-----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, VnRCdkqulDeAWM2wSkPkDq0oT5pWObXLI3wtlnXHaR84OMan2Z/DfnyuSZwTzgOi o5ZfolIt3ndjk4Ta3+Cb5Q== 0000950144-98-002799.txt : 19980317 0000950144-98-002799.hdr.sgml : 19980317 ACCESSION NUMBER: 0000950144-98-002799 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980316 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 CENTRAL INDEX KEY: 0000895360 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 382816473 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07350 FILM NUMBER: 98566676 BUSINESS ADDRESS: STREET 1: 6201 POWERS FERRY ROAD NW CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 7709531959 MAIL ADDRESS: STREET 1: 6201 POWERS FERRY ROAD, NW CITY: ATLANTA STATE: GA ZIP: 30339 N-30D 1 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCT NO.2 1 The attached are incorporated by reference herein to the annual reports filed by and on behalf of the following: Seligman Portfolios, Inc., filed March 2, 1998 Portfolios which include: Seligman Capital; Seligman Cash Management; Seligman Common Stock; Seligman Bond; Seligman Income; Seligman Henderson International; Seligman Communications and Information; Seligman Frontier; Seligman Henderson Global Smaller Companies; Seligman High-Yield Bond; Seligman Henderson Global Technology; and Seligman Henderson Global Growth Opportunities 2 [CANADA LIFE LETTERHEAD] February, 1998 Dear Trillium(R) Policyholder: Enclosed for your review is the Trillium Annual Report for the period ending December 31, 1997. We encourage you to review this information and refer to it as needed throughout the year. Also, we are pleased to provide you with the enclosed two supplements to the Trillium Variable Annuity prospectus dated May 1, 1997. The first supplement provides the information on amended tax laws that allow for the use of both Simple IRAs and Roth IRAs. For more information on the new IRA plans, please contact your registered representative. The second supplement announces a manager change for the Seligman Capital portfolio. For your convenience, the "tear-off" below can be used to make additional payments to your Trillium policy. Thank you for selecting Trillium. Sincerely, /s/ Janice S. Blanchard Janice Blanchard, ChFC, CLU Senior Marketing Coordinator - ------------------------------------------------------------------------------- Policyowner(s): ____________________________ Policy Number: _______________ If you are changing allocation, please complete the following: __________ This payment only __________ This payment and all future payments __________ Re-allocate all current assets __________% Cash Mgmt (21) __________% Comm & Info (27) __________% Income (22) __________% Global Grwth Ops (28) __________% Bond (23) __________% Global Smlr Cos (29) __________% Common Stock (24) __________% Frontier (41) __________% Capital (25) __________% High Yld Bond (42) __________% International (26) __________% Global Tech (43) __________% Fixed Account (Specify 1, 3, 5, 7 or 10 Years*) Total must equal 100%. Please make checks payable to Canada Life Insurance Company of America. - -------------------- --------------------------------- Date Policyowner's Signature *Years 3, 5, 7 and 10 availability is subject to state approval 6201 Powers Ferry Rd., NW Atlanta, GA 30339 3 VARIABLE ACCOUNT PERFORMANCE
Average Annual Total Returns for Periods Ending December 31, 1997 Assuming Contract Continues [TRILLIUM LOGO] Since Inception A VARIABLE ANNUITY 1 Year 3 Year 5 Year Inception Date - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO 20.26% 20.55% -- 20.31% 10/4/94 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO 17.61 -- -- 12.10 5/1/96 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN FRONTIER PORTFOLIO 14.47 22.30 -- 22.42 10/4/94 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO 1.76 11.06 -- 11.06 10/4/94 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN CAPITAL PORTFOLIO 19.36 18.90 11.37% 12.45 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO 10.76 -- -- 5.12 5/1/96 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO 6.61 7.12 -- 7.19 5/3/93 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN COMMON STOCK PORTFOLIO 19.37 20.82 13.91 13.17 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO 12.19 10.90 6.85 8.25 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HIGH-YIELD BOND PORTFOLIO 13.25 -- -- 12.10 5/1/95 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN BOND PORTFOLIO 7.23 7.35 4.62 5.20 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN CASH MANAGEMENT PORTFOLIO 3.84 3.70 2.81 3.48 6/21/88 - ---------------------------------------------------------------------------------------------------------------------------------
* Not annualized. SELIGMAN CASH MANAGEMENT PORTFOLIO'S current yield, annualized for the seven-day period ending December 31, 1997, was 3.82%. TRILLIUM FIXED ACCOUNT'S rate for the one year Guarantee Period was 4.75% as of December 31, 1997. Rates for each Guarantee Period will be different and are subject to change on a monthly basis. The 3,5,7, and 10 year Guarantee Periods are currently not approved in all states. Please call 800-221-2783 for state approval and the current rates on these Guarantee Periods. Performance quoted represents past performance, and the investment return and principal value of an investment will fluctuate so that units, when surrendered, may be worth more or less than their original cost. Performance of the variable portfolios reflects the performance of Seligman Portfolios, Inc., the underlying investment vehicle for the Trillium Variable Account adjusted for the current fees and charges (excluding CDSC) associated with Trillium. For performance figures with CDSC, please see reverse side. The variable account commenced operations on 5/3/93. The fixed account is held in the general account of Canada Life Insurance Company of America (CLICA) and provides a guarantee, by CLICA, against loss of principal, and guarantees payment of a specified current rate of interest. Please contact your financial advisor or call Seligman Financial Services at 800-221-2783 for a prospectus containing full details including information on fees and charges. Please read the prospectus carefully before investing or sending money. There are specific risks associated with global technology investing such as currency fluctuations, foreign taxation, differences in financial reporting practices, and changes in political conditions. A portfolio that concentrates its investments in one sector of the economy may be subject to greater share price fluctuations than a more diversified portfolio. There are specific risks associated with global investing such as currency fluctuations, foreign taxation, differences in financial reporting practices, and changes in political conditions. The securities in which the Seligman High-Yield Bond Portfolio invests are subject to a greater risk of loss of principal and interest then higher-rated investment grade bonds. Purchasers should carefully assess the risks associated with an investment in the portfolio. 4
VARIABLE ACCOUNT PERFORMANCE Average Annual Total Returns for Periods Ending December 31, 1997 Assuming Contract Is Surrendered at End of Period Since Inception 1 Year 3 Year 5 Year Inception Date - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO 14.86% 19.51% -- 19.39% 10/4/94 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO 12.21 -- -- 9.12 5/1/96 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN FRONTIER PORTFOLIO 9.07 21.29 -- 21.54 10/4/94 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (3.64) 9.83 -- 10.16 10/4/94 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN CAPITAL PORTFOLIO 13.96 17.82 11.02% 12.45 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO 5.36 -- -- 1.97 5/1/96 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO 1.21 5.79 -- 6.59 5/3/93 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN COMMON STOCK PORTFOLIO 13.97 19.78 13.59 13.17 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO 6.79 9.67 6.43 8.25 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN HIGH-YIELD BOND PORTFOLIO 7.85 -- -- 10.70 5/1/95 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN BOND PORTFOLIO 1.83 6.03 4.16 5.20 6/21/88 - --------------------------------------------------------------------------------------------------------------------------------- SELIGMAN CASH MANAGEMENT PORTFOLIO (1.56) 2.28 2.32 3.48 6/21/88 - ---------------------------------------------------------------------------------------------------------------------------------
Issued by: Canada Life Insurance Company of America, 6201 Powers Ferry Road, N.W., Atlanta, GA 30339 Distributed by: Seligman Financial Services, Inc., 100 Park Avenue, New York, NY 10007 - (800) 221-2783 SELIGMAN CASH MANAGEMENT PORTFOLIO'S current yield, annualized for the seven-day period ending December 31, 1997, was 3.82% TRILLIUM FIXED ACCOUNT'S rate for the one year Guarantee Period was 4.75% as of December 31, 1997. Rates for each Guarantee Period will be different and are subject to change on a monthly basis. The 3,5,7, and 10 year Guarantee Periods are currently not approved in all states. Please call 800-221-2783 for state approval and the current rates on these Guarantee Periods. Performance quoted represents past performance, and the investment return and principal value of an investment will fluctuate so that units, when surrendered, may be worth more or less than their original cost. Performance of the variable portfolios reflects the performance of Seligman Portfolios, Inc., the underlying investment vehicle for the Trillium Variable Account and is adjusted for Trillium's current fees and charges including the maximum CDSC of 6%. Trillium's CDSC for current premiums (premiums paid during the current and previous six policy years) starts at 6% and decreases in steps, depending on the number of policy years since the premium was paid, as follows: less than two years, 6% at least two, but less than four, 5% at least four, but less than five, 4% at least five, but less than six, 3% at least six, but less than seven, 2% at least seven, no charge. The variable account commenced operations on 5/3/93. The fixed account is held in the general account of Canada Life Insurance Company of America (CLICA) and provides a guarantee, by CLICA, against loss of principal, and guarantees payment of a specified current rate of interest. Please contact your financial advisor or call Seligman Financial Services at 800-221-2783 for a prospectus containing full details including information on fees and charges. Please read the prospectus carefully before investing or sending money. 5 - ------------------------------------------------------------------------------ A N N U A L R E P O R T - ------------------------------------------------------------------------------ TRILLIUM A VARIABLE ANNUITY December 31, 1997 6 Total Returns* For the Year Ended December 31, 1997 Sub-Accounts: Bond........................................................ 7.31% Capital..................................................... 19.44 Cash Management............................................. 3.92 Common Stock................................................ 19.45 Communications and Information.............................. 20.35 Frontier.................................................... 14.54 Global Growth Opportunities................................. 10.84 Global Smaller Companies.................................... 1.84 Global Technology........................................... 17.69 International............................................... 6.69 High-Yield Bond............................................. 13.32 Income...................................................... 12.27
- ------------------ *Total returns of the Sub-Accounts are based on the performance of the Seligman Portfolios, Inc., the underlying investment vehicle for the Canada Life of America Variable Annuity Account 2 (Variable Annuity Account 2), less current fees and charges. The returns exclude any contingent deferred sales charge ("CDSC") applicable to the Variable Annuity Account 2. 7 Seligman Portfolios, Inc. the underlying investment vehicle for TRILLIUM A Variable Annuity February 6, 1998 Dear Contract Owner: J. & W. Seligman & Co. Incorporated, as Manager of Seligman Portfolios, Inc. ("the Fund"), the underlying investment vehicle for your Trillium Variable Annuity, and Canada Life Insurance Company of America, as issuer of The Canada Life of America Variable Annuity Account 2 (the "Variable Account"), are pleased to provide the enclosed audited financial statements and accompanying information for the year ended December 31, 1997. Nineteen ninety-seven was the seventh year of economic expansion in the US, with real domestic growth of 3.8%. Consumer price inflation slowed to under 2%, interest rates moved steadily lower, productivity rose, and unemployment levels reached 27-year lows. Meanwhile, the federal budget deficit virtually disappeared and corporate profits posted a third consecutive year of strong gains. The domestic equity markets, as measured by the Dow Jones Industrial Average (DJIA), brought returns in excess of 20% for a third consecutive year -- a feat unmatched in the DJIA's 101-year history. However, the majority of the market advances occurred in the first seven months of the year, as the Asian financial crisis increased uncertainty in the last quarter. Despite a brief rally in May, and strong results when the equity markets broadened in the third quarter, the valuations and performance of small-capitalization stocks continued to trail those of large-capitalization stocks. Although there were occasional setbacks due to fears of inflation and the possibility of Federal Reserve Board interventions, 1997 was also a successful year for the fixed-income markets. Once the effect of the March adjustment in the federal funds rate subsided, yields progressively trended downward and prices improved. The yield on the benchmark 30-year US Treasury bond ended the year at 5.92%, significantly lower than the 6.64% yield on December 31, 1996. Additionally, the yield on the benchmark three-month US Treasury bill reached 5.34% by year end, somewhat higher than the 5.17% yield on December 31, 1996. Going forward, the outlook for US corporate profits in 1998 is more uncertain due to expectations of modest economic growth and the unforeseeable effects of the Asian crisis. There is also a risk of temporary price deflation linked to the Asian crisis, as those economies seek to export their way out of trouble. Barring problems caused by the tightness of the labor market, we expect a continuation of the current low-inflation and low-interest- rate environment, but no deflation. Internationally, the year has been dominated by the continuing and worsening economic and financial crisis in Asia. By year end, the crisis, which started in Thailand, had spread throughout Asia to much larger economies such as South Korea. The Japanese economy was also very weak, and stock markets throughout Asia fell very sharply. Thus far, Europe has taken an optimistic view of these events, and with the background of falling inflation and interest rates, stock markets there have performed very well. Looking forward, the problems in Asia are unlikely to be resolved quickly. Therefore, we will continue to favor the European area as a whole and invest in some selected emerging markets. We thank you for your continued interest in Trillium, and look forward to serving your investment needs in the many years to come. Respectfully, /s/ Allen Loney /s/ William C. Morris D. Allen Loney William C. Morris President Chairman Canada Life Insurance Company of America J. & W. Seligman & Co. Incorporated -- 1 -- 8 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 - ------------------------------------------------------------------------------ STATEMENT OF NET ASSETS - ------------------------------------------------------------------------------
CASH COMMON COMMUNICATIONS BOND CAPITAL MANAGEMENT STOCK AND INFORMATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ----------- ----------- ----------- ------------- NET ASSETS: Investment in Seligman Portfolios, Inc., at market value (see Note 3 for cost values)................. $4,982,006 $14,983,560 $7,291,206 $32,411,950 $73,680,233 Due (to) from Canada Life Insurance Company of America (Note 6)................................... (24,292) 31,721 (34,328) 163,690 497,281 Receivable (payable) for investments sold (purchased) (3,775) (29,371) 126,689 (67,447) (177,566) ---------- ----------- ---------- ----------- ----------- NET ASSETS........................................... $4,953,939 $14,985,910 $7,383,567 $32,508,193 $73,999,948 ========== =========== ========== =========== =========== NET ASSETS ATTRIBUTABLE TO: Policyholders' liability reserve..................... $4,953,939 $14,985,910 $7,383,567 $32,508,193 $73,999,948 ---------- ----------- ---------- ----------- ----------- NET ASSETS........................................... $4,953,939 $14,985,910 $7,383,567 $32,508,193 $73,999,948 ========== =========== ========== =========== =========== NUMBER OF UNITS OUTSTANDING.......................... 303,296 486,445 5,291,742 992,580 4,053,481 ========== =========== ========== =========== =========== NET ASSET VALUE PER UNIT............................. $16.3337 $30.8070 $1.3953 $32.7512 $18.2559 ========== =========== ========== =========== ===========
- ------------------ See accompanying notes. STATEMENT OF OPERATIONS
CASH COMMON COMMUNICATIONS BOND CAPITAL MANAGEMENT STOCK AND INFORMATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ----------- ----------- ----------- -------------- NET INVESTMENT INCOME: Dividend and capital gain distributions............. $248,056 $ 988,744 $427,461 $4,978,458 $18,996,507 Less mortality and expense risk charges (Note 6).... 53,705 189,814 122,936 412,662 1,019,729 -------- ---------- -------- ---------- ----------- NET INVESTMENT INCOME............................... 194,351 798,930 304,525 4,565,796 17,976,778 -------- ---------- -------- ---------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain from investments.................. 8,066 458,289 -- 488,619 2,491,942 Net unrealized appreciation (depreciation) from investments................................. 66,018 899,608 -- (535,131) (8,926,535) -------- ---------- -------- ---------- ----------- NET REALIZED AND UNREALIZED GAIN (Loss) FROM INVESTMENTS.................................. 74,084 1,357,897 -- (46,512) (6,434,593) -------- ---------- -------- ---------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... $268,435 $2,156,827 $304,525 $4,519,284 $11,542,185 ======== ========== ======== ========== ===========
- ------------------- See accompanying notes. -- 2 -- 9 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 - ------------------------------------------------------------------------------ December 31, 1997 - ------------------------------------------------------------------------------
GLOBAL GLOBAL GROWTH SMALLER GLOBAL HIGH-YIELD FRONTIER OPPORTUNITIES COMPANIES TECHNOLOGY INTERNATIONAL BOND INCOME SUB-ACCOUNTS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT COMBINED ----------- ------------- ----------- ----------- ------------- ----------- ----------- ------------ $34,585,073 $4,574,218 $19,510,887 $3,241,991 $8,727,870 $22,477,341 $8,281,764 $234,748,099 359,489 170,042 4,969 51,382 77,550 300,714 6,982 1,605,200 (56,437) 15,098 35,449 127 37 (62,232) (8,217) (227,645) ----------- ---------- ----------- ---------- ---------- ----------- ---------- ------------ $34,888,125 $4,759,358 $19,551,305 $3,293,500 $8,805,457 $22,715,823 $8,280,529 $236,125,654 =========== ========== =========== ========== ========== =========== ========== ============ $34,888,125 $4,759,358 $19,551,305 $3,293,500 $8,805,457 $22,715,823 $8,280,529 $236,125,654 ----------- ---------- ----------- ---------- ---------- ----------- ---------- ------------ $34,888,125 $4,759,358 $19,551,305 $3,293,500 $8,805,457 $22,715,823 $8,280,529 $236,125,654 =========== ========== =========== ========== ========== =========== ========== ============ 1,806,075 437,357 1,380,030 271,907 634,692 1,671,215 386,042 17,714,862 =========== ========== =========== ========== ========== =========== ========== ============ $ 19.3171 $ 10.8821 $ 14.1673 $ 12.1126 $ 13.8736 $ 13.5924 $ 21.4498 =========== ========== =========== ========== ========== =========== ==========
- ------------------------------------------------------------------------------ FOR THE YEAR ENDED DECEMBER 31, 1997 - ------------------------------------------------------------------------------
GLOBAL GLOBAL GROWTH SMALLER GLOBAL HIGH-YIELD FRONTIER OPPORTUNITIES COMPANIES TECHNOLOGY INTERNATIONAL BOND INCOME SUB-ACCOUNTS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT COMBINED ----------- ------------- ----------- ----------- ------------ ----------- ----------- ------------ $ 3,135,271 $ 50,905 $477,129 $ 446,558 $310,052 $1,745,758 $815,008 $32,619,907 463,654 48,616 296,841 34,443 131,043 253,491 124,822 3,151,756 ----------- -------- -------- --------- -------- ---------- -------- ----------- 2,671,617 2,289 180,288 412,115 179,009 1,492,267 690,186 29,468,151 ----------- -------- -------- --------- -------- ---------- -------- ----------- 878,611 77,328 265,007 190,061 251,193 390,673 77,550 5,577,339 500,110 153,700 (90,117) (324,750) 73,912 176,658 165,357 (7,841,170) ----------- -------- -------- --------- -------- ---------- -------- ----------- 1,378,721 231,028 174,890 (134,689) 325,105 567,331 242,907 (2,263,831) ----------- -------- -------- --------- -------- ---------- -------- ----------- $ 4,050,338 $233,317 $355,178 $ 277,426 $504,114 $2,059,598 $933,093 $27,204,320 =========== ======== ======== ========= ======== ========== ======== ===========
-- 3 -- 10 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 - ------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------
BOND CAPITAL CASH MANAGEMENT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------ ------------------------ ------------------------ YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ------------------------ ------------------------ ------------------------ 1997 1996 1997 1996 1997 1996 ---------- ---------- ----------- ---------- ---------- ---------- OPERATIONS: Net investment income (loss)......... $ 194,351 $ 107,014 $ 798,930 $ 475,901 $ 304,525 $ 330,116 Net realized gain (loss) on investments..................... 8,066 (2,688) 458,289 148,246 -- -- Net unrealized appreciation (depreciation) on investments...... 66,018 (116,469) 899,608 52,121 -- -- ---------- ---------- ----------- ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......................... 268,435 (12,143) 2,156,827 676,268 304,525 330,116 ---------- ---------- ----------- ---------- ---------- ---------- CAPITAL TRANSACTIONS: Net increase (decrease) from unit transactions (Note 5).............. 2,029,015 833,395 3,428,077 4,653,886 (1,162,636) 1,753,858 ---------- ---------- ----------- ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS ARISING FROM CAPITAL TRANSACTIONS....................... 2,029,015 833,395 3,428,077 4,653,886 (1,162,636) 1,753,858 ---------- ---------- ----------- ---------- ---------- ---------- TOTAL INCREASE (DECREASE) IN NET ASSETS...................... 2,297,450 821,252 5,584,904 5,330,154 (858,111) 2,083,974 Net Assets, Beginning of Period ..... 2,656,489 1,835,237 9,401,006 4,070,852 8,241,678 6,157,704 ---------- ---------- ----------- ---------- ---------- ---------- NET ASSETS, END OF PERIOD ........... $4,953,939 $2,656,489 $14,985,910 $9,401,006 $7,383,567 $8,241,678 ========== ========== =========== ========== ========== ==========
GLOBAL GROWTH GLOBAL GLOBAL OPPORTUNITIES SMALLER COMPANIES TECHNOLOGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------ ------------------------ ------------------------ YEAR ENDED YEAR 5/1/96* DECEMBER 31, YEAR 5/1/96* ENDED TO ------------------------- ENDED TO 12/31/97 12/31/96 1997 1996 12/31/97 12/31/96 ---------- ---------- ----------- ----------- ---------- ---------- OPERATIONS: Net investment income (loss)......... $ 2,289 $ (3,423) $ 180,288 $ 991,325 $ 412,115 $ 692 Net realized gain (loss) on investments ...................... 77,328 1,198 265,007 177,060 190,061 3,894 Net unrealized appreciation (depreciation) on investments...... 153,700 10,126 (90,117) (45,488) (324,750) 54,493 ---------- ---------- ----------- ----------- ---------- ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... 233,317 7,901 355,178 1,122,897 277,426 59,079 ---------- ---------- ----------- ----------- ---------- ---------- CAPITAL TRANSACTIONS: Net increase (decrease)from unit transactions (Note 5).............. 3,233,258 1,284,882 2,874,836 10,327,648 1,899,573 1,057,422 ---------- ---------- ----------- ----------- ---------- ---------- NET INCREASE (DECREASE)IN NET ASSETS ARISING FROM CAPITAL TRANSACTIONS....................... 3,233,258 1,284,882 2,874,836 10,327,648 1,899,573 1,057,422 ---------- ---------- ----------- ----------- ---------- ---------- TOTAL INCREASE IN NET ASSETS......... 3,466,575 1,292,783 3,230,014 11,450,545 2,176,999 1,116,501 Net Assets, Beginning of Period ..... 1,292,783 -- 16,321,291 4,870,746 1,116,501 -- ---------- ---------- ----------- ----------- ---------- ---------- NET ASSETS, END OF PERIOD............ $4,759,358 $1,292,783 $19,551,305 $16,321,291 $3,293,500 $1,116,501 ========== ========== =========== =========== ========== ==========
- ---------------- * Commencement of operations. See accompanying notes. -- 4 -- 11 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------
COMMON STOCK COMMUNICATIONS AND FRONTIER SUB-ACCOUNT INFORMATION SUB-ACCOUNT SUB-ACCOUNT ---------------------------- ---------------------------- ---------------------------- YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ---------------------------- ---------------------------- ---------------------------- 1997 1996 1997 1996 1997 1996 ----------- ----------- ----------- ----------- ----------- ----------- $ 4,565,796 $ 2,678,713 $17,976,778 $ (667,768) $ 2,671,617 $ 2,509,079 488,619 195,563 2,491,942 (1,090,347) 878,611 341,465 (535,131) (425,986) (8,926,535) 5,505,927 500,110 405,499 ----------- ----------- ----------- ----------- ----------- ----------- 4,519,284 2,448,290 11,542,185 3,747,812 4,050,338 3,256,043 ----------- ----------- ----------- ----------- ----------- ----------- 7,593,933 8,521,175 8,108,126 14,971,955 4,928,379 11,790,123 ----------- ----------- ----------- ----------- ----------- ----------- 7,593,933 8,521,175 8,108,126 14,971,955 4,928,379 11,790,123 ----------- ----------- ----------- ----------- ----------- ----------- 12,113,217 10,969,465 19,650,311 18,719,767 8,978,717 15,046,166 20,394,976 9,425,511 54,349,637 35,629,870 25,909,408 10,863,242 ----------- ----------- ----------- ----------- ----------- ----------- $32,508,193 $20,394,976 $73,999,948 $54,349,637 $34,888,125 $25,909,408 =========== =========== =========== =========== =========== ===========
INTERNATIONAL HIGH-YIELD BOND INCOME SUB-ACCOUNTS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT COMBINED ------------------------- --------------------------- --------------------------- ------------------------------ YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ------------------------- --------------------------- --------------------------- ------------------------------ 1997 1996 1997 1996 1997 1996 1997 1996 ---------- ---------- ----------- ----------- ---------- ------------ ------------- ------------ $ 179,009 $ 106,747 $ 1,492,267 $ 644,240 $ 690,186 $ 423,903 $ 29,468,151 $ 7,596,539 251,193 107,485 390,673 143,025 77,550 (17,889) 5,577,339 7,012 73,912 112,177 176,658 45,075 165,357 (105,663) (7,841,170) 5,491,812 ---------- ---------- ----------- ----------- ---------- ------------ ------------- ------------ 504,114 326,409 2,059,598 832,340 933,093 300,351 27,204,320 13,095,363 ---------- ---------- ----------- ----------- ---------- ------------ ------------- ------------ 1,173,767 2,728,950 9,388,102 7,503,654 (747,332) 3,023,461 42,747,098 68,450,409 ---------- ---------- ----------- ----------- ---------- ------------ ------------- ------------ 1,173,767 2,728,950 9,388,102 7,503,654 (747,332) 3,023,461 42,747,098 68,450,409 ---------- ---------- ----------- ----------- ---------- ------------ ------------- ------------ 1,677,881 3,055,359 11,447,700 8,335,994 185,761 3,323,812 69,951,418 81,545,772 7,127,576 4,072,217 11,268,123 2,932,129 8,094,768 4,770,956 166,174,236 84,628,464 ---------- ---------- ----------- ----------- ---------- ------------ ------------- ------------ $8,805,457 $7,127,576 $22,715,823 $11,268,123 $8,280,529 $8,094,768 $236,125,654 $166,174,236 ========== ========== =========== =========== ========== ========== ============ ============
-- 5 -- 12 Canada Life of America Variable Annuity Account 2 - ------------------------------------------------------------------------------ Notes to Financial Statements - ------------------------------------------------------------------------------ 1. Organization Canada Life of America Variable Annuity Account 2 ("Variable Annuity Account 2") was established on February 26, 1993, as a separate investment account of Canada Life Insurance Company of America ("CLICA") to receive and invest premium payments under variable annuity policies issued by CLICA. Variable Annuity Account 2 is registered as a unit investment trust under the Investment Company Act of 1940, as amended. The assets of Variable Annuity Account 2 are invested in the shares of Seligman Portfolios, Inc. (the "Fund"), a diversified, open-end, management investment company. Variable Annuity Account 2 has twelve sub-accounts, each of which invests only in the shares of the corresponding portfolio of the Fund. The assets of Variable Annuity Account 2 are the property of CLICA. The portion of Variable Annuity Account 2 assets applicable to the policies will not be charged with liabilities arising out of any other business CLICA may conduct. 2. Significant Accounting Policies Investments Investments in shares of the Fund are valued at the reported net asset values of the respective portfolios. Realized gains and losses are computed on the basis of average cost. The difference between cost and current market value of investments owned is recorded as an unrealized gain or loss on investments. Dividends Dividends are recorded on the ex-dividend date and reflect the dividends declared by the Fund from their accumulated net investment income and net realized investment gains. Dividends in the Cash Management Portfolio are declared daily and paid monthly. Dividends in the Bond, Capital, Common Stock, Communications and Information, Frontier, Global Growth Opportunities, Global Smaller Companies, Global Technology, International, High-Yield Bond, and Income Portfolios are declared and paid annually. Dividends paid to the Variable Annuity Account 2 are reinvested in additional shares of the respective portfolio of the Fund at the net asset value per share. Federal Income Taxes Variable Annuity Account 2 is not taxed separately because the operations of Variable Annuity Account 2 will be included in the federal income tax return of CLICA, which is taxed as a "life insurance company" under the provisions of the Internal Revenue Code. 3. Investments The investment by Variable Annuity Account 2 in the individual portfolios of the Fund at December 31, 1997, is as follows:
NUMBER OF SHARES MARKET PRICE MARKET VALUE COST ---------------- ------------ ------------ ----------- Bond 486,524 $10.24 $ 4,982,006 $ 4,999,256 Capital 827,821 18.10 14,983,560 13,987,584 Cash Management 7,291,206 1.00 7,291,206 7,291,206 Common Stock 1,990,906 16.28 32,411,950 33,630,087 Communications and Information 5,628,742 13.09 73,680,233 80,714,115 Frontier 2,191,703 15.78 34,585,073 33,255,815 Global Growth Opportunities 414,707 11.03 4,574,218 4,410,392 Global Smaller Companies 1,503,150 12.98 19,510,887 19,512,442 Global Technology 306,137 10.59 3,241,991 3,512,248 International 644,599 13.54 8,727,870 8,330,282 High-Yield Bond 1,893,626 11.87 22,477,341 22,215,782 Income 766,830 10.80 8,281,764 8,409,188 ------------ ------------ $234,748,099 $240,268,397 ============ ============
4. Security Purchases and Sales The aggregate cost of purchases and the proceeds from sales of investments for the year ended December 31, 1997, are presented below:
AGGREGATE COST OF PURCHASES PROCEEDS FROM SALES ---------------------------- ------------------ Bond $ 3,238,306 $ 995,030 Capital 9,169,566 4,922,299 Cash Management 27,253,771 27,965,801 Common Stock 18,212,555 6,102,269 Communications and Information 45,843,027 19,958,374 Frontier 16,902,517 9,529,348 Global Growth Opportunities 4,505,053 1,295,885 Global Smaller Companies 7,787,221 4,676,548 Global Technology 4,325,695 2,066,203 International 3,725,088 2,405,695 High-Yield Bond 19,905,913 9,035,339 Income 2,815,049 2,841,618 ------------ ----------- $163,683,761 $91,794,409 ============ ===========
-- 6 -- 13 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 5. SUMMARY OF CHANGES FROM UNIT TRANSACTIONS The following table represents a summary of changes from unit transactions attributable to contract holders for the periods indicated. The Global Growth Opportunities and Global Technology Sub-Accounts commenced operations on May 1, 1996.
YEAR ENDED DECEMBER 31, 1997 YEAR ENDED DECEMBER 31, 1996 -------------------------------- -------------------------------- UNITS AMOUNT UNITS AMOUNT ----------- ----------- ----------- ----------- BOND SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 261,683 $ 4,117,039 132,349 $ 1,978,551 Terminated contracts and net transfers out (132,913) (2,088,024) (76,585) (1,145,156) ----------- ----------- ----------- ----------- 128,770 2,029,015 55,764 833,395 ----------- ----------- ----------- ----------- CAPITAL SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 304,990 8,703,658 248,098 6,192,212 Terminated contracts and net transfers out (183,032) (5,275,581) (61,479) (1,538,326) ----------- ----------- ----------- ----------- 121,958 3,428,077 186,619 4,653,886 ----------- ----------- ----------- ----------- CASH MANAGEMENT SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 28,517,454 39,834,422 16,031,782 22,304,326 Terminated contracts and net transfers out (29,363,850) (40,997,058) (14,650,097) (20,550,468) ----------- ----------- ----------- ----------- (846,396) (1,162,636) 1,381,685 1,753,858 ----------- ----------- ----------- ----------- COMMON STOCK SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 511,179 15,875,524 420,292 10,665,942 Terminated contracts and net transfers out (262,447) (8,281,591) (82,681) (2,144,767) ----------- ----------- ----------- ----------- 248,732 7,593,933 337,611 8,521,175 ----------- ----------- ----------- ----------- COMMUNICATIONS AND INFORMATION SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 1,120,831 31,154,764 2,136,400 29,690,542 Terminated contracts and net transfers out (650,150) (23,046,638) (1,068,840) (14,718,587) ----------- ----------- ----------- ----------- 470,681 8,108,126 1,067,560 14,971,955 ----------- ----------- ----------- ----------- FRONTIER SUB-ACCOUNT ACCUMULATION UNITS: Contract purchases and net transfers in 1,123,395 17,074,867 813,870 14,406,146 Terminated contracts and net transfers out (853,657) (12,146,488) (63,193) (2,616,023) ----------- ----------- ----------- ----------- 269,738 4,928,379 750,677 11,790,123 ----------- ----------- ----------- ----------- GLOBAL GROWTH OPPORTUNITIES SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 482,602 5,012,445 163,620 1,572,553 Terminated contracts and net transfers out (176,920) (1,779,187) (31,945) (287,671) ----------- ----------- ----------- ----------- 305,682 3,233,258 131,675 1,284,882 ----------- ----------- ----------- ----------- GLOBAL SMALLER COMPANIES SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 992,939 8,591,113 890,029 11,994,060 Terminated contracts and net transfers out (786,157) (5,716,277) (125,651) (1,666,412) ----------- ----------- ----------- ----------- 206,782 2,874,836 764,378 10,327,648 ----------- ----------- ----------- ----------- GLOBAL TECHNOLOGY SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 332,006 3,909,248 127,107 1,242,668 Terminated contracts and net transfers out (168,582) (2,009,675) (18,624) (185,246) ----------- ----------- ----------- ----------- 163,424 1,899,573 108,483 1,057,422 ----------- ----------- ----------- ----------- INTERNATIONAL SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 107,800 4,319,259 327,752 4,120,757 Terminated contracts and net transfers out (21,223) (3,145,492) (109,617) (1,391,807) ----------- ----------- ----------- ----------- 86,577 1,173,767 218,135 2,728,950 ----------- ----------- ----------- -----------
-- 7 -- 14 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS (CONTINUED) - ------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997 YEAR ENDED DECEMBER 31, 1996 ------------------------------- ------------------------------ UNITS AMOUNT UNITS AMOUNT ---------- ----------- --------- ---------- HIGH-YIELD BOND SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 1,917,673 $19,330,600 848,850 $ 9,721,724 Terminated contracts and net transfers out (1,185,914) (9,942,498) (185,110) (2,218,070) ---------- ----------- --------- ----------- 731,759 9,388,102 663,740 7,503,654 ---------- ----------- --------- ----------- INCOME SUB-ACCOUNT Accumulation Units: Contract purchases and net transfers in 156,332 3,156,221 224,340 4,172,168 Terminated contracts and net transfers out (193,980) (3,903,553) (62,752) (1,148,707) ---------- ----------- --------- ----------- (37,648) (747,332) 161,588 3,023,461 ---------- ----------- --------- ----------- Net increase from unit transactions $42,747,098 $68,450,409 =========== ===========
6. MORTALITY AND EXPENSE RISK (M AND E) CHARGES CLICA assumes mortality and expense risks related to the operations of Variable Annuity Account 2 and deducts a charge equal to an effective annual rate of 1.25% of the net asset value of each of the Funds at each valuation period. In addition, at each valuation period from January 1, 1997, through September 30, 1997, an effective annual rate of 0.35% of the net asset value of each Sub-Account was deducted as daily administration fees. Effective October 1, 1997, the daily administration fee was lowered to 0.15% of the net asset value of each Sub-Account. 7. NET ASSETS Net assets at December 31, 1997, consisted of the following:
ACCUMULATED NET INVESTMENT NET UNREALIZED ACCUMULATED INCOME REALIZED APPRECIATION UNIT M AND E AND CAPITAL GAIN ON (DEPRECIATION) COMBINED SUB-ACCOUNT TRANSACTIONS CHARGES GAINS INVESTMENTS ON INVESTMENTS NET ASSETS - ----------- ------------ ------------ ----------- ----------- -------------- ------------ Bond $ 4,521,600 $ (109,917) $ 551,488 $ 8,018 $ (17,250) $ 4,953,939 Capital 11,740,916 (355,517) 2,010,505 594,030 995,976 14,985,910 Cash Management 6,753,526 (347,125) 977,166 -- -- 7,383,567 Common Stock 24,500,824 (712,480) 9,237,074 700,912 (1,218,137) 32,508,193 Communications and Information 60,049,510 (1,913,359) 21,311,676 1,586,003 (7,033,882) 73,999,948 Frontier 26,783,559 (772,194) 6,306,959 1,240,543 1,329,258 34,888,125 Global Growth Opportunities 4,518,140 (53,332) 52,198 78,526 163,826 4,759,358 Global Smaller Companies 17,772,703 (458,481) 1,772,811 465,827 (1,555) 19,551,305 Global Technology 2,956,995 (42,294) 455,101 193,955 (270,257) 3,293,500 International 7,706,388 (244,532) 575,495 370,518 397,588 8,805,457 High-Yield Bond 19,725,121 (382,716) 2,569,531 542,328 261,559 22,715,823 Income 6,653,053 (293,171) 1,995,271 52,800 (127,424) 8,280,529 ------------ ----------- ----------- ---------- ----------- ------------ $193,682,335 $(5,685,118) $47,815,275 $5,833,460 $(5,520,298) $236,125,654 ============ =========== =========== ========== =========== ============
8. Unit Values Unit values as reported are calculated by dividing total net assets by total units for each Sub-Account. -- 8 -- 15 CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2 - ------------------------------------------------------------------------------ REPORT OF INDEPENDENT AUDITORS - ------------------------------------------------------------------------------ Board of Directors of Canada Life Insurance Company of America and Contract Owners of Canada Life of America Variable Annuity Account 2 We have audited the accompanying statement of net assets of Canada Life of America Variable Annuity Account 2 (comprising, respectively, the Bond, Capital, Cash Management, Common Stock, Communications and Information, Frontier, Global Growth Opportunities, Global Smaller Companies, Global Technology, International, High-Yield Bond, and Income Sub-Accounts) as of December 31, 1997, and the related statements of operations and changes in net assets for the periods indicated therein. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1997, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective Sub-Accounts constituting the Canada Life of America Variable Annuity Account 2 at December 31, 1997, and the results of their operations and the changes in their net assets for each of the periods indicated therein in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG LLP Atlanta, Georgia February 6, 1998 -- 9 -- -----END PRIVACY-ENHANCED MESSAGE-----