contract, a different account will be established and values, benefits and charges will be calculated separately. The various administrative rules described below will apply separately to each contract, unless otherwise noted. CONTRACT APPLICATION AND PURCHASE PAYMENTS Purchase Payments Please send all of your purchase payment payments to the service center. We will send the owner a confirmation letter to acknowledge the acceptance of each purchase payment. The initial purchase payment for each contract must generally be at least $5,000. Transamerica, may, at its discretion, accept lower initial purchase payments for certain qualified contracts. We will ordinarily issue the contract and derive the net purchase payment from the initial purchase payment within two days of receipt of a properly completed application and the purchase payment. At this time, the contract is accepted and funded with your purchase payment. A net purchase payment is defined as a purchase payment minus any applicable premium taxes. These taxes may include retaliatory premium taxes, which possibly could be levied in the future in New York, or in any other state in which the owner lives, where such taxes are levied in the future. Acceptance of the application is subject to it being received in good order. Transamerica reserves the right to reject any application or purchase payment. Contracts normally will not be issued with respect to annuitants more than 80 years old, although Transamerica in its discretion may waive this restriction in certain cases. If the initial purchase payment cannot be credited within two days of receipt of the purchase payment and information requesting issuance of a contract because the information is incomplete or for any other reason, then Transamerica will contact the owner. We will explain the reason for the delay and will refund the initial purchase payment within five business days. However, if the owner consents to Transamerica retaining the initial purchase payment, we will credit it to your contract as soon as the requirements are fulfilled. Ten Day Cancellation Option Each contract provides for a free look period of 10 days (or longer if required by state law) after receipt of the contract during which you may cancel the contract. To cancel, the contract must be returned to us with a written notice of cancellation. In some states, including for some ages of owners in some states, and in all states for IRAs, Transamerica will refund the greater of the purchase payments or account value of the date the written notice and the contract are received by Transamerica. In other states, the purchase payments allocated to the fixed account plus the variable accumulated value will be returned with any adjustments required by applicable law or regulation (and without imposition of any contingent deferred sales load) as of the date the notice and contract are received. You should consult your registered representative or investment adviser (or see your contract) for the applicable provision. Additional purchase payments may be paid into the contract at any time prior to the annuity date, as long as the annuitant or contingent annuitant is living. Additional purchase payments must be at least $500, or at least $100 if paid to an automatic payment plan. Using an automatic payment plan, the additional purchase payments are automatically deducted from a bank account. In addition, minimum allocation amounts apply. Additional net purchase payments are credited to the contract as of the date the payment is received. Currently, additional purchase payments after the initial purchase payment may not be made to Section 401(a) and Section 403(b) annuity contracts. Total purchase payments for any contract may not exceed $1,000,000 without prior approval of Transamerica. In no event may the sum of all purchase payments for a contract during any taxable year exceed the limits imposed by any applicable federal or state laws, rules, or regulations. Choosing One or More Investment Options You specify how purchase payments will be allocated under the contract. You may allocate the net purchase payments between and among one or more of the sub-accounts of the variable account and the guarantee periods of the fixed account. Portions must be whole number percentages and any allocation percentage for a sub-account must be at least 10%. In addition, the initial allocation to any inactive sub-account is subject to a minimum of $500. The initial allocation to a new guarantee period is subject to a minimum of $1,000. You may choose to allocate nothing to a particular sub-account or guarantee period. With regard to the allocation of purchase payments during the free look period for any portion of the net purchase payments allocated to the fixed account, the amounts you specify by will be allocated to the guarantee periods you specify. With regard to purchase payments allocated to the variable account, in most situations where the purchase payment allocated to the fixed account plus variable accumulation value will be refunded upon exercise of the free look, the net purchase payments derived from the initial purchase payments will be allocated between and among the sub-accounts of the variable account and the guarantee periods of the fixed account in accordance with the allocation percentages you select. In most situations where the greater of purchase payments or account value will be refunded on exercise of the free look, the net purchase payment derived from the portion of initial purchase payment allocated to the variable account will first be allocated to the Money Market Sub-Account. It will remain in that sub-account until the estimated end of the free look period, allowing 5 days for delivery of the contract by mail. The dollar value of the variable accumulation units held in the Money Market Sub-Account attributable to such net purchase payment will then be allocated among the sub-accounts in accordance with the allocation percentages you select. This initial allocation after the free look period from the Money Market Sub-Account to the selected sub-accounts does not count toward the limit of 18 free transfers per contract Year. Each net purchase payment will be subject to the allocation percentages in effect at the time of receipt of such purchase payment. The allocation percentages for new purchase payments between and among the sub-accounts and the guarantee period may be changed by the owner at any time by submitting a request for such change, in a form and manner acceptable to Transamerica, to the service center. Any changes to the allocation percentages are subject to the limitations above. Any change will take effect with the first purchase payment received with or after receipt by the service center of the request for such change and will continue in effect until subsequently changed. If an allocation of an additional net purchase payment is directed to an inactive sub-account, then the amount allocated must be at least $500. If an allocation of an additional net purchase payment is directed to a new guaranteed period of the fixed account, then the amount allocated must be at least $1000. Investment Option Limit Currently, as the owner, you may not allocate purchase payment dollars to more than eighteen investment options over the life of the contract. Investment options include sub-accounts of the variable account and guarantee periods of the fixed account. Each sub-account and each duration of a guarantee period of the fixed account that ever received a transfer or purchase payment allocation count as one towards this total of eighteen limit. Transamerica may waive this limit in the future. For example, if the owner makes an allocation to the money market sub-account and later transfers all amounts out of this money market sub-account, it would still count as one for the purposes of the limitation even if it held no value. If the owner transfers from a sub-account to another sub-account and later back to the first, the count towards the limitation would be two, not three. If the owner selects a guarantee period and renews for the same term, the count will be one. If the owner renews to a guarantee period with a different term, the count will be two. ACCOUNT VALUE Before the annuity date, the account value is the sum of : * the fixed accumulated value, plus * the variable accumulated value. The fixed accumulated value is the total dollar amount of all guarantee amounts held under the fixed account for the contract prior to the annuity date. The fixed accumulated value is determined without regard to any interest adjustment. The variable accumulated value is the total dollar amount of all variable accumulation units under each sub-account of the variable account held for the contract prior to the annuity date. The variable accumulated value prior to the annuity date is equal to: a) net purchase payments allocated to the sub-accounts; plus or minus b) any increase or decrease in the value of the assets of the sub-accounts due to investment results; less c) the daily mortality and expense risk charge; less d) the daily administrative expense charge; less e) any reductions for the annual account fee; plus or minus f) amounts transferred from or to the fixed account; less g) any applicable transfer fees and systematic withdrawal option fees; and less h) any withdrawals from the sub-accounts less any premium tax applicable to those withdrawals. A valuation period is the period between successive valuation days. It begins at the close of the New York Stock Exchange, generally 4:00 p.m. ET, on each valuation day. It ends at the close of the New York Stock Exchange on the next succeeding valuation day. A valuation day is each day that the New York Stock Exchange is open for regular business. The value of the variable account assets is determined at the end of each valuation day. To determine the value of an asset on a day that is not a valuation day, the value of that asset as of the end of the next valuation day will be used. Days that are not considered to be valuation days are those during which the New York Stock Exchange is closed for regular business. The variable accumulated value is expected to change from valuation period to valuation period. The changes reflect how the investment performed of all of the selected portfolios, and also reflect the deductions for charges. How Your Variable Accumulation Units Are Created When you, as the contract owner, pay purchase payments into your contract, those purchase payments are used to purchase variable accumulation units in the sub-accounts in which you have chosen to invest. At the end of each valuation period during which Transamerica received purchase payments from you, the owner, will be credited with variable accumulation units. The number of units you receive is determined by dividing: * the portion of each net purchase payment allocated to the sub-accounts, by * the variable accumulation unit value, at the end of the valuation Period. When you, the owner, pay your first purchase payment, which is defined as the initial net purchase payment, variable accumulation units for that payment are credited to the account value. That credit is then held in the money market sub-account for fifteen calendar days after the contract date. The variable accumulation units credited to your contract as the result of your initial net purchase payment are credited to your contract's value within two valuation days of: 1. the date upon which Transamerica's service center receives an acceptable and properly completed application; or 2. the date upon which Transamerica's service center receives the initial purchase payment. The variable accumulation units credited to your contract as the result of subsequent purchase payments will be credited to your contract's value at the end of the valuation period during which Transamerica received your payment. How Variable Accumulation Unit Values Are Calculated The value of a variable accumulation unit for each sub-account for a valuation period is established at the end of each valuation period. It is calculated by multiplying the value of that unit at the end of the prior valuation period by the sub-account's net investment factor for the valuation period. The value of a variable accumulation unit may go up or down. The net investment factor is used to determine the value of accumulation and annuity unit values for the end of a valuation period. The applicable formula can be found in the Statement of Additional Information, or SAI. Transferring Among Sub-Accounts When you transfer purchase payment dollars among the sub-accounts, those transfers will result in the purchase and/or cancellation of variable accumulation units. The value of these units will equal the total dollar amount you are transferring to or from a sub-account. These transactions are valued at the end of the valuation day on which you performed your transaction. TRANSFERS Transfers Before the Annuity Date Before the annuity date, as the owner you may transfer any portion of the account value among and between the sub-accounts and the guarantee periods then offered by us. You can make transfers by giving a written request to the service center subject to the following conditions: * the minimum amount which may be transferred is $500; and * the minimum transfer to an inactive sub-account is $500; and * the minimum transfer required to establish a new guarantee period is $1,000. Transfers are also subject to terms and conditions that may be imposed by the portfolios. Your transfer requests must specify: * The sub-account or guarantee period from which the transfer is to be made; * the amounts you wish to transfer, subject to the minimum transfer amount; and * the sub-account or guarantee period you wish to receive the transfer. Transamerica imposes a transfer fee of $10 for each transfer over 18 in a contract year. We also reserve the right to: * waive the transfer fee; * vary the number of transfers without charge; or * not count transfers under certain options or services. The transfer will generally be effective on the date your request is received at the service center. If the transfer is made from a guarantee period before its expiration date, it will be subject to an interest adjustment. If a transfer from a guarantee period is made within the 30-day period ending on its expiration date, we will not count it for purposes of the eighteen allowable transfers. It will also not be subject to any interest adjustment. If a transfer reduces the value in a sub-account to less than $500, then Transamerica reserves the right to transfer the remaining amount along with the amount you requested to be transferred in accordance with your transfer instructions. Under current law, there will not be any tax liability to you, the owner if you make a transfer. Telephone Transfers We will allow telephone transfers if you have provided proper authorization for such transfers in a form and manner acceptable to us. Limitations and rules for these transfers will be provided to you by us. We reserve the right to suspend telephone transfer privileges at any time, for some or all contracts, for any reason. Withdrawals are not permitted by telephone. We will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. If we follows such procedures we will not be liable for any losses due to unauthorized or fraudulent instructions. However, we may be liable for such losses if we doe not follow those reasonable procedures. The procedures we will follow for telephone transfers may include: a) requiring some form of personal identification prior to acting on instructions received by telephone; b) providing written confirmation of the transaction; and/or c) tape recording the instructions given by telephone. Possible Restrictions Transamerica reserves the right without prior notice to modify, restrict, suspend or eliminate the transfer privileges, including telephone transfers, at any time and for any reason. For example, restrictions may be necessary to protect owners from adverse impacts on portfolio management of large and/or numerous transfers by market timers or others. We have determined that the movement of significant sub-account values from one sub-account to another may prevent the portfolio impacted by these transfers from taking advantage of investment opportunities. This occurs because the portfolio must maintain a significant cash position in order to handle redemptions. Such large and sudden movement of assets in any one portfolio may also cause a substantial increase in portfolio transaction costs. These costs must be indirectly borne by owners. Therefore, Transamerica reserves the right to require that all transfer requests be made by you, the owner and not by a third party holding a power of attorney. We also require that each transfer request be made by a separate communication to Transamerica. Transamerica also reserves the right to request that each transfer request be submitted in writing and be manually signed by the owner or owners; facsimile transfer requests may not be allowed. Dollar Cost Averaging Prior to the annuity date, you, as the owner, may request that a designated amount of money be automatically transferred from one, and only one, of the sub-accounts which invests in: * the Money Market; * the Quality Bond Portfolio; or * the Limited High Term Income Portfolio. Or you can have it transferred from the fixed account. This money may be transferred to any of the sub-accounts or the fixed account on a monthly basis by submitting a request to the service center. The request must be in a form and manner acceptable to Transamerica. You can transfer amounts from the source accounts in addition to the Money Market and Quality Bond Sub-Account, and can include the shortest guarantee period. Call the service center for the availability of the source accounts options. Your transfers will begin the month following, but no sooner than one week following, receipt of such request, provided that dollar cost averaging transfers will not commence until the later of: 1. 30 days after the contract date, or 2. the estimated end of the free look period, allowing 5 days for delivery of the contract by mail. Transfers will continue for the duration selected by the owner unless: 1. terminated by the owner, 2. automatically terminated by Transamerica because there are insufficient funds in the source account, or 3. for other reasons as set forth in the contract. As the owner, you may request that monthly transfers be continued. You can accomplish this by giving notice to the service center in a form and manner acceptable to Transamerica within 30 days prior to the last monthly transfer. If no request to continue the monthly transfers is made by you, as the owner, this option will terminate automatically with the last transfer. In order to be eligible for dollar cost averaging, the owner must meet the following conditions: 1. the value of the source account must be at least $5,000; 2. the minimum amount that you may transfer out of the source account is $250 per month; and 3. the minimum amount transferred into any other sub-account is the greater of $250 or 10% of the amount being transferred. Please note that dollar cost averaging transfers can not be made from a source account from which you are receiving systematic withdrawals or automatic payouts. As the owner, you will not be charged for the dollar cost averaging service. Transfers that result from dollar cost averaging practices will not count toward 18 transfers allowed without charge. We will make no interest adjustments on dollar cost averaging transfers from the fixed account, if we allow it as a source account. Dollar cost averaging transfers may not be made to the fixed account. Automatic Asset Rebalancing When you allocate purchase payments to certain portfolios in certain percentages, you define how you want your investments to perform. Changing market conditions effect each portfolio's performance, and can throw your allocations out of balance. As the owner, you may instruct Transamerica to automatically rebalance the amounts by reallocating them among the variable sub-accounts, at the time, and in the percentages that you specify. You must specify automatic asset rebalancing in your instructions to Transamerica. As the owner, you may elect to have the rebalancing done on an annual, semi-annual or quarterly basis. You may also elect to have amounts allocated among the sub-accounts using whole percentages, with a minimum of 10% allocated to each sub-account. As the owner, you may elect to establish, change or terminate the automatic asset rebalancing by submitting a request to the service center in a form and manner acceptable to Transamerica. Automatic asset rebalancing will not count towards the limit of 18 free transfers in a contract year. There is currently no charge for the automatic asset rebalancing. However, Transamerica reserves the right to charge a nominal amount for this feature. Transamerica also reserves the right to discontinue offering automatic asset rebalancing any time for any reason. After the Annuity Date If a variable annuity payout option is elected, as the owner, you may make transfers among sub-accounts after the annuity date by submitting a request in a form acceptable to the service center. Your request will be subject to the following provisions: 1. transfers after the annuity date may be made no more than four times during any annuity year; and 2. the minimum amount transferred from one sub-account to another is the amount supporting a current $75 monthly payment. Your transfers among sub-accounts during the annuity period will be processed based on the formula outlined in the Statement of Additional Information. CASH WITHDRAWALS Withdrawals As the owner, you may withdraw all or part of the cash surrender value for a contract at any time during the life of the annuitant and prior to the annuity date. You can accomplish this by giving a written request to the service center. Your request will be subject to the rules below. Federal or state laws, rules or regulations may also apply. You cannot make withdrawals after the annuity date. The amount payable to you as the owner if the contract is surrendered on or before the annuity date is the cash surrender value. The cash surrender value is equal to the account value, minus any account fee, minus any interest adjustment, minus any applicable contingent deferred sales load and minus any applicable premium taxes. If the account value exceeds $50,000 on the date the contract is surrendered, and where permitted by law, we will waive the account fee. Only one partial withdrawal will be permitted while the systematic withdrawal option is in effect. Partial withdrawals must be at least $500. A full surrender of your contract will result in a cash withdrawal payment equal to the contract's cash surrender value at the end of the valuation period during which your request is received along with all of your completed forms. Any contingent deferred sales load which applies to your contract with Transamerica will be deducted from the amount you paid. In the case of a partial withdrawal, you, as the owner may instruct the service center as to the amounts to be withdrawn from each sub-account or fixed account. If you do not specify from where the withdrawal is to be made, the withdrawal will be taken pro rata from all sub-accounts with current values. If the requested withdrawal reduces the value of the sub-account from which the withdrawal was made to less than $500, Transamerica reserves the right to transfer the remaining value of that sub-account pro rata. If no such sub-accounts exist, such transfer will be made to the money market sub-account. As the owner, you will be notified in writing of any such transfer. A partial withdrawal will not be processed if it would reduce the account value to less than $2,000. In that case, you, as the owner will be notified that you will have 10 days from the date notice is mailed to: a. withdraw a lesser amount, subject to the $500 minimum, leaving a account value of at least $2,000; or b. surrender the contract for its cash surrender value. Amounts payable will be determined as of the end of the valuation period during which the subsequent instructions are received. If, after the expiration of the 10-day period, no written election is received from you as the owner, your withdrawal request will be considered null and void, and no withdrawal will be processed. A full surrender will result in a cash withdrawal payment equal to the cash surrender value at the end of the valuation period during which the election is received along with all completed forms. Any applicable contingent deferred sales load will be deducted from the amount paid. Fees and Taxes Relating to Withdrawals or Surrenders The account fee, unless waived, will be deducted from a full surrender before the application of any contingent deferred sales load. You withdrawals may be taxable transactions. The Code requires Transamerica to withhold federal income tax from withdrawals. However, generally as an owner, you will be entitled to elect, in writing, not to have tax withholding apply. This is true except for distributions from certain qualified contracts that may be subject to mandatory 20% withholding. Withholding applies to the portion of the withdrawal which is includible in income and subject to federal income tax. The federal income tax withholding rate for partial withdrawals and full surrenders is currently 10% of the taxable amount of the withdrawal. Withholding applies only if the taxable amount of the withdrawal is at least $200. Some states also require withholding for state income taxes. Moreover, the Code provides that a 10% penalty tax may be imposed on the taxable portions of distributions for certain early withdrawals. Withdrawal , including surrender requests, generally will be processed as of the end of the valuation period during which the request, including all completed forms, is received. Payment of any cash withdrawal or lump sum death benefit due from the variable account will occur within seven days from the date on which your request is received, except that Transamerica may postpone such payment if: 1. the New York Stock Exchange is closed for other than usual weekends or holidays, or trading on the Exchange is otherwise restricted; 2. an emergency exists as defined by the Commission, or the Commission requires that trading be restricted; or 3. the Commission permits a delay for the protection of owners. The withdrawal request will be effective when all appropriate withdrawal request forms are received. Payments of any amounts derived from purchase payments paid by check may be delayed until the check has cleared the owner's bank. When a withdrawal is made from a guarantee period before its expiration date, the amount withdrawn will generally be subject to an interest adjustment. The payment of a withdrawal from the fixed account may be delayed for up to six months. If delayed for more than 30 days, interest will be paid on the withdrawal amount up to the date of payment. You, as the owner, assume the investment risk for amounts allocated to the variable account. Certain withdrawals are subject to a contingent deferred sales load The total amount paid upon surrender of the contract, taking into account any prior withdrawals, may be more or less than the total purchase payments paid. Additional Withdrawal and Surrender Provisions After a withdrawal of the total cash surrender value, or at any time that the account value is zero, all of your rights, as the owner will terminate. Except for rollover IRA's, qualified contracts offered by the prospectus are only offered with Transamerica's prior permission. They will be issued in connection with retirement plans which meet the requirements of Section 408(b) of the Code. You should refer to the terms of the particular retirement plans for any additional limitations or restrictions on your cash withdrawals, as these limitations or restrictions may supercede those of the contract issued by Transamerica. As an owner, you may elect, under the systematic withdrawal option or automatic payout option (but not both), to withdraw certain amounts on a periodic basis from the sub-accounts prior to the annuity date. Systematic Withdrawal Option Prior to the annuity date, as the owner, you may elect to have withdrawals automatically made from one or more sub-account(s) on a monthly basis. You can accomplish this by giving written notice to the service center. Then other distribution modes may be permitted. The withdrawals will commence the month following, but no sooner than one week following, receipt of your written notice. Please note these exceptions, however, will not commence sooner than the later of: a. 30 days after the contract date; or b. the end of the free look period. Upon written notice to you, the owner, Transamerica may change the day of the month on which withdrawals are made under this option. Withdrawals will be from the sub-account, or sub-accounts, and in the percentage allocations specified by you the owner. If no specifications are made, withdrawals will be pro rata from all sub-accounts and fixed account with value. Systematic withdrawals can not be made from a sub-account from which dollar cost averaging transfers are being made. Eligibility and Rules of the Systematic Withdrawal Contract To be eligible for the systematic withdrawal option: * the account value must be at least $12,000 at the time you elect to use this option; * the minimum monthly amount that can be withdrawn is $100; and * the maximum monthly amount that can be withdrawn on an annual basis is equal to the sum, as of the date of the first withdrawal, of: a. 10% of purchase payments that are less than seven contract years old, and b. 10% of remaining purchase payments that are at least seven contract years old. Systematic withdrawals are not subject to the contingent deferred sales load but can be reduced by any applicable premium tax. Systematic withdrawals may be taxable, subject to withholding, and subject to the 10% penalty tax. The systematic withdrawals will continue unless you, as the owner, terminate them or automatically terminates by Transamerica as set forth in the contract. If this option is terminated it may not be used again until the next contract anniversary. In some states, no partial withdrawal may be made while the systematic withdrawal option is in effect. Any partial withdrawal will automatically terminate the systematic withdrawal option. Any portion of such partial withdrawal, which exceeds the allowed amount for withdrawals after the first withdrawal in a contract year will be subject to a contingent deferred sales load. In other states, only one partial withdrawal can be made while the systematic withdrawal option is in effect. Making more than one partial withdrawal while this option is in effect will automatically terminate the systematic withdrawal option. The amounts taken as the first and second partial withdrawals which exceed the allowed amount for withdrawals after the first withdrawal in a contract year, will be subject to a contingent deferred sales load. We reserve the right to impose an annual fee of an amount not to exceed $25 per contract year for administrative expenses associated with processing the systematic withdrawals. This fee, which is currently waived, will be deducted from each systematic withdrawal in equal installments during a contract year. The systematic withdrawal option is not available with the fixed account. Consult your tax adviser and, if applicable, the particular retirement plan, before requesting withdrawals from a qualified contract. There may be severe restrictions with regard to withdrawals from qualified contracts. Automatic Payout Option, or APO Prior to the annuity date, the owner may elect the automatic payout option, referred to as the APO to satisfy minimum distribution requirements under the Code for certain qualified contracts. DEATH BENEFIT If an owner or annuitant dies before the annuity date, a death benefit is payable. The death benefit will be equal to the greatest of: 1) the Account Value; 2) the Account Value determined as of the seventh contract anniversary and at each succeeding contract anniversary occurring at subsequent seven year intervals thereafter, adjusted for any subsequent purchase payments paid by the owner (less the sum of all subsequent withdrawals and any premium taxes applicable to those withdrawals), or 3) the sum of all purchase payments, less withdrawals and any premium taxes applicable to those withdrawals, plus interest thereon equal to a 5% annual effective rate, credited on a daily basis up to a) the contract anniversary following the earlier of any owner's or annuitant's 75th birthday, or b) the date the sum of all purchase payments, (less the sum of all withdrawals and any premium taxes), together with credited interest, has grown to two times the amount of all purchase payments (less all withdrawals and any premium taxes) as a result of such interest accumulation, if earlier. For contracts purchased by any owner or with an annuitant age 75 or older, the death benefit available under option three above will be the sum of all purchase payments, less withdrawals and any premium taxes applicable to these withdrawals. The death benefit will be determined as of the valuation period during which the later of: a) proof of death of the owner or annuitant is received by the service center; or b) written notice of the method of settlement elected by the beneficiary is received at the service center. If no settlement method is elected, the death benefit will be calculated and paid as of a date no later than one year after the date of death. No contingent deferred sales load will apply. Until the death benefit is paid, the account value allocated to the variable account will remain in the sub-accounts as previously specified by the owner, or in the sub-accounts as reallocated according to instructions received by Transamerica from all beneficiaries. Therefore, the account value will fluctuate with investment performance of the applicable sub-accounts. As a result, the amount of the death benefit will depend on the account value at the time the death benefit is paid. There is no extra charge for the death benefit, and it applies automatically, i.e. no election by the owner is necessary. Payment of Death Benefit The death benefit is generally payable upon receipt of proof of death of the annuitant or owner. Where the owner is not an individual, the death benefit is generally payable upon receipt of proof of death of the annuitant. Once the Transamerica service center receives this proof and the beneficiary's choice of a method of settlement, the death benefit generally will be paid within seven days, or as soon thereafter as Transamerica has sufficient information to make the payment. The death benefit may be paid in a lump sum cash benefit. Or, subject to any limitations under any state or federal law, rule, or regulation, it may be paid under one of the annuity forms, unless a settlement agreement effective under the contract prevents this choice. If no settlement method is elected within one year of the date of death, the death benefit will be paid in a lump sum. The payment of the death benefit may be subject to certain distribution requirements under the federal income tax laws. Designation of Beneficiaries You as the owner may select one or more beneficiaries and name them in a form and manner acceptable to us. If the owner selects more than one beneficiary, unless you indicate otherwise they will each share equally in any death benefits payable in the event of the annuitant's death before the annuity date if there is no contingent annuitant, or the owner's death if there is no joint owner, and the owner is an individual other than the annuitant. Different beneficiaries may be named with respect to the annuitant's death and the owner's death. Respectively, these individuals are referred to as the annuitant's beneficiary and the owner's beneficiary. Before the annuitant's death, you as the owner may change the beneficiary by notice to the service center in a form and manner acceptable to Transamerica. The owner may also make the designation of beneficiary irrevocable by sending notice to and obtaining approval from the service center. Irrevocable beneficiaries may only be changed with the written consent of the designated irrevocable beneficiaries, except to the extent required by law. The interest of any beneficiary who dies before the owner or annuitant will terminate at the death of the beneficiary. The interest of any beneficiary who dies at the time of, or within 30 days after, the death of the owner or annuitant will also terminate if no benefits have been paid, unless the contract has been endorsed to provide otherwise. The benefits will then be paid as though the beneficiary had died before the owner or annuitant. If the interests of all designated beneficiaries have terminated, any benefits payable will be paid to the owner's estate. Transamerica may rely on an affidavit by any responsible person in determining the identity or non-existence of any beneficiary not identified by name. Death of Annuitant Prior to the Annuity Date If the annuitant dies prior to the annuity date and the annuitant is not the owner and there is no contingent annuitant, a death benefit under the contract relating to that annuitant will be paid to the annuitant's beneficiary. If there is a contingent annuitant, then upon the death of the annuitant the contingent annuitant will become the annuitant and no death benefit will be paid at that time. Death of Owner Prior to the Annuity Date If an owner dies before the annuity date, a death benefit will be paid to that owner's beneficiary. If the contract has joint owners, the surviving joint owner will be the owner's beneficiary. If the owner's beneficiary is the deceased owner's spouse, then the spouse may elect to treat the contract as his or her own or receive payment of the death benefit. The payment of the death benefit may be subject to certain distribution requirements under the federal income tax laws. Death of Annuitant or Owner After the Annuity Date If the annuitant or an owner dies after the annuity starts, the remaining undistributed portion, if any, of the contract will be distributed at least as rapidly as under the method of distribution being used as of the date of such death. Under some annuity forms, there will be no death benefit. If the owner is not the annuitant, upon an owner's death, any remaining ownership rights will pass to the owner's beneficiary. CHARGES AND DEDUCTIONS No deductions are made from purchase payments except for any applicable premium taxes. Therefore, the full amount, less any premium taxes, of the purchase payments are invested in one or more of the sub-accounts of the variable account or the fixed account. As more fully described below, charges under the contract are assessed in three ways: 1. as deductions for the contract or annuity fees, any transfer fees, any systematic withdrawal option or asset rebalancing fees, any interest adjustment (for withdrawals from the fixed account) and, if applicable, for premium taxes; 2. as charges against the assets of the variable account for the assumption of mortality and expense risks and administrative expenses; and 3. as contingent deferred sales loads. In addition, certain deductions are made from the assets of the funds for investment management fees and expenses. These fees and expenses are described in the funds' prospectuses and their statements of additional information. Contingent Deferred Sales Load No deduction for sales charges is made from the contract owner's purchase payments, although premium tax may be deducted. However, a contingent deferred sales load of up to 6% of purchase payments paid may be imposed on certain withdrawals or surrenders from the account value to partially cover certain expenses incurred by Transamerica relating to the sale of the contracts, including commissions paid to salespersons, the costs of preparation of sales literature and other promotional costs and acquisition expenses. The contingent deferred sales load percentage varies according to the number of contract years between the contract year in which a net purchase payment was credited to the contract and the contract year in which the withdrawal is made. The amount of the contingent deferred sales load is determined by multiplying the amount withdrawn subject to the contingent deferred sales load by the contingent deferred sales load percentage in accordance with the following table. Number of Contract Years Contingent Deferred Sales Load Since Receipt of Each Purchase Payment As a Percentage of Purchase Payment Less than one year 6% 1 year but less than 2 years 6% 2 years but less than 3 years 5% 3 years but less than 4 years 5% 4 years but less than 5 years 4% 5 years but less than 6 years 4% 6 years but less than 7 years 2% 7 or more years 0% ------------------------------------------------------------------------ In no event shall the total contingent deferred sales load assessed against the contract exceed 6% of the aggregate purchase payments paid to a contract. Certain amounts may be withdrawn free of any contingent deferred sales load. As the owner, you may make withdrawals up to the allowed amount without incurring a contingent deferred sales load each contract year before the annuity date. During the first contract year, the allowed amount is equal to accumulated earnings not previously withdrawn. For the first withdrawal, and only the first withdrawal in a contract year after the first contract year, the available allowed amount you are allowed to withdraw is equal to the sum of : 1. 100% of purchase payments not previously withdrawn and received at least seven contract years before the date of withdrawal; plus 2. the greater of a) the accumulated earnings not previously withdrawn; or b) 15% of purchase payments received at least one but less than seven complete contract years before the date of withdrawal not reduced to take into account any withdrawals deemed to be made from such purchase payments. After the first withdrawal in a contract year, after the first contract year, the available allowed amount is equal to the sum of: 1. 100% of purchase payments not previously withdrawn and received at least seven complete contract years before the date of withdrawal; plus 2. accumulated earnings not previously withdrawn. Your withdrawals will always be made first from your accumulated earnings, and then from your purchase payments on a first in first out basis. This is done so that accumulated earnings may be depleted with the first withdrawal and the 10% of purchase payments discussed above is not used in the calculation of the allowed amount. If an allowed amount is not withdrawn during a contract year, it does not carry over to the next contract year. However, accumulated earnings, if any, in an owner's account value are always available as the allowed amount. No withdrawals are allowed with regard to purchase payments made by a check which has not cleared. Some contract owners may hold contracts which, when originally issued, provided for an allowed amount which was equal to the sum of: 1. all purchase payments, not previously withdrawn and held more then seven contract years; plus 2. 10% of purchase payments held between one and seven contract years not reduced by any withdrawals made by the owner from such purchase payments. Under these contracts, withdrawals were made first from purchase payments on a first in first out basis, then from earnings. The allowed amount applicable to these contract owners will be determined by whichever formula provides them with the larger amount available, for full surrenders only, without a contingent deferred sales load. No contingent deferred sales load will be charged on the allowed amount if a contract is surrendered and the owner was eligible to withdraw the amount without charge, but had not made such a withdrawal during the contract year. In addition, no contingent deferred sales load is assessed: 1. upon annuitization after the first three contract years to an option involving life contingencies; 2. upon payment of the death benefit; 3. upon transfers of account value among and between the sub-accounts and the guarantee periods; 4. under the systematic withdrawal option; or, 5. in some circumstances, under the automatic payout option. Any applicable contingent deferred sales load will be deducted from the amount requested for both partial withdrawals and full surrenders. The contingent deferred sales load and any premium tax applicable to a withdrawal from the fixed account will be deducted from the amount withdrawn after the interest adjustment, if any, is applied and before payment is made to the owner. The contingent deferred sales load arising from a withdrawal or surrender of the contract will be waived if the owner receives extended medical care in a licensed hospital or nursing care facility for a least 45 days (30 days for contracts issued in Pennsylvania) during any continuous 60 day period beginning on or after the first contract anniversary and the request for the withdrawal or surrender, together with proof of such extended care, is received at the service center during the term of such care or within 90 days after the last day upon which the owner received such extended care. This waiver of the contingent deferred sales load may not be available in all states and does not apply if the owner is receiving extended medical care in a licensed hospital or nursing care facility at the time the owner applied for the contract or at the contract date. Additionally, in some states, the contingent deferred sales load arising from a withdrawal or surrender of the contract will be waived if the owner is diagnosed, after the first contract year, with a terminal illness reasonably expected to result in death within twelve months. Proof of the terminal illness must be received by the service center at the time the withdrawal or surrender request is received. Administrative Charges At the end of each contract year before the annuity date, Transamerica deducts an annual account fee as partial compensation for expenses relating to the issue and maintenance of the contract and the variable account. The annual account fee is equal to the lesser of $30 or 2% of the account value. No account fee will be deducted for a contract year if your account value exceeds $50,000 on the last business day of the contract year or as of the date the contract is surrendered. The account fee may be changed upon 30 days advance written notice to you, the owner, subject to the prior approval of the New York State Insurance Department. In no event may this fee exceed the lesser of $60 or 2% of the account value. Such increases in the account fee will apply only to future deductions after the effective date of the change. If you surrender your contract on other than the end of a contract year, we will deduct the account fee in full at the time of the surrender. The account fee will be deducted on a pro rata basis from each sub-account in which the contract is invested at the time of such deduction or from the fixed account if there are insufficient funds in the sub-accounts. If the entire amount is in the fixed account, then the annual account fee will be deducted on a pro rata basis from all guarantee periods. The account fee for a contract year may be waived if the account value exceeds $50,000 on the last business day of that contract year or as of the date the contract is surrendered. This waiver of the account fee may not be available in all states. After the annuity date, an annual annuity fee of $30 will be deducted in equal amounts from each variable annuity payment made during the year. If monthly payments, the amount paid per month will be $2.50. This fee will not be changed. No annuity fee will be deducted from fixed annuity payments. Transamerica also deducts the administrative expense charge from the variable account at the end of each valuation period both before and after the annuity date at an effective current annual rate of 0.15% of assets held in each sub-account . This deduction is for administrative expenses attributable to the contracts and the variable account which exceed the revenues received from the account fee, any transfer fee, and any fee imposed for systematic withdrawals. Transamerica has the ability to increase or decrease this charge, but the charge is guaranteed not to exceed 0.25%. Transamerica will provide 30 days written notice of any change in fees. The administrative charges do not bear any relationship to the actual administrative costs of a particular contract. The administrative expense charge is reflected in the variable accumulation or variable annuity unit values for each sub-account. Mortality and Expense Risk Charge Transamerica imposes a charge called the mortality and expense risk charge to compensate it for bearing certain mortality and expense risks under the contracts. For assuming these risks, Transamerica makes a daily charge equal to 0.003403% corresponding to an effective annual rate of 1.25% of the value of the net assets in the variable account. This charge is imposed before the annuity date and if an annuity purchase amount is applied to a variable payment option, also after the annuity date. Transamerica guarantees that this charge of 1.25% will never increase. The mortality and expense risk charge is reflected in the variable accumulation or variable annuity unit values for each sub-account. Variable accumulated values and variable annuity payments are not affected by changes in actual mortality experience incurred by Transamerica. The mortality risks assumed by Transamerica arise from its contractual obligations to make annuity payments and to pay death benefits prior to the annuity date. The annuity payments are determined in accordance with the annuity tables and other provisions contained in the contract. Thus, as owner, you are assured that neither the annuitant's own longevity nor an unanticipated improvement in general life expectancy will adversely affect the annuity payments under the contract. Transamerica also bears substantial risk in connection with the death benefit before the annuity date, since it will pay a death benefit that may be greater than the account value. In this way, we bear the risk of unfavorable experience in the sub-accounts. The expense risk assumed by Transamerica is the risk that Transamerica's actual expenses in administering the contract and the variable account will exceed the amount recovered through the administrative expense charge, account fees, transfer fees and any fees imposed for systematic withdrawals. If the mortality and expense risk charge is insufficient to cover actual costs and risks assumed, the loss will fall on Transamerica. Conversely, if this charge is more than sufficient, any excess will be profit to Transamerica. Currently, we expect a profit from this charge. Transamerica anticipates that the contingent deferred sales load will not generate sufficient funds to pay the cost of distributing the contracts. To the extent that the contingent deferred sales load is insufficient to cover the actual cost of contract distribution, the deficiency will be met from Transamerica's general corporate assets which may include amounts, if any, derived from the mortality and expense risk charge. Premium Taxes We may be required to pay premium or retaliatory taxes currently ranging from 0% to 3.5% in connection with purchase payments or values under the contracts. Depending upon applicable state law, we may deduct the premium taxes which are payable with respect to a particular contract from the purchase payments, from amounts withdrawn, or from amounts applied on the annuity date. In some states, charges for both direct premium taxes and retaliatory premium taxes may be imposed at the same or different times with respect to the same purchase payment, depending upon applicable state law. In certain limited circumstances, a broker-dealer or other entity distributing the contracts may elect to pay to Transamerica an amount equal to the premium taxes that would otherwise be attributable to that entity's customers. In such cases, Transamerica will not impose a premium tax charge on those contracts. Transfer Fee We charge a $10 transfer fee for each transfer in excess of eighteen in a contract year. We reserve the right to: a) waive the transfer fee; b) vary the number of transfers without charge; or c) not count transfers under certain options or services for purposes of the allowed number without charge. Currently, we do not charge a fee for automatic asset rebalancing. However, we reserve the right to impose a nominal fee. Systematic Withdrawal Option We reserve the right to impose an annual fee of an amount not to exceed $25 for administrative expenses associated with processing systematic withdrawals. This fee, which is currently waived, will be deducted from each systematic withdrawal you take in equal installments during a contract year. Taxes Under present laws, Transamerica will incur state or local taxes, in addition to the premium taxes described above, in several states. No charges are currently made for taxes other than state premium taxes. However, Transamerica reserves the right to deduct charges in the future for federal, state and local taxes or the economic burden resulting from the application of any tax laws that we determine to be attributable to the contracts. Portfolio Expenses The value of the assets in the variable account reflects the value of portfolio shares and therefore the fees and expenses paid by each portfolio. You can find a complete description of the fees, expenses, and deductions from the portfolios in the portfolio's prospectuses. Interest Adjustment For a description of the interest adjustment applicable to early withdrawals and transfers from the guarantee periods of the fixed account, see The Fixed Account on page 26. Sales in Special Situations Transamerica may sell the contracts in special situations that are expected to involve reduced expenses for Transamerica. These instances may include: 1. sales in certain group arrangements, such as employee savings plans; 2. sales to current or former officers, directors, employees and their families, of Transamerica and its affiliates; 3. sales to officers, directors, employees and their families, of the Portfolios' investment advisers and their affiliates; or 4. sales to officers, directors, employees and sales agents, including registered representatives and their families, of broker-dealers and other financial institutions that have sales agreements with Transamerica to sell the contracts. In such situations: 1. the contingent deferred sales load may be reduced or waived; 2. the mortality and expense risk charge or administration charges may be reduced or waived; or 3. certain amounts may be credited to the contract account value, for example, amounts related to commissions or sales compensation otherwise payable to a broker-dealer may be credited to the contract account value. These reductions in fees or charges or credits to account value will not unfairly discriminate against any contract owner. These reductions in fees or charges or credits to account value are generally taxable and treated as purchase payments for purposes of income tax and any possible premium tax charge. ANNUITY PAYMENTS Annuity Date Initially, as the owner, you select the annuity date at the time you pay the initial purchase payment. Thereafter, you may change the annuity date from time to time by giving notice to the service center in a form and manner acceptable to us. The service center must receive notice of each change at least 30 days prior to the then-current annuity date. The annuity date must not be earlier than the third contract anniversary, except for certain qualified contracts. The latest annuity date which may be elected is the later of: a) the first day of the calendar month immediately preceding the month of the annuitant's 85th birthday; or b) the first day of the month coinciding with or next following the tenth contract anniversary. This annuity date extension to the tenth contract anniversary may not be available in all states. The annuity date must be the first day of a calendar month. The first annuity payment will be on the first day of the month immediately following the annuity date. Annuity Payment The annuity date is the date that the annuity purchase amount is applied to provide the annuity payments under the contract . The annuity date will be used in conjunction with to the annuity form and payment option you have selected. The annuity date will remain effective unless the entire account value has been withdrawn or the death benefit has been paid to the beneficiary prior to that date. The annuity purchase amount is the account value, minus any interest adjustment, minus any applicable contingent deferred sales load and minus any applicable premium taxes. Any contingent deferred sales load will be waived if values are applied to an annuity form involving life contingencies on or after the third contract anniversary. If the amount of the monthly annuity payment from any of the payment options which you , as the owner, select results in a monthly annuity payment of less than $150, or if the annuity purchase amount is less than $5,000, Transamerica reserves the right to offer a less frequent mode of payment or pay the account value in a cash payment. Monthly annuity payments from the variable annuity payment option will further be subject to a minimum monthly annuity amount of $75 from each sub-account of the variable account from which such payments are made. As the owner, you may choose from the annuity forms below and Transamerica may consent to other plans of payment before the annuity date. For annuity forms involving life income, the actual age and/or sex of the annuitant, or a joint or contingent annuitant will affect the amount of each payment. Sex-distinct rates generally are not allowed under certain qualified contracts. Transamerica reserves the right to ask for satisfactory proof of the annuitant's, or the joint or contingent annuitant's age. We may delay annuity payments until satisfactory proof is received. Since payments to older annuitants are expected to be fewer in number, the amount of each annuity payment under a selected annuity form will be greater for older annuitants than for younger annuitants. As the owner, you may choose from the two annuity payment options described below. The annuity date and annuity forms available for qualified contracts may also be controlled by endorsements, the plan or applicable law. A portion or the entire amount of the annuity payments may be taxable as ordinary income. If, at the time the annuity payments begin, Transamerica has not received a proper written election not to have federal income taxes withheld, we must by law withhold such taxes from the taxable portion of such annuity payments and remit that amount to the federal government. Federal income tax withholding is mandatory for certain distributions from Section 401 retirement plans and 403(b) annuities. State income tax withholding may also apply. Election of Annuity Forms and Payment Options The annuity form and payment option for each contract is set as a 120 month period certain and life annuity form, under the variable payment option. Before the annuity date, and while the annuitant is living, the owner may, by written request, change the annuity form or annuity payment option or may request payment of the cash surrender value for the contract. The request for change of the annuity date or annuity payment option must be received by the service center at least 30 days prior to the annuity date. In the event that you, as owner, do not select an annuity form and payment option within at least 30 days before the annuity date, Transamerica will make variable annuity payments in accordance with the 120 month period certain and life annuity form and the applicable provisions of the contract. Annuity Payment Options The annuity forms may be paid under fixed or variable annuity payment options. Under the fixed annuity payment option, the amount of each payment will be determined on the annuity date and will not subsequently be affected by the investment performance of the sub-accounts. Under the variable annuity payment option, the annuity payments, after the first annuity payment, will reflect the investment experience of the sub-account or sub-accounts chosen by the owner. Owners may elect a fixed annuity, a variable annuity, or a combination of both, in 25% increments of the annuity purchase amount. If, as the owner, you elect a combination, you must specify what part of the annuity purchase amount is to be applied to the fixed and variable payment options. Unless you specify otherwise, the applied annuity purchase amount will be used to provide a variable annuity. In this event, the initial allocation of variable annuity units for the variable sub-accounts will be in proportion to the contract's value in the sub-accounts on the annuity date. Fixed Annuity Payment Option A fixed annuity provides for annuity payments which will remain constant in accordance with the terms of the annuity form elected. If a fixed annuity is selected, the portion of the annuity purchase amount used to provide the fixed annuity will be transferred to the general account assets of Transamerica. The amount of annuity payments will be established by the fixed annuity provisions selected and the age and sex, if sex-distinct rates are allowed by law, of the annuitant and will not reflect investment performance after the annuity date. The fixed annuity payment amounts are determined by applying the annuity purchase rate specified in the contract to the portion of the annuity purchase amount applied to the fixed annuity option by the owner. Payments may vary after the death of the annuitant under some annuity options; the amounts of these variances are fixed on the annuity date. Variable Annuity Payment Option A variable annuity provides for payments that vary in dollar amount, based on the investment performance of the selected sub-accounts of the variable account. The variable annuity purchase rate tables in the contract reflect an assumed annual interest rate of 4%, so if the actual net investment performance of the sub-accounts is less than this rate, then the dollar amount of the actual annuity payments will decrease. If the actual net investment performance of the sub-accounts is higher than this rate, then the dollar amount of the actual annuity payments will increase. If the net investment performance exactly equals the 4% rate, then the dollar amount of the actual annuity payments will remain constant. Variable annuity payments will be based on the sub-accounts which you, as the owner, select, and on the allocations you make among the sub-accounts. For further details as to the determination of variable annuity payments, see the Statement of Additional Information. Annuity Forms As the contract owner, you may choose any of the annuity forms described below. Subject to approval by Transamerica, you may also select any other annuity forms then being offered by Transamerica. You may select among any of the following contract choices: 1. Life Annuity. Payments start on the first day of the month immediately following the annuity date, if the annuitant is living. Payments end with the payment due just before the annuitant's death. There is no death benefit under this form. It is possible that only one payment will be made under this form if the annuitant dies before the second payment is due; only two payments will be made if the annuitant dies before the third payment is due, and so forth. 2. Life and Contingent Annuity. Payments start on the first day of the month immediately following the annuity date, if the annuitant is living. Payments will continue for as long as the annuitant lives. After the annuitant dies, payments will be made to the contingent annuitant, if living, for as long as the contingent annuitant lives. The continued payments can be in the same amount as the original payments, or in an amount equal to one-half or two-thirds thereof. Payments will end with the payment due just before the death of the contingent annuitant. There is no death benefit after both the annuitant and the contingent annuitant die. If the contingent annuitant does not survive the annuitant, payments will end with the payment due just before the death of the annuitant. It is possible that only one payment or very few payments will be made under this form, if the annuitant and contingent annuitant die shortly after payments begin. The written request for this form must: a) name the contingent annuitant; and b) state the percentage of payments for the contingent annuitant. Once annuity payments start under this annuity form, the person named as contingent annuitant for purposes of being the measuring life, may not be changed. Transamerica will require proof of age for the annuitant and for the contingent annuitant before payments start. 3. Life Annuity With Period Certain. Payments start on the first day of the month immediately following the annuity date, if the annuitant is living. Payments will be made for the longer of: a) the annuitant's life; or, b) the period certain. The period certain may be 120 or 180 or 240 months, but in no event may it exceed the life expectancy of the annuitant. If the annuitant dies after all payments have been made for the period certain, payments will cease with the payment due just before the annuitant's death. No benefit will then be payable to the annuitant's beneficiary. If the annuitant dies during the period certain, the rest of the period certain payments will be made to the annuitant's beneficiary. The owner may elect to have the commuted value of these payments paid in a single sum. Transamerica will determine the commuted value by discounting the rest of the payments at the then current rate of interest used for commuted values. If, as the owner, you do not elect to have the commuted value paid in a single sum after the annuitant's death, you may designate a payee to receive any remaining payments payable if the annuitant's beneficiary dies before all of the payments under the period certain have been made. If the annuitant's beneficiary dies before receiving all of the remaining period certain payments and a designated payee does not survive the annuitant's beneficiary for at least 30 days, then the remaining payments will be paid to the owner, if living, otherwise in a single sum to the owner's estate. The written request for this form must: a) state the length of the period certain; and b) name the annuitant's beneficiary. 4. Joint and Survivor Annuity Payments will be made, starting on the first day of the month immediately following the annuity date, if and for as long as the annuitant and joint annuitant are living. After the annuitant or joint annuitant dies, payments will continue as long as the survivor lives. The continued payments can be in the same amount as the original payments, or in an amount equal to one-half or two-thirds thereof. It is possible that only one payment or very few payments will be made under this form if the annuitant and joint annuitant both die shortly after payments begin. The written request for this form must: a) name the joint annuitant; and b) state the percentage of continued payments for the survivor. Once payments start under this annuity form, the person named as joint annuitant, for the purpose of being the measuring life, may not be changed. Transamerica will need proof of age for the joint annuitant before payments start. 5. Other Forms of Payment. Benefits can be provided under any other annuity form not described in this section subject to Transamerica's agreement and any applicable state or federal law or regulation. Requests for any other annuity form must be made in writing to the service center at least 30 days before the annuity date. Once payments start under the annuity form and payment option selected by the owner: a) no changes can be made in the annuity form and payment option; b) no additional purchase payment will be accepted under the contract; and c) no further withdrawals will be allowed. The owner may, at any time after the annuity date by written notice to us at our service center, change the payee of annuity benefits being provided under the contract. The effective date of change in payee will be the later of: a) the date we receive the written request for such change; or b) the date specified by the owner. If the contract is issued as a qualified contract, you may not change the payee on or after the annuity date. Alternate Fixed Annuity Rates The amount of any fixed annuity payments will be determined on the annuity date by using either the guaranteed fixed annuity rates or Transamerica's current single purchase payment fixed annuity rates at the time, whichever would result in a higher amount of monthly fixed annuity payments. QUALIFIED CONTRACTS The contracts may be used to fund rollover IRAs and, with Transamerica's prior permission, to fund contributory IRAs and contributory Roth IRAs, for use in connection with Section 408 and 408A of the Code. A rollover IRA is one whose initial purchase payment is from the rollover or transfer of certain kinds of distributions from a non-Roth IRA, qualified plans, or Section 403(b) tax sheltered annuities. Each must follow the rules set out in the Code to maintain favorable tax treatment of the rollover IRA. A rollover Roth IRA is one whose initial purchase payment is from the rollover, transfer or conversion from non-Roth IRA or Roth IRA. A contributory IRA or contributory Roth IRA are those whose initial and subsequent purchase payments are subject to limitations imposed by the Code. With Transamerica's prior permission, the contract may also be used for various types of qualified pension and profit sharing plans under Section 401 of the Code, which permits corporate employers to establish various types of retirement plans for employees, and as Section 403(b) annuities. Currently, additional purchase payments after the initial purchase payment may not be made to contracts used as Section 401(a) or Section 403(b) annuities. The tax rules applicable to distribution from qualified retirement plans, including restrictions on contributions and benefits, taxation of distributions, and any tax penalties, vary according to the type of plan and the terms and the conditions of the plan itself. Various tax penalties may apply to: a) contributions in excess of specified limits; b) distributions prior to age 591/2 , subject to certain exceptions; c) distributions that do not satisfy specified requirements; and d) certain other transactions subject to qualified plans. If you are purchasing a contract for use in a qualified plan, you should seek competent advice regarding the suitability of the proposed plan documents and the contracts to their specific needs. Transamerica reserves the right to decline to sell the contract to certain qualified plans or terminate the contract if, in Transamerica's judgment, the contract is not appropriate for the plan. If a contract is purchased to fund an IRA or Roth IRA, the annuitant must also be the owner. In addition, under current tax law, minimum distributions are required from certain qualified contracts. The Owner should consult his/her tax adviser concerning these matters. The Automatic Payout Option, or APO Prior to the annuity date, for qualified contract other than Roth IRAs, the owner may elect the automatic payout option, or APO, to satisfy minimum distribution requirements under Sections 401(a)(9), 403(b), and 408(b)(3) of the Code with regard to this contract. For IRAs and Sep/IRAs, this may be elected no earlier than six months prior to the calendar year in which the owner attains age 701/2, but payments may not begin earlier than January of such calendar year. For other qualified contracts, APO can be elected no earlier than six months prior to the later of when the owner: a) attains age 70 1/2; and b) retires from employment. Additionally, APO withdrawals may not begin before the later of: a) 30 days after the Contract Date; or b) the end of the Free Look Period. APO may be elected in any calendar month, but no later than the month in which the owner attains age 84. APO withdrawals will be from the sub-accounts and in the percentage allocations which you, as the owner specify. If no specifications are made, withdrawals will be pro rata from all sub-accounts with value. Withdrawals can not be made from a sub-account from which dollar cost averaging transfers are being made. Payments will be made annually, and will continue unless terminated by the owner or automatically terminated by Transamerica as set forth in the contract. Once terminated, APO may not be elected again. If only APO withdrawals are made, no contingent deferred sales load will apply, regardless of the allowed amount. However, if a partial withdrawal is taken, that partial withdrawal and any subsequent withdrawals that contract year will be subject to a contingent deferred sales load to the extent they exceed the allowed amount. To be eligible for this option, the following conditions must be met: 1. the account value must be at least $12,000 at the time of election; and 2. the annual withdrawal amount is the larger of the required minimum distribution under Code Sections 401(a)(9) or 408(b)(3) or $500. APO allows the required minimum distribution to be paid from the sub-accounts of the variable account. If there are insufficient funds in the variable account to make a withdrawal, or for other reasons as set forth in the contract, this option will terminate. In which case, if there are amounts in a contract's account value remaining in the fixed account, the minimum distribution requirements with regard to the account value may not be met. If amounts are transferred to sub-accounts from a guaranteed period before its expiration date, an interest adjustment will be made to such amounts. If you have more than one qualified plan subject to the Code's minimum distribution requirements, you must consider all such plans in the calculation of your minimum distribution requirement, but Transamerica will make calculations and distribution with regard to this contract only. Restrictions under Section 403(b) Programs Certain restrictions apply to annuity contracts used in connection with Internal Revenue Code Section 403(b) retirement plans. Section 403(b) of the Internal Revenue Code provides for tax-deferred retirement savings plans for employees of certain non-profit and educational organizations. In accordance with the requirements of the Code, Section 403(b) annuities generally may not permit distribution of: a) elective contributions made in years beginning after December 31, 1988; b) earnings on those contributions; or c) earnings on amounts attributable to elective contributions held as of the end of the last year beginning before January 1, 1989. Distributions of such amounts will be allowed only upon death of the employee, on or after attainment of age 591/2, separation from service, disability, or financial hardship, except that income attributable to elective contributions may not be distributed in the case of hardship. FEDERAL TAX MATTERS Introduction The following discussion is a general description of federal tax considerations relating to the contract and is not intended as tax advice. This discussion is not intended to address the tax consequences resulting from all of the situations in which a person may be entitled to or may receive a distribution under the contract. Any person concerned about these tax implications should consult a competent tax adviser before initiating any transaction. This discussion is based upon Transamerica's understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service. No representation is made as to the likelihood of the continuation of the present federal income tax laws or of the current interpretation by the Internal Revenue Service. Moreover, no attempt has been made to consider any applicable state or other tax laws. The Contract may be purchased: a) on a non-tax qualified basis for use as a non-qualified contract; or b) purchased and used in connection with plans qualifying for special tax treatment as a qualified contract. Qualified contracts are designed for use by individuals solely as plans entitled to special income tax treatment under sections 401, 403(b), 408 and 408A of the Code. The ultimate effect of federal income taxes on the amounts held under a contract, on annuity payments, and on the economic benefit to the owner, the annuitant, or the beneficiary may depend on the type of retirement plan, and on the tax status of the individual concerned. In addition, certain requirements must be satisfied in purchasing a qualified contract with proceeds from a tax qualified retirement plan and receiving distributions from a qualified contract in order to continue receiving special tax treatment. Therefore, if you are considering the purchase of a qualified contract, you should seek competent legal and tax advice regarding the suitability of the contract for you situation. You will also need to be aware of the applicable requirements, and the tax treatment of the rights and benefits of the contract. The following discussion assumes that a qualified contract is purchased with proceeds from and/or contributions under retirement plans that qualify for the intended special federal income tax treatment. The following discussion is also based on the assumption that the contract qualifies as an annuity contract for federal income tax purposes. The Statement of Additional Information discusses the requirements for qualifying as an annuity. Purchase Payments At the time the initial purchase payment is paid, as a prospective purchaser, you must specify whether you are purchasing a non-qualified contract or a qualified contract. If the initial purchase payment is derived from an exchange or surrender of another annuity contract, Transamerica may require that the prospective purchaser provide information with regard to the federal income tax status of the previous annuity contract. Transamerica will require that persons purchase separate contracts if they desire to invest monies qualifying for different annuity tax treatment under the Code. Each such separate contract would require the minimum initial purchase payment stated above. Additional purchase payments under a contract must qualify for the same federal income tax treatment as the initial purchase payment under the contract. Transamerica will not accept an additional purchase payment under a contract if the federal income tax treatment of such purchase payment would be different from that of the initial purchase payment. Taxation of Annuities In General Section 72 of the Code governs taxation of annuities in general. Transamerica believes that the owner who is a natural person generally is not taxed on increases in the value of a contract until distribution occurs by withdrawing all or part of the account value, for example, through withdrawals or annuity payments under the annuity option elected. For this purpose, the assignment, pledge, or agreement to assign or pledge any portion of the account value, and in the case of a qualified contract, any portion of an interest in the plan, generally will be treated as a distribution. The taxable portion of a distribution, in the form of a single sum payment or an annuity, is taxable as ordinary income. The owner of any non-qualified contract who is not a natural person generally must include in income any increase in the excess of the account value over the investment in the contract during the taxable year. There are some exceptions to this rule and a prospective owner that is not a natural person, for example, a trust, may wish to discuss these with a competent tax adviser. The following discussion generally applies to contracts owned by natural persons. Withdrawals In the case of a withdrawal under a qualified contract, including withdrawals under the systematic withdrawal option or the automatic payout option, a ratable portion of the amount received is taxable. This portion is generally based on the ratio of the investment in the contract to the individual's total accrued benefit under the retirement plan. The investment in the contract generally equals the amount of any non-deductible purchase payments paid by or on behalf of any individual. For a qualified contract, the investment in the contract can be zero. Special tax rules may apply to certain distributions from a qualified contract. With respect to non-qualified contracts, partial withdrawals, including withdrawals under the systematic withdrawal option, are generally treated as taxable income to the extent that the account value immediately before the withdrawal exceeds the investment in the contract at that time. The investment in the contract is generally equal to the amount of non-deductible purchase payments made. If a partial withdrawal from the fixed account is subject to an interest adjustment, the account value immediately before the withdrawal will not be altered to take into account the interest adjustment. As a result, for purposes of determining the taxable portion of the partial withdrawal, the account value will be treated as including the amount deducted from the fixed account due to the interest adjustment. Full surrenders are treated as taxable income to the extent that the amount received exceeds the investment in the contract. Annuity Payments Although the tax consequences may vary depending on the annuity payment elected under the contract, in general, only the portion of the annuity payment that represents the amount by which the account value exceeds the investment in the contract will be taxed. After the investment in the contract is recovered, the full amount of any additional annuity payments is taxable. For variable annuity payments, the taxable portion is generally determined by an equation that establishes a specific dollar amount of each payment that is not taxed. The dollar amount is determined by dividing the investment in the contract by the total number of expected periodic payments. However, the entire distribution will be taxable once the recipient has recovered the dollar amount of his or her investment in the contract. For fixed annuity payments, in general, there is no tax on the portion of each payment which represents the same ratio that the investment in the contract bears to the total expected value of the annuity payments for the term of the payments. However, the remainder of each annuity payment is taxable. Once the investment in the contract has been fully recovered, the full amount of any additional annuity payments is taxable. If annuity payments cease as a result of an annuitant's death before full recovery of the investment in the contract, consult a competent tax advisor regarding deductibility of the unrecovered amount. Withholding The Code requires Transamerica to withhold federal income tax from distributions under the contracts. However, except for distributions from certain qualified contracts, an owner will be entitled to elect, in writing, not to have tax withheld. Withholding applies to the portion of a distribution which is includible in income and subject to federal income tax, where the taxable amount is at least $200. Some states also require withholding for state income taxes. The withholding varies according to the type of distribution and the owner's tax status. "Eligible rollover distributions" from Section 401(a) plans and Section 403(b) tax sheltered annuities are subject to mandatory federal income tax withholding at the rate of 20%. An eligible rollover distribution is the taxable portion of any distribution from such a plan, except for certain distributions, such as minimum required distributions or settlement option payments made in a specified form. The 20% mandatory withholding does not apply, however, if the owner chooses a "direct rollover" from the plan to another tax-qualified plan or to an IRA, other than a Roth IRA. The federal income tax withholding rate for a distribution that is not an eligible rollover distribution is 10% of the taxable amount of the distribution. Penalty Tax In the case of a distribution pursuant to a non-qualified contract, a federal income tax penalty that equals 10% of the amount treated as taxable income may be imposed. In general, however, there is no penalty tax on distributions: 1. made on or after the date on which the owner attains age 591/2; 2. made as a result of death or disability of the owner; or 3. received in substantially equal periodic payments as a life annuity or a joint and survivor annuity for the lives or life expectancies of the owner and a joint owner Other tax penalties may apply to certain distributions under a qualified contract. Taxation of Death Benefit Proceeds Amounts may be distributed from the contract because of the death of an owner or the annuitant. Generally such amounts are includible in income as follows: 1. if distributed in a lump sum, they are taxed in the same manner as a full surrender, as described above; or 2. if distributed under an annuity option, they are taxed in the same manner as annuity payments, as described above. For these purposes, the investment in the contract is not affected by the owner's or annuitant's death. That is, the investment in the contract remains the amount of any purchase payments paid which were not excluded from gross income. Other rules relating to distributions at death apply to qualified contracts. You should consult your legal counsel and tax adviser regarding these rules and their impact on qualified contracts. Required Distributions upon Owner's Death Notwithstanding any provision of the contract or this prospectus to the contrary, no payment of benefits provided under the contract will be allowed that does not satisfy the requirements of Section 72(s) of the Code. If the owner dies before the annuity date, the death benefit payable to the owner's beneficiary will be distributed as follows: a) the death benefit must be completely distributed within five years of the owner's date of death; or b) the owner's beneficiary may elect, within the one year period after the owner's date of death, to receive the death benefit in the form of an annuity from us. Please note that Item b) is based on the following provisions: 1. the annuity must be distributed in substantially equal installments over the life of the owner's beneficiary or over a period not extending beyond the life expectancy of the owner's beneficiary; and 2. the distributions must not begin not later than one year after the owner's date of death. Notwithstanding items a) and b) above, if the sole owner's beneficiary is the deceased owner's surviving spouse, then the surviving spouse may elect, within the one year period after the owner's date of death, to continue the contract under the same terms as before the owner's death. Upon receipt of such election from the spouse, in a form and manner acceptable to us, at our service office: 1. all rights of the spouse as owner's beneficiary under the contract in effect prior to such election will cease; 2. the spouse will become the owner of the contract and will also be treated as the contingent annuitant, if none has been named and only if the deceased owner was the annuitant; and 3. all rights and privileges granted by the contract or allowed by Transamerica will belong to the spouse as owner of the contract. This election will be deemed to have been made by the spouse if such spouse makes a purchase payment payment to the contract or fails to make a timely election as described in this paragraph. If the owner's beneficiary is a nonspouse, the distribution provisions described in subparagraphs a. and b. above, will apply even if the annuitant and/or contingent annuitant are alive at the time of the owner's death. If the nonspouse owner's beneficiary is not an individual, then only a cash payment will be paid. If no election is received by us from a nonspouse owner's beneficiary within the one year period after the owner's date of death, then we will pay the death benefit to the owner's beneficiary in a cash payment. The death benefit will be determined as of the date we make the cash payment. Such cash payment will be in full settlement of all our liability under the contract. If Annuitant Dies After Annuity Starts - If the annuitant dies after the annuity starts, any benefit payable will be distributed at least as rapidly as under the annuity form then in effect. If Owner Dies After Annuity Starts - If the owner dies after the annuity starts, any benefit payable will continue to be distributed at least as rapidly as under the annuity form then in effect. All of the owner's rights granted under the contract or allowed by us will pass to the owner's beneficiary. Joint Ownership - For purposes of this section, if the contract has joint owners we will consider the date of death of the first joint owner as the death of the owner and the surviving joint owner will become the owner of the contract. Transfers, Assignments, or Exchanges of the Contract A transfer of ownership of a non-qualified contract, the designation of an annuitant, payee, or beneficiary who is not also the owner, or the exchange of a contract may result in certain tax consequences to the owner that are not discussed herein. If, as an owner, you are contemplating any such designation, transfer, assignment, or exchange, you should contact a competent tax adviser with respect to the potential tax effects of such a transaction. Certain qualified contracts cannot be transferred or assigned, except as permitted by the Code or the Employee Retirement Income Security Act of 1974, also referred to simply as ERISA. Multiple Policies All deferred non-qualified annuity contracts that are issued by Transamerica, or its affiliates, to the same owner during any calendar year are treated as one annuity contract for purposes of determining the amount includible in gross income under section 72(e) of the Code. In addition, the Treasury Department has specific authority to issue regulations that prevent the avoidance of section 72(e) through the serial purchase of annuity contracts or otherwise. Congress has also indicated that the Treasury Department may have authority to treat the combination purchase of an immediate annuity contract and separate deferred annuity contracts as a single annuity contract under its general authority to prescribe rules as may be necessary to enforce the income tax laws. QUALIFIED CONTRACTS In General The qualified contract is designed for use as a rollover IRA. With Transamerica's prior permission, the contract may also be used as a rollover Roth IRA, a contributory IRA, or as a contributory Roth IRA, as a Section 403(b) annuity, and for use in qualified pension and profit sharing plans established by corporate employers. The tax rules applicable to participants and beneficiaries in retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from: * contributions in excess of specified limits; * distributions prior to age 591/2, subject to certain exceptions; * distributions that do not conform to specified commencement and minimum distribution rules; and * other specified circumstances. We make no attempt to provide more than general information about use of the contracts with the various types of retirement plans. Owners and participants under retirement plans as well as annuitants and beneficiaries are cautioned that the rights of any person to any benefits under qualified contracts may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the contract issued in connection with such a plan. Some retirement plans are subject to distribution and other requirements that are not incorporated in the administration of the contracts. Owners are responsible for determining that contributions, distributions and other transactions with respect to the contracts satisfy applicable law. Purchasers of contracts for use with any retirement plan should consult their legal counsel and tax adviser regarding the suitability of the contract. For qualified plans under Section 401(a), 403(a) and 403(b), the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the owner or plan participant: 1. reaches age 70 1/2; or 2. retires These distributions must be made in a specified form and manner. If the plan participant is a "5 percent owner" as defined in the Code, distributions generally must begin no later than April 1 of the calendar year following the calendar year in which the owner, or plan participant reaches, age 70 1/2. For IRAs described in Section 408, distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the owner, or plan participant, reaches age 70 1/2. Roth IRAs under Section 408A do not require distributions at any time prior to the owner's death. Qualified Pension and Profit Sharing Plans Section 401(a) of the Code permits employers to establish various types of retirement plans for employees. Such retirement plans may permit the purchase of the contract in order to provide retirement savings under the plans. The Self-Employed Individuals' Tax Retirement Act of 1962, as amended, commonly referred to as H.R. 10, also permits self-employed individuals to establish qualified plans for themselves and their employees. Adverse tax consequences to the plan, to the participant, or to both, may result if this contract is assigned or transferred to any individual as a means to provide benefits payments. Purchasers of a contract for use with such plans should seek competent advice regarding the suitability of the proposed plan documents and the contract to their specific needs. The contract is designed to invest retirement savings and not to distribute retirement benefits. Individual Retirement Annuities, Simplified Employee Plans and Roth IRAs The contracts are designed for use with rollover IRAs and contributory IRAs. A contributory IRA is a contract in which initial and subsequent purchase payments are subject to limitations imposed by the Code. Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an individual retirement annuity or individual retirement account, each hereinafter referred to as an IRA. Also, distributions from certain other qualified plans may be rolled over, or transferred on a tax-deferred basis into an IRA. Earnings in an IRA are not taxed until distributed. IRA contributions are limited each year to the lesser of $2,000 or 100% of the owner's compensation. This includes earned income as defined in Code Section 401(c)(2) and may be deductible in whole or in part depending on the individual's adjusted gross income and whether or not the individual is considered an active participant in a qualified plan. The limit on the amount contributed to an IRA does not apply to distributions from certain other types of qualified plans that are rolled over or transferred on a tax-deferred basis into an IRA. Other than nondeductible contributions, amounts in the IRA are taxed when distributed from the IRA. Distributions prior to age 59 1/2 are subject to a 10% penalty tax, unless certain exceptions apply. Purchasers should seek competent advice as to the suitability of the contract for use with IRAs. Eligible employers that meet specified criteria under Code Section 408(k) could establish simplified employee pension plans, also referred to as SEP-IRAs, for their employees using IRAs. Employer contributions that may be made to such plans are larger than the amounts that may be contributed to regular IRAs, and may be deductible to the employer. SEP-IRAs are subject to certain Code requirements regarding participation and amounts of contributions. The Policies may also be used with rollover Roth IRAs and contributory Roth IRAs. A contributory Roth IRA is a contract to which initial and subsequent purchase payments are subject to limitations imposed by the Code. Section 408A of the Code permits eligible individuals to contribute to an individual retirement program known as a Roth IRA on a non-deductible basis. In addition, distributions from a Section 408 IRA may be converted to a Roth IRA. A Section 408 IRA is an IRA described in Sections 408(a) or 408(b), other than a Roth IRA. You should consult a tax adviser before combining any converted amounts with any other Roth IRA contributions, including any other conversion amounts from other tax years. Distributions from a Roth IRA generally are not taxed, except that, once total distributions exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply to distributions made: 1. before age 59 1/2, subject to certain exceptions; or 2. during the five taxable years starting with the year in which the first contribution is made to the Roth IRA. Purchasers should seek competent advice as to the suitability of the contract for use with Roth IRAs.The sale of a contract for use with an IRA, SEP-IRA or Roth IRA may be subject to special disclosure requirements of the Internal Revenue Service. Purchasers of these contracts will be provided with supplemental information required by the Internal Revenue Service or other appropriate agency. Such purchasers will have the right to revoke their purchase within 7 days of the earlier of the establishment of the IRA, SEP-IRA or Roth IRA or their purchase. Tax Sheltered Annuities Under Code Section 403(b), payments made by public school systems and certain tax exempt organizations to purchase annuity contracts for their employees are excludable from the gross income of the employee, subject to certain limitations. However, these payments may be subject to Social Security and Medicare taxes, which are also referred to as FICA taxes. Code Section 403(b)(11) restricts the distribution under Code Section 403(b) annuity contracts of: * elective contributions made in years beginning after December 31, 1988; * earnings on those contributions; or * earnings in such years on amounts held as of the last year beginning before January 1, 1989. Distribution of those amounts may only occur upon death of the employee, attainment of age 591/2, separation from service, disability, or financial hardship. In addition, income attributable to elective contributions may not be distributed in the case of hardship. Pre-1989 contributions and earnings through December 31, 1989 are not subject to the restrictions described above. However, funds transferred to a qualified contract from a Section 403(b)(7) custodial account will be subject to the restrictions. Restrictions under Qualified Policies Other restrictions with respect to the election, commencement, or distribution of benefits may apply under qualified contracts or under the terms of the plans in respect of which qualified contracts are issued. A qualified contract will be amended as necessary to conform to the requirements of the Code. Possible Changes in Taxation Legislation has been proposed in 1998 that, if enacted, would adversely modify the federal taxation of certain insurance and annuity contracts. For example, one proposal would tax transfers among investment options and tax exchanges involving variable contracts. A second proposal would reduce the "investment in the contract" under cash value life insurance and certain annuity contracts by certain amounts, thereby increasing the amount of income for purposes of computing gain. Although the likelihood of there being any changes is uncertain, there is always the possibility that the tax treatment of the contracts could be changed by legislation or other means. Moreover, it is also possible that any change could be retroactive, that is, effective prior to the date of the change. You should consult a tax adviser with respect to legislative developments and their effect on the contract. Other Tax Consequences As noted above, the foregoing discussion of the federal income tax consequences is not exhaustive and special rules are provided with respect to other tax situations not discussed in this prospectus. Further, the federal income tax consequences discussed herein reflect Transamerica's understanding of current law and the law may change. Federal gift and estate tax consequences and state and local estate, inheritance, and other tax consequences of ownership or receipt of distributions under the contract depend on the individual circumstances of each owner or recipient of the distribution. A competent tax adviser should be consulted for further information. DISTRIBUTION OF THE CONTRACT Transamerica Securities Sales Corporation, also referred to as TSSC, is the principal underwriter of the contracts. TSSC may also serve as an underwriter and distributor of other contracts issued through the variable account and certain other separate accounts of Transamerica and any affiliates of Transamerica. TSSC is a wholly-owned subsidiary of Transamerica Insurance Corporation of California, which is a subsidiary of Transamerica Corporation. TSSC is registered with the Commission as a broker/dealer and is a member of the National Association of Securities Dealers, Inc., also known as the NASD. Its principal offices are located at 1150 South Olive, Los Angeles, California 90015. Transamerica pays TSSC for acting as the principal underwriter under a distribution agreement. TSSC has entered into sales agreements with other broker/dealers to solicit applications for the contracts through registered representatives who are licensed to sell securities and variable insurance products. These agreements provide that applications for the contracts may be solicited by registered representatives of the broker/dealers appointed by Transamerica to sell its variable life insurance and variable annuities. These broker/dealers are registered with the Commission and are members of the NASD. The registered representatives are authorized under applicable state regulations to sell variable life insurance and variable annuities. Under the agreements, contracts will be sold by broker/dealers which will generally receive compensation of up to 6.25% of any initial and additional purchase payments paid, although higher amounts may be paid in certain circumstances. Additional amounts may be paid in certain circumstances (such as upon certain annuitizations, when an additional commission of 2.5% of the account value annuitized may be paid). Additional amounts, including asset based trail commissions, may be paid in certain circumstances. Transamerica Financial Resources, Inc. , referred to as TFR, also is an underwriter and distributor of the Policies. TFR is a wholly-owned subsidiary of Transamerica Insurance Corporation of California and is registered with the Commission and the NASD as a broker/dealer. PREPARING FOR YEAR 2000 As a result of computer systems that may recognize a date of 12/31/00 as the year 1900 rather than the year 2000, disruptions of business activities may occur with the year 2000. In response, Transamerica established in 1997 a "Y2K" committee to address this issue. With regard to the systems and software which administer and affect the contracts, Transamerica has determined that its own internal systems will be Year 2000 compliant. Additionally, Transamerica requires any third party vendor which supplies software or administrative services to Transamerica in connection with the administration of the contracts, to certify that the software or services will be Year 2000 compliant. In determining the variable accumulation unit values for each variable sub-account, Transamerica is reliant upon information received from the portfolios and is confirming that Year 2000 issues will not interfere with this flow of information. As of the date of this prospectus, it is not anticipated that contract owners will experience negative affects on their investment, or on the services received in connection with their contracts, as a result of Year 2000 issues. However, especially when taking into account interaction with other systems, it is difficult to predict with precision that there will be no disruption of services in connection with the year 2000. LEGAL PROCEEDINGS There is no pending material legal proceeding affecting the variable account. Transamerica is involved in various kinds of routine litigation which, in management's judgment, are not of material importance to Transamerica's assets or to the variable account. LEGAL MATTERS The organization of Transamerica, its authority to issue the contracts and the validity of the form of the contracts have been passed upon by James W. Dederer, general counsel of Transamerica. ACCOUNTANTS The financial statements for each of the three years ended December 31, 1998 appearing in the Statement of Additional Information have been audited by Ernst & Young LLP, Independent Auditors, as set forth in their reports thereon appearing elsewhere herein. They are included in reliance upon such reports given upon the authority of such firm experts in accounting and auditing. VOTING RIGHTS To the extent required by applicable law, all portfolio shares held in the variable account will be voted by Transamerica at regular and special shareholder meetings of the respective funds in accordance with instructions received from persons having voting interests in the corresponding sub-account. If, however, the 1940 Act or any regulation thereunder should be amended, or if the present interpretation thereof should change, or if Transamerica determines that it is allowed to vote all portfolio shares in its own right, Transamerica may elect to do so. The person with the voting interest is the owner. The number of votes which are available to an owner will be calculated separately for each sub-account of the variable account. Before the annuity date, that number will be determined by applying his or her percentage interest, if any, in a particular sub-account to the total number of votes attributable to that sub-account. The owner holds a voting interest in each sub-account to which the account value is allocated. After the annuity date, the number of votes decreases as annuity payments are made and as the reserves for the contract decrease. The number of votes of a portfolio will be determined as of the date coincident with the date established by that portfolio for determining shareholders eligible to vote at the meeting of the funds. Voting instructions will be solicited by written communication prior to such meeting in accordance with procedures established by the respective funds. Shares as to which no timely instructions are received and shares held by Transamerica as to which owners have no beneficial interest will be voted in proportion to the voting instructions which are received with respect to all contracts participating in the sub-account. Voting instructions to abstain on any item to be voted upon will be applied on a pro rata basis to reduce the votes eligible to be cast. Each person or entity having a voting interest in a sub-account will receive proxy material, reports and other material relating to the appropriate portfolio. It should be noted that the funds are not required to, and do not intend to, hold annual or other regular meetings of shareholders. AVAILABLE INFORMATION Transamerica has filed a registration statement with the Securities and Exchange Commission under the Securities Act of 1933 relating to the contract offered by this prospectus. This prospectus has been filed as a part of the registration statement and does not contain all of the information set forth in the registration statement and exhibits thereto, and reference is hereby made to such registration statement and exhibits for further information relating to Transamerica and the contract. Statements contained in this prospectus, as to the content of the contract and other legal instruments, are summaries. For a complete statement of the terms thereof, reference is made to the instruments filed as exhibits to the registration statement. The registration statement and the exhibits thereto may be inspected and copied at the office of the Commission, located at 450 Fifth Street, N.W., Washington, D.C. Appendix A STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS A Statement of Additional Information is available which contains more details concerning the subjects discussed in this prospectus. The following is the table of contents for that statement: TABLE OF CONTENTS Page The Contract (page 22) 3 Dollar Cost Averaging (page 25) 3 Net Investment Factor (page 24) 3 Annuity Period (page 33) 3 Variable Annuity Units and Payments 3 Variable Annuity Unit Value 4 Transfers After the Annuity Date 4 General Provisions 4 IRS Required Distributions 4 Non-Participating 4 Misstatement of Age or Sex 4 Proof of Existence and Age 4 Assignment 4 Annuity Data 5 Annual Report 5 Incontestability 5 Ownership 5 Entire Contract 5 Changes In the Contract 5 Protection of Benefits 5 Delay of Payments 5 Notices and Directions 6 Calculations of Yields and Total Returns (page 16) 6 Money Market Sub-Account Yield Calculations 6 Other Sub-Account Yield Calculations 6 Standard Total Return Calculations 7 Hypothetical Performance Data 8 Other Performance Data 8 Historic Performance Data 8 General Limitations 8 Sub-Account Performance Figures 8 Hypothetical Sub-Account Performance Figures 8 Federal Tax Matters (page 35) 10 Taxation of Transamerica 10 Tax Status of the Policies 11 Distribution of the Contract (page 37) 11 Safekeeping of Account Assets (page 18) 12 Transamerica (page 18) 12 General Information and History 12 State Regulation (Page 18) 12 Records and Reports 12 Financial Statements 12 Appendix 13 Annuity Transfer Formula 13 Appendix B Example of Variable Accumulation Unit Value Calculations Suppose the net asset value per share of a portfolio at the end of the current valuation period is $20.15; at the end of the immediately preceding valuation period it was $20.10; the valuation period is one day; and no dividends or distributions caused the portfolio to go ex-dividend during the current valuation period. $20.15 divided by $20.10 is 1.002488. Subtracting the one day risk factor for mortality and expense risk charge and the administrative expense charge of .003814% (the daily equivalent of the current charge of 1.40% on an annual basis) gives a net investment factor of 1.002449. If the value of the variable accumulation unit for the immediately preceding valuation period had been 15.500000, the value for the current valuation period would be 15.537966 (15.5 x 1.002449). Example of Variable Annuity Unit Value Calculations Suppose the circumstances of the first example exist, and the value of a variable annuity unit for the immediately preceding valuation period had been 13.500000. If the first variable annuity payment is determined by using an annuity payment based on an assumed interest rate of 4% per year, the value of the variable annuity unit for the current valuation period would be 13.531613 (13.5 x 1.002449, which is the Net Investment Factor x 0.999893). 0.999893 is the factor, for a one day valuation period, that neutralizes the assumed rate of four percent (4%) per year used to establish the variable annuity rates found in the contract. Example of Variable Annuity Payment Calculations Suppose that the account is currently credited with 3,200.000000 variable accumulation units of a particular sub-account. Also suppose that the variable accumulation unit value and the variable annuity unit value for the particular sub-account for the valuation period which ends immediately preceding the first day of the month is 15.500000 and 13.500000 respectively, and that the variable annuity rate for the age and option elected is $5.73 per $1,000. Then the first variable annuity payment would be: 3.200 x 15.5 x 5.73 divided by 1,000 = $284.21, and the number of variable annuity units credited for future payments would be: 284.21 divided by 13.5 = 21.052444. For the second monthly payment, suppose that the variable annuity unit value on the 10th day of the second month is 13.565712. Then the second variable annuity payment would be $285.59 (21.052444 x 13.565712). Appendix C DEFINITIONS Account: The account established and maintained under the contract to which your net purchase payments are credited. Account Value: The account value is equal to the sum of: a) the fixed accumulated value, plus b) the variable accumulated value. Active Sub-Account: A sub-account of the variable account in which the contract has current value. Annuitant: The person: (a) whose life is used to determine the amount of monthly annuity payments on the annuity date; and (b) who is the payee designated to receive monthly annuity payments, unless such payee is changed by the owner. The annuitant cannot be changed after the contract has been issued, except upon the annuitant's death prior to the annuity date if a contingent annuitant has previously been named. In the case of a qualified contract used to fund an IRA or a 403(b) annuity, the owner must be the annuitant. Annuitant's Beneficiary: The person or persons named by the owner who may receive the death benefit under the contract, if: (a) the annuitant is not the owner, there is no named contingent annuitant and the annuitant dies before the annuity date and before the death of the owner or owners; or (b) the annuitant dies after the annuity date under an annuity form containing a period certain option. Annuity Date: The date on which the annuity purchase amount will be applied to provide an annuity under the annuity form and payment option selected by the owner. Monthly annuity payments will start the first day of the month immediately following the annuity date. Unless the annuity date is changed as allowed by the contract, the annuity date will be as shown in the contract. Annuity Payment: An amount paid by Transamerica at regular intervals to the annuitant and/or any other payee specified by the owner. It may be on a variable or fixed basis. Annuity Purchase Amount: The amount applied as a single purchase payment to provide an annuity under the annuity form and payment options available under the contract. The annuity purchase amount is equal to the account value, less any applicable contingent deferred sales load, and less any applicable premium taxes. In determining the annuity purchase amount, Transamerica will waive the contingent deferred sales load if the annuity form involves life contingencies and the annuity date occurs on or after the third contract anniversary. Annuity Year: A one-year period starting on the annuity date and, after that, each succeeding one-year period. Cash Surrender Value: The amount payable to the owner if the contract is surrendered on or before the annuity date. The cash surrender value is equal to the account value, less the account fee, less any applicable contingent deferred sales load, and less applicable premium taxes. Code: The U.S. Internal Revenue Code of 1986, as amended, and the rules and regulations issued thereunder. Contingent Annuitant: The person who: (a) becomes the annuitant if the annuitant dies before the annuity date; or (b) may receive benefits under the contract if the annuitant dies after the annuity date under an annuity form containing a contingent annuity option. A contingent annuitant may be designated only if the owner is not also the annuitant. The contingent annuitant may be changed at any time by the owner while the annuitant is living and before the annuity date. Contract Anniversary: The same month and day as the contract date in each calendar year after the calendar year in which the contract date occurs. Contract Date: The effective date of the contract as shown on the contract. Contract Year: The 12-month period from the contract date and ending with the day before the first contract anniversary and each twelve month period thereafter. The first contract year for any particular net purchase payment is the contract year in which the purchase payment is received by the service center. Expiration Date: The last day of a guarantee period. Fixed Account: The fixed account contains one or more guarantee periods to which all or portions of net purchase payments and transfers may be allocated. The fixed account assets are general assets of the company and are distinguishable from those allocated to a separate account of the company. Fixed Accumulated Value: The total dollar amount of all guarantee amounts held under the fixed account for the contract prior to the annuity date. The fixed accumulated value is determined without regard to any interest adjustment. Fixed Annuity: An annuity with predetermined payment amounts. Free Look Period: The period of time, beginning on the date the owner receives the contract, during which the owner has the right to cancel the contract. The length of this period depends upon the state of issuance. Funds: Dreyfus Variable Investment Fund, Dreyfus Stock Index Fund, The Dreyfus Socially Responsible Growth Fund, Inc., Dreyfus Investment Portfolios and Transamerica Variable Insurance Fund, Inc., in which the variable account currently invests. Guarantee Amount: An amount equal to: a) the amount of the net purchase payment or transfer allocated to a particular guarantee period with a particular expiration date; less b) any withdrawals or transfers made from that guarantee period; less c) any applicable transfer fee; less d) any reductions for the annual account fee; and plus e) interest credited. Guarantee Period: The period for which a guaranteed interest rate is credited which shall not be less than one year. Inactive Sub-Account: A sub-account of the variable account in which the contract has a zero balance. Net Investment Factor: An index that measures the investment performance of a sub-account from one valuation period to the next. Net Purchase Payment: A purchase payment reduced by any applicable premium tax, including retaliatory premium taxes. Non-Qualified Contract: A contract other than a qualified contract. Owner or Joint Owners: The person or persons who, while living, control all rights and benefits under the contract. Joint owners own the contract equally with the right of survivorship. The right of survivorship means that if a joint owner dies, his or her interest in the contract will pass to the surviving joint owner in accordance with the death benefit provision. Joint owners must be husband and wife as of the contract date (except in Pennsylvania). Qualified contracts may not have joint owners. Owner's Beneficiary: If the owner is an individual, the owner's beneficiary is the person(s) who may receive the death benefit if the owner dies before the annuity date and before the death of the annuitant. If the contract has joint owners, the surviving joint owner will be the owner's beneficiary. Payee: The person who receives the annuity payments after the annuity date. The payee will be the annuitant, unless otherwise changed by the owner. Portfolio: Dreyfus Stock Index Fund, The Dreyfus Socially Responsible Growth Fund, Inc., or any one of the series of Dreyfus Variable Investment Fund or any one of the portfolios of Dreyfus Investment Portfolios or the Growth Portfolio of Transamerica Variable Insurance Fund, Inc., underlying a sub-account of the variable account. Proof of Death: May be: (a) a copy of a certified death certificate; (b) a copy of a certified decree of a court of competent jurisdiction as to the finding of death; (c) a written statement by a medical doctor who attended the deceased; or (d) any other proof satisfactory to Transamerica. Qualified Contract: A contract issued in connection with a retirement plan or program. Receipt: Receipt and acceptance by Transamerica at its service center. Series: Any of the portfolios of Dreyfus Variable Investment Fund available for investment by a sub-account under the contract. Service Center: Transamerica's Annuity Service Center, at P.O. Box 31728, Charlotte, North Carolina 28231-1728 and at telephone (800) 258-4261. Source Account: A sub-account of the variable account or the fixed account, as permitted, from which dollar cost averaging transfers are being made. Sub-Account: A subdivision of the variable account investing solely in shares of one of the portfolios. Valuation Day: Any day the New York Stock Exchange is open for trading. Valuation Period: The time interval between the closing of the New York Stock Exchange on consecutive valuation days. Variable Account: Separate Account VA-2L, a separate account established and maintained by Transamerica for the investment of a portion of its assets pursuant to Section 10506 of the California Insurance Code. The variable account contains several sub-accounts to which all or portions of net purchase payments and transfers may be allocated. Variable Accumulated Value: The total dollar amount of all variable accumulation units under each sub-account of the variable account held for the contract prior to the annuity date. The variable accumulated value prior to the annuity date is equal to: (a) net purchase payments allocated to the sub-accounts; plus or minus (b) any increase or decrease in the value of assets of the sub-accounts due to investment results; less (c) the daily mortality and expense risk charge; less (d) the daily administrative expense charge; less (e) reductions for the annual account fee deducted on the last business day of each contract year; plus or minus (f) amounts transferred to or from the fixed account; less (g) any applicable transfer fees; and less (h) withdrawals from the sub-accounts. Variable Accumulation Unit: A unit of measure used to determine the account value prior to the annuity date. The value of a variable accumulation unit varies with each sub-account. Variable Annuity: An annuity with payments which vary as to dollar amount in relation to the investment performance of specified sub-accounts of the variable account. Variable Annuity Unit: A unit of measure used to determine the amount of the second and each subsequent payment under a variable annuity payment option. The value of a variable annuity unit varies with each sub-account. Withdrawals: Refers to partial withdrawals, full surrenders, and systematic withdrawals that are paid in cash to the owner, person or persons specified by the owner. Written Notice or Written Request: A notice or request in writing by the owner to Transamerica's service center. Such a request must contain original signatures; no carbons or photocopies will be accepted. Transamerica reserves the right to accept a facsimile copy. Appendix D CONDENSED FINANCIAL INFORMATION The following condensed financial information is derived from the financial statements of the variable account. The data should be read in conjunction with the financial statements, related notes, and other financial information included in the Statement of Additional Information. The following table sets forth certain information regarding the sub-accounts for the period from commencement of business operations of the sub-account through December 31, 1998. The variable accumulation unit values and the number of variable accumulation units outstanding for each sub-account for the periods shown are as follows:
Year Ending December 31, 1993 - --------------------------------------------------------------------------------------------------------- Money Special Zero Coupon Quality Market Value 2000 Bond Small Cap Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93) (Inception 1/4/93) Accumulation Unit Value at Beginning of Period $1.021 $12.797 $13.225 $12.310 $39.620 Accumulation Unit Value at End of Period $1.018 $12.861 $13.373 $12.445 $37.702 Number of Accumulation Units Outstanding at End of Period 2,678,280.492 167,686.797 137,252.898 86,752.856 138,557.449 Capital Appreciation Stock Index Socially Responsible Sub-Account Sub-Account Sub-Account (Inception- (Inception (Inception- 4/5/93 1/4/93 10/7/93 Accumulation Unit Value at Beginning of Period $12.500 $15.310 $12.490 Accumulation Unit Value at End of Period $13.160 $16.521 $13.364 Number of Accumulation Units Outstanding at End of Period 237,733.021 93,536.733 26,089.826 Year Ending December 31, 1994 - --------------------------------------------------------------------------------------------------------- Money Special Zero Coupon Quality Market Value 2000 Bond Small Cap Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $1.018 $12.861 $13.373 $12.445 $37.702 Accumulation Unit Value at End of Period $1.048 $12.496 $12.672 $11.710 $40.064 Number of Accumulation Units Outstanding at End of Period 23,559,789.795 1,486,438.137 476,355.738 931,527.691 1.250,237.625 Growth and Income International Equity Sub-Account Sub-Account Capital Appreciation Stock Index Socially Responsible (Inception (Inception Sub-Account Sub-Account Sub-Account 12/15/94) 12/15/94) Accumulation Unit Value at Beginning of Period $13.160 $16.521 $13.364 $12.177 $12.247 Accumulation Unit Value at End of Period $13.373 $16.437 $13.377 $12.167 $12.240 Number of Accumulation Units Outstanding at End of Period 919,622.615 348,937.285 135,018.350 4,300.380 8,552.073 Year Ending December 31, 1995 - ------------------------------------------------------------------------------------------------------------ Money Special Zero Coupon Quality Market Value 2000 Bond Small Cap Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $1.048 $12.496 $12.672 $11.710 $40.064 Accumulation Unit Value at End of Period $1.093 $12.292 $14.740 $13.908 $51.121 Number of Accumulation Units Outstanding at End of Period 31,807,563.947 1,288,429.555 903,799.152 2,052,313.888 2,155,879.198 Growth and Income International Equity Sub-Account Sub-Account Capital Appreciation Stock Index Socially Responsible (Inception (Inception Sub-Account Sub-Account Sub-Account 1/5/95) 1/5/95) Accumulation Unit Value at Beginning of Period $13.373 $16.437 $13.377 $12.167 $12.240 Accumulation Unit Value at End of Period $17.610 $22.172 $17.752 $19.426 $12.964 Number of Accumulation Units Outstanding at End of Period 2,077,029.504 977,271.816 295,077.936 2,565,038.589 530,374.642 Year Ending December 31, 1996 - --------------------------------------------------------------------------------------------------------- Money Special Zero Coupon Quality Market Value 2000 Bond Small Cap Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $1.093 $12.292 $14.740 $13.908 $51.121 Accumulation Unit Value at End of Period $1.132 $11.682 $14.911 $14.142 $58.773 Number of Accumulation Units Outstanding at End of Period 38,983,053.941 1,232, 530.711 1,320,168.687 3,072,774.847 2,736,720.675 International Capital Appreciation Stock Index Socially Responsible Growth and Income Equity Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $17.610 $22.172 $17.752 $19.426 $12.964 Accumulation Unit Value at End of Period $21.802 $26.791 $21.221 $23.131 $14.267 Number of Accumulation Units Outstanding at End of Period 3,665,146.389 2,030,280.057 708,680.320 6,332,649.215 1,480,395.223 International Value Disciplined Stock Small Company Stock Sub-Account Sub-Account Sub-Account (Inception 5/1/96) (Inception 5/1/96) (Incepiton 5/1/96) Accumulation Unit Value at Beginning of Period $10.00 $10.00 $10.00 Accumulation Unit Value at End of Period $10.244 $11.776 $10.772 Number of Accumulation Units Outstanding at End of Period 230,868.491 618,809.191 543,949.419 Year Ending December 31, 1997 - --------------------------------------------------------------------------------------------------------- Money Special Zero Coupon Quality Market Value 2000 Bond Small Cap Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $1.132 $11.682 $14.911 $14.142 $58.773 Accumulation Unit Value at End of Period $1.175 $14.185 $15.736 $15.260 $67.668 Number of Accumulation Units Outstanding at End of Period 42,660,950.364 2,649,561.005 1,350,865.031 4,020,220.452 2,954,842.907 International Capital Appreciation Stock Index Socially Responsible Growth and Income Equity Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $21.802 $26.791 $21.221 $23.131 $14.267 Accumulation Unit Value at End of Period $27.532 $35.128 $26.879 $26.509 $15.422 Number of Accumulation Units Outstanding at End of Period 6,447,159.634 3,357,236.245 1,335,814.063 7,480,387.355 2,176,230.247 Limited Term High Income Balanced International Value Disciplined Stock Small Company Stock Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (Inception 5/1/97) (Inception 5/1/97) Accumulation Unit Value at Beginning of Period $10.244 $11.776 $10.772 $10.000 $10.000 Accumulation Unit Value at End of Period $10.982 $15.272 $12.935 $10.852 $11.738 Number of Accumulation Units Outstanding at End of Period 1,047,389.002 2,278,146.352 1,604,089.554 2,424,231.798 647,855.304 Year Ending December 31, 1998 - --------------------------------------------------------------------------------------------------------- Money Special Zero Coupon Quality Market Value 2000 Bond Small Cap Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $_____ $_____ $______ $______ $______ Accumulation Unit Value at End of Period $______ $______ $______ $______ $______ Number of Accumulation Units Outstanding at End of Period 12,049,327.817 1,017,390.458 424,325.816 987,773.886 1,031,483.594 International Capital Appreciation Stock Index Socially Responsible Growth and Income Equity Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $______ $______ $______ $______ $______ Accumulation Unit Value at End of Period $______ $______ $______ $______ $______ Number of Accumulation Units Outstanding at End of Period 1,798,913.636 808,857.987 230,281.724 2,179,109.968 378,355.293 Limited Term High Income Balanced International Value Disciplined Stock Small Company Stock Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (Inception 5/1/97) (Inception 5/1/97) Accumulation Unit Value at Beginning of Period $______ $______ $______ $______ $______ Accumulation Unit Value at End of Period $______ $______ $______ $______ $______ Number of Accumulation Units Outstanding at End of Period 172,941.244 1,196,912.676 513,524.112 473,373.863 333,714.857 Transamerica Growth Cash Value MidCap Stock Sub-Account Sub-Account Sub-Account Accumulation Unit Value at Beginning of Period $______ $______ $______ Accumulation Unit Value at End of Period $______ $______ $______ Number of Accumulation Units Outstanding at End of Period 172,941.244 1,196,912.676 513,524.112
Financial Statements for the Variable Account and Transamerica The financial statements and reports of independent auditors for the variable account and Transamerica are contained in the Statement of Additional Information. 1 STATEMENT OF ADDITIONAL INFORMATION FOR DREYFUS/TRANSAMERICA TRIPLE ADVANTAGE VARIABLE ANNUITY Issued By Transamerica Occidental Life Insurance Company The Statement of Additional Information expands upon subjects discussed in the current Prospectus for the Dreyfus/Transamerica Triple Advantage Variable Annuity (Contract) issued by Transamerica Occidental Life Insurance Company. The Owner may obtain a copy of the Prospectus dated May 1, 1999, as supplemented from time to time, by writing to Transamerica Occidental Life Insurance Company, Annuity Service Center, at P.O. Box 31848 Charlotte, North Carolina 28231 or calling 800-258-4260. Terms used in the current Prospectus for the Contract are incorporated in this Statement. The Contract will be issued as a certificate under a group annuity contract in some states and as an individual annuity contract in other states. The term "Contract" as used herein refers to both the individual contract and the certificates issued under the group contract. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT. Dated May 1, 1999
11 TABLE OF CONTENTS Page THE CONTRACT......................................................................................................3 DOLLAR COST AVERAGING.............................................................................................3 NET INVESTMENT FACTOR.............................................................................................3 ANNUITY PERIOD....................................................................................................3 Variable Annuity Units and Payments......................................................................3 Variable Annuity Unit Value..............................................................................4 Transfers After the Annuity Date.........................................................................4 GENERAL PROVISIONS................................................................................................4 IRS Required Distributions...............................................................................4 Non-Participating........................................................................................4 Misstatement of Age or Sex...............................................................................4 Proof of Existence and Age...............................................................................4 Assignment...............................................................................................4 Annuity Data.............................................................................................5 Annual Report............................................................................................5 Incontestability.........................................................................................5 Ownership................................................................................................5 Entire Contract..........................................................................................5 Changes in the Contract..................................................................................5 Protection of Benefits...................................................................................5 Delay of Payments........................................................................................5 Notices and Directions...................................................................................6 CALCULATION OF YIELDS AND TOTAL RETURNS...........................................................................6 Money Market Sub-Account Yield Calculation...............................................................6 Other Sub-Account Yield Calculations.....................................................................7 Standard Total Return Calculations.......................................................................7 Hypothetical Performance Data............................................................................8 Other Performance Data...................................................................................8 HISTORIC PERFORMANCE DATA.........................................................................................8 General Limitations......................................................................................8 Sub-Account Performance Data.............................................................................9 Hypothetical Sub-Account Performance Figures.............................................................9 FEDERAL TAX MATTERS..............................................................................................11 Taxation of Transamerica................................................................................11 Tax Status of the Contract..............................................................................11 DISTRIBUTION OF THE CONTRACT.....................................................................................12 SAFEKEEPING OF VARIABLE ACCOUNT ASSETS...........................................................................13 TRANSAMERICA.....................................................................................................13 General Information and History.........................................................................13 STATE REGULATION.................................................................................................13 RECORDS AND REPORTS..............................................................................................13 FINANCIAL STATEMENTS.............................................................................................13 APPENDIX.........................................................................................................14 Annuity Transfer Formula.............................................................................14
THE CONTRACT As a supplement to the description in the Prospectus, the following provides additional information about the Contract which may be of interest to some Owners. DOLLAR COST AVERAGING We reserve the right to send written notification to the Owner as to the options available if termination of Dollar Cost Averaging, either by the Owner or by Transamerica, results in the value of the receiving Sub-Account(s) to which monthly transfers were made to be less than $500. The Owner will have 10 days from the date our notice is mailed to: (a) transfer the value of the Sub-Account(s) to another Sub-Account with a value equal to or greater than $500; or (b) transfer funds from another Sub-Account into the receiving Sub-Account(s) to bring the value of that Sub-Account to at least $500; or (c) submit an additional Purchase Payment to make the value of the Sub-Account equal to or greater than $500; or (d) transfer the entire value of the receiving Sub-Account(s) back into the Source Account from which the automatic transfers were made. If no election, in a form and manner acceptable to Transamerica, is made by the Owner prior to the end of the 10 day period, we reserve the right to transfer the value of the receiving Sub-Account(s) back into the Source Account from which the automatic transfers were made. Transfers made as a result of (a), (b), or (d) above will not be counted for purposes of the eighteen free transfers per Contract Year limitation. NET INVESTMENT FACTOR For any Sub-Account of the Variable Account, the Net Investment Factor for a Valuation Period, before the Annuity Date, is (a) divided by (b), minus (c) minus (d). Where (a) is The net asset value per share held in the Sub-Account, as of the end of the Valuation Period, plus or minus The per-share amount of any dividend or capital gain distributions if the "ex-dividend" date occurs in the Valuation Period, plus or minus A per-share charge or credit as Transamerica may determine, as of the end of the Valuation Period, for taxes. Where (b) is The net asset value per share held in the Sub-Account as of the end of the last prior Valuation Period. Where (c) is The daily charge of 0.003403% (1.25% annually) for the Mortality and Expense Risk Charge under the Contract times the number of calendar days in the current Valuation Period. Where (d) is The daily Administrative Expense Charge, currently 0.000411% (0.15% annually) times the number of calendar days in the current Valuation Period. This charge may be increased, but will not exceed 0.000684% (0.25% annually). A Valuation Day is defined as any day that the New York Stock Exchange is open. ANNUITY PERIOD The Variable Annuity Options provide for payments that fluctuate or vary in dollar amount, based on the investment performance of the elected Variable Account Sub-Account(s). Variable Annuity Units and Payments For the first monthly payment, the number of Variable Annuity Units credited in each Sub-Account will be determined by dividing (a) the product of the portion of the value to be applied to the Sub-Account and the Variable Annuity Purchase Rate specified in the Contract by (b) the value of one Variable Annuity Unit in that Sub-Account on the Annuity Date. The amount of each subsequent Variable Annuity Payment equals the product of the number of Variable Annuity Units in each Sub-Account and the Sub-Account's Variable Annuity Unit Value as of the tenth day of the month before the payment due date. The amount of each payment may vary as may the date of determination. Variable Annuity Unit Value The value of a Variable Annuity Unit in a Sub-Account on any Valuation Day is determined as described below. The Net Investment Factor for the Valuation Period (for the appropriate Annuity Payment frequency) just ended is multiplied by the value of the Variable Annuity Unit for the Sub-Account on the preceding Valuation Day. The Net Investment Factor after the Annuity Date is calculated in the same manner as before the Annuity Date and then multiplied by an interest factor. The interest factor equals (.999893)n where n is the number of days since the preceding Valuation Day. This compensates for the 4% interest assumption built into the Variable Annuity Purchase Rates. Transfers After the Annuity Date After the Annuity Date, the Owner may transfer Variable Annuity Units from one Sub-Account to another, subject to certain limitations. (See "Transfers" page 28 of the Prospectus.) The dollar amount of each subsequent monthly Variable Annuity Payment after the transfer must be determined using the new number of Variable Annuity Units multiplied by the Sub-Account's Variable Annuity Unit Value. The formula used to determine a transfer after the Annuity Date can be found in the Appendix to this Statement of Additional Information. GENERAL PROVISIONS IRS Required Distributions The Contract is intended to qualify as an annuity contract for federal income tax purposes. All provisions in the Contract will be interpreted to maintain such tax qualification. We may make changes in order to maintain this qualification or to conform the Contract to any applicable changes in the tax qualification requirements. We will provide you with a copy of any changes made to the Contract. If any Owner under a Non-Qualified Contract dies before the entire interest in the Contract is distributed, the value generally must be distributed to the designated Beneficiary so that the Contract qualifies as an annuity under the Code. (See "Federal Tax Matters" page 39.) Non-Participating The Contract is non-participating. No dividends are payable and the Contract will not share in the profits or surplus earnings of Transamerica. Misstatement of Age or Sex If the age or sex of the Annuitant or any other measuring life has been misstated in the application, or other form relied upon to determine annuity payment , the Annuity Payments under the Contract will be whatever the Annuity Purchase Amount applied on the Annuity Date would purchase on the basis of the correct age or sex of the Annuitant and/or other measuring life. Any overpayments or underpayments by Transamerica as a result of any such misstatement may be respectively charged against or credited to the Annuity Payment or Annuity Payments to be made after the correction so as to adjust for such overpayment or underpayment. Proof of Existence and Age Before making any payment under the Contract, Transamerica may require proof of the existence and/or proof of the age of the Annuitant or any other measuring life, or any other information deemed necessary in order to provide benefits under the Contract. Assignment No assignment of a Contract will be binding on Transamerica unless made in writing and given to Transamerica at its Service Center. Transamerica is not responsible for the adequacy of any assignment. The Owner's rights and the interest of any Annuitant or non-irrevocable Beneficiary will be subject to the rights of any assignee of record. Annuity Data Transamerica will not be liable for obligations which depend on receiving information from a Payee or measuring life until such information is received in a satisfactory form. Annual Report At least once each Contract Year prior to the Annuity Date, the Owner will be given a report of the current Account Value. This report will also include any other information required by law or regulation. After the Annuity Date, a confirmation will be provided with every Variable Annuity Payment. Incontestability Each Contract is incontestable from the Contract Date. Ownership Only the Owner(s) will be entitled to the rights granted by the Contract, or allowed by Transamerica under the Contract. If an Owner dies, the rights of the Owner belong to the estate of the Owner unless the Owner has previously named an Owner's Beneficiary. A surviving Joint Owner automatically becomes the Owner's Beneficiary. Entire Contract Transamerica has issued the Contract in consideration and acceptance of the payment of the Initial Purchase Payment and, where state law requires, the application. In those states that require a written application, a copy of the application is attached to and is part of the Contract and along with the Contract constitutes the entire contract. All statements made by the Owner are considered representations and not warranties. Transamerica will not use any statement in defense of a claim unless it is made in the application and a copy of the application is attached to the Contract when issued. The group annuity contract has been issued to a trust organized under Missouri law. However, the sole purpose of the trust is to hold the group annuity contract. The Owner has all rights and benefits under the individual certificate issued under the group contract. Changes in the Contract Only two authorized officers of Transamerica, acting together, have the authority to bind Transamerica or to make any change in the individual contract or the group contract or individual certificates thereunder and then only in writing. Transamerica will not be bound by any promise or representation made by any other persons. Transamerica may not change or amend the individual contract or the group contract or individual certificates thereunder, except as expressly provided therein, without the Owner's consent. However, Transamerica may change or amend the individual contract or the group contract or individual certificates thereunder if such change or amendment is necessary for the individual contract or the group contract or individual certificates thereunder to comply with any state or federal law, rule or regulation. Protection of Benefits To the extent permitted by law, no benefit (including death benefits) under the Contract will be subject to any claim or process of law by any creditor. Delay of Payments Payment of any cash withdrawal or lump sum death benefit due from the Variable Account will occur within seven days from the date the election becomes effective, except that Transamerica may be permitted to postpone such payment or transfers if: (1) the New York Stock Exchange is closed for other than usual weekends or holidays, or trading on the Exchange is otherwise restricted; or (2) an emergency exists as defined by the Securities and Exchange Commission (Commission), or the Commission requires that trading be restricted; or (3) the Commission permits a delay for the protection of Owners. In addition, while it is our intention to process all transfers from the Sub-Accounts immediately upon receipt of a transfer request, the Contract gives us the right to delay effecting a transfer from a Sub-Account for up to seven days, but only in certain limited circumstances. However, the staff of the Commission currently interprets the Investment Company Act of 1940 to require the immediate processing of all transfers, and in compliance with that interpretation we will process all transfers immediately unless and until the Commission or its staff changes its interpretation or otherwise permits us to exercise this right. Subject to such approval, we may delay effecting such a transfer only if there is a delay of payment from an affected Portfolio. If this happens, and if the prior approval of the Commission or its staff is obtained, then we will calculate the dollar value or number of units involved in the transfer from a Sub-Account on or as of the date we receive a written transfer request, but will not process the transfer to the transferee Sub-Account until a later date during the seven-day delay period when the Portfolio underlying the transferring Sub-Account obtains liquidity to fund the transfer request through sales of portfolio securities, new Purchase Payments, transfers by investors or otherwise. During this period, the amount transferred would not be invested in a Sub-Account. Transamerica may delay payment of any withdrawal from the Fixed Account for a period of not more than six months after Transamerica receives the request for such withdrawal. If Transamerica delays payment for more than 30 days, Transamerica will pay interest on the withdrawal amount up to the date of payment. (See "Cash Withdrawals" page 30 of the Prospectus.) Notices and Directions Transamerica will not be bound by any authorization, direction, election or notice which is not in writing, in a form and manner acceptable to Transamerica, and received at our Service Center. Any written notice requirement by Transamerica to the Owner will be satisfied by our mailing of any such required written notice, by first-class mail, to the Owner's last known address as shown on our records. CALCULATION OF YIELDS AND TOTAL RETURNS Money Market Sub-Account Yield Calculation In accordance with regulations adopted by the Commission, Transamerica is required to compute the Money Market Sub-Account's current annualized yield for a seven-day period in a manner which does not take into consideration any realized or unrealized gains or losses on shares of the Money Market Series or on its portfolio securities. This current annualized yield is computed by determining the net change (exclusive of realized gains and losses on the sale of securities and unrealized appreciation and depreciation) in the value of a hypothetical account having a balance of one unit of the Money Market Sub-Account and income other than investment income at the beginning of such seven-day period, dividing such net change in Account Value by the value of the account at the beginning of the period to determine the base period return and annualizing this quotient on a 365-day basis. The net change in Account Value reflects the deductions for the annual Account Fee, the Mortality and Expense Risk Charge and Administrative Expense Charges and income and expenses accrued during the period. Because of these deductions, the yield for the Money Market Sub-Account of the Variable Account will be lower than the yield for the Money Market Portfolio or any comparable substitute funding vehicle. The Commission also permits Transamerica to disclose the effective yield of the Money Market Sub-Account for the same seven-day period, determined on a compounded basis. The effective yield is calculated by compounding the unannualized base period return by adding one to the base period return, raising the sum to a power equal to 365 divided by 7, and subtracting one from the result. The yield on amounts held in the Money Market Sub-Account normally will fluctuate on a daily basis. Therefore, the disclosed yield for any given past period is not an indication or representation of future yields or rates of return. The Money Market Sub-Account's actual yield is affected by changes in interest rates on money market securities, average portfolio maturity of the Money Market Portfolio or substitute funding vehicle, the types and quality of portfolio securities held by the Money Market Series or substitute funding vehicle, and operating expenses. In addition, the yield figures do not reflect the effect of any Contingent Deferred Sales Load (of up to 6% of Purchase Payments) that may be applicable to a Contract. Other Sub-Account Yield Calculations Transamerica may from time to time disclose the current annualized yield of one or more of the Sub-Accounts (except the Money Market Sub-Account) for 30-day periods. The annualized yield of a Sub-Account refers to the income generated by the Sub-Account over a specified 30-day period. Because this yield is annualized, the yield generated by a Sub-Account during the 30-day period is assumed to be generated each 30-day period. The yield is computed by dividing the net investment income per Variable Accumulation Unit earned during the period by the price per unit on the last day of the period, according to the following formula: YIELD = 2[{a-b + 1}6 - 1] cd Where: a = net investment income earned during the period by the Portfolio attributable to the shares owned by the Sub-Account. b = expenses for the Sub-Account accrued for the period (net of reimbursements). c = the average daily number of Variable Accumulation Units outstanding during the period. d = the maximum offering price per Variable Accumulation Unit on the last day of the period. Net investment income will be determined in accordance with rules established by the Commission. Accrued expenses will include all recurring fees that are charged to all Contracts. The yield calculations do not reflect the effect of any Contingent Deferred Sales Load that may be applicable to a particular Contract. Contingent Deferred Sales Load range from 6% to 0% of the amount of Account Value withdrawn depending on the elapsed time since the receipt of each Purchase Payment attributable to the portion of the Account Value withdrawn. Because of the charges and deductions imposed by the Variable Account, the yield for the Sub-Account will be lower than the yield for the corresponding Portfolio. The yield on amounts held in the Sub-Accounts normally will fluctuate over time. Therefore, the disclosed yield for any given period is not an indication or representation of future yields or rates of return. The Sub-Account's actual yield will be affected by the types and quality of portfolio securities held by the Portfolio, and its operating expenses. Standard Total Return Calculations Transamerica may from time to time also disclose average annual total returns for one or more of the Sub-Accounts for various periods of time. Average annual total return quotations are computed by finding the average annual compounded rates of return over one, five and ten year periods that would equate the initial amount invested to the ending redeemable value, according to the following formula: P{1 + T}n = ERV Where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one, five or ten-year period at the end of the one, five, or ten-year period (or fractional portion thereof). All recurring fees are recognized in the ending redeemable value. The standard average annual total return calculations will reflect the effect of any Contingent Deferred Sales Load that may be applicable to a particular period. Hypothetical Performance Data Transamerica may also disclose "hypothetical" performance data for a Sub-Account, for periods before the Sub-Account commenced operations. Such performance information for the Sub-Account will be calculated based on the performance of the corresponding Portfolio and the assumption that the Sub-Account was in existence for the same periods as those indicated for the Portfolio, with a level of Contract charges currently in effect. The Portfolio used for these calculations will be the actual Portfolio that the Sub-Account will invest in. This type of hypothetical performance data may be disclosed on both an average annual total return and a cumulative total return basis. Moreover, it may be disclosed assuming that the Contract is not surrendered (i.e., with no deduction for the Contingent Deferred Sales Load) and assuming that the Contract is surrendered at the end of the applicable period (i.e., reflecting a deduction for any applicable Contingent Deferred Sales Load). Other Performance Data Transamerica may from time to time also disclose average annual total returns in a non-standard format in conjunction with the standard described above. The non-standard format will be identical to the standard format except that the Contingent Deferred Sales Load percentage will be assumed to be 0%. Transamerica may from time to time also disclose cumulative total returns in conjunction with the standard format described above. The cumulative returns will be calculated using the following formula assuming that the Contingent Deferred Sales Load percentage will be 0%. CTR = {ERV/P} - 1 Where: CTR = the cumulative total return net of Sub-Account recurring charges for the period. ERV = ending redeemable value of a hypothetical $1,000 payment at the beginning of the one, five, or ten-year period at the end of the one, five, or ten-year period (or fractional portion thereof). P = a hypothetical initial payment of $1,000. All non-standard performance data will be advertised only if the standard performance data is also disclosed. HISTORIC PERFORMANCE DATA General Limitations The figures below represent the past performance of the Sub-Accounts and are not indicative of future performance. The figures may reflect the waiver of advisory fees and reimbursement of other expenses. Except for Transamerica Growth, the Funds have provided the performance data for the Sub-Accounts. Except for Transamerica Growth none of the Funds or their investment advisers are affiliated with Transamerica. In preparing the tables below, Transamerica has relied on the data provided by the Funds. While Transamerica has no reason to doubt the accuracy of the figures provided by the Funds, Transamerica has not verified those figures. Money Market Sub-Account Yields The annualized yield for the Money Market Sub-Account for the seven-day period ending December 31, 1998 was ______%. The effective yield for the Money Market Sub-Account for the seven-day period ending December 31, 1998 was _______%. Sub-Account Performance Figures Including Hypothetical Performance The charts below show historical performance data for the Sub-Accounts, including, for seven Sub-Accounts, "hypothetical" data for the periods prior to the inception of the Sub-Accounts, based on the performance of the corresponding Portfolios since their inception date, with a level of charges equal to those currently assessed under the Contracts. These figures are not an indication of the future performance of the Sub-Accounts. Some of the figures reflect the waiver of advisory fees and reimbursement of other expenses for part or all of the periods indicated. The dates to the left of the Sub-Account names below indicate the date of commencement of operation of the Portfolios, which coincide with the date of commencement of operation of the corresponding Sub-Account, with these seven exceptions: the Money Market; Managed Assets, Zero Coupon 2000, Qualify Bond, Small Cap and Stock Index Sub-Accounts which commenced operations January 4, 1993, and the Transamerica Growth Sub-Account which commenced operations May 1, 1998. Hence, the performance data given for these seven Sub-Accounts which precedes these dates is "hypothetical." Standard Average annual total returns for periods since inception of the Portfolio, including hypothetical performance, for each Sub-Account are as follows. These figures include mortality and expenses charges deducted at 1.25%, the administrative expenses charge of 0.15% per annum, the administration charge of $30 per annum adjusted for average account size and the maximum contingent deferred sales load of 6%.
- ---------------------------------------- ------------------- ------------------ ------------------ ------------------ For the period from commencement of SUB-ACCOUNT (date of commencement of For the 1-year For the 3-year For the 5-year Portfolio operation of Corresponding Portfolio) period ending period ending period ending operations to 12/31/98 12/31/98 12/31/98 12/31/98 - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Money Market (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Special Value (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Zero Coupon 2000 (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Quality Bond (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Small Cap (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Capital Appreciation (4/5/93) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Stock Index (9/29/89) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Socially Responsible (10/7/93) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Growth & Income (12/15/94) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ International Equity (12/15/94) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ International Value (5/1/96) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Disciplined Stock (5/1/96) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Small Company Stock (5/1/96) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Balanced (5/1/97) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Limited Term High Income(5/1/97) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Transamerica Growth(2/26/69)* - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Core Value ( ) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ MidCap Stock ( ) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Non-Standard Average annual total returns for period since inception of the Portfolio including hypothetical performance, for each Sub-Account are as follows. These figures include mortality and expenses charges deducted at 1.25%, the administrative expenses charge of 0.15% per annum, the administration charge of $30 per annum adjusted for average account size but do not reflect the maximum contingent deferred sales load of 6% which if reflected would reduce the figures. Non-Standard performance data will only be disclosed if the standard performance data for the required periods is also disclosed. - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ For the period from commencement of SUB-ACCOUNT (date of commencement of For the 1-year For the 3-year For the 5-year Portfolio operation of Corresponding Portfolio) period ending period ending period ending operations to 12/31/98 12/31/98 12/31/98 12/31/98 - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Money Market (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Special Value (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Zero Coupon 2000 (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Quality Bond (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Small Cap (8/31/90) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Capital Appreciation (4/5/93) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Stock Index (9/29/89) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Socially Responsible (10/7/93) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Growth & Income (12/15/94) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ International Equity (12/15/94) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ International Value (5/1/96) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Disciplined Stock (5/1/96) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Small Company Stock (5/1/96) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Balanced (5/1/97) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Limited Term High Income(5/1/97) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Transamerica Growth(2/26/69)* - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Core Value ( ) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ MidCap Stock ( ) - ---------------------------------------- ------------------- ------------------ ------------------ ------------------ Non-Standard Cumulative total returns for periods since inception of the Portfolio, including hypothetical performance, for each Sub-Account are as follows. These figures include mortality and expenses charges deducted at 1.25%, the administrative expenses charge of 0.15% per annum, the administration charge of $30 per annum adjusted for average account size but do not reflect the maximum contingent deferred sales load of 6%, which if reflected would reduce the figures. Nonstandard performance data will only be disclosed if standard performance data for the required periods is also disclosed. - ---------------------------------------- ------------------- ------------------ For the 1-year SUB-ACCOUNT (date of commencement of period ending Since Inception operation of Corresponding Portfolio) 12/31/98 - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Money Market (8/31/90) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Special Value (8/31/90) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Zero Coupon 2000 (8/31/90) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Quality Bond (8/31/90) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Small Cap (8/31/90) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Capital Appreciation (4/5/93) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Stock Index (9/29/89) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Socially Responsible (10/7/93) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Growth & Income (12/15/94) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ International Equity (12/15/94) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ International Value (5/1/96) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Disciplined Stock (5/1/96) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Small Company Stock (5/1/96) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Balanced (5/1/97) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Limited Term High Income(5/1/97) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Transamerica Growth(2/26/69)* - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ Core Value ( ) - ---------------------------------------- ------------------- ------------------ - ---------------------------------------- ------------------- ------------------ MidCap Stock ( ) - ---------------------------------------- ------------------- ------------------
*The Growth Portfolio of the Transamerica Variable Insurance Fund, Inc., is the successor to Separate Account Fund C of Transamerica Occidental Life Insurance Company, a management investment company funding variable annuities, through a reorganization on November 1, 1996. Accordingly, the performance data for the Transamerica VIF Growth Portfolio include performance of its predecessor. The performance shown in the "since inception" box for the Transamerica Growth Sub-Account is 10-year performance, not performance since 1969. FEDERAL TAX MATTERS The Dreyfus/Transamerica Triple Advantage Variable Annuity may be purchased on a non-tax qualified basis ("Non-Qualified Contract") or purchased and used in connection with plans qualifying for special tax treatment ("Qualified Contract"). Qualified Contracts are designed for use by retirement plans qualified for special tax treatment under Sections 401, 403(b) or 408 of the Internal Revenue Code of 1986, as amended (the "Code"). The ultimate effect of federal income taxes on the Account Value, on Annuity Payments, and on the economic benefit to the Owner, the Annuitant or the Beneficiary may depend on the type of retirement plan for which the Contract is purchased, on the tax and employment status of the individual concerned and on Transamerica's tax status. THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. Any person concerned about these tax implications should consult a competent tax adviser. This discussion is based upon Transamerica's understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service ("IRS"). No representation is made as to the likelihood of continuation of these present federal income tax laws or of the current interpretations by the Internal Revenue Service. Moreover, no attempt has been made to consider any applicable state or other tax laws. Taxation of Transamerica Transamerica is taxed as a life insurance company under Part I of Subchapter L of the Code. Since the Variable Account is not an entity separate from Transamerica, and its operations form a part of Transamerica, it will not be taxed separately as a "regulated investment company" under Subchapter M of the Code. Investment income and realized capital gains are automatically applied to increase reserves under the Contracts. Under existing federal income tax law, Transamerica believes that the Variable Account investment income and realized net capital gains will not be taxed to the extent that such income and gains are applied to increase the reserves under the Contracts. Accordingly, Transamerica does not anticipate that it will incur any federal income tax liability attributable to the Variable Account and, therefore, Transamerica does not intend to make provisions for any such taxes. However, if changes in the federal tax laws or interpretations thereof result in Transamerica being taxed on income or gains attributable to the Variable Account, then Transamerica may impose a charge against the Variable Account (with respect to some or all Contracts) in order to set aside provisions to pay such taxes. Tax Status of the Contract Section 817(h) of the Code requires that with respect to Non-Qualified Contracts, the investments of the Funds be "adequately diversified" in accordance with Treasury regulations in order for the Contracts to qualify as annuity contracts under federal tax law. The Variable Account, through the Funds, intends to comply with the diversification requirements prescribed by the Treasury in Reg. Sec. 1.817-5, which affect how the Funds' assets may be invested. In certain circumstances, Owners of variable annuity contracts may be considered the owners, for federal income tax purposes, of the assets of the separate accounts used to support their contracts. In those circumstances, income and gains from the separate account assets would be includible in the variable contract owner's gross income. The IRS has stated in published rulings that a variable contract Owner will be considered the Owner of separate account assets if the contract Owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. The Treasury Department has also announced, in connection with the issuance of regulations concerning diversification, that those regulations "do not provide guidance concerning the circumstances in which investor control for the investments of a segregated asset account may cause the investor (i.e., the Owner), rather than the insurance company, to be treated as the Owner of the assets in the account." This announcement also stated that guidance would be issued by way of regulations or rulings on the "extent to which policyholders may direct their investments to particular Sub-Accounts without being treated as owners of the underlying assets." The ownership rights under the Contract are similar to, but different in certain respects from, those described by the IRS in rulings in which it was determined that Contract Owners were not owners of separate account assets. For example, the Owner has additional flexibility in allocating premium payments and Account Values. These differences could result in an Owner being treated as the owner of a pro rata portion of the assets of the Variable Account. In addition, Transamerica does not know what standards will be set forth, if any, in the regulations or rulings which the Treasury Department has stated it expects to issue. Transamerica therefore reserves the right to modify the Contract as necessary to attempt to prevent an Owner from being considered the owner of a pro rata share of the assets of the Variable Account. In order to be treated as an annuity contract for federal income tax purposes, section 72(s) of the Code requires any Non-Qualified Contract to provide that (a) if any Owner dies on or after the Annuity Date but prior to the time the entire interest in the Contract has been distributed, the remaining portion of such interest will be distributed at least as rapidly as under the method of distribution being used as of the date of that Owner's death; and (b) if any Owner dies prior to the Annuity Date, the entire interest in the Contract will be distributed within five years after the date of the Owner's death. These requirements will be considered satisfied as to any portion of the Owner's interest which is payable to or for the benefit of a "designated beneficiary" and which is distributed over the life of such "designated beneficiary" or over a period not extending beyond the life expectancy of that Beneficiary, provided that such distributions begin within one year of the Owner's death. The Owner's "designated beneficiary" refers to a natural person designated by such Owner as a Beneficiary and to whom ownership of the Contract passes by reason of death. However, if the Owner's "designated beneficiary" is the surviving spouse of the deceased Owner, the Contract may be continued with the surviving spouse as the new owner. The Non-Qualified Contracts contain provisions which are intended to comply with the requirements of section 72(s) of the Code, although no regulations interpreting these requirements have yet been issued. Transamerica intends to review such provisions and modify them if necessary to assure that they comply with the requirements of Code section 72(s) when clarified by regulation or otherwise. Other rules may apply to Qualified Contracts. DISTRIBUTION OF THE CONTRACT Transamerica Securities Sales Corporation ("TSSC") is principal underwriter of the Contracts. TSSC may also serve as principal underwriter and distributor of other contracts issued through the Variable Account and certain other separate accounts of Transamerica and any affiliates of Transamerica. TSSC is a wholly owned subsidiary of Transamerica Insurance Corporation of California, which is a subsidiary of Transamerica Corporation. TSSC is registered with the Commission as a broker/dealer and is a member of the National Association of Securities Dealers, Inc. ("NASD"). Transamerica pays TSSC for acting as the principal underwriter under a distribution agreement. TSSC has entered into sales agreements with other broker/dealers to solicit applications for the Contracts through registered representatives who are licensed to sell securities and variable insurance products. These agreements provide that applications for the Contracts may be solicited by registered representatives of the broker/dealers appointed by Transamerica to sell its variable life insurance and variable annuities. These broker/dealers are registered with the Commission and are members of the NASD. The registered representatives are authorized under applicable state regulations to sell variable life insurance and variable annuities. Transamerica Financial Resources, Inc. ("TFR") is an underwriter and distributor of the Contracts. TFR is a wholly-owned subsidiary of Transamerica Insurance Corporation of California and is registered with the Commission and the NASD as a broker/dealer. Under the agreements, applications for the Contracts will be sold by broker/dealers which will receive compensation as described in the Prospectus. The offering of the Contracts is expected to be continuous and neither TSSC nor TFR anticipate discontinuing the offering of the Contracts. However, TSSC and TFR reserve the right to discontinue the offering of the Contracts. During fiscal year 1998, $________________ in commissions were paid to TSSC as underwriter of the Contracts; no amounts were retained by TSSC. During fiscal year 1997, $21,886,072.80 in commissions were paid to TSSC as underwriter of the Contracts; no amounts were retained by TSSC. During fiscal year 1996, $15,506,834.71 in commissions were paid to TSSC as underwriter of the Contracts; no amounts were retained by TSSC. During fiscal year 1998, $_______________ in commissions were paid to TFR as underwriter of the Contracts; no amounts were retained by TFR. During fiscal year 1997, $2,394,358.42 in commissions were paid to TFR as underwriter of the Contracts; no amounts were retained by TFR. During fiscal year 1996, $2,283,845.07 in commissions were paid to TFR as underwriter of the Contracts; no amounts were retained by TFR. SAFEKEEPING OF VARIABLE ACCOUNT ASSETS Title to assets of the Variable Account is held by Transamerica. The assets of the Variable Account are kept separate and apart from Transamerica general account assets. Records are maintained of all purchases and redemptions of Portfolio shares held by each of the Sub-Accounts. TRANSAMERICA General Information and History Transamerica Occidental Life Insurance Company was formerly known as Occidental Life Insurance Company of California. The name change occurred on or about September 1, 1981. Transamerica is wholly-owned by Transamerica Insurance Corporation of California, which is in turn, wholly-owned by Transamerica Corporation. Transamerica Corporation is a financial services organization which engages through its subsidiaries in two primary businesses: finance and insurance. Finance consists of consumer lending, commercial lending, leasing and real estate services. Insurance comprises life insurance, asset management, and insurance brokerage. STATE REGULATION Transamerica is subject to the insurance laws and regulations of all the states where it is licensed to operate. The availability of certain Contract rights and provisions depends on state approval and/or filing and review processes. Where required by state law or regulation, the Contract will be modified accordingly. RECORDS AND REPORTS All records and accounts relating to the Variable Account will be maintained by Transamerica or by its Service Office. As presently required by the provisions of the 1940 Act and regulations promulgated thereunder which pertain to the Variable Account, reports containing such information as may be required under the 1940 Act or by other applicable law or regulation will be sent to Owners semi-annually at their last known address of record. FINANCIAL STATEMENTS This Statement of Additional Information contains the financial statements of the Variable Account as of December 31, 1998. The consolidated financial statements of Transamerica included in this Statement of Additional Information should be considered only as bearing on the ability of Transamerica to meet its obligations under the Contract. They should not be considered as bearing on the investment performance of the assets held in the Variable Account. APPENDIX Accumulation Transfer Formula Transfers after the annuity date are implemented according to the following formulas: (1) Determine the number of units to be transferred from the variable sub-account as follows: = AT/AUV1 (2) Determine the number of variable accumulation units remaining in such variable sub-account (after the transfer): = UNIT1 AT/AUV1 (3) Determine the number of variable accumulation units in the transferee variable sub-account (after the transfer): = UNIT2 + AT/AUV2 (4) Subsequent variable accumulation payments will reflect the changes in variable accumulation units in each variable sub-account as of the next Variable Accumulation Payment's due date. Where: (AUV1) is the variable accumulation Unit value of the Variable sub-account that the transfer is being made from as of the end of the valuation Period in which the transfer request was received. (AUV2) is the variable accumulation unit value of the variable sub-account that the transfer is being made to as of the end of the valuation period in which the transfer request was received. (UNIT1) is the number of variable accumulation units in the Variable sub-account that the transfer is being made from, before the transfer. (UNIT2) is the number of variable accumulation units in the variable sub-account that the transfer is being made to, before the transfer. (AT) is the dollar amount being transferred from the variable sub-account. (This page has been left blank intentionally.) PART C Other Information Item 24. Financial Statements and Exhibits (a) Financial Statements All required financial statements are included in Parts A or B of this Registration Statement. (b) Exhibits (1)Resolution of the Board of Directors of Transamerica Occidental Life Insurance Company ("Transamerica") authorizing establishment of the Variable Account.(1) (2) Not Applicable. (3) (a)Master Agreement among Transamerica Occidental Life Insurance Company, First Transamerica Life Insurance, Transamerica Financial Resources, Inc., Dreyfus Service Corporation, and Dreyfus Service Organization, Inc. (4) (b) Principal Agency Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Service Organization, Inc. (4) (c) Distribution Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Service Corporation.(4) (d) Form of Sales Agreement among Dreyfus Service Corporation, Dreyfus Service Organization, Inc., and Broker-Dealers. (4) (e) Amendment Dated as of August 31, 1993, to Master Agreement among Transamerica Occidental Life Insurance Company, First Transamerica Life Insurance Company, Transamerica Financial Resources, Inc., Dreyfus Service Corporation and Dreyfus Service Organization, Inc. (6) (f) Amendment Dated as of August 31, 1993 to Principal Agency Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Service Organization, Inc. (6) (g) Amendment Dated as of August 31, 1993 to Distribution Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Service Corporation. (6) (h) Distribution Agreement between Transamerica Occidental Life Insurance Company and Transamerica Insurance Securities Sales Corporation, dated as of August 24, 1994. (8) (i) Sales Agreement among Transamerica Insurance Securities Sales Corporation, Transamerica Occidental Life Insurance Company, First Transamerica Life Insurance Company, Dreyfus Service Corporation, and Dreyfus Service Organization, Inc., dated as of August 24, 1994. (8) (j) Services Agreement among Transamerica Occidental Life Insurance Company, First Transamerica Life Insurance Company, Transamerica Insurance Securities Sales Corporation, Dreyfus Service Corporation, and Dreyfus Service Organization, Inc., dated as of August 24, 1994. (8) (k) Sales Agreement among Transamerica Insurance Securities Sales Corporation, Transamerica Occidental Life Insurance Company, First Transamerica Life Insurance Company and Broker/Dealers, dated August 24, 1994.(10) (l) Form of Sales Agreement between Transamerica Occidental Life Insurance Company, Transamerica Life Insurance and Annuity Company, First Transamerica Life Insurance Company and Transamerica Securities Sales Corporation.(10) (4) Group Contract Form, Certificate Form, Individual Contract Form and Endorsements. (a) Contract Form and Endorsements. (5) (i) Form of Flexible Purchase Payment Multi-Funded Deferred Master Group Annuity Contract. (ii) Form of Automatic Payout Option Endorsement to Group Contract. (iii) Form of Dollar Cost Averaging Option Endorsement to Group Contract. (iv) Form of Systematic Withdrawal Option Endorsement to Group Contract. (v) Form of Guaranteed Minimum Death Benefit Endorsement to Group Contract. (vi) Form of Fixed Account Rider to Group Contract. (7) (b) Certificate of Participation Form and Endorsements. (5) (i) Form of Certificate of Participation. (ii) Form of IRA Endorsement to Certificate. (iii)Form of Dollar Cost Averaging Option Endorsement to Certificate. (iv) Form of Systematic Withdrawal Option Endorsement to Certificate. (v) Form of Automatic Payout Option Endorsement to Certificate. (vi) Form of Benefit Distribution Endorsement to Certificate. (c) Individual Contract Form and Endorsements (6) (i) Form of Flexible Purchase Payment Multi-Funded Deferred Individual Annuity Contract. (ii) Form of IRA Endorsement to Individual Contract. (iii) Form of Benefit Distribution Endorsement. (iv) Form of Dollar Cost Averaging Option Endorsement to Individual Contract. (v) Form of Systematic Withdrawal Option Endorsement to Individual Contract. (vi) Form of Automatic Payout Option Endorsement to Individual Contract. (vii) Form of Guaranteed Minimum Death Benefit Endorsement to Individual Contract. (viii) Form of Fixed Account Rider to Individual Contract. (7) (5) (a) Form of Application for and Acceptance of Group Annuity Contract.(5) (b) Form of Application for Enrollment under Group Annuity Contract.(5) (c) Form of Application for Individual Annuity Contract. (6) (6) (a) Restated Articles of Incorporation of Transamerica. (1) (b) Restated By-Laws of Transamerica. (1) (7) Not applicable. (8) (a) Participation Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Variable Investment Fund. (4) (b) Participation Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Life and Annuity Index Fund, Inc. (4) (c) Participation Agreement between Transamerica Occidental Life Insurance Company and The Dreyfus Socially Responsible Growth Fund, Inc. (6) (d) Administrative Services Agreement between Transamerica Occidental Life Insurance Company and Vantage Computer Systems, Inc. (4) (e) Amendment Dated as of August 31, 1993 to Participation Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Variable Investment Fund. (6) (f) Amendment Dated as of August 31, 1993 to Participation Agreement between Transamerica Occidental Life Insurance Company and Dreyfus Life and Annuity Index Fund, Inc. (6) (g) Amendment Dated as of August 24, 1994 to Participation Agreement Dated as of March 3, 1993, As Amended, between Transamerica Occidental Life Insurance Company and Dreyfus Variable Investment Fund. (8) (h) Amendment Dated as of August 24, 1994 to Participation Agreement Dated as of August 31, 1993 between Transamerica Occidental Life Insurance Company and Dreyfus Socially Responsible Growth Fund, Inc. (8) (i) Amendment Dated as of August 24, 1994 to Participation Agreement Dated as of March 3, 1993, As Amended, between Transamerica Occidental Life Insurance Company and Dreyfus Stock Index Fund. (8) (9) (a) Opinion and Consent of Counsel. (9) (10) (a) Consent of Counsel. (10) (11) (b) Consent of Independent Auditors. (10) (11) (11) No financial statements are omitted from item 23. (12) Not applicable. (13) Performance Data Calculations. (6) (14) Not applicable. (15) Powers of Attorney. Frank Beardsley (12) Richard N. Latzer (2)(11) Thomas J. Cusack (6)(11) Karen MacDonald (9)(11) James W. Dederer (2)(11) Gary U. Rolle' (2)(11) Paul E. Rutledge III(11) T. Desmond Sugrue(10)(11) George A. Foegele (11) David E. Gooding (2)(11) Nooruddin S. Veerjee (4)(11) Edgar H. Grubb (2)(11) Robert A. Watson(9)(11) Frank C. Herringer (2)(11) (1) Filed with initial filing of this Form N-4 Registration Statement, File No. 33-49998 (July 24, 1992). (2) Incorporated by reference to Exhibit 7(c) of Post-Effective Amendment No.1 to the Registration Statement of Transamerica Occidental Life Insurance Company's Separate Account VL on Form S-6, File No. 33-28107 (April 30, 1990). (3) Incorporated by reference to Exhibit 7(d) of Post-Effective Amendment No. 2 to the Registration Statement of Transamerica Occidental Life Insurance Company's Separate Account VL on Form S-6, File No. 33-28107 (April 30, 1991). (4) Filed with Post-Effective Amendment No. 1 to this Form N-4 Registration Statement, File No. 33-49998 (April 30, 1993). (5) Filed with Post-Effective Amendment No. 3 to this Form N-4 Registration Statement, File No. 33-49998 (March 8, 1994). (6) Filed with Post-Effective Amendment No. 4 to this Form N-4 Registration Statement, File No. 33-49998 (April 29, 1994). (7) Filed with Post-Effective Amendment No. 5 to this Form N-4 Registration Statement, File No. 33-49998 (March 1, 1995). (8) Filed with Post-Effective Amendment No. 6 to this Form N-4 Registration Statement File No. 33-499988 (April 28, 1995). (9) Filed with Post-Effective Amendment No. 7 to this Form N-4 Registration Statement File No. 33-49998 (April 26, 1996). (10) Filed with Post-Effective Amendment No. 8 to this Form N-4 Registration Statement File No. 33-49998 (April 28, 1997) (11) Filed with Post-Effective Amendment No. 9 to this Form N-4 Registation Statement file No. 333-49998 (April 28, 1998). (12) Filed herewith. Item 25. List of Directors of Transamerica Occidental Life Insurance Company Frank Beardsley Frank C. Herringer Thomas J. Cusack Richard N. Latzer James W. Dederer Karen MacDonald Gary U. Rolle' George A. Foegele Paul E. Rutledge III David E. Gooding Edgar H. GrubbT. Desmond Sugrue Nooruddin S. Veerjee Robert A. Watson List of Officers for Transamerica Occidental Life Insurance Company
Thomas J. Cusack Chairman, President and Chief Executive Officer Nooruddin S. Veerjee President - Insurance Products Division Frank Beardsley President - Transamerica Asset Management George A. Foegele Senior Vice President Paul E. Rutledge III President - Reinsurance Division James W. Dederer, CLU Executive Vice President, General Counsel and Corporate Secretary David E. Gooding Executive Vice President and Chief Information Officer Meheriar Hasan Vice President Daniel E. Jund, FLMI Senior Vice President Karen MacDonald Senior Vice President and Corporate Actuary William N. Scott, CLU, FLMI Senior Vice President T. Desmond Sugrue Executive Vice President Ron F. Wagley Senior Vice President and Chief Agency Officer Darrel K.S. Yuen President-Asian Operations Richard N. Latzer Chief Investment Officer Gary U. Rolle', CFA Chief Investment Officer Stephen J. Ahearn Investment Officer Jim Bowman Vice President John M. Casparian Investment Officer Catherine Collinson Vice President Heather E. Creeden Investment Officer Colin Funai Investment Officer William L. Griffin Investment Officer Heidi Y. Hu Investment Officer Matthew W. Kuhns Investment Officer Michael F. Luongo Investment Officer Dennis J. McNamara Investment Officer Matthew Palmer Investment Officer Thomas C. Pokorski Investment Officer Susan A. Silbert Investment Officer Philip W. Treick Investment Officer Jeffrey S. Van Harte Investment Officer Paul Wintermute Investment Officer William D. Adams Vice President Sandra Bailey-Whichard Vice President Nicki Bair Senior Vice President Michael Barnhart Regional Vice President Dennis Barry Vice President Laurie Bayless Vice President Nancy Blozis Vice President and Controller Thomas Briggle Vice President Thomas Brimacombe Vice President Sandy Brown Vice President John Byrnes Vice President Kent Callahan Vice President Roy Chong-Kit Senior Vice President and Actuary Matt Coben Vice President Ken Cochrane Vice Presidetn Alan T. Cunningham Vice President and Deputy General Counsel Glenn Cunningham Vice President Robert DeMarco Vice President Peter DeWolf Vice President Mitch Dimler Vice President Randy Dobo Vice President and Actuary Thomas P. Dolan, FLMI Vice President John V. Dohmen Vice President Harry Dunn, FSA Vice President and Chief Reinsurance Actuary Gail DuBois Vice President and Actuary Ken Ellis Vice President George Garcia Vice President and Chief Medicare Officer David M. Goldstein Vice President and Deputy General Counsel Paul Hankwitz, MD Vice President and Chief Medical Director Randall C. Hoiby Vice President and Associate General Counsel John W. Holowasko Vice President William M. Hurst Vice President and Associate General Counsel James M. Jackson Vice President and Deputy General Counsel Allan H. Johnson, FSA Vice President and Actuary Michael Kappos Vice President Patrick Kelleher Vice President and Reinsurance Financial Officer Ken Kilbane Vice President Frank J. LaRusso Vice President and Chief Underwriting Officer Susan Mack Vice President and Associate General Counsel Philip E. McHale, FLMI Vice President Mark Madden Vice President Maureen McCarthy Vice President Vic Modugno Vice President and Associate Actuary Jess Nadelman Vice President Wayne Nakano, CPA Vice President Paul Norris Vice President and Actuary Susan O'Brien Vice President Thomas P. O'Neill Vice President Michael Palace, ASA Vice President and Actuary Jerry Paul Vice President Stephen W. Pinkham Vice President Kristy M. Pipes Senior Vice President Larry H. Roy Senior Vice President Michael Sanders Vice President Gary L. Seagraves Vice President Joel D. Seigle Vice President Karen Stout Vice President James O. Strand Vice President Alice Su Vice President Lee Tang Vice President Bill Tate Vice President Claude W. Thau, FSA Senior Vice President Barry Tobin Vice President Kim A. Tursky Vice President and Assistant Secretary John Vieren Vice President Timothy Weis Vice President William R. Wellnitz, FSA Senior Vice President and Actuary Virginia M. Wilson Senior Vice President and Controller Ronald R. Wolfe Regional Vice President Sally Yamada Vice President and Treasurer Olisa Abaelu Second Vice President Benjamin Bock Vice President Daniel J. Bohmfalk Second Vice President and Associate Actuary Ken Bromberg Second Vice President Art Bueno Second Vice President Barry Buner Second Vice President Wonjoon Cho Second Vice President Art Cohen Second Vice President Dave Costanza Second Vice President Reid A. Evers Vice President and Associate General Counsel David Fairhall Second Vice President and Associate Actuary Selma Fox Second Vice President Toni A. Forge Second Vice President Jerry Gable, FSA Second Vice President Linda Goodwin M.D. Second Vice President and Reinsurance Medical Director Roger Hagopian Second Vice President Zahid Hussain Vice President and Associate Actuary Ahmad Kamil, FIA, MAAA Vice President and Associate Actuary Andrew G. Kanelos Second Vice President Ronald G. Keller Second Vice President Joan Klubnik Second Vice President Roger Korte Second Vice President Lynette Lawson Second Vice President Dean LeCesne Second Vice President Liwen Lien Second Vice President Marilyn McCullough Vice President Richard MacKenzie Second Vice President Danny Mahoney Second Vice President Carl Marcero Vice President and Chief Reinsurance Underwriter Jodie Moore Second Vice President Clay Moye Second Vice President Daniel A. Norwick Second Vice President John Oliver Second Vice President Susan O'Brien Second Vice President Stephanie Quincey Second Vice President Paul Reisz Second Vice President Ray Robinson Second Vice President Beverly Rochecharlie Second Vice President John J. Romer Vice President Laura Scully Second Vice President Frederick Seto Second Vice President Jack Shalley, MD Second Vice President and Medical Director Steven R. Shepard Second Vice President and Assistant General Counsel Frank Snyder Second Vice President Mary Spence Second Vice President Jean Stefaniak Second Vice President Christina Stiver Vice President David Stone Second Vice President Suzette Stover-Hoyt Second Vice President John Tillotson Second Vice President K. Y. To Second Vice President Boning Tong Second Vice President and Associate Actuary Janet Unruh Second Vice President and Assistant General Counsel Colleen Vandermark Vice President Marsha Wallace Second Vice President James B. Watson Second Vice President and Assistant General Counsel Sheila Wickens, MD Second Vice President and Medical Director Michael B. Wolfe Vice President James Wolfenden Statement Officer Kamran Haghighi Tax Officer Susan Vivino Assistant Secretary
Item 26. Person Controlled by or Under Common Control With the Depositor or Registrant. The Depositor, Transamerica Occidental Life Insurance Company (Transamerica), is wholly owned by Transamerica Insurance Corporation of California. The Registrant is a segregated asset account of Transamerica. The following chart indicates the persons controlled by or under common control with Transamerica. - - ARC Reinsurance Corporation Transamerica Management, Inc. -- DE BWAC Seventeen, Inc. Transamerica Commercial Finance Canada, Limited -- ON Transamerica Commercial Finance Corporation, Canada -- Can. BWAC Twelve, Inc. TIFCO Lending Corporation -- IL Transamerica Insurance Finance Corporation -- MD BWAC Twenty-One, Inc. Transamerica Commercial Holdings Limited -- U.K. First Florida Appraisal Services, Inc. First Georgia Appraisal Services, Inc. -- GA Greybox L.L.C. Transamerica Trailer Leasing S.N.C. -- Fra. Intermodal Equipment, Inc. Transamerica Leasing N.V. -- Belg. Transamerica Leasing SRL -- Itl. Inventory Funding Trust Inventory Funding Company, LLC -- DE Metropolitan Mortgage Company Easy Yes Mortgage, Inc. -- FL Easy Yes Mortgage, Inc. -- GA First Florida Appraisal Services, Inc. -- FL Freedom Tax Services, Inc. -- FL J.J. & W. Advertising, Inc. -- FL J.J. & W. Realty Services, Inc. -- FL Liberty Mortgage Company of Ft. Myers, Inc. -- FL Metropolis Mortgage Company -- FL Perfect Mortgage Company -- FL Pyramid Insurance Company, Ltd. Pacific Cable Ltd. -- Bmda. TA Leasing Holding Co., Inc. Trans Ocean Ltd. -- DE Transamerica Leasing Inc. -- DE Trans Ocean Container Corp. SpaceWise Inc. -- DE Trans Ocean Container Finance Corp. -- DE Trans Ocean Leasing Deutschland GmbH -- Ger. Trans Ocean Leasing PTY Limited -- Aust. Trans Ocean Management S.A. -- SWTZ Trans Ocean Regional Corporate Holdings -- CA Trans Ocean Tank Services Corporation -- DE Trans Ocean Ltd. Trans Ocean Container Corp. -- DE Transamerica Accounts Holding Corporation ARS Funding Corporation -- DE Transamerica Acquisition Corporation Camtrex Group, Inc. -- Transamerica Business Credit Corporation Bay Capital Corporation -- DE Coast Funding Corporation -- DE Direct Capital Equity Investment, Inc. -- DE Gulf Capital Corporation -- DE TA Air East, Corp. -- TA Air III, Corp. -- DE TA Air IV, Corp. -- DE TA Air IX, Corp. -- DE TA Air I, Corp. -- DE TA Air VIII, Corp. -- TA Air VII, Corp. -- TA Air VI, Corp. -- TA Air V, Corp. -- TA Air X Corp. -- DE TA Marine I Corp. -- DE TA Marine II Corp. -- DE TBC III, Inc. -- DE TBC II, Inc. -- DE TBC IV, Inc. -- DE TBC I, Inc. -- DE TBC Tax III, Inc. -- DE TBC Tax II, Inc. -- DE TBC Tax IV, Inc. -- DE TBC TAX IX, Inc. -- DE TBC Tax I, Inc. -- DE TBC Tax VIII, Inc. -- DE TBC Tax VII, Inc. -- DE TBC Tax VI, Inc. -- DE TBC Tax V, Inc. -- DE TBC V, Inc. -- DE TBCC Funding Trust I -- TBCC Funding Trust II -- The Plain Company -- DE Transamerica Mezzanine Financing, Inc. -- Transamerica Small Business Services, Inc. -- Transamerica Business Credit Corporation - DE TA Air II, Corp. -- DE Transamerica Commercial Finance Canada, Limited Transamerica Acquisition Corporation -- Can. Transamerica Commercial Finance Corporation Inventory Funding Trust -- DE TCF Asset Management Corporation -- CO Transamerica Distribution Finance Corporation de Mexico -- Transamerica Joint Ventures, Inc. -- DE Transamerica Commercial Finance Corporation, I BWAC Credit Corporation -- DE BWAC International Corporation -- DE BWAC Twelve, Inc. -- DE Transamerica Business Credit Corporation -- DE Transamerica Distribution Finance Corporation -- DE Transamerica Equipment Financial Services Corporation -- Transamerica Commercial Finance Limited WFC Polska Sp. Zo.o -- Transamerica Commercial Holdings Limited Transamerica Commercial Finance Limited -- U.K. Transamerica Trailer Leasing Limited -- NY Transamerica Trailer Leasing Limited -- U.K. Transamerica Consumer Finance Holding Company Metropolitan Mortgage Company -- FL Pacific Agency, Inc. -- IN Transamerica Consumer Mortgage Receivables Corporation -- DE Transamerica Mortgage Company -- DE Transamerica Corporation ARC Reinsurance Corporation -- HI Inter-America Corporation -- CA Pyramid Insurance Company, Ltd. -- HI RTI Holdings, Inc. -- DE Transamerica Airlines, Inc. -- DE Transamerica Business Technologies Corporation -- DE Transamerica CBO I, Inc. -- DE Transamerica Corporation (Oregon) -- OR Transamerica Delaware, L.P. -- DE Transamerica Finance Corporation -- DE Transamerica Financial Products, Inc. -- CA Transamerica Foundation -- CA Transamerica Insurance Corporation of California -- CA Transamerica Intellitech, Inc. -- DE Transamerica International Holdings, Inc. -- DE Transamerica Investment Services, Inc. -- DE Transamerica LP Holdings Corp. -- DE Transamerica Pacific Insurance Company, Ltd. -- HI Transamerica Real Estate Tax Service (A Division of Transamerica Corporation) -- N/A Transamerica Realty Services, Inc. -- DE Transamerica Senior Properties, Inc. -- DE TREIC Enterprises, Inc. -- DE Transamerica Distribution Finance Corporation Transamerica Accounts Holding Corporation -- DE Transamerica Commercial Finance Corporation -- DE Transamerica Inventory Finance Corporation -- DE Transamerica Retail Financial Services Corporation -- DE Transamerica Vendor Financial Services Corporation -- DE Transamerica Distribution Finance Corporation de Mexico TDF de Mexico -- Transamerica Distribution Finance Corporation de Mexico and TDF de Mexico Transamerica Corporate Services de Mexico -- Transamerica Finance Corporation TA Leasing Holding Co., Inc. -- DE Transamerica Commercial Finance Corporation, I -- DE Transamerica Home Loan -- CA Transamerica HomeFirst, Inc. -- CA Transamerica Lending Company -- DE Transamerica Financial Resources, Inc. Financial Resources Insurance Agency of Texas -- TX TBK Insurance Agency of Ohio, Inc. -- OH Transamerica Financial Resources Insurance Agency of Alabama Inc. -- AL Transamerica Financial Resources Insurance Agency of Massachusetts Inc. -- MA Transamerica GmbH Inc. Transamerica Financieringsmaatschappij B.V. -- Neth. Transamerica GmbH - Germany -- Ger. Transamerica Insurance Corporation of California Arbor Life Insurance Company -- AZ Bulkrich Trading -- Gemini Investments, Inc. -- Plaza Insurance Sales, Inc. -- CA Transamerica Advisors, Inc. -- CA Transamerica Annuity Service Corporation -- NM Transamerica Financial Resources, Inc. -- DE Transamerica International Insurance Services, Inc. -- DE Transamerica Occidental Life Insurance Company -- CA Transamerica Products, Inc. -- CA Transamerica Securities Sales Corporation -- MD Transamerica Service Company -- DE Transamerica Insurance Finance Corporation Transamerica Insurance Finance Company (Europe) -- MD Transamerica Insurance Finance Corporation Transamerica Insurance Finance Corporation, California -- CA Transamerica Insurance Finance Corporation - MD Transamerica Insurance Finance Corporation, Canada -- ON Transamerica Intellitech, Inc. Information Service Corp. -- Transamerica International Insurance Services, Inc. Home Loans and Finance Ltd. -- U.K. Transamerica Inventory Finance Corporation BWAC Seventeen, Inc. -- DE BWAC Twenty-One, Inc. -- DE Transamerica Commercial Finance France S.A. -- Fra. Transamerica GmbH Inc. -- DE Transamerica Investment Services, Inc. Transamerica Income Shares, Inc. (managed by TA Investment Services) -- MD Transamerica Leasing Holdings Inc. Greybox Logistics Services Inc. -- DE Greybox L.L.C. -- DE Greybox Services Limited -- U.K. Intermodal Equipment, Inc. -- DE Transamerica Distribution Services Inc. -- DE Transamerica Leasing Coordination Center -- Belg. Transamerica Leasing do Brasil Ltda. -- Braz. Transamerica Leasing GmbH -- Ger. Transamerica Leasing Limited -- U.K. Transamerica Leasing Pty. Ltd. -- Aust. Transamerica Leasing (Canada) Inc. -- Can. Transamerica Leasing (HK) Ltd. -- H.K. Transamerica Leasing (Proprietary) Limited -- S.Afr. Transamerica Tank Container Leasing Pty. Limited -- Aust. Transamerica Trailer Holdings I Inc. -- DE Transamerica Trailer Holdings II Inc. -- DE Transamerica Trailer Holdings III Inc. -- DE Transamerica Trailer Leasing AB -- Swed. Transamerica Trailer Leasing AG -- SWTZ Transamerica Trailer Leasing A/S -- Denmk. Transamerica Trailer Leasing GmbH -- Ger. Transamerica Trailer Leasing (Belgium) N.V. -- Belg. Transamerica Trailer Leasing (Netherlands) B.V. -- Neth. Transamerica Trailer Spain S.A. -- Spn. Transamerica Transport Inc. -- NJ Transamerica Leasing Inc. Better Asset Management Company LLC -- DE Transamerica Leasing Holdings Inc. -- DE Transamerica Leasing Limited ICS Terminals (UK) Limited -- U.K. Transamerica Life Insurance and Annuity Company Transamerica Assurance Company -- MO Transamerica Management, Inc. Criterion Investment Management Company -- TX Transamerica Occidental Life Insurance Company NEF Investment Company -- CA Transamerica China Investments Holdings Limited -- H.K. Transamerica International RE (Bermuda) Ltd. -- Bmda. Transamerica Life Insurance and Annuity Company -- NC Transamerica Life Insurance Company of Canada -- Can. Transamerica Life Insurance Company of New York -- NY Transamerica South Park Resources, Inc. -- DE Transamerica Variable Insurance Fund, Inc. -- MD USA Administration Services, Inc. -- KS Transamerica Products, Inc. Transamerica Products II, Inc. -- CA Transamerica Products IV, Inc. -- CA Transamerica Products I, Inc. -- CA Transamerica Real Estate Tax Service Transamerica Flood Hazard Certification (A Division of TA Real Estate Tax Service) -- N/A Transamerica Realty Services, Inc. Bankers Mortgage Company of California -- CA Pyramid Investment Corporation -- DE The Gilwell Company -- CA Transamerica Affordable Housing, Inc. -- CA Transamerica Minerals Company -- CA Transamerica Oakmont Corporation -- CA Ventana Inn, Inc. -- CA Transamerica Retail Financial Services Corporation Transamerica Consumer Finance Holding Company -- DE Whirlpool Financial National Bank -- DE Transamerica Senior Properties, Inc. Transamerica Senior Living, Inc. -- DE Transamerica Small Business Services, Inc. Emergent Business Capital Holdings, Inc. -- *Designates INACTIVE COMPANIES A Division of Transamerica Corporation ss.Limited Partner; Transamerica Corporation is General Partner Item 27. Number of Certificate Owners As of April 1, 1999 there were Owners of Non-Qualified Individual Contracts and Owners of Qualified Individual Contracts. Item 28. Indemnification Transamerica's Bylaws provide in Article V as follows: Section 1. Right to Indemnification. Each person who was or is a party or is threatened to be made a party to or is involved, even as a witness, in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereafter a "Proceeding"), by reason of the fact that he, or a person of whom he is the legal representative, is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation, including service with respect to employee benefit plans, whether the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or agent (hereafter an "Agent"), shall be indemnified and held harmless by the corporation to the fullest extent authorized by statutory and decisional law, as the same exists or may hereafter be interpreted or amended (but, in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the corporation to provide broader indemnification rights than were permitted prior thereto) against all expense, liability, and loss (including attorneys' fees, judgements, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments, or other charges imposed thereon, and any federal, state, local or foreign taxes imposed on any Agent as a result of the actual or deemed receipt of any payments under this Article) incurred or suffered by such person in connection with investigating, defending, being a witness in, or participating in (including on appeal), or preparing for any of the foregoing, in any Proceeding (hereafter "Expenses"); provided however, that except as to actions to enforce indemnification rights pursuant to Section 3 of this Article, the corporation shall indemnify any Agent seeking indemnification in connection with a Proceeding (or part thereof) initiated by such person only if the Proceeding (or part thereof) was authorized by the Board of Directors of the corporation. The right to indemnification conferred in this Article shall be a contract right. [It is the Corporation's intent that the bylaws provide indemnification in excess of that expressly permitted by Section 317 of the California General Corporation Law, as authorized by the Corporation's Articles of Incorporation.] Section 2. Authority to Advance Expenses. Expenses incurred by an officer or director (acting in his capacity as such) in defending a Proceeding shall be paid by the corporation in advance of the final disposition of such Proceeding, provided, however, that if required by the California General Corporation Law, as amended, such Expenses shall be advanced only upon delivery to the corporation of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article or otherwise. Expenses incurred by other Agents of the corporation (or by the directors or officers not acting in their capacity as such, including service with respect to employee benefit plans) may be advanced upon the receipt of a similar undertaking, if required by law, and upon such other terms and conditions as the Board of Directors deems appropriate. Any obligation to reimburse the corporation for Expense advances shall be unsecured and no interest shall be charged thereon. Section 3. Right of Claimant to Bring Suit. If a claim under Section 1 or 2 of this Article is not paid in full by the corporation within 30 days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense (including attorneys' fees) of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending a Proceeding in advance of its final disposition where the required undertaking has been tendered to the corporation) that the claimant has not met the standards of conduct that make it permissible under the California General Corporation Law for the corporation to indemnify the claimant for the amount claimed. The burden of proving such a defense shall be on the corporation. Neither the failure of the corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper under the circumstances because he has met the applicable standard of conduct set forth in the California General Corporation Law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant had not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. Section 4. Provisions Nonexclusive. The rights conferred on any person by this Article shall not be exclusive of any other rights that such person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. To the extent that any provision of the Articles, agreement, or vote of the stockholders or disinterested directors is inconsistent with these bylaws, the provision, agreement, or vote shall take precedence. Section 5. Authority to Insure. The corporation may purchase and maintain insurance to protect itself and any Agent against any Expense asserted against or incurred by such person, whether or not the corporation would have the power to indemnify the Agent against such Expense under applicable law or the provisions of this Article [provided that, in cases where the corporation owns all or a portion of the shares of the company issuing the insurance policy, the company and/or the policy must meet one of the two sets of conditions set forth in Section 317 of the California General Corporation Law, as amended]. Section 6. Survival of Rights. The rights provided by this Article shall continue as to a person who has ceased to be an Agent and shall inure to the benefit of the heirs, executors, and administrators of such person. Section 7. Settlement of Claims. The corporation shall not be liable to indemnify any Agent under this Article (a) for any amounts paid in settlement of any action or claim effected without the corporation's written consent, which consent shall not be unreasonably withheld; or (b) for any judicial award, if the corporation was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action. Section 8. Effect of Amendment Any amendment, repeal, or modification of this Article shall not adversely affect any right or protection of any Agent existing at the time of such amendment, repeal, or modification. Section 9. Subrogation. In the event of payment under this Article, the corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the Agent, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the corporation effectively to bring suit to enforce such rights. Section 10. No Duplication of Payments. The corporation shall not be liable under this Article to make any payment in connection with any claim made against the Agent to the extent the Agent has otherwise actually received payment (under any insurance policy, agreement, vote, or otherwise) of the amounts otherwise indemnifiable hereunder. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling person of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by the director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. The directors and officers of Transamerica Occidental Life Insurance Company are covered under a Directors and Officers liability program which includes direct coverage to directors and officers (Coverage A) and corporate reimbursement (Coverage B) to reimburse the Company for indemnification of its directors and officers. Such directors and officers are indemnified for loss arising from any covered claim by reason of any Wrongful Act in their capacities as directors or officers. In general, the term "loss" means any amount which the insureds are legally obligated to pay for a claim for Wrongful Acts. In general, the term "Wrongful Acts" means any breach of duty, neglect, error, misstatement, misleading statement or omission caused, committed or attempted by a director or officer while acting individually or collectively in their capacity as such, claimed against them solely by reason of their being directors and officers. The limit of liability under the program is $95,000,000 for Coverage A and $80,000,000 for Coverage B for the period 11/15/98 to 11/15/2000. Coverage B is subject to a self insured retention of $15,000,000. The primary policy under the program is with CNA Lloyds, Gulf, Chubb and Travelers. Item 29. Principal Underwriter Transamerica Securities Sales Corporation (TSSC) and Transamerica Financial Resources (TFR) are the co-underwriters of the Certificates and the Individual Contracts as defined in the Investment Company Act of 1940. TSSC became Principal Underwriter effective 8-24-94. NAME AND PRINCIPAL POSITION AND OFFICES WITH BUSINESS ADDRESS* TRANSAMERICA SECURITIES SALES CORPORATION Barbara A. Kelley President and Director Regina M. Fink Secretary and Director Benjamin Tang Treasurer Nooruddin Veerjee Director Dan S. Trivers Senior Vice President Nicki A. Bair Vice President Chris Shaw Second Vice President *The Principal business address for each officer and director is 1150 South Olive, Los Angeles, CA 90015. NAME AND PRINCIPAL POSITION AND OFFICES WITH BUSINESS ADDRESS* TRANSAMERICA FINANCIAL RESOURCES Nooruddin S. Veerjee Chairman of the Board and Director Barbara A. Kelley President and Director Regina M. Fink Secretary and Counsel Monica Suryapranata Treasurer Gilbert F. Cronin Director James W. Dederer Director Dan Trivers Vice President, Director of Administration and Chief Compliance Officer Ronald F. Wagley Director Kerry Rider Vice President and Director of Compliance and Assistant Secretary Susan Vivino Assistant Secretary *The Principal business address for each officer and director is 1150 South Olive, Los Angeles, CA 90015. The following table lists the amounts of commissions paid to the co-underwriters during the last fiscal year.
Name of Principal Net Underwriting Compensation on Brokerage UnderwriterDiscounts & Commission Redemption Commissions Compensation TSSC -0- -0- 21,886,072.80 -0- TFR -0- -0- 2,394,358.42 -0-
Item 30. Location and Accounts and Records All accounts and records required to be maintained by Section 31(a) of the 1940 Act and the rules under it are maintained by Transamerica or the Service Office at their administrative offices. Item 31. Management Services All management contracts are discussed in Parts A or B. Items 32. Undertakings (a) Registrant undertakes that it will file a post-effective amendment to this registration statement as frequently as necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. (b) Registrant undertakes that it will include either (1) as part of any application to purchase a Certificate or an Individual Contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information. (c) Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request to Transamerica at the address or phone number listed in the Prospectus. (d) Registrant represents that it is relying on a no-action letter dated November 28, 1988, to the American Council of Life Insurance (Ref. No. IP-6-88) regarding Sections 22(e), 27(c)(i) and 27(d) of the Investment Company Act of 1940, in connection with redeemability restrictions on Section 403(b) policies, and that paragraphs numbered (1) through (4) of that letter will be complied with. (e) Transamerica hereby represents that the fees and the charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Transamerica. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Transamerica Occidental Life Insurance Company certifies that this Post-Effective Amendment No. 10 to the Registration Statement meets all of the requirements for effectiveness pursuant to Rule 485(a) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 10 to the Registration Statement to be signed on its behalf by the undersigned in the City of Los Angeles, State of California on this 25th day of February, 1999. SEPARATE ACCOUNT VA-2L TRANSAMERICA OCCIDENTAL OF TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY LIFE INSURANCE COMPANY (DEPOSITOR) (REGISTRANT) -------------------------- David M. Goldstein Vice President As Required by the Securities Act of 1933, this Post-Effective Amendment No. 10 to the Registration Statement has been signed by the following persons in the capacities and on the date indicated.
Signatures Titles Date _____________________* Director February 25, 1999 Frank Beardsley _____________________* Senior Vice President Virginia M. Wilson and Controller ______________________* Director, President, ChairmanFebruary 25, 1999 Thomas J. Cusack and Chief Executive Officer ______________________* Director, Executive Vice President February 25, 1999 James W. Dederer General Counsel and Corporate Secretary ______________________* Director February 25, 1999 George A. Foegele ______________________* Director February 25, 1999 David E. Gooding ______________________* Director February 25, 1999 Edgar H. Grubb ______________________* Director February 25, 1999 Frank C. Herringer ______________________* Director February 25, 1999 Richard N. Latzer ______________________* Director February 25, 1999 Karen MacDonald ______________________* Director February 25, 1999 Gary U. Rolle' ______________________* Director February 25, 1999 Paul E. Rutledge III ______________________* Director February 25, 1999 T. Desmond Sugrue February 25, 1999 ______________________* Director February 25, 1999 Nooruddin S. Veerjee ______________________* Director February 25, 1999 Robert A. Watson
______________________ On February 25, 1999 as Attorney-in-Fact pursuant to *By:David M. Goldstein powers of attorney previously filed and filed herewith, and in his own capacity as Vice President. -----END PRIVACY-ENHANCED MESSAGE-----