485BPOS 1 four85b_curiangard.txt As filed with the Securities and Exchange Commission on April 2, 2009 Commission File Nos. 333-118368 811-08664 UNITED STATES 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. 14 |X| and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 185 |X| -------------- Jackson National Separate Account - I (Exact Name of Registrant) -------------- Jackson National Life Insurance Company (Name of Depositor) 1 Corporate Way, Lansing, Michigan 48951 (Address of Depositor's Principal Executive Offices) Depositor's Telephone Number, including Area Code: (517) 381-5500 Thomas J. Meyer, Esq. Senior Vice President, Secretary and General Counsel Jackson National Life Insurance Company 1 Corporate Way Lansing, MI 48951 (Name and Address of Agent for Service) Copy to: Anthony L. Dowling, Esq. Jackson National Life Insurance Company 1 Corporate Way Lansing, MI 48951 It is proposed that this filing will become effective: ___ immediately upon filing pursuant to paragraph (b) _X_ on April 6, 2009, pursuant to paragraph (b) ___ 60 days after filing pursuant to paragraph (a)(1) ___ on [date] pursuant to paragraph (a)(1) of Rule 485 If appropriate, check the following box: ___ This post-effective amendment designates a new effective date for a previously filed post-effective amendment. CURIANGARD(SM) SIMPLIFIED RETIREMENT ANNUITY MODIFIED SINGLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY Issued by Jackson National Life Insurance Company(R) and through Jackson National Separate Account - I Effective April 6, 2009, this Curiangard Simplified Retirement Annuity is no longer available for purchase. The date of this prospectus is April 6, 2009, which states the information about the separate account, the Contract, and Jackson National Life Insurance Company ("Jackson(SM)") you should know before investing. This prospectus provides a description of the material rights and obligations under the Contract. Your Contract and any endorsements are the formal contractual agreement between you and the Company. It is important that you read the Contract and endorsements, which reflect state or other variations. This information is meant to help you decide if the Contract will meet your needs. Please carefully read this prospectus and any related documents and keep everything together for future reference. Additional information about the separate account can be found in the statement of additional information ("SAI") dated April 6, 2009 that is available upon request without charge. To obtain a copy, contact us at our: Annuity Service Center P.O. Box 30314 Lansing, Michigan 48909-7814 1-800-873-5654 www.jackson.com This prospectus also describes a variety of optional features, not all of which may be available at the time you are interested in purchasing a Contract, as we reserve the right to prospectively restrict availability of the optional features. Broker-dealers selling the Contracts may limit the availability of an optional feature. Ask your representative about what optional features are or are not offered. If a particular optional feature that interests you is not offered, you may want to contact another broker-dealer to explore its availability. In addition, not all optional features may be available in combination with other optional features, as we also currently restrict, as well as reserve the right to prospectively restrict, the availability to elect certain features if certain other optional features have been elected. We reserve the right to limit the number of Contracts that you may purchase. We also reserve the right to refuse any premium payment. Please confirm with us or your representative that you have the most current prospectus and supplements to the prospectus that describe the availability and any restrictions on the optional features. We offer other variable annuity products with different product features, benefits and charges. In some states, you may purchase the Contract through an automated electronic transmission/order ticket verification procedure. Ask your representative about availability and the details. The SAI is incorporated by reference into this prospectus, and its table of contents begins on page 1. The prospectus and SAI are part of the registration statement that we filed with the Securities and Exchange Commission ("SEC") about this securities offering. The registration statement, material incorporated by reference, and other information is available on the website the SEC maintains (http://www.sec.gov) regarding registrants that make electronic filings. Jackson intends to rely on newly adopted SEC Rule 12h-7 to the extent it may be determined to be applicable to variable insurance products. -------------------------------------------------------------------------------- Neither the SEC nor any state securities commission has approved or disapproved the securities offered through this prospectus disclosure. It is a criminal offense to represent otherwise. We do not intend for this prospectus to be an offer to sell or a solicitation of an offer to buy these securities in any state where this is not permitted. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- o Not FDIC/NCUA insured o Not Bank/CU guaranteed o May lose value o Not a deposit o Not insured by any federal agency -------------------------------------------------------------------------------- The Contract makes available for investment fixed and variable options. The variable options are Investment Divisions of the Separate Account, each of which invests in one of the following funds - all class A shares (the "Funds"): JNL Series Trust ---------------- JNL/S&P Disciplined Moderate Fund JNL/S&P Disciplined Moderate Growth Fund JNL/S&P Disciplined Growth Fund The Funds are not the same mutual funds that you would buy through your stockbroker or a retail mutual fund. The prospectus for the Funds is attached to this prospectus. Previously, the JNL/S&P Growth Retirement Strategy Fund, the JNL/S&P Moderate Growth Retirement Strategy Fund, and JNL/S&P Moderate Retirement Strategy Fund (collectively "Retirement Funds") were offered as Funds under this Contract. However, effective April 6, 2009, these Retirement Funds were merged with the JNL/S&P Disciplined Growth Fund, JNL/S&P Disciplined Moderate Growth Fund and JNL/S&P Disciplined Moderate Fund, as outlined below:
------------------------------------------------------------------------------------------------- CURRENTLY OFFERED FUND PREVIOUSLY OFFERED FUND ------------------------------------------------------------------------------------------------- JNL/S&P Disciplined Growth Fund JNL/S&P Growth Retirement Strategy Fund ------------------------------------------------------------------------------------------------- JNL/S&P Disciplined Moderate Growth Fund JNL/S&P Moderate Growth Retirement Strategy Fund ------------------------------------------------------------------------------------------------- JNL/S&P Disciplined Moderate Fund JNL/S&P Moderate Retirement Strategy Fund -------------------------------------------------------------------------------------------------
TABLE OF CONTENTS GLOSSARY ................................................................. 2 KEY FACTS ................................................................ 3 FEES AND EXPENSES TABLES ................................................. 4 EXAMPLE .................................................................. 7 THE ANNUITY CONTRACT ..................................................... 8 JACKSON .................................................................. 8 THE FIXED ACCOUNT ........................................................ 9 THE SEPARATE ACCOUNT ..................................................... 10 INVESTMENT DIVISIONS ..................................................... 10 CONTRACT CHARGES ......................................................... 11 DISTRIBUTION OF CONTRACTS ................................................ 17 PURCHASES ................................................................ 18 TRANSFERS AND FREQUENT TRANSFER RESTRICTIONS ............................. 20 TELEPHONE AND INTERNET TRANSACTIONS ...................................... 21 ACCESS TO YOUR MONEY ..................................................... 22 INCOME PAYMENTS (THE INCOME PHASE) ....................................... 40 DEATH BENEFIT ............................................................ 41 TAXES .................................................................... 43 OTHER INFORMATION ........................................................ 46 PRIVACY POLICY ........................................................... 48 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION ............. 50 APPENDIX A (Trademarks, Services Marks, and Related Disclosures) ......... A-1 APPENDIX B (GMWB Prospectus Examples) .................................... B-1 APPENDIX C (Broker-Dealer Support) ....................................... C-1 APPENDIX D (Accumulation Unit Values) .................................... D-1 1 GLOSSARY These terms are capitalized when used throughout this prospectus because they have special meaning. In reading this prospectus, please refer back to this glossary if you have any questions about these terms. Accumulation Unit - a unit of measure we use to calculate the value in an Investment Division prior to the Income Date. Aggregate Premium - the measure used to determine the applicable breakpoint for the amount of the Mortality and Expense Risk Charge. Aggregate Premium at issue is the amount of premium you expect to contribute that you specify when you apply for the Contract (Statement of Intention), and thereafter the actual premium you paid less total partial withdrawals as computed at the end of the sixth Contract Month. Premiums are accepted only during the first six Contract Months. Annuitant - the natural person on whose life annuity payments for this Contract are based. The Contract allows for the naming of joint Annuitants. Any reference to the Annuitant includes any joint Annuitant. Annuity Unit - a unit of measure we use in calculating the value of a variable annuity payment on and after the Income Date. Beneficiary - the natural person or legal entity designated to receive any Contract benefits upon the Owner's death. The Contract allows for the naming of multiple Beneficiaries. Completed Year - the succeeding twelve months from the date on which we receive a premium payment. Contract - the individual modified single premium deferred variable and fixed annuity contract and any optional endorsements you may have selected. Contract Anniversary - each one-year anniversary of the Contract's Issue Date. Contract Month - the period of time between consecutive monthly anniversaries of the Contract's Issue date. Contract Quarter - the period of time between consecutive three-month anniversaries of the Contract's Issue Date. Contract Value - the sum of your allocations between the Contract's Investment Divisions and Fixed Account. Contract Year - the succeeding twelve months from a Contract's Issue Date and every anniversary. Excess Interest Adjustment - an adjustment to the Contract Value allocated to the Fixed Account that is withdrawn, transferred, or annuitized before the end of the period. Fixed Account - part of our General Account to which the Contract Value you allocate is guaranteed to earn a stated rate of return over the specified period. General Account - the General Account includes all our assets, including any Contract Value you allocate to the Fixed Account, which are available to our creditors. Good Order - when our administrative requirements are met for any requested action or change, including that we have received sufficient supporting documentation. Income Date - the date on which you begin receiving annuity payments. Issue Date - the date your Contract is issued. Investment Division - one of multiple variable options of the Separate Account to allocate your Contract's value, each of which exclusively invests in a different available Fund. The Investment Divisions are called variable because the return on investment is not guaranteed. Jackson, JNL, we, our, or us - Jackson National Life Insurance Company. (We do not capitalize "we," "our," or "us" in the prospectus.) Owner, you or your - the natural person or legal entity entitled to exercise all rights and privileges under the Contract. Usually, but not always, the Owner is the Annuitant. The Contract allows for the naming of joint Owners. (We do not capitalize "you" or "your" in the prospectus.) Any reference to the Owner includes any joint Owner. Separate Account - Jackson National Separate Account - I. The Separate Account is divided into sub-accounts generally referred to as Investment Divisions. Statement of Intention - the amount of total premium that you anticipate paying and specify in the annuity application when you apply for the Contract. The higher your anticipated total premium, the lower your Contract's initial Mortality and Expense Risk Charge will be for the first six months. Premiums are accepted during the first six Contract Months only. 2 KEY FACTS The immediately following two sections briefly introduce the Contract (and its benefits and features) and its costs; however, please carefully read the whole prospectus and any related documents before purchasing the Contract to be sure that it will meet your needs. -------------------------------------------------------------------------------- Allocation Options The Contract makes available Investment Divisions and ------------------ a Fixed Account for allocation of your premium payments and Contract Value. For more information about the fixed options, please see "THE FIXED ACCOUNT" beginning on page 9. For more information about the Investment Divisions, please see "INVESTMENT DIVISIONS" beginning on page 10. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Investment Purpose The Contract is intended to help you save for ------------------ retirement or another long-term investment purpose. The Contract is designed to provide tax deferral on your earnings, if it is not issued under a qualified retirement plan. Qualified plans confer their own tax deferral. For more information, please see "TAXES" beginning on page 43. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Free Look If you change your mind about having purchased the --------- Contract, you may return it without penalty. There are conditions and limitations, including time limitations, depending on where you live. For more information, please see "Free Look" beginning on page 47. In some states, we are required to hold the premiums of a senior citizen in the Fixed Account during the free look period, unless we are specifically directed to allocate the premiums to the Investment Divisions. State laws vary; your free look rights will depend on the laws of the state in which you purchased the Contract. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Purchases Premiums are accepted during the first six Contract --------- Months only. As a result, you may have to buy additional Contracts to meet your total annuity coverage goal. Multiple Contracts may result in higher charges and total expenses. There are also minimum and maximum premium requirements. In addition, the Contract has a premium protection option, namely the Capital Protection Program. For more information, please see "PURCHASES" beginning on page 19. There is a breakpoint schedule for the Mortality and Expense Risk Charge. The breakpoints are based on the amount of Aggregate Premium. Aggregate Premium at issue is equal to the anticipated total premium specified in the Statement of Intention section of the annuity application. If no Statement of Intention is provided, the Aggregate Premium at issue will equal the initial premium received. The Aggregate Premium is re-determined only at the end of the sixth Contract Month and is equal to total Premium actually paid less total partial withdrawals. A change in the Aggregate Premium at the end of the sixth Contract Month may dictate an adjustment to the Mortality and Expense Risk Charge at that time but in no event will the Mortality and Expense Risk Charge be adjusted for changes in Aggregate Premium or Contract value subsequent to this initial six Contract Month period. For more information, please see "CONTRACT CHARGES" beginning on page 11. -------------------------------------------------------------------------------- Withdrawals Before the Income Date, there are a number of ways to ----------- access your Contract Value, generally subject to a charge or adjustment, particularly during the early Contract Years. There are also a number of optional withdrawal benefits available. The Contract has a free withdrawal provision and waives the charges and adjustments in the event of some unforeseen emergencies. However, partial withdrawals within the first six Contract Months may result in a change to the Mortality and Expense Risk Charge assessed after the sixth Contract Month. For more information, please see "ACCESS TO YOUR MONEY" beginning on page 22. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Income Payments There are a number of income options available. For --------------- more information, please see "INCOME PAYMENTS (THE INCOME PHASE)" beginning on page 40. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Death Benefit The Contract has a death benefit that becomes payable ------------- if you die before the Income Date. There are also optional death benefits available. For more information, please see "DEATH BENEFIT" beginning on page 41. -------------------------------------------------------------------------------- 3 FEES AND EXPENSES TABLES The following tables describe the fees and expenses that you will pay when purchasing, owning and surrendering the Contract. The first table (and footnotes) describes the fees and expenses that you will pay at the time that you purchase the Contract, surrender the Contract or transfer cash value between investment options. -------------------------------------------------------------------------------- Owner Transaction Expenses -------------------------- Front-end Sales Load None -------------------------------------------------------------------------------- Maximum Withdrawal Charge (1) - Percentage of premium withdrawn, if applicable 5% -------------------------------------------------------------------------------- Maximum Premium Taxes (2) - Percentage of each premium 3.5% -------------------------------------------------------------------------------- Commutation Fee: Upon a total withdrawal after income payments have commenced under income option 4, or if after death during the period for which payments are guaranteed under income option 3 and Beneficiary elects a lump sum payment, the amount received will be reduced by (a) minus (b) where: o (a) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at the rate assumed in calculating the initial payment; and o (b) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at a rate no more than 1.00% higher than the rate used in (a). -------------------------------------------------------------------------------- Transfer Charge (3) - Per transfer after 15 in a Contract Year $ 25 -------------------------------------------------------------------------------- Expedited Delivery Charge (4) $22.50 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- (1) There may be a withdrawal charge on these withdrawals of Contract Value: withdrawals in excess of the free withdrawal amounts; withdrawals under a tax-qualified Contract that exceed the required minimum distributions of the Internal Revenue Code; withdrawals in excess of the free withdrawal amount to meet the required minimum distributions of a tax-qualified Contract purchased with contributions from a nontaxable transfer, after the Owner's death, of an Individual Retirement Annuity (IRA), or to meet the required minimum distributions of a Roth IRA annuity; a total withdrawal; and withdrawals on an Income Date that is within one year of the Issue Date. The withdrawal charge is a schedule lasting six Completed Years: Completed Years Since Receipt Of Premium - 0 1 2 3 4 5 6+ ----------------------------------------------------------- Base 5% 4% 3% 3% 2% 1% 0% Schedule ----------------------------------------------------------- (2) Premium taxes generally range from 0 to 3.5% and vary by state. (3) We do not count transfers in conjunction with dollar cost averaging, earnings sweep, automatic rebalancing, and periodic automatic transfers. (4) For overnight delivery on Saturday; otherwise, the overnight delivery charge is $10 for withdrawals. We also charge $20 for wire transfers in connection with withdrawals. The next table (and footnotes) describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including the Funds' fees and expenses. 4 -------------------------------------------------------------------------------- Periodic Expenses ----------------- Base Contract ------------- Annual Contract Maintenance Charge (5) $35 Mortality and Expense Risk Charge The Mortality and Expense Risk Charge is expressed as an annual percentage of the average daily account value of the Investment Divisions and is set initially based upon the breakpoint schedule below using the Aggregate Premium determined at issue. Aggregate Premium at issue is equal to the anticipated total premium specified in the Statement of Intention section of the annuity application. If no Statement of Intention is indicated, the Aggregate Premium at issue will equal the initial premium received. The Aggregate Premium will be re-determined only at the end of the sixth Contract Month, which may result in a change to the Mortality and Expense Risk Charge assessed after the sixth Contract Month. At the time the Aggregate Premium is re-determined, the Mortality and Expense Risk Charge will be based on the newly determined Aggregate Premium. (6) Aggregate Premium Years 1-7 Years 8+ ------------------------------------------------- $50,000 to $99,999.99 0.90% 0.30% ------------------------------------------------- $100,000 to $249,999.99 0.60% 0.30% ------------------------------------------------- $250,000 to $499,999.99 0.35% 0.30% ------------------------------------------------- $500,000 to $749,999.99 0.25% 0.25% ------------------------------------------------- $750,000 to $999,999.99 0.20% 0.20% ------------------------------------------------- $1,000,000+ 0.15% 0.15% ------------------------------------------------- Administration Charge (in all years) 0.15% ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ Maximum Total Separate Account Annual Expenses for Base Contract for Years 1-7 1.05% Maximum Total Separate Account Annual Expenses for Base Contract for Years 8+ 0.45% As an annual percentage of average daily account value of Investment Divisions ------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- Optional Endorsements - The endorsement charges for the optional death benefits are based on average account value. Please see footnotes 8 - 10 for those charges that are not based on average account value. A variety of Optional Endorsements to the Contract are available. You may select one of each grouping below. (7) ------------------------------------------------------------------------------------------------ 5% GMWB With Annual Step-Up Maximum Annual Charge ("AutoGuard 5(SM)") (8) 1.47% 5% For Life GMWB With Annual Step-Up Maximum Annual Charge ("LifeGuard Protector(SM)") (9) 1.47% Joint 5% For Life GMWB With Annual Step-Up Maximum Annual Charge ("LifeGuard Protector with Joint Option") (10) 1.62% ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ Return of Premium Death Benefit (11) 0.55% Highest Anniversary Value Death Benefit Maximum Annual Charge (12) 0.55% ------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- (5) This charge is waived on Contract Value of $50,000 or more. This charge is deducted proportionally from your allocations to the Investment Divisions and Fixed Account either annually (on your Contract Anniversary) or in conjunction with a total withdrawal, as applicable. (6) Premiums are accepted only during the first six Contract Months. The Aggregate Premium re-determined at the end of the sixth Contract Month is equal to total Premium paid less total partial withdrawals. Any resulting increase or decrease in the Mortality and Expense Risk Charge assessed after the sixth Contract Month will not be retroactive back to the issue date of the Contract. Therefore, any decrease in the Mortality and Expense Risk Charge caused by the payment of additional premium subsequent to the Contract issue date will become effective only after the sixth Contract month and will not be retroactive back to the issue date. If the Contract Owner dies prior to the end of the sixth Contract Month, there will not be an adjustment to the Mortality and Expense Risk Charge. (7) The optional death benefits are only available to select when purchasing the Contract and once purchased cannot be canceled. In addition, the charges for the optional death benefits are based on average account value but the charges for the optional GMWBs are not. Please see footnotes 8 -10 below and "CONTRACT CHARGES" beginning on page 11 for more information concerning those charges not based on average account value. (8) The charge is quarterly, currently 0.1625% (0.65% annually) of the GWB, subject to a maximum annual charge of 1.45%. But for Contracts purchased in Washington State, the charge is monthly, currently 0.055% (0.66% annually) of the GWB, subject to a maximum annual charge of 1.47% as used in the Table. We reserve the right to prospectively change the current charge: on new Contracts; if you select this benefit after your Contract is issued; or with a step-up that you request (not on step-ups that are automatic) - subject to the applicable maximum annual charge. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. The charge is deducted at the end of each Contract Quarter/Contract Month, or upon termination of the endorsement, from your Contract Value on a pro rata 5 basis. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. For more information, including how the GWB is calculated, please see "5% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 25. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. For Contracts to which this endorsement was added before December 3, 2007, you pay the applicable percentage of the GWB each calendar quarter. For Contracts to which this endorsement was added on or after December 3, 2007, you pay the applicable percentage of the GWB each Contract Quarter. For Contracts purchased in Washington State, you pay the applicable percentage of the GWB each Contract Month. (9) 1.47% is the maximum annual charge of the 5% for Life GMWB With Annual Step-Up for a 65-69 year old, which charge is payable monthly. The charge for the 5% for Life GMWB With Annual Step-Up varies by age group. The below table has the maximum and current charges for all age groups. You pay the applicable percentage of the GWB each calendar quarter. But for Contracts purchased in Washington State, the charge is monthly. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the Fixed Account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation. 5% for Life GMWB With Annual Step-Up -------------------------------------------------------------- Annual Charge Maximum Current -------------------------------------------------------------- Ages 45 - 49 0.85%/4 0.87%/12 0.40%/4 0.42%/12 50 - 54 0.85%/4 0.87%/12 0.40%/4 0.42%/12 55 - 59 1.20%/4 1.20%/12 0.65%/4 0.66%/12 60 - 64 1.30%/4 1.32%/12 0.75%/4 0.75%/12 65 - 69 1.45%/4 1.47%/12 0.90%/4 0.90%/12 70 - 74 0.85%/4 0.87%/12 0.50%/4 0.51%/12 75 - 80 0.60%/4 0.60%/12 0.35%/4 0.36%/12 -------------------------------------------------------------- Charge Basis GWB -------------------------------------------------------------- Charge Frequency Quarterly Monthly Quarterly Monthly -------------------------------------------------------------- We reserve the right to prospectively change the current charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the current charge when you elect a step-up (not on step-ups that are automatic), again subject to the applicable maximum annual charge. For more information about the charge for this endorsement, please see "5% For Life GMWB With Annual Step-Up Charge" beginning on page 28. For more information about how the endorsement works, including more details regarding the GWB, please see "5% For Life GMWB With Annual Step-Up" beginning on page 28. (10) 1.62% is the maximum annual charge of the Joint 5% for Life GMWB With Annual Step-Up for a 65-69 year old, which charge is payable monthly. The charge for the Joint 5% for Life GMWB With Annual Step-Up varies by age group. The below table has the maximum and current charges for all age groups. You pay the applicable percentage of the GWB each calendar quarter. But for Contracts purchased in Washington State, the charge is monthly. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the Fixed Account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation. Joint 5% for Life GMWB With Annual Step-Up -------------------------------------------------------------- Annual Charge Maximum Current -------------------------------------------------------------- Ages 45 - 49 1.00%/4 1.02%/12 0.55%/4 0.57%/12 50 - 54 1.00%/4 1.02%/12 0.55%/4 0.57%/12 55 - 59 1.35%/4 1.35%/12 0.80%/4 0.81%/12 60 - 64 1.45%/4 1.47%/12 0.90%/4 0.90%/12 65 - 69 1.60%/4 1.62%/12 1.05%/4 1.05%/12 70 - 74 1.00%/4 1.02%/12 0.65%/4 0.66%/12 75 - 80 0.75%/4 0.75%/12 0.50%/4 0.51%/12 -------------------------------------------------------------- Charge Basis GWB -------------------------------------------------------------- Charge Frequency Quarterly Monthly Quarterly Monthly -------------------------------------------------------------- We reserve the right to prospectively change the current charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the current charge when you elect a step-up (not on step-ups that are automatic), again subject to the applicable maximum annual charge. For more information about the charge for this endorsement, please see "Joint 5% for Life GMWB With Annual Step-Up Charge" beginning on page 15. For more information about how the endorsement works, please see "Joint 5% for Life GMWB With Annual Step-Up" beginning on page 33. (11) The current charge is 0.20%. (12) The current charge is 0.35%. 6 The next item shows the minimum and maximum total annual operating expenses charged by the Funds that you may pay periodically during the time that you own the Contract. Total Annual Fund Operating Expenses ------------------------------------ (Expenses that are deducted from Fund assets, including management and administration fees, 12b-1 service fees and other expenses.) ------------------------------------ Minimum: 0.84% Maximum: 0.85% ------------------------------------ More detail concerning each Fund's fees and expenses is below. But please refer to the Funds' prospectus for even more information, including investment objectives, performance, and information about Jackson National Asset Management, LLC(R), the Funds' Adviser and Administrator, as well as the sub-advisers.
---------------------------------------------------------------------------------------------------- Fund Operating Expenses ----------------------- (As an annual percentage of the Fund's ACQUIRED FUND average daily net assets) MANAGEMENT SERVICE OTHER FEES AND ANNUAL AND ADMIN (12B-1) EXPENSES EXPENSES OPERATING FUND NAME FEE(A) FEE (B) (C) EXPENSES ---------------------------------------------------------------------------------------------------- JNL/S&P Disciplined Moderate 0.18% 0.00% 0.01% 0.66%(D) 0.85% ---------------------------------------------------------------------------------------------------- JNL/S&P Disciplined Moderate Growth 0.18% 0.00% 0.01% 0.66%(D) 0.85% ---------------------------------------------------------------------------------------------------- JNL/S&P Disciplined Growth 0.18% 0.00% 0.01% 0.65%(D) 0.84% ----------------------------------------------------------------------------------------------------
(A) Certain Funds pay Jackson National Asset Management, LLC, the Administrator, an administrative fee for certain services provided to the Fund by the Administrator. All of the JNL/S&P Funds pay an administrative fee of 0.05%. The Management and Administrative Fee and the Annual Operating Expenses columns in this table reflect the inclusion of the applicable administrative fee. (B) Other expenses include registration fees, licensing costs, a portion of the Chief Compliance Officer costs, directors and officers insurance, certain professional fees, and the fees and expenses of the disinterested Trustees/Managers and of independent legal counsel to the disinterested Trustees/Managers. (C) Acquired fund fees and expenses shown represent each Fund's pro rata share of fees and expenses of investing in mutual funds, including money market funds used for purposes of investing available cash balances. (D) Amounts are based on the allocations to underlying funds during the period ended December 31,2008. Current allocations may be different, and therefore, actual amounts for subsequent periods may be higher or lower than those shown above. EXAMPLE The example below is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include Contract Owner transaction expenses, Contract fees, Separate Account annual expenses and Fund fees and expenses. (The Annual Contract Maintenance Charge is determined by dividing the total amount of such charges collected during the calendar year by the total market value of the Investment Divisions and Fixed Account.) The example assumes that you invest $10,000 in the Contract for the time periods indicated. Neither transfer fees nor premium tax charges are reflected in the example. The example also assumes that your investment has a 5% annual return on assets each year. The following example includes maximum Fund fees and expenses and the costs if you select the optional Highest Anniversary Value Death Benefit and the Guaranteed Minimum Withdrawal Benefit (using the maximum possible charge). In addition, the Mortality and Expense and Administrative Charges are assumed to be 1.05% during the first seven Contract years and 0.45% thereafter. (Mortality and Expense and Administrative Charges are expressed as an annual percentage of the average daily account value of the Investment Divisions.) Although your actual costs may be higher or lower, based on these assumptions, your costs would be: If you surrender your Contract at the end of the applicable time period: 1 year 3 years 5 years 10 years $911 $1,544 $2,292 $4,097 7 If you annuitize at the end of the applicable time period: 1 year * 3 years 5 years 10 years $911 $1,544 $2,292 $4,097 * Withdrawal charges apply to income payments occurring within one year of the Contract's Issue Date. If you do not surrender your Contract: 1 year 3 years 5 years 10 years $411 $1,244 $2,092 $4,097 The example does not represent past or future expenses. Your actual costs may be higher or lower. Condensed Financial Information. The information about the values of all Accumulation Units constitutes the condensed financial information, which can be found in the Statement of Additional Information. The value of an Accumulation Unit is determined on the basis of changes in the per share value of an underlying fund and Separate Account charges for the base Contract and the various combinations of optional endorsements. The financial statements of the Separate Account and Jackson can be found in the Statement of Additional Information. The financial statements of the Separate Account include information about all the contracts offered through the Separate Account. The financial statements of Jackson that are included should be considered only as bearing upon the company's ability to meet its contractual obligations under the Contracts. Jackson's financial statements do not bear on the future investment experience of the assets held in the Separate Account. For your copy of the Statement of Additional Information, please contact us at the Annuity Service Center. Our contact information is on the cover page of this prospectus. THE ANNUITY CONTRACT Your Contract is a contract between you, the Owner, and us. Your Contract is intended to help facilitate your retirement savings on a tax-deferred basis, or other long-term investment purposes, and provides for a death benefit. Purchases under tax-qualified plans should be made for other than tax deferral reasons. Tax-qualified plans provide tax deferral that does not rely on the purchase of an annuity contract. We will not issue a Contract to someone older than age 90 (age 85 for Contracts purchased in Oklahoma). Optional benefits may have different requirements, as noted. You may allocate your Contract Value to o our Fixed Account, as may be made available by us, or as may be otherwise limited by us, o Investment Divisions of the Separate Account that invest in underlying Funds. Your Contract, like all deferred annuity contracts, has two phases: o the accumulation phase, which is the period between the issue date of the Contract and the Income Date, and o the income phase, which begins on the Income Date and is when we make income payments to you. As the Owner, you can exercise all the rights under your Contract. You can assign your Contract at any time during your lifetime, but we will not be bound until we receive written notice of the assignment (there is an assignment form). We reserve the right to refuse an assignment, and an assignment may be a taxable event. Your ability to change ownership is limited on Contracts with one of the For Life GMWBs. Please contact our Annuity Service Center for help and more information. The Contract is a modified single premium fixed and variable deferred annuity and may be issued as either an individual or a group contract. Contracts issued in your state may provide different features and benefits than those described in this prospectus. This prospectus provides a description of the material rights and obligations under the Contract. Your Contract and any endorsements are the formal contractual agreement between you and the Company. In those states where Contracts are issued as group contracts, references throughout the prospectus to "Contract(s)" shall also mean "certificate(s)." 8 JACKSON We are a stock life insurance company organized under the laws of the state of Michigan in June 1961. Our legal domicile and principal business address is 1 Corporate Way, Lansing, Michigan 48951. We are admitted to conduct life insurance and annuity business in the District of Columbia and all states except New York. We are ultimately a wholly owned subsidiary of Prudential plc (London, England). We issue and administer the Contracts and the Separate Account. We maintain records of the name, address, taxpayer identification number and other pertinent information for each Owner, the number and type of Contracts issued to each Owner and records with respect to the value of each Contract. We are working to provide documentation electronically. When this program is available, we will, as permitted, forward documentation electronically. Please contact us at our Annuity Service Center for more information. THE FIXED ACCOUNT Contract Value that you allocate to a Fixed Account option will be placed with other assets in our General Account. The Fixed Account is not registered with the SEC, and the SEC does not review the information we provide to you about it. Disclosures regarding the Fixed Account, however, may be subject to the general provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. Both the availability of the Fixed Account options, and transfers into and out of the Fixed Account, may be subject to contractual and administrative requirements. For more information, please see the application, check with the registered representative helping you to purchase the Contract, or contact us at our Annuity Service Center. Each Fixed Account option offers a base interest rate that we established and will credit to your Contract Value in the Fixed Account for a specified period (currently, one, three, five or seven years), subject to availability (and we reserve the right, in our sole discretion, to limit or suspend availability of the Fixed Account options), so long as the Contract Value in the Fixed Account is not withdrawn, transferred, or annuitized until the end of the specified period. The base interest rate is subject to your Contract's Fixed Account minimum interest rate, which will be 2% a year, credited daily, during the first ten Contract Years and 3% a year, credited daily, afterwards. Depending on the Issue Date of your Contract, however, the Fixed Account minimum interest rate may be 3% a year, credited daily, in all Contract Years. Subject to these minimum requirements, we may declare different base interest rates at different times. An Excess Interest Adjustment may apply to amounts withdrawn, transferred or annuitized from a Fixed Account Option prior to the end of the specified period. The Excess Interest Adjustment reflects changes in the level of interest rates since the beginning of the Fixed Account Option period. The Excess Interest Adjustment is based on the relationship of the current new business interest rate to the guaranteed base interest rate being credited to the Fixed Account Option. The current new business interest rate used for this comparison is the base interest rate available on a new Fixed Account Option of the same duration, increased by 0.50%. Generally, the Excess Interest Adjustment will increase the Fixed Account Option Value when current new business rates are lower than the rate being credited and will decrease the Fixed Account Option Value when current new business rates are higher than the rate being credited. There will be no Excess Interest Adjustment when the current new business interest rate (after adjustment for the 0.50% bias) is greater than the guaranteed base interest rate by less than 0.50%. This restriction avoids decreases in the Fixed Account Option Value in situations where the general level of interest rates has declined but the bias results in a current new business interest rate that is higher than the guaranteed base interest rate. Also, there is no Excess Interest Adjustment on: the one-year Fixed Account option; death benefit proceed payments; payments pursuant to a life contingent income option or an income option resulting in payments spread over at least five years; amounts withdrawn for Contract charges; and free withdrawals. In no event will the Excess Interest Adjustment reduce the credited interest below the guaranteed minimum interest rate applicable to the Fixed Account portion of your Contract, which can not be less than the guaranteed minimum interest rate required under state insurance laws. Whenever a specified period ends, you will have 30 days to transfer or withdraw the Contract Value in the Fixed Account option, and there will not be an Excess Interest Adjustment. If you do nothing, then after 30 days, the Contract Value that remains in that Fixed Account option will be subject to another specified period of the same duration, subject to availability, and provided that that specified period will not extend beyond the Income Date. Otherwise, the next closest specified period, or the one-year Fixed Account option (if there is one year or less until the Income Date), will apply. You may allocate premiums to the one-year Fixed Account option, but we may require that the amount in the one-year Fixed Account be automatically transferred on a monthly basis in equal installments to your choice of Investment Division within 12 months of the date we received the premium, so that at the end of the period, all amounts in the one-year Fixed Account will have been transferred. 9 The amount will be determined based on the amount allocated to the one-year Fixed Account and the base interest rate. Charges, withdrawals and additional transfers taken from the one-year Fixed Account will shorten the length of time it takes to deplete the account balance. These automatic transfers will not count against the 15 free transfers in a Contract year. Interest will continue to be credited daily on the account balance remaining in the one-year Fixed Account as funds are automatically transferred into your choice of Investment Divisions. However, the effective yield over the 12-month automatic transfer period will be less than the base interest rate, as it will be applied to a declining balance in the one-year Fixed Account. The DCA+ Fixed Account, if available, offers a fixed interest rate that we guarantee for a period of up to one year in connection with dollar-cost-averaging transfers to one or more of the Investment Divisions or systematic transfers to other Fixed Account options. From time to time, we will offer special enhanced rates on the DCA+ Fixed Account. DCA+ Fixed Account is only available for new premiums. Premiums are accepted during the first six Contract Months only. THE SEPARATE ACCOUNT We established the Separate Account on June 14, 1993, pursuant to the provisions of Michigan law. The Separate Account is a separate account under state insurance law and a unit investment trust under federal securities law and is registered as an investment company with the SEC. The assets of the Separate Account legally belong to us and the obligations under the Contracts are our obligations. However, we are not allowed to use the Contract assets in the Separate Account to pay our liabilities arising out of any other business we may conduct. All of the income, gains and losses resulting from these assets (whether or not realized) are credited to or charged against the Contracts and not against any other Contracts we may issue. The Separate Account is divided into Investment Divisions. We do not guarantee the investment performance of the Separate Account or any of its Investment Divisions. INVESTMENT DIVISIONS Each Investment Division purchases the shares of one underlying Fund (mutual fund portfolio) that has its own investment objective. The Investment Divisions are designed to offer the potential for a higher return than the Fixed Account options. However, this is not guaranteed. It is possible for you to lose your Contract Value allocated to any of the Investment Divisions. If you allocate Contract Values to the Investment Divisions, the amounts you are able to accumulate in your Contract during the accumulation phase will depend upon the performance of the Investment Divisions you select. The amount of the income payments you receive during the income phase also will depend, in part, on the performance of the Investment Divisions you choose for the income phase. The following Funds in which the Investment Divisions invest are each known as a Fund of Funds. Funds offered in a Fund of Funds structure may have higher expenses than direct investments in the underlying Funds. You should read the prospectus for the JNL Series Trust for more information. JNL/S&P Disciplined Moderate JNL/S&P Disciplined Moderate Growth JNL/S&P Disciplined Growth The names of the Funds that are available, along with the names of the advisers and sub-advisers and a brief statement of each investment objective, are below: -------------------------------------------------------------------------------- JNL Series Trust -------------------------------------------------------------------------------- JNL/S&P Disciplined Moderate Fund Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC) Seeks capital growth, and secondarily, current income by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC. The Fund seeks to achieve capital growth through its investments in Underlying Funds that invest primarily in equity securities. The Fund seeks to achieve current income through its investments in Underlying Funds that invest primarily in fixed-income securities. 10 Under normal circumstances, the Fund allocates approximately 50% to 70% of its assets to Underlying Funds that invest primarily in equity securities, 20% to 50% to Underlying Funds that invest primarily in fixed-income securities and 0% to 20% of its assets to Underlying Funds that invest primarily in money market securities. -------------------------------------------------------------------------------- JNL/S&P Disciplined Moderate Growth Fund Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC) Seeks capital growth, and secondarily, current income by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC. The Fund seeks to achieve capital growth through its investments in Underlying Funds that invest primarily in equity securities. The Fund seeks to achieve current income through its investments in Underlying Funds that invest primarily in fixed-income securities. Under normal circumstances, the Fund allocates approximately 70% to 90% of its assets to Underlying Funds that invest primarily in equity securities, 5% to 30% to Underlying Funds that invest primarily in fixed-income securities and 0% to 15% of its assets to Underlying Funds that invest primarily in money market securities. -------------------------------------------------------------------------------- JNL/S&P Disciplined Growth Fund Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC) Seeks capital growth by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC. The Fund seeks to achieve capital growth through its investments in Underlying Funds that invest primarily in equity securities. Under normal circumstances, the Fund allocates approximately 80% to 100% of its assets to Underlying Funds that invest primarily in equity securities, 0% to 20% to Underlying Funds that invest primarily in fixed-income securities and 0% to 20% of its assets to Underlying Funds that invest primarily in money market securities. -------------------------------------------------------------------------------- The investment objectives and policies of certain Funds are similar to the investment objectives and policies of other mutual funds that the Fund's investment sub-advisers also manage. Although the objectives and policies may be similar, the investment results of the Funds may be higher or lower than the results of those other mutual funds. We cannot guarantee, and make no representation, that the investment results of similar funds will be comparable even though the funds have the same investment sub-advisers. The underlying Funds are available only through variable annuity contracts issued by Jackson. They are NOT offered or made available to the general public directly. A Fund's performance may be affected by risks specific to certain types of investments, such as foreign securities, derivative investments, non-investment grade debt securities, initial public offerings (IPOs) or companies with relatively small market capitalizations. IPOs and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A Fund may not experience similar performance as its assets grow. You should read the prospectus for the JNL Series Trust carefully before investing. Additional Funds and Investment Divisions may be available in the future. The prospectus for the JNL Series Trust is attached to this prospectus. However, this prospectus may also be obtained at no charge by calling 1-800-873-5654 (Annuity and Life Service Center) or 1-800-777-7779 (for contracts purchased through a bank or financial institution), by writing P.O. Box 30314, Lansing, Michigan 48909-7814, or by visiting www.jackson.com. Voting Privileges. To the extent required by law, we will obtain instructions from you and other Owners about how to vote our shares of a Fund when there is a vote of shareholders of a Fund. We will vote all the shares we own in proportion to those instructions from Owners. An effect of this proportional voting is that a relatively small number of Owners may determine the outcome of a vote. Substitution. We reserve the right to substitute a different Fund or a different mutual fund for the one in which any Investment Division is currently invested, or transfer money to the General Account. We will not do this without any required approval of the SEC. We will give you notice of any substitution. CONTRACT CHARGES There are charges associated with your Contract, the deduction of which will reduce the investment return of your Contract. Charges are deducted proportionally from your Contract Value. Some of these charges are for optional endorsements, as noted, so they are deducted from your Contract Value only if you selected to add that optional endorsement to your Contract. These charges may be a lesser amount where required by state law or as described below, but will not be increased. We expect to profit from certain charges assessed under the Contract. These charges (and certain other expenses) are as follows: Mortality and Expense Risk Charge. Each day, as part of our calculation of the value of the Accumulation Units and Annuity Units, we make a deduction for the Mortality and Expense Risk Charge. The Mortality and Expense Risk Charge is expressed as an annual percentage of the average daily account value of the Investment Divisions and is set based upon the breakpoint 11 schedule below using the Aggregate Premium determined at issue. Aggregate Premium at issue is equal to the anticipated total premium breakpoint specified by you in the Statement of Intention section of the application. If no Statement of Intention is provided by you in the application, the Aggregate Premium at issue will equal the initial premium received. The Aggregate Premium will be re-determined only once at the end of the sixth Contract Month. At the time the Aggregate Premium is re-determined, the Mortality and Expense Risk Charge will be set by reference to the newly determined Aggregate Premium. This re-determination of Aggregate Premium will result in a change to the Mortality and Expense Risk Charge assessed after the sixth Contract Month if the newly determined Aggregate Premium falls into a breakpoint band within the breakpoint schedule that differs from the breakpoint band used to set the Mortality and Expense Risk Charge at issue. Newly determined Aggregate Premium that falls into a higher breakpoint band than the breakpoint band used to set the Mortality and Expense Risk Charge at issue (whether decided by the anticipated total premium breakpoint band specified by you in the Statement of Intention section of the application or, if no Statement of Intention was provided by you, by the initial premium received) will result in a decreased Mortality and Expense Risk Charge. Conversely, newly determined Aggregate Premium that falls into a lower breakpoint band than the breakpoint band used to set the Mortality and Expense Risk Charge at issue will result in an increased Mortality and Expense Risk Charge. Any increase or decrease in the Mortality and Expense Risk Charge assessed after the sixth Contract Month will not be retroactive back to the issue date of the Contract. If the Contract Owner dies prior to the end of the sixth Contract Month, there will not be an adjustment to the Mortality and Expense Risk Charge. Thus, while the Contract may continue for a period of time after the death of the Owner, premium payments made after the initial premium will not result in a change in the Mortality and Expense Risk Charge. The Mortality and Expense Risk Charge does not apply to the Fixed Account. Aggregate Premium Years 1-7 Years 8+ ---------------------------------------------- $50,000 to $99,999.99 0.90% 0.30% ---------------------------------------------- $100,000 to $249,999.99 0.60% 0.30% ---------------------------------------------- $250,000 to $499,999.99 0.35% 0.30% ---------------------------------------------- $500,000 to $749,999.99 0.25% 0.25% ---------------------------------------------- $750,000 to $999,999.99 0.20% 0.20% ---------------------------------------------- $1,000,000+ 0.15% 0.15% ---------------------------------------------- Premiums are accepted during the first six Contract Months only. The Aggregate Premium is re-determined at the end of the sixth Contract Month and is equal to total Premium paid less certain partial withdrawals, as discussed below. A withdrawal before the end of the sixth Contract month could affect the Aggregate Premium as re-determined at the end of the sixth Contract Month, and may result in a higher Mortality and Expense Risk Charge. For information about withdrawals affecting Aggregate Premium, please see "Access To Your Money" beginning on page 22. The Mortality and Expense Risk Charge compensates us for the risks we assume in connection with all the Contracts, not just your Contract. Our mortality risks under the Contracts arise from our obligations: o to make income payments for the life of the Annuitant during the income phase; o to waive the withdrawal charge in the event of the Owner's death; and o to provide a basic death benefit prior to the Income Date. Our expense risks under the Contracts include the risk that our actual cost of administering the Contracts and the Investment Divisions may exceed the amount that we receive from the administration charge and the annual contract maintenance charge. Included among these expense risks are those that we assume in connection with increasing distribution expenses, waivers of withdrawal charges under the Terminal Illness Benefit, the Specified Conditions Benefit and the Extended Care Benefit. If your Contract Value were ever to become insufficient to pay this charge, your Contract would terminate without value. Annual Contract Maintenance Charge. During the accumulation phase, we deduct a $35 annual contract maintenance charge on the Contract Anniversary of the Issue Date. We will also deduct the annual contract maintenance charge if you make a total withdrawal. This charge is for administrative expenses. The annual contract maintenance charge will be assessed on the Contract Anniversary or upon full withdrawal and is taken from the Investment Divisions and the Fixed Account options based on the proportion their respective value bears to the Contract Value. We will not deduct this charge if, when the deduction is to be made, the value of your Contract is $50,000 or more. Administration Charge. Each day, as part of our calculation of the value of the Accumulation Units and Annuity Units, we make a deduction for administration charges. On an annual basis, these charges equal 0.15% of the average daily net asset value of 12 your allocations to the Investment Divisions. This charge does not apply to the Fixed Account. This charge compensates us for our expenses incurred in administering the Contracts and the Separate Account. Transfer Charge. You must pay $25 for each transfer in excess of 15 in a Contract Year. This charge is deducted from the amount that is transferred prior to the allocation to a different Investment Division or the Fixed Account, as applicable. We waive the transfer charge in connection with Dollar Cost Averaging, Earnings Sweep, Rebalancing transfers and any transfers we require, and we may charge a lesser fee where required by state law. Withdrawal Charge. At any time during the accumulation phase (if and to the extent that Contract Value is sufficient to pay any remaining withdrawal charges that remain after a withdrawal), you may withdraw the following with no withdrawal charge: o premiums that are no longer subject to a withdrawal charge (premiums in your annuity for at least six years), plus o earnings (excess of your Contract Value allocated to the Investment Divisions and the Fixed Account over your remaining premiums allocated to those accounts) o during each Contract Year 10% of premium that would otherwise incur a withdrawal charge or be reduced by an Excess Interest Adjustment, and that has not been previously withdrawn (this can be withdrawn at once or in segments throughout the Contract Year), minus earnings (required minimum distributions will be counted as part of the free withdrawal amount). We will deduct a withdrawal charge on: o withdrawals in excess of the free withdrawal amounts, or o withdrawals under a tax-qualified Contract that exceed its required minimum distributions, or o withdrawals in excess of the free withdrawal amounts to meet the required minimum distribution of a tax-qualified Contract purchased with contributions from a nontaxable transfer, after the Owner's death, of an Individual Retirement Annuity (IRA), or to meet the required minimum distribution of a Roth IRA annuity, or o amounts withdrawn in a total withdrawal, or o amounts applied to income payments on an Income Date that is within one year of the Issue Date. The amount of the withdrawal charge deducted varies (depending upon how many years prior to the withdrawal you made the premium payment(s) you are withdrawing) according to the following schedule: Withdrawal Charge (as a percentage of premium payments): Completed Years since Receipt 0 1 2 3 4 5 6+ of Premium Base Schedule 5% 4% 3% 3% 2% 1% 0% For purposes of the withdrawal charge, we treat withdrawals as coming first from earnings and then from the oldest remaining premium. If you make a full withdrawal, or elect to commence income payments within one year of the date your Contract was issued, the withdrawal charge is based on premiums remaining in the Contract and no free withdrawal amount applies. If you withdraw only part of the value of your Contract, we deduct the withdrawal charge from the remaining value in your Contract. The withdrawal charge compensates us for costs associated with selling the Contracts. Note: Withdrawals under a non-qualified Contract will be taxable on an "income first" basis. This means that any withdrawal from a non-qualified Contract that does not exceed the accumulated income under the Contract will be taxable in full. Any withdrawals under a tax-qualified Contract will be taxable except to the extent that they are allocable to an investment in the Contract (any after-tax contributions). In most cases, there will be little or no investment in the Contract for a tax-qualified Contract because contributions will have been made on a pre-tax or tax-deductible basis. 13 We do not assess the withdrawal charge on any amounts paid out as: o income payments (but the withdrawal charge is deducted at the Income Date if income payments are commenced in the first Contract Year); o death benefits; o withdrawals necessary to satisfy the required minimum distribution of the Internal Revenue Code (but if the withdrawal requested exceeds the required minimum distribution; if the Contract was purchased with contributions from a nontaxable transfer, after the Owner's death, of an Individual Retirement Annuity (IRA); or is a Roth IRA annuity, then the entire withdrawal in excess of the free withdrawal amount will be subject to the withdrawal charge); o if permitted by your state, withdrawals of up to $250,000 from the Investment Divisions and Fixed Account if you incur a terminal illness or if you need extended hospital or nursing home care as provided in your Contract; or o if permitted by your state, withdrawals of up to 25% of your Contract Value from the Investment Divisions and Fixed Account (12 1/2% for each of two joint Owners) if you incur certain serious medical conditions specified in your Contract. We may reduce or eliminate the amount of the withdrawal charge when the Contract is sold under circumstances that reduce our sales expense. Some examples are the purchase of a Contract by a large group of individuals or an existing relationship between us and a prospective purchaser. We may not deduct a withdrawal charge under a Contract issued to an officer, director, agent or employee of Jackson or any of our affiliates. 5% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up ("AutoGuard 5") Charge. If you select the 5% GMWB With Annual Step-Up, in most states you will pay 0.1625% of the GWB each quarter (0.65% annually). In Washington State, the charge is monthly, currently 0.055% of the GWB (0.66% annually), which we will waive at the end of a Contract Month to the extent that the charge exceeds the amount of your Contract Value allocated to the Investment Divisions. For Contracts to which this endorsement was added before December 3, 2007, you pay the applicable percentage of the GWB each calendar quarter. For Contracts to which this endorsement was added on or after December 3, 2007, you pay the applicable percentage of the GWB each Contract Quarter. For Contracts purchased in Washington State, you pay the applicable percentage of the GWB each Contract Month. The actual deduction of the charge will be reflected in your quarterly statement. For more information about the GWB, please see "5% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 25. We deduct the charge from your Contract Value on a pro rata basis over each applicable Investment Division and the Fixed Account. In Washington State, the monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. The charge may be reduced if you do not take any withdrawals before the fifth Contract Anniversary, or before the tenth Contract Anniversary, after the endorsement's effective date. If the charge in your state is quarterly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.1125% of the GWB each quarter (0.45% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.05% of the GWB each quarter (0.20% annually). If the charge in your state is monthly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.0375% of the GWB each Contract Month (0.45% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.0175% of the GWB each Contract Month (0.21% annually). We reserve the right to prospectively change the charge: on new Contracts; if you select this benefit after your Contract is issued; or with a step-up that you request (not on step-ups that are automatic) - subject to a maximum charge of 1.45% annually in states where the charge is quarterly, 1.47% annually in states where the charge is monthly. We stop deducting this charge on the earlier date that you annuitize the Contract, or your Contract Value is zero. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "5% Guaranteed Minimum Withdrawal Benefit with Annual Step-Up" beginning on page 25. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 24 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. 14 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up ("LifeGuard Protector") Charge. The charge for this GMWB is expressed as an annual percentage of the GWB and depends on the Owner's age when the endorsement is added to the Contract. The charge varies by age group (see table below). For more information about the GWB, please see "5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 28. With joint Owners, the charge is based on the older Owner's age. For the Owner that is a legal entity, the charge is based on the Annuitant's age. (With joint Annuitants, the charge is based on the older Annuitant's age.) Annual Charge Maximum Current -------------------------------------------------------------------- Ages 45 - 49 0.85% / 4 0.87% / 12 0.40% / 4 0.42% / 12 50 - 54 0.85% / 4 0.87% / 12 0.40% / 4 0.42% / 12 55 - 59 1.20% / 4 1.20% / 12 0.65% / 4 0.66% / 12 60 - 64 1.30% / 4 1.32% / 12 0.75% / 4 0.75% / 12 65 - 69 1.45% / 4 1.47% / 12 0.90% / 4 0.90% / 12 70 - 74 0.85% / 4 0.87% / 12 0.50% / 4 0.51% / 12 75 - 80 0.60% / 4 0.60% / 12 0.35% / 4 0.36% / 12 You pay the applicable annual percentage of the GWB each calendar quarter. For Contracts purchased in Washington State, the charge is monthly, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the Fixed Account. Monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The charge is prorated, from the endorsement's effective date, to the end of the first quarter or first month after selection. Similarly, the charge is prorated upon termination of the endorsement. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when you elect a step-up, (not on step-ups that are automatic), again subject to the applicable maximum annual charge. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 28. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 28. Also see "Guaranteed Minimum Withdrawal Benefit General Considerations" and "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 24 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. Joint 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up ("LifeGuard Protector With Joint Option") Charge. The charge for this GMWB is expressed as an annual percentage of the GWB and depends on the youngest Covered Life's age when the endorsement is added to the Contract. For more information about the GWB and for information on who is a Covered Life under this form of GMWB, please see "Joint 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 33. The charge varies by age group (see table below), and both Covered Lives must be within the eligible age range. Annual Charge Maximum Current -------------------------------------------------------------------- Ages 45 - 49 1.00% / 4 1.02% / 12 0.55% / 4 0.57% / 12 50 - 54 1.00% / 4 1.02% / 12 0.55% / 4 0.57% / 12 55 - 59 1.35% / 4 1.35% / 12 0.80% / 4 0.81% / 12 60 - 64 1.45% / 4 1.47% / 12 0.90% / 4 0.90% / 12 65 - 69 1.60% / 4 1.62% / 12 1.05% / 4 1.05% / 12 70 - 74 1.00% / 4 1.02% / 12 0.65% / 4 0.66% / 12 75 - 80 0.75% / 4 0.75% / 12 0.50% / 4 0.51% / 12 You pay the applicable annual percentage of the GWB each calendar quarter. For Contracts purchased in Washington State, the charge is monthly, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over 15 each applicable Investment Division and the Fixed Account. Monthly charges are also pro rata, deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The charge is prorated, from the endorsement's effective date to the end of the first quarter or first month after selection. Similarly, the charge is prorated upon termination of the endorsement. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when you elect a step-up (not on step-ups that are automatic), again subject to the applicable maximum annual charge. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "Joint 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 33. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "Joint 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 33. Also see "Guaranteed Minimum Withdrawal Benefit General Considerations" and "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 24 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. Death Benefit Charges. There is no additional charge for the Contract's basic death benefit. However, for an additional charge, you may select one of the Contract's available optional death benefits in place of the basic death benefit. Please ask your agent whether there are variations on these benefits in your state or contact our Annuity Service Center. Our contact information is on the cover page of this prospectus. If you select the Return of Premium Death Benefit, you will pay 0.20%, subject to a maximum of 0.55% on new issues, on an annual basis of the average daily net asset value of your allocations to the Investment Divisions. If you select the Highest Anniversary Value Death Benefit, you will pay 0.35%, subject to a maximum of 0.55% on new issues, on an annual basis of the average daily net asset value of your allocations to the Investment Divisions. We stop deducting either of these charges on the date you annuitize. Commutation Fee. If you make a total withdrawal from your Contract after income payments have commenced under income option 4, or if after your death during the period for which payments are guaranteed to be made under income option 3 your Beneficiary elects to receive a lump sum payment, the amount received will be reduced by (a) minus (b) where: o (a) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at the rate assumed in calculating the initial payment; and o (b) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at a rate no more than 1.00% higher than the rate used in (a). Other Expenses. We pay the operating expenses of the Separate Account, including those not covered by the mortality and expense and administrative charges. There are deductions from and expenses paid out of the assets of the Funds. These expenses are described in the attached prospectus for the JNL Series Trust. For more information, please see the "Fund Operating Expenses" table beginning on page 7. Premium Taxes. Some states and other governmental entities charge premium taxes or other similar taxes. We pay these taxes and may make a deduction from your Contract Values for them. Premium taxes generally range from 0% to 3.5% (the amount of state premium tax, if any, will vary from state to state). Income Taxes. We reserve the right, when calculating unit values, to deduct a credit or charge with respect to any taxes we have paid or reserved for during the valuation period that we determine to be attributable to the operation of the Separate Account, or to a 16 particular Investment Division. No federal income taxes are applicable under present law and we are not presently making any such deduction. DISTRIBUTION OF CONTRACTS Jackson National Life Distributors LLC ("JNLD"), located at 7601 Technology Way, Denver, Colorado 80237, serves as the distributor of the Contracts. JNLD is a wholly owned subsidiary of Jackson National Life Insurance Company. Commissions are paid to broker-dealers who sell the Contracts. While commissions may vary, they are not expected to exceed 8% of any premium payment. Where lower commissions are paid up front, we may also pay trail commissions. We may also pay commissions on the Income Date if the annuity option selected involves a life contingency or a payout over a period of ten or more years. Under certain circumstances, JNLD out of their own resources may pay bonuses, overrides, and marketing allowances, in addition to the standard commissions. These payments and/or reimbursements to broker-dealers are in recognition of their marketing and distribution and/or administrative services support. They may not be offered to all broker-dealers, and the terms of any particular agreement may vary among broker-dealers depending on, among other things, the level and type of marketing and distribution support provided, assets under management, and the volume and size of the sales of our insurance products. They may provide us greater access to the registered representatives of the broker-dealers receiving such compensation or may otherwise influence the broker-dealer and/or registered representative to present the Contracts more favorably than other investment alternatives. Such compensation is subject to applicable state insurance law and regulation and the NASD rules of conduct. While such compensation may be significant, it will not cause any additional direct charge by us to you. The two primary forms of such compensation paid by JNLD are overrides and marketing support payments. Overrides are payments that are designed as consideration for product placement, assets under management and sales volume. Overrides are generally based on a fixed percentage of product sales and currently range from 10 to 50 basis points (0.10% to 0.50%). Marketing support payments may be in the form of cash and/or non-cash compensation and allow us to, among other things, participate in sales conferences and educational seminars. Examples of such payments include, but are not limited to, reimbursements for representative training or "due diligence" meetings (including travel and lodging expenses), client prospecting seminars, and business development and educational enhancement items. Payments or reimbursements for meetings and seminars are generally based on the anticipated level of participation and/or accessibility and the size of the audience. Subject to NASD rules of conduct, we may also provide cash and/or non-cash compensation to registered representatives in the form of gifts, promotional items and occasional meals and entertainment. Below is an alphabetical listing of the 20 broker-dealers that received the largest amounts of marketing and distribution and/or administrative support in 2008 from the Distributor in relation to the sale of our variable insurance products: A.G. Edwards & Sons, Inc. Centaurus Financial, Inc. Commonwealth Financial Network FSC Securities Corporation Hantz Financial Services, Inc. Intersecurities, Inc. Invest Financial Corporation Investment Centers of America, Inc. Lincoln Financial Securities Corporation LPL Financial Corporation National Planning Corporation Next Financial Group, Inc. Raymond James & Associates, Inc. Royal Alliance Associates, Inc. Securities America, Inc. SII Investments, Inc. UBS Financial Services, Inc. Wachovia Securities LLC WaMu Investments, Inc. Woodbury Financial Services, Inc. 17 Please see Appendix C for a complete list of broker-dealers that received amounts of marketing and distribution and/or administrative support in 2008 from the Distributor in relation to the sale of our variable insurance products. While we endeavor to update this list on an annual basis, please note that interim changes or new arrangements may not be listed. We may, under certain circumstances where permitted by applicable law, pay a bonus to a Contract purchaser to the extent the broker-dealer waives its commission. You can learn about the amount of any available bonus by calling the toll-free number on the cover page of this prospectus. Contract purchasers should inquire of the representative if such bonus is available to them and its compliance with applicable law. We may use any of our corporate assets to cover the cost of distribution, including any profit from the Contract's mortality and expense risk charge and other charges. Besides Jackson National Life Distributors LLC, we are affiliated with the following broker-dealers: o National Planning Corporation o SII Investments, Inc. o IFC Holdings, Inc. d/b/a Invest Financial Corporation o Investment Centers of America, Inc. o Curian Clearing LLC The Distributor also has the following relationships with the sub-advisers and their affiliates. The Distributor receives payments from certain sub-advisers to assist in defraying the costs of certain promotional and marketing meetings in which they participate. The amounts paid depend on the nature of the meetings, the number of meetings attended, the costs expected to be incurred and the level of the sub-adviser's participation. National Planning Corporation participates in the sales of shares of retail mutual funds advised by certain sub-advisers and other unaffiliated entities and receives selling and other compensation from them in connection with those activities, as described in the prospectus or statement of additional information for those funds. The fees range between 0.30% and 0.45% depending on these factors. In addition, the Distributor acts as distributor of variable annuity contracts and variable life insurance policies (the "Other Contracts") issued by Jackson National Life Insurance Company and its subsidiary, Jackson National Life Insurance Company of New York. Raymond James Financial Services, a brokerage affiliate of the sub-adviser to the JNL/Eagle Funds, participates in the sale of Contracts and is compensated by JNLD, as are unaffiliated broker-dealers, for its activities at the standard rates of compensation. The compensation consists of commissions, trail commissions and other compensation or promotional incentives as described above and in the prospectus or statement of additional information for the Other Contracts. All of the compensation described here, and other compensation or benefits provided by Jackson or our affiliates, may be greater or less than the total compensation on similar or other products. The amount and/or structure of the compensation can possibly create a potential conflict of interest as it may influence your registered representative, broker-dealer or selling institution to present this Contract over other investment alternatives. The variations in compensation, however, may also reflect differences in sales effort or ongoing customer services expected of the registered representative or the broker-dealer. You may ask your registered representative about any variations and how he or she and his or her broker-dealer are compensated for selling the Contract. 18 PURCHASES Effective April 6, 2009, this Curiangard Simplified Retirement Annuity is no longer available for purchase. Minimum Initial Premium: o $50,000 under most circumstances Minimum Additional Premiums: o $500 for a qualified or non-qualified plan; however, additional premiums will not be accepted beyond the sixth Contract Month. As a result of the six Contract Month limit on subsequent premiums, you may have to buy additional Contracts to meet your total annuity coverage goal. Multiple Contracts may result in higher charges and total expenses. However, we reserve the right to limit the number of Contracts that you may purchase. We also reserve the right to refuse any premium payment. The minimums apply to purchases, but do not preclude subsequent partial withdrawals that would reduce Contract Values below the minimum initial purchase amounts, as long as the amount left in the account is sufficient to pay any remaining withdrawal charge. There is a $100 minimum balance requirement for each Investment Division and Fixed Account. We reserve the right to restrict availability or impose restrictions on the Fixed Account. Maximum Premiums: o The maximum total of all premiums you may make without our prior approval is $1 million. The payment of subsequent premiums within the limited period of the first six Contract Months, relative to market conditions at the time the payments are made, may or may not contribute to the various benefits under your Contract, including the optional enhanced death benefits or any GMWBs. Allocations of Premium. You may allocate your premiums to one or more of the Investment Divisions and Fixed Account. Each allocation must be a whole percentage between 0% and 100%. The minimum amount you may allocate to the Investment Division or a Fixed Account is $100. We will allocate any additional premiums you pay in the same way unless you instruct us otherwise. These allocations will be subject to our minimum allocation rules. We will issue your Contract and allocate your first premium within two business days (days when the New York Stock Exchange is open) after we receive your first premium and all information that we require for the purchase of a Contract. If we do not receive all of the information that we require, we will contact you to get the necessary information. If for some reason we are unable to complete this process within five business days, we will return your money. Each business day ends when the New York Stock Exchange closes (usually 4:00 p.m. Eastern time). Capital Protection Program. If you select our Capital Protection Program at issue, we will allocate enough of your premium to the Fixed Account you select to assure that the amount so allocated will equal, at the end of a selected period of 1, 3, 5, or 7 years, your total original premium paid. You may allocate the rest of your premium to any Investment Division(s). If any part of the Fixed Account value is surrendered or transferred before the end of the selected guaranteed period, the value at the end of that period will not equal the original premium. This program is available only if Fixed Account options are available. There is no charge for the Capital Protection Program. You should consult your Jackson representative with respect to the current availability of Fixed Account options, their limitations, and the availability of the Capital Protection Program. For an example of capital protection, assume you made a premium payment of $10,000 when the interest rate for the three-year guaranteed period was 3% per year. We would allocate $9,152 to that guarantee period because $9,152 would increase at that interest rate to $10,000 after three years, assuming no withdrawals are taken. The remaining $848 of the payment would be allocated to the Investment Division(s) you selected. Alternatively, assume Jackson receives a premium payment of $10,000 when the interest rate for the 7-year period is 6.75% per year. Jackson will allocate $6,331 to that guarantee period because $6,331 will increase at that interest rate to $10,000 after 7 years. The remaining $3,669 of the payment will be allocated to the Investment Division(s) you selected. 19 Thus, as these examples demonstrate, the shorter guarantee periods require allocation of substantially all your premium to achieve the intended result. In each case, the results will depend on the interest rate declared for the guarantee period. Accumulation Units. Your Contract Value allocated to the Investment Divisions will go up or down depending on the performance of the Investment Divisions you select. In order to keep track of the value of your Contract during the accumulation phase, we use a unit of measure called an "Accumulation Unit." During the income phase we use a measure called an "Annuity Unit." Every business day, we determine the value of an Accumulation Unit for each of the Investment Divisions by: o determining the total amount of assets held in the particular Investment Division; o subtracting any asset-based charges and taxes chargeable under the Contract; and o dividing this amount by the number of outstanding Accumulation Units. Charges deducted through the cancellation of units are not reflected in this computation. The value of an Accumulation Unit may go up or down from day to day. The base Contract has a different Accumulation Unit value than each combination of optional endorsements an Owner may elect, based on the differing amount of charges applied in calculating that Accumulation Unit value. When you make a premium payment, we credit your Contract with Accumulation Units. The number of Accumulation Units we credit is determined at the close of that business day by dividing the amount of the premium allocated to any Investment Division by the value of the Accumulation Unit for that Investment Division that reflects the combination of optional endorsements you have elected and their respective charges. TRANSFERS AND FREQUENT TRANSFER RESTRICTIONS You may transfer your Contract Value between and among the Investment Divisions at any time, unless transfers are subject to other limitations, but transfers between an Investment Division and the Fixed Account must occur prior to the Income Date. Transfers from the Fixed Account will be subject to any applicable Excess Interest Adjustment. There may be periods when we do not offer the Fixed Account, or when we impose special transfer requirements on the Fixed Account. If a renewal occurs within one year of the Income Date, we will continue to credit interest up to the Income Date at the then Current Interest Rate for the applicable Fixed Account Option. You can make 15 transfers every Contract Year during the accumulation phase without charge. A transfer will be effective as of the end of the business day when we receive your transfer request in Good Order, and we will disclaim all liability for transfers made based on your transfer instructions, or the instructions of a third party authorized to submit transfer requests on your behalf. Restrictions on Transfers: Market Timing. The Contract is not designed for frequent transfers by anyone. Frequent transfers between and among Investment Divisions may disrupt the underlying Funds and could negatively impact performance, by interfering with efficient management and reducing long-term returns, and increasing administrative costs. Frequent transfers may also dilute the value of shares of an underlying Fund. Neither the Contracts nor the underlying Funds are meant to promote any active trading strategy, like market timing. Allowing frequent transfers by one or some Owners could be at the expense of other Owners of the Contract. To protect Owners and the underlying Funds, we have policies and procedures to deter frequent transfers between and among the Investment Divisions. Under these policies and procedures, there is a $25 charge per transfer after 15 in a Contract Year, and no round trip transfers are allowed within 15 calendar days. Also, we could restrict your ability to make transfers to or from one or more of the Investment Divisions, which possible restrictions may include, but are not limited to: o limiting the number of transfers over a period of time; o requiring a minimum time period between each transfer; o limiting transfer requests from an agent acting on behalf of one or more Owners or under a power of attorney on behalf of one or more Owners; or o limiting the dollar amount that you may transfer at any one time. To the extent permitted by applicable law, we reserve the right to restrict the number of transfers per year that you can request, and to restrict you from making transfers on consecutive business days. In addition, your right to make transfers between and among 20 Investment Divisions may be modified if we determine that the exercise by one or more Owners is, or would be, to the disadvantage of other Owners. We continuously monitor transfers under the Contract for disruptive activity based on frequency, pattern and size. We will more closely monitor Contracts with disruptive activity, placing them on a watch list, and if the disruptive activity continues, we will restrict the availability of electronic or telephonic means to make a transfer, instead requiring that transfer instructions be mailed through regular U.S. postal service, and/or terminate the ability to make transfers completely, as necessary. If we terminate your ability to make transfers, you may need to make a partial withdrawal to access the Contract Value in the Investment Division(s) from which you sought a transfer. We will notify you and your representative in writing within five days of placing the Contract on a watch list. Regarding round trip transfers, we will allow redemptions from an Investment Division; however, once a complete or partial redemption has been made from an Investment Division through an Investment Division transfer, you will not be permitted to transfer any value back into that Investment Division within 15 calendar days of the redemption. We will treat as short-term trading activity any transfer that is requested into an Investment Division that was previously redeemed within the previous 15 calendar days, whether the transfer was requested by you or a third party. Our policies and procedures do not apply to the Fixed Account, Dollar Cost Averaging, Earnings Sweep or the Automatic Rebalancing program. We may also make exceptions that involve an administrative error, or a personal unanticipated financial emergency of an Owner resulting from an identified health, employment, or other financial or personal event that makes the existing allocation imprudent or a hardship. These limited exceptions will be granted by an oversight team pursuant to procedures designed to result in their consistent application. Please contact our Annuity Service Center if you believe your transfer request entails a financial emergency. Otherwise, we do not exempt any person or class of persons from our policies and procedures. We have agreements allowing for asset allocation and investment advisory services that are not only subject to our policies and procedures, but also to additional conditions and limitations, intended to limit the potential adverse impact of these activities on other Owners of the Contract. We expect to apply our policies and procedures uniformly, but because detection and deterrence involves judgments that are inherently subjective, we cannot guarantee that we will detect and deter every Contract engaging in frequent transfers every time. If these policies and procedures are ineffective, the adverse consequences described above could occur. We also expect to apply our policies and procedures in a manner reasonably designed to prevent transfers that we consider to be to the disadvantage of other Owners, and we may take whatever action we deem appropriate, without prior notice, to comply with or take advantage of any state or federal regulatory requirement. TELEPHONE AND INTERNET TRANSACTIONS The Basics. You can request certain transactions by telephone or at www.jackson.com, our Internet website, subject to our right to terminate electronic or telephonic transfer privileges described above. Our Annuity Service Center representatives are available during business hours to provide you with information about your account. We require that you provide proper identification before performing transactions over the telephone or through our Internet website. For Internet transactions, this will include a Personal Identification Number (PIN). You may establish or change your PIN at www.jackson.com. What You Can Do and How. You may make transfers by telephone or through the Internet unless you elect not to have this privilege. Any authorization you provide to us in an application, at our website, or through other means will authorize us to accept transaction instructions, including Investment Division transfers/allocations, by you and your financial representative unless you notify us to the contrary. To notify us, please call us at the Annuity Service Center. Our contact information is on the cover page of this prospectus and the number is referenced in your Contract or on your quarterly statement. What You Can Do and When. When authorizing a transfer, you must complete your telephone call by the close of the New York Stock Exchange (usually 4:00 p.m. Eastern time) in order to receive that day's Accumulation Unit value for an Investment Division. Transfer instructions you send electronically are considered to be received by us at the time and date stated on the electronic acknowledgement we return to you. If the time and date indicated on the acknowledgement is before the close of the New York Stock Exchange, the instructions will be carried out that day. Otherwise the instructions will be carried out the next business day. We will retain permanent records of all web-based transactions by confirmation number. If you do not receive an electronic acknowledgement, you should telephone our Annuity Service Center immediately. 21 How to Cancel a Transaction. You may only cancel an earlier telephonic or electronic transfer request made on the same day by calling the Annuity Service Center before the New York Stock Exchange closes. Otherwise, your cancellation instruction will not be allowed because of the round trip transfer restriction. Our Procedures. Our procedures are designed to provide reasonable assurance that telephone or any other electronic authorizations are genuine. Our procedures include requesting identifying information and tape-recording telephone communications and other specific details. We and our affiliates disclaim all liability for any claim, loss or expense resulting from any alleged error or mistake in connection with a transaction requested by telephone or other electronic means that you did not authorize. However, if we fail to employ reasonable procedures to ensure that all requested transactions are properly authorized, we may be held liable for such losses. We do not guarantee access to telephonic and electronic information or that we will be able to accept transaction instructions via the telephone or electronic means at all times. We also reserve the right to modify, limit, restrict, or discontinue at any time and without notice the acceptance of instruction from someone other than you and/or this telephonic and electronic transaction privilege. Elections of any optional benefit or program must be in writing and will be effective upon receipt of the request in Good Order. Upon notification of the Owner's death, any telephone transfer authorization, other than by the surviving joint Owners, designated by the Owner ceases and we will not allow such transactions unless the executor/representative provides written authorization for a person or persons to act on the executor's/representative's behalf. ACCESS TO YOUR MONEY You can have access to the money in your Contract: o by making either a partial or complete withdrawal, o by electing the Systematic Withdrawal Program, o by electing a Guaranteed Minimum Withdrawal Benefit ("GMWB"), or o by electing to receive income payments. Your Beneficiary can have access to the money in your Contract when a death benefit is paid. Except in connection with certain withdrawals associated with a GMWB or withdrawals made to satisfy minimum distribution requirements of the Internal Revenue Code, a withdrawal before the end of the sixth Contract month will affect the Aggregate Premium as re-determined at the end of the sixth Contract Month, and may result in a higher Mortality and Expense Risk Charge, depending on the amount of the newly determined Aggregate Premium and where it falls within the breakpoint schedule (please see "Mortality and Expense Risk Charge" beginning on page 11 for more information). At the end of the sixth Contract Month, the Aggregate Premium is re-determined to equal: o The actual Premium paid to date; o Less total partial withdrawals to date unless one of the two following conditions apply: 1. Total partial withdrawals are less than the maximum annual withdrawal permitted in accordance with the GMWB, if applicable. The following rules apply in determining the amount of total partial withdrawals: a. Partial Withdrawals are assumed to be the total amount withdrawn from the Contract, including any Withdrawal Charges and Excess Interest Adjustments; and b. All withdrawals including systematic withdrawals, required minimum distributions prior to the Income Date, withdrawals of asset allocation and advisory fees, and free withdrawals are counted toward the total amount withdrawn. Or 22 2. All partial withdrawals taken during the first six Contract Months are made to satisfy required minimum distributions under the Internal Revenue Code for each applicable calendar year spanned by the six Contract Month period. Withdrawals under the Contract may also be subject to a withdrawal charge. For purposes of the withdrawal charge, we treat withdrawals as coming first from earnings and then from the oldest remaining premium. When you make a complete withdrawal you will receive the value of your Contract as of the end of the business day your request is received by us in Good Order, minus any applicable taxes, the annual contract maintenance charge, charges due under any optional endorsement and all applicable withdrawal charges, adjusted for any applicable Excess Interest Adjustment. For more information about withdrawal charges, please see "Withdrawal Charge" beginning on page 13. Your withdrawal request must be in writing. We will accept withdrawal requests submitted via facsimile. There are risks associated with not requiring original signatures in order to disburse the money. To minimize the risks, the proceeds will be sent to your last recorded address in our records, so be sure to notify us, in writing with an original signature of any address change. We do not assume responsibility for improper disbursements if you have failed to provide us with the current address to which the proceeds should be sent. Except in connection with the Systematic Withdrawal Program, you must withdraw at least $500 or, if less, the entire amount in the Fixed Account or Investment Division from which you are making the withdrawal. If you are not specific, your withdrawal will be taken from your allocations to the Investment Divisions and Fixed Account based on the proportion their respective values bear to the Contract Value. With the Systematic Withdrawal Program, you may withdraw a specified dollar amount (of at least $50 per withdrawal) or a specified percentage. After your withdrawal, at least $100 must remain in each Fixed Account or Investment Division from which the withdrawal was taken. A withdrawal request that would reduce the remaining Contract Value to less than $100 will be treated as a request for a complete withdrawal. If you have an investment adviser who, for a fee, manages your Contract Value, you may authorize payment of the fee from the Contract by requesting a partial withdrawal. There are conditions and limitations, so please contact our Annuity Service Center for more information. Our contact information is on the cover page of this prospectus. We neither endorse any investment advisers, nor make any representations as to their qualifications. The fee for this service would be covered in a separate agreement between the two of you, and would be in addition to the fees and expenses described in this prospectus. Income taxes, tax penalties and certain restrictions may apply to any withdrawal you make. There are limitations on withdrawals from qualified plans. For more information, please see "TAXES" beginning on page 43. Waiver of Withdrawal Charges for Certain Emergencies. We will waive the withdrawal charge (withdrawals from the Investment Divisions and the Fixed Account), but not any Excess Interest Adjustment that would otherwise apply in certain circumstances by providing you, at no charge, the following: o Terminal Illness Benefit, under which we will waive any withdrawal charges on amounts of up to $250,000 of your Contract Value from the Investment Divisions and Fixed Account that you withdraw after providing us with a physician's statement that you have been diagnosed with an illness that will result in your death within 12 months; o Specified Conditions Benefit, under which you may make a one-time withdrawal of up to 25% (for joint Owners, this benefit applies to each of them for 12 1/2%) of your Contract Value from the Investment Divisions and Fixed Account with no withdrawal charge after having provided us with a physician's statement that you have been diagnosed with one of the following conditions: o Heart attack o Stroke o Coronary artery surgery o Life-threatening cancer o Renal failure or o Alzheimer's disease; and 23 o Extended Care Benefit, under which we will waive any withdrawal charges on amounts of up to $250,000 of your Contract Value from the Investment Divisions and Fixed Account that you withdraw after providing us with a physician's statement that you have been confined to a nursing home or hospital for 90 consecutive days, beginning at least 30 days after your Contract was issued. You may exercise these benefits once under your Contract. Guaranteed Minimum Withdrawal Benefit General Considerations. Most people who are managing their investments to provide retirement income want to provide themselves with sufficient lifetime income and also to provide for an inheritance for their Beneficiaries. The main obstacles they face in meeting these goals are the uncertainties as to (i) how much income their investments will produce, and (ii) how long they will live and will need to draw income from their investments. A Guaranteed Minimum Withdrawal Benefit (GMWB) is designed to help reduce these uncertainties. A GMWB is intended to address those concerns but does not provide any guarantee the income will be sufficient to cover any individual's particular needs. Moreover, the GMWB does not assure that you will receive any return on your investments. The GMWB also does not protect against loss of purchasing power of assets covered by a GMWB due to inflation. Even relatively low levels of inflation may have a significant effect on purchasing power if not offset by stronger positive investment returns. The step-up feature on certain of the GMWBs may provide protection against inflation when there are strong investment returns that coincide with the availability of effecting a step-up. Payments under the GMWB will first be made from your Contract Value. Our obligations to pay you more than your Contract Value will only arise under limited circumstances. Thus, in considering the election of any GMWB you need to consider whether the value to you of the level of protection that is provided by a GMWB and its costs, which reduce Contract Value and offset our risks, are consistent with your level of concern and the minimum level of assets that you want to be sure are guaranteed. The 5% For Life GMWB with the Joint Option is available only to spouses and differs from the 5% For Life GMWB without the Joint Option (which is available to spouses and unrelated parties) and enjoys the following advantages: o If the Contract Value falls to zero, benefit payments under the endorsement will continue until the death of the last surviving Covered Life if the For Life Guarantee is effective. (For more information about the For Life Guarantee and for information on who is a Covered Life under this form of GMWB, please see the "Joint 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 33.) o If an Owner dies before the automatic payment of benefits begins, the surviving Covered Life may continue the Contract and the For Life Guarantee is not automatically terminated (as it is on the 5% For Life GMWB without the Joint Option). The 5% For Life GMWB with Joint Option has a higher charge than the 5% For Life GMWB without the Joint Option. Guaranteed Minimum Withdrawal Benefit Important Special Considerations. Each of the GMWBs provides that the GMWB and all benefits thereunder will terminate on the Income Date, which is the date when annuity payments begin. The Income Date is either a date that you choose or the Latest Income Date. The Latest Income Date is the date on which the Owner attains age 90 under a Non-Qualified Contract, unless otherwise approved by the Company, or such earlier date as required by the applicable qualified plan, law or regulation. Before (1) electing a GMWB, (2) electing to annuitize your Contract after having purchased a GMWB, or (3) when the Latest Income Date is approaching and you are thinking about electing or have elected a GMWB, you should consider whether the termination of all benefits under the GMWB and annuitizing produces the better financial results for you. Naturally, you should discuss with your Jackson representative whether a GMWB is even suitable for you. Consultation with your financial and tax advisor is also recommended. These considerations are of greater significance if you are thinking about electing or have elected a GMWB For Life, as the For Life payments will cease when you annuitize voluntarily or on the Latest Income Date. Although each of the For Life GMWBs contain an annuitization option that may allow the equivalent of For Life payments when you annuitize on the Latest Income Date, all benefits under a GMWB For Life (and under the other GMWBs) will terminate when you annuitize. To the extent that we can extend the Latest Income Date without adverse tax consequences to you, we will do so, as permitted by the applicable qualified plan, law, or regulation. After you have consulted your financial and tax advisors you will need to contact us to request an extension of the Latest 24 Income Date. Please also see "Extension of Latest Income Date" beginning on page 45 for further information regarding possible adverse tax consequences of extending the Latest Income Date. In addition, with regard to required minimum distributions (RMDs) under an IRA only, it is important to consult your financial and tax advisor to determine whether the benefits of a particular GMWB will satisfy your RMD requirements. With regard to other qualified plans, you must determine what your qualified plan permits. Distributions under qualified plans and Tax-Sheltered Annuities must begin by the later of the calendar year in which you attain age 70 1/2 or the calendar year in which you retire. You do not necessarily have to annuitize your Contract to meet the minimum distribution. 5% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up ("AutoGuard 5"). The following description is supplemented by the examples in Appendix B that may assist you in understanding how calculations are made in certain circumstances. For Owners 80 years old and younger on the Contract's Issue Date, or on the date on which this endorsement is selected if after the Contract's Issue Date, a 5% GMWB With Annual Step-Up may be available, which permits an Owner to make partial withdrawals, prior to the Income Date that, in total, are guaranteed to equal the Guaranteed Withdrawal Balance (GWB)(as defined below), regardless of your Contract Value. The 5% GMWB With Annual Step-Up is not available on a Contract that already has a GMWB (one GMWB only per Contract). We may further limit the availability of this optional endorsement. Once selected, the 5% GMWB With Annual Step-Up cannot be canceled. If you select the 5% GMWB With Annual Step-Up when you purchase your Contract, your premium payment net of any applicable taxes will be used as the basis for determining the GWB. The 5% GMWB With Annual Step-Up may also be selected after the Issue Date within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if your request is in Good Order. If you select the 5% GMWB With Annual Step-Up after the Issue Date, to determine the GWB, we will use your Contract Value on the date the endorsement is added to the Contract. The GWB can never be more than $5 million (including upon "step-up"), and the GWB is reduced with each withdrawal you take. Once the GWB has been determined, we calculate the Guaranteed Annual Withdrawal Amount (GAWA), which is the maximum annual partial withdrawal amount, except for certain tax-qualified Contracts (as explained below). Upon selection, the GAWA is equal to 5% of the GWB. The GAWA will not be reduced if partial withdrawals taken within any one Contract Year do not exceed 5%. However, withdrawals are not cumulative. If you do not take 5% in one Contract Year, you may not take more than 5% the next Contract Year. If you withdraw more than 5%, the guaranteed amount available may be less than the total premium payments and the GAWA will likely be reduced The GAWA can be divided up and taken on a payment schedule that you request. You can continue to take the GAWA each Contract Year until the GWB has been depleted. Withdrawal charges and Excess Interest Adjustments, as applicable, are taken into consideration in calculating the amount of your partial withdrawals pursuant to the 5% GMWB With Annual Step-Up, but these charges or adjustments are offset by your ability to make free withdrawals under the Contract. For certain tax-qualified Contracts, the 5% GMWB With Annual Step-Up allows for withdrawals greater than GAWA to meet the required minimum distribution (RMD) under the Internal Revenue Code (Code) without compromising the endorsement's guarantees. Examples 3, 4, 5 and 7 in Appendix B supplement this description. Premiums are accepted during the first six Contract Months only; however, any time a subsequent premium payment is made, we recalculate the GWB and the GAWA. Each time you make a premium payment, the GWB is increased by the amount of the net premium payment. Also, the GAWA will increase by 5% of the net premium payment or 5% of the increase in the GWB, if the maximum GWB is reached. We require prior approval for a subsequent premium payment, however, that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. See Example 2b in Appendix B to see how the GWB is recalculated when the $5 million maximum is reached. If the total of your partial withdrawals made in the current Contract Year is greater than the GAWA, we will recalculate your GWB and your GAWA will likely be lower in the future. In other words, withdrawing more than the GAWA in any Contract Year could cause the GWB to be reduced by more than the amount of the withdrawal(s), likely reducing the GAWA, too. Recalculation of the GWB and GAWA may result in reducing or extending the payout period. Examples 3, 4, 5, and 7 in Appendix B illustrate the impact of such withdrawals. For certain tax-qualified Contracts, this GMWB allows for withdrawals greater than GAWA to meet the Contract's required minimum distributions (RMDs) under the Internal Revenue Code (Code) without compromising the endorsement's guarantees. Examples 3, 4, 5, and 7 in Appendix B supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "Required Minimum Distribution Calculations" below for more information. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is less than or equal to the GAWA or RMD, as applicable, the GWB is equal to the greater of: 25 o the GWB prior to the partial withdrawal less the partial withdrawal; or o zero. If all your partial withdrawals made in the current Contract Year are less than or equal to the GAWA or RMD, as applicable, the GAWA is the lesser of: o the GAWA prior to the partial withdrawal; or o the GWB after the partial withdrawal. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is greater than the GAWA or RMD, as applicable, and this endorsement was added to your Contract on or after December 3, 2007, the GWB is equal to the greater of: o the GWB prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see below), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; or o zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is greater than the GAWA or RMD, as applicable, and this endorsement was added to your Contract on or after December 3, 2007, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal, or o the GWB after the partial withdrawal. The Excess Withdrawal is defined to be the lesser of: o the total amount of the current partial withdrawal, or o the amount by which the cumulative partial withdrawals for the current Contract Year exceeds the greater of the GAWA or the RMD, as applicable. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is greater than the GAWA or RMD, as applicable, and this endorsement was added to your Contract before December 3, 2007, the GWB is equal to the lesser of: o the Contract Value after the partial withdrawal; or o the greater of the GWB prior to the partial withdrawal less the partial withdrawal or zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is greater than the GAWA or RMD, as applicable, and this endorsement was added to your Contract before December 3, 2007, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal, or o the GWB after the partial withdrawal, or o 5% of the Contract Value after the partial withdrawal. For purposes of all of these calculations, all partial withdrawals are assumed to be the total amount withdrawn, including any withdrawal charges and Excess Interest Adjustments. Withdrawals made under the guarantee of this endorsement are considered to be the same as any other partial withdrawals, including systematic withdrawals, for the purposes of calculating any other values under the Contract and any other endorsements. They are subject to the same restrictions and processing rules as described in the Contract. Withdrawals under the guarantee of this 26 endorsement are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 43. -------------------------------------------------------------------- Required Minimum Distribution Calculations. Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Code, RMDs are calculated and taken on a calendar year basis. But with the 5% GMWB With Annual Step-Up, GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the endorsement's guarantees may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of either of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2008 Contract Year (ending June 30) is $10. The RMD requirements for calendar years 2007 and 2008 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2007 and $8 in each of the two halves of calendar year 2008, then at the time the withdrawal in the first half of calendar year 2008 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2008 Contract Year is less than the higher RMD requirement for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. An exception to this general rule is that with the calendar year in which your RMDs are to begin (generally, when you reach age 70 1/2), however, you may take your RMDs for the current and next calendar years during the same Contract Year, as necessary (see example below). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1937, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2007 RMD) until March 30, 2008, he may still take the 2008 RMD before the next Contract Year begins, June 30, 2008 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2008 RMD) after June 30, 2008, he should wait until the next Contract Year begins (that is after June 30, 2009) to take his third RMD (the 2009 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). Examples that are relevant specific to tax-qualified Contracts, illustrating the GMWB in varying circumstances and with specific factual assumptions, are at the end of the prospectus in Appendix B, particularly examples 3, 4, 5 and 7. Please consult the representative who is helping, or who helped, you purchase your tax-qualified Contract, and your tax adviser, to be sure that the 5% GMWB With Annual Step-Up ultimately suits your needs relative to your RMD. -------------------------------------------------------------------- Withdrawals made under section 72(t) or section 72(q) of the Code are not considered RMDs for purposes of preserving the guarantees under this GMWB. Such withdrawals that exceed the GAWA will have the same effect as any withdrawal or excess withdrawal as described above and, consistent with that description, may cause a significant negative impact to your benefit. Step-Ups. Step-ups with the 5% GMWB With Annual Step-Up reset your GWB to the greater of Contract Value or the GWB before step-up, and GAWA becomes the greater of 5% of the new GWB or GAWA before step-up. Step-ups occur automatically upon each of the first 12 Contract Anniversaries from the endorsement's effective date, then on or after the 13th Contract Anniversary, at any time upon your request, so long as there is at least one year between step-ups. Upon election of a Step-Up, the GMWB charge may be increased, subject to the maximum charges listed above. The request will be processed and effective on the day we receive the request in Good Order. Before deciding to "step-up," please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. 27 Spousal Continuation. If you die before annuitizing a Contract with the 5% GMWB With Annual Step-Up, the Contract's death benefit is still payable when Contract Value is greater than zero. Alternatively, the Contract allows the Beneficiary who is your spouse to continue it, retaining all rights previously held by the Owner. If the spouse continues the Contract and the 5% GMWB With Annual Step-Up endorsement already applies to the Contract, the 5% GMWB With Annual Step-Up will continue and no adjustment will be made to the GWB or the GAWA at the time of continuation. Step-ups will continue automatically or as permitted (as described above), and Contract Anniversaries will continue to be based on the anniversary of the original Contract's Issue Date. Upon spousal continuation of a Contract without the 5% GMWB With Annual Step-Up, if the 5% GMWB With Annual Step-Up is available at the time, the Beneficiary may request to add this endorsement within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if the request is made in Good Order. Termination. The 5% GMWB With Annual Step-Up endorsement terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly statement charge on the date you annuitize or surrender the Contract. In surrendering the Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under the 5% GMWB With Annual Step-Up. The 5% GMWB With Annual Step-Up also terminates: with the Contract upon your death (unless the Beneficiary who is your spouse continues the Contract) or upon the first date both the GWB and Contract Value equal zero - whichever occurs first. Contract Value Is Zero. If your Contract Value is reduced to zero as the result of a partial withdrawal, contract charges or poor fund performance and the GWB is greater than zero, the GWB will be paid to you on a periodic basis elected by you, which will be no less frequently than annually, so long as the Contract is still in the accumulation phase. The total annual payment will equal the GAWA, but will not exceed the current GWB. The payments continue until the GWB is reduced to zero. All other rights under your Contract cease and all optional endorsements are terminated without value. Upon your death as the Owner, your Beneficiary will receive the scheduled payments. No other death benefit will be paid. Annuitization. If you decide to annuitize your Contract, you may choose the following income option instead of one of the other income options listed in your Contract: Fixed Payment Income Option. This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that you select. If you should die (assuming you are the Owner) before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. This income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the Annuitant at the time the option becomes effective. See "Guaranteed Minimum Withdrawal Benefit General Considerations" and "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 24 for additional things to consider before electing a GMWB; when electing to annuitize your Contract after having purchased a GMWB; or when the Latest Income Date is approaching and you are thinking about electing or have elected a GMWB. Effect of GMWB on Tax Deferral. The purchase of the 5% GMWB With Annual Step-Up may not be appropriate for the Owners of Contracts who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors on this and other matters prior to electing the 5% GMWB With Annual Step-Up. 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up ("LifeGuard Protector"). The following description of this GMWB is supplemented by the examples in Appendix B, particularly examples 6 and 7 for the Step-Ups and examples 8 and 9 for the For Life guarantees. This GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the longer of: o The Owner's life (the "For Life Guarantee") if the For Life Guarantee is in effect; The For Life Guarantee is based on the life of the first Owner to die with joint Owners. There is also another GMWB option for joint Owners that are spouses, as described below. 28 For the Owner that is a legal entity, the For Life Guarantee is based on the Annuitant's life (or the life of the first Annuitant to die if there is more than one Annuitant). The For Life Guarantee becomes effective on the Contract Anniversary on or immediately following the Owner's 65th birthday (or with joint Owners, the oldest Owner's 65th birthday). If the Owner (or oldest Owner) is 65 years old or older on the endorsement's effective date, then the For Life Guarantee is effective when this GMWB is added to the Contract. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event Contract Value is reduced to zero. Or o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. Because of the For Life Guarantee, your withdrawals could amount to more than the GWB. But PLEASE NOTE: The guarantees of this GMWB are subject to the endorsement's terms, conditions, and limitations that are explained below. Please consult the representative who is helping, or who helped, you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Owners 45 to 80 years old (proof of age is required); may be added to a Contract on the Issue Date or any Contract Anniversary; and once added cannot be canceled except by a Beneficiary who is the Owner's spouse, who, upon the Owner's death, may elect to continue the Contract without the GMWB. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. This GMWB is not available on a Contract that already has a GMWB (only one GMWB per Contract). We allow ownership changes of a Contract with this GMWB when the Owner is a legal entity - to another legal entity or the Annuitant. Otherwise, ownership changes are not allowed. Also, when the Owner is a legal entity, charges will be determined based on the age of the Annuitant and changing Annuitants is not allowed. Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. Election. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. When this GMWB is added to the Contract on the Issue Date - ----------------------------------------------------------- -------------------------------------------------------------------------- The GWB equals initial premium net of any applicable premium taxes. The GAWA equals 5% of the GWB. -------------------------------------------------------------------------- When this GMWB is added to the Contract on any Contract Anniversary - --------------------------------------------------------------------- -------------------------------------------------------------------------- The GWB equals Contract Value. The GAWA equals 5% of the GWB. -------------------------------------------------------------------------- PLEASE NOTE: At the time the For Life Guarantee becomes effective, the GAWA is reset to equal 5% of the then current GWB. Premium net of any applicable premium taxes is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on the date the endorsement is added to the Contract. The GWB can never be more than $5 million (including upon Step-up), and the GWB is reduced by each withdrawal. 29 Withdrawals. Withdrawals may cause both the GWB and GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The two tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) Required Minimum Distribution Calculations. For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 3, 4 and 7 in Appendix B supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. When a withdrawal, plus all prior withdrawals in the current Contract --------------------------------------------------------------------- Year, is less than or equal to the greater of the GAWA or RMD, as ----------------------------------------------------------------- applicable - ------------ -------------------------------------------------------------------------- The GWB is recalculated, equaling the greater of: o The GWB before the withdrawal less the withdrawal; Or o Zero. The GAWA: o Is unchanged while the For Life Guarantee is in effect; Otherwise o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. -------------------------------------------------------------------------- The GAWA is not reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 3 in Appendix B). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount - even set equal to the Contract Value. The GAWA is also potentially impacted. When a withdrawal, plus all prior withdrawals in the current Contract --------------------------------------------------------------------- Year, exceeds the greater of the GAWA or RMD, as applicable - ------------------------------------------------------------- -------------------------------------------------------------------------- The GWB is recalculated, equaling the lesser of: o Contract Value after the withdrawal; Or o The greater of the GWB before the withdrawal less the withdrawal, or zero. The GAWA is recalculated, equaling the lesser of: o 5% of the Contract Value after the withdrawal; Or o The greater of 5% of the GWB after the withdrawal, or zero. -------------------------------------------------------------------------- Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a Fixed Account option may be subject to an Excess Interest Adjustment. For more information, please see "THE FIXED ACCOUNT" beginning on page 9. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 43. -------------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. -------------------------------------------------------------------------- 30 -------------------------------------------------------------------------- Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2008 Contract Year (ending June 30) is $10. The RMDs for calendar years 2007 and 2008 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2007 and $8 in each of the two halves of calendar year 2008, then at the time the withdrawal in the first half of calendar year 2008 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2008 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. An exception to this general rule is that with the calendar year in which your RMDs are to begin (generally, when you reach age 70 1/2), however, you may take your RMDs for the current and next calendar years during the same Contract Year, as necessary (see example below). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1937, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2007 RMD) until March 30, 2008, he may still take the 2008 RMD before the next Contract Year begins, June 30, 2008 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2008 RMD) after June 30, 2008, he should wait until the next Contract Year begins (that is after June 30, 2009) to take his third RMD (the 2009 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). Examples that are relevant specific to tax-qualified Contracts, illustrating this GMWB, in varying circumstances and with specific factual assumptions, are at the end of the prospectus in Appendix B, particularly examples 3, 4, and 7. Please consult the representative who is helping, or who helped, you purchase your tax-qualified Contract, and your tax adviser, to be sure that this GMWB ultimately suits your needs relative to your RMD. -------------------------------------------------------------------------- Withdrawals made under section 72(t) or section 72(q) of the Code are not considered RMDs for purposes of preserving the guarantees under this GMWB. Such withdrawals that exceed the GAWA will have the same effect as any withdrawal or excess withdrawal as described above and, consistent with that description, may cause a significant negative impact to your benefit. Premiums. Premiums are accepted during the first six Contract Months only; however, ------------------------------------------------------------------------- with each subsequent premium payment on the Contract - ------------------------------------------------------ -------------------------------------------------------------------------- The GWB is recalculated, increasing by the amount of the premium net of any applicable premium taxes. The GAWA is also recalculated, increasing by: o 5% of the premium net of any applicable premium taxes; Or o 5% of the increase in the GWB - if the maximum GWB is hit. -------------------------------------------------------------------------- We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. The GWB can never be more than $5 million. See Example 2b in Appendix B to see how the GWB is recalculated when the $5 million maximum is hit. Step-Up. In the event Contract Value is greater than the GWB, this GMWB allows the GWB to be reset to the Contract Value (a "Step-Up"). Upon election of a Step-Up, the GMWB charge may be increased, subject to the maximum charges listed above. 31 With a Step-Up - ---------------- -------------------------------------------------------------------------- The GWB equals Contract Value. The GAWA is recalculated, equaling the greater of: o 5% of the new GWB; Or o The GAWA before the Step-Up. -------------------------------------------------------------------------- Step-Ups occur automatically upon each of the first ten Contract Anniversaries from the endorsement's effective date. Thereafter, a Step-Up is allowed at any time upon your request, so long as there is at least one year between Step-Ups. The GWB can never be more than $5 million with a Step-Up. A request for Step-Up is processed and effective on the date received in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. Owner's Death. The Contract's death benefit is not affected by this GMWB so long as Contract Value is greater than zero and the Contract is still in the accumulation phase. Upon your death (or the first Owner's death with joint Owners), this GMWB terminates without value. Contract Value Is Zero. With this GMWB, in the event Contract Value is zero, the GAWA is unchanged and payable so long as the For Life Guarantee is in effect and the Contract is still in the accumulation phase. Otherwise, payments will be made while there is value to the GWB (until depleted), so long as the Contract is still in the accumulation phase. Payments are made on the periodic basis you elect, but no less frequently than annually. After each payment when the Contract Value is zero - ---------------------------------------------------- -------------------------------------------------------------------------- The GWB is recalculated, equaling the greater of: o The GWB before the payment less the payment; Or o Zero. The GAWA: o Is unchanged so long as the For Life Guarantee is in effect; Otherwise o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. -------------------------------------------------------------------------- If you die before all scheduled payments are made, then your Beneficiary will receive the remainder. All other rights under your Contract cease, except for the right to change Beneficiaries. All optional endorsements terminate without value. And no other death benefit is payable. Spousal Continuation. In the event of the Owner's death (or the first Owner's death with joint Owners), the Beneficiary who is the Owner's spouse may elect to: o Continue the Contract with this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal Beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o Upon the Owner's death, the For Life Guarantee is void. o Only the GWB is payable while there is value to it (until depleted). o Step-Ups will continue automatically or as permitted; otherwise, the above rules for Step-Ups apply. o Contract Anniversaries will continue to be based on the Contract's Issue Date. o Continue the Contract without this GMWB (GMWB is terminated). o Add this GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the Beneficiary's eligibility - whether or not the spousal Beneficiary terminated the GMWB in continuing the Contract. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 43. Termination. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly 32 charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); o The date of the Owner's death (or the first Owner's death with joint Owners), unless the Beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB; o The Continuation Date if the spousal Beneficiary elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract Value is zero. Annuitization. Life Income of GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of the Owner (or, with joint Owners, the lifetime of joint Owner who dies first). The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the Owner (or the first Owner's death with joint Owners), and there is no provision for a death benefit payable to the Beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if the Owner dies before the due date of the second payment. Specified Period Income of the GAWA. On the Latest Income Date if the For Life Guarantee is not in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (This income option only applies if the GMWB has been continued by the spousal Beneficiary upon the death of the original Owner, in which case the spouse becomes the Owner of the Contract and the Latest Income Date is based on the age of the spouse.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. See "Guaranteed Minimum Withdrawal Benefit General Considerations" and "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 24 for additional things to consider before electing a GMWB; when electing to annuitize your Contract after having purchased a GMWB; or when the Latest Income Date is approaching and you are thinking about electing or have elected a GMWB. Effect of GMWB on Tax Deferral. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. Joint 5% For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up ("LifeGuard Protector With Joint Option"). The description of this GMWB is supplemented by the examples in Appendix B, particularly examples 6 and 7 for the Step-Ups and example 9 for the For Life Guarantee. This GMWB is available for both non-qualified and tax-qualified Contracts. For non-qualified Contracts, there must be joint Owners and the joint Owners are required to be spouses (as defined under the Internal Revenue Code). Each joint Owner is considered to be a "Covered Life." 33 The Owners cannot be subsequently changed and new Owners cannot be added. Upon death of either joint Owner, the surviving joint Owner will be treated as the primary Beneficiary and all other Beneficiaries will be treated as contingent Beneficiaries. The For Life Guarantee will not apply to these contingent Beneficiaries, as they are not Covered Lives. This GMWB is available on a limited basis under non-qualified Contracts for certain kinds of legal entities, such as (i) custodial accounts where the spouses are the joint Annuitants and (ii) trusts where the spouses are the sole beneficial owners, and the For Life Guarantee is based on the Annuitant's life who dies last. Tax-qualified Contracts cannot be issued to joint Owners and require the Owner and Annuitant to be the same person. Under a tax-qualified Contract, the election of this GMWB requires the Owner and primary Beneficiary to be spouses (as defined in the Internal Revenue Code). The Owner and only the primary spousal Beneficiary named at the election of this GMWB under a tax-qualified Contract will also each be considered a Covered Life, and these Covered Lives cannot be subsequently changed. For tax-qualified Contracts, the Owner and primary spousal Beneficiary cannot be changed while both are living. If the Owner dies first, the primary spousal Beneficiary will become the Owner upon Spousal Continuation and he or she may name a Beneficiary; however, that Beneficiary is not considered a Covered Life. Likewise, if the primary spousal Beneficiary dies first, the Owner may name a new Beneficiary; however, that Beneficiary is also not considered a Covered Life and consequently the For Life Guarantee will not apply to the new Beneficiary. For both non-qualified and tax-qualified Contracts, this GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the longer of: o The lifetime of the last surviving Covered Life if the For Life Guarantee is in effect; The For Life Guarantee becomes effective on the Contract Anniversary on or immediately following the youngest Covered Life's 65th birthday. If the youngest Covered Life is 65 years old or older on the endorsement's effective date, then the For Life Guarantee is effective when this GMWB is added to the Contract. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event Contract Value is reduced to zero. Or o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. Because of the For Life Guarantee, your withdrawals could amount to more than the GWB. But PLEASE NOTE: The guarantees of this GMWB are subject to the endorsement's terms, conditions, and limitations that are explained below. Please consult the representative who is helping, or who helped, you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Covered Lives 45 to 80 years old (proof of age is required and both Covered Lives must be within the eligible age range). If the age of any Covered Life is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the Contract Value will be adjusted by the difference between the charges actually paid and the charges that would have been paid assuming the correct age. Future GMWB charges will be based on the correct age. If the age at election of either Covered Life falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. This GMWB may be added to a Contract on the Issue Date or on any Contract Anniversary and it cannot be canceled except by a spousal Beneficiary who is not a Covered Life, who, upon the Owner's death, may elect to continue the Contract without the GMWB. To continue joint GMWB coverage upon the death of the Owner (or the death of either joint Owner of a non-qualified Contract), provided that the other Covered Life is still living, the Contract must be continued by election of Spousal Continuation. Upon continuation, the spouse becomes the Owner and obtains all rights as the Owner. 34 At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. This GMWB is not available on a Contract that already has a GMWB (only one GMWB per Contract). Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect, which is the maximum of the Guaranteed Annual Withdrawal Amount (GAWA) or the required minimum distribution. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. Election. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. When this GMWB is added to the Contract on the Issue Date - ----------------------------------------------------------- -------------------------------------------------------------------------- The GWB equals initial premium net of any applicable premium taxes. The GAWA equals 5% of the GWB. -------------------------------------------------------------------------- When this GMWB is added to the Contract on any Contract Anniversary - --------------------------------------------------------------------- -------------------------------------------------------------------------- The GWB equals Contract Value. The GAWA equals 5% of the GWB. -------------------------------------------------------------------------- PLEASE NOTE: At the time the For Life Guarantee becomes effective, the GAWA is reset to equal 5% of the then current GWB. Premium net of any applicable premium taxes is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on the date the endorsement is added to the Contract. The GWB can never be more than $5 million (including upon Step-up), and the GWB is reduced by each withdrawal. Withdrawals. Withdrawals may cause both the GWB and GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The two tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) Required Minimum Distribution Calculations. For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 3, 4 and 7 in Appendix B supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. When a withdrawal, plus all prior withdrawals in the current Contract --------------------------------------------------------------------- Year, is less than or equal to the greater of the GAWA or RMD, as ----------------------------------------------------------------- applicable - ------------ -------------------------------------------------------------------------- The GWB is recalculated, equaling the greater of: o The GWB before the withdrawal less the withdrawal; Or o Zero. The GAWA: o Is unchanged while the For Life Guarantee is in effect; Otherwise o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. -------------------------------------------------------------------------- The GAWA is not reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 3 in Appendix B). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount - even set equal to the Contract Value. The GAWA is also potentially impacted. 35 When a withdrawal, plus all prior withdrawals in the current Contract --------------------------------------------------------------------- Year, exceeds the greater of the GAWA or RMD, as applicable - ------------------------------------------------------------- -------------------------------------------------------------------------- The GWB is recalculated, equaling the lesser of: o Contract Value after the withdrawal; Or o The greater of the GWB before the withdrawal less the withdrawal, or zero. The GAWA is recalculated, equaling the lesser of: o 5% of the Contract Value after the withdrawal; Or o The greater of 5% of the GWB after the withdrawal, or zero. -------------------------------------------------------------------------- Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a Fixed Account option may be subject to an Excess Interest Adjustment. For more information, please see "THE FIXED ACCOUNT" beginning on page 9. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 43. -------------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2008 Contract Year (ending June 30) is $10. The RMDs for calendar years 2007 and 2008 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2007 and $8 in each of the two halves of calendar year 2008, then at the time the withdrawal in the first half of calendar year 2008 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2008 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. An exception to this general rule is that with the calendar year in which your RMDs are to begin (generally, when you reach age 70 1/2), however, you may take your RMDs for the current and next calendar years during the same Contract Year, as necessary (see example below). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1937, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2007 RMD) until March 30, 2008, he may still take the 2008 RMD before the next Contract Year begins, June 30, 2008 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2008 RMD) after June 30, 2008, he should wait until the next Contract Year begins (that is after June 30, 2009) to take his third RMD (the 2009 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). Examples that are relevant specific to tax-qualified Contracts, illustrating this GMWB, in varying circumstances and with specific factual assumptions, are at the end of the prospectus in Appendix B, particularly examples 3, 4, and 7. Please consult the representative who is helping, or who helped, you purchase your tax-qualified Contract, and your tax adviser, to be sure that this GMWB ultimately suits your needs relative to your RMD. -------------------------------------------------------------------------- 36 Withdrawals made under section 72(t) or section 72(q) of the Code are not considered RMDs for purposes of preserving the guarantees under this GMWB. Such withdrawals that exceed the GAWA will have the same effect as any withdrawal or excess withdrawal as described above and, consistent with that description, may cause a significant negative impact to your benefit. Premiums. Premiums are accepted during the first six Contract Months only; however, ------------------------------------------------------------------------- with each subsequent premium payment on the Contract - ------------------------------------------------------ -------------------------------------------------------------------------- The GWB is recalculated, increasing by the amount of the premium net of any applicable premium taxes. The GAWA is also recalculated, increasing by: o 5% of the premium net of any applicable premium taxes; Or o 5% of the increase in the GWB - if the maximum GWB is hit. -------------------------------------------------------------------------- We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. The GWB can never be more than $5 million. See Example 2b in Appendix B to see how the GWB is recalculated when the $5 million maximum is hit. Step-Up. In the event Contract Value is greater than the GWB, this GMWB allows the GWB to be reset to the Contract Value (a "Step-Up"). Upon election of a Step-Up, the GMWB charge may be increased, subject to the maximum charges listed above. With a Step-Up - ---------------- -------------------------------------------------------------------------- The GWB equals Contract Value. The GAWA is recalculated, equaling the greater of: o 5% of the new GWB; Or o The GAWA before the Step-Up. -------------------------------------------------------------------------- Step-Ups occur automatically upon each of the first ten Contract Anniversaries from the endorsement's effective date. Thereafter, a Step-Up is allowed at any time upon your request, so long as there is at least one year between Step-Ups. The GWB can never be more than $5 million with a Step-Up. A request for Step-Up is processed and effective on the date received in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. Owner's Death. The Contract's death benefit is not affected by this GMWB so long as Contract Value is greater than zero and the Contract is still in the accumulation phase. Upon the death of the sole Owner of a qualified Contract or the death of either joint Owner of a non-qualified Contract while the Contract is still in force and before the Income Date, this GMWB terminates without value unless continued by the spouse. Please see the information beginning on page 33 regarding the required ownership and Beneficiary structure under both qualified and non-qualified Contracts when selecting the Joint 5% For Life GMWB With Annual Step-Up benefit. Contract Value Is Zero. With this GMWB, in the event Contract Value is zero, the GAWA is unchanged and payable so long as the For Life Guarantee is in effect and the Contract is still in the accumulation phase. Otherwise, payments will be made while there is value to the GWB (until depleted), so long as the Contract is still in the accumulation phase. Payments are made on the periodic basis you elect, but no less frequently than annually. After each payment when the Contract Value is zero - ---------------------------------------------------- -------------------------------------------------------------------------- The GWB is recalculated, equaling the greater of: o The GWB before the payment less the payment; Or o Zero. The GAWA: o Is unchanged so long as the For Life Guarantee is in effect; Otherwise o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. -------------------------------------------------------------------------- If you die before all scheduled payments are made, then your Beneficiary will receive the remainder. All other rights under your Contract cease, except for the right to change Beneficiaries. All optional endorsements terminate without value. And no other death benefit is payable. 37 Spousal Continuation. In the event of the Owner's (or either joint Owner's) death, the surviving spousal Beneficiary may elect to: o Continue the Contract with this GMWB - so long as the Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal Beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o If the surviving spouse is a Covered Life and the For Life Guarantee is already in effect, then the For Life Guarantee remains effective on and after the Continuation Date. If the For Life Guarantee is not already in effect and the surviving spouse is a Covered Life, the For Life Guarantee becomes effective on the Contract Anniversary on or immediately following the youngest original Covered Life's 65th birthday, and the above rules for the For Life Guarantee apply. The effective date of the For Life Guarantee will be set on the effective date of the endorsement. If the surviving spouse is not a Covered Life, the For Life Guarantee is null and void. However, the surviving spouse will be entitled to make withdrawals until the GWB is exhausted. o For a surviving spouse who is a Covered Life, continuing the Contract with this GMWB is necessary to be able to fully realize the benefit of the For Life Guarantee. The For Life Guarantee is not a separate guarantee and only applies if the related GMWB has not terminated. o Step-Ups will continue automatically or as permitted in accordance with the above rules for Step-Ups. o Contract Anniversaries will continue to be based on the original Contract's Issue Date. o A new joint Owner may not be added in a non-qualified Contract if a surviving spouse continues the Contract. o Continue the Contract without this GMWB (GMWB is terminated) if the surviving spouse is not a Covered Life. Thereafter, no GMWB charge will be assessed. If the surviving spouse is a Covered Life, the Contract cannot be continued without this GMWB. o Add another GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the spousal Beneficiary's eligibility, and provided that this GMWB was terminated on the Continuation Date. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 43. Termination. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); o The date of death of the sole Owner of a qualified Contract or the death of either joint Owner of a non-qualified Contract, unless the Beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB (continuing the Contract with this GMWB is necessary to be able to fully realize the benefit of the For Life Guarantee if the surviving spouse is a Covered Life); o The Continuation Date if the spousal Beneficiary, who is not a Covered Life, elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract Value is zero. 38 Annuitization. -------------- Joint Life Income of GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of last surviving Covered Life. The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the last surviving Covered Life, and there is no provision for a death benefit payable to the Beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if both Covered Lives die before the due date of the second payment. Specified Period Income of the GAWA. On the Latest Income Date if the For Life Guarantee is not in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (This income option only applies if the GMWB has been continued by the spousal Beneficiary and the spousal Beneficiary is not a Covered Life in which case the spouse becomes the Owner of the Contract and the Latest Income Date is based on the age of the spouse.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. See "Guaranteed Minimum Withdrawal Benefit General Considerations" and "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 24 for additional things to consider before electing a GMWB; when electing to annuitize your Contract after having purchased a GMWB; or when the Latest Income Date is approaching and you are thinking about electing or have elected a GMWB. Effect of GMWB on Tax Deferral. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. Systematic Withdrawal Program. You can arrange to have money automatically sent to you periodically while your Contract is still in the accumulation phase. You may withdraw a specified dollar amount (of at least $50 per withdrawal), a specified percentage or earnings. Your withdrawals may be on a monthly, quarterly, semi-annual or annual basis. If you have arranged for systematic withdrawals, schedule any planned Step-Up under a GMWB to occur prior to the withdrawal. Example 7 in Appendix B illustrates the consequences of a withdrawal preceding a Step-Up. There is no charge for the Systematic Withdrawal Program; however, you will have to pay taxes on the money you receive. You may also be subject to a withdrawal charge and an Excess Interest Adjustment. Suspension of Withdrawals or Transfers. We may be required to suspend or delay withdrawals or transfers to or from an Investment Division when: o the New York Stock Exchange is closed (other than customary weekend and holiday closings); o under applicable SEC rules, trading on the New York Stock Exchange is restricted; o under applicable SEC rules, an emergency exists so that it is not reasonably practicable to dispose of securities in an Investment Division or determine the value of its assets; or o the SEC, by order, may permit for the protection of Contract Owners. We have reserved the right to defer payment for a withdrawal or transfer from the Fixed Account for up to six months or the period permitted by law. 39 INCOME PAYMENTS (THE INCOME PHASE) The income phase of your Contract occurs when you begin receiving regular income payments from us. The Income Date is the day those payments begin. Once income payments begin, the Contract cannot be returned to the accumulation phase. You can choose the Income Date and an income option. All of the Contract Value must be annuitized. The income options are described below. If you do not choose an income option, we will assume that you selected option 3, which provides a life annuity with 120 months of guaranteed payments. You can change the Income Date or income option at least seven days before the Income Date, but changes to the Income Date may only be to a later date. You must give us written notice at least seven days before the scheduled Income Date. Income payments must begin by your 90th birthday under a non-qualified Contract, or by such earlier date as required by the applicable qualified plan, law or regulation, unless otherwise approved by the Company. Under a traditional Individual Retirement Annuity, required minimum distributions must begin in the calendar year in which you attain age 70 1/2 (or such other age as required by law). Distributions under qualified plans and Tax-Sheltered Annuities must begin by the later of the calendar year in which you attain age 70 1/2 or the calendar year in which you retire. You do not necessarily have to annuitize your Contract to meet the minimum distribution requirements for Individual Retirement Annuities, qualified plans, and Tax-Sheltered Annuities. Distributions from Roth IRAs are not required prior to your death. At the Income Date, you can choose to receive fixed payments or variable payments based on the Investment Divisions. Unless you tell us otherwise, your income payments will be based on the fixed and variable options that were in place on the Income Date. You can choose to have income payments made monthly, quarterly, semi-annually or annually. Or you can choose a single lump sum payment. If you have less than $5,000 to apply toward an income option and state law permits, we may provide your payment in a single lump sum, part of which may be taxable as Federal Income. Likewise, if your first income payment would be less than $50 and state law permits, we may set the frequency of payments so that the first payment would be at least $50. Variable Income Payments. If you choose to have any portion of your income payments based upon one or more Investment Divisions, the dollar amount of your initial annuity payment will depend primarily upon the following: o the amount of your Contract Value you allocate to the Investment Division(s) on the Income Date; o the amount of any applicable premium taxes or withdrawal charges and any Excess Interest Adjustment deducted from your Contract Value on the Income Date; o which income option you select; and o the investment factors listed in your Contract that translate the amount of your Contract Value (as adjusted for applicable charges, frequency of payment and commencement date) into initial payment amounts that are measured by the number of Annuity Units of the Investment Division(s) you select credited to your Contract. The investment factors in your Contract are calculated based upon a variety of factors, including an assumed investment rate of 3%. State variations may apply. If the actual net investment rate experienced by an Investment Division exceeds the assumed net investment rate, variable annuity payments will increase over time. Conversely, if the actual net investment rate is less than the assumed net investment rate, variable annuity payments will decrease over time. If the actual net investment rate equals the assumed net investment rate, the variable annuity payments will remain constant. If assumed net investment rate is a lower percentage, for example, 3% versus 4.5% under a particular Annuity Option, the initial payment will be smaller if the 3% assumed net investment rate applies instead of the 4.5% assumed net investment rate, but, all other things being equal, the subsequent 3% assumed net investment rate payments have the potential for increasing in amount by a larger percentage and for decreasing in amount by a smaller percentage. We calculate the dollar amount of subsequent income payments that you receive based upon the performance of the Investment Divisions you select. If that performance (measured by changes in the value of Annuity Units) exceeds the assumed investment rate, then your income payments will increase; if that performance is less than the assumed investment rate, then your income payments will decrease. Neither expenses actually incurred (other than taxes on investment return), nor mortality actually experienced, will adversely affect the dollar amount of subsequent income payments. 40 Income Options. The Annuitant is the person whose life we look to when we make income payments (each description assumes that you are the Owner and Annuitant). The following income options may not be available in all states. Option 1 - Life Income. This income option provides monthly payments for your life. Option 2 - Joint and Survivor. This income option provides monthly payments for your life and for the life of another person (usually your spouse) selected by you. Option 3 - Life Annuity With at Least 120 or 240 Monthly Payments. This income option provides monthly payments for the Annuitant's life, but with payments continuing to the Beneficiary for the remainder of 10 or 20 years (as you select) if the Annuitant dies before the end of the selected period. If the Beneficiary does not want to receive the remaining scheduled payments, a single lump sum may be requested, which will be equal to the present value of the remaining payments (as of the date of calculation) discounted at an interest rate that will be no more than 1% higher than the rate used to calculate the initial payment. Option 4 - Income for a Specified Period. This income option provides monthly payments for any number of years from 5 to 30. If the Beneficiary does not want to receive the remaining scheduled payments, a single lump sum may be requested, which will be equal to the present value of the remaining payments (as of the date of calculation) discounted at an interest rate that will be no more than 1% higher than the rate used to calculate the initial payment. Additional Options - We may make other income options available. No withdrawals are permitted during the income phase under an income option that is life contingent. DEATH BENEFIT The Contract has a death benefit, namely the basic death benefit, which is payable during the accumulation phase. Instead you may choose an optional death benefit for an additional charge, availability of which may vary by state. For more information about the availability of an optional death benefit in your state, please see the application, check with the registered representative helping you to purchase the Contract or contact us at our Annuity Service Center. Our contact information is on the first page of this prospectus. The optional death benefits are only available upon application, and once chosen, cannot be canceled. The effects of any GMWB on the amount payable to your Beneficiaries upon your death should be considered in selecting the death benefits in combination with a GMWB. Except as provided in certain of the GMWB endorsements, no death benefit will be paid upon your death in the event the Contract Value falls to zero. The death benefit paid to your Beneficiary upon your death is calculated as of the date we receive all required documentation in Good Order which includes, but is not limited to, due proof of death and a completed claim form from the Beneficiary of record (if there are multiple Beneficiaries, we will calculate the death benefit when we receive this documentation from the first Beneficiary). Payment will include interest to the extent required by law. The death benefit paid will be the basic death benefit unless you have selected one of the other death benefit endorsements. If you have a guaranteed minimum death benefit, the amount by which the guaranteed minimum death benefit exceeds the account value will be put into your account as of the date we receive all required documentation from the Beneficiary of record and will be allocated among the Investment Divisions and Fixed Account according to the current allocation instructions on file for your account as of that date. Each Beneficiary will receive their portion of the remaining value, subject to market fluctuations, when their option election form is received at our Home Office in Lansing, Michigan. Basic Death Benefit. If you die before moving to the income phase, the person you have chosen as your Beneficiary will receive a death benefit. If you have a joint Owner, the death benefit will be paid when the first joint Owner dies. The surviving joint Owner will be treated as the Beneficiary. Any other Beneficiary designated will be treated as a contingent Beneficiary. Only a spousal Beneficiary has the right to continue the Contract in force upon your death. The death benefit equals the Contract Value on the date we receive all required documentation from your Beneficiary. Optional Death Benefits. Optional death benefits are available that are designed to protect your Contract Value from potentially poor investment performance and the impact that poor investment performance could have on the amount of the basic death benefit. Because there is an additional annual charge for each of these optional death benefits, and because you cannot change your selection, please be sure that you have read about and understand the Contract's basic death benefit before selecting an optional death benefit. Optional death benefits are available if you are 79 years of age or younger on the Contract's Issue Date. However, the older you are when your Contract is issued, the less advantageous it would be for you to select an optional death benefit. These optional death benefits are subject to our administrative rules to assure appropriate use, which administrative rules may be changed, as necessary. 41 Depending on when and in what state you apply for the Contract: the availability of an optional death benefit may be different and how an optional death benefit is calculated varies - all as noted below. For purposes of these optional death benefits, "Net Premiums" are defined as your premium payments net of premium taxes, reduced by any withdrawals (including applicable charges and deductions) at the time of the withdrawal in the same proportion that the Contract Value was reduced on the date of the withdrawal. Accordingly, if a withdrawal were to reduce the Contract Value by 50%, for example, Net Premiums would also be reduced by 50%. Similarly, with the "Highest Anniversary Value" component, the adjustment to your Contract Value for any withdrawals (including applicable charges and deductions) will have occurred proportionally at the time of the withdrawals. Following are the calculations for the optional death benefits: Return of Premium Death Benefit, changes your basic death benefit to the greatest of: (a) your Contract Value on the date we receive all required documentation from your Beneficiary; or (b) total Net Premiums since your Contract was issued. All withdrawals will reduce this portion of the calculation in the same proportion that the Contract Value was reduced on the date of the withdrawal. Highest Anniversary Value Death Benefit, changes your basic death benefit to the greatest of: (a) your Contract Value as of the end of the business day on which we receive all required documentation from your Beneficiary; or (b) total Net Premiums since your Contract was issued; or (c) your greatest Contract Value on any Contract Anniversary prior to your 81st birthday, minus any withdrawals (including any applicable withdrawal charges and adjustments), plus any premiums paid (net of any applicable premium taxes) subsequent to that Contract Anniversary. Payout Options. The basic death benefit and the optional death benefits can be paid under one of the following payout options: o single lump sum payment; or o payment of entire death benefit within 5 years of the date of death; or o payment of the entire death benefit under an income option over the Beneficiary's lifetime or for a period not extending beyond the Beneficiary's life expectancy; or payment of a portion of the death benefit under an income option over the Beneficiary's lifetime or for a period not extending beyond the Beneficiary's life expectancy, with the balance of the death benefit payable to the Beneficiary. Any portion of the death benefit not applied under an income option within one year of the Owner's death, however, must be paid within five years of the date of the Owner's death. Under these payout options, the Beneficiary may also elect to receive additional lump sums at any time. The receipt of any additional lump sums will reduce the future income payments to the Beneficiary. Unless the Beneficiary chooses to receive the entire death benefit in a single sum, the Beneficiary must elect a payout option within the 60-day period beginning with the date we receive proof of death and payments must begin within one year of the date of death. If the Beneficiary chooses to receive some or all of the death benefit in a single sum and all the necessary requirements are met, we will pay the death benefit within seven days. If your Beneficiary is your spouse, he/she may elect to continue the Contract, at the current Contract Value, in his/her own name. For more information, please see "Special Spousal Continuation Option" beginning on page 43. Pre-Selected Payout Options. As Owner, you may also make a predetermined selection of the death benefit payout option if your death occurs before the Income Date. However, at the time of your death, we may modify the death benefit option if the death 42 benefit you selected exceeds the life expectancy of the Beneficiary. If this Pre-selected Death Benefit Option Election is in force at the time of your death, the payment of the death benefit may not be postponed, nor can the Contract be continued under any other provisions of this Contract. This restriction applies even if the Beneficiary is your spouse, unless such restriction is prohibited by the Internal Revenue Code. If the Beneficiary does not submit the required documentation for the death benefit to us within one year of your death, however, the death benefit must be paid, in a single lump sum, within five years of your death. The Pre-selected Death Benefit Option may not be available in your state. Special Spousal Continuation Option. If your spouse is the Beneficiary and elects to continue the Contract in his or her own name after your death, pursuant to the Special Spousal Continuation Option, no death benefit will be paid at that time. Moreover, we will contribute to the Contract a Continuation Adjustment, which is the amount by which the death benefit that would have been payable exceeds the Contract Value. We calculate this amount using the Contract Value and death benefit as of the date we receive completed forms and due proof of death from the Beneficiary of record and the spousal Beneficiary's written request to continue the Contract (the "Continuation Date"). We will add this amount to the Contract based on the current allocation instructions at the time of your death, subject to any minimum allocation restrictions, unless we receive other allocation instructions from your spouse. The Special Spousal Continuation Option may not be available in your state. See your financial advisor for information regarding the availability of the Special Spousal Continuation Option. If your spouse continues the Contract in his/her own name under the Special Spousal Continuation Option, the new Contract Value will be considered the initial premium for purposes of determining any future death benefit under the Contract. The age of the surviving spouse at the time of the continuation of the Contract will be used to determine all benefits under the Contract prospectively, so the death benefit may be at a different level. If your spouse elects to continue the Contract, your spouse, as new Owner, cannot terminate most of the optional benefits you elected. However, a GMWB will terminate upon your death (and no further GMWB charges will be deducted), unless your spouse is eligible for the benefit and elects to continue it with the Contract. The Contract, and its optional benefits, remains the same, except as described above. There is no charge for the Spousal Continuation Option; however, your spouse will also be subject to the same fees, charges and expenses under the Contract as you were. The Special Spousal Continuation Option is available to elect one time on the Contract. However, if you have elected the Pre-Selected Death Benefit Option the Contract cannot be continued under the Special Spousal Continuation Option, unless preventing continuation would be prohibited by the Internal Revenue Code. The Pre-Selected Death Benefit Option may not be available in your state. Death of Owner On or After the Income Date. If you or a joint Owner dies, and is not the Annuitant, on or after the Income Date, any remaining payments under the income option elected will continue at least as rapidly as under the method of distribution in effect at the date of death. If you die, the Beneficiary becomes the Owner. If the joint Owner dies, the surviving joint Owner, if any, will be the designated Beneficiary. Any other Beneficiary designation on record at the time of death will be treated as a contingent Beneficiary. A contingent Beneficiary is entitled to receive payment only after the Beneficiary dies. Death of Annuitant. If the Annuitant is not an Owner or joint Owner and dies before the Income Date, you can name a new Annuitant, subject to our underwriting rules. If you do not name a new Annuitant within 30 days of the death of the Annuitant, you will become the Annuitant. However, if the Owner is a non-natural person (for example, a corporation), then the death of the Annuitant will be treated as the death of the Owner, and a new Annuitant may not be named. If the Annuitant dies on or after the Income Date, any remaining guaranteed payment will be paid to the Beneficiary as provided for in the income option selected. Any remaining guaranteed payment will be paid at least as rapidly as under the method of distribution in effect at the Annuitant's death. TAXES The following is only general information and is not intended as tax advice to any individual. Additional tax information is included in the SAI. You should consult your own tax adviser as to how these general rules will apply to you if you purchase a Contract. CONTRACT OWNER TAXATION Tax-Qualified and Non-Qualified Contracts. If you purchase your Contract as a part of a tax-qualified plan such as an Individual Retirement Annuity (IRA), Tax-Sheltered Annuity (sometimes referred to as a 403(b) Contract), or pension or profit-sharing plan (including a 401(k) Plan or H.R. 10 Plan) your Contract will be what is referred to as a tax-qualified contract. Tax 43 deferral under a tax-qualified contract arises under the specific provisions of the Internal Revenue Code (Code) governing the tax-qualified plan, so a tax-qualified contract should be purchased only for the features and benefits other than tax deferral that are available under a tax-qualified contract, and not for the purpose of obtaining tax deferral. You should consult your own adviser regarding these features and benefits of the Contract prior to purchasing a tax-qualified contract. If you do not purchase your Contract as a part of any tax-qualified pension plan, specially sponsored program or an individual retirement annuity, your Contract will be what is referred to as a non-qualified contract. The amount of your tax liability on the earnings under and the amounts received from either a tax-qualified or a non-qualified Contract will vary depending on the specific tax rules applicable to your Contract and your particular circumstances. Non-Qualified Contracts - General Taxation. Increases in the value of a non-qualified Contract attributable to undistributed earnings are generally not taxable to the Contract Owner or the Annuitant until a distribution (either a withdrawal, including withdrawals under any GMWB you may elect, or an income payment) is made from the Contract. This tax deferral is generally not available under a non-qualified Contract owned by a non-natural person (e.g., a corporation or certain other entities other than a trust holding the Contract as an agent for a natural person). Loans based on a non-qualified Contract are treated as distributions. Non-Qualified Contracts - Aggregation of Contracts. For purposes of determining the taxability of a distribution, the Code provides that all non-qualified contracts issued by us (or an affiliate) to you during any calendar year must be treated as one annuity contract. Additional rules may be promulgated under this Code provision to prevent avoidance of its effect through the ownership of serial contracts or otherwise. Non-Qualified Contracts - Withdrawals and Income Payments. Any withdrawal from a non-qualified Contract, including withdrawals under any GMWB you may elect, is taxable as ordinary income to the extent it does not exceed the accumulated earnings under the Contract. In contrast, a part of each income payment under a non-qualified Contract is generally treated as a non-taxable return of premium. The balance of each income payment is taxable as ordinary income. The amounts of the taxable and non-taxable portions of each income payment are determined based on the amount of the investment in the Contract and the length of the period over which income payments are to be made. Income payments received after all of your investment in the Contract is recovered are fully taxable as ordinary income. Additional information is provided in the SAI. The Code also imposes a 10% penalty on certain taxable amounts received under a non-qualified Contract. This penalty tax will not apply to any amounts: o paid on or after the date you reach age 59 1/2; o paid to your Beneficiary after you die; o paid if you become totally disabled (as that term is defined in the Code); o paid in a series of substantially equal periodic payments made annually (or more frequently) for your life (or life expectancy) or for a period not exceeding the joint lives (or joint life expectancies) of you and your Beneficiary; o paid under an immediate annuity; or o which come from premiums made prior to August 14, 1982. Non-Qualified Contracts - Required Distributions. In order to be treated as an annuity contract for federal income tax purposes, the Code requires any non-qualified Contract issued after January 18, 1985 to provide that (a) if an owner dies on or after the annuity starting 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 an owner dies prior to the annuity starting date, the entire interest in the contract must be distributed within five years after the date of the owner's death. The requirements of (b) above can be considered satisfied if any portion of the Owner's interest which is payable to or for the benefit of a "designated Beneficiary" is distributed over the life of such Beneficiary or over a period not extending beyond the life expectancy of that Beneficiary and such distributions begin within one year of that Owner's death. The Owner's "designated Beneficiary," who must be a natural person, is the 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 Owner, the contract may be continued with the surviving spouse as the new Owner. 44 Tax-Qualified Contracts - Withdrawals and Income Payments. The Code imposes limits on loans, withdrawals, and income payments under tax-qualified Contracts. The Code also imposes required minimum distributions for tax-qualified Contracts and a 10% penalty on certain taxable amounts received prematurely under a tax-qualified Contract. These limits, required minimum distributions, tax penalties and the tax computation rules are summarized in the SAI. Any withdrawals under a tax-qualified Contract, including withdrawals under any GMWB you may elect, will be taxable except to the extent they are allocable to an investment in the Contract (any after-tax contributions). In most cases, there will be little or no investment in the Contract for a tax-qualified Contract because contributions will have been made on a pre-tax or tax-deductible basis. Withdrawals - Tax-Sheltered Annuities. The Code limits the withdrawal of amounts attributable to purchase payments made under a salary reduction agreement from Tax-Sheltered Annuities. Withdrawals can only be made when an Owner: o reaches age 59 1/2; o leaves his/her job; o dies; o becomes disabled (as that term is defined in the Code); or o experiences hardship. However, in the case of hardship, the Owner can only withdraw the premium and not any earnings. Withdrawals - Roth IRAs. Subject to certain limitations, individuals may also purchase a type of non-deductible IRA annuity known as a Roth IRA annuity. Qualified distributions from Roth IRA annuities are entirely federal income tax free. A qualified distribution requires that the individual has held the Roth IRA annuity for at least five years and, in addition, that the distribution is made either after the individual reaches age 59 1/2, on account of the individual's death or disability, or as a qualified first-time home purchase, subject to $10,000 lifetime maximum, for the individual, or for a spouse, child, grandchild or ancestor. Constructive Withdrawals - Investment Adviser Fees. Withdrawals from non-qualified Contracts for the payment of investment adviser fees will be considered taxable distributions from the Contract. In a series of Private Letter Rulings, however, the Internal Revenue Service has held that the payment of investment adviser fees from a tax-qualified Contract need not be considered a distribution for income tax purposes. Under the facts in these Rulings: o there was a written agreement providing for payments of the fees solely from the annuity Contract, o the Contract Owner had no liability for the fees, and o the fees were paid solely from the annuity Contract to the adviser. Extension of Latest Income Date. If you do not annuitize your non-qualified Contract on or before the latest Income Date, it is possible that the IRS could challenge the status of your Contract as an annuity Contract for tax purposes. The result of such a challenge could be that you would be viewed as either constructively receiving the increase in the Contract Value each year from the inception of the Contract or the entire increase in the Contract Value would be taxable in the year of your Latest Income Date. In either situation, you could realize taxable income even if the Contract proceeds are not distributed to you at that time. Accordingly, before purchasing a Contract, you should consult your tax advisor with respect to these issues. Death Benefits. None of the death benefits paid under the Contract to the Beneficiary will be tax-exempt life insurance benefits. The rules governing the taxation of payments from an annuity Contract, as discussed above, generally apply to the payment of death benefits and depend on whether the death benefits are paid as a lump sum or as annuity payments. Estate or gift taxes may also apply. Assignment. An assignment of your Contract will generally be a taxable event. Assignments of a tax-qualified Contract may also be limited by the Code and the Employee Retirement Income Security Act of 1974, as amended. These limits are summarized in the SAI. You should consult your tax adviser prior to making any assignment of your Contract. Diversification. The Code provides that the underlying investments for a non-qualified variable annuity must satisfy certain diversification requirements in order to be treated as an annuity Contract. We believe that the underlying investments are being managed so as to comply with these requirements. A fuller discussion of the diversification requirements is contained in the SAI. Owner Control. In a Revenue Ruling issued in 2003, the Internal Revenue Service (IRS) considered certain variable annuity and variable life insurance contracts and held that the types of actual and potential control that the contract owners could exercise over the investment assets held by the insurance company under these variable contracts was not sufficient to cause the contract owners to be 45 treated as the owners of those assets and thus to be subject to current income tax on the income and gains produced by those assets. Under the Contract, like the contracts described in the Revenue Ruling, there will be no arrangement, plan, contract or agreement between the Contract Owner and Jackson regarding the availability of a particular investment option and other than the Contract Owner's right to allocate premiums and transfer funds among the available sub-accounts, all investment decisions concerning the sub-accounts will be made by the insurance company or an advisor in its sole and absolute discretion. The Contract will differ from the contracts described in the Revenue Ruling, in two respects. The first difference is that the contract in the Revenue Ruling provided 12 investment options with the insurance company having the ability to add an additional 8 options whereas a Contract offers 3 Investment Divisions and at least one Fixed Account option. The second difference is that the owner of a contract in the Revenue Ruling could only make one transfer per 30-day period without a fee whereas during the accumulation phase, a Contract Owner will be permitted to make up to 15 transfers in any one year without a charge. The Revenue Ruling states that whether the owner of a variable contract is to be treated as the owner of the assets held by the insurance company under the contract will depend on all of the facts and circumstances. Jackson does not believe that the differences between the Contract and the contracts described in the Revenue Ruling with respect to the number of investment choices and the number of investment transfers that can be made under the contract without an additional charge should prevent the holding in the Revenue Ruling from applying to the Owner of a Contract. At this time, however, it cannot be determined whether additional guidance will be provided by the IRS on this issue and what standards may be contained in such guidance. We reserve the right to modify the Contract to the extent required to maintain favorable tax treatment. Withholding. In general, the income portion of distributions from a Contract are subject to 10% federal income tax withholding and the income portion of income payments are subject to withholding at the same rate as wages unless you elect not to have tax withheld. Some states have enacted similar rules. Different rules may apply to payments delivered outside the United States. Eligible rollover distributions from a Contract issued under certain types of tax-qualified plans will be subject to federal tax withholding at a mandatory 20% rate unless the distribution is made as a direct rollover to a tax-qualified plan or to an individual retirement account or annuity. The Code generally allows the rollover of most distributions to and from tax-qualified plans, tax-sheltered annuities, Individual Retirement Annuities and eligible deferred compensation plans of state or local governments. Distributions which may not be rolled over are those which are: (a) one of a series of substantially equal annual (or more frequent) payments made (a) over the life or life expectancy of the employee, (b) the joint lives or joint life expectancies of the employee and the employee's Beneficiary, or (c) for a specified period of ten years or more; (b) a required minimum distribution; (c) a hardship withdrawal; or (d) the non-taxable portion of a distribution. JACKSON TAXATION We will pay company income taxes on the taxable corporate earnings created by this separate account product adjusted for various permissible deductions and certain tax benefits discussed below. While we may consider company income tax liabilities and tax benefits when pricing our products, we do not currently include our income tax liabilities in the charges you pay under the contract. We will periodically review the issue of charging for these taxes and may impose a charge in the future. (We do impose a so-called "Federal (DAC) Tax Charge" under variable life insurance policies, but the "Federal (DAC) Tax Charge" merely compensates us for the required deferral of acquisition cost and does not constitute company income taxes.) In calculating our corporate income tax liability, we derive certain corporate income tax benefits associated with the investment of company assets, including separate account assets that are treated as company assets under applicable income tax law. These benefits reduce our overall corporate income tax liability. Under current law, such benefits may include dividends received deductions and foreign tax credits which can be material. We do not pass these benefits through to the separate accounts, principally because: (i) the great bulk of the benefits results from the dividends received deduction, which involves no reduction in the dollar amount of dividends that the separate account receives; (ii) product owners are not the owners of the assets generating the benefits under applicable income tax law; and (iii) while we impose a so-called "Federal (DAC) tax charge" under variable life insurance policies, we do not currently include company income taxes in the charges owners pay under the products. 46 OTHER INFORMATION Dollar Cost Averaging. If the amount allocated to the Investment Divisions plus the amount allocated to a Fixed Account option is at least $15,000, you can arrange to have a dollar amount or percentage of money periodically transferred automatically into the Investment Divisions and other Fixed Account options from the one-year Fixed Account or any of the Investment Divisions. If the Fixed Account options are not available or otherwise restricted, dollar cost averaging will be exclusively from the Investment Divisions. In the case of transfers from the one-year Fixed Account or Investment Divisions with a stable unit value to the Investment Divisions, this can let you pay a lower average cost per unit over time than you would receive if you made a one-time purchase. Transfers from the more volatile Investment Divisions may not result in lower average costs and such Investment Divisions may not be an appropriate source of dollar cost averaging transfers in volatile markets. There is no charge for Dollar Cost Averaging. Certain restrictions may apply. Dollar Cost Averaging Plus (DCA+). The DCA+ Fixed Account is a "source account" designed for dollar cost averaging transfers to Investment Divisions or systematic transfers to other Fixed Accounts. The DCA+ Fixed Account is credited with an enhanced interest rate. If a DCA+ Fixed Account is selected, monies in the DCA+ Fixed Account will be systematically transferred to the Investment Divisions or other Fixed Accounts chosen over the DCA+ term selected. There is no charge for DCA+. The DCA+ Fixed Account is only available for new premiums. Premiums are accepted during the first six Contract Months only. You should consult your Jackson representative with respect to the current availability of the Fixed Account options and the availability of DCA+. Earnings Sweep. You can choose to move your earnings from the source accounts (only applicable from the one year Fixed Account Option, if currently available). There is no charge for Earnings Sweep. Rebalancing. You can arrange to have us automatically reallocate your Contract Value among Investment Divisions and the one-year Fixed Account (if currently available) periodically to maintain your selected allocation percentages. Rebalancing is consistent with maintaining your allocation of investments among market segments, although it is accomplished by reducing your Contract Value allocated to the better performing Investment Divisions. There is no charge for Rebalancing. You may cancel a Dollar Cost Averaging, Earnings Sweep or Rebalancing program using whatever methods you use to change your allocation instructions. Free Look. You may return your Contract to the selling agent or us within ten days (or longer if required by your state) after receiving it. We will return o the Contract Value, plus o any fees (other than asset-based fees) and expenses deducted from the premiums. We will determine the Contract Value in the Investment Divisions as of the date we receive the Contract or the date you return it to the selling agent. We will return premium payments where required by law. In some states, we are required to hold the premiums of a senior citizen in the Fixed Account during the free look period, unless we are specifically directed to allocate the premiums to the Investment Divisions. State laws vary; your free look rights will depend on the laws of the state in which you purchased the Contract. Advertising. From time to time, we may advertise several types of performance of the Investment Divisions. o Total return is the overall change in the value of an investment in an Investment Division over a given period of time. o Standardized average annual total return is calculated in accordance with SEC guidelines. o Non-standardized total return may be for periods other than those required by, or may otherwise differ from, standardized average annual total return. For example, if a Fund has been in existence longer than the Investment Division, we may show non-standardized performance for periods that begin on the inception date of the Fund, rather than the inception date of the Investment Division. o Yield refers to the income generated by an investment over a given period of time. Performance will be calculated by determining the percentage change in the value of an Accumulation Unit by dividing the increase (decrease) for that unit by the value of the Accumulation Unit at the beginning of the period. Performance will reflect the deduction of the mortality and expense risk and administration charges and may reflect the deduction of the annual contract maintenance and withdrawal charges, but will not reflect charges for optional features except in performance data used in sales materials that promote 47 those optional features. The deduction of withdrawal charges and/or the charges for optional features would reduce the percentage increase or make greater any percentage decrease. Restrictions Under the Texas Optional Retirement Program (ORP). Contracts issued to participants in ORP contain restrictions required under the Texas Administrative Code. In accordance with those restrictions, a participant in ORP will not be permitted to make withdrawals prior to such participant's retirement, death, attainment of age 70 1/2 or termination of employment in a Texas public institution of higher education. The restrictions on withdrawal do not apply in the event a participant in ORP transfers the Contract Value to another approved contract or vendor during the period of ORP participation. These requirements will apply to any other jurisdiction with comparable requirements. Modification of Your Contract. Only our President, Vice President, Secretary or Assistant Secretary may approve a change to or waive a provision of your Contract. Any change or waiver must be in writing. We may change the terms of your Contract without your consent in order to comply with changes in applicable law, or otherwise as we deem necessary. Legal Proceedings. Jackson is a defendant in a number of civil proceedings substantially similar to other litigation brought against many life insurers alleging misconduct in the sale or administration of insurance products. These matters are sometimes referred to as market conduct litigation. The market conduct litigation currently pending against Jackson asserts various theories of liability and purports to be filed on behalf of individuals or differing classes persons in the United States who purchased either life insurance or annuity products from Jackson during periods ranging from 1981 to present. Jackson has retained national and local counsel experienced in the handling of such litigation. To date, such litigation has either been resolved by Jackson on a non-material basis, or is being vigorously defended. Jackson accrues for legal contingencies once the contingency is deemed to be probable and estimable. Please see the Jackson National Life Insurance Company and Subsidiaries Consolidated Financial Statements for the year ending December 31, 2008, for information concerning such amounts that have been accrued. At this time, it is not feasible to make a meaningful estimate of the amount or range of any additional losses that could result from an unfavorable outcome in such actions. PRIVACY POLICY Collection of Nonpublic Personal Information. We collect nonpublic personal information (financial and health) about you from some or all of the following sources: o Information we receive from you on applications or other forms; o Information about your transactions with us; o Information we receive from a consumer reporting agency; o Information we obtain from others in the process of verifying information you provide us; and o Individually identifiable health information, such as your medical history, when you have applied for a life insurance policy. Disclosure of Current and Former Customer Nonpublic Personal Information. We will not disclose our current and former customers' nonpublic personal information to affiliated or nonaffiliated third parties, except as permitted by law. To the extent permitted by law, we may disclose to either affiliated or nonaffiliated third parties all of the nonpublic personal financial information that we collect about our customers, as described above. In general, any disclosures to affiliated or nonaffiliated parties will be for the purpose of them providing services for us so that we may more efficiently administer your Contract and process the transactions and services you request. We do not sell information to either affiliated or non-affiliated parties. We also share customer name and address information with unaffiliated mailers to assist in the mailing of company newsletters and other Contract Owner communications. Our agreements with these third parties require them to use this information responsibly and restrict their ability to share this information with other parties. We do not internally or externally share nonpublic personal health information other than, as permitted by law, to process transactions or to provide services that you have requested. These transactions or services include, but are not limited to, underwriting life insurance policies, obtaining reinsurance of life policies and processing claims for waiver of premium, accelerated death benefits, terminal illness benefits or death benefits. 48 You should know that your representative is independent of Jackson. He or she is responsible for the use and security of information you provide him or her. Please contact your representative if you have questions about his or her privacy policy. Security to Protect the Confidentiality of Nonpublic Personal Information. We have security practices and procedures in place to prevent unauthorized access to your nonpublic personal information. Our practices of safeguarding your information help protect against the criminal use of the information. Our employees are bound by a Code of Conduct requiring that all information be kept in strict confidence, and they are subject to disciplinary action for violation of the Code. We restrict access to nonpublic personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic and procedural safeguards that comply with federal and state regulations to guard your nonpublic personal information. 49 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION General Information and History .......................................... 2 Services ................................................................. 2 Purchase of Securities Being Offered ..................................... 3 Underwriters ............................................................. 3 Calculation of Performance ............................................... 3 Additional Tax Information ............................................... 4 Annuity Provisions ....................................................... 15 Net Investment Factor .................................................... 16 Condensed Financial Information .......................................... 17 50 APPENDIX A TRADEMARKS, SERVICE MARKS, AND RELATED DISCLOSURES "JNL(R)," "Jackson National(R)" and "Jackson(SM)" are trademarks or service marks of Jackson National Life Insurance Company. "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," and "Standard & Poor's 500," are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Jackson. Any investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any Standard & Poor's Index are not sponsored, endorsed, sold or promoted by Standard & Poor's Financial Services LLC, a wholly owned subsidiary of The McGraw-Hill Companies, Inc. ("S&P") and its affiliates. S&P and its affiliates make no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in these Funds. Among the fund options considered are index funds based on the S&P 500 and other indexes that are published by S&P. S&P typically receives license fees from the issuers of such funds, some of which may be based on the amount of assets invested in the fund. Please see the Statement of Additional Information which sets forth certain additional disclaimers and limitations of liabilities on behalf of S&P. B-1 APPENDIX B GMWB PROSPECTUS EXAMPLES Unless otherwise specified, the following examples assume you elected a 5% GMWB when you purchased your Contract, no other optional benefits were elected, your initial premium payment was $100,000, your GAWA is greater than your RMD at the time a withdrawal is requested, and all partial withdrawals requested include any applicable charges. The examples also assume that the GMWB and any For Life guarantee have not been terminated as described in the Access to Your Money section of this prospectus. Example 1: At election, your GWB and GAWA are determined. o Example 1a: If the GMWB is elected at issue: o Your initial GWB is $100,000, which is your initial Premium payment. o Your GAWA is $5,000, which is 5% of your initial GWB ($100,000*0.05 = $5,000). o Example 1b: If the GMWB is elected after issue when the Contract Value is $105,000: o Your initial GWB is $105,000, which is your Contract Value on the effective date of the endorsement. o Your GAWA is $5,250, which is 5% of your initial GWB ($105,000*0.05 = $5,250). Example 2: Upon payment of a subsequent Premium, your GWB and GAWA are re-determined. Your GWB is subject to a maximum of $5,000,000. o Example 2a: If you make an additional Premium payment of $50,000 and your GWB is $100,000 at the time of payment: o Your new GWB is $150,000, which is your GWB prior to the additional Premium payment ($100,000) plus your additional Premium payment ($50,000). o Your GAWA is $7,500, which is your GAWA prior to the additional Premium payment ($5,000) plus 5% of your additional Premium payment ($50,000*0.05 = $2,500). o Example 2b: If you make an additional Premium payment of $100,000 and your GWB is $4,950,000 and your GAWA is $247,500 at the time of payment: o Your new GWB is $5,000,000, which is the maximum, since your GWB prior to the additional Premium payment ($4,950,000) plus your additional Premium payment ($100,000) exceeds the maximum of $5,000,000. o Your GAWA is $250,000, which is your GAWA prior to the additional Premium payment ($247,500) plus 5% of the allowable $50,000 increase in your GWB (($5,000,000 - $4,950,000)*0.05 = $2,500). Example 3: Upon withdrawal of the guaranteed amount (which is your GAWA for endorsements for non-qualified contracts or which is the greater of your GAWA or your RMD for those GMWBs related to qualified contracts), your GWB and GAWA are re-determined. o Example 3a: If you withdraw an amount equal to your GAWA ($5,000) when your GWB is $100,000: o Your new GWB is $95,000, which is your GWB prior to the withdrawal ($100,000) less the amount of the withdrawal ($5,000). o Your GAWA for the next year remains $5,000, since you did not withdraw an amount that exceeds your GAWA. o If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($95,000 / $5,000 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, prior to the Latest Income Date. o Example 3b: If you withdraw an amount equal to your RMD ($7,500), which is greater than your GAWA ($5,000) when your GWB is $100,000 and your RMD provision is in effect for your endorsement: o Your new GWB is $92,500, which is your GWB prior to the withdrawal ($100,000) less the amount of the withdrawal ($7,500). o Your GAWA for the next year remains $5,000, since your withdrawal did not exceed the greater of your GAWA ($5,000) or your RMD ($7,500). B-1 o If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($92,500 / $5,000 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and the amount of the final withdrawal would be less than your GAWA (and equal to your remaining GWB) if your endorsement is not a For Life GMWB or if your endorsement is a For Life GMWB and the For Life Guarantee is not in effect. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, prior to the Latest Income Date. o Notes: o If your endorsement does not include a For Life Guarantee or if the For Life Guarantee is not in effect, your GAWA would not be permitted to exceed your new GWB. o Withdrawals taken in connection with a GMWB are considered the same as any other withdrawal for the purpose of determining all other values under the Contract. In the case where your minimum death benefit is reduced proportionately for withdrawals, your death benefit may be reduced by more than the amount of the withdrawal. Example 4: Upon withdrawal of an amount that exceeds your guaranteed amount (as defined in Example 3), your GWB and GAWA are re-determined. (This example does not apply if you purchase AutoGuard 5 and the effective date of the endorsement is on or after December 3, 2007.) o Example 4a: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $120,000 and your GWB is $100,000: o Your new GWB is $90,000, which is the lesser of 1) your GWB prior to the withdrawal less the amount of the withdrawal ($100,000 - $10,000 = $90,000) or 2) your Contract Value prior to the withdrawal less the amount of the withdrawal ($120,000 - $10,000 = $110,000). o Your GAWA is recalculated based on the type of endorsement you have elected. - If your endorsement is not a For Life GMWB, your GAWA for the next year remains $5,000, since it is recalculated to equal the lesser of 1) your GAWA prior to the withdrawal ($5,000) or 2) 5% of your Contract Value after the withdrawal ($110,000*0.05 = $5,500). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 18 years to deplete your GWB ($90,000 / $5,000 per year = 18 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). - If your endorsement is a For Life GMWB, your GAWA is recalculated to equal $4,500, which is 5% of your new GWB ($90,000*0.05 = $4,500), and if the For Life Guarantee was effective prior to the withdrawal, it remains in effect. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years, prior to the Latest Income Date, to deplete your GWB ($90,000 / $4,500 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, prior to the Latest Income Date. o Example 4b: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $105,000 and your GWB is $100,000: o Your new GWB is $90,000, which is the lesser of 1) your GWB prior to the withdrawal less the amount of the withdrawal ($100,000 - $10,000 = $90,000) or 2) your Contract Value prior to the withdrawal less the amount of the withdrawal ($105,000 - $10,000 = $95,000). o Your GAWA is recalculated based on the type of endorsement you have elected. - If your endorsement is not a For Life GMWB, your GAWA for the next year is recalculated to equal $4,750, which is the lesser of 1) your GAWA prior to the withdrawal ($5,000) or 2) 5% of your Contract Value after the withdrawal ($95,000*0.05 = $4,750). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($90,000 / $4,750 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and the amount of your final withdrawal would be less than your GAWA (and equal to your remaining GWB). - If your endorsement is a For Life GMWB, your GAWA is recalculated to equal $4,500, which is 5% of your new GWB ($90,000*0.05 = $4,500), and if the For Life Guarantee was effective prior to the withdrawal, it remains in effect. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years, prior to the Latest Income Date, to deplete your GWB ($90,000 / $4,500 per year = 20 years), provided that there are no B-2 further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, prior to the Latest Income Date. o Example 4c: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $90,000 and your GWB is $100,000: o Your new GWB is $80,000, which is the lesser of 1) your GWB prior to the withdrawal less the amount of the withdrawal ($100,000 - $10,000 = $90,000) or 2) your Contract Value prior to the withdrawal less the amount of the withdrawal ($90,000 - $10,000 = $80,000). o Your GAWA is recalculated based on the type of endorsement you have elected. - If your endorsement is not a For Life GMWB, your GAWA for the next year is recalculated to equal $4,000, which is the lesser of 1) your GAWA prior to the withdrawal ($5,000) or 2) 5% of your Contract Value after the withdrawal ($80,000*0.05 = $4,000). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($80,000 / $4,000 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). - If your endorsement is a For Life GMWB, your GAWA is recalculated to equal $4,000, which is 5% of your new GWB ($80,000*0.05 = $4,000), and if the For Life Guarantee was effective prior to the withdrawal, it remains in effect. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years, prior to the Latest Income Date, to deplete your GWB ($80,000 / $4,000 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, prior to the Latest Income Date. o Notes: o If your endorsement does not include a For Life Guarantee or if the For Life Guarantee is not in effect, your GAWA would not be permitted to exceed your remaining GWB. o Withdrawals taken in connection with a GMWB are considered the same as any other withdrawal for the purpose of determining all other values under the Contract. In the case where your minimum death benefit is reduced proportionately for withdrawals, your death benefit may be reduced by more than the amount of the withdrawal. Example 5: Upon withdrawal of an amount that exceeds your guaranteed amount (as defined in Example 3), your GWB and GAWA are re-determined. (This example only applies if you purchase AutoGuard 5 and the effective date of the endorsement is on or after December 3, 2007.) o Example 5a: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $130,000 and your GWB is $100,000: o Your new GWB is $91,200, which is your GWB reduced dollar for dollar for your GAWA, then reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [($100,000 - $5,000)*(1 - ($10,000 - $5,000) / ($130,000 - $5,000)) = $91,200]. o Your GAWA is recalculated to equal $4,800, which is your current GAWA reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [$5,000 * (1 - ($10,000 - $5,000) / ($130,000 - $5,000)) = $4,800]. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($91,200 / $4,800 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, provided that the withdrawals are taken prior to the Latest Income Date. o Example 5b: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $105,000 and your GWB is $100,000: o Your GWB is $90,250, which is your GWB reduced dollar for dollar for your GAWA, then reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [($100,000 - $5,000)*(1 - ($10,000 - $5,000) / ($105,000 - $5,000)) = $90,250]. B-3 o Your GAWA is $4,750, which is your current GAWA reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [$5,000 * (1 - ($10,000 - $5,000)/($105,000 - $5,000)) = $4,750]. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($90,250 / $4,750 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. o Example 5c: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $55,000 and your GWB is $100,000: o Your GWB is $85,500, which is your GWB reduced dollar for dollar for your GAWA, then reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [($100,000 - $5,000) * (1 - ($10,000 - $5,000) / ($55,000 - $5,000)) = $85,500]. o Your GAWA is $4,500, which is your current GAWA reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [$5,000*(1-($10,000-$5,000)/($55,000 - $5,000))=$4,500]. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($85,500 / $4,500 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. o Notes: o Your GAWA would not be permitted to exceed your remaining GWB. o Withdrawals taken in connection with a GMWB are considered the same as any other withdrawal for the purpose of determining all other values under the Contract. In the case where your minimum death benefit is reduced proportionately for withdrawals, your death benefit may be reduced by more than the amount of the withdrawal. Example 6: Upon step-up, your GWB and GAWA are re-determined. o Example 6a: If at the time of step-up your Contract Value is $200,000, your GWB is $100,000 and your GAWA is $5,000: o Your new GWB is recalculated to equal $200,000, which is equal to your Contract Value. o Your GAWA for the next year is recalculated to equal $10,000, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($200,000*0.05 = $10,000). o After step-up, if you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($200,000 / $10,000 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, prior to the Latest Income Date. o Example 6b: If at the time of step-up your Contract Value is $90,000, your GWB is $80,000 and your GAWA is $5,000: o Your new GWB is recalculated to equal $90,000, which is equal to your Contract Value. o Your GAWA for the next year remains $5,000, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($90,000*0.05 = $4,500). o After step-up, if you continued to take annual withdrawals equal to your GAWA, it would take an additional 18 years to deplete your GWB ($90,000 / $5,000 per year = 18 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 18 years, prior to the Latest Income Date. o Notes: o The election of an Owner-initiated step-up may result in an increase in the GMWB charge. If the charge does increase, a separate calculation would be recommended to establish if the step-up is a beneficial election. o Your GWB will only automatically step up to the Contract Value if the Contract Value is greater than your GWB at the time of the automatic step-up. B-4 Example 7: Impact of the order of transactions. o If prior to any transactions your Contract Value is $200,000, your GWB is $100,000 and you wish to step up your GWB (or your GWB is due to step up automatically) and you also wish to take a withdrawal of an amount equal to your GAWA ($5,000): o If you request the withdrawal after the step-up, upon step-up, your GWB is set equal to $200,000, which is your Contract Value. At that time, your GAWA is recalculated and is equal to $10,000, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($200,000*0.05 = $10,000). Following the step-up and after the withdrawal of $5,000, your new GWB is $195,000, which is your GWB less the amount of the withdrawal ($200,000 - $5,000 = $195,000) and your GAWA will remain at $10,000 since the amount of the withdrawal does not exceed your GAWA. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($195,000 / $10,000 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and the amount of the final withdrawal would be less than your GAWA (and equal to your remaining GWB). However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, prior to the Latest Income Date. o If you requested the withdrawal prior to the step-up, immediately following the withdrawal transaction, your new GWB is $95,000, which is your GWB less the amount of the withdrawal ($100,000 - $5,000 = $95,000) and your Contract Value becomes $195,000, which is your Contract Value prior to the withdrawal less the amount of the withdrawal ($200,000 - $5,000 = $195,000). Upon step-up following the withdrawal, your GWB is set equal to $195,000, which is your Contract Value. At that time, your GAWA is recalculated and is equal to $9,750, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($195,000*0.05 = $9,750). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($195,000 / $9,750 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal). However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, prior to the Latest Income Date. o Notes: o As the example illustrates, when considering a request for a withdrawal at or near the same time as the election or automatic application of a step-up, the order of the transactions may impact your GAWA. If the step-up would result in an increase in your GAWA and the requested withdrawal is less than or equal to your new GAWA, your GAWA resulting after the two transactions would be greater if the withdrawal is requested after the step-up is applied. If the step-up does not increase your GAWA or the withdrawal requested is greater than your new GAWA, your GAWA resulting from the transactions is the same regardless of the order of the transactions. o This example would also apply in situations when the withdrawal exceeded your GAWA but not your permissible RMD. o The election of an Owner-initiated step-up may result in an increase in the GMWB charge. o Your GWB will only automatically step up to the Contract Value if the Contract Value is greater than your GWB at the time of the automatic step-up. o If your endorsement does not include a For Life Guarantee or if the For Life Guarantee is not in effect, your GAWA would not be permitted to exceed your remaining GWB. o Withdrawals taken in connection with a GMWB are considered the same as any other withdrawal for the purpose of determining all other values under the Contract. In the case where your minimum death benefit is reduced proportionately for withdrawals, your death benefit may be reduced by more than the amount of the withdrawal. Example 8: For Life Guarantee becomes effective after the effective date of the endorsement. At the time the For Life Guarantee becomes effective, your GAWA is re-determined. (This example only applies if your endorsement is a For Life GMWB.) o Example 8a: If on the Contract Anniversary on or immediately following your 65th birthday your Contract Value is $30,000, your GWB is $50,000, and your GAWA is $5,000: o Your GAWA for the next year is recalculated to equal $2,500, which is equal to 5% of the current GWB ($50,000*0.05 = $2,500). o The For Life Guarantee becomes effective, thus allowing you to make annual withdrawals equal to your GAWA for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option). Once the For Life Guarantee becomes effective, it remains in effect until the endorsement is terminated, as described in the Access to Your Money section of this prospectus, or upon continuation of the Contract by the spouse (unless your endorsement is a For Life B-5 GMWB with Joint Option and the spouse continuing the Contract is a Covered Life in which case the For Life Guarantee remains in effect upon continuation of the Contract by the spouse). o Example 8b: If your Contract Value has fallen to $0 prior to the Contract Anniversary on or immediately following your 65th birthday, your GWB is $50,000 and your GAWA is $5,000: o You will continue to receive automatic payments of a total annual amount that equals your GAWA until your GWB is depleted. However, your GAWA would not be permitted to exceed your remaining GWB. Your GAWA is not recalculated since the Contract Value is $0. o The For Life Guarantee does not become effective due to the depletion of the Contract Value prior to the effective date of the For Life Guarantee. o Example 8c: If on the Contract Anniversary on or immediately following your 65th birthday, your Contract Value is $50,000, your GWB is $0, and your GAWA is $5,000: o Your GAWA for the next year is recalculated to equal $0, which is equal to 5% of the current GWB ($0*0.05 = $0). o The For Life Guarantee becomes effective, thus allowing you to make annual withdrawals equal to your GAWA for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option). Once the For Life Guarantee becomes effective, it remains in effect until the endorsement is terminated, as described in the Access to Your Money section of this prospectus, or upon continuation of the Contract by the spouse (unless your endorsement is a For Life GMWB with Joint Option and the spouse continuing the Contract is a Covered Life in which case the For Life Guarantee remains in effect upon continuation of the Contract by the spouse). o Although your GAWA is $0, upon step-up your GWB and your GAWA would increase to values greater than $0 and since the For Life Guarantee has become effective, you could withdraw an annual amount equal to your GAWA for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option). o Notes: o For endorsements with a Joint Option, your GAWA is recalculated and the For Life Guarantee becomes effective on the Contract Anniversary on or immediately following the youngest Covered Life's 65th birthday. Example 9: For Life Guarantee on a For Life GMWB with Joint Option. (This example only applies if your endorsement is a For Life GMWB with Joint Option.) o If at the time of the first death of the Covered Lives the Contract Value is $105,000, your GWB is $100,000, and your GAWA is $5,000: o The spouse may continue the Contract and the For Life Guarantee will remain in effect or become effective on the Contract Anniversary on or immediately following the date that the youngest Covered Life attains (or would have attained) age 65. Once the For Life Guarantee becomes effective, the surviving Covered Life will be able to take annual withdrawals equal to the GAWA for the rest of his or her life. o Your GWB remains $100,000 and your GAWA remains $5,000. B-6 APPENDIX C BROKER-DEALER SUPPORT Below is a complete list of broker-dealers that received marketing and distribution and/or administrative support in 2008 from the Distributor in relation to the sale of our variable insurance products. 1st Discount Brokerage, Inc. Capital Analysts, Inc. Essex National Securities Harvest Capital 1st Global Capital Corp. Capital City Securities Feltl & Company Hazard & Siegel, Inc. Abbott Bennett Group LLC Capital Financial Group Ferris Baker Watts, Inc. HBW Securities A.G. Edwards & Sons, Inc. CCF Investments, Inc. FFP Securities, Inc. Heim, Young & Associates, Inc. Acorn Financial CCO Investment Services Corp. Fifth Third Securities Hornor Townsend & Kent, Inc. Advantage Capital Corp. Centennial Securities Company Financial Network Investment Huckin Financial Group, Inc. Advisors Marketing, Inc. Centaurus Financial, Inc. First Allied Securities, Inc. Huntington Investment Company AIG Financial Advisors Century Securities First Brokerage America IMS Securities Allegiant Securities CFD Investments, Inc. First Heartland Capital, Inc. Independent Financial Group American General Securities Chevy Chase Securities First Independent Financial Infinex Investments American Investors Company Choice Investments, Inc. First Merit Insurance Agency ING Financial American Portfolios Financial Colonial Brokerage FNB Brokerage Services Institutional Securities Corp. Ameriprise Advisor Services Colonial Financial Services Fortune Financial Services InterCarolina Financial Services Ameritas Investment Corp. Colonial Investments Services Founders Financial Securities Intersecurities, Inc. Apple Tree Investments Commonwealth Financial Network Fox & Company Investments, Inc. Intervest International Askar Corp. Community Bankers Securities FSC Securities Corp. Invest Financial Corp. Associated Securities Corp. Comprehensive Asset FTC Methods Inc. Investacorp, Inc. AXA Advisors, LLC Management, Inc. G.A. Repple and Company Investment Center, Inc. BancWest Investment Services Coordinated Capital Securities G.W. Sherwold Associates, Inc. Investment Centers of America, Inc. BB&T Investment Services Inc. Countrywide Investment GBA Financial Group, LLC Investment Professionals, Inc. BCG Securities Services Geneos Wealth Management, Inc. Investors Capital Corp. Bentley Lawrence Securities Crowell, Weedon & Company GF Investment Services J P Turner & Company, LLC Berthel Fisher & Company Crown Capital Securities L.P. GLP Investment Services J.J.B. Hilliard, W.L. Lyons, LLC Financial Services CUE Financial Group, Inc. Great American Advisors, Inc. J.W. Cole Financial, Inc. BFT Financial CUNA Brokerage Services, Inc. Great Nation Investment Corp. Janney Montgomery Scott, LLC BOSC, Inc. CUSO Financial Services Great Southern Investments Jefferson Pilot Securities Corp. Brecek & Young Advisors, Inc. Cutter and Company Gunn Allen Financial, Inc. John James Investments, Inc. Brewer Financial Services D.A. Davidson & Company GWN Securities, Inc. Kalos Capital, Inc. Broad Street Securities Dunwoody Brokerage H D Vest Investment Securities KCD Financial Broker Dealer Financial Services, Inc. H&R Block Financial Advisors Key Investments Brookstone Securities E Planning Securities, Inc. H. Beck, Inc. KMS Financial Bueter & Company, Inc. Economy Securities, Inc. Hantz Financial Services, Inc. Koehler Financial, LLC Cadaret, Grant & Company EDI Financial, Inc. Harbour Investment, Inc. Kovack Securities, Inc. Calton & Associates, Inc. Ensemble Financial Services Harger & Company Labrunerie Financial, Inc. Cambridge Investment Research Equable Securities Corp. Harold Dance Investments Landolt Securities, Inc. Cantella & Company Equitas America Equity Services, Inc. ESI Financial
C-1 Lasalle St Securities LLC O.N. Equity Sales Company Royal Alliance Triune Capital Advisors Legend Equities Corp. OneAmerica Securities Associates, Inc. Trustmont Financial Group Leigh Baldwin & Company, LLC Oppenheimer & Company Sammons Securities UBS Financial Services, Inc. Lesko Securities, Inc. P.T. Bloyd & Associates Company, Inc. UnionBanc Investment Liberty Partners Financial Pacific West Schlitt Investor Services, Inc. Services LLC Life Investors Financial Packerland Brokerage Services Scott & Stringfellow, Inc. United Equity Securities Lincoln Financial Park Avenue Securities Securian Financial Services United Planners Financial Securities Corp. Paulson Investment Company Securities America, Inc. USA Advanced Planners, Inc. LPL Financial Corporation Peak Securities Securities Service Network USA Financial Securities Corp. Madison Ave Securities Pension Planners Securities Sicor Securities, Inc. UVEST Corp. Main Street Securities Peoples Securities Sigma Financial Corp. Valmark Securities, Inc. Medallion Investment Planmember Securities Signator Investors, Inc. Vanderbilt Securities LLC Services Inc. Prime Capital Services Inc. SII Investments, Inc. VSR Financial Services, Inc. Merrimac Corporate Prime Financial Services Sorrento Pacific Wachovia Securities LLC Securities Inc. Primevest South West Securities Financial Wall Street Financial Group Metlife Securities Pro Equities, Inc. Services, Inc. Walnut Street Securities Michigan Securities Inc. Professional Asset Management Spectrum Capital WaMu Investments, Inc. Mid Atlantic Securities Inc. Prospera Financial Spire Securities LLC Waterstone Financial Group Milkie/Ferguson Investments Services, Inc. Stanford Group Company Webster Investments MML Investors Services Inc. Purshe Kaplan Sterling Sterne Agee Financial Services Wedbush Morgan Securities Money Concepts Capital Corp. Qa3 Financial Corp. Stifel Nicolaus & Company Western Equity Group Moors & Cabot Inc. Questar Capital Corp. Strategic Financial Alliance Western International Morgan Keegan & Company R.L. Harger & Associates Inc. Summit Alliance Securities LLC Securities, Inc. Morgan Peabody, Inc. Raymond James & Summit Brokerage Wilmington Brokerage Services Multi-Financial Securities Corp. Associates, Inc. Services, Inc. Woodbury Financial Mutual Service Corp. RBC Capital Markets Corp. Summit Equities Inc. Services, Inc. National Planning Corporation RC Dunwoody & Associates Inc. Sunset Financial Workman Securities Corp. National Securities Corp. Regal Securities Inc. Services, Inc. World Equity Group, Inc. New England Securities Resource Horizons Group Syndicated Capital Inc. World Financial Group Newbridge Securities Corp. Riderwood Group Synergy Investment Group World Group Securities, Inc. Next Financial Group, Inc. River Stone Wealth Management TFS Securities Inc. WRP Investments, Inc. NFP Securities, Inc. RNR Securities LLC The Leaders Group Wunderlich Securities North Atlantic Securities LLC Robert W Baird & Company, Inc. Thomas McDonald Partners North Ridge Securities Corp. Roche Securities Sales Thrivent Investment Management NYLife Securities LLC Tower Square Securities, Inc. Transamerica Financial Advisors, Inc. Triad Advisors, Inc.
C-2 APPENDIX D ACCUMULATION UNIT VALUES The tables reflect the values of accumulation units for each Investment Division for the beginning and end of the periods indicated, and the number of accumulation units outstanding as of the end of the periods indicated - for each of a base Contract (with no optional endorsements) and for each Contract with the most expensive combination of optional endorsements (through the end of the most recent period). This information derives from the financial statements of the Separate Account, which together constitute the Separate Account's condensed financial information. The annualized charge for your Contract may fall in between the charge for a base Contract and a Contract with the most expensive combination of optional endorsements, and complete condensed financial information about the Separate Account is available in the SAI. Contact the Annuity Service Center to request your copy free of charge, and contact information is on the cover page of the prospectus. Also, please ask about the more timely accumulation unit values that are available for each Investment Division. Previously, the JNL/S&P Growth Retirement Strategy Fund, the JNL/S&P Moderate Growth Retirement Strategy Fund, and JNL/S&P Moderate Retirement Strategy Fund (collectively "Retirement Funds") were offered as Funds under this Contract. However, effective April 6, 2009, these Retirement Funds were merged with the JNL/S&P Disciplined Growth Fund, JNL/S&P Disciplined Moderate Growth Fund and JNL/S&P Disciplined Moderate Fund, as outlined below:
---------------------------------------- ------------------------------------------------ CURRENTLY OFFERED FUND PREVIOUSLY OFFERED FUND ---------------------------------------- ------------------------------------------------ JNL/S&P Disciplined Growth Fund JNL/S&P Growth Retirement Strategy Fund ---------------------------------------- ------------------------------------------------ JNL/S&P Disciplined Moderate Growth Fund JNL/S&P Moderate Growth Retirement Strategy Fund ---------------------------------------- ------------------------------------------------ JNL/S&P Disciplined Moderate Fund JNL/S&P Moderate Retirement Strategy Fund ---------------------------------------- ------------------------------------------------
At the end of the tables in the SAI are the footnotes with the beginning dates of activity for each Investment Division at every applicable charge level (annualized) under the Contract. D-1 Accumulation Unit Values Base Contract - 0.50%
December 31, December 31, Investment Divisions 2008 2007 ------------ ------------ JNL/S&P Growth Retirement Strategy Division(1353) Accumulation unit value: Beginning of period $ 10.72 $ 10.70 End of period $ 7.32 $ 10.72 Accumulation units outstanding at the end of period 6,676 5,264 JNL/S&P Moderate Growth Retirement Strategy Division(1353) Accumulation unit value: Beginning of period $ 10.64 $ 10.49 End of period $ 7.97 $ 10.64 Accumulation units outstanding at the end of period 9,147 6,073 JNL/S&P Moderate Retirement Strategy Division(1353) Accumulation unit value: Beginning of period $ 10.52 $ 10.29 End of period $ 8.64 $ 10.52 Accumulation units outstanding at the end of period 38,008 7,755
Accumulation Unit Values Base Contract - 1.05%
December 31, December 31, Investment Divisions 2008 2007 ------------ ------------ JNL/S&P Growth Retirement Strategy Division(1276) Accumulation unit value: Beginning of period $ 10.67 $ 10.09 End of period $ 7.24 $ 10.67 Accumulation units outstanding at the end of period 19,972 12,974 JNL/S&P Moderate Growth Retirement Strategy Division(1290) Accumulation unit value: Beginning of period $ 10.58 $ 10.29 End of period $ 7.88 $ 10.58 Accumulation units outstanding at the end of period 14,636 9,783 JNL/S&P Moderate Retirement Strategy Division(1315) Accumulation unit value: Beginning of period $ 10.46 $ 10.33 End of period $ 8.55 $ 10.46 Accumulation units outstanding at the end of period 2,602 1,152
D-2 -------------------------------------------------------------------------------- Questions: If you have any questions about your Contract, you may contact us at: Annuity Service Center: 1 (800) 873-5654 (8 a.m. - 8 p.m. ET) Mail Address: P.O. Box 30314, Lansing, Michigan 48909-7814 Delivery Address: 1 Corporate Way, Lansing, Michigan 48951 Institutional Marketing Group 1 (800) 777-7779 (8 a.m. - 8 p.m. ET) Service Center: (for Contracts purchased through a bank or another financial institution) Mail Address: P.O. Box 30392, Lansing, Michigan 48909-7892 Delivery Address: 1 Corporate Way, Lansing, Michigan 48951 Attn: IMG Home Office: 1 Corporate Way, Lansing, Michigan 48951
-------------------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION APRIL 6, 2009 INDIVIDUAL AND GROUP MODIFIED SINGLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS ISSUED BY THE JACKSON NATIONAL SEPARATE ACCOUNT - I OF JACKSON NATIONAL LIFE INSURANCE COMPANY(R) This Statement of Additional Information (SAI) is not a prospectus. It contains information in addition to and more detailed than set forth in the Prospectus and should be read in conjunction with the Prospectus dated April 6, 2009. The Prospectus may be obtained from Jackson National Life Insurance Company by writing P.O. Box 30314, Lansing, Michigan 48909-7814, or calling 1-800-873-5654. TABLE OF CONTENTS PAGE General Information and History 2 Services 2 Purchase of Securities Being Offered 3 Underwriters 3 Calculation of Performance 3 Additional Tax Information 4 Annuity Provisions 15 Net Investment Factor 16 Condensed Financial Information 17 GENERAL INFORMATION AND HISTORY Jackson National Separate Account - I (Separate Account) is a separate investment account of Jackson National Life Insurance Company (JacksonSM). Jackson is a wholly owned subsidiary of Brooke Life Insurance Company and is ultimately a wholly owned subsidiary of Prudential plc, London, England, a publicly traded life insurance company in the United Kingdom. TRADEMARKS, SERVICE MARKS, AND RELATED DISCLOSURES The JNL/S&P Divisions, and any other investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any Standard & Poor's Index are not sponsored, endorsed, sold or promoted by Standard & Poor's Financial Services LLC ("S&P"), a wholly owned subsidiary of The McGraw-Hill Companies, Inc. and its affiliates. S&P and its affiliates make no representation or warranty, express or implied, to the owners of the Divisions or any member of the public regarding the advisability of investing in securities generally or in the Divisions particularly or the ability of the S&P 500 Index, or any other S&P Index to track general stock market performance. S&P's only relationship to the Separate Account (Licensee) is the licensing of certain trademarks and trade names of S&P, and the S&P 500(R) Index, which are determined, composed and calculated by S&P without regard to the Licensee or the Divisions. S&P has no obligation to take the needs of the Licensee or the owners of the Divisions into consideration in determining, composing or calculating the S&P 500 Index, or any other S&P Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Divisions or the timing of the issuance or sale of the Divisions or in the determination or calculation of the equation by which the Divisions are to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Divisions. S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX, OR ANY OTHER S&P INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE DIVISIONS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX, OR ANY OTHER S&P INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX, OR ANY OTHER S&P INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. SERVICES Jackson keeps the assets of the Separate Account. Jackson holds all cash of the Separate Account and attends to the collection of proceeds of shares of the underlying Funds bought and sold by the Separate Account. The financial statements of Jackson National Separate Account - I and Jackson National Life Insurance Company for the periods indicated have been included herein in reliance upon the reports of KPMG LLP, an independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. KPMG LLP is located at 303 East Wacker Drive, Chicago, Illinois 60601. PURCHASE OF SECURITIES BEING OFFERED The Contracts will be sold by licensed insurance agents in states where the Contracts may be lawfully sold. The agents will be registered representatives of broker-dealers that are registered under the Securities Exchange Act of 1934 and members of the Financial Industry Regulatory Authority (FINRA). UNDERWRITERS The Contracts are offered continuously and are distributed by Jackson National Life Distributors LLC (JNLD), 7601 Technology Way, Denver, Colorado 80237. JNLD is a subsidiary of Jackson. The aggregate amount of underwriting commissions paid to broker/dealers was $70,341 in 2007 and $20,337 in 2008. We paid no commissions prior to 2007 because the Contracts were not available for sale. JNLD did not retain any portion of the commissions. CALCULATION OF PERFORMANCE When Jackson advertises performance for an Investment Division, we will include quotations of standardized average annual total return to facilitate comparison with standardized average annual total return advertised by other variable annuity separate accounts. Standardized average annual total return for an Investment Division will be shown for periods beginning on the date the Investment Division first invested in the corresponding Funds. We will calculate standardized average annual total return according to the standard methods prescribed by rules of the Securities and Exchange Commission. Standardized average annual total return for a specific period is calculated by taking a hypothetical $1,000 investment in an Investment Division at the offering on the first day of the period ("initial investment") and computing the average annual compounded rate of return for the period that would equate the initial investment with the ending redeemable value ("redeemable value") of that investment at the end of the period, carried to at least the nearest hundredth of a percent. Standardized average annual total return reflects the deduction of all recurring charges that are charged to all Contracts. The redeemable value also reflects the effect of any applicable withdrawal charge or other charge that may be imposed at the end of the period. No deduction is made for premium taxes that may be assessed by certain states. Jackson may also advertise non-standardized total return on an annualized and cumulative basis. Non-standardized total return may be for periods other than those required to be presented or may otherwise differ from standardized average annual total return. The Contract is designed for long-term investment; therefore, Jackson believes that non-standardized total return that does not reflect the deduction of any applicable withdrawal charge may be useful to investors. Reflecting the deduction of the withdrawal charge decreases the level of performance advertised. Non-standardized total return may also assume a larger initial investment that more closely approximates the size of a typical Contract. Standardized average annual total return quotations will be current to the last day of the calendar quarter preceding the date on which an advertisement is submitted for publication. Both standardized average annual total return quotations and non-standardized total return quotations will be based on rolling calendar quarters and will cover at least periods of one, five, and ten years, or a period covering the time the Investment Division has been in existence, if it has not been in existence for one of the prescribed periods. Quotations of standardized average annual total return and non-standardized total return are based upon historical earnings and will fluctuate. Any quotation of performance should not be considered a guarantee of future performance. Factors affecting the performance of an Investment Division and its corresponding Fund include general market conditions, operating expenses and investment management. An owner's withdrawal value upon surrender of a Contract may be more or less than its original cost. Jackson may advertise the current annualized yield for a 30-day period for an Investment Division. The annualized yield of an Investment Division refers to the income generated by the Investment Division over a specified 30-day period. Because this yield is annualized, the yield generated by an Investment Division 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 accumulation unit earned during the period by the price per unit on the last day of the period, according to the following formula: 6 ( a-b ) YIELD = 2 [( --- + 1) -1] ( cd )
Where: a = net investment income earned during the period by the Fund attributable to shares owned by the Investment Division. b = expenses for the Investment Division accrued for the period (net of reimbursements). c = the average daily number of accumulation units outstanding during the period. d = the maximum offering price per accumulation unit on the last day of the period.
The maximum withdrawal charge is 5%. Net investment income will be determined in accordance with rules established by the Securities and Exchange Commission. Accrued expenses will include all recurring fees that are charged to all Contracts. Because of the charges and deductions imposed by the Separate Account, the yield for an Investment Division will be lower than the yield for the corresponding Funds. The yield on amounts held in the Investment Division 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. An Investment Division's actual yield will be affected by the types and quality of portfolio securities held by the Fund and the Fund operating expenses. ADDITIONAL TAX INFORMATION NOTE: INFORMATION CONTAINED HEREIN SHOULD NOT BE SUBSTITUTED FOR THE ADVICE OF A PERSONAL TAX ADVISER. JACKSON DOES NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS OF ANY CONTRACT OR ANY TRANSACTION INVOLVING THE CONTRACTS. PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS "ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT OTHER SPECIAL RULES MAY BE APPLICABLE IN CERTAIN SITUATIONS. MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX LAWS OR TO COMPARE THE TAX TREATMENT OF THE CONTRACTS TO THE TAX TREATMENT OF ANY OTHER INVESTMENT. JACKSON'S TAX STATUS Jackson is taxed as a life insurance company under the Internal Revenue Code of1986, as amended (the "Code"). For federal income tax purposes, the Separate Account is not a separate entity from Jackson and its operations form a part of Jackson. TAXATION OF ANNUITY CONTRACTS IN GENERAL Section 72 of the Code governs the taxation of annuities in general. An individual owner is not taxed on increases in the value of a Contract until distribution occurs, either in the form of a withdrawal or as annuity payments under the annuity option elected. For a withdrawal received as a total surrender (total redemption or a death benefit), the recipient is taxed on the portion of the payment that exceeds the cost basis of the Contract. For a payment received as a partial withdrawal from a non-qualified Contract, federal tax liability is generally determined on a last-in, first-out basis, meaning taxable income is withdrawn before the cost basis of the Contract is withdrawn. In the case of a partial withdrawal under a tax-qualified Contract, a ratable portion of the amount received is taxable. For Contracts issued in connection with non-qualified plans, the cost basis is generally the premiums, while for Contracts issued in connection with tax-qualified plans there may be no cost basis. The taxable portion of a withdrawal is taxed at ordinary income tax rates. Tax penalties may also apply. For annuity payments, a portion of each payment in excess of an exclusion amount is includable in taxable income. All annuity payments in excess of the exclusion amount are fully taxable at ordinary income rates. The exclusion amount for payments based on a fixed annuity option is determined by multiplying the payment by the ratio that the cost basis of the Contract (adjusted for any period certain or refund feature) bears to the expected return under the Contract. The exclusion amount for payments based on a variable annuity option is determined by dividing the cost basis of the Contract (adjusted for any period certain or refund guarantee) by the fixed or estimated number of years for which annuity payments are to be made. No exclusion is allowed with respect to any payments received after the investment in the Contract has been recovered (i.e., when the total of the excludable amounts equals the investment in the Contract). For certain types of tax-qualified plans there may be no cost basis in the Contract within the meaning of Section 72 of the Code. Owners, annuitants and beneficiaries under the Contracts should seek competent financial advice about the tax consequences of distributions. WITHHOLDING TAX ON DISTRIBUTIONS The Code generally requires Jackson (or, in some cases, a plan administrator) to withhold tax on the taxable portion of any distribution or withdrawal from a Contract. For "eligible rollover distributions" from Contracts issued under certain types of tax-qualified plans, 20% of the distribution must be withheld, unless the payee elects to have the distribution "rolled over" to another eligible plan in a direct transfer. This requirement is mandatory and cannot be waived by the owner. An "eligible rollover distribution" is the taxable portion of any amount received by a covered employee from a plan qualified under Section 401(a) or 403(a) of the Code, from a tax sheltered annuity qualified under Section 403(b) of the Code or an eligible deferred compensation plan of a state or local government under Section 457(b) of the Code (other than (1) a series of substantially equal periodic payments (not less frequently than annually) for the life (or life expectancy) of the employee, or joint lives (or joint life expectancies) of the employee, and his or her designated beneficiary, or for a specified period of ten years or more; (2) minimum distributions required to be made under the Code; and (3) hardship withdrawals). Failure to "roll over" the entire amount of an eligible rollover distribution (including the amount equal to the 20% portion of the distribution that was withheld) could have adverse tax consequences, including the imposition of a penalty tax on premature withdrawals, described later in this section. Withdrawals or distributions from a Contract other than eligible rollover distributions are also subject to withholding on the taxable portion of the distribution, but the owner may elect in such cases to waive the withholding requirement. If not waived, withholding is imposed (1) for periodic payments, at the rate that would be imposed if the payments were wages, or (2) for other distributions, at the rate of 10%. If no withholding exemption certificate is in effect for the payee, the rate under (1) above is computed by treating the payee as a married individual claiming three withholding exemptions. Generally, the amount of any payment of interest to a non-resident alien of the United States shall be subject to withholding of a tax equal to 30% of such amount or, if applicable, a lower treaty rate. A payment may not be subject to withholding where the recipient sufficiently establishes that such payment is effectively connected to the recipient's conduct of a trade or business in the United States and such payment is included in the recipient's gross income. DIVERSIFICATION -- SEPARATE ACCOUNT INVESTMENTS Section 817(h) of the Code imposes certain asset diversification standards on variable annuity Contracts. The Code provides that a variable annuity Contract will not be treated as an annuity Contract for any period (and any subsequent period) for which the investments held in any segregated asset account underlying the Contract are not adequately diversified, in accordance with regulations prescribed by the United States Treasury Department ("Treasury Department"). Disqualification of the Contract as an annuity Contract would result in imposition of federal income tax to the owner with respect to earnings allocable to the Contract prior to the receipt of payments under the Contract. The Code contains a safe harbor provision which provides that annuity Contracts, such as the Contracts, meet the diversification requirements if, as of the last day of each calendar quarter, or within 30 days after such last day, the underlying assets meet the diversification standards for a regulated investment company and no more than 55% of the total assets consist of cash, cash items, U.S. government securities and securities of other regulated investment companies. The Treasury Department has issued Regulations establishing diversification requirements for the mutual Funds underlying variable Contracts. These Regulations amplify the diversification requirements for variable Contracts set forth in the Code and provide an alternative to the safe harbor provision described above. Under these Regulations, a mutual Fund will be deemed adequately diversified if (1) no more than 55% of the value of the total assets of the mutual Fund is represented by any one investment; (2) no more than 70% of the value of the total assets of the mutual Fund is represented by any two investments; (3) no more than 80% of the value of the total assets of the mutual Fund is represented by any three investments; and (4) no more than 90% of the value of the total assets of the mutual Fund is represented by any four investments. Jackson intends that each Fund of the JNL Series Trust will be managed by its respective investment adviser in such a manner as to comply with these diversification requirements. At the time the Treasury Department issued the diversification Regulations, it did not provide guidance regarding the circumstances under which Contract owner control of the investments of a segregated asset account would cause the Contract owner to be treated as the owner of the assets of the segregated asset account. Revenue Ruling 2003-91 provides such guidance by describing the circumstances under which the owner of a variable contract will not possess sufficient control over the assets underlying the contract to be treated as the owner of those assets for federal income tax purposes. Rev. Rul. 2003-91 considered certain variable annuity and variable life insurance contracts and held that the types of actual and potential control that the contract owners could exercise over the investment assets held by the insurance company under these variable contracts was not sufficient to cause the contract owners to be treated as the owners of those assets and thus to be subject to current income tax on the income and gains produced by those assets. Under the contracts in Rev. Rul. 2003-91 there was no arrangement, plan, contract or agreement between the contract owner and the insurance company regarding the availability of a particular investment option and other than the contract owner's right to allocate premiums and transfer funds among the available sub-accounts, all investment decisions concerning the sub-accounts were made by the insurance company or an advisor in its sole and absolute discretion. Twelve investment options were available under the contracts in Rev. Rul. 2003-91 although the insurance company had the right to increase (but to no more than 20) or decrease the number of sub-accounts at any time. The contract owner was permitted to transfer amounts among the various investment options without limitation, subject to incurring fees for more than one transfer per 30-day period. Like the contracts described in Rev. Rul. 2003-91, under the Contract there will be no arrangement, plan, contract or agreement between a Contract owner and Jackson regarding the availability of a particular Allocation Option and other than the Contract owner's right to allocate premiums and transfer funds among the available Allocation Options, all investment decisions concerning the Allocation Options will be made by Jackson or an advisor in its sole and absolute discretion. The Contract will differ from the contracts described in Rev. Rul. 2003-91 in two respects. The first difference is that the contracts described in Rev. Rul. 2003-91 provided only 12 investment options with the insurance company having the ability to add an additional 8 options whereas the Contract offers 3 Investment Divisions and at least 1 Fixed Account option. The second difference is that the owner of a contract in Rev. Rul. 2003-91 could only make one transfer per 30-day period without a fee whereas during the accumulation phase, a Contract owner is permitted to make up to 15 transfers in any one year without a charge. Rev. Rul. 2003-91 states that whether the owner of a variable contract is to be treated as the owner of the assets held by the insurance company under the contract will depend on all of the facts and circumstances. Jackson does not believe that the differences between the Contract and the contracts described in Rev. Rul. 2003-91 with respect to the number of investment choices and the number of investment transfers that can be made under the Contract without an additional charge should prevent the holding in Rev. Rul. 2003-91 from applying to the owner of a Contract. At this time, however, it cannot be determined whether additional guidance will be provided by the IRS on this issue and what standards may be contained in such guidance. Jackson reserves the right to modify the Contract to the extent required to maintain favorable tax treatment. MULTIPLE CONTRACTS The Code provides that multiple non-qualified annuity Contracts that are issued within a calendar year to the same Contract owner by one company or its affiliates are treated as one annuity Contract for purposes of determining the tax consequences of any distribution. Such treatment may result in adverse tax consequences including more rapid taxation of the distributed amounts from such multiple Contracts. For purposes of this rule, Contracts received in a Section 1035 exchange will be considered issued in the year of the exchange. Owners should consult a tax adviser prior to purchasing more than one annuity Contract in any calendar year. PARTIAL 1035 EXCHANGES Section 1035 of the Code provides that an annuity Contract may be exchanged in a tax-free transaction for another annuity Contract. Historically, it was presumed that only the exchange of an entire Contract, as opposed to a partial exchange, would be accorded tax-free status. In 1998, in CONWAY V. COMMISSIONER, the Tax Court held that the direct transfer of a portion of an annuity Contract into another annuity Contract qualified as a non-taxable exchange. In response to the CONWAY decision, the IRS issued Notice 2003-51 and Revenue Procedure 2008-24. In accordance with these rulings, the IRS will consider a partial exchange valid if there is either no withdrawal from, or surrender of, either the surviving annuity contract or the new annuity contract within 12 months of the date of the partial exchange or if the owner can demonstrate that they have met certain conditions under Section 72(a)(2) or had any life event similar to these conditions that occurred between the date of the exchange and the date of the withdrawal or surrender. In the absence of further guidance from the Internal Revenue Service it is unclear what specific types of life events may be approved by the Internal Revenue Service. Due to the uncertainty in this area owners should consult their own tax advisers prior to entering into a partial exchange of an annuity Contract. CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS Under Section 72(u) of the Code, the investment earnings on premiums for Contracts will be taxed currently to the owner if the owner is a non-natural person, e.g., a corporation or certain other entities. Such Contracts generally will not be treated as annuities for federal income tax purposes (except for the taxation of life insurance companies). However, this treatment is not applied to Contracts held by a trust or other entity as an agent for a natural person nor to Contracts held by certain tax-qualified plans. Purchasers should consult their own tax counsel or other tax adviser before purchasing a Contract to be owned by a non-natural person. TAX TREATMENT OF ASSIGNMENTS An assignment or pledge of a Contract may have tax consequences. Any assignment or pledge of a tax-qualified Contract may also be prohibited by ERISA in some circumstances. Owners should, therefore, consult competent legal advisers should they wish to assign or pledge their Contracts. An assignment or pledge of all or any portion of the value of a Non-Qualified Contract is treated under Section 72 of the Code as an amount not received as an annuity. The value of the Contract assigned or pledged that exceeds the aggregate premiums paid will be included in the individual's gross income. In addition, the amount included in the individual's gross income could also be subject to the 10% penalty tax discussed below under Non-Qualified Contracts. An assignment or pledge of all or any portion of the value of a Qualified Contract will disqualify the Qualified Contract. If the Qualified Contract is part of a qualified pension or profit-sharing plan, the Code prohibits the assignment or alienation of benefits provided under the plan. If the Qualified Contract is an IRA annuity or a 403(b) annuity, the Code requires the Qualified Contract to be nontransferable. If the Qualified Contract is part of an eligible deferred compensation plan, amounts cannot be made available to plan participants or beneficiaries: (1) until the calendar year in which the participant attains age 70 1/2; (2) when the participant has a severance from employment; or (3) when the participant is faced with an unforeseeable emergency. DEATH BENEFITS Any death benefits paid under the Contract are taxable to the beneficiary. The rules governing the taxation of payments from an annuity Contract, as discussed above, generally apply to the payment of death benefits and depend on whether the death benefits are paid as a lump sum or as annuity payments. Estate or gift taxes may also apply. TAX-QUALIFIED PLANS The Contracts offered by the Prospectus are designed to be suitable for use under various types of tax-qualified plans. Taxation of owners of a tax-qualified Contract will vary based on the type of plan and the terms and conditions of each specific plan. Owners, annuitants and beneficiaries are cautioned that benefits under a tax-qualified Contract may be subject to the terms and conditions of the plan, regardless of the terms and conditions of the Contracts issued to fund the plan. Owners, annuitant and beneficiaries are also reminded that a tax-qualified Contract will not provide any necessary or additional tax deferral if it is used to fund a tax-qualified plan that is already tax-deferred. TAX TREATMENT OF WITHDRAWALS NON-QUALIFIED CONTRACTS Section 72 of the Code governs treatment of distributions from annuity Contracts. It provides that if the Contract value exceeds the aggregate premiums made, any amount withdrawn not in the form of an annuity payment will be treated as coming first from the earnings and then, only after the income portion is exhausted, as coming from the principal. Withdrawn earnings are included in a taxpayer's gross income. Section 72 further provides that a 10% penalty will apply to the income portion of any distribution. The penalty is not imposed on amounts received: (1) after the taxpayer reaches 59 1/2; (2) upon the death of the owner; (3) if the taxpayer is totally disabled as defined in Section 72(m)(7) of the Code; (4) in a series of substantially equal periodic payments made at least annually for the life (or life expectancy) of the taxpayer or for the joint lives (or joint life expectancies) of the taxpayer and his beneficiary; (5) under an immediate annuity; or (6) which are allocable to premium payments made prior to August 14, 1982. With respect to (4) above, if the series of substantially equal periodic payments is modified before the later of your attaining age 59 1/2 or five years from the date of the first periodic payment, then the tax for the year of the modification is increased by an amount equal to the tax which would have been imposed (the 10% penalty tax) but for the exception, plus interest for the tax years in which the exception was used. TAX-QUALIFIED CONTRACTS In the case of a withdrawal under a tax-qualified Contract, a ratable portion of the amount received is taxable, generally based on the ratio of the individual's cost basis to the individual's total accrued benefit under the retirement plan. Special tax rules may be available for certain distributions from a tax-qualified Contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion of any distribution from qualified retirement plans, including Contracts issued and qualified under Code Sections 401 (pension and profit sharing plans), 403(b) (tax-sheltered annuities), individual retirement accounts and annuities under 408(a) and (b) (IRAs) and Roth IRAs under 408A. To the extent amounts are not included in gross income because they have been rolled over to an IRA or to another eligible qualified plan, no tax penalty will be imposed. The tax penalty will not apply to the following distributions: (1) distributions made on or after the date on which the owner or annuitant (as applicable) reaches age 59 1/2; (2) distributions following the death or disability of the owner or annuitant (as applicable) (for this purpose "disability" is defined in Section 72(m)(7) of the Code); (3) distributions that are part of a series of substantially equal periodic payments made not less frequently than annually for the life (or life expectancy) of the owner or annuitant (as applicable) or the joint lives (or joint life expectancies) of such owner or annuitant (as applicable) and his or her designated beneficiary; (4) distributions to an owner or annuitant (as applicable) who has separated from service after he has attained age 55; (5) distributions made to the owner or annuitant (as applicable) to the extent such distributions do not exceed the amount allowable as a deduction under Code Section 213 to the owner or annuitant (as applicable) for amounts paid during the taxable year for medical care; (6) distributions made to an alternate payee pursuant to a qualified domestic relations order; (7) distributions made on account of an IRS levy upon the qualified Contracts; (8) distributions from an IRA after separation from employment for the purchase of medical insurance (as described in Section 213(d)(1)(D) of the Code) for the Contract owner or annuitant (as applicable) and his or her spouse and dependents if the Contract owner or annuitant (as applicable) has received unemployment compensation for at least 12 weeks (this exception will no longer apply after the Contract owner or annuitant (as applicable) has been re-employed for at least 60 days); (9) distributions from an IRA made to the owner or annuitant (as applicable) to the extent such distributions do not exceed the qualified higher education expenses (as defined in Section 72(t)(7) of the Code) (as applicable) for the taxable year; and (10) distributions from an IRA made to the owner or annuitant (as applicable) which are qualified first time home buyer distributions (as defined in Section 72(t)(8) of the Code). The exceptions stated in items (4) and (6) above do not apply in the case of an IRA. The exception stated in (3) above applies to an IRA without the requirement that there be a separation from service. With respect to (3) above, if the series of substantially equal periodic payments is modified before the later of your attaining age 59 1/2 or five years from the date of the first periodic payment, then the tax for the year of the modification is increased by an amount equal to the tax which would have been imposed (the 10% penalty tax) but for the exception, plus interest for the tax years in which the exception was used. Withdrawals of amounts attributable to contributions made pursuant to a salary reduction agreement (in accordance with Section 403(b)(11) of the Code) are limited to the following: when the owner attains age 59 1/2, severs employment, dies, becomes disabled (within the meaning of Section 72(m)(7) of the Code), or in the case of hardship. Hardship withdrawals do not include any earnings on salary reduction contributions. These limitations on withdrawals apply to: (1) salary reduction contributions made after December 31, 1988; (2) income attributable to such contributions; and (3) income attributable to amounts held as of December 31, 1988. The limitations on withdrawals do not affect rollovers or exchanges between certain tax-qualified plans. Tax penalties may also apply. While the foregoing limitations only apply to certain Contracts issued in connection with Section 403(b) plans, all owners should seek competent tax advice regarding any withdrawals or distributions. The taxable portion of a withdrawal or distribution from tax-qualified Contracts may, under some circumstances, be "rolled over" into another eligible plan so as to continue to defer income tax on the taxable portion. Such treatment is available for an "eligible rollover distribution" made by certain types of plans (as described above under "Taxes - Withholding Tax on Distributions") that is transferred within 60 days of receipt into another eligible plan or an IRA. Plans making such eligible rollover distributions are also required, with some exceptions specified in the Code, to provide for a direct transfer of the distribution to the transferee plan designated by the recipient. Amounts received from IRAs may also be rolled over into other IRAs or certain other plans, subject to limitations set forth in the Code. Prior to the date that annuity payments begin under an annuity Contract, the required minimum distribution rules applicable to defined contribution plans and IRAs will be used. Generally, distributions from a tax-qualified plan must commence no later than April 1 of the calendar year following the year in which the employee attains the later of age 70 1/2 or the date of retirement. In the case of an IRA, distributions must commence no later than April 1 of the calendar year following the year in which the owner attains age 70 1/2. Required distributions from defined contribution plans and IRAs are determined by dividing the account balance by the appropriate distribution period found in a uniform lifetime distribution table set forth in IRS regulations. For this purpose, the entire interest under an annuity Contract is the account value under the Contract plus the actuarial value of any other benefits such as guaranteed death benefits that will be provided under the Contract. If the sole beneficiary is the Contract holder's or employee's spouse and the spouse is more than 10 years younger than the employee, a longer distribution period measured by the joint life and last survivor expectancy of the Contract holder employee and spouse is permitted to be used. Distributions under a defined benefit plan or an annuity Contract must be paid in the form of periodic annuity payments for the employee's life (or the joint lives of the employee and beneficiary) or over a period certain that does not exceed the period under the uniform lifetime table for the employee's age in the year in which the annuity starting date occurs. If the required minimum distributions are not made, a 50% penalty tax on the amount not distributed is imposed on the individual. TYPES OF TAX-QUALIFIED PLANS The Contracts offered herein are designed to be suitable for use under various types of tax-qualified plans. Taxation of participants in each tax-qualified plan varies with the type of plan and terms and conditions of each specific plan. Owners, annuitants and beneficiaries are cautioned that benefits under a tax-qualified plan may be subject to the terms and conditions of the plan regardless of the terms and conditions of the Contracts issued pursuant to the plan. Some retirement plans are subject to distribution and other requirements that are not incorporated into Jackson's administrative procedures. Jackson is not bound by the terms and conditions of such plans to the extent such terms conflict with the terms of a Contract, unless Jackson specifically consents to be bound. Owners, annuitants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contracts comply with applicable law. A tax-qualified Contract will not provide any necessary or additional tax deferral if it is used to fund a tax-qualified plan that is tax deferred. However, the Contract has features and benefits other than tax deferral that may make it an appropriate investment for a tax-qualified plan. Following are general descriptions of the types of tax-qualified plans with which the Contracts may be used. Such descriptions are not exhaustive and are for general informational purposes only. The tax rules regarding tax-qualified plans are very complex and will have differing applications depending on individual facts and circumstances. Each purchaser should obtain competent tax advice prior to purchasing a Contract issued under a tax-qualified plan. Contracts issued pursuant to tax-qualified plans include special provisions restricting Contract provisions that may otherwise be available as described herein. Generally, Contracts issued pursuant to tax-qualified plans are not transferable except upon surrender or annuitization. Various penalty and excise taxes may apply to contributions or distributions made in violation of applicable limitations. Furthermore, certain withdrawal penalties and restrictions may apply to surrenders from Tax-Qualified Contracts. (See "Tax Treatment of Withdrawals - Tax-Qualified Contracts" above.) On July 6, 1983, the Supreme Court decided in ARIZONA GOVERNING COMMITTEE V. NORRIS that benefits provided under an employer's deferred compensation plan could not, under Title VII of the Civil Rights Act of 1964, vary between men and women. The Contracts sold by Jackson in connection with certain Tax-Qualified Plans will utilize tables that do not differentiate on the basis of sex. Such annuity tables will also be available for use in connection with certain non-qualified deferred compensation plans. (a) Tax-Sheltered Annuities Section 403(b) of the Code permits the purchase of "tax-sheltered annuities" by public schools and certain charitable, educational and scientific organizations described in Section 501(c)(3) of the Code. These qualifying employers may make contributions to the Contracts for the benefit of their employees. Such contributions are not included in the gross income of the employee until the employee receives distributions from the Contract. The amount of contributions to the tax-sheltered annuity is limited to certain maximums imposed by the Code. Furthermore, the Code sets forth additional restrictions governing such items as transferability, distributions, non-discrimination and withdrawals. Employee loans are not allowed under these Contracts. Any employee should obtain competent tax advice as to the tax treatment and suitability of such an investment. (b) Individual Retirement Annuities Section 408(b) of the Code permits eligible individuals to contribute to an individual retirement program known as an "individual retirement annuity" ("IRA annuity"). Under applicable limitations, certain amounts may be contributed to an IRA annuity that will be deductible from the individual's gross income. IRA annuities are subject to limitations on eligibility, contributions, transferability and distributions. Sales of IRA annuities are subject to special requirements imposed by the Code, including the requirement that certain informational disclosure be given to persons desiring to establish an IRA. Purchasers of Contracts to be qualified as IRA annuities should obtain competent tax advice as to the tax treatment and suitability of such an investment. (c) Roth IRA Annuities Section 408A of the Code provides that individuals may purchase a non-deductible IRA annuity, known as a Roth IRA annuity. Purchase payments for Roth IRA annuities are limited to a maximum of $5,000 for 2008. After 2008, the limit will be adjusted annually for inflation in $500 increments. In addition, the Act allows individuals age 50 and older to make additional catch-up IRA contributions. The otherwise maximum contribution limit (before application of adjusted gross income phase-out limits) for an individual who had celebrated his or her 50th birthday before the end of the tax year is increased by $1,000. The same contribution and catch-up contributions are also available for purchasers of Traditional IRA annuities. Lower maximum limitations apply to individuals above certain adjusted gross income levels. For 2008, these levels are $101,000 in the case of single taxpayers, $159,000 in the case of married taxpayers filing joint returns, and $0 in the case of married taxpayers filing separately. These levels are indexed annually in $1,000 increments. An overall $5,000 annual limitation (increased as discussed above) continues to apply to all of a taxpayer's IRA annuity contributions, including Roth IRA annuities and non-Roth IRA annuities. Qualified distributions from Roth IRA annuities are free from federal income tax. A qualified distribution requires that the individual has held the Roth IRA annuity for at least five years and, in addition, that the distribution is made either after the individual reaches age 59 1/2, on the individual's death or disability, or as a qualified first-time home purchase, subject to a $10,000 lifetime maximum, for the individual, a spouse, child, grandchild, or ancestor. Any distribution that is not a qualified distribution is taxable to the extent of earnings in the distribution. Distributions are treated as made from contributions first and therefore no distributions are taxable until distributions exceed the amount of contributions to the Roth IRA annuity. The 10% penalty tax and the regular IRA annuity exceptions to the 10% penalty tax apply to taxable distributions from Roth IRA annuities. Amounts may be rolled over from one Roth IRA annuity to another Roth IRA annuity. Furthermore, an individual may make a rollover contribution from a non-Roth IRA annuity to a Roth IRA annuity, unless the individual has adjusted gross income over $100,000 or the individual is a married taxpayer filing a separate return. The adjusted gross income limit is eliminated for rollovers after December 31, 2009. The individual must pay tax on any portion of the IRA annuity being rolled over that would be included in income if the distributions were not rolled over. For rollovers in 2010, the income may be reported ratably in 2011 and 2012. There are no similar limitations on rollovers from one Roth IRA annuity to another Roth IRA annuity. (d) Pension and Profit-Sharing Plans The Internal Revenue Code permits employers, including self-employed individuals, to establish various types of qualified retirement plans for employees. These retirement plans may permit the purchase of the Contracts to provide benefits under the plan. Contributions to the plan for the benefit of employees will not be included in the gross income of the employee until distributed from the plan. The tax consequences to owners may vary depending upon the particular plan design. However, the Code places limitations on all plans on such items as amount of allowable contributions; form, manner and timing of distributions; vesting and non-forfeitability of interests; nondiscrimination in eligibility and participation; and the tax treatment of distributions, transferability of benefits, withdrawals and surrenders. Purchasers of Contracts for use with pension or profit sharing plans should obtain competent tax advice as to the tax treatment and suitability of such an investment. (e) Eligible Deferred Compensation Plans - Section 457 Under Code provisions, employees and independent Contractors performing services for state and local governments and other tax-exempt organizations may participate in eligible deferred compensation plans under Section 457 of the Code. The amounts deferred under a Plan that meets the requirements of Section 457 of the Code are not taxable as income to the participant until paid or otherwise made available to the participant or beneficiary. As a general rule, the maximum amount that can be deferred in any one year is the lesser of 100% of the participant's includible compensation or the elective deferral limitation. The Act increases the dollar limit on deferrals to conform to the $16,500 elective deferral limitation in 2009. The limit is indexed for inflation in $500 increments annually thereafter. In addition, the Act allows individuals in eligible deferred compensation plans of state or local governments age 50 and older to make additional catch-up contributions. The otherwise maximum contribution limit for an individual who had celebrated his or her 50th birthday before the end of the tax year is increased by $5,500. The same contribution and catch-up contributions are also available for participants in qualified pension and profit-sharing plans and tax-sheltered annuities under Section 403(b) of the Code. In limited circumstances, the plan may provide for additional catch-up contributions in each of the last three years before normal retirement age. Furthermore, the Code provides additional requirements and restrictions regarding eligibility and distributions. All of the assets and income of an eligible deferred compensation plan established by a governmental employer must be held in trust for the exclusive benefit of participants and their beneficiaries. For this purpose, custodial accounts and certain annuity Contracts are treated as trusts. The requirement of a trust does not apply to amounts under a Plan of a tax-exempt (non-governmental) employer. In addition, the requirement of a trust does not apply to amounts under a Plan of a governmental employer if the Plan is not an eligible plan within the meaning of Section 457(b) of the Code. In the absence of such a trust, amounts under the plan will be subject to the claims of the employer's general creditors. In general, distributions from a Plan are prohibited under Section 457 of the Code unless made after the participant: * attains age 70 1/2, * severs employment, * dies, or * suffers an unforeseeable financial emergency as defined in the regulations. Under present federal tax law, amounts accumulated in a Plan of a tax-exempt (non-governmental) employer under Section 457 of the Code cannot be transferred or rolled over on a tax-deferred basis except for certain transfers to other Plans under Section 457. Amounts accumulated in a Plan of a state or local government employer may be transferred or rolled over to another eligible deferred compensation plan of a state or local government, an IRA, a qualified pension or profit-sharing plan or a tax-sheltered annuity under Section 403(b) of the Code. ANNUITY PROVISIONS VARIABLE ANNUITY PAYMENT The initial annuity payment is determined by taking the Contract value allocated to that Investment Division, less any premium tax and any applicable Contract charges, and then applying it to the income option table specified in the Contract. The appropriate rate must be determined by the sex (except where, as in the case of certain Qualified Plans and other employer-sponsored retirement plans, such classification is not permitted) and age of the annuitant and designated second person, if any. The dollars applied are divided by 1,000 and the result multiplied by the appropriate annuity factor appearing in the table to compute the amount of the first monthly payment. That amount is divided by the value of an annuity unit as of the Income Date to establish the number of annuity units representing each variable payment. The number of annuity units determined for the first variable payment remains constant for the second and subsequent monthly variable payments, assuming that no reallocation of Contract values is made. The amount of the second and each subsequent monthly variable payment is determined by multiplying the number of annuity units by the annuity unit value as of the business day next preceding the date on which each payment is due. The mortality and expense experience will not adversely affect the dollar amount of the variable annuity payments once payments have commenced. ANNUITY UNIT VALUE The initial value of an annuity unit of each Investment Division was set when the Investment Divisions were established. The value may increase or decrease from one business day to the next. The income option tables contained in the Contract are based on an assumed investment rate of 3% for option 4 or 4.5% for option 1-3. The value of a fixed number of annuity units will reflect the investment performance of the Investment Divisions elected, and the amount of each payment will vary accordingly. For each Investment Division, the value of an annuity unit for any business day is determined by multiplying the annuity unit value for the immediately preceding business day by the percentage change in the value of an accumulation unit from the immediately preceding business day to the business day of valuation, calculated by use of the Net Investment Factor, described below. The result is then multiplied by a second factor which offsets the effect of the assumed net investment rate of 3% for option 4 or 4.5% for option 1-3. NET INVESTMENT FACTOR The net investment factor is an index applied to measure the net investment performance of an Investment Division from one valuation date to the next. The net investment factor for any Investment Division for any valuation period during the accumulation and annuity phases is determined by dividing (a) by (b) and then subtracting (c) from the result where: (a) is the net result of: (1) the net asset value of a Fund's share held in the Investment Division determined as of the valuation date at the end of the valuation period, plus (2) the per share amount of any dividend or other distribution declared by the Fund if the "ex-dividend" date occurs during the valuation period, plus or minus (3) a per share credit or charge with respect to any taxes paid or reserved for by Jackson during the valuation period which are determined by Jackson to be attributable to the operation of the Investment Division (no federal income taxes are applicable under present law); (b) is the net asset value of the Fund share held in the Investment Division determined as of the valuation date at the end of the preceding valuation period; and (c) is the asset charge factor determined by Jackson for the valuation period to reflect the asset-based charges (the mortality and expense risk charge), administration charge, and any applicable charges for optional benefits. Also see "Income Payments (The Income Phase)" in the Prospectus. CONDENSED FINANCIAL INFORMATION Accumulation Unit Values The tables reflect the values of accumulation units for each Investment Division for the beginning and end of the periods indicated, and the number of accumulation units outstanding as of the end of the periods indicated - for Contracts with all levels of charges (and combinations of optional endorsements). This information derives from the financial statements of the Separate Account, which together constitute the Separate Account's condensed financial information. Contact the Annuity Service Center to request your copy free of charge, and contact information is on the cover page of the prospectus. Also, please ask about the more timely accumulation unit values that are available for each Investment Division. Previously, the JNL/S&P Growth Retirement Strategy Fund, the JNL/S&P Moderate Growth Retirement Strategy Fund, and JNL/S&P Moderate Retirement Strategy Fund (collectively "Retirement Funds") were offered as Funds under this Contract. However, effective April 6, 2009, these Retirement Funds were merged with the JNL/S&P Disciplined Growth Fund, JNL/S&P Disciplined Moderate Growth Fund and JNL/S&P Disciplined Moderate Fund, as outlined below:
--------------------------------------------------------- ------------------------------------------------------- CURRENTLY OFFERED FUND PREVIOUSLY OFFERED FUND --------------------------------------------------------- ------------------------------------------------------- --------------------------------------------------------- ------------------------------------------------------- JNL/S&P Disciplined Growth Fund JNL/S&P Growth Retirement Strategy Fund --------------------------------------------------------- ------------------------------------------------------- --------------------------------------------------------- ------------------------------------------------------- JNL/S&P Disciplined Moderate Growth Fund JNL/S&P Moderate Growth Retirement Strategy Fund --------------------------------------------------------- ------------------------------------------------------- --------------------------------------------------------- ------------------------------------------------------- JNL/S&P Disciplined Moderate Fund JNL/S&P Moderate Retirement Strategy Fund --------------------------------------------------------- -------------------------------------------------------
At the end of the tables are the footnotes with the beginning dates of activity for each Investment Division at every applicable charge level (annualized) under the Contract. ACCUMULATION UNIT VALUES BASE CONTRACT - 0.70%
INVESTMENT DIVISIONS DECEMBER 31, DECEMBER 31, 2008 2007 ---- ---- JNL/S&P Growth Retirement Strategy Division Accumulation unit value: Beginning of period N/A N/A End of period N/A N/A Accumulation units outstanding at the end of period N/A N/A JNL/S&P Moderate Growth Retirement Strategy Division(1370) Accumulation unit value: Beginning of period $10.62 $10.33 End of period $7.94 $10.62 Accumulation units outstanding at the end of period 16,923 22,920 JNL/S&P Moderate Retirement Strategy Division(1438) Accumulation unit value: Beginning of period $10.50 $10.41 End of period $8.61 $10.50 Accumulation units outstanding at the end of period 67,587 14,409 ACCUMULATION UNIT VALUES BASE CONTRACT - 0.75% INVESTMENT DIVISIONS DECEMBER 31, DECEMBER 31, 2008 2007 ---- ---- JNL/S&P Growth Retirement Strategy Division(1251) Accumulation unit value: Beginning of period $10.70 $10.12 End of period $7.28 $10.70 Accumulation units outstanding at the end of period 48,777 58,009 JNL/S&P Moderate Growth Retirement Strategy Division(1299) Accumulation unit value: Beginning of period $10.61 $10.42 End of period $7.93 $10.61 Accumulation units outstanding at the end of period 32,900 24,662 JNL/S&P Moderate Retirement Strategy Division(1355) Accumulation unit value: Beginning of period $10.49 $10.33 End of period $8.60 $10.49 Accumulation units outstanding at the end of period 20,432 4,778
1 - September 16, 1996 66 - March 4, 2002 131 - June 7, 2002 2 - April 1, 1998 67 - March 5, 2002 132 - June 10, 2002 3 - April 8, 1998 68 - March 6, 2002 133 - June 11, 2002 4 - April 9, 1998 69 - March 7, 2002 134 - June 12, 2002 5 - April 13, 1998 70 - March 8, 2002 135 - June 14, 2002 6 - April 15, 1998 71 - March 11, 2002 136 - June 17, 2002 7 - January 21, 1999 72 - March 12, 2002 137 - June 20, 2002 8 - January 29, 1999 73 - March 13, 2002 138 - June 21, 2002 9 - February 9, 1999 74 - March 14, 2002 139 - June 24, 2002 10 - March 22, 1999 75 - March 15, 2002 140 - June 25, 2002 11 - April 1, 1999 76 - March 18, 2002 141 - June 26, 2002 12 - April 8, 1999 77 - March 19, 2002 142 - June 27, 2002 13 - April 9, 1999 78 - March 20, 2002 143 - June 28, 2002 14 - April 13, 1999 79 - March 21, 2002 144 - July 1, 2002 15 - April 15, 1999 80 - March 22, 2002 145 - July 2, 2002 16 - April 22, 1999 81 - March 25, 2002 146 - July 3, 2002 17 - July 2, 1999 82 - March 26, 2002 147 - July 5, 2002 18 - August 16, 1999 83 - March 27, 2002 148 - July 8, 2002 19 - May 1, 2000 84 - March 28, 2002 149 - July 9, 2002 20 - November 3, 2000 85 - April 1, 2002 150 - July 11, 2002 21 - November 17, 2000 86 - April 2, 2002 151 - July 12, 2002 22 - November 27, 2000 87 - April 3, 2002 152 - July 15, 2002 23 - December 14, 2000 88 - April 4, 2002 153 - July 16, 2002 24 - December 19, 2000 89 - April 8, 2002 154 - July 18, 2002 25 - February 12, 2001 90 - April 9, 2002 155 - July 22, 2002 26 - March 28, 2001 91 - April 10, 2002 156 - July 24, 2002 27 - May 1, 2001 92 - April 11, 2002 157 - July 25, 2002 28 - June 7, 2001 93 - April 12, 2002 158 - July 26, 2002 29 - August 15, 2001 94 - April 15, 2002 159 - July 29, 2002 30 - October 29, 2001 95 - April 16, 2002 160 - July 30, 2002 31 - December 14, 2001 96 - April 17, 2002 161 - July 31, 2002 32 - January 3, 2002 97 - April 18, 2002 162 - August 1, 2002 33 - January 7, 2002 98 - April 19, 2002 163 - August 5, 2002 34 - January 10, 2002 99 - April 22, 2002 164 - August 6, 2002 35 - January 11, 2002 100 - April 23, 2002 165 - August 7, 2002 36 - January 14, 2002 101 - April 24, 2002 166 - August 8, 2002 37 - January 15, 2002 102 - April 25, 2002 167 - August 12, 2002 38 - January 18, 2002 103 - April 26, 2002 168 - August 13, 2002 39 - January 22, 2002 104 - April 29, 2002 169 - August 14, 2002 40 - January 23, 2002 105 - April 30, 2002 170 - August 15, 2002 41 - January 25, 2002 106 - May 1, 2002 171 - August 16, 2002 42 - January 28, 2002 107 - May 2, 2002 172 - August 19, 2002 43 - January 29, 2002 108 - May 3, 2002 173 - August 20, 2002 44 - January 30, 2002 109 - May 6, 2002 174 - August 23, 2002 45 - January 31, 2002 110 - May 7, 2002 175 - August 26, 2002 46 - February 1, 2002 111 - May 8, 2002 176 - August 28, 2002 47 - February 4, 2002 112 - May 9, 2002 177 - August 29, 2002 48 - February 5, 2002 113 - May 10, 2002 178 - August 30, 2002 49 - February 6, 2002 114 - May 13, 2002 179 - September 3, 2002 50 - February 7, 2002 115 - May 14, 2002 180 - September 4, 2002 51 - February 8, 2002 116 - May 15, 2002 181 - September 5, 2002 52 - February 11, 2002 117 - May 16, 2002 182 - September 6, 2002 53 - February 12, 2002 118 - May 17, 2002 183 - September 10, 2002 54 - February 13, 2002 119 - May 20, 2002 184 - September 11, 2002 55 - February 14, 2002 120 - May 21, 2002 185 - September 12, 2002 56 - February 15, 2002 121 - May 23, 2002 186 - September 13, 2002 57 - February 19, 2002 122 - May 24, 2002 187 - September 16, 2002 58 - February 20, 2002 123 - May 28, 2002 188 - September 17, 2002 59 - February 21, 2002 124 - May 29, 2002 189 - September 18, 2002 60 - February 22, 2002 125 - May 30, 2002 190 - September 19, 2002 61 - February 25, 2002 126 - May 31, 2002 191 - September 20, 2002 62 - February 26, 2002 127 - June 3, 2002 192 - September 23, 2002 63 - February 27, 2002 128 - June 4, 2002 193 - September 24, 2002 64 - February 28, 2002 129 - June 5, 2002 194 - September 25, 2002 65 - March 1, 2002 130 - June 6, 2002 195 - September 26, 2002 196 - September 27, 2002 261 - January 31, 2003 326 - May 12, 2003 197 - September 30, 2002 262 - February 3, 2003 327 - May 13, 2003 198 - October 1, 2002 263 - February 4, 2003 328 - May 14, 2003 199 - October 2, 2002 264 - February 5, 2003 329 - May 15, 2003 200 - October 3, 2002 265 - February 6, 2003 330 - May 19, 2003 201 - October 4, 2002 266 - February 7, 2003 331 - May 20, 2003 202 - October 7, 2002 267 - February 12, 2003 332 - May 21, 2003 203 - October 8, 2002 268 - February 13, 2003 333 - May 22, 2003 204 - October 9, 2002 269 - February 14, 2003 334 - May 23, 2003 205 - October 10, 2002 270 - February 18, 2003 335 - May 27, 2003 206 - October 11, 2002 271 - February 19, 2003 336 - May 28, 2003 207 - October 14, 2002 272 - February 20, 2003 337 - May 29, 2003 208 - October 15, 2002 273 - February 21, 2003 338 - May 30, 2003 209 - October 17, 2002 274 - February 24, 2003 339 - June 2, 2003 210 - October 18, 2002 275 - February 25, 2003 340 - June 3, 2003 211 - October 21, 2002 276 - February 26, 2003 341 - June 4, 2003 212 - October 22, 2002 277 - February 27, 2003 342 - June 5, 2003 213 - October 24, 2002 278 - February 28, 2003 343 - June 6, 2003 214 - October 25, 2002 279 - March 3, 2003 344 - June 9, 2003 215 - October 28, 2002 280 - March 4, 2003 345 - June 10, 2003 216 - October 29, 2002 281 - March 5, 2003 346 - June 11, 2003 217 - October 31, 2002 282 - March 6, 2003 347 - June 12, 2003 218 - November 1, 2002 283 - March 7, 2003 348 - June 13, 2003 219 - November 4, 2002 284 - March 10, 2003 349 - June 16, 2003 220 - November 5, 2002 285 - March 11, 2003 350 - June 17, 2003 221 - November 6, 2002 286 - March 12, 2003 351 - June 18, 2003 222 - November 7, 2002 287 - March 13, 2003 352 - June 19, 2003 223 - November 8, 2002 288 - March 14, 2003 353 - June 20, 2003 224 - November 12, 2002 289 - March 17, 2003 354 - June 23, 2003 225 - November 13, 2002 290 - March 18, 2003 355 - June 24, 2003 226 - November 14, 2002 291 - March 19, 2003 356 - June 25, 2003 227 - November 15, 2002 292 - March 20, 2003 357 - June 26, 2003 228 - November 18, 2002 293 - March 21, 2003 358 - June 27, 2003 229 - November 19, 2002 294 - March 24, 2003 359 - June 30, 2003 230 - November 20, 2002 295 - March 26, 2003 360 - July 1, 2003 231 - November 22, 2002 296 - March 27, 2003 361 - July 2, 2003 232 - November 25, 2002 297 - March 28, 2003 362 - July 3, 2003 233 - November 26, 2002 298 - March 31, 2003 363 - July 7, 2003 234 - November 27, 2002 299 - April 1, 2003 364 - July 8, 2003 235 - November 29, 2002 300 - April 2, 2003 365 - July 9, 2003 236 - December 2, 2002 301 - April 3, 2003 366 - July 10, 2003 237 - December 3, 2002 302 - April 4, 2003 367 - July 11, 2003 238 - December 5, 2002 303 - April 7, 2003 368 - July 14, 2003 239 - December 6, 2002 304 - April 8, 2003 369 - July 15, 2003 240 - December 9, 2002 305 - April 9, 2003 370 - July 17, 2003 241 - December 16, 2002 306 - April 10, 2003 371 - July 18, 2003 242 - December 17, 2002 307 - April 11, 2003 372 - July 21, 2003 243 - December 18, 2002 308 - April 14, 2003 373 - July 22, 2003 244 - December 19, 2002 309 - April 15, 2003 374 - July 23, 2003 245 - December 23, 2002 310 - April 16, 2003 375 - July 24, 2003 246 - December 27, 2002 311 - April 17, 2003 376 - July 25, 2003 247 - December 30, 2002 312 - April 21, 2003 377 - July 28, 2003 248 - December 31, 2002 313 - April 22, 2003 378 - July 29, 2003 249 - January 2, 2003 314 - April 23, 2003 379 - July 30, 2003 250 - January 3, 2003 315 - April 24, 2003 380 - July 31, 2003 251 - January 6, 2003 316 - April 25, 2003 381 - August 1, 2003 252 - January 9, 2003 317 - April 28, 2003 382 - August 4, 2003 253 - January 16, 2003 318 - April 29, 2003 383 - August 5, 2003 254 - January 17, 2003 319 - April 30, 2003 384 - August 6, 2003 255 - January 21, 2003 320 - May 1, 2003 385 - August 7, 2003 256 - January 22, 2003 321 - May 2, 2003 386 - August 8, 2003 257 - January 24, 2003 322 - May 5, 2003 387 - August 11, 2003 258 - January 27, 2003 323 - May 6, 2003 388 - August 12, 2003 259 - January 28, 2003 324 - May 7, 2003 389 - August 13, 2003 260 - January 30, 2003 325 - May 8, 2003 390 - August 14, 2003 391 - August 15, 2003 456 - November 17, 2003 521 - February 23, 2004 392 - August 18, 2003 457 - November 18, 2003 522 - February 24, 2004 393 - August 19, 2003 458 - November 19, 2003 523 - February 25, 2004 394 - August 20, 2003 459 - November 20, 2003 524 - February 26, 2004 395 - August 21, 2003 460 - November 21, 2003 525 - February 27, 2004 396 - August 22, 2003 461 - November 24, 2003 526 - March 1, 2004 397 - August 25, 2003 462 - November 25, 2003 527 - March 2, 2004 398 - August 26, 2003 463 - November 26, 2003 528 - March 3, 2004 399 - August 27, 2003 464 - November 28, 2003 529 - March 4, 2004 400 - August 28, 2003 465 - December 1, 2003 530 - March 5, 2004 401 - August 29, 2003 466 - December 2, 2003 531 - March 8, 2004 402 - September 2, 2003 467 - December 3, 2003 532 - March 9, 2004 403 - September 3, 2003 468 - December 4, 2003 533 - March 10, 2004 404 - September 5, 2003 469 - December 5, 2003 534 - March 11, 2004 405 - September 8, 2003 470 - December 8, 2003 535 - March 12, 2004 406 - September 9, 2003 471 - December 9, 2003 536 - March 15, 2004 407 - September 10, 2003 472 - December 10, 2003 537 - March 16, 2004 408 - September 11, 2003 473 - December 11, 2003 538 - March 17, 2004 409 - September 12, 2003 474 - December 12, 2003 539 - March 18, 2004 410 - September 15, 2003 475 - December 15, 2003 540 - March 19, 2004 411 - September 16, 2003 476 - December 16, 2003 541 - March 22, 2004 412 - September 17, 2003 477 - December 17, 2003 542 - March 23, 2004 413 - September 18, 2003 478 - December 18, 2003 543 - March 24, 2004 414 - September 19, 2003 479 - December 19, 2003 544 - March 25, 2004 415 - September 22, 2003 480 - December 22, 2003 545 - March 26, 2004 416 - September 23, 2003 481 - December 23, 2003 546 - March 29, 2004 417 - September 24, 2003 482 - December 24, 2003 547 - March 30, 2004 418 - September 25, 2003 483 - December 26, 2003 548 - March 31, 2004 419 - September 26, 2003 484 - December 29, 2003 549 - April 1, 2004 420 - September 29, 2003 485 - December 30, 2003 550 - April 2, 2004 421 - September 30, 2003 486 - December 31, 2003 551 - April 5, 2004 422 - October 1, 2003 487 - January 2, 2004 552 - April 6, 2004 423 - October 2, 2003 488 - January 5, 2004 553 - April 7, 2004 424 - October 3, 2003 489 - January 6, 2004 554 - April 8, 2004 425 - October 4, 2003 490 - January 7, 2004 555 - April 12, 2004 426 - October 6, 2003 491 - January 8, 2004 556 - April 13, 2004 427 - October 7, 2003 492 - January 9, 2004 557 - April 14, 2004 428 - October 8, 2003 493 - January 12, 2004 558 - April 15, 2004 429 - October 9, 2003 494 - January 13, 2004 559 - April 16, 2004 430 - October 10, 2003 495 - January 14, 2004 560 - April 19, 2004 431 - October 13, 2003 496 - January 15, 2004 561 - April 20, 2004 432 - October 14, 2003 497 - January 16, 2004 562 - April 21, 2004 433 - October 15, 2003 498 - January 20, 2004 563 - April 22, 2004 434 - October 16, 2003 499 - January 21, 2004 564 - April 23, 2004 435 - October 17, 2003 500 - January 22, 2004 565 - April 26, 2004 436 - October 20, 2003 501 - January 23, 2004 566 - April 27, 2004 437 - October 21, 2003 502 - January 26, 2004 567 - April 28, 2004 438 - October 22, 2003 503 - January 27, 2004 568 - April 29, 2004 439 - October 23, 2003 504 - January 28, 2004 569 - April 30, 2004 440 - October 24, 2003 505 - January 29, 2004 570 - May 3, 2004 441 - October 27, 2003 506 - January 30, 2004 571 - May 4, 2004 442 - October 28, 2003 507 - February 2, 2004 572 - May 5, 2004 443 - October 29, 2003 508 - February 3, 2004 573 - May 6, 2004 444 - October 30, 2003 509 - February 4, 2004 574 - May 7, 2004 445 - October 31, 2003 510 - February 5, 2004 575 - May 10, 2004 446 - November 3, 2003 511 - February 6, 2004 576 - May 11, 2004 447 - November 4, 2003 512 - February 9, 2004 577 - May 12, 2004 448 - November 5, 2003 513 - February 10, 2004 578 - May 13, 2004 449 - November 6, 2003 514 - February 11, 2004 579 - May 14, 2004 450 - November 7, 2003 515 - February 12, 2004 580 - May 17, 2004 451 - November 10, 2003 516 - February 13, 2004 581 - May 18, 2004 452 - November 11, 2003 517 - February 17, 2004 582 - May 19, 2004 453 - November 12, 2003 518 - February 18, 2004 583 - May 20, 2004 454 - November 13, 2003 519 - February 19, 2004 584 - May 21, 2004 455 - November 14, 2003 520 - February 20, 2004 585 - May 24, 2004 586 - May 25, 2004 651 - August 30, 2004 716 - December 1, 2004 587 - May 26, 2004 652 - August 31, 2004 717 - December 2, 2004 588 - May 27, 2004 653 - September 1, 2004 718 - December 3, 2004 589 - May 28, 2004 654 - September 2, 2004 719 - December 6, 2004 590 - June 1, 2004 655 - September 3, 2004 720 - December 7, 2004 591 - June 2, 2004 656 - September 7, 2004 721 - December 8, 2004 592 - June 3, 2004 657 - September 8, 2004 722 - December 9, 2004 593 - June 4, 2004 658 - September 9, 2004 723 - December 10, 2004 594 - June 7, 2004 659 - September 10, 2004 724 - December 13, 2004 595 - June 8, 2004 660 - September 13, 2004 725 - December 14, 2004 596 - June 9, 2004 661 - September 14, 2004 726 - December 15, 2004 597 - June 10, 2004 662 - September 15, 2004 727 - December 16, 2004 598 - June 14, 2004 663 - September 16, 2004 728 - December 17, 2004 599 - June 15, 2004 664 - September 17, 2004 729 - December 20, 2004 600 - June 16, 2004 665 - September 20, 2004 730 - December 21, 2004 601 - June 17, 2004 666 - September 21, 2004 731 - December 22, 2004 602 - June 18, 2004 667 - September 22, 2004 732 - December 23, 2004 603 - June 21, 2004 668 - September 23, 2004 733 - December 27, 2004 604 - June 22, 2004 669 - September 24, 2004 734 - December 28, 2004 605 - June 23, 2004 670 - September 27, 2004 735 - December 29, 2004 606 - June 24, 2004 671 - September 28, 2004 736 - December 30, 2004 607 - June 25, 2004 672 - September 29, 2004 737 - December 31, 2004 608 - June 28, 2004 673 - September 30, 2004 738 - January 3, 2005 609 - June 29, 2004 674 - October 1, 2004 739 - January 4, 2005 610 - July 1, 2004 675 - October 4, 2004 740 - January 5, 2005 611 - July 2, 2004 676 - October 5, 2004 741 - January 6, 2005 612 - July 6, 2004 677 - October 6, 2004 742 - January 7, 2005 613 - July 7, 2004 678 - October 7, 2004 743 - January 10, 2005 614 - July 8, 2004 679 - October 8, 2004 744 - January 11, 2005 615 - July 9, 2004 680 - October 11, 2004 745 - January 12, 2005 616 - July 12, 2004 681 - October 12, 2004 746 - January 13, 2005 617 - July 13, 2004 682 - October 13, 2004 747 - January 14, 2005 618 - July 14, 2004 683 - October 14, 2004 748 - January 18, 2005 619 - July 15, 2004 684 - October 15, 2004 749 - January 19, 2005 620 - July 16, 2004 685 - October 18, 2004 750 - January 20, 2005 621 - July 19, 2004 686 - October 19, 2004 751 - January 21, 2005 622 - July 20, 2004 687 - October 20, 2004 752 - January 24, 2005 623 - July 21, 2004 688 - October 21, 2004 753 - January 25, 2005 624 - July 22, 2004 689 - October 22, 2004 754 - January 26, 2005 625 - July 23, 2004 690 - October 25, 2004 755 - January 27, 2005 626 - July 26, 2004 691 - October 26, 2004 756 - January 28, 2005 627 - July 27, 2004 692 - October 27, 2004 757 - January 31, 2005 628 - July 28, 2004 693 - October 28, 2004 758 - February 1, 2005 629 - July 29, 2004 694 - October 29, 2004 759 - February 2, 2005 630 - July 30, 2004 695 - November 1, 2004 760 - February 3, 2005 631 - August 2, 2004 696 - November 2, 2004 761 - February 4, 2005 632 - August 3, 2004 697 - November 3, 2004 762 - February 7, 2005 633 - August 4, 2004 698 - November 4, 2004 763 - February 8, 2005 634 - August 5, 2004 699 - November 5, 2004 764 - February 9, 2005 635 - August 6, 2004 700 - November 8, 2004 765 - February 10, 2005 636 - August 9, 2004 701 - November 9, 2004 766 - February 11, 2005 637 - August 10, 2004 702 - November 10, 2004 767 - February 14, 2005 638 - August 11, 2004 703 - November 11, 2004 768 - February 15, 2005 639 - August 12, 2004 704 - November 12, 2004 769 - February 16, 2005 640 - August 13, 2004 705 - November 15, 2004 770 - February 17, 2005 641 - August 16, 2004 706 - November 16, 2004 771 - February 18, 2005 642 - August 17, 2004 707 - November 17, 2004 772 - February 22, 2005 643 - August 18, 2004 708 - November 18, 2004 773 - February 23, 2005 644 - August 19, 2004 709 - November 19, 2004 774 - February 24, 2005 645 - August 20, 2004 710 - November 22, 2004 775 - February 25, 2005 646 - August 23, 2004 711 - November 23, 2004 776 - February 28, 2005 647 - August 24, 2004 712 - November 24, 2004 777 - March 1, 2005 648 - August 25, 2004 713 - November 26, 2004 778 - March 2, 2005 649 - August 26, 2004 714 - November 29, 2004 779 - March 3, 2005 650 - August 27, 2004 715 - November 30, 2004 780 - March 4, 2005 781 - March 7, 2005 846 - June 9, 2005 911 - September 13, 2005 782 - March 8, 2005 847 - June 10, 2005 912 - September 14, 2005 783 - March 9, 2005 848 - June 13, 2005 913 - September 15, 2005 784 - March 10, 2005 849 - June 14, 2005 914 - September 16, 2005 785 - March 11, 2005 850 - June 15, 2005 915 - September 19, 2005 786 - March 14, 2005 851 - June 16, 2005 916 - September 21, 2005 787 - March 15, 2005 852 - June 17, 2005 917 - September 22, 2005 788 - March 16, 2005 853 - June 20, 2005 918 - September 23, 2005 789 - March 17, 2005 854 - June 21, 2005 919 - September 26, 2005 790 - March 18, 2005 855 - June 22, 2005 920 - September 27, 2005 791 - March 21, 2005 856 - June 23, 2005 921 - September 29, 2005 792 - March 22, 2005 857 - June 24, 2005 922 - September 30, 2005 793 - March 23, 2005 858 - June 27, 2005 923 - October 3, 2005 794 - March 24, 2005 859 - June 28, 2005 924 - October 4, 2005 795 - March 28, 2005 860 - June 29, 2005 925 - October 5, 2005 796 - March 29, 2005 861 - June 30, 2005 926 - October 6, 2005 797 - March 30, 2005 862 - July 1, 2005 927 - October 7, 2005 798 - March 31, 2005 863 - July 5, 2005 928 - October 10, 2005 799 - April 1, 2005 864 - July 6, 2005 929 - October 11, 2005 800 - April 4, 2005 865 - July 7, 2005 930 - October 12, 2005 801 - April 5, 2005 866 - July 8, 2005 931 - October 13, 2005 802 - April 6, 2005 867 - July 11, 2005 932 - October 14, 2005 803 - April 7, 2005 868 - July 12, 2005 933 - October 17, 2005 804 - April 8, 2005 869 - July 13, 2005 934 - October 18, 2005 805 - April 11, 2005 870 - July 14, 2005 935 - October 19, 2005 806 - April 12, 2005 871 - July 15, 2005 936 - October 20, 2005 807 - April 13, 2005 872 - July 18, 2005 937 - October 21, 2005 808 - April 14, 2005 873 - July 19, 2005 938 - October 24, 2005 809 - April 15, 2005 874 - July 20, 2005 939 - October 25, 2005 810 - April 18, 2005 875 - July 21, 2005 940 - October 26, 2005 811 - April 19, 2005 876 - July 22, 2005 941 - October 27, 2005 812 - April 20, 2005 877 - July 25, 2005 942 - October 28, 2005 813 - April 21, 2005 878 - July 26, 2005 943 - October 31, 2005 814 - April 22, 2005 879 - July 27, 2005 944 - November 1, 2005 815 - April 25, 2005 880 - July 28, 2005 945 - November 2, 2005 816 - April 26, 2005 881 - July 29, 2005 946 - November 3, 2005 817 - April 27, 2005 882 - August 1, 2005 947 - November 4, 2005 818 - April 28, 2005 883 - August 2, 2005 948 - November 7, 2005 819 - April 29, 2005 884 - August 3, 2005 949 - November 8, 2005 820 - May 2, 2005 885 - August 4, 2005 950 - November 9, 2005 821 - May 3, 2005 886 - August 5, 2005 951 - November 10, 2005 822 - May 4, 2005 887 - August 8, 2005 952 - November 11, 2005 823 - May 5, 2005 888 - August 9, 2005 953 - November 14, 2005 824 - May 6, 2005 889 - August 10, 2005 954 - November 15, 2005 825 - May 9, 2005 890 - August 11, 2005 955 - November 16, 2005 826 - May 10, 2005 891 - August 12, 2005 956 - November 17, 2005 827 - May 11, 2005 892 - August 15, 2005 957 - November 18, 2005 828 - May 12, 2005 893 - August 16, 2005 958 - November 21, 2005 829 - May 13, 2005 894 - August 17, 2005 959 - November 22, 2005 830 - May 16, 2005 895 - August 18, 2005 960 - November 23, 2005 831 - May 17, 2005 896 - August 19, 2005 961 - November 25, 2005 832 - May 18, 2005 897 - August 22, 2005 962 - November 28, 2005 833 - May 19, 2005 898 - August 24, 2005 963 - November 29, 2005 834 - May 20, 2005 899 - August 25, 2005 964 - November 30, 2005 835 - May 23, 2005 900 - August 26, 2005 965 - December 1, 2005 836 - May 24, 2005 901 - August 29, 2005 966 - December 2, 2005 837 - May 25, 2005 902 - August 30, 2005 967 - December 5, 2005 838 - May 26, 2005 903 - August 31, 2005 968 - December 6, 2005 839 - May 27, 2005 904 - September 1, 2005 969 - December 7, 2005 840 - May 31, 2005 905 - September 2, 2005 970 - December 9, 2005 841 - June 1, 2005 906 - September 6, 2005 971 - December 12, 2005 842 - June 2, 2005 907 - September 7, 2005 972 - December 13, 2005 843 - June 3, 2005 908 - September 8, 2005 973 - December 14, 2005 844 - June 6, 2005 909 - September 9, 2005 974 - December 16, 2005 845 - June 8, 2005 910 - September 12, 2005 975 - December 19, 2005 976 - December 20, 2005 1041 - March 30, 2006 1106 - July 6, 2006 977 - December 21, 2005 1042 - March 31, 2006 1107 - July 7, 2006 978 - December 22, 2005 1043 - April 3, 2006 1108 - July 10, 2006 979 - December 23, 2005 1044 - April 4, 2006 1109 - July 11, 2006 980 - December 27, 2005 1045 - April 5, 2006 1110 - July 12, 2006 981 - December 28, 2005 1046 - April 6, 2006 1111 - July 13, 2006 982 - December 29, 2005 1047 - April 7, 2006 1112 - July 14, 2006 983 - December 30, 2005 1048 - April 10, 2006 1113 - July 17, 2006 984 - January 3, 2006 1049 - April 11, 2006 1114 - July 18, 2006 985 - January 5, 2006 1050 - April 13, 2006 1115 - July 19, 2006 986 - January 6, 2006 1051 - April 17, 2006 1116 - July 20, 2006 987 - January 9, 2006 1052 - April 18, 2006 1117 - July 21, 2006 988 - January 10, 2006 1053 - April 19, 2006 1118 - July 24, 2006 989 - January 11, 2006 1054 - April 20, 2006 1119 - July 25, 2006 990 - January 12, 2006 1055 - April 21, 2006 1120 - July 26, 2006 991 - January 13, 2006 1056 - April 24, 2006 1121 - July 27, 2006 992 - January 17, 2006 1057 - April 25, 2006 1122 - July 28, 2006 993 - January 18, 2006 1058 - April 27, 2006 1123 - July 31, 2006 994 - January 19, 2006 1059 - April 28, 2006 1124 - August 1, 2006 995 - January 20, 2006 1060 - May 1, 2006 1125 - August 2, 2006 996 - January 23, 2006 1061 - May 2, 2006 1126 - August 3, 2006 997 - January 24, 2006 1062 - May 3, 2006 1127 - August 4, 2006 998 - January 25, 2006 1063 - May 4, 2006 1128 - August 7, 2006 999 - January 26, 2006 1064 - May 5, 2006 1129 - August 8, 2006 1000 - January 27, 2006 1065 - May 8, 2006 1130 - August 9, 2006 1001 - January 30, 2006 1066 - May 9, 2006 1131 - August 10, 2006 1002 - January 31, 2006 1067 - May 10, 2006 1132 - August 11, 2006 1003 - February 1, 2006 1068 - May 11, 2006 1133 - August 14, 2006 1004 - February 2, 2006 1069 - May 12, 2006 1134 - August 15, 2006 1005 - February 3, 2006 1070 - May 15, 2006 1135 - August 16, 2006 1006 - February 6, 2006 1071 - May 16, 2006 1136 - August 17, 2006 1007 - February 7, 2006 1072 - May 17, 2006 1137 - August 18, 2006 1008 - February 8, 2006 1073 - May 18, 2006 1138 - August 21, 2006 1009 - February 9, 2006 1074 - May 19, 2006 1139 - August 22, 2006 1010 - February 10, 2006 1075 - May 22, 2006 1140 - August 23, 2006 1011 - February 13, 2006 1076 - May 23, 2006 1141 - August 24, 2006 1012 - February 14, 2006 1077 - May 24, 2006 1142 - August 25, 2006 1013 - February 15, 2006 1078 - May 25, 2006 1143 - August 28, 2006 1014 - February 16, 2006 1079 - May 26, 2006 1144 - August 29, 2006 1015 - February 17, 2006 1080 - May 30, 2006 1145 - August 30, 2006 1016 - February 21, 2006 1081 - May 31, 2006 1146 - August 31, 2006 1017 - February 22, 2006 1082 - June 1, 2006 1147 - September 1, 2006 1018 - February 23, 2006 1083 - June 2, 2006 1148 - September 5, 2006 1019 - February 24, 2006 1084 - June 5, 2006 1149 - September 6, 2006 1020 - February 27, 2006 1085 - June 6, 2006 1150 - September 7, 2006 1021 - February 28, 2006 1086 - June 7, 2006 1151 - September 11, 2006 1022 - March 1, 2006 1087 - June 8, 2006 1152 - September 12, 2006 1023 - March 2, 2006 1088 - June 9, 2006 1153 - September 13, 2006 1024 - March 3, 2006 1089 - June 12, 2006 1154 - September 14, 2006 1025 - March 6, 2006 1090 - June 13, 2006 1155 - September 15, 2006 1026 - March 7, 2006 1091 - June 14, 2006 1156 - September 18, 2006 1027 - March 8, 2006 1092 - June 15, 2006 1157 - September 19, 2006 1028 - March 9, 2006 1093 - June 16, 2006 1158 - September 20, 2006 1029 - March 10, 2006 1094 - June 19, 2006 1159 - September 21, 2006 1030 - March 13, 2006 1095 - June 20, 2006 1160 - September 22, 2006 1031 - March 16, 2006 1096 - June 21, 2006 1161 - September 25, 2006 1032 - March 17, 2006 1097 - June 22, 2006 1162 - September 26, 2006 1033 - March 20, 2006 1098 - June 23, 2006 1163 - September 27, 2006 1034 - March 21, 2006 1099 - June 26, 2006 1164 - September 28, 2006 1035 - March 22, 2006 1100 - June 27, 2006 1165 - September 29, 2006 1036 - March 23, 2006 1101 - June 28, 2006 1166 - October 2, 2006 1037 - March 24, 2006 1102 - June 29, 2006 1167 - October 3, 2006 1038 - March 27, 2006 1103 - June 30, 2006 1168 - October 4, 2006 1039 - March 28, 2006 1104 - July 3, 2006 1169 - October 5, 2006 1040 - March 29, 2006 1105 - July 5, 2006 1170 - October 6, 2006 1171 - October 9, 2006 1236 - January 22, 2007 1301 - April 25, 2007 1172 - October 10, 2006 1237 - January 23, 2007 1302 - April 26, 2007 1173 - October 11, 2006 1238 - January 24, 2007 1303 - April 27, 2007 1174 - October 12, 2006 1239 - January 25, 2007 1304 - April 30, 2007 1175 - October 13, 2006 1240 - January 26, 2007 1305 - May 1, 2007 1176 - October 16, 2006 1241 - January 29, 2007 1306 - May 2, 2007 1177 - October 17, 2006 1242 - January 30, 2007 1307 - May 3, 2007 1178 - October 18, 2006 1243 - January 31, 2007 1308 - May 4, 2007 1179 - October 19, 2006 1244 - February 1, 2007 1309 - May 7, 2007 1180 - October 20, 2006 1245 - February 2, 2007 1310 - May 8, 2007 1181 - October 23, 2006 1246 - February 5, 2007 1311 - May 9, 2007 1182 - October 24, 2006 1247 - February 6, 2007 1312 - May 10, 2007 1183 - October 25, 2006 1248 - February 7, 2007 1313 - May 11, 2007 1184 - October 26, 2006 1249 - February 8, 2007 1314 - May 14, 2007 1185 - October 27, 2006 1250 - February 9, 2007 1315 - May 15, 2007 1186 - October 31, 2006 1251 - February 12, 2007 1316 - May 16, 2007 1187 - November 1, 2006 1252 - February 13, 2007 1317 - May 17, 2007 1188 - November 2, 2006 1253 - February 14, 2007 1318 - May 18, 2007 1189 - November 3, 2006 1254 - February 15, 2007 1319 - May 21, 2007 1190 - November 6, 2006 1255 - February 16, 2007 1320 - May 22, 2007 1191 - November 7, 2006 1256 - February 20, 2007 1321 - May 23, 2007 1192 - November 8, 2006 1257 - February 21, 2007 1322 - May 24, 2007 1193 - November 10, 2006 1258 - February 22, 2007 1323 - May 25, 2007 1194 - November 13, 2006 1259 - February 23, 2007 1324 - May 29, 2007 1195 - November 14, 2006 1260 - February 26, 2007 1325 - May 30, 2007 1196 - November 15, 2006 1261 - February 27, 2007 1326 - May 31, 2007 1197 - November 16, 2006 1262 - February 28, 2007 1327 - June 1, 2007 1198 - November 17, 2006 1263 - March 1, 2007 1328 - June 4, 2007 1199 - November 20, 2006 1264 - March 2, 2007 1329 - June 5, 2007 1200 - November 21, 2006 1265 - March 5, 2007 1330 - June 6, 2007 1201 - November 22, 2006 1266 - March 6, 2007 1331 - June 7, 2007 1202 - November 24, 2006 1267 - March 7, 2007 1332 - June 8, 2007 1203 - November 27, 2006 1268 - March 8, 2007 1333 - June 11, 2007 1204 - November 28, 2006 1269 - March 9, 2007 1334 - June 12, 2007 1205 - November 29, 2006 1270 - March 12, 2007 1335 - June 13, 2007 1206 - November 30, 2006 1271 - March 13, 2007 1336 - June 14, 2007 1207 - December 1, 2006 1272 - March 14, 2007 1337 - June 15, 2007 1208 - December 4, 2006 1273 - March 15, 2007 1338 - June 18, 2007 1209 - December 5, 2006 1274 - March 16, 2007 1339 - June 19, 2007 1210 - December 6, 2006 1275 - March 19, 2007 1340 - June 20, 2007 1211 - December 7, 2006 1276 - March 20, 2007 1341 - June 21, 2007 1212 - December 11, 2006 1277 - March 21, 2007 1342 - June 22, 2007 1213 - December 12, 2006 1278 - March 22, 2007 1343 - June 25, 2007 1214 - December 13, 2006 1279 - March 23, 2007 1344 - June 26, 2007 1215 - December 14, 2006 1280 - March 26, 2007 1345 - June 27, 2007 1216 - December 18, 2006 1281 - March 27, 2007 1346 - June 28, 2007 1217 - December 20, 2006 1282 - March 28, 2007 1347 - June 29, 2007 1218 - December 21, 2006 1283 - March 29, 2007 1348 - July 2, 2007 1219 - December 22, 2006 1284 - March 30, 2007 1349 - July 3, 2007 1220 - December 26, 2006 1285 - April 2, 2007 1350 - July 5, 2007 1221 - December 27, 2006 1286 - April 3, 2007 1351 - July 6, 2007 1222 - December 28, 2006 1287 - April 4, 2007 1352 - July 9, 2007 1223 - December 29, 2006 1288 - April 5, 2007 1353 - July 10, 2007 1224 - January 3, 2007 1289 - April 9, 2007 1354 - July 11, 2007 1225 - January 4, 2007 1290 - April 10, 2007 1355 - July 12, 2007 1226 - January 5, 2007 1291 - April 11, 2007 1356 - July 13, 2007 1227 - January 8, 2007 1292 - April 12, 2007 1357 - July 16, 2007 1228 - January 9, 2007 1293 - April 13, 2007 1358 - July 17, 2007 1229 - January 10, 2007 1294 - April 16, 2007 1359 - July 18, 2007 1230 - January 11, 2007 1295 - April 17, 2007 1360 - July 19, 2007 1231 - January 12, 2007 1296 - April 18, 2007 1361 - July 20, 2007 1232 - January 16, 2007 1297 - April 19, 2007 1362 - July 23, 2007 1233 - January 17, 2007 1298 - April 20, 2007 1363 - July 24, 2007 1234 - January 18, 2007 1299 - April 23, 2007 1364 - July 25, 2007 1235 - January 19, 2007 1300 - April 24, 2007 1365 - July 26, 2007 1366 - July 27, 2007 1431 -October 31, 2007 1735 - February 07, 2008 1367 - July 30, 2007 1432 -November 1, 2007 1736 - February 08, 2008 1368 - July 31, 2007 1433 -November 2, 2007 1737 - February 11, 2008 1369 - August 1, 2007 1434 -November 5, 2007 1738 - February 12, 2008 1370 - August 2, 2007 1435 -November 6, 2007 1739 - February 13, 2008 1371 - August 3, 2007 1436 -November 8, 2007 1740 - February 14, 2008 1372 - August 6, 2007 1437 -November 9, 2007 1741 - February 15, 2008 1373 - August 7, 2007 1438 -November 12, 2007 1742 - February 19, 2008 1374 - August 8, 2007 1439 -November 13, 2007 1743 - February 20, 2008 1375 - August 9, 2007 1440 -November 14, 2007 1744 - February 21, 2008 1376 - August 10, 2007 1441 -November 15, 2007 1745 - February 22, 2008 1377 - August 13, 2007 1442 -November 16, 2007 1746 - February 25, 2008 1378 - August 14, 2007 1443 -November 19, 2007 1747 - February 26, 2008 1379 - August 15, 2007 1444 -November 20, 2007 1748 - February 27, 2008 1380 - August 16, 2007 1445 -November 21, 2007 1749 - February 28, 2008 1381 - August 17, 2007 1446 -November 23, 2007 1750 - February 29, 2008 1382 - August 20, 2007 1447 -November 26, 2007 1751 - March 03, 2008 1383 - August 21, 2007 1448 -November 27, 2007 1752 - March 04, 2008 1384 - August 23, 2007 1449 -November 28, 2007 1753 - March 05, 2008 1385 - August 24, 2007 1450 -November 30, 2007 1754 - March 06, 2008 1386 - August 27, 2007 1451 -December 3, 2007 1755 - March 07, 2008 1387 - August 28, 2007 1452 -December 4, 2007 1756 - March 10, 2008 1388 - August 29, 2007 1453 -December 5, 2007 1757 - March 11, 2008 1389 - August 30, 2007 1454 -December 6, 2007 1758 - March 12, 2008 1390 - August 31, 2007 1455 -December 7, 2007 1759 - March 13, 2008 1391 - September 4, 2007 1456 -December 10, 2007 1760 - March 14, 2008 1392 - September 5, 2007 1457 -December 11, 2007 1761 - March 17, 2008 1393 - September 6, 2007 1458 -December 12, 2007 1762 - March 18, 2008 1394 - September 7, 2007 1459 -December 13, 2007 1763 - March 19, 2008 1395 - September 10, 2007 1460 -December 14, 2007 1764 - March 20, 2008 1396 - September 11, 2007 1461 -December 17, 2007 1765 - March 24, 2008 1397 - September 12, 2007 1462 -December 18, 2007 1766 - March 25, 2008 1398 - September 13, 2007 1463 -December 19, 2007 1767 - March 26, 2008 1399 - September 14, 2007 1464 -December 20, 2007 1768 - March 27, 2008 1400 - September 17, 2007 1465 -December 21, 2007 1769 - March 28, 2008 1401 - September 18, 2007 1466 -December 24, 2007 1770 - March 31, 2008 1402 - September 19, 2007 1467 -December 26, 2007 1771 - April 01, 2008 1403 - September 20, 2007 1468 -December 27, 2007 1772 - April 02, 2008 1404 - September 21, 2007 1469 -December 28, 2007 1773 - April 03, 2008 1405 - September 24, 2007 1470 -December 31, 2007 1774 - April 04, 2008 1406 - September 25, 2007 1710 -January 02, 2008 1775 - April 07, 2008 1407 - September 26, 2007 1711 -January 03, 2008 1776 - April 08, 2008 1408 - September 28, 2007 1712 -January 04, 2008 1777 - April 09, 2008 1409 - October 1, 2007 1713 -January 07, 2008 1778 - April 10, 2008 1410 - October 2, 2007 1714 -January 08, 2008 1779 - April 11, 2008 1411 - October 3, 2007 1715 -January 09, 2008 1780 - April 14, 2008 1412 - October 4, 2007 1716 -January 10, 2008 1781 - April 15, 2008 1413 - October 5, 2007 1717 -January 11, 2008 1782 - April 16, 2008 1414 - October 8, 2007 1718 -January 14, 2008 1783 - April 17, 2008 1415 - October 9, 2007 1719 -January 15, 2008 1784 - April 18, 2008 1416 - October 10, 2007 1720 -January 16, 2008 1785 - April 21, 2008 1417 - October 11, 2007 1721 -January 17, 2008 1786 - April 22, 2008 1418 - October 12, 2007 1722 -January 18, 2008 1787 - April 23, 2008 1419 - October 15, 2007 1723 -January 22, 2008 1788 - April 24, 2008 1420 - October 16, 2007 1724 -January 23, 2008 1789 - April 25, 2008 1421 - October 17, 2007 1725 -January 24, 2008 1790 - April 28, 2008 1422 - October 18, 2007 1726 -January 25, 2008 1791 - April 29, 2008 1423 - October 19, 2007 1727 -January 28, 2008 1792 - April 30, 2008 1424 - October 22, 2007 1728 -January 29, 2008 1793 - May 01, 2008 1425 - October 23, 2007 1729 -January 30, 2008 1794 - May 02, 2008 1426 - October 24, 2007 1730 -January 31, 2008 1795 - May 05, 2008 1427 - October 25, 2007 1731 -February 01, 2008 1796 - May 06, 2008 1428 - October 26, 2007 1732 -February 04, 2008 1797 - May 07, 2008 1429 - October 29, 2007 1733 -February 05, 2008 1798 - May 08, 2008 1430 - October 30, 2007 1734 -February 06, 2008 1799 - May 09, 2008 1800 - May 12, 2008 1865 - August 15, 2008 1930 - November 20, 2008 1801 - May 13, 2008 1866 - August 18, 2008 1931 - November 21, 2008 1802 - May 14, 2008 1867 - August 19, 2008 1932 - November 24, 2008 1803 - May 15, 2008 1868 - August 20, 2008 1933 - November 25, 2008 1804 - May 16, 2008 1869 - August 21, 2008 1934 - November 26, 2008 1805 - May 19, 2008 1870 - August 22, 2008 1935 - December 01, 2008 1806 - May 20, 2008 1871 - August 25, 2008 1936 - December 02, 2008 1807 - May 21, 2008 1872 - August 26, 2008 1937 - December 04, 2008 1808 - May 22, 2008 1873 - August 28, 2008 1938 - December 05, 2008 1809 - May 23, 2008 1874 - August 29, 2008 1939 - December 08, 2008 1810 - May 27, 2008 1875 - September 03, 2008 1940 - December 09, 2008 1811 - May 28, 2008 1876 - September 04, 2008 1941 - December 10, 2008 1812 - May 29, 2008 1877 - September 05, 2008 1942 - December 11, 2008 1813 - May 30, 2008 1878 - September 08, 2008 1943 - December 12, 2008 1814 - June 02, 2008 1879 - September 10, 2008 1944 - December 15, 2008 1815 - June 03, 2008 1880 - September 11, 2008 1945 - December 16, 2008 1816 - June 04, 2008 1881 - September 12, 2008 1946 - December 17, 2008 1817 - June 05, 2008 1882 - September 15, 2008 1947 - December 19, 2008 1818 - June 06, 2008 1883 - September 16, 2008 1948 - December 22, 2008 1819 - June 09, 2008 1884 - September 17, 2008 1949 - December 23, 2008 1820 - June 10, 2008 1885 - September 18, 2008 1950 - December 24, 2008 1821 - June 11, 2008 1886 - September 19, 2008 1951 - December 26, 2008 1822 - June 12, 2008 1887 - September 22, 2008 1952 - December 29, 2008 1823 - June 13, 2008 1888 - September 23, 2008 1953 - December 31, 2008 1824 - June 17, 2008 1889 - September 24, 2008 1825 - June 18, 2008 1890 - September 25, 2008 1826 - June 19, 2008 1891 - September 26, 2008 1827 - June 20, 2008 1892 - September 29, 2008 1828 - June 23, 2008 1893 - September 30, 2008 1829 - June 24, 2008 1894 - October 01, 2008 1830 - June 25, 2008 1895 - October 02, 2008 1831 - June 26, 2008 1896 - October 03, 2008 1832 - June 27, 2008 1897 - October 06, 2008 1833 - June 30, 2008 1898 - October 07, 2008 1834 - July 01, 2008 1899 - October 08, 2008 1835 - July 02, 2008 1900 - October 09, 2008 1836 - July 03, 2008 1901 - October 10, 2008 1837 - July 07, 2008 1902 - October 13, 2008 1838 - July 08, 2008 1903 - October 14, 2008 1839 - July 09, 2008 1904 - October 15, 2008 1840 - July 10, 2008 1905 - October 16, 2008 1841 - July 11, 2008 1906 - October 17, 2008 1842 - July 14, 2008 1907 - October 20, 2008 1843 - July 15, 2008 1908 - October 21, 2008 1844 - July 16, 2008 1909 - October 22, 2008 1845 - July 17, 2008 1910 - October 23, 2008 1846 - July 18, 2008 1911 - October 24, 2008 1847 - July 21, 2008 1912 - October 27, 2008 1848 - July 22, 2008 1913 - October 28, 2008 1849 - July 23, 2008 1914 - October 29, 2008 1850 - July 24, 2008 1915 - October 30, 2008 1851 - July 25, 2008 1916 - October 31, 2008 1852 - July 28, 2008 1917 - November 03, 2008 1853 - July 29, 2008 1918 - November 04, 2008 1854 - July 30, 2008 1919 - November 05, 2008 1855 - July 31, 2008 1920 - November 06, 2008 1856 - August 01, 2008 1921 - November 07, 2008 1857 - August 04, 2008 1922 - November 10, 2008 1858 - August 05, 2008 1923 - November 11, 2008 1859 - August 06, 2008 1924 - November 12, 2008 1860 - August 07, 2008 1925 - November 13, 2008 1861 - August 11, 2008 1926 - November 14, 2008 1862 - August 12, 2008 1927 - November 17, 2008 1863 - August 13, 2008 1928 - November 18, 2008 1864 - August 14, 2008 1929 - November 19, 2008 Jackson National Separate Account I [LOGO] Financial Statements December 31, 2008 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/AIM JNL/Capital JNL/AIM Global International JNL/AIM JNL/AIM Guardian Global Real Estate Growth Large Cap Small Cap Balanced Portfolio Portfolio Growth Portfolio Growth Portfolio Portfolio -------------- -------------- ---------------- ---------------- --------------- Assets Investments, at value (a) $ 112,538,812 $ 108,749,870 $ 127,034,559 $ 37,619,933 $ 173,338,524 Receivables: Investment securities sold 194,643 142,871 153,925 39,675 260,087 Sub-account units sold 237,661 43,395 484,547 109,418 79,958 -------------- -------------- ---------------- ---------------- --------------- Total assets 112,971,116 108,936,136 127,673,031 37,769,026 173,678,569 -------------- -------------- ---------------- ---------------- --------------- Liabilities Payables: Investment securities purchased 237,661 43,395 484,547 109,418 79,958 Sub-account units redeemed 189,428 137,980 148,178 37,988 252,348 Insurance fees due to Jackson 5,215 4,891 5,747 1,687 7,739 -------------- -------------- ---------------- ---------------- --------------- Total liabilities 432,304 186,266 638,472 149,093 340,045 -------------- -------------- ---------------- ---------------- --------------- Net assets (Note 6) $ 112,538,812 $ 108,749,870 $ 127,034,559 $ 37,619,933 $ 173,338,524 ---------------------------------- ============== ============== ================ ================ =============== (a) Investment shares 19,436,755 15,806,667 14,652,198 5,015,991 23,583,473 Investments at cost $ 203,797,293 $ 184,203,656 $ 184,525,236 $ 60,855,075 $ 244,421,383 JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio Portfolio Portfolio Portfolio ------------------ ------------------- -------------- ----------------- -------------- Assets Investments, at value (a) $ 120,056,205 $ 15,040,264 $ 123,759,835 $ 175,642,940 $ 40,232,681 Receivables: Investment securities sold 175,596 13,227 90,133 284,704 57,690 Sub-account units sold 234,313 32,580 101,045 277,079 160,679 ------------------ ------------------- -------------- ----------------- -------------- Total assets 120,466,114 15,086,071 123,951,013 176,204,723 40,451,050 ------------------ ------------------- -------------- ----------------- -------------- Liabilities Payables: Investment securities purchased 234,313 32,580 101,045 277,079 160,679 Sub-account units redeemed 170,455 12,545 84,874 276,538 55,809 Insurance fees due to Jackson 5,141 682 5,259 8,166 1,881 ------------------ ------------------- -------------- ----------------- -------------- Total liabilities 409,909 45,807 191,178 561,783 218,369 ------------------ ------------------- -------------- ----------------- -------------- Net assets (Note 6) $ 120,056,205 $ 15,040,264 $ 123,759,835 $ 175,642,940 $ 40,232,681 ---------------------------------- ================== =================== ============== ================= ============== (a) Investment shares 7,826,350 3,312,833 8,839,988 27,791,604 6,584,727 Investments at cost $ 175,010,665 $ 21,868,529 $ 179,773,207 $ 305,717,465 $ 51,039,506
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio Portfolio Income Portfolio ------------ --------------- ------------------ ------------- ---------------- Assets Investments, at value (a) $ 37,395,642 $ 107,791,438 $ 552,969,807 $ 34,779,687 $ 214,039,597 Receivables: Investment securities sold 38,372 142,567 1,068,368 45,692 462,176 Sub-account units sold 139,668 305,693 727,387 110,430 180,165 ------------ --------------- ------------------ ------------- ---------------- Total assets 37,573,682 108,239,698 554,765,562 34,935,809 214,681,938 ------------ --------------- ------------------ ------------- ---------------- Liabilities Payables: Investment securities purchased 139,668 305,693 727,387 110,430 180,165 Sub-account units redeemed 36,774 137,737 1,043,032 44,120 452,498 Insurance fees due to Jackson 1,598 4,830 25,336 1,572 9,678 ------------ --------------- ------------------ ------------- ---------------- Total liabilities 178,040 448,260 1,795,755 156,122 642,341 ------------ --------------- ------------------ ------------- ---------------- Net assets (Note 6) $ 37,395,642 $ 107,791,438 $ 552,969,807 $ 34,779,687 $ 214,039,597 -------------------------------- ============ =============== ================== ============= ================ (a) Investment shares 7,539,444 9,042,906 87,495,223 5,865,040 28,963,410 Investments at cost $ 75,457,653 $ 171,121,482 $ 831,825,197 $ 54,049,489 $ 294,946,761 JNL/Franklin JNL/ JNL/Goldman JNL/ JNL/Franklin Templeton Goldman Sachs Sachs Emerging Goldman Sachs Templeton Mutual Small Cap Core Plus Markets Debt Mid Cap Shares Portfolio Value Portfolio Bond Portfolio Portfolio Value Portfolio ----------------- ----------------- --------------- -------------- ---------------- Assets Investments, at value (a) $ 60,997,592 $ 57,615,127 $ 276,385,247 $ 8,742,623 $ 64,798,851 Receivables: Investment securities sold 74,677 228,369 502,330 10,958 380,678 Sub-account units sold 139,913 131,455 1,760,480 60,205 97,573 ----------------- ----------------- --------------- -------------- ---------------- Total assets 61,212,182 57,974,951 278,648,057 8,813,786 65,277,102 ----------------- ----------------- --------------- -------------- ---------------- Liabilities Payables: Investment securities 139,913 131,455 1,760,480 60,205 97,573 purchased Sub-account units redeemed 71,860 225,748 490,009 10,589 377,725 Insurance fees due to Jackson 2,817 2,621 12,321 369 2,953 ----------------- ----------------- --------------- -------------- ---------------- Total liabilities 214,590 359,824 2,262,810 71,163 478,251 ----------------- ----------------- --------------- -------------- ---------------- Net assets (Note 6) $ 60,997,592 $ 57,615,127 $ 276,385,247 $ 8,742,623 $ 64,798,851 -------------------------------- ================= ================= =============== ============== ================ (a) Investment shares 9,838,321 8,769,426 25,806,279 903,164 9,953,741 Investments at cost $ 88,797,938 $ 87,869,359 $ 298,671,131 $ 8,658,458 $ 105,805,915
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/ JNL/JPMorgan Goldman Sachs JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard Short Duration International MidCap Growth & Quality Bond Emerging Markets Bond Portfolio Value Portfolio Portfolio Portfolio Portfolio ---------------- ----------------- -------------- ---------------- ---------------- Assets Investments, at value (a) $ 87,243,862 $ 187,536,202 $ 64,780,497 $ 448,359,641 $ 148,734,173 Receivables: Investment securities sold 309,086 256,080 41,068 4,454,399 229,474 Sub-account units sold 343,709 596,106 198,111 1,271,237 1,470,291 ---------------- ----------------- -------------- ---------------- ---------------- Total assets 87,896,657 188,388,388 65,019,676 454,085,277 150,433,938 ---------------- ----------------- -------------- ---------------- ---------------- Liabilities Payables: Investment securities purchased 343,709 596,106 198,111 1,271,237 1,470,291 Sub-account units redeemed 305,103 247,467 38,333 4,433,777 222,654 Insurance fees due to Jackson 3,983 8,613 2,735 20,622 6,820 ---------------- ----------------- -------------- ---------------- ---------------- Total liabilities 652,795 852,186 239,179 5,725,636 1,699,765 ---------------- ----------------- -------------- ---------------- ---------------- Net assets (Note 6) $ 87,243,862 $ 187,536,202 $ 64,780,497 $ 448,359,641 $ 148,734,173 ---------------------------------- ================ ================= ============== ================ ================ (a) Investment shares 9,320,925 32,786,049 5,809,910 36,600,787 25,294,927 Investments at cost $ 94,624,122 $ 342,182,345 $ 98,489,019 $ 435,604,565 $ 264,850,596 JNL/Lazard Mid Cap JNL/Lazard JNL/M&G JNL/M&G JNL/MCM Equity Small Cap Global Basics Global Leaders 10 x 10 Portfolio Equity Portfolio Portfolio Portfolio Portfolio ---------------- ----------------- -------------- -------------- -------------- Assets Investments, at value (a) $ 110,320,795 $ 60,108,378 $ 552,316 $ 366,424 $ 88,276,078 Receivables: Investment securities sold 135,935 90,375 123 41 309,067 Sub-account units sold 98,746 60,116 2,789 -- 3,339 ---------------- ----------------- -------------- -------------- -------------- Total assets 110,555,476 60,258,869 555,228 366,465 88,588,484 ---------------- ----------------- -------------- -------------- -------------- Liabilities Payables: Investment securities purchased 98,746 60,116 2,789 -- 3,339 Sub-account units redeemed 130,929 87,694 105 28 305,086 Insurance fees due to Jackson 5,006 2,681 18 13 3,981 ---------------- ----------------- -------------- -------------- -------------- Total liabilities 234,681 150,491 2,912 41 312,406 ---------------- ----------------- -------------- -------------- -------------- Net assets (Note 6) $ 110,320,795 $ 60,108,378 $ 552,316 $ 366,424 $ 88,276,078 ---------------------------------- ================ ================= ============== ============== ============== (a) Investment shares 16,176,070 9,821,630 65,596 43,883 14,261,079 Investments at cost $ 201,344,275 $ 107,531,205 $ 537,677 $ 343,645 $ 122,234,167
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Bond Index Communications Consumer Brands Dow 10 25 Portfolio Portfolio Sector Portfolio Sector Portfolio Portfolio --------------- -------------- ---------------- ---------------- -------------- Assets Investments, at value (a) $ 326,725,874 $ 314,497,576 $ 27,618,471 $ 22,306,246 $ 335,674,758 Receivables: Investment securities sold 832,051 977,326 48,498 23,659 627,876 Sub-account units sold 55,135 544,716 3,535 89,035 194,002 --------------- -------------- ---------------- ---------------- -------------- Total assets 327,613,060 316,019,618 27,670,504 22,418,940 336,496,636 --------------- -------------- ---------------- ---------------- -------------- Liabilities Payables: Investment securities purchased 55,135 544,716 3,535 89,035 194,002 Sub-account units redeemed 817,284 962,837 47,190 22,626 612,801 Insurance fees due to Jackson 14,767 14,489 1,308 1,033 15,075 --------------- -------------- ---------------- ---------------- -------------- Total liabilities 887,186 1,522,042 52,033 112,694 821,878 --------------- -------------- ---------------- ---------------- -------------- Net assets (Note 6) $ 326,725,874 $ 314,497,576 $ 27,618,471 $ 22,306,246 $ 335,674,758 ---------------------------------- =============== ============== ================ ================ ============== (a) Investment shares 46,212,995 28,435,586 11,555,845 3,638,866 48,437,916 Investments at cost $ 527,754,227 $ 315,362,216 $ 45,467,330 $ 31,949,630 $ 521,615,908 JNL/MCM Enhanced JNL/MCM S&P 500 Stock JNL/MCM JNL/MCM JNL/MCM Dow Dividend Index European 30 Financial Global 15 Portfolio Portfolio Portfolio Sector Portfolio Portfolio --------------- -------------- ---------------- ---------------- -------------- Assets Investments, at value (a) $ 187,965,070 $ 42,727,355 $ 392,902 $ 72,119,554 $ 523,596,857 Receivables: Investment securities sold 380,787 35,786 244 111,275 973,230 Sub-account units sold 142,994 107,186 8,004 149,631 473,240 --------------- -------------- ---------------- ---------------- -------------- Total assets 188,488,851 42,870,327 401,150 72,380,460 525,043,327 --------------- -------------- ---------------- ---------------- -------------- Liabilities Payables: Investment securities purchased 142,994 107,186 8,004 149,631 473,240 Sub-account units redeemed 372,171 33,868 226 107,858 949,515 Insurance fees due to Jackson 8,616 1,918 18 3,417 23,715 --------------- -------------- ---------------- ---------------- -------------- Total liabilities 523,781 142,972 8,248 260,906 1,446,470 --------------- -------------- ---------------- ---------------- -------------- Net assets (Note 6) $ 187,965,070 $ 42,727,355 $ 392,902 $ 72,119,554 $ 523,596,857 ---------------------------------- =============== ============== ================ ================ ============== (a) Investment shares 34,872,926 9,601,653 45,739 13,160,503 46,459,348 Investments at cost $ 354,477,718 $ 66,437,114 $ 375,416 $ 119,737,202 $ 761,240,876
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/MCM JNL/MCM JNL/MCM International JNL/MCM JNL/MCM Healthcare Index 5 Index JNL 5 JNL Optimized Sector Portfolio Portfolio Portfolio Portfolio 5 Portfolio ---------------- ------------- --------------- --------------- --------------- Assets Investments, at value (a) $ 118,315,363 $ 56,122,504 $ 296,336,432 $ 2,750,039,606 $ 288,762,199 Receivables: Investment securities sold 170,463 67,260 479,722 6,530,948 516,754 Sub-account units sold 210,921 20,987 650,511 1,593,329 212,768 ---------------- ------------- --------------- --------------- --------------- Total assets 118,696,747 56,210,751 297,466,665 2,758,163,883 289,491,721 ---------------- ------------- --------------- --------------- --------------- Liabilities Payables: Investment securities purchased 210,921 20,987 650,511 1,593,329 212,768 Sub-account units redeemed 165,055 64,768 466,187 6,406,088 503,631 Insurance fees due to Jackson 5,408 2,492 13,535 124,860 13,123 ---------------- ------------- --------------- --------------- --------------- Total liabilities 381,384 88,247 1,130,233 8,124,277 729,522 ---------------- ------------- --------------- --------------- --------------- Net assets (Note 6) $ 118,315,363 $ 56,122,504 $ 296,336,432 $ 2,750,039,606 $ 288,762,199 ---------------------------------- ================ ============= =============== =============== =============== (a) Investment shares 12,415,043 8,217,058 31,491,651 435,822,442 48,777,398 Investments at cost $ 149,927,977 $ 70,660,293 $ 454,788,992 $ 5,030,372,946 $ 499,041,527 JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Nasdaq 25 NYSE International Oil & Gas Pacific Rim 30 S&P 10 Portfolio 25 Portfolio Sector Portfolio Portfolio Portfolio ---------------- ------------------ ---------------- -------------- -------------- Assets Investments, at value (a) $ 52,148,087 $ 50,699,836 $ 303,558,910 $ 489,459 $ 319,741,251 Receivables: Investment securities sold 88,017 150,201 747,962 296 663,883 Sub-account units sold 21,029 57,521 484,634 5,083 395,947 ---------------- ------------------ ---------------- -------------- -------------- Total assets 52,257,133 50,907,558 304,791,506 494,838 320,801,081 ---------------- ------------------ ---------------- -------------- -------------- Liabilities Payables: Investment securities purchased 21,029 57,521 484,634 5,083 395,947 Sub-account units redeemed 85,529 147,788 733,162 274 649,405 Insurance fees due to Jackson 2,488 2,413 14,800 22 14,478 ---------------- ------------------ ---------------- -------------- -------------- Total liabilities 109,046 207,722 1,232,596 5,379 1,059,830 ---------------- ------------------ ---------------- -------------- -------------- Net assets (Note 6) $ 52,148,087 $ 50,699,836 $ 303,558,910 $ 489,459 $ 319,741,251 ---------------------------------- ================ ================== ================ ============== ============== (a) Investment shares 7,114,337 9,005,299 14,843,956 50,985 38,992,835 Investments at cost $ 77,517,905 $ 83,672,828 $ 441,223,651 $ 454,225 $ 512,630,462
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/MCM JNL/MCM JNL/MCM S&P 500 JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap Index S&P SMid Select Small-Cap Portfolio Index Portfolio Portfolio 60 Portfolio Portfolio ---------------- --------------- --------------- --------------- ---------------- Assets Investments, at value (a) $ 25,914,069 $ 235,461,609 $ 352,979,849 $ 40,939,929 $ 298,382,903 Receivables: Investment securities sold 74,023 394,722 667,133 138,060 598,454 Sub-account units sold 9,720 410,574 606,484 45,443 93,984 ---------------- --------------- --------------- --------------- ---------------- Total assets 25,997,812 236,266,905 354,253,466 41,123,432 299,075,341 ---------------- --------------- --------------- --------------- ---------------- Liabilities Payables: Investment securities purchased 9,720 410,574 606,484 45,443 93,984 Sub-account units redeemed 72,783 383,858 650,845 136,063 585,035 Insurance fees due to Jackson 1,240 10,864 16,288 1,997 13,419 ---------------- --------------- --------------- --------------- ---------------- Total liabilities 83,743 805,296 1,273,617 183,503 692,438 ---------------- --------------- --------------- --------------- ---------------- Net assets (Note 6) $ 25,914,069 $ 235,461,609 $ 352,979,849 $ 40,939,929 $ 298,382,903 ---------------------------------- ================ =============== =============== =============== ================ (a) Investment shares 3,520,933 28,820,270 46,814,304 6,998,278 32,084,183 Investments at cost $ 32,555,009 $ 374,000,824 $ 494,581,493 $ 54,947,857 $ 559,283,031 JNL/MCM JNL/MCM JNL/ Small Cap Technology JNL/MCM Oppenheimer Index Sector Value Line 30 JNL/MCM Global Growth Portfolio Portfolio Portfolio VIP Portfolio Portfolio ---------------- --------------- --------------- --------------- ---------------- Assets Investments, at value (a) $ 193,801,337 $ 49,760,923 $ 517,872,874 $ 228,217,219 $ 104,997,285 Receivables: Investment securities sold 352,546 69,347 1,007,166 388,801 241,053 Sub-account units sold 418,741 91,635 533,543 117,880 119,562 ---------------- --------------- --------------- --------------- ---------------- Total assets 194,572,624 49,921,905 519,413,583 228,723,900 105,357,900 ---------------- --------------- --------------- --------------- ---------------- Liabilities Payables: Investment securities purchased 418,741 91,635 533,543 117,880 119,562 Sub-account units redeemed 343,613 66,997 983,219 378,323 236,363 Insurance fees due to Jackson 8,933 2,350 23,947 10,478 4,690 ---------------- --------------- --------------- --------------- ---------------- Total liabilities 771,287 160,982 1,540,709 506,681 360,615 ---------------- --------------- --------------- --------------- ---------------- Net assets (Note 6) $ 193,801,337 $ 49,760,923 $ 517,872,874 $ 228,217,219 $ 104,997,285 ---------------------------------- ================ =============== =============== =============== ================ (a) Investment shares 24,285,882 12,629,676 54,975,889 45,102,217 14,999,612 Investments at cost $ 303,071,277 $ 80,240,364 $ 834,702,183 $ 428,683,671 $ 176,927,750
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/ JNL/PAM JNL/PAM JNL/PIMCO JNL/PIMCO PPM America Asia ex-Japan China-India Real Return Total Return Core Equity Portfolio Portfolio Portfolio Bond Portfolio Portfolio ---------------- --------------- --------------- --------------- ---------------- Assets Investments, at value (a) $ 3,934,203 $ 24,870,505 $ 423,346,238 $ 871,072,301 $ 37,458,826 Receivables: Investment securities sold 22,369 25,686 786,552 1,482,810 113,189 Sub-account units sold 2,499 617,590 265,655 770,009 700 ---------------- --------------- --------------- --------------- ---------------- Total assets 3,959,071 25,513,781 424,398,445 873,325,120 37,572,715 ---------------- --------------- --------------- --------------- ---------------- Liabilities Payables: Investment securities purchased 2,499 617,590 265,655 770,009 700 Sub-account units redeemed 22,178 24,592 766,731 1,443,318 111,693 Insurance fees due to Jackson 191 1,094 19,821 39,492 1,496 ---------------- --------------- --------------- --------------- ---------------- Total liabilities 24,868 643,276 1,052,207 2,252,819 113,889 ---------------- --------------- --------------- --------------- ---------------- Net assets (Note 6) $ 3,934,203 $ 24,870,505 $ 423,346,238 $ 871,072,301 $ 37,458,826 ---------------------------------- ================ =============== =============== =============== ================ (a) Investment shares 819,626 5,879,552 41,915,469 78,687,651 3,006,326 Investments at cost $ 4,775,622 $ 33,067,308 $ 474,066,776 $ 940,831,663 $ 58,343,246 JNL/ JNL/ JNL/ JNL/ JNL/ PPM America PPM America PPM America PPM America Red Rocks Listed High Yield Mid Cap Value Small Cap Value Value Equity Private Equity Bond Portfolio Portfolio Portfolio Portfolio Portfolio ---------------- --------------- --------------- --------------- ----------------- Assets Investments, at value (a) $ 172,415,363 $ 3,372,961 $ 4,762,511 $ 55,567,160 $ 12,101,739 Receivables: Investment securities sold 225,347 12,154 3,754 45,139 8,171 Sub-account units sold 1,581,418 493 5,466 29,604 187,068 ---------------- --------------- --------------- --------------- ----------------- Total assets 174,222,128 3,385,608 4,771,731 55,641,903 12,296,978 ---------------- --------------- --------------- --------------- ----------------- Liabilities Payables: Investment securities purchased 1,581,418 493 5,466 29,604 187,068 Sub-account units redeemed 217,567 11,996 3,521 42,916 7,639 Insurance fees due to Jackson 7,780 158 233 2,223 532 ---------------- --------------- --------------- --------------- ----------------- Total liabilities 1,806,765 12,647 9,220 74,743 195,239 ---------------- --------------- --------------- --------------- ----------------- Net assets (Note 6) $ 172,415,363 $ 3,372,961 $ 4,762,511 $ 55,567,160 $ 12,101,739 ---------------------------------- ================ =============== =============== =============== ================= (a) Investment shares 38,658,153 600,171 759,571 7,340,444 2,047,671 Investments at cost $ 251,074,921 $ 5,119,438 $ 6,313,948 $ 100,815,367 $ 13,500,787
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/S&P JNL/S&P Competitive JNL/S&P JNL/S&P Disciplined JNL/S&P 4 Advantage Disciplined Disciplined Moderate Portfolio Portfolio Growth Portfolio Moderate Portfolio Growth Portfolio ---------------- --------------- ---------------- ------------------ ---------------- Assets Investments, at value (a) $ 255,728,801 $ 26,645,324 $ 25,006,910 $ 55,788,106 $ 71,318,733 Receivables: Investment securities sold 297,177 33,081 32,324 60,923 104,006 Sub-account units sold 525,968 35,156 5,246 135 397,052 ---------------- --------------- ---------------- ------------------ ---------------- Total assets 256,551,946 26,713,561 25,044,480 55,849,164 71,819,791 ---------------- --------------- ---------------- ------------------ ---------------- Liabilities Payables: Investment securities purchased 525,968 35,156 5,246 135 397,052 Sub-account units redeemed 285,482 31,848 31,136 58,353 100,876 Insurance fees due to Jackson 11,695 1,233 1,188 2,570 3,130 ---------------- --------------- ---------------- ------------------ ---------------- Total liabilities 823,145 68,237 37,570 61,058 501,058 ---------------- --------------- ---------------- ------------------ ---------------- Net assets (Note 6) $ 255,728,801 $ 26,645,324 $ 25,006,910 $ 55,788,106 $ 71,318,733 ---------------------------------- ================ =============== ================ ================== ================ (a) Investment shares 37,662,563 3,861,641 3,963,060 7,226,439 10,472,648 Investments at cost $ 319,073,393 $ 34,442,150 $ 33,616,525 $ 69,097,110 $ 93,510,367 JNL/S&P JNL/S&P JNL/S&P JNL/ JNL/ Dividend Income Growth Intrinsic S&P Managed S&P Managed & Growth Retirement Value Aggressive Conservative Portfolio Strategy Portfolio Portfolio Growth Portfolio Portfolio ---------------- ------------------ --------------- ---------------- ---------------- Assets Investments, at value (a) $ 33,656,301 $ 548,448 $ 29,550,583 $ 334,779,087 $ 374,871,333 Receivables: Investment securities sold 35,317 385 31,379 328,301 527,111 Sub-account units sold 18,110 -- 39,841 453,983 632,671 ---------------- ------------------ --------------- ---------------- ---------------- Total assets 33,709,728 548,833 29,621,803 335,561,371 376,031,115 ---------------- ------------------ --------------- ---------------- ---------------- Liabilities Payables: Investment securities purchased 18,110 -- 39,841 453,983 632,671 Sub-account units redeemed 33,799 373 30,067 313,749 509,187 Insurance fees due to Jackson 1,518 12 1,312 14,552 17,924 ---------------- ------------------ --------------- ---------------- ---------------- Total liabilities 53,427 385 71,220 782,284 1,159,782 ---------------- ------------------ --------------- ---------------- ---------------- Net assets (Note 6) $ 33,656,301 $ 548,448 $ 29,550,583 $ 334,779,087 $ 374,871,333 ---------------------------------- ================ ================== =============== ================ ================ (a) Investment shares 4,780,725 84,768 4,758,548 39,902,156 40,093,191 Investments at cost $ 37,996,935 $ 843,804 $ 39,640,933 $ 476,261,292 $ 437,282,151
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/ JNL/ JNL/S&P JNL/S&P JNL/ S&P Managed S&P Managed Moderate Growth Moderate S&P Managed Moderate Moderate Retirement Retirement Growth Portfolio Portfolio Growth Portfolio Strategy Portfolio Strategy Portfolio ---------------- -------------- ---------------- ------------------ ------------------ Assets Investments, at value (a) $ 721,594,391 $ 511,031,299 $ 902,364,841 $ 583,495 $ 1,108,190 Receivables: Investment securities sold 931,681 734,290 1,214,636 570 205 Sub-account units sold 407,363 947,799 151,327 -- -- ---------------- -------------- ---------------- ------------------ ------------------ Total assets 722,933,435 512,713,388 903,730,804 584,065 1,108,395 ---------------- -------------- ---------------- ------------------ ------------------ Liabilities Payables: Investment securities purchased 407,363 947,799 151,327 -- -- Sub-account units redeemed 899,594 710,374 1,173,009 558 185 Insurance fees due to Jackson 32,087 23,916 41,627 12 20 ---------------- -------------- ---------------- ------------------ ------------------ Total liabilities 1,339,044 1,682,089 1,365,963 570 205 ---------------- -------------- ---------------- ------------------ ------------------ Net assets (Note 6) $ 721,594,391 $ 511,031,299 $ 902,364,841 $ 583,495 $ 1,108,190 ---------------------------------- ================ ============== ================ ================== ================== (a) Investment shares 90,880,906 56,971,159 102,658,116 86,188 145,815 Investments at cost $ 1,069,826,678 $ 642,345,424 $ 1,224,035,338 $ 841,477 $ 1,421,265 JNL/ JNL/S&P JNL/S&P JNL/S&P S&P Retirement JNL/S&P Retirement 2015 Retirement 2020 Retirement 2025 Income Total Yield Portfolio Portfolio Portfolio Portfolio Portfolio ---------------- --------------- ----------------- -------------- -------------- Assets Investments, at value (a) $ 25,131,726 $ 10,275,811 $ 6,118,161 $ 45,552,192 $ 28,398,904 Receivables: Investment securities sold 28,840 11,097 6,654 73,434 32,304 Sub-account units sold 3,174 9,445 26,262 29,568 9,512 ---------------- --------------- --------------- -------------- -------------- Total assets 25,163,740 10,296,353 6,151,077 45,655,194 28,440,720 ---------------- --------------- --------------- -------------- -------------- Liabilities Payables: Investment securities purchased 3,174 9,445 26,262 29,568 9,512 Sub-account units redeemed 27,712 10,625 6,390 71,301 30,997 Insurance fees due to Jackson 1,128 472 264 2,133 1,307 ---------------- --------------- --------------- -------------- -------------- Total liabilities 32,014 20,542 32,916 103,002 41,816 ---------------- --------------- --------------- -------------- -------------- Net assets (Note 6) $ 25,131,726 $ 10,275,811 $ 6,118,161 $ 45,552,192 $ 28,398,904 ---------------------------------- ================ =============== =============== ============== ============== (a) Investment shares 3,141,466 1,348,532 826,779 5,055,737 4,458,227 Investments at cost $ 33,415,785 $ 14,072,983 $ 8,576,611 $ 52,466,575 $ 37,025,178
See notes to the financial statements. Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2008
JNL/Select JNL/Select JNL/ JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Balanced Money Market Select Value Price Established Price Mid-Cap Price Value Portfolio Portfolio Portfolio Growth Portfolio Growth Portfolio Portfolio -------------- -------------- -------------- ------------------ ---------------- -------------- Assets Investments, at value (a) $ 432,805,939 $1,200,692,288 $ 153,536,896 $ 301,125,206 $ 309,195,829 $ 204,239,876 Receivables: Investment securities sold 479,083 12,732,470 234,980 259,086 460,305 570,864 Sub-account units sold 149,093 1,530,611 200,469 237,051 336,059 110,475 -------------- -------------- -------------- ------------------ ---------------- -------------- Total assets 433,434,115 1,214,955,369 153,972,345 301,621,343 309,992,193 204,921,215 -------------- -------------- -------------- ------------------ ---------------- -------------- Liabilities Payables: Investment securities purchased 149,093 1,530,611 200,469 237,051 336,059 110,475 Sub-account units redeemed 460,297 12,675,316 228,075 246,294 446,853 561,768 Insurance fees due to Jackson 18,786 57,154 6,905 12,792 13,452 9,096 -------------- -------------- -------------- ------------------ ---------------- -------------- Total liabilities 628,176 14,263,081 435,449 496,137 796,364 681,339 -------------- -------------- -------------- ------------------ ---------------- -------------- Net assets (Note 6) $ 432,805,939 $1,200,692,288 $ 153,536,896 $ 301,125,206 $ 309,195,829 $ 204,239,876 ----------------------------- ============== ============== ============== ================== ================ ============== (a) Investment shares 33,760,214 1,200,692,288 12,185,468 23,710,646 19,074,388 29,260,727 Investments at cost $ 536,985,659 $1,200,692,285 $ 215,135,523 $ 460,854,968 $ 496,310,193 $ 356,899,578
See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/Capital JNL/AIM Global JNL/AIM JNL/AIM JNL/AIM Guardian Global Real Estate International Large Cap Small Cap Balanced Portfolio Growth Portfolio Growth Portfolio Growth Portfolio Portfolio -------------- ---------------- ---------------- ---------------- --------------- Investment income dividends $ 3,075,243 $ 675,584 $ 243,157 $ -- $ 2,329,440 -------------- ---------------- ---------------- ---------------- --------------- Expenses Insurance charges (Note 3) 2,413,085 2,625,225 2,804,596 811,989 3,299,678 -------------- ---------------- ---------------- ---------------- --------------- Total expenses 2,413,085 2,625,225 2,804,596 811,989 3,299,678 -------------- ---------------- ---------------- ---------------- --------------- Net investment income (loss) 662,158 (1,949,641) (2,561,439) (811,989) (970,238) -------------- ---------------- ---------------- ---------------- --------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 24,077,155 27,952,338 8,066,886 5,579,505 21,310,767 Investments (30,097,045) (6,512,308) (9,428,672) (4,004,267) (9,874,181) Net change in unrealized appreciation (depreciation) on investments (65,661,515) (102,301,906) (76,098,187) (26,396,270) (83,604,384) -------------- ---------------- ---------------- ---------------- --------------- Net realized and unrealized gain (loss) (71,681,405) (80,861,876) (77,459,973) (24,821,032) (72,167,798) -------------- ---------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets from operations $ (71,019,247) $ (82,811,517) $ (80,021,412) $ (25,633,021) $ (73,138,036) --------------------------------------- ============== ================ ================ ================ =============== JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio Portfolio Portfolio Portfolio ------------------ ------------------- ------------- ----------------- ------------- Investment income dividends $ -- $ 29,528 $ 4,341 $ 182,715 $ -- ------------------ ------------------- ------------- ----------------- ------------- Expenses Insurance charges (Note 3) 2,354,942 194,601 2,292,890 5,041,764 439,426 ------------------ ------------------- ------------- ----------------- ------------- Total expenses 2,354,942 194,601 2,292,890 5,041,764 439,426 ------------------ ------------------- ------------- ----------------- ------------- Net investment income (loss) (2,354,942) (165,073) (2,288,549) (4,859,049) (439,426) ------------------ ------------------- ------------- ----------------- ------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies -- -- -- 10,452,168 3,427,099 Investments (9,264,001) (3,626,943) (6,219,109) (48,239,561) (2,505,598) Net change in unrealized appreciation (depreciation) on investments (72,691,339) (6,843,195) (71,963,477) (151,680,404) (11,223,299) ------------------ ------------------- ------------- ----------------- ------------- Net realized and unrealized gain (loss) (81,955,340) (10,470,138) (78,182,586) (189,467,797) (10,301,798) ------------------ ------------------- ------------- ----------------- ------------- Net increase (decrease) in net assets from operations $ (84,310,282) $ (10,635,211) $ (80,471,135) $ (194,326,846) $ (10,741,224) --------------------------------------- ================== =================== ============= ================= =============
See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio Portfolio Income Portfolio -------------- --------------- ------------------ ------------- ---------------- Investment income dividends $ 1,408,943 $ -- $ 9,823,115 $ 7,175 $ 228,973 -------------- --------------- ------------------ ------------- ---------------- Expenses Insurance charges (Note 3) 841,440 2,187,336 11,849,023 721,976 4,418,495 -------------- --------------- ------------------ ------------- ---------------- Total expenses 841,440 2,187,336 11,849,023 721,976 4,418,495 -------------- --------------- ------------------ ------------- ---------------- Net investment income (loss) 567,503 (2,187,336) (2,025,908) (714,801) (4,189,522) -------------- --------------- ------------------ ------------- ---------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 14,453,600 6,987,658 372,771 3,379 -- Investments (4,401,238) (16,407,042) (57,284,890) (4,473,625) (23,033,796) Net change in unrealized appreciation (depreciation) on investments (36,484,953) (55,600,313) (262,705,773) (17,901,248) (71,102,309) -------------- --------------- ------------------ ------------- ---------------- Net realized and unrealized gain (loss) (26,432,591) (65,019,697) (319,617,892) (22,371,494) (94,136,105) -------------- --------------- ------------------ ------------- ---------------- Net increase (decrease) in net assets from operations $ (25,865,088) $ (67,207,033) $ (321,643,800) $ (23,086,295) $ (98,325,627) --------------------------------------- ============== =============== ================== ============= ================ JNL/Franklin JNL/ JNL/Goldman JNL/ JNL/Franklin Templeton Goldman Sachs Sachs Emerging Goldman Sachs Templeton Mutual Small Cap Core Plus Markets Debt Mid Cap Shares Portfolio Value Portfolio Bond Portfolio Portfolio(a) Value Portfolio ---------------- --------------- -------------- -------------- --------------- Investment income dividends $ -- $ 701,038 $ 11,714,377 $ -- $ 859,560 ---------------- --------------- -------------- -------------- --------------- Expenses Insurance charges (Note 3) 1,143,835 1,008,659 5,698,948 20,644 1,423,020 ---------------- --------------- -------------- -------------- --------------- Total expenses 1,143,835 1,008,659 5,698,948 20,644 1,423,020 ---------------- --------------- -------------- -------------- --------------- Net investment income (loss) (1,143,835) (307,621) 6,015,429 (20,644) (563,460) ---------------- --------------- -------------- -------------- --------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 206,736 6,146,860 4,600,198 -- 11,470,889 Investments (7,160,551) (8,752,165) (1,501,377) (29,362) (11,226,610) Net change in unrealized appreciation (depreciation) on investments (26,037,663) (24,184,597) (34,779,113) 84,166 (39,238,534) ---------------- --------------- -------------- -------------- --------------- Net realized and unrealized gain (loss) (32,991,478) (26,789,902) (31,680,292) 54,804 (38,994,255) ---------------- --------------- -------------- -------------- --------------- Net increase (decrease) in net assets from operations $ (34,135,313) $ (27,097,523) $ (25,664,863) $ 34,160 $ (39,557,715) --------------------------------------- ================ =============== ============== ============== ===============
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/ JNL/JPMorgan Goldman Sachs JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard Short Duration International MidCap Growth & Quality Bond Emerging Markets Bond Portfolio Value Portfolio Portfolio Portfolio Portfolio -------------- --------------- ------------- --------------- ---------------- Investment income dividends $ 3,909,634 $ 5,725,682 $ -- $ 9,063,739 $ 1,508,610 -------------- --------------- ------------- --------------- ---------------- Expenses Insurance charges (Note 3) 1,579,065 4,978,900 1,534,256 5,190,199 3,914,948 -------------- --------------- ------------- --------------- ---------------- Total expenses 1,579,065 4,978,900 1,534,256 5,190,199 3,914,948 -------------- --------------- ------------- --------------- ---------------- Net investment income (loss) 2,330,569 746,782 (1,534,256) 3,873,540 (2,406,338) -------------- --------------- ------------- --------------- ---------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 378,458 44,192,069 -- -- 24,189,585 Investments (3,303,206) (34,990,270) (2,238,153) 3,634,089 (26,067,862) Net change in unrealized appreciation (depreciation) on investments (7,112,621) (182,076,245) (52,063,658) 9,295,629 (137,316,037) -------------- --------------- ------------- --------------- ---------------- Net realized and unrealized gain (loss) (10,037,369) (172,874,446) (54,301,811) 12,929,718 (139,194,314) -------------- --------------- ------------- --------------- ---------------- Net increase (decrease) in net assets from operations $ (7,706,800) $ (172,127,664) $ (55,836,067) $ 16,803,258 $ (141,600,652) --------------------------------------- ============== =============== ============= =============== ================ JNL/Lazard JNL/Lazard JNL/M&G JNL/M&G JNL/MCM Mid Cap Small Cap Global Basics Global Leaders 10 x 10 Equity Portfolio Equity Portfolio Portfolio(a) Portfolio(a) Portfolio ---------------- ---------------- ------------- -------------- -------------- Investment income dividends $ 2,004,535 $ -- $ -- $ 575 $ 949,611 ---------------- ---------------- ------------- -------------- -------------- Expenses Insurance charges (Note 3) 2,756,597 1,439,066 684 1,142 1,334,735 ---------------- ---------------- ------------- -------------- -------------- Total expenses 2,756,597 1,439,066 684 1,142 1,334,735 ---------------- ---------------- ------------- -------------- -------------- Net investment income (loss) (752,062) (1,439,066) (684) (567) (385,124) ---------------- ---------------- ------------- -------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 772,930 1,942,284 -- -- 773,601 Investments (31,651,674) (18,442,298) (12,440) 13,382 (5,904,965) Net change in unrealized appreciation (depreciation) on investments (45,529,498) (22,762,182) 14,639 22,780 (32,520,869) ---------------- ---------------- ------------- -------------- -------------- Net realized and unrealized gain (loss) (76,408,242) (39,262,196) 2,199 36,162 (37,652,233) ---------------- ---------------- ------------- -------------- -------------- Net increase (decrease) in net assets from operations $ (77,160,304) $ (40,701,262) $ 1,515 $ 35,595 $ (38,037,357) --------------------------------------- ================ ================ ============= ============== ==============
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Bond Index Communications Consumer Brands Dow 10 25 Portfolio Portfolio Sector Portfolio Sector Portfolio Portfolio --------------- ------------- ---------------- ---------------- ---------------- Investment income dividends $ 15,649,892 $ 13,820,082 $ 1,681,015 $ 67,805 $ -- --------------- ------------- ---------------- ---------------- ---------------- Expenses Insurance charges (Note 3) 8,275,895 5,383,237 665,123 333,234 8,943,454 --------------- ------------- ---------------- ---------------- ---------------- Total expenses 8,275,895 5,383,237 665,123 333,234 8,943,454 --------------- ------------- ---------------- ---------------- ---------------- Net investment income (loss) 7,373,997 8,436,845 1,015,892 (265,429) (8,943,454) --------------- ------------- ---------------- ---------------- ---------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 40,824,210 -- 5,609,164 3,314,999 -- Investments (23,042,466) 2,384,884 (16,598,558) (3,288,165) (15,753,538) Net change in unrealized appreciation (depreciation) on investments (232,971,095) (6,442,644) (13,458,874) (8,110,916) (302,071,782) --------------- ------------- ---------------- ---------------- ---------------- Net realized and unrealized gain (loss) (215,189,351) (4,057,760) (24,448,268) (8,084,082) (317,825,320) --------------- ------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets from operations $ (207,815,354) $ 4,379,085 $ (23,432,376) $ (8,349,511) $ (326,768,774) --------------------------------------- =============== ============= ================ ================ ================ JNL/MCM JNL/MCM Enhanced JNL/MCM JNL/MCM JNL/MCM Dow Dividend S&P 500 Stock European 30 Financial Global 15 Portfolio Index Portfolio Portfolio(a) Sector Portfolio Portfolio ---------------- --------------- ------------ ---------------- ----------------- Investment income dividends $ 1,307,748 $ 854,665 $ 1,550 $ 1,218,760 $ -- ---------------- --------------- ------------ ---------------- ----------------- Expenses Insurance charges (Note 3) 4,910,995 905,282 778 1,172,982 14,916,097 ---------------- --------------- ------------ ---------------- ----------------- Total expenses 4,910,995 905,282 778 1,172,982 14,916,097 ---------------- --------------- ------------ ---------------- ----------------- Net investment income (loss) (3,603,247) (50,617) 772 45,778 (14,916,097) ---------------- --------------- ------------ ---------------- ----------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 1,099,436 6,615,825 -- 5,246,792 -- Investments (55,714,704) (10,027,770) (491) (20,331,245) 25,134,325 Net change in unrealized appreciation (depreciation) on investments (137,802,914) (23,555,683) 17,486 (39,932,868) (577,548,504) ---------------- --------------- ------------ ---------------- ----------------- Net realized and unrealized gain (loss) (192,418,182) (26,967,628) 16,995 (55,017,321) (552,414,179) ---------------- --------------- ------------ ---------------- ----------------- Net increase (decrease) in net assets from operations $ (196,021,429) $ (27,018,245) $ 17,767 $ (54,971,543) $ (567,330,276) --------------------------------------- ================ =============== ============ ================ =================
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Healthcare Index 5 International JNL 5 JNL Optimized Sector Portfolio Portfolio Index Portfolio Portfolio 5 Portfolio ---------------- -------------- --------------- ---------------- --------------- Investment income dividends $ 1,031,941 $ 579,026 $ 8,765,792 $ 89,071,341 $ 51,376 ---------------- -------------- --------------- ---------------- --------------- Expenses Insurance charges (Note 3) 2,119,374 705,425 7,116,950 67,865,759 6,490,828 ---------------- -------------- --------------- ---------------- --------------- Total expenses 2,119,374 705,425 7,116,950 67,865,759 6,490,828 ---------------- -------------- --------------- ---------------- --------------- Net investment income (loss) (1,087,433) (126,399) 1,648,842 21,205,582 (6,439,452) ---------------- -------------- --------------- ---------------- --------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 6,678,339 769,107 9,112,330 518,289,850 23,500,409 Investments (9,913,651) (3,054,716) (15,894,637) (234,871,747) (36,597,643) Net change in unrealized appreciation (depreciation) on investments (34,276,318) (14,400,812) (227,905,716) (2,477,857,915) (219,683,482) ---------------- -------------- --------------- ---------------- --------------- Net realized and unrealized gain (loss) (37,511,630) (16,686,421) (234,688,023) (2,194,439,812) (232,780,716) ---------------- -------------- --------------- ---------------- --------------- Net increase (decrease) in net assets from operations $ (38,599,063) $ (16,812,820) $ (233,039,181) $ (2,173,234,230) $ (239,220,168) --------------------------------------- ================ ============== =============== ================ =============== JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Nasdaq 25 NYSE International Oil & Gas Pacific Rim 30 S&P 10 Portfolio 25 Portfolio Sector Portfolio Portfolio(a) Portfolio -------------- ------------------ ---------------- -------------- -------------- Investment income dividends $ 17,730 $ 8,817 $ 2,384,112 $ -- $ -- -------------- ------------------ ---------------- -------------- -------------- Expenses Insurance charges (Note 3) 1,315,422 1,250,502 7,510,833 929 9,330,992 -------------- ------------------ ---------------- -------------- -------------- Total expenses 1,315,422 1,250,502 7,510,833 929 9,330,992 -------------- ------------------ ---------------- -------------- -------------- Net investment income (loss) (1,297,692) (1,241,685) (5,126,721) (929) (9,330,992) -------------- ------------------ ---------------- -------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 3,353,391 3,674,874 27,354,373 -- -- Investments (5,563,575) (11,865,671) (12,322,413) (17) 3,522,952 Net change in unrealized appreciation (depreciation) on investments (38,002,224) (33,914,219) (205,567,250) 35,235 (341,032,066) -------------- ------------------ ---------------- -------------- -------------- Net realized and unrealized gain (loss) (40,212,408) (42,105,016) (190,535,290) 35,218 (337,509,114) -------------- ------------------ ---------------- -------------- -------------- Net increase (decrease) in net assets from operations $ (41,510,100) $ (43,346,701) $ (195,662,011) $ 34,289 $ (346,840,106) --------------------------------------- ============== ================== ================ ============== ==============
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 500 S&P SMid JNL/MCM S&P 24 S&P 400 MidCap Index 60 Select Small-Cap Portfolio Index Portfolio Portfolio Portfolio Portfolio --------------- --------------- --------------- --------------- ---------------- Investment income dividends $ -- $ 3,398,475 $ 7,544,733 $ 6,333 $ 1,344,103 --------------- --------------- --------------- --------------- ---------------- Expenses Insurance charges (Note 3) 435,698 5,413,106 7,735,335 770,855 7,840,739 --------------- --------------- --------------- --------------- ---------------- Total expenses 435,698 5,413,106 7,735,335 770,855 7,840,739 --------------- --------------- --------------- --------------- ---------------- Net investment income (loss) (435,698) (2,014,631) (190,602) (764,522) (6,496,636) --------------- --------------- --------------- --------------- ---------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 326,524 22,815,835 -- 1,164,943 51,150,489 Investments (1,864,107) (16,964,625) (13,879,071) (5,588,336) (41,122,048) Net change in unrealized appreciation (depreciation) on investments (7,952,621) (150,382,081) (198,777,806) (11,004,445) (222,223,015) --------------- --------------- --------------- --------------- ---------------- Net realized and unrealized gain (loss) (9,490,204) (144,530,871) (212,656,877) (15,427,838) (212,194,574) --------------- --------------- --------------- --------------- ---------------- Net increase (decrease) in net assets from operations $ (9,925,902) $ (146,545,502) $ (212,847,479) $ (16,192,360) $ (218,691,210) --------------------------------------- =============== =============== =============== =============== ================ JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio VIP Portfolio Portfolio --------------- --------------- --------------- --------------- ---------------- Investment income dividends $ 3,245,455 $ 11,704 $ 2,531,930 $ 4,905,221 $ 2,026,227 --------------- --------------- --------------- --------------- ---------------- Expenses Insurance charges (Note 3) 4,303,868 1,272,319 14,189,818 5,510,926 2,480,850 --------------- --------------- --------------- --------------- ---------------- Total expenses 4,303,868 1,272,319 14,189,818 5,510,926 2,480,850 --------------- --------------- --------------- --------------- ---------------- Net investment income (loss) (1,058,413) (1,260,615) (11,657,888) (605,705) (454,623) --------------- --------------- --------------- --------------- ---------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 14,001,555 4,450,954 20,080,167 80,979,098 18,790,069 Investments (17,228,916) (12,492,273) (21,746,909) (10,311,669) (7,583,783) Net change in unrealized appreciation (depreciation) on investments (103,413,662) (35,705,812) (490,827,766) (250,340,581) (89,861,479) --------------- --------------- --------------- --------------- ---------------- Net realized and unrealized gain (loss) (106,641,023) (43,747,131) (492,494,508) (179,673,152) (78,655,193) --------------- --------------- --------------- --------------- ---------------- Net increase (decrease) in net assets from operations $ (107,699,436) $ (45,007,746) $ (504,152,396) $ (180,278,857) $ (79,109,816) --------------------------------------- =============== =============== =============== =============== ================
See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/ JNL/PAM JNL/PAM JNL/PIMCO JNL/PIMCO PPM America Asia ex-Japan China-India Real Return Total Return Core Equity Portfolio(a) Portfolio(a) Portfolio Bond Portfolio Portfolio -------------- -------------- -------------- -------------- -------------- Investment income dividends $ 73,700 $ -- $ 6,553,734 $ 38,109,207 $ 99,181 -------------- -------------- -------------- -------------- -------------- Expenses Insurance charges (Note 3) 73,685 299,458 7,423,258 14,670,334 810,327 -------------- -------------- -------------- -------------- -------------- Total expenses 73,685 299,458 7,423,258 14,670,334 810,327 -------------- -------------- -------------- -------------- -------------- Net investment income (loss) 15 (299,458) (869,524) 23,438,873 (711,146) -------------- -------------- -------------- -------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies -- -- 16,288,072 33,947,905 -- Investments (3,460,850) (6,962,532) (18,406,779) (3,091,161) (2,610,062) Net change in unrealized appreciation (depreciation) on investments (841,418) (8,196,803) (53,220,897) (75,446,225) (25,004,940) -------------- -------------- -------------- -------------- -------------- Net realized and unrealized gain (loss) (4,302,268) (15,159,335) (55,339,604) (44,589,481) (27,615,002) -------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets from operations $ (4,302,253) $ (15,458,793) $ (56,209,128) $ (21,150,608) $ (28,326,148) --------------------------------------- ============== ============== ============== ============== ============== JNL/ JNL/ JNL/ JNL/ PPM America JNL/ Red Rocks PPM America PPM America Small Cap PPM America Listed High Yield Mid Cap Value Value Value Equity Private Equity Bond Portfolio Portfolio(a) Portfolio(a) Portfolio Portfolio(b) -------------- -------------- -------------- -------------- -------------- Investment income dividends $ 18,482,471 $ 45,752 $ 31,787 $ 2,128,397 $ 58,840 -------------- -------------- -------------- -------------- -------------- Expenses Insurance charges (Note 3) 3,446,381 85,836 45,292 1,262,172 23,393 -------------- -------------- -------------- -------------- -------------- Total expenses 3,446,381 85,836 45,292 1,262,172 23,393 -------------- -------------- -------------- -------------- -------------- Net investment income (loss) 15,036,090 (40,084) (13,505) 866,225 35,447 -------------- -------------- -------------- -------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies -- -- -- 10,861,801 -- Investments (38,490,930) (3,016,033) (736,300) (5,469,608) (234,435) Net change in unrealized appreciation (depreciation) on investments (49,152,243) (1,746,476) (1,551,437) (59,148,066) (1,399,049) -------------- -------------- -------------- -------------- -------------- Net realized and unrealized gain (loss) (87,643,173) (4,762,509) (2,287,737) (53,755,873) (1,633,484) -------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets from operations $ (72,607,083) $ (4,802,593) $ (2,301,242) $ (52,889,648) $ (1,598,037) --------------------------------------- ============== ============== ============== ============== ==============
(a) Commencement of operations March 31, 2008. (b) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/S&P JNL/S&P JNL/S&P JNL/S&P Competitive Disciplined Disciplined Disciplined JNL/S&P 4 Advantage Growth Moderate Moderate Portfolio Portfolio Portfolio Portfolio Growth Portfolio -------------- -------------- -------------- -------------- ---------------- Investment income dividends $ 11,218 $ 388,234 $ 347,410 $ 608,141 $ 764,297 -------------- -------------- -------------- -------------- ---------------- Expenses Insurance charges (Note 3) 2,983,876 469,498 333,828 789,549 909,525 -------------- -------------- -------------- -------------- ---------------- Total expenses 2,983,876 469,498 333,828 789,549 909,525 -------------- -------------- -------------- -------------- ---------------- Net investment income (loss) (2,972,658) (81,264) 13,582 (181,408) (145,228) -------------- -------------- -------------- -------------- ---------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies -- -- 212,502 283,935 479,913 Investments (12,180,790) (2,462,453) (2,236,556) (2,280,011) (3,705,768) Net change in unrealized appreciation (depreciation) on investments (63,129,882) (7,752,847) (8,629,592) (13,719,885) (22,326,391) -------------- -------------- -------------- -------------- ---------------- Net realized and unrealized gain (loss) (75,310,672) (10,215,300) (10,653,646) (15,715,961) (25,552,246) -------------- -------------- -------------- -------------- ---------------- Net increase (decrease) in net assets from operations $ (78,283,330) $ (10,296,564) $ (10,640,064) $ (15,897,369) $ (25,697,474) --------------------------------------- ============== ============== ============== ============== ================ JNL/S&P JNL/S&P Growth JNL/ JNL/ Dividend Income Retirement JNL/S&P S&P Managed S&P Managed & Growth Strategy Intrinsic Value Aggressive Conservative Portfolio Portfolio Portfolio Growth Portfolio Portfolio --------------- -------------- --------------- ---------------- -------------- Investment income dividends $ 884,678 $ 55,833 $ 409,963 $ 1,761,783 $ 14,901,774 --------------- -------------- --------------- ---------------- -------------- Expenses Insurance charges (Note 3) 301,247 6,192 587,375 7,601,283 6,341,149 --------------- -------------- --------------- ---------------- -------------- Total expenses 301,247 6,192 587,375 7,601,283 6,341,149 --------------- -------------- --------------- ---------------- -------------- Net investment income (loss) 583,431 49,641 (177,412) (5,839,500) 8,560,625 --------------- -------------- --------------- ---------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 17,667 425 265,104 22,710,581 5,626,867 Investments (1,187,859) (45,863) (5,447,145) 2,660,698 (9,562,726) Net change in unrealized appreciation (depreciation) on investments (4,336,302) (298,751) (10,025,929) (249,172,602) (64,160,775) --------------- -------------- --------------- ---------------- -------------- Net realized and unrealized gain (loss) (5,506,494) (344,189) (15,207,970) (223,801,323) (68,096,634) --------------- -------------- --------------- ---------------- -------------- Net increase (decrease) in net assets from operations $ (4,923,063) $ (294,548) $ (15,385,382) $ (229,640,823) $ (59,536,009) --------------------------------------- =============== ============== =============== ================ ==============
See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/ JNL/S&P JNL/S&P JNL/ JNL/ S&P Managed Moderate Growth Moderate S&P Managed S&P Managed Moderate Retirement Retirement Growth Moderate Growth Strategy Strategy Portfolio Portfolio Portfolio Portfolio Portfolio --------------- -------------- --------------- --------------- -------------- Investment income dividends $ 5,399,459 $ 21,582,612 $ 25,319,505 $ 79,202 $ 101,886 --------------- -------------- --------------- --------------- -------------- Expenses Insurance charges (Note 3) 16,187,131 9,343,464 18,737,564 5,820 5,733 --------------- -------------- --------------- --------------- -------------- Total expenses 16,187,131 9,343,464 18,737,564 5,820 5,733 --------------- -------------- --------------- --------------- -------------- Net investment income (loss) (10,787,672) 12,239,148 6,581,941 73,382 96,153 --------------- -------------- --------------- --------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 75,027,682 12,661,398 47,794,868 250 8,241 Investments (23,028,370) (16,814,327) (26,338,385) (20,586) (16,487) Net change in unrealized appreciation (depreciation) on investments (470,914,100) (145,635,471) (395,760,052) (248,256) (306,907) --------------- -------------- --------------- --------------- -------------- Net realized and unrealized gain (loss) (418,914,788) (149,788,400) (374,303,569) (268,592) (315,153) --------------- -------------- --------------- --------------- -------------- Net increase (decrease) in net assets from operations $ (429,702,460) $ (137,549,252) $ (367,721,628) $ (195,210) $ (219,000) --------------------------------------- =============== ============== =============== =============== ============== JNL/ JNL/S&P JNL/S&P JNL/S&P S&P Retirement JNL/S&P Retirement 2015 Retirement 2020 Retirement 2025 Income Total Yield Portfolio Portfolio Portfolio Portfolio Portfolio --------------- --------------- --------------- -------------- -------------- Investment income dividends $ 293,969 $ 131,488 $ 74,698 $ 706,942 $ 379,185 --------------- --------------- --------------- -------------- -------------- Expenses Insurance charges (Note 3) 614,347 169,897 101,120 655,828 347,246 --------------- --------------- --------------- -------------- -------------- Total expenses 614,347 169,897 101,120 655,828 347,246 --------------- --------------- --------------- -------------- -------------- Net investment income (loss) (320,378) (38,409) (26,422) 51,114 31,939 --------------- --------------- --------------- -------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 641,965 405,925 251,611 724,598 6,055 Investments (2,016,057) (496,122) (435,724) (1,064,735) (3,170,269) Net change in unrealized appreciation (depreciation) on investments (8,954,796) (4,090,812) (2,588,390) (7,954,488) (8,598,047) --------------- --------------- --------------- -------------- -------------- Net realized and unrealized gain (loss) (10,328,888) (4,181,009) (2,772,503) (8,294,625) (11,762,261) --------------- --------------- --------------- -------------- -------------- Net increase (decrease) in net assets from operations $ (10,649,266) $ (4,219,418) $ (2,798,925) $ (8,243,511) $ (11,730,322) --------------------------------------- =============== =============== =============== ============== ==============
See notes to the financial statements. Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2008
JNL/T.Rowe Price JNL/T.Rowe JNL/Select JNL/Select JNL/ Established Price Mid-Cap JNL/T.Rowe Balanced Money Market Select Value Growth Growth Price Value Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio -------------- -------------- -------------- -------------- --------------- -------------- Investment income dividends $ 12,210,846 $ 20,160,104 $ 72,566 $ 365,951 $ -- $ 5,502,870 -------------- -------------- -------------- -------------- --------------- -------------- Expenses Insurance charges (Note 3) 7,983,037 16,862,354 3,101,655 6,837,338 6,747,855 4,724,086 -------------- -------------- -------------- -------------- --------------- -------------- Total expenses 7,983,037 16,862,354 3,101,655 6,837,338 6,747,855 4,724,086 -------------- -------------- -------------- -------------- --------------- -------------- Net investment income (loss) 4,227,809 3,297,750 (3,029,089) (6,471,387) (6,747,855) 778,784 -------------- -------------- -------------- -------------- --------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 20,368,240 -- 3,172,303 3,216,209 30,517,324 32,952,365 Investments (11,048,500) 8 (14,346,566) (15,103,779) (20,947,230) (18,592,131) Net change in unrealized appreciation (depreciation) on investments (137,331,388) (8) (63,620,285) (219,540,661) (220,233,224) (159,230,308) -------------- -------------- -------------- -------------- --------------- -------------- Net realized and unrealized gain (loss) (128,011,648) -- (74,794,548) (231,428,231 (210,663,130 (144,870,074) -------------- -------------- -------------- -------------- --------------- -------------- Net increase (decrease) in net assets from operations $ (123,783,839) $ 3,297,750 $ (77,823,637) $ (237,899,618) $ (217,410,985) $ (144,091,290) ------------------------------- ============== ============== ============== ============== =============== ==============
See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/Capital JNL/AIM Global JNL/AIM JNL/AIM JNL/AIM Guardian Global Real Estate International Large Cap Small Cap Balanced Portfolio Growth Portfolio Growth Portfolio Growth Portfolio Portfolio -------------- ---------------- ---------------- ---------------- --------------- Operations Net investment income (loss) $ 662,158 $ (1,949,641) $ (2,561,439) $ (811,989) $ (970,238) Net realized gain (loss) on investments (6,019,890) 21,440,030 (1,361,786) 1,575,238 11,436,586 Net change in unrealized appreciation (depreciation) on investments (65,661,515) (102,301,906) (76,098,187) (26,396,270) (83,604,384) -------------- ---------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets from operations (71,019,247) (82,811,517) (80,021,412) (25,633,021) (73,138,036) -------------- ---------------- ---------------- ---------------- --------------- Contract transactions (1) Purchase payments (Note 4) 34,569,226 19,282,771 22,066,977 6,865,959 53,311,168 Surrenders and terminations (9,185,016) (15,643,289) (14,824,668) (4,357,736) (19,813,402) Transfers between portfolios 24,271,965 (15,144,697) 6,177,650 (8,261,946) 29,345,892 Net annuitization transactions (52,845) (28,929) (41,859) (125,711) (91,990) Policyholder charges (Note 3) (231,265) (189,271) (220,932) (85,484) (258,406) -------------- ---------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets from contract transactions 49,372,065 (11,723,415) 13,157,168 (5,964,918) 62,493,262 -------------- ---------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets (21,647,182) (94,534,932) (66,864,244) (31,597,939) (10,644,774) Net assets beginning of period 134,185,994 203,284,802 193,898,803 69,217,872 183,983,298 -------------- ---------------- ---------------- ---------------- --------------- Net assets end of period $ 112,538,812 $ 108,749,870 $ 127,034,559 $ 37,619,933 $ 173,338,524 ------------------------------------------- ============== ================ ================ ================ =============== (1) Contract unit transactions Units Outstanding at December 31, 2007 10,354,984 10,936,421 13,728,758 4,447,846 14,527,869 Units Issued 10,762,356 2,695,045 5,634,448 1,765,260 10,887,730 Units Redeemed (7,380,782) (3,570,445) (4,692,030) (2,137,520) (5,992,570) -------------- ---------------- ---------------- ---------------- --------------- Units Outstanding at December 31, 2008 13,736,558 10,061,021 14,671,176 4,075,586 19,423,029 ============== ================ ================ ================ =============== JNL/ JNL/Capital JNL/Capital JNL/Capital Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio Portfolio Portfolio Portfolio ------------------ ------------------- ------------- -------------- ------------- Operations Net investment income (loss) $ (2,354,942) $ (165,073) $ (2,288,549) $ (4,859,049) $ (439,426) Net realized gain (loss) on investments (9,264,001) (3,626,943) (6,219,109) (37,787,393) 921,501 Net change in unrealized appreciation (depreciation) on investments (72,691,339) (6,843,195) (71,963,477) (151,680,404) (11,223,299) ------------------ ------------------- ------------- -------------- ------------- Net increase (decrease) in net assets from operations (84,310,282) (10,635,211) (80,471,135) (194,326,846) (10,741,224) ------------------ ------------------- ------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 40,288,996 13,121,006 43,343,345 102,036,200 15,210,469 Surrenders and terminations (15,323,959) (561,348) (16,334,998) (18,135,190) (1,036,874) Transfers between portfolios 24,218,716 11,137,508 25,843,341 (8,170,081) 17,617,322 Net annuitization transactions (60,362) -- (42,599) (113,851) (43,625) Policyholder charges (Note 3) (163,098) (7,620) (204,383) (442,831) (20,719) ------------------ ------------------- ------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions 48,960,293 23,689,546 52,604,706 75,174,247 31,726,573 ------------------ ------------------- ------------- -------------- ------------- Net increase (decrease) in net assets (35,349,989) 13,054,335 (27,866,429) (119,152,599) 20,985,349 Net assets beginning of period 155,406,194 1,985,929 151,626,264 294,795,539 19,247,332 ------------------ ------------------- ------------- -------------- ------------- Net assets end of period $ 120,056,205 $ 15,040,264 $ 123,759,835 $ 175,642,940 $ 40,232,681 ------------------------------------------- ================== =================== ============= ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2007 5,770,334 201,502 5,756,080 21,576,768 1,804,423 Units Issued 4,599,804 5,048,951 3,826,332 25,601,253 5,672,931 Units Redeemed (2,839,532) (1,885,031) (1,853,719) (20,395,491) (1,323,628) ------------------ ------------------- ------------- -------------- ------------- Units Outstanding at December 31, 2008 7,530,606 3,365,422 7,728,693 26,782,530 6,153,726 ================== =================== ============= ============== =============
See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio Portfolio Income Portfolio -------------- --------------- ------------------ ------------- ---------------- Operations Net investment income (loss) $ 567,503 $ (2,187,336) $ (2,025,908) $ (714,801) $ (4,189,522) Net realized gain (loss) on investments 10,052,362 (9,419,384) (56,912,119) (4,470,246) (23,033,796) Net change in unrealized appreciation (depreciation) on investments (36,484,953) (55,600,313) (262,705,773) (17,901,248) (71,102,309) -------------- --------------- ------------------ ------------- ---------------- Net increase (decrease) in net assets from operations (25,865,088) (67,207,033) (321,643,800) (23,086,295) (98,325,627) -------------- --------------- ------------------ ------------- ---------------- Contract transactions (1) Purchase payments (Note 4) 3,137,917 20,748,987 194,436,331 16,248,888 62,608,536 Surrenders and terminations (6,524,392) (12,865,971) (38,593,346) (2,287,708) (16,771,742) Transfers between portfolios (3,543,617) 8,080,184 (42,777,203) (3,198,228) 14,563,113 Net annuitization transactions -- (18,973) (39,547) (31,762) (23,474) Policyholder charges (Note 3) (63,321) (147,204) (897,721) (60,557) (315,394) -------------- --------------- ------------------ ------------- ---------------- Net increase (decrease) in net assets from contract transactions (6,993,413) 15,797,023 112,128,514 10,670,633 60,061,039 -------------- --------------- ------------------ ------------- ---------------- Net increase (decrease) in net assets (32,858,501) (51,410,010) (209,515,286) (12,415,662) (38,264,588) Net assets beginning of period 70,254,143 159,201,448 762,485,093 47,195,349 252,304,185 -------------- --------------- ------------------ ------------- ---------------- Net assets end of period $ 37,395,642 $ 107,791,438 $ 552,969,807 $ 34,779,687 $ 214,039,597 ------------------------------------------- ============== =============== ================== ============= ================ (1) Contract unit transactions Units Outstanding at December 31, 2007 3,734,656 6,377,648 76,811,672 4,766,435 23,214,606 Units Issued 733,991 3,396,170 38,419,028 3,228,911 14,226,166 Units Redeemed (1,154,092) (2,683,342) (26,556,647) (1,982,718) (8,967,185) -------------- --------------- ------------------ ------------- ---------------- Units Outstanding at December 31, 2008 3,314,555 7,090,476 88,674,053 6,012,628 28,473,587 ============== =============== ================== ============= ================ JNL/Franklin JNL/ JNL/Goldman JNL/ JNL/Franklin Templeton Goldman Sachs Sachs Emerging Goldman Sachs Templeton Mutual Small Cap Core Plus Markets Debt Mid Cap Shares Portfolio Value Portfolio Bond Portfolio Portfolio(a) Value Portfolio ------------------ --------------- -------------- -------------- --------------- Operations Net investment income (loss) $ (1,143,835) $ (307,621) $ 6,015,429 $ (20,644) $ (563,460) Net realized gain (loss) on investments (6,953,815) (2,605,305) 3,098,821 (29,362) 244,279 Net change in unrealized appreciation (depreciation) on investments (26,037,663) (24,184,597) (34,779,113) 84,166 (39,238,534) ------------------ --------------- -------------- -------------- --------------- Net increase (decrease) in net assets from operations (34,135,313) (27,097,523) (25,664,863) 34,160 (39,557,715) ------------------ --------------- -------------- -------------- --------------- Contract transactions (1) Purchase payments (Note 4) 25,050,833 12,128,656 45,498,051 2,719,450 17,500,666 Surrenders and terminations (4,153,764) (3,589,077) (31,527,694) (67,201) (5,611,623) Transfers between portfolios 3,309,440 19,106,730 (41,184,511) 6,057,472 3,176,493 Net annuitization transactions (33,219) (9,503) (61,271) -- (4,995) Policyholder charges (Note 3) (87,714) (74,599) (472,053) (1,258) (113,144) ------------------ --------------- -------------- -------------- --------------- Net increase (decrease) in net assets from contract transactions 24,085,576 27,562,207 (27,747,478) 8,708,463 14,947,397 ------------------ --------------- -------------- -------------- --------------- Net increase (decrease) in net assets (10,049,737) 464,684 (53,412,341) 8,742,623 (24,610,318) Net assets beginning of period 71,047,329 57,150,443 329,797,588 -- 89,409,169 ------------------ --------------- -------------- -------------- --------------- Net assets end of period $ 60,997,592 $ 57,615,127 $ 276,385,247 $ 8,742,623 $ 64,798,851 ------------------------------------------- ================== =============== ============== ============== =============== (1) Contract unit transactions Units Outstanding at December 31, 2007 7,206,398 4,911,959 16,644,122 -- 6,902,473 Units Issued 5,913,306 5,648,320 6,766,975 973,871 4,831,625 Units Redeemed (2,986,698) (3,041,391) (8,488,500) (67,400) (3,781,806) ------------------ --------------- -------------- -------------- --------------- Units Outstanding at December 31, 2008 10,133,006 7,518,888 14,922,597 906,471 7,952,292 ================== =============== ============== ============== ===============
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/ JNL/JPMorgan Goldman Sachs JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard Short Duration International MidCap Growth & Quality Bond Emerging Markets Bond Portfolio Value Portfolio Portfolio Portfolio Portfolio -------------- --------------- ------------- --------------- ---------------- Operations Net investment income (loss) $ 2,330,569 $ 746,782 $ (1,534,256) $ 3,873,540 $ (2,406,338) Net realized gain (loss) on investments (2,924,748) 9,201,799 (2,238,153) 3,634,089 (1,878,277) Net change in unrealized appreciation (depreciation) on investments (7,112,621) (182,076,245) (52,063,658) 9,295,629 (137,316,037) -------------- --------------- ------------- --------------- ---------------- Net increase (decrease) in net assets from operations (7,706,800) (172,127,664) (55,836,067) 16,803,258 (141,600,652) -------------- --------------- ------------- --------------- ---------------- Contract transactions (1) Purchase payments (Note 4) 22,178,819 47,875,143 8,253,144 41,947,693 71,453,366 Surrenders and terminations (7,663,698) (21,144,861) (13,012,954) (35,441,899) (15,681,772) Transfers between portfolios 14,589,429 (62,976,111) (7,492,996) 234,687,634 (8,823,044) Net annuitization transactions (11,690) (126,851) (14,482) (21,917) (32,423) Policyholder charges (Note 3) (107,817) (370,609) (158,531) (473,829) (341,304) -------------- --------------- ------------- --------------- ---------------- Net increase (decrease) in net assets from contract transactions 28,985,043 (36,743,289) (12,425,819) 240,697,682 46,574,823 -------------- --------------- ------------- --------------- ---------------- Net increase (decrease) in net assets 21,278,243 (208,870,953) (68,261,886) 257,500,940 (95,025,829) Net assets beginning of period 65,965,619 396,407,155 133,042,383 190,858,701 243,760,002 -------------- --------------- ------------- --------------- ---------------- Net assets end of period $ 87,243,862 $ 187,536,202 $ 64,780,497 $ 448,359,641 $ 148,734,173 ------------------------------------------- ============== =============== ============= =============== ================ (1) Contract unit transactions Units Outstanding at December 31, 2007 6,282,624 22,558,033 6,122,148 11,779,367 17,320,893 Units Issued 11,035,122 7,742,480 1,680,430 26,294,411 16,929,231 Units Redeemed (8,339,883) (10,644,718) (2,449,206) (11,553,491) (12,744,625) -------------- --------------- ------------- --------------- ---------------- Units Outstanding at December 31, 2008 8,977,863 19,655,795 5,353,372 26,520,287 21,505,499 ============== =============== ============= =============== ================ JNL/Lazard JNL/Lazard JNL/M&G JNL/M&G JNL/MCM Mid Cap Small Cap Global Basics Global Leaders 10 x 10 Equity Portfolio Equity Portfolio Portfolio(a) Portfolio(a) Portfolio ---------------- ---------------- ------------- -------------- ------------- Operations Net investment income (loss) $ (752,062) $ (1,439,066) $ (684) $ (567) $ (385,124) Net realized gain (loss) on investments (30,878,744) (16,500,014) (12,440) 13,382 (5,131,364) Net change in unrealized appreciation (depreciation) on investments (45,529,498) (22,762,182) 14,639 22,780 (32,520,869) ---------------- ---------------- ------------- -------------- ------------- Net increase (decrease) in net assets from operations (77,160,304) (40,701,262) 1,515 35,595 (38,037,357) ---------------- ---------------- ------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 13,608,117 7,583,126 494,717 295,886 52,363,075 Surrenders and terminations (15,829,868) (8,235,095) (864) (1,029) (3,129,835) Transfers between portfolios (24,622,921) (9,562,198) 56,951 35,974 26,250,945 Net annuitization transactions (77,645) 473 -- -- -- Policyholder charges (Note 3) (248,512) (145,118) (3) (2) (34,909) ---------------- ---------------- ------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions (27,170,829) (10,358,812) 550,801 330,829 75,449,276 ---------------- ---------------- ------------- -------------- ------------- Net increase (decrease) in net assets (104,331,133) (51,060,074) 552,316 366,424 37,411,919 Net assets beginning of period 214,651,928 111,168,452 -- -- 50,864,159 ---------------- ---------------- ------------- -------------- ------------- Net assets end of period $ 110,320,795 $ 60,108,378 $ 552,316 $ 366,424 $ 88,276,078 ------------------------------------------- ================ ================ ============= ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2007 11,206,112 7,129,999 -- -- 5,187,556 Units Issued 2,574,070 2,535,741 72,384 88,396 12,492,561 Units Redeemed (4,244,558) (3,289,047) (6,598) (44,412) (3,331,703) ---------------- ---------------- ------------- -------------- ------------- Units Outstanding at December 31, 2008 9,535,624 6,376,693 65,786 43,984 14,348,414 ================ ================ ============= ============== =============
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Bond Index Communications Consumer Brands Dow 10 25 Portfolio Portfolio Sector Portfolio Sector Portfolio Portfolio -------------- ------------- ---------------- ---------------- -------------- Operations Net investment income (loss) $ 7,373,997 $ 8,436,845 $ 1,015,892 $ (265,429) $ (8,943,454) Net realized gain (loss) on investments 17,781,744 2,384,884 (10,989,394) 26,834 (15,753,538) Net change in unrealized appreciation (depreciation) on investments (232,971,095) (6,442,644) (13,458,874) (8,110,916) (302,071,782) -------------- ------------- ---------------- ---------------- -------------- Net increase (decrease) in net assets from operations (207,815,354) 4,379,085 (23,432,376) (8,349,511) (326,768,774) -------------- ------------- ---------------- ---------------- -------------- Contract transactions (1) Purchase payments (Note 4) 27,285,218 49,177,839 3,938,609 3,777,706 35,177,814 Surrenders and terminations (36,568,033) (23,865,910) (4,223,231) (2,099,235) (42,104,583) Transfers between portfolios (145,041,982) (17,992,036) (30,487,881) 11,060,331 (145,176,300) Net annuitization transactions (68,651) (80,126) (102,923) -- (93,682) Policyholder charges (Note 3) (809,598) (472,888) (79,347) (41,863) (906,342) -------------- ------------- ---------------- ---------------- -------------- Net increase (decrease) in net assets from contract transactions (155,203,046) 6,766,879 (30,954,773) 12,696,939 (153,103,093) -------------- ------------- ---------------- ---------------- -------------- Net increase (decrease) in net assets (363,018,400) 11,145,964 (54,387,149) 4,347,428 (479,871,867) Net assets beginning of period 689,744,274 303,351,612 82,005,620 17,958,818 815,546,625 -------------- ------------- ---------------- ---------------- -------------- Net assets end of period $ 326,725,874 $ 314,497,576 $ 27,618,471 $ 22,306,246 $ 335,674,758 ------------------------------------------- ============== ============= ================ ================ ============== (1) Contract unit transactions Units Outstanding at December 31, 2007 57,880,581 25,865,848 13,424,784 1,718,632 73,138,636 Units Issued 6,823,763 13,269,239 6,665,794 3,202,902 10,307,980 Units Redeemed (21,718,473) (12,893,574) (12,468,058) (1,749,532) (26,815,031) -------------- ------------- ---------------- ---------------- -------------- Units Outstanding at December 31, 2008 42,985,871 26,241,513 7,622,520 3,172,002 56,631,585 ============== ============= ================ ================ ============== JNL/MCM JNL/MCM Enhanced JNL/MCM JNL/MCM JNL/MCM Dow Dividend S&P 500 Stock European 30 Financial Global 15 Portfolio Index Portfolio Portfolio(a) Sector Portfolio Portfolio -------------- --------------- ------------ ---------------- ---------------- Operations Net investment income (loss) $ (3,603,247) $ (50,617) $ 772 $ 45,778 $ (14,916,097) Net realized gain (loss) on investments (54,615,268) (3,411,945) (491) (15,084,453) 25,134,325 Net change in unrealized appreciation (depreciation) on investments (137,802,914) (23,555,683) 17,486 (39,932,868) (577,548,504) -------------- --------------- ------------ ---------------- ---------------- Net increase (decrease) in net assets from operations (196,021,429) (27,018,245) 17,767 (54,971,543) (567,330,276) -------------- --------------- ------------ ---------------- ---------------- Contract transactions (1) Purchase payments (Note 4) 50,665,272 7,157,877 180,244 25,879,102 90,310,693 Surrenders and terminations (17,863,464) (4,703,022) (1,367) (5,329,965) (65,523,382) Transfers between portfolios (29,355,062) (11,769,948) 196,262 55,024,475 (240,453,499) Net annuitization transactions (23,360) (14,321) -- 9,200 (359,464) Policyholder charges (Note 3) (524,830) (74,300) (4) (131,670) (1,401,735) -------------- --------------- ------------ ---------------- ---------------- Net increase (decrease) in net assets from contract transactions 2,898,556 (9,403,714) 375,135 75,451,142 (217,427,387) -------------- --------------- ------------ ---------------- ---------------- Net increase (decrease) in net assets (193,122,873) (36,421,959) 392,902 20,479,599 (784,757,663) Net assets beginning of period 381,087,943 79,149,314 -- 51,639,955 1,308,354,520 -------------- --------------- ------------ ---------------- ---------------- Net assets end of period $ 187,965,070 $ 42,727,355 $ 392,902 $ 72,119,554 $ 523,596,857 ------------------------------------------- ============== =============== ============ ================ ================ (1) Contract unit transactions Units Outstanding at December 31, 2007 36,492,226 7,792,688 -- 4,370,519 68,945,392 Units Issued 16,912,438 4,243,687 46,960 12,863,680 12,054,340 Units Redeemed (17,253,615) (5,195,753) (1,233) (4,616,240) (26,607,787) -------------- --------------- ------------ ---------------- ---------------- Units Outstanding at December 31, 2008 36,151,049 6,840,622 45,727 12,617,959 54,391,945 ============== =============== ============ ================ ================
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Healthcare Index 5 International JNL 5 JNL Optimized Sector Portfolio Portfolio Index Portfolio Portfolio 5 Portfolio ---------------- ------------- --------------- ---------------- --------------- Operations Net investment income (loss) $ (1,087,433) $ (126,399) $ 1,648,842 $ 21,205,582 $ (6,439,452) Net realized gain (loss) on investments (3,235,312) (2,285,609) (6,782,307) 283,418,103 (13,097,234) Net change in unrealized appreciation (depreciation) on investments (34,276,318) (14,400,812) (227,905,716) (2,477,857,915) (219,683,482) ---------------- ------------- --------------- ---------------- --------------- Net increase (decrease) in net assets from operations (38,599,063) (16,812,820) (233,039,181) (2,173,234,230) (239,220,168) ---------------- ------------- --------------- ---------------- --------------- Contract transactions (1) Purchase payments (Note 4) 24,177,929 31,288,244 54,569,865 619,667,899 151,193,264 Surrenders and terminations (9,938,234) (1,756,247) (30,053,997) (222,885,508) (17,061,652) Transfers between portfolios 36,395,898 15,521,811 (49,140,531) (675,834,070) 18,432,200 Net annuitization transactions (33,215) -- (172,985) (716,328) 46,453 Policyholder charges (Note 3) (206,669) (38,152) (709,362) (5,825,360) (427,351) ---------------- ------------- --------------- ---------------- --------------- Net increase (decrease) in net assets from contract transactions 50,395,709 45,015,656 (25,507,010) (285,593,367) 152,182,914 ---------------- ------------- --------------- ---------------- --------------- Net increase (decrease) in net assets 11,796,646 28,202,836 (258,546,191) (2,458,827,597) (87,037,254) Net assets beginning of period 106,518,717 27,919,668 554,882,623 5,208,867,203 375,799,453 ---------------- ------------- --------------- ---------------- --------------- Net assets end of period $ 118,315,363 $ 56,122,504 $ 296,336,432 $ 2,750,039,606 $ 288,762,199 ------------------------------------------- ================ ============= =============== ================ =============== (1) Contract unit transactions Units Outstanding at December 31, 2007 8,577,438 2,823,670 27,401,164 376,758,384 31,419,740 Units Issued 10,939,140 7,063,431 8,051,522 84,496,080 27,646,962 Units Redeemed (6,921,570) (1,664,268) (9,376,150) (109,539,644) (13,572,137) ---------------- ------------- --------------- ---------------- --------------- Units Outstanding at December 31, 2008 12,595,008 8,222,833 26,076,536 351,714,820 45,494,565 ================ ============= =============== ================ =============== JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Nasdaq 25 NYSE International Oil & Gas Pacific Rim 30 S&P 10 Portfolio 25 Portfolio Sector Portfolio Portfolio(a) Portfolio -------------- ------------------ ---------------- -------------- ------------- Operations Net investment income (loss) $ (1,297,692) $ (1,241,685) $ (5,126,721) $ (929) $ (9,330,992) Net realized gain (loss) on investments (2,210,184) (8,190,797) 15,031,960 (17) 3,522,952 Net change in unrealized appreciation (depreciation) on investments (38,002,224) (33,914,219) (205,567,250) 35,235 (341,032,066) -------------- ------------------ ---------------- -------------- ------------- Net increase (decrease) in net assets from operations (41,510,100) (43,346,701) (195,662,011) 34,289 (346,840,106) -------------- ------------------ ---------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 13,731,323 26,207,703 93,555,547 205,837 30,350,164 Surrenders and terminations (4,621,779) (5,612,306) (32,616,785) (1,989) (42,058,216) Transfers between portfolios (21,705,705) 10,071,632 (4,600,272) 251,323 (154,142,130) Net annuitization transactions (8,472) -- (185,048) -- (107,608) Policyholder charges (Note 3) (121,716) (181,480) (740,732) (1) (953,896) -------------- ------------------ ---------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions (12,726,349) 30,485,549 55,412,710 455,170 (166,911,686) -------------- ------------------ ---------------- -------------- ------------- Net increase (decrease) in net assets (54,236,449) (12,861,152) (140,249,301) 489,459 (513,751,792) Net assets beginning of period 106,384,536 63,560,988 443,808,211 -- 833,493,043 -------------- ------------------ ---------------- -------------- ------------- Net assets end of period $ 52,148,087 $ 50,699,836 $ 303,558,910 $ 489,459 $ 319,741,251 ------------------------------------------- ============== ================== ================ ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2007 8,393,161 5,504,285 12,229,193 -- 58,972,536 Units Issued 3,869,096 7,500,480 10,585,765 52,875 8,308,621 Units Redeemed (5,111,099) (4,740,187) (9,060,409) (1,690) (21,621,029) -------------- ------------------ ---------------- -------------- ------------- Units Outstanding at December 31, 2008 7,151,158 8,264,578 13,754,549 51,185 45,660,128 ============== ================== ================ ============== =============
(a) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio Index Portfolio Index Portfolio 60 Portfolio Portfolio -------------- --------------- ----------------- -------------- ----------------- Operations Net investment income (loss) $ (435,698) $ (2,014,631) $ (190,602) $ (764,522) $ (6,496,636) Net realized gain (loss) on investments (1,537,583) 5,851,210 (13,879,071) (4,423,393) 10,028,441 Net change in unrealized appreciation (depreciation) on investments (7,952,621) (150,382,081) (198,777,806) (11,004,445) (222,223,015) -------------- --------------- ----------------- -------------- ----------------- Net increase (decrease) in net assets from operations (9,925,902) (146,545,502) (212,847,479) (16,192,360) (218,691,210) -------------- --------------- ----------------- -------------- ----------------- Contract transactions (1) Purchase payments (Note 4) 6,131,114 31,637,211 47,935,478 11,953,193 31,371,756 Surrenders and terminations (1,226,660) (24,001,175) (35,211,530) (2,273,214) (35,428,290) Transfers between portfolios 8,236,158 (39,032,522) (7,056,027) 15,063,129 (106,414,764) Net annuitization transactions -- (124,266) (109,748) -- (83,304) Policyholder charges (Note 3) (26,443) (562,550) (776,927) (57,679) (816,461) -------------- --------------- ----------------- -------------- ----------------- Net increase (decrease) in net assets from contract transactions 13,114,169 (32,083,302) 4,781,246 24,685,429 (111,371,063) -------------- --------------- ----------------- -------------- ----------------- Net increase (decrease) in net assets 3,188,267 (178,628,804) (208,066,233) 8,493,069 (330,062,273) Net assets beginning of period 22,725,802 414,090,413 561,046,082 32,446,860 628,445,176 -------------- --------------- ----------------- -------------- ----------------- Net assets end of period $ 25,914,069 $ 235,461,609 $ 352,979,849 $ 40,939,929 $ 298,382,903 ------------------------------------------ ============== =============== ================= ============== ================= (1) Contract unit transactions Units Outstanding at December 31, 2007 2,111,462 25,779,781 44,589,782 3,676,287 34,012,464 Units Issued 3,004,864 6,760,177 13,883,676 6,628,387 5,118,876 Units Redeemed (1,473,398) (8,653,244) (12,689,602) (3,535,289) (11,792,56 -------------- --------------- ----------------- -------------- -----------------) Units Outstanding at December 31, 2008 3,642,928 23,886,714 45,783,856 6,769,385 27,338,779 ============== =============== ================= ============== ================= JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio VIP Portfolio Portfolio --------------- ---------------- ---------------- --------------- --------------- Operations Net investment income (loss) $ (1,058,413) $ (1,260,615) $ (11,657,888) $ (605,705) $ (454,623) Net realized gain (loss) on investments (3,227,361) (8,041,319) (1,666,742) 70,667,429 11,206,286 Net change in unrealized appreciation (depreciation) on investments (103,413,662) (35,705,812) (490,827,766) (250,340,581) (89,861,479) --------------- ---------------- ---------------- --------------- --------------- Net increase (decrease) in net assets from operations (107,699,436) (45,007,746) (504,152,396) (180,278,857) (79,109,816) --------------- ---------------- ---------------- --------------- --------------- Contract transactions (1) Purchase payments (Note 4) 26,082,609 17,723,149 127,732,107 48,956,398 19,769,113 Surrenders and terminations (19,034,324) (7,763,740) (51,066,318) (18,679,972) (12,780,128) Transfers between portfolios (21,726,121) (14,768,612) (152,741,202) (43,482,998) (19,231,092) Net annuitization transactions (41,392) (8,852) (59,755) (80,757) (43,343) Policyholder charges (Note 3) (453,167) (176,673) (1,579,552) (506,923) (206,033) --------------- ---------------- ---------------- --------------- --------------- Net increase (decrease) in net assets from contract transactions (15,172,395) (4,994,728) (77,714,720) (13,794,252) (12,491,483) --------------- ---------------- ---------------- --------------- --------------- Net increase (decrease) in net assets (122,871,831) (50,002,474) (581,867,116) (194,073,109) (91,601,299) Net assets beginning of period 316,673,168 99,763,397 1,099,739,990 422,290,328 196,598,584 --------------- ---------------- ---------------- --------------- --------------- Net assets end of period $ 193,801,337 $ 49,760,923 $ 517,872,874 $ 228,217,219 $ 104,997,285 ------------------------------------------ =============== ================ ================ =============== =============== (1) Contract unit transactions Units Outstanding at December 31, 2007 21,145,571 14,471,996 61,930,772 29,419,417 13,001,501 Units Issued 5,531,076 12,136,083 17,502,165 7,554,030 2,826,184 Units Redeemed (6,455,641) (13,585,053) (23,009,254) (8,723,649) (3,903,347) --------------- ---------------- ---------------- --------------- --------------- Units Outstanding at December 31, 2008 20,221,006 13,023,026 56,423,683 28,249,798 11,924,338 =============== ================ ================ =============== ===============
See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/ JNL/PAM JNL/PAM JNL/PIMCO JNL/PIMCO PPM America Asia ex-Japan China-India Real Return Total Return Core Equity Portfolio(a) Portfolio(a) Portfolio Bond Portfolio Portfolio ---------------- --------------- --------------- --------------- ---------------- Operations Net investment income (loss) $ 15 $ (299,458) $ (869,524) $ 23,438,873 $ (711,146) Net realized gain (loss) on investments (3,460,850) (6,962,532) (2,118,707) 30,856,744 (2,610,062) Net change in unrealized appreciation (depreciation) on investments (841,418) (8,196,803) (53,220,897) (75,446,225) (25,004,940) ---------------- --------------- --------------- --------------- ---------------- Net increase (decrease) in net assets from operations (4,302,253) (15,458,793) (56,209,128) (21,150,608) (28,326,148) ---------------- --------------- --------------- --------------- ---------------- Contract transactions (1) Purchase payments (Note 4) 3,728,640 12,995,797 109,831,638 176,780,817 2,021,545 Surrenders and terminations (153,596) (1,647,258) (37,243,724) (73,731,800) (9,740,697) Transfers between portfolios 4,663,464 29,028,151 332,552,062 192,823,131 (2,195,945) Net annuitization transactions -- -- (103,216) (369,359) 2,451 Policyholder charges (Note 3) (2,052) (47,392) (871,168) (1,291,431) (73,130) ---------------- --------------- --------------- --------------- ---------------- Net increase (decrease) in net assets from contract transactions 8,236,456 40,329,298 404,165,592 294,211,358 (9,985,776) ---------------- --------------- --------------- --------------- ---------------- Net increase (decrease) in net assets 3,934,203 24,870,505 347,956,464 273,060,750 (38,311,924) Net assets beginning of period -- -- 75,389,774 598,011,551 75,770,750 ---------------- --------------- --------------- --------------- ---------------- Net assets end of period $ 3,934,203 $ 24,870,505 $ 423,346,238 $ 871,072,301 $ 37,458,826 ------------------------------------------ ================ =============== =============== =============== ================ (1) Contract unit transactions Units Outstanding at December 31, 2007 -- -- 6,906,343 40,603,202 4,013,494 Units Issued 2,872,677 12,246,468 63,358,491 40,763,515 363,748 Units Redeemed (2,054,102) (6,282,817) (29,260,272) (21,809,071) (1,015,436) ---------------- --------------- --------------- --------------- ---------------- Units Outstanding at December 31, 2008 818,575 5,963,651 41,004,562 59,557,646 3,361,806 ================ =============== =============== =============== ================ JNL/ JNL/ JNL/ JNL/ JNL/ PPM America PPM America PPM America PPM America Red Rocks Listed High Yield Mid Cap Value Small Cap Value Value Equity Private Equity Bond Portfolio Portfolio(a) Portfolio(a) Portfolio Portfolio(b) ---------------- --------------- --------------- -------------- ---------------- Operations Net investment income (loss) $ 15,036,090 $ (40,084) $ (13,505) $ 866,225 $ 35,447 Net realized gain (loss) on investments (38,490,930) (3,016,033) (736,300) 5,392,193 (234,435) Net change in unrealized appreciation (depreciation) on investments (49,152,243) (1,746,476) (1,551,437) (59,148,066) (1,399,049) ---------------- --------------- --------------- -------------- ---------------- Net increase (decrease) in net assets from operations (72,607,083) (4,802,593) (2,301,242) (52,889,648) (1,598,037) ---------------- --------------- --------------- -------------- ---------------- Contract transactions (1) Purchase payments (Note 4) 22,703,000 2,055,986 2,146,602 3,816,816 6,564,082 Surrenders and terminations (23,942,259) (325,885) (157,785) (14,135,513) (54,504) Transfers between portfolios (20,707,517) 6,456,144 5,079,390 (490,622) 7,191,065 Net annuitization transactions (123,025) -- -- 4,459 -- Policyholder charges (Note 3) (397,477) (10,691) (4,454) (106,925) (867) ---------------- --------------- --------------- -------------- ---------------- Net increase (decrease) in net assets from contract transactions (22,467,278) 8,175,554 7,063,753 (10,911,785) 13,699,776 ---------------- --------------- --------------- -------------- ---------------- Net increase (decrease) in net assets (95,074,361) 3,372,961 4,762,511 (63,801,433) 12,101,739 Net assets beginning of period 267,489,724 -- -- 119,368,593 -- ---------------- --------------- --------------- -------------- ---------------- Net assets end of period $ 172,415,363 $ 3,372,961 $ 4,762,511 $ 55,567,160 $ 12,101,739 ------------------------------------------ ================ =============== =============== ============== ================ (1) Contract unit transactions Units Outstanding at December 31, 2007 20,645,862 -- -- 6,244,762 -- Units Issued 12,672,507 1,925,697 1,108,171 1,669,904 2,090,467 Units Redeemed (13,948,783) (1,326,334) (343,811) (2,388,330) (46,788) ---------------- --------------- --------------- -------------- ---------------- Units Outstanding at December 31, 2008 19,369,586 599,363 764,360 5,526,336 2,043,679 ================ =============== =============== ============== ================
(a) Commencement of operations March 31, 2008. (b) Commencement of operations October 6, 2008. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/S&P JNL/S&P Competitive JNL/S&P JNL/S&P Disciplined JNL/S&P 4 Advantage Disciplined Disciplined Moderate Portfolio Portfolio Growth Portfolio Moderate Portfolio Growth Portfolio --------------- -------------- ---------------- ------------------ ---------------- Operations Net investment income (loss) $ (2,972,658) $ (81,264) $ 13,582 $ (181,408) $ (145,228) Net realized gain (loss) on investments (12,180,790) (2,462,453) (2,024,054) (1,996,076) (3,225,855) Net change in unrealized appreciation (depreciation) on investments (63,129,882) (7,752,847) (8,629,592) (13,719,885) (22,326,391) --------------- -------------- ---------------- ------------------ ---------------- Net increase (decrease) in net assets from operations (78,283,330) (10,296,564) (10,640,064) (15,897,369) (25,697,474) --------------- -------------- ---------------- ------------------ ---------------- Contract transactions (1) Purchase payments (Note 4) 162,935,583 14,439,648 13,585,815 24,570,384 38,525,307 Surrenders and terminations (8,342,315) (1,557,464) (762,814) (2,772,013) (2,855,760) Transfers between portfolios 157,543,060 17,872,336 7,154,126 16,374,392 22,982,433 Net annuitization transactions -- -- -- (29,035) -- Policyholder charges (Note 3) (145,979) (43,521) (12,888) (48,845) (35,510) --------------- -------------- ---------------- ------------------ ---------------- Net increase (decrease) in net assets from contract transactions 311,990,349 30,710,999 19,964,239 38,094,883 58,616,470 --------------- -------------- ---------------- ------------------ ---------------- Net increase (decrease) in net assets 233,707,019 20,414,435 9,324,175 22,197,514 32,918,996 Net assets beginning of period 22,021,782 6,230,889 15,682,735 33,590,592 38,399,737 --------------- -------------- ---------------- ------------------ ---------------- Net assets end of period $ 255,728,801 $ 26,645,324 $ 25,006,910 $ 55,788,106 $ 71,318,733 ------------------------------------------ =============== ============== ================ ================== ================ (1) Contract unit transactions Units Outstanding at December 31, 2007 2,220,823 628,714 1,496,107 3,189,662 3,658,371 Units Issued 42,078,624 5,635,315 3,751,989 5,860,463 8,815,109 Units Redeemed (5,952,969) (2,391,540) (1,251,916) (1,709,035) (1,899,070) --------------- -------------- ---------------- ------------------ ---------------- Units Outstanding at December 31, 2008 38,346,478 3,872,489 3,996,180 7,341,090 10,574,410 =============== ============== ================ ================== ================ JNL/S&P JNL/S&P JNL/ JNL/ Dividend Income Growth JNL/S&P S&P Managed S&P Managed & Growth Retirement Intrinsic Value Aggressive Conservative Portfolio Strategy Portfolio Portfolio Growth Portfolio Portfolio --------------- ------------------ ---------------- ---------------- -------------- Operations Net investment income (loss) $ 583,431 $ 49,641 $ (177,412) $ (5,839,500) $ 8,560,625 Net realized gain (loss) on investments (1,170,192) (45,438) (5,182,041) 25,371,279 (3,935,859) Net change in unrealized appreciation (depreciation) on investments (4,336,302) (298,751) (10,025,929) (249,172,602) (64,160,775) --------------- ------------------ ---------------- ---------------- -------------- Net increase (decrease) in net assets from operations (4,923,063) (294,548) (15,385,382) (229,640,823) (59,536,009) --------------- ------------------ ---------------- ---------------- -------------- Contract transactions (1) Purchase payments (Note 4) 17,734,079 69,832 20,177,260 48,167,113 85,536,507 Surrenders and terminations (862,678) (96,268) (2,335,217) (49,265,568) (31,202,765) Transfers between portfolios 20,834,474 54,208 15,336,252 (40,351,672) 139,780,670 Net annuitization transactions 153,197 -- -- (16,990) 64,633 Policyholder charges (Note 3) (17,421) (70) (64,772) (832,045) (608,894) --------------- ------------------ ---------------- ---------------- -------------- Net increase (decrease) in net assets from contract transactions 37,841,651 27,702 33,113,523 (42,299,162) 193,570,151 --------------- ------------------ ---------------- ---------------- -------------- Net increase (decrease) in net assets 32,918,588 (266,846) 17,728,141 (271,939,985) 134,034,142 Net assets beginning of period 737,713 815,294 11,822,442 606,719,072 240,837,191 --------------- ------------------ ---------------- ---------------- -------------- Net assets end of period $ 33,656,301 $ 548,448 $ 29,550,583 $ 334,779,087 $ 374,871,333 ------------------------------------------ =============== ================== ================ ================ ============== (1) Contract unit transactions Units Outstanding at December 31, 2007 75,568 76,247 1,192,657 37,209,909 20,751,298 Units Issued 5,439,725 12,625 6,797,811 6,596,390 29,036,242 Units Redeemed (783,916) (13,447) (3,265,267) (9,533,318) (11,749,946) --------------- ------------------ ---------------- ---------------- -------------- Units Outstanding at December 31, 2008 4,731,377 75,425 4,725,201 34,272,981 38,037,594 =============== ================== ================ ================ ==============
See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/S&P JNL/ JNL/ JNL/S&P Moderate JNL/ S&P Managed S&P Managed Moderate Growth Retirement S&P Managed Moderate Moderate Retirement Strategy Growth Portfolio Portfolio Growth Portfolio Strategy Portfolio Portfolio ---------------- --------------- ---------------- ------------------ -------------- Operations Net investment income (loss) $ (10,787,672) $ 12,239,148 $ 6,581,941 $ 73,382 $ 96,153 Net realized gain (loss) on investments 51,999,312 (4,152,929) 21,456,483 (20,336) (8,246) Net change in unrealized appreciation (depreciation) on investments (470,914,100) (145,635,471) (395,760,052) (248,256) (306,907) ---------------- --------------- ---------------- ------------------ -------------- Net increase (decrease) in net assets from operations (429,702,460) (137,549,252) (367,721,628) (195,210) (219,000) ---------------- --------------- ---------------- ------------------ -------------- Contract transactions (1) Purchase payments (Note 4) 113,516,187 114,944,987 186,709,830 -- 250,000 Surrenders and terminations (100,625,361) (43,894,327) (94,586,596) (14,817) (39,857) Transfers between portfolios (60,637,993) 102,540,548 (71,938,436) 120,207 822,094 Net annuitization transactions (347,073) (54,837) (517,739) -- -- Policyholder charges (Note 3) (1,681,825) (883,703) (1,469,983) -- -- ---------------- --------------- ---------------- ------------------ -------------- Net increase (decrease) in net assets from contract transactions (49,776,065) 172,652,668 18,197,076 105,390 1,032,237 ---------------- --------------- ---------------- ------------------ -------------- Net increase (decrease) in net assets (479,478,525) 35,103,416 (349,524,552) (89,820) 813,237 Net assets beginning of period 1,201,072,916 475,927,883 1,251,889,393 673,315 294,953 ---------------- --------------- ---------------- ------------------ -------------- Net assets end of period $ 721,594,391 $ 511,031,299 $ 902,364,841 $ 583,495 $ 1,108,190 ------------------------------------------ ================ =============== ================ ================== ============== (1) Contract unit transactions Units Outstanding at December 31, 2007 74,650,365 38,279,657 82,229,721 63,438 28,094 Units Issued 14,751,855 27,195,640 20,100,708 62,597 106,680 Units Redeemed (19,031,822) (12,456,983) (19,219,487) (52,430) (6,145) ---------------- --------------- ---------------- ------------------ -------------- Units Outstanding at December 31, 2008 70,370,398 53,018,314 83,110,942 73,605 128,629 ================ =============== ================ ================== ============== JNL/ JNL/S&P JNL/S&P JNL/S&P S&P Retirement JNL/S&P Retirement 2015 Retirement 2020 Retirement 2025 Income Total Yield Portfolio Portfolio Portfolio Portfolio Portfolio --------------- --------------- --------------- -------------- --------------- Operations Net investment income (loss) $ (320,378) $ (38,409) $ (26,422) $ 51,114 $ 31,939 Net realized gain (loss) on investments (1,374,092) (90,197) (184,113) (340,137) (3,164,214) Net change in unrealized appreciation (depreciation) on investments (8,954,796) (4,090,812) (2,588,390) (7,954,488) (8,598,047) --------------- --------------- --------------- -------------- --------------- Net increase (decrease) in net assets from operations (10,649,266) (4,219,418) (2,798,925) (8,243,511) (11,730,322) --------------- --------------- --------------- -------------- --------------- Contract transactions (1) Purchase payments (Note 4) 8,820,316 5,031,591 2,904,340 14,798,993 12,610,236 Surrenders and terminations (1,472,377) (442,001) (471,927) (3,653,879) (988,777) Transfers between portfolios 12,637,666 1,551,934 1,725,658 13,595,092 25,263,286 Net annuitization transactions (6,245) -- -- 50,975 -- Policyholder charges (Note 3) (22,133) (7,200) (17,564) (39,316) (20,866) --------------- --------------- --------------- -------------- --------------- Net increase (decrease) in net assets from contract transactions 19,957,227 6,134,324 4,140,507 24,751,865 36,863,879 --------------- --------------- --------------- -------------- --------------- Net increase (decrease) in net assets 9,307,961 1,914,906 1,341,582 16,508,354 25,133,557 Net assets beginning of period 15,823,765 8,360,905 4,776,579 29,043,838 3,265,347 --------------- --------------- --------------- -------------- --------------- Net assets end of period $ 25,131,726 $ 10,275,811 $ 6,118,161 $ 45,552,192 $ 28,398,904 ------------------------------------------ =============== =============== =============== ============== =============== (1) Contract unit transactions Units Outstanding at December 31, 2007 1,358,920 710,408 400,249 2,615,299 324,611 Units Issued 4,510,989 868,596 617,458 3,993,920 6,347,508 Units Redeemed (2,727,105) (249,921) (209,298) (1,510,854) (2,210,242) --------------- --------------- --------------- -------------- --------------- Units Outstanding at December 31, 2008 3,142,804 1,329,083 808,409 5,098,365 4,461,877 =============== =============== =============== ============== ===============
See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2008
JNL/Select JNL/Select JNL/ Balanced Money Market Select Value Portfolio Portfolio Portfolio ------------------ ------------------ ------------------ Operations Net investment income (loss) $ 4,227,809 $ 3,297,750 $ (3,029,089) Net realized gain (loss) on investments 9,319,740 8 (11,174,263) Net change in unrealized appreciation (depreciation) on investments (137,331,388) (8) (63,620,285) ------------------ ------------------ ------------------ Net increase (decrease) in net assets from operations (123,783,839) 3,297,750 (77,823,637) ------------------ ------------------ ------------------ Contract transactions (1) Purchase payments (Note 4) 87,954,187 366,020,533 31,638,934 Surrenders and terminations (49,461,508) (228,882,959) (14,210,335) Transfers between portfolios 21,131,509 448,245,072 (2,863,043) Net annuitization transactions (293,748) (1,189,009) (76,342) Policyholder charges (Note 3) (624,516) (4,805,226) (263,568) ------------------ ------------------ ------------------ Net increase (decrease) in net assets from contract transactions 58,705,924 579,388,411 14,225,646 ------------------ ------------------ ------------------ Net increase (decrease) in net assets (65,077,915) 582,686,161 (63,597,991) Net assets beginning of period 497,883,854 618,006,127 217,134,887 ------------------ ------------------ ------------------ Net assets end of period $ 432,805,939 $ 1,200,692,288 $ 153,536,896 ------------------------------------------ ================== ================== ================== (1) Contract unit transactions Units Outstanding at December 31, 2007 18,482,233 48,897,221 9,897,293 Units Issued 7,562,702 119,481,577 4,063,714 Units Redeemed (5,619,500) (73,717,657) (3,293,875) ------------------ ------------------ ------------------ Units Outstanding at December 31, 2008 20,425,435 94,661,141 10,667,132 ================== ================== ================== JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ------------------ ----------------- Operations Net investment income (loss) $ (6,471,387) $ (6,747,855) $ 778,784 Net realized gain (loss) on investments (11,887,570) 9,570,094 14,360,234 Net change in unrealized appreciation (depreciation) on investments (219,540,661) (220,233,224) (159,230,308) ----------------- ------------------ ----------------- Net increase (decrease) in net assets from operations (237,899,618) (217,410,985) (144,091,290) ----------------- ------------------ ----------------- Contract transactions (1) Purchase payments (Note 4) 51,999,325 69,847,852 27,308,575 Surrenders and terminations (50,427,000) (41,988,315) (29,092,465) Transfers between portfolios (20,114,007) (11,219,185) (16,644,674) Net annuitization transactions (391,044) (94,978) (199,977) Policyholder charges (Note 3) (585,445) (586,821) (361,741) ----------------- ------------------ ----------------- Net increase (decrease) in net assets from contract transactions (19,518,171) 15,958,553 (18,990,282) ----------------- ------------------ ----------------- Net increase (decrease) in net assets (257,417,789) (201,452,432) (163,081,572) Net assets beginning of period 558,542,995 510,648,261 367,321,448 ----------------- ------------------ ----------------- Net assets end of period $ 301,125,206 $ 309,195,829 $ 204,239,876 ------------------------------------------ ================= ================== ================= (1) Contract unit transactions Units Outstanding at December 31, 2007 18,570,197 12,275,244 22,937,684 Units Issued 3,519,089 3,852,084 5,115,380 Units Redeemed (4,522,701) (3,638,961) (6,283,120) ----------------- ------------------ ----------------- Units Outstanding at December 31, 2008 17,566,585 12,488,367 21,769,944 ================= ================== =================
See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
Fifth Third Fifth Third Disciplined Fifth Third JNL/AIM Balanced Value Mid Cap Fifth Third International VIP VIP VIP Quality Growth Growth Portfolio(b) Portfolio(b) Portfolio(b) VIP Portfolio(b) Portfolio ------------- --------------- --------------- ---------------- -------------- Operations Net investment income (loss) $ 262 $ 160,596 $ (7,229) $ 150,687 $ 27,990 Net realized gain (loss) on investments 15,149 1,741,014 943,593 1,452,968 10,857,758 Net change in unrealized appreciation (depreciation) on investments (6,503) (1,377,439) (563,207) (676,053) 627,133 ------------- --------------- --------------- ---------------- -------------- Net increase (decrease) in net assets from operations 8,908 524,171 373,157 927,602 11,512,881 ------------- --------------- --------------- ---------------- -------------- Contract transactions (1) Purchase payments (Note 4) -- 112,552 44,905 108,170 37,276,165 Surrenders and terminations (8,694) (264,329) (116,684) (219,111) (17,344,153) Transfers between portfolios (145,748) (8,388,952) (3,419,076) (6,837,085) 39,474,859 Net annuitization transactions -- -- -- -- 70,784 Policyholder charges (Note 3) (77) (6,223) (2,700) (5,039) (163,422) ------------- --------------- --------------- ---------------- -------------- Net increase (decrease) in net assets from contract transactions (154,519) (8,546,952) (3,493,555) (6,953,065) 59,314,233 ------------- --------------- --------------- ---------------- -------------- Net increase (decrease) in net assets (145,611) (8,022,781) (3,120,398) (6,025,463) 70,827,114 Net assets beginning of period 145,611 8,022,781 3,120,398 6,025,463 132,457,688 ------------- --------------- --------------- ---------------- -------------- Net assets end of period $ -- $ -- $ -- $ -- $ 203,284,802 -------------------------------------- ============= =============== =============== ================ ============== (1) Contract unit transactions Units Outstanding at December 31, 2006 11,321 434,095 178,550 788,606 7,661,510 Units Issued 9,911 19,139 8,183 45,765 5,486,693 Units Redeemed (21,232) (453,234) (186,733) (834,371) (2,211,782) ------------- --------------- --------------- ---------------- -------------- Units Outstanding at December 31, 2007 -- -- -- -- 10,936,421 ============= =============== =============== ================ ============== JNL/Capital JNL/AIM JNL/AIM Guardian Large Cap JNL/AIM Small Cap JNL/Alger Global Growth Real Estate Growth Growth Balanced Portfolio Portfolio Portfolio Portfolio(a) Portfolio ------------- --------------- --------------- ---------------- -------------- Operations Net investment income (loss) $ (1,393,680) $ 1,886,988 $ (788,501) $ (380,071) $ 1,549,194 Net realized gain (loss) on investments 14,889,530 8,635,274 7,575,368 27,307,517 17,459,838 Net change in unrealized appreciation (depreciation) on investments 5,953,536 (45,025,484) (2,104,846) (16,163,940) (10,071,629) ------------- --------------- --------------- ---------------- -------------- Net increase (decrease) in net assets from operations 19,449,386 (34,503,222) 4,682,021 10,763,506 8,937,403 ------------- --------------- --------------- ---------------- -------------- Contract transactions (1) Purchase payments (Note 4) 19,676,560 81,675,947 11,579,533 2,525,848 23,991,944 Surrenders and terminations (12,271,938) (10,409,521) (6,158,905) (7,522,618) (20,109,781) Transfers between portfolios 77,848,911 (54,146,991) 11,391,869 (137,550,481) 19,962,396 Net annuitization transactions (52,565) (13,641) (4,475) (43,001) (78,806) Policyholder charges (Note 3) (235,251) (237,225) (135,502) (84,073) (240,794) ------------- --------------- --------------- ---------------- -------------- Net increase (decrease) in net assets from contract transactions 84,965,717 16,868,569 16,672,520 (142,674,325) 23,524,959 ------------- --------------- --------------- ---------------- -------------- Net increase (decrease) in net assets 104,415,103 (17,634,653) 21,354,541 (131,910,819) 32,462,362 Net assets beginning of period 89,483,700 151,820,647 47,863,331 131,910,819 151,520,936 ------------- --------------- --------------- ---------------- -------------- Net assets end of period $ 193,898,803 $ 134,185,994 $ 69,217,872 $ -- $ 183,983,298 ------------------------------------- ============= =============== =============== ================ ============== (1) Contract unit transactions Units Outstanding at December 31, 2006 7,209,939 9,795,414 3,368,327 6,620,731 12,673,661 Units Issued 9,418,929 9,961,160 2,159,234 259,892 5,031,893 Units Redeemed (2,900,110) (9,401,590) (1,079,715) (6,880,623) (3,177,685) ------------- --------------- --------------- ---------------- -------------- Units Outstanding at December 31, 2007 13,728,758 10,354,984 4,447,846 -- 14,527,869 ============= =============== =============== ================ ==============
(a) The period is from January 1, 2007 through acquisition April 27, 2007. (b) The period is from January 1, 2007 through liquidation October 12, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/Credit JNL/Capital JNL/Capital Suisse Guardian Global Guardian JNL/Capital Global JNL/ Diversified International Guardian U.S. Natural Credit Suisse Research SmallCap Growth Equity Resources Long/Short Portfolio Portfolio(b) Portfolio Portfolio(a) Portfolio(a) --------------- ------------- -------------- -------------- ------------- Operations Net investment income (loss) $ (887,907) $ (1,734) $ (2,072,396) $ (1,988,608) $ (123,919) Net realized gain (loss) on investments 3,881,639 (33) 4,975,265 2,604,318 179,675 Net change in unrealized appreciation (depreciation) on investments 15,772,849 14,930 6,828,210 21,605,879 416,474 --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from operations 18,766,581 13,163 9,731,079 22,221,589 472,230 --------------- ------------- -------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 9,782,346 481,706 15,049,163 64,666,650 6,249,336 Surrenders and terminations (20,623,392) (2,510) (21,942,116) (7,364,921) (280,998) Transfers between portfolios 38,358,508 1,493,642 9,977,442 215,419,342 12,807,814 Net annuitization transactions 29,027 -- (81,709) 5,554 -- Policyholder charges (Note 3) (130,303) (72) (181,914) (152,675) (1,050) --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions 27,416,186 1,972,766 2,820,866 272,573,950 18,775,102 --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets 46,182,767 1,985,929 12,551,945 294,795,539 19,247,332 Net assets beginning of period 109,223,427 -- 139,074,319 -- -- --------------- ------------- -------------- -------------- ------------- Net assets end of period $ 155,406,194 $ 1,985,929 $ 151,626,264 $ 294,795,539 $ 19,247,332 ------------------------------------------- =============== ============= ============== ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 5,042,099 -- 5,847,479 -- -- Units Issued 2,083,180 201,767 1,377,658 23,059,218 2,275,599 Units Redeemed (1,354,945) (265) (1,469,057) (1,482,450) (471,176) --------------- ------------- -------------- -------------- ------------- Units Outstanding at December 31, 2007 5,770,334 201,502 5,756,080 21,576,768 1,804,423 =============== ============= ============== ============== ============= JNL/Franklin JNL/Eagle Templeton JNL/Franklin JNL/Franklin JNL/Eagle SmallCap Founding Templeton Templeton Core Equity Equity Strategy Global Growth Income Portfolio Portfolio Portfolio(a) Portfolio(a) Portfolio --------------- ------------- -------------- -------------- ------------- Operations Net investment income (loss) $ 237,469 $ 1,045,078 $ (6,674,479) $ (86,314) $ 5,134,736 Net realized gain (loss) on investments 14,059,633 31,031,826 (1,459,472) 35,521 1,299,738 Net change in unrealized appreciation (depreciation) on investments (14,825,281) (21,772,102) (16,149,617) (1,368,554) (11,192,563) --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from operations (528,179) 10,304,802 (24,283,568) (1,419,347) (4,758,089) --------------- ------------- -------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 5,135,626 32,737,643 545,121,808 33,340,999 123,191,819 Surrenders and terminations (8,621,231) (13,560,306) (15,808,624) (1,030,828) (7,845,390) Transfers between portfolios (3,667,843) 25,753,109 257,484,841 16,317,700 83,397,544 Net annuitization transactions (55,489) 22,259 173,765 1,226 -- Policyholder charges (Note 3) (76,607) (125,780) (203,129) (14,401) (109,220) --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions (7,285,544) 44,826,925 786,768,661 48,614,696 198,634,753 --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets (7,813,723) 55,131,727 762,485,093 47,195,349 193,876,664 Net assets beginning of period 78,067,866 104,069,721 -- -- 58,427,521 --------------- ------------- -------------- -------------- ------------- Net assets end of period $ 70,254,143 $ 159,201,448 $ 762,485,093 $ 47,195,349 $ 252,304,185 ------------------------------------------- =============== ============= ============== ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 4,108,529 4,595,183 -- -- 5,381,483 Units Issued 690,240 3,860,595 85,987,508 6,111,587 21,086,391 Units Redeemed (1,064,113) (2,078,130) (9,175,836) (1,345,152) (3,253,268) --------------- ------------- -------------- -------------- ------------- Units Outstanding at December 31, 2007 3,734,656 6,377,648 76,811,672 4,766,435 23,214,606 =============== ============= ============== ============== =============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/ JNL/ Goldman JNL/Franklin JNL/Franklin JNL/ Goldman Sachs Templeton Templeton Goldman Sachs Sachs Short Mutual Small Cap Core Plus Mid Cap Duration Shares Value Bond Value Bond Portfolio(a) Portfolio Portfolio Portfolio Portfolio --------------- ------------- -------------- -------------- ------------- Operations Net investment income (loss) $ (658,119) $ 619,786 $ 5,372,567 $ 584,570 $ 1,072,626 Net realized gain (loss) on investments (123,619) 3,194,668 3,488,590 4,090,664 1,129,388 Net change in unrealized appreciation (depreciation) on investments (1,762,683) (9,076,938) 6,469,545 (6,143,027) (743,213) --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from operations (2,544,421) (5,262,484) 15,330,702 (1,467,793) 1,458,801 --------------- ------------- -------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 47,985,009 22,466,941 58,392,394 31,299,203 18,724,419 Surrenders and terminations (1,671,410) (3,021,911) (27,078,418) (4,963,172) (4,181,497) Transfers between portfolios 27,302,183 (2,296,555) 32,443,998 9,984,571 24,220,215 Net annuitization transactions -- (6,670) 70,808 (19,519) (45,067) Policyholder charges (Note 3) (24,032) (55,828) (414,408) (75,916) (47,825) --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions 73,591,750 17,085,977 63,414,374 36,225,167 38,670,245 --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets 71,047,329 11,823,493 78,745,076 34,757,374 40,129,046 Net assets beginning of period -- 45,326,950 251,052,512 54,651,795 25,836,573 --------------- ------------- -------------- -------------- ------------- Net assets end of period $ 71,047,329 $ 57,150,443 $ 329,797,588 $ 89,409,169 $ 65,965,619 -------------------------------------------- =============== ============= ============== ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 -- 3,594,731 13,343,006 4,263,977 2,533,872 Units Issued 8,439,205 3,368,958 6,386,022 5,413,661 8,683,154 Units Redeemed (1,232,807) (2,051,730) (3,084,906) (2,775,165) (4,934,402) --------------- ------------- -------------- -------------- ------------- Units Outstanding at December 31, 2007 7,206,398 4,911,959 16,644,122 6,902,473 6,282,624 =============== ============= ============== ============== ============= JNL/JPMorgan JNL/JPMorgan JNL/JPMorgan U.S. JNL/Lazard JNL/Lazard International MidCap Government Emerging Mid Cap Value Growth & Quality Bond Markets Value Portfolio Portfolio Portfolio Portfolio Portfolio --------------- ------------- -------------- -------------- ------------- Operations Net investment income (loss) $ 14,331,823 $ (1,773,738) $ 3,880,694 $ (1,517,084) $ 8,511,191 Net realized gain (loss) on investments 43,473,940 9,645,674 1,622,094 5,736,070 24,940,060 Net change in unrealized appreciation (depreciation) on investments (27,308,047) (1,042,161) 2,848,679 17,674,225 (45,994,972) --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from operations 30,497,716 6,829,775 8,351,467 21,893,211 (12,543,721) --------------- ------------- -------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 105,791,282 9,118,623 21,080,713 56,906,048 46,216,694 Surrenders and terminations (27,051,059) (19,187,153) (21,976,374) (7,400,892) (18,868,192) Transfers between portfolios (5,521,597) 23,686,418 16,157,464 142,450,471 14,431,628 Net annuitization transactions (44,867) (12,498) (100,242) 18,714 (24,632) Policyholder charges (Note 3) (454,572) (143,057) (175,669) (172,692) (222,068) --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions 72,719,187 13,462,333 14,985,892 191,801,649 41,533,430 --------------- ------------- -------------- -------------- ------------- Net increase (decrease) in net assets 103,216,903 20,292,108 23,337,359 213,694,860 28,989,709 Net assets beginning of period 293,190,252 112,750,275 167,521,342 30,065,142 185,662,219 --------------- ------------- -------------- -------------- ------------- Net assets end of period $ 396,407,155 $ 133,042,383 $ 190,858,701 $ 243,760,002 $ 214,651,928 ------------------------------------------- =============== ============= ============== ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 18,029,849 5,728,690 10,828,158 2,766,326 9,360,512 Units Issued 12,299,038 2,183,448 4,877,637 17,576,391 5,044,257 Units Redeemed (7,770,854) (1,789,990) (3,926,428) (3,021,824) (3,198,657) --------------- ------------- -------------- -------------- ------------- Units Outstanding at December 31, 2007 22,558,033 6,122,148 11,779,367 17,320,893 11,206,112 =============== ============= ============== ============== =============
(a) Commencement of operations January 16, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/Lazard JNL/MCM Small Cap JNL/MCM JNL/MCM Communications Value 10 x 10 JNL/MCM Bond Index Sector Portfolio Portfolio(a) 25 Portfolio Portfolio Portfolio ------------- ------------- ------------- ------------- -------------- Operations Net investment income (loss) $ 2,692,300 $ (340,918) $ (281,223) $ 7,255,243 $ 2,108,193 Net realized gain (loss) on investments 4,072,123 (1,098,329) 43,647,723 2,710,855 5,588,346 Net change in unrealized appreciation (depreciation) on investments (16,788,108) (1,437,220) (76,007,512) 2,999,704 (9,049,141) ------------- ------------- ------------- ------------- -------------- Net increase (decrease) in net assets from operations (10,023,685) (2,876,467) (32,641,012) 12,965,802 (1,352,602) ------------- ------------- ------------- ------------- -------------- Contract transactions (1) Purchase payments (Note 4) 16,906,270 37,090,579 126,106,694 58,704,746 25,537,646 Surrenders and terminations (12,575,988) (1,324,951) (45,067,442) (17,786,346) (8,223,650) Transfers between portfolios (10,224,322) 18,024,902 (64,962,251) 18,797,532 13,145,068 Net annuitization transactions (63,220) -- (360,188) (84,167) (23,679) Policyholder charges (Note 3) (211,841) (49,904) (780,284) (304,544) (142,843) ------------- ------------- ------------- ------------- -------------- Net increase (decrease) in net assets from contract transactions (6,169,101) 53,740,626 14,936,529 59,327,221 30,292,542 ------------- ------------- ------------- ------------- -------------- Net increase (decrease) in net assets (16,192,786) 50,864,159 (17,704,483) 72,293,023 28,939,940 Net assets beginning of period 127,361,238 -- 707,448,757 231,058,589 53,065,680 ------------- ------------- ------------- ------------- -------------- Net assets end of period $ 111,168,452 $ 50,864,159 $ 689,744,274 $ 303,351,612 $ 82,005,620 ------------------------------------------ ============= ============= ============= ============= ============== (1) Contract unit transactions Units Outstanding at December 31, 2006 7,492,738 -- 56,751,709 20,618,779 8,875,777 Units Issued 1,791,576 7,573,223 14,374,885 10,496,712 11,752,776 Units Redeemed (2,154,315) (2,385,667) (13,246,013) (5,249,643) (7,203,769) ------------- ------------- ------------- ------------- -------------- Units Outstanding at December 31, 2007 7,129,999 5,187,556 57,880,581 25,865,848 13,424,784 ============= ============= ============= ============= ============== JNL/MCM JNL/MCM Consumer Enhanced JNL/MCM Brands JNL/MCM JNL/MCM S&P 500 Stock Financial Sector Dow 10 Dow Dividend Index Sector Portfolio Portfolio Portfolio Portfolio Portfolio ------------- ------------- ------------- ------------- ------------- Operations Net investment income (loss) $ (267,385) $ (14,690,144) $ (6,225,566) $ (73,985) $ (82,046) Net realized gain (loss) on investments 2,509,855 63,033,465 6,821,710 4,173,512 4,740,076 Net change in unrealized appreciation (depreciation) on investments (4,009,383) (53,962,671) (51,702,747) (2,806,274) (16,031,535) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations (1,766,913) (5,619,350) (51,106,603) 1,293,253 (11,373,505) ------------- ------------- ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 3,867,335 152,040,211 182,446,523 7,977,654 14,426,324 Surrenders and terminations (2,013,712) (54,586,307) (15,495,198) (6,434,515) (5,333,108) Transfers between portfolios (4,813,257) (123,111,741) (12,985,057) 9,956,682 (12,013,548) Net annuitization transactions (5,063) (434,823) -- (163,857) (12,677) Policyholder charges (Note 3) (31,497) (882,473) (247,130) (102,161) (73,094) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions (2,996,194) (26,975,133) 153,719,138 11,233,803 (3,006,103) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets (4,763,107) (32,594,483) 102,612,535 12,527,056 (14,379,608) Net assets beginning of period 22,721,925 848,141,108 278,475,408 66,622,258 66,019,563 ------------- ------------- ------------- ------------- ------------- Net assets end of period $ 17,958,818 $ 815,546,625 $ 381,087,943 $ 79,149,314 $ 51,639,955 ------------------------------------------ ============= ============= ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 1,966,887 75,603,513 23,592,929 6,530,982 4,510,969 Units Issued 1,698,687 18,045,288 22,984,684 3,919,761 2,866,146 Units Redeemed (1,946,942) (20,510,165) (10,085,387) (2,658,055) (3,006,596) ------------- ------------- ------------- ------------- ------------- Units Outstanding at December 31, 2007 1,718,632 73,138,636 36,492,226 7,792,688 4,370,519 ============= ============= ============= ============= =============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/MCM JNL/MCM JNL/MCM Healthcare JNL/MCM International JNL/MCM Global 15 Sector Index 5 Index JNL 5 Portfolio Portfolio Portfolio(a) Portfolio Portfolio --------------- --------------- --------------- --------------- --------------- Operations Net investment income (loss) $ (21,447,314) $ (855,758) $ (142,403) $ 5,824,151 $ 19,806,817 Net realized gain (loss) on investments 135,389,159 7,305,423 6,713 38,814,966 127,294,599 Net change in unrealized appreciation (depreciation) on investments (14,977,777) (1,473,505) (136,977) (4,802,609) (220,621,793) --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets from operations 98,964,068 4,976,160 (272,667) 39,836,508 (73,520,377) --------------- --------------- --------------- --------------- --------------- Contract transactions (1) Purchase payments (Note 4) 264,328,520 19,143,145 23,902,158 110,365,581 2,075,357,087 Surrenders and terminations (81,481,715) (7,832,507) (286,347) (39,264,474) (202,388,500) Transfers between portfolios (92,333,996) 9,662,910 4,582,787 (12,464,537) (96,638,194) Net annuitization transactions (476,309) (34,835) -- (182,869) (402,314) Policyholder charges (Note 3) (1,467,074) (115,333) (6,263) (808,241) (3,942,550) --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets from contract transactions 88,569,426 20,823,380 28,192,335 57,645,460 1,771,985,529 --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets 187,533,494 25,799,540 27,919,668 97,481,968 1,698,465,152 Net assets beginning of period 1,120,821,026 80,719,177 -- 457,400,655 3,510,402,051 --------------- --------------- --------------- --------------- --------------- Net assets end of period $ 1,308,354,520 $ 106,518,717 $ 27,919,668 $ 554,882,623 $ 5,208,867,203 -------------------------------------- =============== =============== =============== =============== =============== (1) Contract unit transactions Units Outstanding at December 31, 2006 64,546,540 6,873,027 -- 24,460,537 253,347,477 Units Issued 21,177,267 5,429,153 3,515,370 9,300,771 179,431,588 Units Redeemed (16,778,415) (3,724,742) (691,700) (6,360,144) (56,020,681) --------------- --------------- --------------- --------------- --------------- Units Outstanding at December 31, 2007 68,945,392 8,577,438 2,823,670 27,401,164 376,758,384 =============== =============== =============== =============== =============== JNL/MCM JNL/MCM NYSE JNL/MCM JNL JNL/MCM International Oil & Gas JNL/MCM Optimized Nasdaq 25 25 Sector S&P 10 5 Portfolio Portfolio Portfolio(a) Portfolio Portfolio ------------- ------------- ------------- ------------- ------------- Operations Net investment income (loss) $ 3,558,270 $ (1,437,827) $ 1,629,270 $ (2,287,984) $ (14,368,540) Net realized gain (loss) on investments 4,529,586 4,733,275 292,811 51,190,641 53,400,033 Net change in unrealized appreciation (depreciation) on investments 4,170,852 8,480,076 941,226 45,989,319 (12,413,179) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations 12,258,708 11,775,524 2,863,307 94,891,976 26,618,314 ------------- ------------- ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 150,212,680 23,055,701 25,481,852 94,618,388 141,474,610 Surrenders and terminations (5,916,621) (4,696,561) (716,593) (28,044,161) (54,985,186) Transfers between portfolios 135,473,862 10,961,802 35,943,513 898,800 (81,478,092) Net annuitization transactions (76,749) (1,047) -- (117,201) (433,900) Policyholder charges (Note 3) (94,735) (106,667) (11,091) (475,525) (950,022) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions 279,598,437 29,213,228 60,697,681 66,880,301 3,627,410 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets 291,857,145 40,988,752 63,560,988 161,772,277 30,245,724 Net assets beginning of period 83,942,308 65,395,784 -- 282,035,934 803,247,319 ------------- ------------- ------------- ------------- ------------- Net assets end of period $ 375,799,453 $ 106,384,536 $ 63,560,988 $ 443,808,211 $ 833,493,043 -------------------------------------- ============= ============= ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 7,833,912 6,035,415 -- 10,353,209 58,733,169 Units Issued 25,903,906 5,871,233 6,158,768 7,491,179 14,986,975 Units Redeemed (2,318,078) (3,513,487) (654,483) (5,615,195) (14,747,608) ------------- ------------- ------------- ------------- ------------- Units Outstanding at December 31, 2007 31,419,740 8,393,161 5,504,285 12,229,193 58,972,536 ============= ============= ============= ============= =============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/MCM S&P 400 JNL/MCM JNL/MCM JNL/MCM JNL/MCM MidCap S&P 500 S&P SMid Select S&P 24 Index Index 60 Small-Cap Portfolio Portfolio Portfolio Portfolio(a) Portfolio ------------- ------------- ------------- ------------- ------------- Operations Net investment income (loss) $ (317,030) $ (2,137,282) $ (1,652,443) $ 723,745 $ 44,062,425 Net realized gain (loss) on investments 359,492 46,202,148 26,185,634 (547,966) 40,248,040 Net change in unrealized appreciation (depreciation) on investments 877,747 (25,638,814) (8,770,935) (3,003,484) (168,414,527) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations 920,209 18,426,052 15,762,256 (2,827,705) (84,104,062) ------------- ------------- ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 8,220,561 69,233,832 94,942,711 18,253,236 121,869,827 Surrenders and terminations (874,477) (27,748,642) (37,340,529) (433,012) (41,846,110) Transfers between portfolios (3,231,591) 5,192,626 (17,249,831) 17,460,910 (66,531,018) Net annuitization transactions -- (91,489) (519,583) -- (309,429) Policyholder charges (Note 3) (12,435) (516,325) (612,711) (6,569) (726,552) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions 4,102,058 46,070,002 39,220,057 35,274,565 12,456,718 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets 5,022,267 64,496,054 54,982,313 32,446,860 (71,647,344) Net assets beginning of period 17,703,535 349,594,359 506,063,769 -- 700,092,520 ------------- ------------- ------------- ------------- ------------- Net assets end of period $ 22,725,802 $ 414,090,413 $ 561,046,082 $ 32,446,860 $ 628,445,176 -------------------------------------- ============= ============= ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 1,737,156 22,952,423 41,376,318 -- 33,388,482 Units Issued 1,428,408 8,562,276 11,297,796 4,363,229 9,707,004 Units Redeemed (1,054,102) (5,734,918) (8,084,332) (686,942) (9,083,022) ------------- ------------- ------------- ------------- ------------- Units Outstanding at December 31, 2007 2,111,462 25,779,781 44,589,782 3,676,287 34,012,464 ============= ============= ============= ============= ============= JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value JNL/MCM Global Index Sector Line 30 VIP Growth Portfolio Portfolio Portfolio Portfolio Portfolio --------------- --------------- --------------- --------------- --------------- Operations Net investment income (loss) $ (1,210,648) $ (1,115,576) $ (15,953,667) $ 5,660,821 $ (1,158,995) Net realized gain (loss) on investments 26,515,006 5,033,485 36,043,205 29,638,356 25,774,993 Net change in unrealized appreciation (depreciation) on investments (39,012,383) 2,684,411 124,250,063 959,296 (16,612,209) --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets from operations (13,708,025) 6,602,320 144,339,601 36,258,473 8,003,789 --------------- --------------- --------------- --------------- --------------- Contract transactions (1) Purchase payments (Note 4) 59,272,887 18,860,684 276,153,514 93,088,503 34,407,604 Surrenders and terminations (21,227,672) (6,881,879) (46,780,661) (19,226,556) (15,280,005) Transfers between portfolios (17,678,136) 21,626,354 (95,650,675) (100,627,786) (11,226,738) Net annuitization transactions (88,826) (16,579) (104,020) (28,695) (76,272) Policyholder charges (Note 3) (391,241) (113,713) (1,017,806) (392,844) (171,737) --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets from contract transactions 19,887,012 33,474,867 132,600,352 (27,187,378) 7,652,852 --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets 6,178,987 40,077,187 276,939,953 9,071,095 15,656,641 Net assets beginning of period 310,494,181 59,686,210 822,800,037 413,219,233 180,941,943 --------------- --------------- --------------- --------------- --------------- Net assets end of period $ 316,673,168 $ 99,763,397 $ 1,099,739,990 $ 422,290,328 $ 196,598,584 -------------------------------------- =============== =============== =============== =============== =============== (1) Contract unit transactions Units Outstanding at December 31, 2006 19,902,842 9,646,385 54,436,545 31,350,619 12,505,159 Units Issued 6,351,425 10,809,867 26,646,716 10,270,211 3,884,356 Units Redeemed (5,108,696) (5,984,256) (19,152,489) (12,201,413) (3,388,014) --------------- --------------- --------------- --------------- --------------- Units Outstanding at December 31, 2007 21,145,571 14,471,996 61,930,772 29,419,417 13,001,501 =============== =============== =============== =============== ===============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/ JNL/ JNL/ JNL/PIMCO JNL/PIMCO PPM America PPM America Oppenheimer Real Return Total Return Core Equity High Yield Growth Portfolio(b) Portfolio(a) Bond Portfolio Portfolio Bond Portfolio ------------------- ------------ -------------- --------------- -------------- Operations Net investment income (loss) $ 2,248,627 $ (354,022) $ 17,912,089 $ (1,043,505) $ 18,025,021 Net realized gain (loss) on investments 3,176,617 426,528 1,401,147 3,921,675 (2,619,642) Net change in unrealized appreciation (depreciation) on investments (3,028,256) 2,500,358 14,001,736 (9,909,969) (24,910,400) ------------------- ------------ -------------- --------------- -------------- Net increase (decrease) in net assets from operations 2,396,988 2,572,864 33,314,972 (7,031,799) (9,505,021) ------------------- ------------ -------------- --------------- -------------- Contract transactions (1) Purchase payments (Note 4) 1,594,241 18,024,272 104,442,860 2,505,808 54,642,424 Surrenders and terminations (1,064,746) (920,402) (36,890,588) (16,914,810) (30,706,181) Transfers between portfolios (29,870,530) 55,727,013 62,602,771 (5,857,469) (30,611,057) Net annuitization transactions -- -- (100,258) (45,290) (69,497) Policyholder charges (Note 3) (16,456) (13,973) (537,021) (104,207) (385,249) ------------------- ------------ -------------- --------------- -------------- Net increase (decrease) in net assets from contract transactions (29,357,491) 72,816,910 129,517,764 (20,415,968) (7,129,560) ------------------- ------------ -------------- --------------- -------------- Net increase (decrease) in net assets (26,960,503) 75,389,774 162,832,736 (27,447,767) (16,634,581) Net assets beginning of period 26,960,503 -- 435,178,815 103,218,517 284,124,305 ------------------- ------------ -------------- --------------- -------------- Net assets end of period $ -- $ 75,389,774 $ 598,011,551 $ 75,770,750 $ 267,489,724 ------------------------------------------- =================== ============ ============== =============== ============== (1) Contract unit transactions Units Outstanding at December 31, 2006 2,995,289 -- 31,702,356 5,014,106 21,538,502 Units Issued 1,411,124 8,645,021 14,710,661 266,870 12,083,351 Units Redeemed (4,406,413) (1,738,678) (5,809,815) (1,267,482) (12,975,991) ------------------- ------------ -------------- --------------- -------------- Units Outstanding at December 31, 2007 -- 6,906,343 40,603,202 4,013,494 20,645,862 =================== ============ ============== =============== ============== JNL/ JNL/S&P PPM America JNL/Putnam Competitive JNL/S&P Value Equity Midcap JNL/S&P 4 Advantage Disciplined Portfolio Growth Portfolio(d) Portfolio(c) Portfolio(c) Growth Portfolio(a) ------------- ------------------- ------------ ------------ ------------------- Operations Net investment income (loss) $ (1,251,268) $ (471,602) $ (8,855) $ (2,052) $ (92,012) Net realized gain (loss) on investments 10,428,461 5,012,375 (371) (445) 13,540 Net change in unrealized appreciation (depreciation) on investments (17,385,292) (4,798,547) (214,710) (43,979) 19,977 ------------- ------------------- ------------ ------------ ------------------- Net increase (decrease) in net assets from operations (8,208,099) (257,774) (223,936) (46,476) (58,495) ------------- ------------------- ------------ ------------ ------------------- Contract transactions (1) Purchase payments (Note 4) 6,284,840 3,244,505 1,701,635 76,290 12,225,919 Surrenders and terminations (27,032,338) (3,228,827) (21,373) (7,769) (103,343) Transfers between portfolios (6,371,186) (31,236,677) 20,565,515 6,208,968 3,618,863 Net annuitization transactions (56,891) -- -- -- -- Policyholder charges (Note 3) (244,714) (56,356) (59) (124) (209) ------------- ------------------- ------------ ------------ ------------------- Net increase (decrease) in net assets from contract transactions (27,420,289) (31,277,355) 22,245,718 6,277,365 15,741,230 ------------- ------------------- ------------ ------------ ------------------- Net increase (decrease) in net assets (35,628,388) (31,535,129) 22,021,782 6,230,889 15,682,735 Net assets beginning of period 154,996,981 31,535,129 -- -- -- ------------- ------------------- ------------ ------------ ------------------- Net assets end of period $ 119,368,593 $ -- $ 22,021,782 $ 6,230,889 $ 15,682,735 ------------------------------------------- ============= =================== ============ ============ =================== (1) Contract unit transactions Units Outstanding at December 31, 2006 7,581,869 3,662,997 -- -- -- Units Issued 702,222 1,159,472 2,225,813 629,519 1,553,860 Units Redeemed (2,039,329) (4,822,469) (4,990) (805) (57,753) ------------- ------------------- ------------ ------------ ------------------- Units Outstanding at December 31, 2007 6,244,762 -- 2,220,823 628,714 1,496,107 ============= =================== ============ ============ ===================
(a) Commencement of operations January 16, 2007. (b) The period is from January 1, 2007 through acquisition April 27, 2007. (c) Commencement of operations December 3, 2007. (d) The period is from January 1, 2007 through acquisition November 30, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/S&P JNL/S&P JNL/S&P Disciplined JNL/S&P Growth Disciplined Moderate Dividend Income Retirement JNL/S&P Moderate Growth & Growth Strategy Intrinsic Value Portfolio(a) Portfolio(a) Portfolio(b) Portfolio(a) Portfolio(b) ------------ ------------ --------------- ------------- --------------- Operations Net investment income (loss) $ (186,515) $ (257,160) $ 49 $ 14,356 $ (1,596) Net realized gain (loss) on investments 49,958 84,569 (1) 1,356 (672) Net change in unrealized appreciation (depreciation) on investments 410,881 134,757 (4,333) 3,395 (64,422) ------------ ------------ --------------- ------------- --------------- Net increase (decrease) in net assets from operations 274,324 (37,834) (4,285) 19,107 (66,690) ------------ ------------ --------------- ------------- --------------- Contract transactions (1) Purchase payments (Note 4) 22,136,769 31,118,891 241,052 676,041 141,774 Surrenders and terminations (346,990) (383,633) (806) (10,533) (11,370) Transfers between portfolios 11,527,145 7,706,114 501,753 130,679 11,758,878 Net annuitization transactions -- -- -- -- -- Policyholder charges (Note 3) (656) (3,801) (1) -- (150) ------------ ------------ --------------- ------------- --------------- Net increase (decrease) in net assets from contract transactions 33,316,268 38,437,571 741,998 796,187 11,889,132 ------------ ------------ --------------- ------------- --------------- Net increase (decrease) in net assets 33,590,592 38,399,737 737,713 815,294 11,822,442 Net assets beginning of period -- -- -- -- -- ------------ ------------ --------------- ------------- --------------- Net assets end of period $ 33,590,592 $ 38,399,737 $ 737,713 $ 815,294 $ 11,822,442 ------------------------------------------- ============ ============ =============== ============= =============== (1) Contract unit transactions Units Outstanding at December 31, 2006 -- -- -- -- -- Units Issued 3,468,691 4,138,063 75,650 78,848 1,193,826 Units Redeemed (279,029) (479,692) (82) (2,601) (1,169) ------------ ------------ --------------- ------------- --------------- Units Outstanding at December 31, 2007 3,189,662 3,658,371 75,568 76,247 1,192,657 ============ ============ =============== ============= =============== JNL/ JNL/ JNL/ JNL/ S&P Managed S&P Managed JNL/ S&P Managed S&P Managed Aggressive Conservative S&P Managed Moderate Moderate Growth Portfolio Portfolio Growth Portfolio Portfolio Growth Portfolio ---------------- ------------- ---------------- --------------- ---------------- Operations Net investment income (loss) $ 1,887,312 $ 2,463,427 $ 582,195 $ 5,187,035 $ 6,085,219 Net realized gain (loss) on investments 31,797,530 9,723,953 97,819,719 18,207,140 95,289,761 Net change in unrealized appreciation (depreciation) on investments 8,450,433 (3,893,071) (24,453,338) (3,465,622) (30,290,631) ---------------- ------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets from operations 42,135,275 8,294,309 73,948,576 19,928,553 71,084,349 ---------------- ------------- ---------------- --------------- ---------------- Contract transactions (1) Purchase payments (Note 4) 73,782,275 65,721,365 174,085,833 146,253,778 263,996,233 Surrenders and terminations (62,655,490) (16,961,580) (104,021,484) (27,556,653) (95,161,497) Transfers between portfolios (23,107,186) 57,661,228 (22,769,708) 53,778,049 19,238,252 Net annuitization transactions (137,748) 9,973 (374) (289,356) (54,143) Policyholder charges (Note 3) (925,999) (251,866) (1,340,944) (427,557) (1,097,950) ---------------- ------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets from contract transactions (13,044,148) 106,179,120 45,953,323 171,758,261 186,920,895 ---------------- ------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets 29,091,127 114,473,429 119,901,899 191,686,814 258,005,244 Net assets beginning of period 577,627,945 126,363,762 1,081,171,017 284,241,069 993,884,149 ---------------- ------------- ---------------- --------------- ---------------- Net assets end of period $ 606,719,072 $ 240,837,191 $ 1,201,072,916 $ 475,927,883 $ 1,251,889,393 ------------------------------------------- ================ ============= ================ =============== ================ (1) Contract unit transactions Units Outstanding at December 31, 2006 38,010,553 11,360,944 71,759,942 24,211,376 69,732,022 Units Issued 6,806,834 16,018,376 14,790,673 19,949,976 25,300,257 Units Redeemed (7,607,478) (6,628,022) (11,900,250) (5,881,695) (12,802,558) ---------------- ------------- ---------------- --------------- ---------------- Units Outstanding at December 31, 2007 37,209,909 20,751,298 74,650,365 38,279,657 82,229,721 ================ ============= ================ =============== ================
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/S&P JNL/S&P Moderate Moderate Growth Retirement JNL/S&P JNL/S&P JNL/S&P Retirement Strategy Strategy Retirement 2015 Retirement 2020 Retirement 2025 Portfolio(a) Portfolio(a) Portfolio Portfolio Portfolio ------------------- ------------ --------------- --------------- --------------- Operations Net investment income (loss) $ 14,306 $ 9,234 $ (102,563) $ (62,547) $ (24,344) Net realized gain (loss) on investments 820 407 196,717 100,092 73,014 Net change in unrealized appreciation (depreciation) on investments (9,726) (6,168) 373,090 174,386 83,161 ------------------- ------------ --------------- --------------- --------------- Net increase (decrease) in net assets from operations 5,400 3,473 467,244 211,931 131,831 ------------------- ------------ --------------- --------------- --------------- Contract transactions (1) Purchase payments (Note 4) 247,324 54,631 6,951,836 5,000,426 2,248,127 Surrenders and terminations (2,384) (246) (265,140) (59,179) (103,706) Transfers between portfolios 422,975 237,095 4,107,076 1,361,702 1,564,089 Net annuitization transactions -- -- -- -- -- Policyholder charges (Note 3) -- -- (5,267) (1,105) (3,045) ------------------- ------------ --------------- --------------- --------------- Net increase (decrease) in net assets from contract transactions 667,915 291,480 10,788,505 6,301,844 3,705,465 ------------------- ------------ --------------- --------------- --------------- Net increase (decrease) in net assets 673,315 294,953 11,255,749 6,513,775 3,837,296 Net assets beginning of period -- -- 4,568,016 1,847,130 939,283 ------------------- ------------ --------------- --------------- --------------- Net assets end of period $ 673,315 $ 294,953 $ 15,823,765 $ 8,360,905 $ 4,776,579 ------------------------------------------- =================== ============ =============== =============== =============== (1) Contract unit transactions Units Outstanding at December 31, 2006 -- -- 421,940 168,274 85,050 Units Issued 79,576 29,779 1,135,220 628,607 390,392 Units Redeemed (16,138) (1,685) (198,240) (86,473) (75,193) ------------------- ------------ --------------- --------------- --------------- Units Outstanding at December 31, 2007 63,438 28,094 1,358,920 710,408 400,249 =================== ============ =============== =============== =============== JNL/ S&P Retirement JNL/S&P JNL/Select JNL/Select JNL/ Income Total Yield Balanced Money Market Select Value Portfolio Portfolio(b) Portfolio Portfolio Portfolio -------------- ------------ ------------- ------------- ------------- Operations Net investment income (loss) $ (101,617) $ (2,697) $ 4,561,966 $ 12,403,936 $ 3,679,364 Net realized gain (loss) on investments 270,956 (325) 33,770,223 69 18,536,004 Net change in unrealized appreciation (depreciation) on investments 674,943 (28,227) (13,593,377) (70) (12,409,774) -------------- ------------ ------------- ------------- ------------- Net increase (decrease) in net assets from operations 844,282 (31,249) 24,738,812 12,403,935 9,805,594 -------------- ------------ ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 11,508,905 54,987 76,979,670 337,643,558 52,206,684 Surrenders and terminations (1,239,966) (6,303) (51,075,386) (151,555,312) (15,555,787) Transfers between portfolios 9,724,890 3,248,060 34,180,698 177,248,824 5,322,514 Net annuitization transactions -- -- (177,212) (2,154,797) (80,727) Policyholder charges (Note 3) (14,619) (148) (392,849) (2,774,097) (217,302) -------------- ------------ ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions 19,979,210 3,296,596 59,514,921 358,408,176 41,675,382 -------------- ------------ ------------- ------------- ------------- Net increase (decrease) in net assets 20,823,492 3,265,347 84,253,733 370,812,111 51,480,976 Net assets beginning of period 8,220,346 -- 413,630,121 247,194,016 165,653,911 -------------- ------------ ------------- ------------- ------------- Net assets end of period $ 29,043,838 $ 3,265,347 $ 497,883,854 $ 618,006,127 $ 217,134,887 ------------------------------------------- ============== ============ ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 777,190 -- 16,394,751 20,136,534 8,007,405 Units Issued 2,204,104 325,288 5,453,130 77,558,867 4,732,228 Units Redeemed (365,995) (677) (3,365,648) (48,798,180) (2,842,340) -------------- ------------ ------------- ------------- ------------- Units Outstanding at December 31, 2007 2,615,299 324,611 18,482,233 48,897,221 9,897,293 ============== ============ ============= ============= =============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- ------------- Operations Net investment income (loss) $ (2,410,371) $ 573,334 $ 2,355,321 Net realized gain (loss) on investments 57,881,598 70,489,252 36,127,326 Net change in unrealized appreciation (depreciation) on investments (22,585,572) (11,557,100) (44,486,679) ----------------- ---------------- ------------- Net increase (decrease) in net assets from operations 32,885,655 59,505,486 (6,004,032) ----------------- ---------------- ------------- Contract transactions (1) Purchase payments (Note 4) 55,835,900 72,134,647 51,425,257 Surrenders and terminations (63,457,116) (52,346,138) (34,907,068) Transfers between portfolios 167,383,850 36,159,732 33,305,990 Net annuitization transactions (219,229) (188,861) (20,071) Policyholder charges (Note 3) (507,552) (470,166) (391,160) ----------------- ---------------- ------------- Net increase (decrease) in net assets from contract transactions 159,035,853 55,289,214 49,412,948 ----------------- ---------------- ------------- Net increase (decrease) in net assets 191,921,508 114,794,700 43,408,916 Net assets beginning of period 366,621,487 395,853,561 323,912,532 ----------------- ---------------- ------------- Net assets end of period $ 558,542,995 $ 510,648,261 $ 367,321,448 ------------------------------------------- ================= ================ ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 13,352,032 11,279,876 20,028,033 Units Issued 8,918,494 3,602,287 8,299,692 Units Redeemed (3,700,329) (2,606,919) (5,390,041) ----------------- ---------------- ------------- Units Outstanding at December 31, 2007 18,570,197 12,275,244 22,937,684 ================= ================ =============
See notes to the financial statements. Jackson National Separate Account I Notes to Financial Statements Note 1 - Organization --------------------- Jackson National Life Insurance Company ("Jackson") established Jackson National Separate Account I (the "Separate Account") on June 14, 1993. The Separate Account commenced operations on October 16, 1995, and is registered under the Investment Company Act of 1940 as a unit investment trust. The Separate Account assets legally belong to Jackson and the obligations under the contracts are the obligation of Jackson. However, the contract assets in the Separate Account are not chargeable with liabilities arising out of any other business Jackson may conduct. The Separate Account receives and invests, based on the directions for the contract holder, net premiums for individual flexible premium variable annuity contracts issued by Jackson. The contracts can be purchased on a non-tax qualified basis or in connection with certain plans qualifying for favorable federal income tax treatment. The Separate Account contains ninety-six (96) Portfolios as of December 31, 2008, each of which invests in the following mutual funds ("Funds"): -------------------------------------------------------------------------------- JNL Series Trust -------------------------------------------------------------------------------- JNL/AIM Global Real Estate Fund JNL/AIM International Growth Fund JNL/AIM Large Cap Growth Fund JNL/AIM Small Cap Growth Fund JNL/Capital Guardian Global Balanced Fund JNL/Capital Guardian Global Diversified Research Fund JNL/Capital Guardian International Small Cap Fund JNL/Capital Guardian U.S. Growth Equity Fund JNL/Credit Suisse Global Natural Resources Fund JNL/Credit Suisse Long/Short Fund JNL/Eagle Core Equity Fund JNL/Eagle SmallCap Equity Fund JNL/Franklin Templeton Founding Strategy Fund JNL/Franklin Templeton Global Growth Fund JNL/Franklin Templeton Income Fund JNL/Franklin Templeton Mutual Shares Fund JNL/Franklin Templeton Small Cap Value Fund JNL/Goldman Sachs Core Plus Bond Fund JNL/Goldman Sachs Emerging Markets Debt Fund JNL/Goldman Sachs Mid Cap Value Fund JNL/Goldman Sachs Short Duration Bond Fund JNL/JPMorgan International Value Fund JNL/JPMorgan MidCap Growth Fund JNL/JPMorgan U.S. Government & Quality Bond Fund JNL/Lazard Emerging Markets Fund JNL/Lazard Mid Cap Equity Fund JNL/Lazard Small Cap Equity Fund JNL/M&G Global Basics Fund JNL/M&G Global Leaders Fund JNL/MCM 10 x 10 Fund* JNL/MCM Bond Index Fund* JNL/MCM Enhanced S&P 500 Stock Index Fund* JNL/MCM European 30 Fund* JNL/MCM Index 5 Fund* JNL/MCM International Index Fund* JNL/MCM Pacific Rim 30 Fund* JNL/MCM S&P 400 MidCap Index Fund* JNL/MCM S&P 500 Index Fund* JNL/MCM Small Cap Index Fund* JNL/Oppenheimer Global Growth Fund JNL/PAM Asia ex-Japan Fund JNL/PAM China-India Fund JNL/PIMCO Real Return Fund JNL/PIMCO Total Return Bond Fund JNL/PPM America Core Equity Fund JNL/PPM America High Yield Bond Fund JNL/PPM America Mid Cap Value Fund JNL/PPM America Small Cap Value Fund JNL/PPM America Value Equity Fund JNL/Red Rocks Listed Private Equity Fund JNL/S&P 4 Fund JNL/S&P Competitive Advantage Fund JNL/S&P Disciplined Growth Fund JNL/S&P Disciplined Moderate Fund JNL/S&P Disciplined Moderate Growth Fund JNL/S&P Dividend Income & Growth Fund JNL/S&P Growth Retirement Strategy Fund JNL/S&P Intrinsic Value Fund JNL/S&P Managed Aggressive Growth Fund JNL/S&P Managed Conservative Fund JNL/S&P Managed Growth Fund JNL/S&P Managed Moderate Fund JNL/S&P Managed Moderate Growth Fund JNL/S&P Moderate Growth Retirement Strategy Fund JNL/S&P Moderate Retirement Strategy Fund JNL/S&P Retirement 2015 Fund JNL/S&P Retirement 2020 Fund JNL/S&P Retirement 2025 Fund JNL/S&P Retirement Income Fund JNL/S&P Total Yield Fund JNL/Select Balanced Fund JNL/Select Money Market Fund JNL/Select Value Fund JNL/T.Rowe Price Established Growth Fund JNL/T.Rowe Price Mid-Cap Growth Fund JNL/T.Rowe Price Value Fund Jackson National Separate Account I Notes to Financial Statements (Continued) Note 1 - Organization (continued) --------------------------------- -------------------------------------------------------------------------------- JNL Variable Fund LLC -------------------------------------------------------------------------------- JNL/MCM 25 Fund* JNL/MCM Communications Sector Fund* JNL/MCM Consumer Brands Sector Fund* JNL/MCM Dow SM 10 Fund* JNL/MCM Dow SM Dividend Fund* JNL/MCM Financial Sector Fund* JNL/MCM Global 15 Fund* JNL/MCM Healthcare Sector Fund* JNL/MCM JNL 5 Fund* JNL/MCM JNL Optimized 5 Fund* JNL/MCM Nasdaq(R) 25 Fund* JNL/MCM NYSE(R) International 25 Fund* JNL/MCM Oil & Gas Sector Fund* JNL/MCM S&P(R) 10 Fund* JNL/MCM S&P(R) 24 Fund* JNL/MCM S&P(R) SMid 60 Fund* JNL/MCM Select Small-Cap Fund* JNL/MCM Technology Sector Fund* JNL/MCM Value Line(R) 30 Fund* JNL/MCM VIP Fund* Jackson National Asset Management, LLC, a wholly-owned subsidiary of Jackson, serves as investment adviser for all the Funds and receives a fee for its services from each of the Funds. During the year ended December 31, 2008, the following Funds changed names:
------------------------------------------------------------------------------------------------------------------------------------ PRIOR PORTFOLIO NAME CURRENT PORTFOLIO NAME EFFECTIVE DATE ------------------------------------------------------------------------------------------------------------------------------------ JNL/Lazard Mid Cap Value Fund JNL/Lazard Mid Cap Equity Fund March 31,2008 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Lazard Small Cap Value Fund JNL/Lazard Small Cap Equity Fund March 31, 2008 ------------------------------------------------------------------------------------------------------------------------------------ JNL/AIM Real Estate Fund JNL/AIM Global Real Estate Fund October 6, 2008 ------------------------------------------------------------------------------------------------------------------------------------
* MCM denotes the sub adviser Mellon Capital Management throughout these financial statements. Note 2 - Significant Accounting Policies ---------------------------------------- The following is a summary of significant accounting policies followed by the Separate Account in the preparation of its financial statements. Use of Estimates ---------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Investments ----------- The Separate Account's investments in the corresponding series of mutual funds ("Funds") are stated at the closing net asset values of the respective Funds. The average cost method is used in determining the cost of the shares sold on withdrawals by the Separate Account. Investments in the Funds are recorded on trade date. Realized gain distributions and dividend distributions received from the Funds are reinvested in additional shares of the Funds and are recorded as income or gain to the Separate Account on the ex-dividend date. Jackson National Separate Account I Notes to Financial Statements (continued) Note 2 - Significant Accounting Policies (continued) ---------------------------------------------------- Federal Income Taxes -------------------- The operations of the Separate Account are included in the federal income tax return of Jackson, which is taxed as a "life insurance company" under the provisions of the Internal Revenue Code. Under current law, no federal income taxes are payable with respect to the Separate Account. Therefore, no federal income tax has been provided. Statement on Financial Accounting Standards ("SFAS") No. 157, "Fair Value -------------------------------------------------------------------------------- Measurements" ------------- This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. The changes to current GAAP from the application of this statement relate to the definition of fair value, the methods used to measure fair value, and expanded disclosures about fair value measurements. Various inputs are used in determining the value of a Funds' investments under SFAS No. 157 guidance. The inputs are summarized into three broad categories. Level 1 includes valuations based on quoted prices of identical securities in active markets. Level 2 includes valuations for which all significant inputs are observable, either directly or indirectly. Direct observable inputs include closing prices of similar securities in active markets or closing prices for identical or similar securities in non-active markets. Indirect observable inputs include factors such as interest rates, yield curves, prepayment speeds, and credit risks. Level 3 includes valuations based on inputs that are unobservable and significant to the fair value measurement including a Funds' own assumptions in determining the fair value of the investment. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. As of December 31, 2008, all of the Separate Account's investments are in funds for which quoted prices are available in an active market. Therefore, all investments have been categorized as Level 1. The characterization of the underlying securities held by the funds in accordance with SFAS No. 157 differs from the characterization of an investment in the fund. Note 3 - Policy Charges ----------------------- Charges are deducted from the Separate Account and remitted to Jackson, to compensate Jackson for providing the insurance benefits set forth in the contracts, administering the contracts, distributing the contracts, and assuming certain risks in connection with the contracts. Policyholder Charges -------------------- Contract Maintenance Charge --------------------------- An annual contract maintenance charge of $35 - $50 is charged against each contract to reimburse Jackson for expenses incurred in establishing and maintaining records relating to the contract. The contract maintenance charge is assessed on each anniversary of the contract date that occurs prior to the annuity date. This charge is only imposed if the contract value is less than $50,000 on the date when the charge is assessed. The charge is deducted by redeeming units. For the years ended December 31, 2008 and 2007, contract maintenance charges were assessed in the amount of $5,503,908 and $4,031,655, respectively. Transfer Fee Charge ------------------- A transfer fee of $25 will apply to transfers made by contract holders between the portfolios in excess of 15 transfers in a contract year. Jackson may waive the transfer fee in connection with pre-authorized automatic transfer programs, or in those states where a lesser fee is required. This fee will be deducted from the amount transferred prior to the allocation to a different portfolio. For the years ended December 31, 2008 and 2007, transfer fee charges were assessed in the amount of $33,073 and $13,285, respectively. Jackson National Separate Account I Notes to Financial Statements (continued) Note 3 - Policy Charges (continued) ----------------------------------- Policyholder Charges (Continued) -------------------------------- Surrender or Contingent Deferred Sales Charge --------------------------------------------- During the first three to seven contract years, certain contracts include a provision for a charge upon the surrender or partial surrender of the contract. The amount assessed under the contract terms, if any, depends upon the cost associated with distributing the particular contracts. The amount, if any, is determined based on a number of factors, including the amount withdrawn, the contract year of surrender, or the number and amount of withdrawals in a calendar year. The surrender charges are assessed by Jackson and withheld from the proceeds of the withdrawals. For the years ended December 31, 2008 and 2007, surrender charges were assessed in the amount of $35,195,770 and $24,796,391, respectively. Optional Benefit Charges ------------------------- Guaranteed Minimum Income Benefit Charge. If this benefit has been selected, Jackson will assess an annual charge of 0.40% - 0.87%, depending on the product, of the Guaranteed Minimum Income Benefit (GMIB) base. The charge will be deducted each calendar quarter from the contract value by redeeming units. Guaranteed Minimum Accumulation Benefit Charge. If this benefit has been selected, Jackson will assess an annual charge of 1.00% - 1.02%, depending on the product, of the Guaranteed Value (GV). The charge will be deducted each calendar quarter from the contract value by redeeming units. Guaranteed Minimum Withdrawal Benefit Charge. If this benefit has been selected, Jackson will assess an annual charge of 0.51% - 1.86%, depending on the product. Jackson reserves the right to prospectively increase the charge on new issues or upon any election of any "step-up" subject to a maximum charge of 0.81%. The charge will be deducted each calendar quarter from the contract value by redeeming units. Asset-based Charges ------------------- Insurance Charges ----------------- Jackson deducts a daily charge for administrative expenses from the net assets of the Separate Account equivalent to an annual rate of 0.15%. In designated products, this expense is waived for initial contributions greater than $1 million, refer to the product prospectus for eligibility. The administration charge is designed to reimburse Jackson for expenses incurred in administrating the Separate Account and its contracts and is assessed through the unit value calculation. Jackson deducts a daily base contract charge from the net assets of the Separate Account equivalent to an annual rate of 0.15% to 1.50% for the assumption of mortality and expense risks. The mortality risk assumed by Jackson is that the insured may receive benefits greater than those anticipated by Jackson. The expense risk assumed by Jackson is that the actual cost of administering the contracts of the Separate Account may exceed the amount received from the Administration Charge and the Contract Maintenance Charge. Optional Benefit Charges ------------------------ Earnings Protection Benefit Charge. If this benefit option has been selected, Jackson will make an additional deduction of 0.20% - 0.45%, depending on the product chosen, on an annual basis of the average daily net asset value of the contract owner's allocations to the portfolios. Jackson National Separate Account I Notes to Financial Statements (continued) Note 3 - Policy Charges (continued) ----------------------------------- Asset-based Charges (continued) ------------------------------- Optional Benefit Charges (continued) ------------------------------------ Contract Enhancement Charge. If one of the contract enhancement benefits is selected, then for a period of five to seven contract years, Jackson will make an additional deduction based upon the average daily net asset value of the contract owner's allocations to the portfolios. The amounts of these charges depend upon the contract enhancements selected and range from 0.395% to 0.695%. Withdrawal Charge Period. If the optional three, four, or five-year withdrawal charge period feature is selected, Jackson will deduct 0.45%, 0.40%, or 0.30%, respectively, on an annual basis of the average daily net asset value of the contract owner's allocations to the portfolios. 20% Additional Free Withdrawal Charge. If a contract owner selects the optional feature that permits you to withdraw up to 20% of premiums that are still subject to a withdrawal charge minus earnings during a Contract year without withdrawal charge, Jackson will deduct 0.30% - 0.40% on an annual basis of the average daily net assets value of the contract owner's allocations to the portfolios. Optional Death Benefit Charges. If any of the optional death benefits are selected that are available under the Contract, Jackson will make an additional deduction of 0.22% - 1.80% on an annual basis of the average daily net asset value of the contract owner's allocations to the portfolios, based on the optional death benefit selected. Premium Taxes ------------- Some states and other governmental entities charge premium taxes or other similar taxes. Jackson is responsible for the payment of these taxes and may make a deduction from the value of the contract for them. Premium taxes generally range from 0% to 3.5% depending on the state. Note 4 - Related Party Transactions ----------------------------------- For contract enhancement benefits related to the optional benefits offered, Jackson contributed $55,553,756 and $94,185,834 to the Separate Account in the form of additional premium to contract owners' accounts for the years ended December 31, 2008 and 2007, respectively. These amounts are included in purchase payments received from contract owners. Jackson National Separate Account I Notes to Financial Statements (continued) Note 5 - Purchases and Sales of Investments ------------------------------------------- For the year ended December 31, 2008, purchases and proceeds from sales of investments are as follows: -------------------------------------------------------------------------------- JNL Series Trust --------------------------------------------------------------------------------
Proceeds Purchases From Sales -------------- ----------------- JNL/AIM Global Real Estate Fund $ 184,747,652 $ 110,636,274 JNL/AIM International Growth Fund 86,739,011 72,459,729 JNL/AIM Large Cap Growth Fund 101,120,025 82,457,410 JNL/AIM Small Cap Growth Fund 33,438,697 34,636,099 JNL/Capital Guardian Global Balanced Fund 180,002,098 97,168,308 JNL/Capital Guardian Global Diversified Research Fund 134,606,279 88,000,928 JNL/Capital Guardian International Small Cap Fund 37,581,799 14,057,326 JNL/Capital Guardian U.S. Growth Equity Fund 107,952,963 57,636,805 JNL/Credit Suisse Global Natural Resources Fund 386,508,809 305,741,443 JNL/Credit Suisse Long/Short Fund 51,720,195 17,005,948 JNL/Eagle Core Equity Fund 30,975,728 22,948,038 JNL/Eagle SmallCap Equity Fund 97,076,803 76,479,457 JNL/Franklin Templeton Founding Strategy Fund 395,030,389 284,555,012 JNL/Franklin Templeton Global Growth Fund 31,691,293 21,732,083 JNL/Franklin Templeton Income Fund 183,161,163 127,289,646 JNL/Franklin Templeton Mutual Shares Fund 56,193,486 33,045,009 JNL/Franklin Templeton Small Cap Value Fund 76,076,469 42,675,023 JNL/Goldman Sachs Core Plus Bond Fund 203,555,792 220,687,642 JNL/Goldman Sachs Emerging Markets Debt Fund 9,488,782 800,961 JNL/Goldman Sachs Mid Cap Value Fund 82,641,860 56,787,035 JNL/Goldman Sachs Short Duration Bond Fund 152,444,148 120,750,079 JNL/JPMorgan International Value Fund 193,270,685 185,075,122 JNL/JPMorgan MidCap Growth Fund 41,327,982 55,288,058 JNL/JPMorgan U.S. Government & Quality Bond Fund 513,568,882 268,997,661 JNL/Lazard Emerging Markets Fund 268,423,450 200,065,381 JNL/Lazard Mid Cap Equity Fund 62,774,566 89,924,527 JNL/Lazard Small Cap Equity Fund 43,210,081 53,065,676 JNL/M&G Global Basics Fund 595,137 45,021 JNL/M&G Global Leaders Fund 692,714 362,451 JNL/MCM 10 x 10 Fund 111,775,503 35,937,750 JNL/MCM Bond Index Fund 212,196,742 196,993,017 JNL/MCM Enhanced S&P 500 Stock Index Fund 49,828,094 52,666,599 Proceeds Purchases From Sales -------------- ----------------- JNL/MCM European 30 Fund $ 387,048 $ 11,141 JNL/MCM Index 5 Fund 63,960,323 18,301,958 JNL/MCM International Index Fund 188,909,675 203,655,513 JNL/MCM Pacific Rim 30 Fund 470,803 16,561 JNL/MCM S&P 400 MidCap Index Fund 146,670,830 157,952,929 JNL/MCM S&P 500 Index Fund 196,687,932 192,097,288 JNL/MCM Small Cap Index Fund 105,429,645 107,658,897 JNL/Oppenheimer Global Growth Fund 68,530,127 62,686,164 JNL/PAM Asia ex-Japan Fund 22,032,579 13,796,108 JNL/PAM China-India Fund 83,980,519 43,950,679 JNL/PIMCO Real Return Fund 880,535,590 460,951,451 JNL/PIMCO Total Return Bond Fund 856,839,839 505,241,703 JNL/PPM America Core Equity Fund 6,896,970 17,593,892 JNL/PPM America High Yield Bond Fund 190,720,839 198,152,028 JNL/PPM America Mid Cap Value Fund 20,322,576 12,187,105 JNL/PPM America Small Cap Value Fund 11,195,799 4,145,550 JNL/PPM America Value Equity Fund 40,918,610 40,102,369 JNL/Red Rocks Listed Private Equity Fund 14,598,216 862,993 JNL/S&P 4 Fund 396,765,832 87,748,141 JNL/S&P Competitive Advantage Fund 62,338,228 31,708,494 JNL/S&P Disciplined Growth Fund 31,964,709 11,774,386 JNL/S&P Disciplined Moderate Fund 59,593,319 21,395,909 JNL/S&P Disciplined Moderate Growth Fund 79,417,471 20,466,316 JNL/S&P Dividend Income & Growth Fund 48,591,238 10,148,489 JNL/S&P Growth Retirement Strategy Fund 221,202 143,434 JNL/S&P Intrinsic Value Fund 65,089,107 31,887,892 JNL/S&P Managed Aggressive Growth Fund 152,120,892 177,548,973 JNL/S&P Managed Conservative Fund 422,742,550 214,984,907 JNL/S&P Managed Growth Fund 369,654,359 355,190,414 JNL/S&P Managed Moderate Fund 420,562,802 223,009,588 JNL/S&P Managed Moderate Growth Fund 431,656,203 359,082,318 JNL/S&P Moderate Growth Retirement Strategy Fund 760,787 581,764
Jackson National Separate Account I Notes to Financial Statements (continued) Note 5 - Purchases and Sales of Investments (continued) ------------------------------------------------------- -------------------------------------------------------------------------------- JNL Series Trust (continued) --------------------------------------------------------------------------------
Proceeds Purchases From Sales -------------- ----------------- JNL/S&P Moderate Retirement Strategy Fund $ 1,233,617 $ 96,987 JNL/S&P Retirement 2015 Fund 50,411,814 30,133,000 JNL/S&P Retirement 2020 Fund 9,441,808 2,939,969 JNL/S&P Retirement 2025 Fund 6,580,573 2,214,878 JNL/S&P Retirement Income Fund 47,365,358 21,837,781 JNL/S&P Total Yield Fund 61,998,880 25,097,007 Proceeds Purchases From Sales -------------- ----------------- JNL/Select Balanced Fund $ 286,228,344 $ 202,926,372 JNL/Select Money Market Fund 1,959,451,274 1,376,692,502 JNL/Select Value Fund 111,324,921 96,956,062 JNL/T.Rowe Price Established Growth Fund 128,519,340 151,292,687 JNL/T.Rowe Price Mid-Cap Growth Fund 221,156,640 181,428,618 JNL/T.Rowe Price Value Fund 130,654,960 115,914,094
-------------------------------------------------------------------------------- Jnl Variable Fund LLC --------------------------------------------------------------------------------
Proceeds Purchases From Sales -------------- ----------------- JNL/MCM 25 Fund $ 161,547,393 $ 268,552,233 JNL/MCM Communications Sector Fund 41,134,526 65,464,244 JNL/MCM Consumer Brands Sector Fund 35,451,293 19,704,785 JNL/MCM Dow SM 10 Fund 132,916,037 294,962,585 JNL/MCM Dow SM Dividend Fund 171,823,261 171,428,515 JNL/MCM Financial Sector Fund 139,658,835 58,915,122 JNL/MCM Global 15 Fund 257,231,539 489,575,023 JNL/MCM Healthcare Sector Fund 159,229,762 103,243,148 JNL/MCM JNL 5 Fund 1,732,625,434 1,478,723,369 JNL/MCM JNL Optimized 5 Fund 363,789,309 194,545,437 Proceeds Purchases From Sales -------------- ----------------- JNL/MCM Nasdaq(R) 25 Fund $ 54,730,586 $ 65,401,236 JNL/MCM NYSE(R) International 25 Fund 89,477,788 56,559,050 JNL/MCM Oil & Gas Sector Fund 444,970,036 367,329,673 JNL/MCM S&P(R) 10 Fund 128,275,100 304,517,776 JNL/MCM S&P(R) 24 Fund 29,496,432 16,491,437 JNL/MCM S&P(R) SMid 60 Fund 56,226,296 31,140,446 JNL/MCM Select Small-Cap Fund 160,720,506 227,437,715 JNL/MCM Technology Sector Fund 90,903,594 92,707,984 JNL/MCM Value Line(R) 30 Fund 345,319,561 414,612,002 JNL/MCM VIP Fund 198,055,545 131,476,405
Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights ----------------------------- The following is a summary for each period in the five year period ended December 31, 2008 of unit values, total returns and expense ratios for variable annuity contracts with the highest and lowest expense ratios in additio to certain other portfolio data. Unit values for portfolios that do not have any assets at period end are calculated based on the net asset value of the underlying fund less expenses charged directly to the separate account.
JNL/Capital JNL/AIM Global JNL/AIM JNL/AIM JNL/AIM Guardian Global Real Estate International Large Cap Small Cap Balanced Portfolio(a) Growth Portfolio Growth Portfolio Growth Portfolio Portfolio -------------- ---------------- ---------------- ---------------- --------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 7.610482 $ 7.963090 $ 7.456591 $ 8.077700 $ 7.353527 Total Return * -38.05% -43.20% -39.96% -41.81% -31.00% Ratio of Expenses ** 3.71% 3.91% 3.75% 3.51% 3.86% Period ended December 31, 2007 Unit Value $ 12.284252 $ 14.019714 $ 12.418859 $ 13.881145 $ 10.657491 Total Return * -18.12% 5.54% 11.47% -2.85%*** 3.85% Ratio of Expenses ** 3.71% 3.91% 3.75% 3.51% 3.86% Period ended December 31, 2006 Unit Value $ 15.003152 $ 13.283412 $ 11.141032 $ 12.952147 $ 10.262688 Total Return * 31.43% 17.90% 3.90% 10.62% 6.60% Ratio of Expenses ** 3.71% 3.91% 3.75% 3.45% 3.86% Period ended December 31, 2005 Unit Value $ 11.415702 $ 11.267140 $ 10.722972 $ 11.709139 $ 9.626865 Total Return * 0.00%*** 3.64%*** 3.30% 4.75% 5.93% Ratio of Expenses ** 3.71% 3.91% 3.75% 3.45% 3.86% Period ended December 31, 2004 Unit Value n/a $ 11.064433 $ 10.380847 $ 11.177826 $ 9.087874 Total Return * n/a 9.87%*** 4.65%*** 2.35%*** 6.75%*** Ratio of Expenses ** n/a 3.45% 3.75% 3.45% 3.86% JNL/Capital JNL/Capital JNL/Credit Guardian Global Guardian JNL/Capital Suisse JNL/ Diversified International Guardian U.S. Global Natural Credit Suisse Research Small Cap Growth Equity Resources Long/Short Portfolio Portfolio(c) Portfolio Portfolio(b) Portfolio(b) --------------- ------------- -------------- -------------- ------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 12.573178 $ 4.376090 $ 13.334545 $ 6.307417 $ 6.368322 Total Return * -44.66% -49.35%*** -42.86% -52.24%*** -34.86%*** Ratio of Expenses ** 3.86% 3.61% 3.41% 3.695% 3.06% Period ended December 31, 2007 Unit Value $ 22.719950 $ 9.848527 $ 23.335999 $ 13.428198 $ 10.538002 Total Return * 16.05% -1.51%*** 6.03% -3.84%*** 3.69%*** Ratio of Expenses ** 3.86% 2.845% 3.41% 3.61% 3.05% Period ended December 31, 2006 Unit Value $ 19.577115 n/a $ 22.007930 n/a n/a Total Return * 9.03% n/a 1.11% n/a n/a Ratio of Expenses ** 3.86% n/a 3.41% n/a n/a Period ended December 31, 2005 Unit Value $ 17.956055 n/a $ 21.766740 n/a n/a Total Return * -1.94% n/a 5.48%*** n/a n/a Ratio of Expenses ** 3.86% n/a 3.41% n/a n/a Period ended December 31, 2004 Unit Value $ 18.310425 n/a $ 21.933995 n/a n/a Total Return * 8.68%*** n/a 6.28%*** n/a n/a Ratio of Expenses ** 3.86% n/a 3.21% n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations May 2, 2005. (b) Commencement of operations January 16, 2007. (c) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/Capital JNL/AIM Global JNL/AIM JNL/AIM JNL/AIM Guardian Global Real Estate International Large Cap Small Cap Balanced Portfolio(a) Growth Portfolio Growth Portfolio Growth Portfolio Portfolio -------------- ---------------- ---------------- ---------------- --------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 8.405404 $ 11.843487 $ 9.083134 $ 9.671897 $ 9.423048 Total Return * -36.34% -41.52% -38.28% -40.33% -29.00% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 13.204592 $ 20.253728 $ 14.717475 $ 16.208684 $ 13.271782 Total Return * -15.86% 8.68% 14.59% 10.26% 6.88% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 15.693623 $ 18.636415 $ 12.843047 $ 14.700524 $ 12.417826 Total Return * 35.03% 21.37% 6.79% 13.35% 9.69% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2005 Unit Value $ 11.622681 $ 15.355109 $ 12.026701 $ 12.968937 $ 11.320907 Total Return * 8.19%*** 9.59% 6.17% 7.34% 9.00% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2004 Unit Value n/a $ 14.011462 $ 11.327999 $ 12.081613 $ 10.386549 Total Return * n/a 15.18% 7.15%*** 3.13%*** 6.66%*** Ratio of Expenses ** n/a 1.00% 1.00% 1.00% 1.00% JNL/Capital JNL/Capital JNL/Credit Guardian Global Guardian JNL/Capital Suisse JNL/ Diversified International Guardian U.S. Global Natural Credit Suisse Research Small Cap Growth Equity Resources Long/Short Portfolio Portfolio(c) Portfolio Portfolio(b) Portfolio(b) --------------- ------------- -------------- -------------- --------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 18.319213 $ 4.496055 $ 18.523053 $ 6.648895 $ 6.630091 Total Return * -43.11% -25.74%*** -41.46% -51.71% -2.64%*** Ratio of Expenses ** 1.10% 1.10% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 32.201914 $ 9.860527 $ 31.644131 $ 13.767720 $ 10.731355 Total Return * 19.32%*** -1.39%*** 8.63% 14.25%*** 6.45%*** Ratio of Expenses ** 1.10% 1.25% 1.00% 1.00% 1.15% Period ended December 31, 2006 Unit Value $ 26.987965 n/a $ 29.129267 n/a n/a Total Return * 12.65% n/a 3.57% n/a n/a Ratio of Expenses ** 1.15% n/a 1.00% n/a n/a Period ended December 31, 2005 Unit Value $ 23.956905 n/a $ 28.126118 n/a n/a Total Return * 0.75% n/a 3.63% n/a n/a Ratio of Expenses ** 1.15% n/a 1.00% n/a n/a Period ended December 31, 2004 Unit Value $ 23.778364 n/a $ 27.141128 n/a n/a Total Return * 10.40%*** n/a 10.56% n/a n/a Ratio of Expenses ** 1.15% n/a 1.00% n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations May 2, 2005. (b) Commencement of operations January 16, 2007. (c) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/AIM JNL/AIM JNL/Capital JNL/AIM Global International Large Cap JNL/AIM Guardian Global Real Estate Growth Growth Small Cap Balanced Portfolio(a) Portfolio Portfolio Growth Portfolio Portfolio -------------- ------------ -------- ---------------- --------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 112,539 $ 108,750 $ 127,035 $ 37,620 $ 173,339 Units Outstanding (in thousands) 13,737 10,061 14,671 4,076 19,423 Investment Income Ratio * 2.18% 0.42% 0.14% 0.00% 1.15% Period ended December 31, 2007 Net Assets (in thousands) $ 134,186 $ 203,285 $ 193,899 $ 69,218 $ 183,983 Units Outstanding (in thousands) 10,355 10,936 13,729 4,448 14,528 Investment Income Ratio * 2.77% 1.65% 0.57% 0.34% 2.54% Period ended December 31, 2006 Net Assets (in thousands) $ 151,821 $ 132,458 $ 89,484 $ 47,863 $ 151,521 Units Outstanding (in thousands) 9,795 7,662 7,210 3,368 12,674 Investment Income Ratio * 1.51% 1.62% 0.02% 0.00% 0.93% Period ended December 31, 2005 Net Assets (in thousands) $ 23,177 $ 88,044 $ 77,265 $ 45,043 $ 118,850 Units Outstanding (in thousands) 2,005 6,119 6,605 3,570 10,813 Investment Income Ratio * 0.00% 1.75% 0.04% 0.00% 0.01% Period ended December 31, 2004 Net Assets (in thousands) n/a $ 78,422 $ 63,173 $ 39,024 $ 97,768 Units Outstanding (in thousands) n/a 5,920 5,689 3,293 9,610 Investment Income Ratio * n/a 1.27% 0.00% 0.00% 1.33% JNL/Capital JNL/Capital Guardian JNL/Capital JNL/Credit Suisse JNL/ Guardian Global International Guardian U.S. Global Natural Credit Suisse Diversified Small Cap Growth Equity Resources Long/Short Research Portfolio Portfolio(c) Portfolio Portfolio(b) Portfolio(b) ------------------ ------------- -------------- ----------------- ------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 120,056 $ 15,040 $ 123,760 $ 175,643 $ 40,233 Units Outstanding (in thousands) 7,531 3,365 7,729 26,783 6,154 Investment Income Ratio * 0.00% 0.25% 0.00% 0.06% 0.00% Period ended December 31, 2007 Net Assets (in thousands) $ 155,406 $ 1,986 $ 151,626 $ 294,796 $ 19,247 Units Outstanding (in thousands) 5,770 202 5,756 21,577 1,804 Investment Income Ratio * 0.71% 0.00% 0.00% 0.00% 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 109,223 n/a $ 139,074 n/a n/a Units Outstanding (in thousands) 5,042 n/a 5,847 n/a n/a Investment Income Ratio * 0.30% n/a 0.00% n/a n/a Period ended December 31, 2005 Net Assets (in thousands) $ 117,922 n/a $ 165,961 n/a n/a Units Outstanding (in thousands) 6,149 n/a 7,241 n/a n/a Investment Income Ratio * 0.50% n/a 0.00% n/a n/a Period ended December 31, 2004 Net Assets (in thousands) $ 142,752 n/a $ 204,976 n/a n/a Units Outstanding (in thousands) 7,517 n/a 9,239 n/a n/a Investment Income Ratio * 0.00% n/a 0.00% n/a n/a
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations May 2, 2005. (b) Commencement of operations January 16, 2007. (c) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/Franklin JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton Templeton Core Equity SmallCap Equity Templeton Founding Global Growth Income Portfolio Portfolio Strategy Portfolio(c) Portfolio(c) Portfolio(b) ----------- --------------- --------------------- ------------- ------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 9.050892 $ 11.575782 $ 6.004356 $ 5.567683 $ 7.144350 Total Return * -41.07% -40.65% -34.77%*** -42.73% -32.19% Ratio of Expenses ** 3.40% 3.91% 3.61% 3.61% 3.56% Period ended December 31, 2007 Unit Value $ 15.359991 $ 19.503996 $ 9.775729 $ 9.721359 $ 10.536430 Total Return * -2.79% 7.77% -6.46%*** -5.91%*** -1.73% Ratio of Expenses ** 3.40% 3.91% 3.31% 3.61% 3.56% Period ended December 31, 2006 Unit Value $ 15.801623 $ 18.097518 n/a n/a $ 10.722272 Total Return * 8.60% 15.49% n/a n/a 4.10%*** Ratio of Expenses ** 3.40% 3.91% n/a n/a 3.56% Period ended December 31, 2005 Unit Value $ 14.549938 $ 15.669951 n/a n/a n/a Total Return * -0.07% -0.24%*** n/a n/a n/a Ratio of Expenses ** 3.40% 3.91% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 14.560445 $ 16.580951 n/a n/a n/a Total Return * 8.80%*** 14.09%*** n/a n/a n/a Ratio of Expenses ** 3.40% 3.40% n/a n/a n/a JNL/Franklin JNL/ JNL/ JNL/Franklin Templeton Goldman Sachs JNL/Goldman Goldman Sachs Templeton Mutual Small Cap Core Plus Sachs Emerging Mid Cap Shares Value Bond Markets Debt Value Portfolio(c) Portfolio(a) Portfolio Portfolio(d) Portfolio(a) ---------------- ------------ ------------- -------------- ------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 5.851107 $ 7.061138 $ 13.633944 $ 9.615461 $ 7.502931 Total Return * -39.82% -35.69% -8.81% 5.28%*** -38.54% Ratio of Expenses ** 3.145% 3.91% 3.91% 2.845% 3.91% Period ended December 31, 2007 Unit Value $ 9.723155 $ 10.980404 $ 14.950410 n/a $ 12.208730 Total Return * -8.10%*** -9.76% 2.88% n/a -1.17% Ratio of Expenses ** 3.145% 3.91% 3.91% n/a 3.91% Period ended December 31, 2006 Unit Value n/a $ 12.167333 $ 14.532441 n/a $ 12.353358 Total Return * n/a 13.21% 0.68% n/a 11.30% Ratio of Expenses ** n/a 3.91% 3.91% n/a 3.91% Period ended December 31, 2005 Unit Value n/a $ 10.747716 $ 14.434635 n/a $ 11.098693 Total Return * n/a 0.89%*** -0.25%*** n/a -0.85%*** Ratio of Expenses ** n/a 3.91% 3.91% n/a 3.91% Period ended December 31, 2004 Unit Value n/a n/a $ 14.997395 n/a n/a Total Return * n/a n/a 4.61%*** n/a n/a Ratio of Expenses ** n/a n/a 3.65% n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations May 2, 2005. (b) Commencement of operations May 1, 2006. (c) Commencement of operations January 16, 2007. (d) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio(c) Portfolio(c) Income Portfolio(b) ----------- --------------- --------------------- ------------- ------------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 12.157618 $ 16.556491 $ 6.319163 $ 5.847939 $ 7.649488 Total Return * -39.64% -38.90% -36.77% -41.27% -30.44% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2007 Unit Value $ 20.143014 $ 27.096246 $ 9.993973 $ 9.957514 $ 10.996249 Total Return * -0.42% 10.97% -1.17%*** 2.11%*** 0.83% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2006 Unit Value $ 20.228069 $ 24.417432 n/a n/a $ 10.908218 Total Return * 11.23% 18.89% n/a n/a V -0.02%*** Ratio of Expenses ** 1.00% 1.00% n/a n/a 1.00% Period ended December 31, 2005 Unit Value $ 18.185242 $ 20.537083 n/a n/a n/a Total Return * 2.35% 1.50% n/a n/a n/a Ratio of Expenses ** 1.00% 1.00% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 17.767948 $ 20.232962 n/a n/a n/a Total Return * 3.82%*** 17.62% n/a n/a n/a Ratio of Expenses ** 1.00% 1.00% n/a n/a n/a JNL/Franklin JNL/ JNL/Franklin Templeton Goldman Sachs JNL/Goldman JNL/ Templeton Mutual Small Cap Core Plus Sachs Emerging Goldman Sachs Shares Value Bond Markets Debt Mid Cap Portfolio(c) Portfolio(a) Portfolio Portfolio(d) Value Portfolio(a) ---------------- ------------- ------------- -------------- ------------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 6.089773 $ 7.855974 $ 20.277549 $ 9.655005 $ 8.347706 Total Return * -5.75%*** -33.79% -6.12% -3.14%*** -36.73% Ratio of Expenses ** 1.10% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2007 Unit Value $ 9.910412 $ 11.866094 $ 21.598776 n/a $ 13.193511 Total Return * -0.79%*** -7.07% 5.94% n/a 1.94%*** Ratio of Expenses ** 1.15% 1.00% 1.00% n/a 1.00% Period ended December 31, 2006 Unit Value n/a $ 12.769450 $ 20.388598 n/a $ 12.942905 Total Return * n/a 3.43%*** 3.65% n/a 14.50% Ratio of Expenses ** n/a 1.00% 1.00% n/a 1.15% Period ended December 31, 2005 Unit Value n/a $ 10.946232 $ 19.671463 n/a $ 11.303526 Total Return * n/a 7.60%*** 1.60% n/a 10.14%*** Ratio of Expenses ** n/a 1.15% 1.00% n/a 1.15% Period ended December 31, 2004 Unit Value n/a n/a $ 19.361240 n/a n/a Total Return * n/a n/a 5.85% n/a n/a Ratio of Expenses ** n/a n/a 1.00% n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations May 2, 2005. (b) Commencement of operations May 1, 2006. (c) Commencement of operations January 16, 2007. (d) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio(c) Portfolio(c) Income Portfolio(b) ----------- --------------- --------------------- ------------- ------------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 37,396 $ 107,791 $ 552,970 $ 34,780 $ 214,040 Units Outstanding (in thousands) 3,315 7,090 88,674 6,013 28,474 Investment Income Ratio * 2.61% 0.00% 1.40% 0.02% 0.09% Period ended December 31, 2007 Net Assets (in thousands) $ 70,254 $ 159,201 $ 762,485 $ 47,195 $ 252,304 Units Outstanding (in thousands) 3,735 6,378 76,812 4,766 23,215 Investment Income Ratio * 1.88% 2.39% 0.00% 1.28% 4.81% Period ended December 31, 2006 Net Assets (in thousands) $ 78,068 $ 104,070 n/a n/a $ 58,428 Units Outstanding (in thousands) 4,109 4,595 n/a n/a 5,381 Investment Income Ratio * 0.02% 0.00% n/a n/a 5.07% Period ended December 31, 2005 Net Assets (in thousands) $ 80,193 $ 80,053 n/a n/a n/a Units Outstanding (in thousands) 4,663 4,181 n/a n/a n/a Investment Income Ratio * 0.87% 0.00% n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) $ 84,921 $ 92,613 n/a n/a n/a Units Outstanding (in thousands) 5,023 4,880 n/a n/a n/a Investment Income Ratio * 0.74% 0.00% n/a n/a n/a JNL/ JNL/Franklin JNL/ JNL/Goldman Goldman Sachs JNL/Franklin Templeton Goldman Sachs Sachs Emerging Mid Cap Templeton Mutual Small Cap Core Plus Markets Debt Value Shares Portfolio(c) Value Portfolio(a) Bond Portfolio Portfolio(d) Portfolio(a) ------------------- ------------------ -------------- -------------- ------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 60,998 $ 57,615 $ 276,385 $ 8,743 $ 64,799 Units Outstanding (in thousands) 10,133 7,519 14,923 906 7,952 Investment Income Ratio * 0.00% 1.19% 3.40% 0.00% 1.02% Period ended December 31, 2007 Net Assets (in thousands) $ 71,047 $ 57,150 $ 329,798 n/a $ 89,409 Units Outstanding (in thousands) 7,206 4,912 16,644 n/a 6,902 Investment Income Ratio * 0.00% 2.81% 3.54% n/a 2.42% Period ended December 31, 2006 Net Assets (in thousands) n/a $ 45,327 $ 251,053 n/a $ 54,652 Units Outstanding (in thousands) n/a 3,595 13,343 n/a 4,264 Investment Income Ratio * n/a 1.38% 0.09% n/a 2.41% Period ended December 31, 2005 Net Assets (in thousands) n/a $ 12,193 $ 187,199 n/a $ 22,285 Units Outstanding (in thousands) n/a 1,120 10,244 n/a 1,978 Investment Income Ratio * n/a 0.00% 5.94% n/a 0.00% Period ended December 31, 2004 Net Assets (in thousands) n/a n/a $ 127,610 n/a n/a Units Outstanding (in thousands) n/a n/a 7,004 n/a n/a Investment Income Ratio * n/a n/a 4.77% n/a n/a
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations May 2, 2005. (b) Commencement of operations May 1, 2006. (c) Commencement of operations January 16, 2007. (d) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/ JNL/JPMorgan Goldman Sachs JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard Short Duration International MidCap Growth & Quality Bond Emerging Markets Bond Portfolio(a) Value Portfolio Portfolio Portfolio Portfolio(a) ----------------- --------------- ------------- --------------- ---------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 9.327447 $ 7.331489 $ 10.484843 $ 12.808585 $ 6.571545 Total Return * -8.94% -46.62% -46.41% 2.61% -51.82% Ratio of Expenses ** 3.21% 3.91% 3.61% 3.75% 3.61% Period ended December 31, 2007 Unit Value $ 10.243295 $ 13.734935 $ 19.566550 $ 12.482587 $ 13.639504 Total Return * 0.45%*** 7.66% 4.11% 2.45% -2.44%*** Ratio of Expenses ** 3.21% 3.91% 3.61% 3.75% 3.61% Period ended December 31, 2006 Unit Value $ 10.109623 $ 12.758163 $ 18.793604 $ 12.184558 $ 10.747873 Total Return * 0.37%*** 26.93% 8.10% -0.54% 11.69%*** Ratio of Expenses ** 2.96% 3.91% 3.61% 3.75% 3.36% Period ended December 31, 2005 Unit Value n/a $ 10.051067 $ 17.386172 $ 12.250484 n/a Total Return * n/a 4.81%*** 2.41%*** -1.40% n/a Ratio of Expenses ** n/a 3.91% 3.61% 3.75% n/a Period ended December 31, 2004 Unit Value n/a $ 8.911939 $ 17.242370 $ 12.424813 n/a Total Return * n/a 16.07%*** 8.76%*** 1.62%*** n/a Ratio of Expenses ** n/a 3.75% 3.45% 3.75% n/a JNL/Lazard JNL/Lazard JNL/M&G JNL/M&G JNL/MCM Mid Cap Small Cap Global Basics Global Leaders 10 x 10 Equity Portfolio Equity Portfolio Portfolio(c) Portfolio(c) Portfolio(b) ---------------- ---------------- ------------- -------------- ------------ Highest expense ratio Period ended December 31, 2008 Unit Value $ 9.420260 $ 7.701860 $ 8.374701 $ 8.306746 $ 6.000234 Total Return * -41.18% -40.69% 12.01%*** 6.85%*** -38.22% Ratio of Expenses ** 3.695% 3.51% 2.295% 2.56% 3.145% Period ended December 31, 2007 Unit Value $ 16.014550 $ 12.986859 n/a n/a $ 9.712781 Total Return * -6.16% -10.04% n/a n/a -2.81%*** Ratio of Expenses ** 3.695% 3.51% n/a n/a 3.145% Period ended December 31, 2006 Unit Value $ 17.065782 $ 14.436122 n/a n/a n/a Total Return * 7.85%*** 6.54%*** n/a n/a n/a Ratio of Expenses ** 3.695% 3.51% n/a n/a n/a Period ended December 31, 2005 Unit Value $ 15.559998 $ 12.861470 n/a n/a n/a Total Return * 4.96% 1.11% n/a n/a n/a Ratio of Expenses ** 3.61% 3.45% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 14.824692 $ 12.720310 n/a n/a n/a Total Return * 10.40%*** 8.52%*** n/a n/a n/a Ratio of Expenses ** 3.61% 3.45% n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations May 1, 2006. (b) Commencement of operations April 30, 2007. (c) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/ JNL/JPMorgan Goldman Sachs JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard Short Duration International MidCap Growth & Quality Bond Emerging Markets Bond Portfolio(a) Value Portfolio Portfolio Portfolio Portfolio(a) ----------------- --------------- ------------- --------------- ---------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 9.893602 $ 10.050436 $ 14.968151 $ 18.637360 $ 7.045604 Total Return * -1.77%*** -45.05% -45.00% 5.47% -50.55% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 10.610338 $ 18.288854 $ 27.213447 $ 17.670275 $ 14.246633 Total Return * 3.67% 10.85% 6.88% 5.32% 24.60%*** Ratio of Expenses ** 1.10% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 10.235082 $ 16.498809 $ 25.461414 $ 16.777961 $ 10.910134 Total Return * -0.12%*** 30.67% 10.94% 2.23% 19.04%*** Ratio of Expenses ** 1.10% 1.00% 1.00% 1.00% 1.10% Period ended December 31, 2005 Unit Value n/a $ 12.626277 $ 22.949895 $ 16.412388 n/a Total Return * n/a 17.39% 5.11% 1.34% n/a Ratio of Expenses ** n/a 1.00% 1.00% 1.00% n/a Period ended December 31, 2004 Unit Value n/a $ 10.755922 $ 21.834409 $ 16.195599 n/a Total Return * n/a 21.32% 16.82% 3.04%*** n/a Ratio of Expenses ** n/a 1.00% 1.00% 1.00% n/a JNL/Lazard JNL/Lazard JNL/M&G JNL/M&G JNL/MCM Mid Cap Small Cap Global Basics Global Leaders 10 x 10 Equity Portfolio Equity Portfolio Portfolio(c) Portfolio(c) Portfolio(b) ---------------- ---------------- ------------- -------------- ------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 12.616145 $ 10.110605 $ 8.400224 $ 8.337377 $ 6.208784 Total Return * -39.57% -39.19% -5.59%*** -4.47%*** -35.78%*** Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.10% Period ended December 31, 2007 Unit Value $ 20.877235 $ 16.625624 n/a n/a $ 9.843719 Total Return * -3.58% -7.74% n/a n/a -4.92%*** Ratio of Expenses ** 1.00% 1.00% n/a n/a 1.15% Period ended December 31, 2006 Unit Value $ 21.652882 $ 18.020082 n/a n/a n/a Total Return * 13.42% 15.64% n/a n/a n/a Ratio of Expenses ** 1.00% 1.00% n/a n/a n/a Period ended December 31, 2005 Unit Value $ 19.090166 $ 15.583063 n/a n/a n/a Total Return * 10.69%*** 3.61% n/a n/a n/a Ratio of Expenses ** 1.00% 1.00% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 17.540416 $ 15.040034 n/a n/a n/a Total Return * 23.29% 14.23% n/a n/a n/a Ratio of Expenses ** 1.15% 1.00% n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations May 1, 2006. (b) Commencement of operations April 30, 2007. (c) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/ JNL/JPMorgan Goldman Sachs JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard Short Duration International MidCap Growth & Quality Bond Emerging Markets Bond Portfolio(a) Value Portfolio Portfolio Portfolio Portfolio(a) ----------------- --------------- ------------- --------------- ---------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 87,244 $ 187,536 $ 64,780 $ 448,360 $ 148,734 Units Outstanding (in thousands) 8,978 19,656 5,353 26,520 21,505 Investment Income Ratio * 4.21% 1.94% 0.00% 2.87% 0.66% Period ended December 31, 2007 Net Assets (in thousands) $ 65,966 $ 396,407 $ 133,042 $ 190,859 $ 243,760 Units Outstanding (in thousands) 6,283 22,558 6,122 11,779 17,321 Investment Income Ratio * 3.89% 5.66% 0.00% 3.79% 0.26% Period ended December 31, 2006 Net Assets (in thousands) $ 25,837 $ 293,190 $ 112,750 $ 167,521 $ 30,065 Units Outstanding (in thousands) 2,534 18,030 5,729 10,828 2,766 Investment Income Ratio * 0.00% 2.37% 0.00% 0.00% 0.00% Period ended December 31, 2005 Net Assets (in thousands) n/a $ 116,828 $ 120,214 $ 168,504 n/a Units Outstanding (in thousands) n/a 9,007 6,834 11,098 n/a Investment Income Ratio * n/a 0.45% 0.27% 3.73% n/a Period ended December 31, 2004 Net Assets (in thousands) n/a $ 72,980 $ 136,152 $ 166,536 n/a Units Outstanding (in thousands) n/a 6,276 8,176 11,036 n/a Investment Income Ratio * n/a 1.42% 0.00% 4.24% n/a JNL/Lazard JNL/Lazard JNL/M&G JNL/M&G JNL/MCM Mid Cap Small Cap Global Basics Global Leaders 10 x 10 Equity Portfolio Equity Portfolio Portfolio(c) Portfolio(c) Portfolio(b) ---------------- ---------------- ------------- -------------- ------------ Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 110,321 $ 60,108 $ 552 $ 366 $ 88,276 Units Outstanding (in thousands) 9,536 6,377 66 44 14,348 Investment Income Ratio * 1.22% 0.00% 0.00% 0.17% 1.18% Period ended December 31, 2007 Net Assets (in thousands) $ 214,652 $ 111,168 n/a n/a $ 50,864 Units Outstanding (in thousands) 11,206 7,130 n/a n/a 5,188 Investment Income Ratio * 5.52% 3.78% n/a n/a 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 185,662 $ 127,361 n/a n/a n/a Units Outstanding (in thousands) 9,361 7,493 n/a n/a n/a Investment Income Ratio * 2.84% 9.21% n/a n/a n/a Period ended December 31, 2005 Net Assets (in thousands) $ 162,241 $ 121,325 n/a n/a n/a Units Outstanding (in thousands) 9,282 8,217 n/a n/a n/a Investment Income Ratio * 10.23% 5.37% n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) $ 133,657 $ 112,999 n/a n/a n/a Units Outstanding (in thousands) 8,272 7,838 n/a n/a n/a Investment Income Ratio * 0.18% 0.05% n/a n/a n/a
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations May 1, 2006. (b) Commencement of operations April 30, 2007. (c) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Bond Index Communications Consumer Brands Dow 10 25 Portfolio Portfolio Sector Portfolio Sector Portfolio Portfolio ------------ ------------ ---------------- ---------------- ------------ Highest expense ratio Period ended December 31, 2008 Unit Value $ 6.083724 $ 10.278779 $ 2.998232 $ 5.890476 $ 4.740586 Total Return * -37.77% -0.28% -41.84% -33.70% -48.14% Ratio of Expenses ** 4.00% 3.91% 3.71% 3.56% 4.00% Period ended December 31, 2007 Unit Value $ 9.775965 $ 10.307274 $ 5.154877 $ 8.884283 $ 9.141905 Total Return * -6.66% 2.31% 0.49% -11.10% -2.96% Ratio of Expenses ** 4.00% 3.91% 3.71% 3.56% 4.00% Period ended December 31, 2006 Unit Value $ 10.473370 $ 10.074061 $ 5.129986 $ 9.994079 $ 9.420741 Total Return * 7.84% -0.32% 15.15%*** 9.48% 24.49% Ratio of Expenses ** 4.00% 3.91% 3.71% 3.56% 4.00% Period ended December 31, 2005 Unit Value $ 9.711698 $ 10.106316 $ 4.041766 $ 9.128653 $ 7.567178 Total Return * -6.73% -0.30%*** -2.22% -3.04%*** -9.36% Ratio of Expenses ** 4.00% 3.91% 3.21% 3.56% 4.00% Period ended December 31, 2004 Unit Value $ 10.411974 $ 10.322773 $ 4.133508 $ 9.884514 $ 8.348810 Total Return * 11.69%*** 0.53%*** 11.05%*** 6.32%*** 7.70%*** Ratio of Expenses ** 4.00% 3.895% 3.21% 3.21% 4.00% JNL/MCM JNL/MCM Enhanced JNL/MCM JNL/MCM JNL/MCM Dow Dividend S&P 500 Stock European 30 Financial Global 15 Portfolio(a) Index Portfolio Portfolio(b) Sector Portfolio Portfolio ------------ --------------- ------------ ---------------- ------------ Highest expense ratio Period ended December 31, 2008 Unit Value $ 4.910643 $ 4.909712 $ 8.579682 $ 4.785452 $ 7.709450 Total Return * -42.83%*** -40.13% -9.36%*** -52.39% -50.53% Ratio of Expenses ** 3.61% 3.80% 2.295% 3.61% 4.00% Period ended December 31, 2007 Unit Value $ 10.068067 $ 8.200194 n/a $ 10.052315 $ 15.585405 Total Return * -13.16% -0.13% n/a -20.31% 6.74% Ratio of Expenses ** 3.545% 3.80% n/a 3.61% 4.00% Period ended December 31, 2006 Unit Value $ 11.593769 $ 8.210535 n/a $ 12.613960 $ 14.601799 Total Return * 2.15%*** 12.49% n/a 14.49% 34.63% Ratio of Expenses ** 3.545% 3.80% n/a 3.61% 4.00% Period ended December 31, 2005 Unit Value n/a $ 7.298669 n/a $ 11.017663 $ 10.845521 Total Return * n/a 0.37% n/a 7.04%*** 5.88% Ratio of Expenses ** n/a 3.80% n/a 3.61% 4.00% Period ended December 31, 2004 Unit Value n/a $ 7.272051 n/a $ 11.007919 $ 10.243321 Total Return * n/a 4.45%*** n/a 7.90%*** 21.26%*** Ratio of Expenses ** n/a 3.80% n/a 3.21% 4.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 17, 2006. (b) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Bond Index Communications Consumer Brands Dow 10 25 Portfolio Portfolio Sector Portfolio Sector Portfolio Portfolio ------------ ------------ ---------------- ---------------- ------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 8.088140 $ 12.587951 $ 3.879092 $ 7.513185 $ 6.302564 Total Return * -35.87% 2.66% -40.24% -31.98% -46.57% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 12.612726 $ 12.261238 $ 6.491019 $ 11.045267 $ 11.794827 Total Return * -3.80% 5.36% 3.26%*** -8.79% 0.01% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 13.110972 $ 11.637195 $ 6.286020 $ 12.109280 $ 11.793390 Total Return * 11.12% 2.62% 35.64% 12.31% 28.28% Ratio of Expenses ** 1.00% 1.00% 1.10% 1.00% 1.00% Period ended December 31, 2005 Unit Value $ 11.799121 $ 11.340550 $ 4.634201 $ 10.781848 $ 9.193764 Total Return * -3.89% 0.84% -0.14% -0.10%*** 6.61% Ratio of Expenses ** 1.00% 1.00% 1.10% 1.00% 1.00% Period ended December 31, 2004 Unit Value $ 12.277074 $ 11.246377 $ 4.640711 $ 11.068600 $ 9.844389 Total Return * 20.69% 1.04%*** -0.23%*** 8.83% 1.84% Ratio of Expenses ** 1.00% 1.00% 1.10% 1.15% 1.00% JNL/MCM JNL/MCM Enhanced JNL/MCM JNL/MCM JNL/MCM Dow Dividend S&P 500 Stock European 30 Financial Global 15 Portfolio(a) Index Portfolio Portfolio(b) Sector Portfolio Portfolio ------------ --------------- ------------ ---------------- ------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 5.304558 $ 6.429082 $ 8.602749 $ 6.132779 $ 10.249580 Total Return * -49.87% -38.43% -7.01%*** -51.14% -49.03% Ratio of Expenses ** 1.00% 1.00% 1.15% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 10.581265 $ 10.441324 n/a $ 12.550628 $ 20.108100 Total Return * -10.83%*** 2.73% n/a -18.19%*** 10.01% Ratio of Expenses ** 1.00% 1.00% n/a 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 11.865620 $ 10.164248 n/a $ 15.340976 $ 18.279250 Total Return * 18.66%*** 15.68% n/a 18.64% 38.72% Ratio of Expenses ** 1.10% 1.00% n/a 1.15% 1.00% Period ended December 31, 2005 Unit Value n/a $ 8.786572 n/a $ 12.930662 $ 13.176756 Total Return * n/a 3.21% n/a 4.90% 9.09% Ratio of Expenses ** n/a 1.00% n/a 1.15% 1.00% Period ended December 31, 2004 Unit Value n/a $ 8.513429 n/a $ 12.326584 $ 12.078281 Total Return * n/a 10.16% n/a 12.19% 26.84% Ratio of Expenses ** n/a 1.00% n/a 1.15% 1.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 17, 2006. (b) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Bond Index Communications Consumer Brands Dow 10 25 Portfolio Portfolio Sector Portfolio Sector Portfolio Portfolio ------------ ---------- ---------------- ---------------- --------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 326,726 $ 314,498 $ 27,618 $ 22,306 $ 335,675 Units Outstanding (in thousands) 42,986 26,242 7,623 3,172 56,632 Investment Income Ratio * 3.13% 4.39% 4.39% 0.34% 0.00% Period ended December 31, 2007 Net Assets (in thousands) $ 689,744 $ 303,352 $ 82,006 $ 17,959 $ 815,547 Units Outstanding (in thousands) 57,881 25,866 13,425 1,719 73,139 Investment Income Ratio * 1.64% 4.40% 4.21% 0.49% 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 707,449 $ 231,059 $ 53,066 $ 22,722 $ 848,141 Units Outstanding (in thousands) 56,752 20,619 8,876 1,967 75,604 Investment Income Ratio * 0.00% 2.20% 2.29% 0.22% 0.00% Period ended December 31, 2005 Net Assets (in thousands) $ 547,728 $ 169,206 $ 12,982 $ 17,930 $ 547,103 Units Outstanding (in thousands) 48,527 15,411 2,866 1,727 62,187 Investment Income Ratio * 0.00% 2.91% 9.45% 1.73% 0.00% Period ended December 31, 2004 Net Assets (in thousands) $ 411,612 $ 111,204 $ 16,654 $ 14,748 $ 429,753 Units Outstanding (in thousands) 34,713 10,126 3,666 1,356 45,137 Investment Income Ratio * 0.00% 0.39% 0.01% 0.00% 0.00% JNL/MCM JNL/MCM Enhanced JNL/MCM JNL/MCM JNL/MCM Dow Dividend S&P 500 Stock European 30 Financial Global 15 Portfolio(a) Index Portfolio Portfolio(b) Sector Portfolio Portfolio ------------ --------------- ------------ ---------------- ----------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 187,965 $ 42,727 $ 393 $ 72,120 $ 523,597 Units Outstanding (in thousands) 36,151 6,841 46 12,618 54,392 Investment Income Ratio * 0.45% 1.56% 0.76% 1.76% 0.00% Period ended December 31, 2007 Net Assets (in thousands) $ 381,088 $ 79,149 n/a $ 51,640 $ 1,308,355 Units Outstanding (in thousands) 36,492 7,793 n/a 4,371 68,945 Investment Income Ratio * 0.00% 1.59% n/a 1.53% 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 278,475 $ 66,622 n/a $ 66,020 $ 1,120,821 Units Outstanding (in thousands) 23,593 6,531 n/a 4,511 64,547 Investment Income Ratio * 0.00% 6.96% n/a 1.37% 0.00% Period ended December 31, 2005 Net Assets (in thousands) n/a $ 51,576 n/a $ 37,388 $ 639,572 Units Outstanding (in thousands) n/a 5,773 n/a 2,987 50,759 Investment Income Ratio * n/a 5.94% n/a 1.82% 0.00% Period ended December 31, 2004 Net Assets (in thousands) n/a $ 58,425 n/a $ 28,505 $ 395,535 Units Outstanding (in thousands) n/a 6,653 n/a 2,369 33,886 Investment Income Ratio * n/a 0.36% n/a 0.07% 0.00%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations January 17, 2006. (b) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Healthcare Index 5 International JNL 5 JNL Optimized Sector Portfolio Portfolio(c) Index Portfolio Portfolio(a) 5 Portfolio(b) ---------------- ------------ --------------- ------------ -------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 7.859728 $ 6.641190 $ 9.690621 $ 7.171980 $ 6.012211 Total Return * -25.89% -29.78%*** -45.10% -44.62% -48.04% Ratio of Expenses ** 3.56% 3.26% 3.895% 3.695% 3.695% Period ended December 31, 2007 Unit Value $ 10.605473 $ 9.793444 $ 17.652756 $ 12.950761 $ 11.569752 Total Return * 3.78% -4.03%*** 6.15% -2.26% 13.27%*** Ratio of Expenses ** 3.56% 3.11% 3.895% 3.695% 3.695% Period ended December 31, 2006 Unit Value $ 10.218724 n/a $ 16.629925 $ 13.250811 $ 10.602318 Total Return * 2.56% n/a 20.79% 14.52% 12.32%*** Ratio of Expenses ** 3.56% n/a 3.895% 3.695% 3.26% Period ended December 31, 2005 Unit Value $ 9.963495 n/a $ 13.767148 $ 11.570828 n/a Total Return * 5.18%*** n/a 8.99% 7.65%** * n/a Ratio of Expenses ** 3.56% n/a 3.895% 3.695% n/a Period ended December 31, 2004 Unit Value $ 9.693345 n/a $ 12.631192 $ 10.865550 n/a Total Return * -0.43%*** n/a 12.88%*** 3.95%** * n/a Ratio of Expenses ** 3.41% n/a 3.895% 3.095% n/a JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Nasdaq 25 NYSE International Oil & Gas Pacific Rim 30 S&P 10 Portfolio(a) 25 Portfolio(c) Sector Portfolio Portfolio(d) Portfolio ------------ ------------------ ---------------- -------------- ----------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 6.734775 $ 5.970626 $ 18.046281 $ 9.546820 $ 5.609372 Total Return * -43.59% -47.72% -40.25% 12.07%*** -51.61% Ratio of Expenses ** 3.61% 3.36% 3.91% 2.36% 4.00% Period ended December 31, 2007 Unit Value $ 11.938104 $ 11.419846 $ 30.200568 n/a $ 11.591185 Total Return * 14.83% 9.11%*** 30.07% n/a 0.89% Ratio of Expenses ** 3.61% 3.36% 3.91% n/a 4.00% Period ended December 31, 2006 Unit Value $ 10.396119 n/a $ 23.218669 n/a $ 11.488758 Total Return * 1.04% n/a 16.17% n/a 0.57% Ratio of Expenses ** 3.61% n/a 3.91% n/a 4.00% Period ended December 31, 2005 Unit Value $ 10.289532 n/a $ 19.986224 n/a $ 11.424088 Total Return * 1.68%*** n/a -7.10%*** n/a 31.89% Ratio of Expenses ** 3.61% n/a 3.91% n/a 4.00% Period ended December 31, 2004 Unit Value $ 10.787801 n/a $ 15.647043 n/a $ 8.661826 Total Return * 1.94%*** n/a 15.27%*** n/a 15.39%*** Ratio of Expenses ** 3.15% n/a 3.41% n/a 4.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations May 1, 2006. (c) Commencement of operations April 30, 2007. (d) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Healthcare Index 5 International JNL 5 JNL Optimized Sector Portfolio Portfolio(c) Index Portfolio Portfolio(a) 5 Portfolio(b) ----------------- ------------- --------------- ------------- --------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 10.024957 $ 6.885272 $ 11.853967 $ 8.040449 $ 6.460537 Total Return * -23.97% -28.18%*** -43.49% -43.11% -46.62% Ratio of Expenses ** 1.00% 1.10% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 13.185167 $ 9.923123 $ 20.977377 $ 14.132910 $ 12.101901 Total Return * 6.49% 1.36%*** 9.29% 0.42% 2.26%*** Ratio of Expenses ** 1.00% 1.15% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 12.381483 n/a $ 19.194913 $ 14.073753 $ 10.751698 Total Return * 5.21% n/a 24.33% 17.64% 7.09%*** Ratio of Expenses ** 1.00% n/a 1.00% 1.00% 1.15% Period ended December 31, 2005 Unit Value $ 11.767904 n/a $ 15.438331 $ 11.963532 n/a Total Return * 8.74%*** n/a 12.19% -0.31%*** n/a Ratio of Expenses ** 1.00% n/a 1.00% 1.00% n/a Period ended December 31, 2004 Unit Value $ 10.984570 n/a $ 13.761360 $ 10.917908 n/a Total Return * 0.67%*** n/a 18.30% 2.51%*** n/a Ratio of Expenses ** 1.10% n/a 1.00% 1.10% n/a JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Nasdaq 25 NYSE International Oil & Gas Pacific Rim 30 S&P 10 Portfolio(a) 25 Portfolio(c) Sector Portfolio Portfolio(d) Portfolio ------------ ------------------ ----------------- -------------- ------------- LOWEST EXPENSE RATIO Period ended December 31, 2008 Unit Value $ 7.523099 $ 6.210757 $ 23.795171 $ 9.573796 $ 7.457573 Total Return * -26.43%*** -40.36%*** -38.48% 0.87%*** -50.13% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.15% 1.00% Period ended December 31, 2007 Unit Value $ 12.949952 $ 11.594407 $ 38.679651 n/a $ 14.954809 Total Return * 17.77% 12.01%*** 33.93% n/a 3.98% Ratio of Expenses ** 1.10% 1.10% 1.00% n/a 1.00% Period ended December 31, 2006 Unit Value $ 10.996216 n/a $ 28.880108 n/a $ 14.382183 Total Return * 3.60% n/a 19.59% n/a 3.62% Ratio of Expenses ** 1.10% n/a 1.00% n/a 1.00% Period ended December 31, 2005 Unit Value $ 10.614405 n/a $ 24.148719 n/a $ 13.879669 Total Return * -2.09% n/a 35.51%*** n/a 35.89% Ratio of Expenses ** 1.10% n/a 1.00% n/a 1.00% Period ended December 31, 2004 Unit Value $ 10.841214 n/a $ 17.733168 n/a $ 10.213546 Total Return * -0.85%*** n/a -0.66%*** n/a 16.50% Ratio of Expenses ** 1.10% n/a 1.10% n/a 1.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations May 1, 2006. (c) Commencement of operations April 30, 2007. (d) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Healthcare Index 5 International JNL 5 JNL Optimized Sector Portfolio Portfolio(c) Index Portfolio Portfolio(a) 5 Portfolio(b) ---------------- ---------------- --------------- ------------- -------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 118,315 $ 56,123 $ 296,336 $ 2,750,040 $ 288,762 Units Outstanding (in thousands) 12,595 8,223 26,077 351,715 45,495 Investment Income Ratio * 0.82% 1.35% 2.07% 2.19% 0.01% Period ended December 31, 2007 Net Assets (in thousands) $ 106,519 $ 27,920 $ 554,883 $ 5,208,867 $ 375,799 Units Outstanding (in thousands) 8,577 2,824 27,401 376,758 31,420 Investment Income Ratio * 0.80% 0.00% 2.83% 2.12% 3.74% Period ended December 31, 2006 Net Assets (in thousands) $ 80,719 n/a $ 457,401 $ 3,510,402 $ 83,942 Units Outstanding (in thousands) 6,873 n/a 24,461 253,347 7,834 Investment Income Ratio * 0.58% n/a 3.16% 0.43% 0.85% Period ended December 31, 2005 Net Assets (in thousands) $ 73,969 n/a $ 270,319 $ 1,178,139 n/a Units Outstanding (in thousands) 6,571 n/a 17,823 99,440 n/a Investment Income Ratio * 0.84% n/a 2.95% 0.05% n/a Period ended December 31, 2004 Net Assets (in thousands) $ 39,865 n/a $ 162,270 $ 81,383 n/a Units Outstanding (in thousands) 3,742 n/a 11,867 7,460 n/a Investment Income Ratio * 0.00% n/a 0.13% 0.60% n/a JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Nasdaq 25 NYSE International Oil & Gas Pacific Rim 30 S&P 10 Portfolio(a) 25 Portfolio(c) Sector Portfolio Portfolio(d) Portfolio ---------------- ------------------- ---------------- -------------- ---------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 52,148 $ 50,700 $ 303,559 $ 489 $ 319,741 Units Outstanding (in thousands) 7,151 8,265 13,755 51 45,660 Investment Income Ratio * 0.02% 0.01% 0.56% 0.00% 0.00% Period ended December 31, 2007 Net Assets (in thousands) $ 106,385 $ 63,561 $ 443,808 n/a $ 833,493 Units Outstanding (in thousands) 8,393 5,504 12,229 n/a 58,973 Investment Income Ratio * 0.00% 6.89% 1.09% n/a 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 65,396 n/a $ 282,036 n/a $ 803,247 Units Outstanding (in thousands) 6,035 n/a 10,353 n/a 58,733 Investment Income Ratio * 0.00% n/a 1.23% n/a 0.00% Period ended December 31, 2005 Net Assets (in thousands) $ 42,128 n/a $ 173,953 n/a $ 694,989 Units Outstanding (in thousands) 4,002 n/a 7,593 n/a 52,332 Investment Income Ratio * 0.00% n/a 2.75% n/a 0.00% Period ended December 31, 2004 Net Assets (in thousands) $ 9,084 n/a $ 52,129 n/a $ 361,642 Units Outstanding (in thousands) 838 n/a 3,035 n/a 36,652 Investment Income Ratio * 0.00% n/a 0.00% n/a 0.00%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations October 1, 2004. (b) Commencement of operations May 1, 2006. (c) Commencement of operations April 30, 2007. (d) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio(b) Index Portfolio Index Portfolio 60 Portfolio(c) Portfolio ------------ --------------- --------------- --------------- ---------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 6.831992 $ 8.422212 $ 6.564522 $ 5.911605 $ 8.735721 Total Return * -5.28%*** -39.97% -40.02% -32.38% -42.41% Ratio of Expenses ** 3.26% 3.895% 3.895% 3.145% 4.00% Period ended December 31, 2007 Unit Value $ 10.513577 $ 14.029655 $ 10.945285 $ 8.742381 $ 15.168172 Total Return * -1.17%*** 3.32% 0.87% -1.08%*** -13.98% Ratio of Expenses ** 3.145% 3.895% 3.895% 3.145% 4.00% Period ended December 31, 2006 Unit Value $ 10.104177 $ 13.578314 $ 10.850789 n/a $ 17.633309 Total Return * 0.00% 5.51% 10.69% n/a 5.20% Ratio of Expenses ** 2.895% 3.895% 3.895% n/a 4.00% Period ended December 31, 2005 Unit Value n/a $ 12.869369 $ 9.802793 n/a $ 16.761938 Total Return * n/a 7.71% 0.40% n/a 4.66% Ratio of Expenses ** n/a 3.895% 3.895% n/a 4.00% Period ended December 31, 2004 Unit Value n/a $ 11.947627 $ 9.763928 n/a $ 16.015281 Total Return * n/a 8.47%*** 5.24%*** n/a 4.35%*** Ratio of Expenses ** n/a 3.895% 3.895% n/a 4.00% JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio(a) VIP Portfolio(a) Portfolio --------------- ---------------- ------------- ---------------- ------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 8.172661 $ 3.163917 $ 8.429241 $ 7.473857 $ 7.568122 Total Return * -37.41% -45.48% -49.35% -44.76% -42.96% Ratio of Expenses ** 3.895% 3.71% 3.695% 3.51% 3.61% Period ended December 31, 2007 Unit Value $ 13.058461 $ 5.803200 $ 16.642550 $ 13.529815 $ 13.268141 Total Return * -5.87% 10.37% 15.13% 6.91% 2.54% Ratio of Expenses ** 3.895% 3.71% 3.695% 3.51% 3.61% Period ended December 31, 2006 Unit Value $ 13.872382 $ 5.258183 $ 14.455154 $ 12.655538 $ 12.940106 Total Return * 13.01% 5.38% -6.36%*** 8.31% 12.82% Ratio of Expenses ** 3.895% 3.71% 3.695% 3.51% 3.61% Period ended December 31, 2005 Unit Value $ 12.275325 $ 4.989541 $ 15.224490 $ 11.684904 $ 11.469210 Total Return * 0.25% 0.00%*** 18.82%*** 8.42%*** 5.39%*** Ratio of Expenses ** 3.895% 3.71% 3.61% 3.51% 3.61% Period ended December 31, 2004 Unit Value $ 12.244585 $ 5.197926 $ 11.381625 $ 11.031481 $ 10.553022 Total Return * 9.54%*** 1.14%*** 2.50%*** 2.75%*** 13.03%*** Ratio of Expenses ** 3.895% 3.21% 3.21% 3.21% 3.41%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations May 1, 2006. (c) Commencement of operations April 30, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio(b) Index Portfolio Index Portfolio 60 Portfolio(c) Portfolio ------------- --------------- --------------- --------------- ---------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 7.257030 $ 10.302385 $ 8.029980 $ 6.127313 $ 11.614036 Total Return * -22.00%*** -38.21% -38.26% -25.70%*** -40.65% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 10.878501 $ 16.671900 $ 13.006640 $ 8.863185 $ 19.569867 Total Return * 6.39% 6.38% 3.85% -13.45%*** -11.35% Ratio of Expenses ** 1.10% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2006 Unit Value $ 10.225154 $ 15.672619 $ 12.524398 n/a $ 22.074332 Total Return * 2.25%*** 8.60% 13.93% n/a 8.39% Ratio of Expenses ** 1.10% 1.00% 1.00% n/a 1.00% Period ended December 31, 2005 Unit Value n/a $ 14.431578 $ 10.992756 n/a $ 20.364977 Total Return * n/a 10.87% 3.34% n/a 7.84% Ratio of Expenses ** n/a 1.00% 1.00% n/a 1.00% Period ended December 31, 2004 Unit Value n/a $ 13.016647 $ 10.637567 n/a $ 18.884179 Total Return * n/a 14.63% 8.97% n/a 11.46% Ratio of Expenses ** n/a 1.00% 1.00% n/a 1.00% JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio(a) VIP Portfolio(a) Portfolio --------------- ---------------- ------------- ---------------- ------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 9.997206 $ 4.093468 $ 9.450010 $ 8.313699 $ 9.246087 Total Return * -35.58% -43.98% -47.97% -39.16%*** -41.45% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 15.517913 $ 7.307406 $ 18.161781 $ 14.629951 $ 15.792289 Total Return * -3.09% 13.41% 18.29% 9.54% 5.26% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2006 Unit Value $ 16.012149 $ 6.443138 $ 15.352958 $ 13.356133 $ 15.002894 Total Return * 16.32% 8.27% -2.36% 10.94% 15.80% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2005 Unit Value $ 13.765517 $ 5.950916 $ 15.724123 $ 12.038914 $ 12.955865 Total Return * 3.19% 8.47%*** 37.42% 8.58% 12.61% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2004 Unit Value $ 13.340256 $ 5.835762 $ 11.442423 $ 11.087700 $ 11.504893 Total Return * 16.26% 0.30%*** 8.45%*** 0.16%*** 16.76% Ratio of Expenses ** 1.00% 1.10% 1.00% 1.10% 1.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations May 1, 2006. (c) Commencement of operations April 30, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio(b) Index Portfolio Index Portfolio 60 Portfolio(c) Portfolio ------------ --------------- --------------- --------------- ---------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 25,914 $ 235,462 $ 352,980 $ 40,940 $ 298,383 Units Outstanding (in thousands) 3,643 23,887 45,784 6,769 27,339 Investment Income Ratio * 0.00% 1.06% 1.65% 0.01% 0.28% Period ended December 31, 2007 Net Assets (in thousands) $ 22,726 $ 414,090 $ 561,046 $ 32,447 $ 628,445 Units Outstanding (in thousands) 2,111 25,780 44,590 3,676 34,012 Investment Income Ratio * 0.00% 1.20% 1.41% 5.03% 7.92% Period ended December 31, 2006 Net Assets (in thousands) $ 17,704 $ 349,594 $ 506,064 n/a $ 700,093 Units Outstanding (in thousands) 1,737 22,952 41,376 n/a 33,390 Investment Income Ratio * 0.00% 1.35% 1.51% n/a 0.00% Period ended December 31, 2005 Net Assets (in thousands) n/a $ 264,156 $ 380,518 n/a $ 546,751 Units Outstanding (in thousands) n/a 18,676 35,107 n/a 28,099 Investment Income Ratio * n/a 1.58% 1.39% n/a 0.00% Period ended December 31, 2004 Net Assets (in thousands) n/a $ 185,042 $ 286,238 n/a $ 356,177 Units Outstanding (in thousands) n/a 14,331 26,949 n/a 19,549 Investment Income Ratio * n/a 0.01% 1.60% n/a 0.00% JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio(a) VIP Portfolio(a) Portfolio --------------- ---------------- ------------- ---------------- ------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 193,801 $ 49,761 $ 517,873 $ 228,217 $ 104,997 Units Outstanding (in thousands) 20,221 13,023 56,424 28,250 11,924 Investment Income Ratio * 1.28% 0.02% 0.30% 1.50% 1.34% Period ended December 31, 2007 Net Assets (in thousands) $ 316,673 $ 99,763 $ 1,099,740 $ 422,290 $ 196,599 Units Outstanding (in thousands) 21,146 14,472 61,931 29,419 13,002 Investment Income Ratio * 1.36% 0.09% 0.00% 3.04% 1.06% Period ended December 31, 2006 Net Assets (in thousands) $ 310,494 $ 59,686 $ 822,800 $ 413,219 $ 180,942 Units Outstanding (in thousands) 19,903 9,646 54,436 31,351 12,505 Investment Income Ratio * 1.59% 0.09% 0.00% 0.52% 0.52% Period ended December 31, 2005 Net Assets (in thousands) $ 217,908 $ 45,266 $ 451,873 $ 225,951 $ 124,849 Units Outstanding (in thousands) 16,115 7,874 28,983 18,905 9,918 Investment Income Ratio * 2.05% 1.60% 0.00% 0.55% 0.25% Period ended December 31, 2004 Net Assets (in thousands) $ 162,490 $ 29,545 $ 33,044 $ 21,516 $ 100,400 Units Outstanding (in thousands) 12,205 5,149 2,890 1,943 8,904 Investment Income Ratio * 0.00% 0.00% 0.00% 0.37% 0.16%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations October 1, 2004. (b) Commencement of operations May 1, 2006. (c) Commencement of operations April 30, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/ JNL/PAM JNL/PAM JNL/PIMCO JNL/PIMCO PPM America Asia ex-Japan China-India Real Return Total Return Core Equity Portfolio(b) Portfolio(b) Portfolio(a) Bond Portfolio Portfolio ------------- ------------ ------------- -------------- ----------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 4.725637 $ 4.086552 $ 9.960680 $ 11.574992 $ 9.975828 Total Return * -49.80%*** -50.99%*** -11.52%*** -3.45% -42.47% Ratio of Expenses ** 3.21% 3.21% 3.545% 3.91% 3.36% Period ended December 31, 2007 Unit Value n/a n/a $ 10.761052 $ 11.988650 $ 17.339977 Total Return * n/a n/a 5.72%*** 4.07% -10.33% Ratio of Expenses ** n/a n/a 3.145% 3.91% 3.36% Period ended December 31, 2006 Unit Value n/a n/a n/a $ 11.519490 $ 19.337160 Total Return * n/a n/a n/a -0.48% 10.00% Ratio of Expenses ** n/a n/a n/a 3.91% 3.36% Period ended December 31, 2005 Unit Value n/a n/a n/a $ 11.575526 $ 17.579695 Total Return * n/a n/a n/a -0.56%*** 2.30%*** Ratio of Expenses ** n/a n/a n/a 3.91% 3.36% Period ended December 31, 2004 Unit Value n/a n/a n/a $ 11.926497 $ 17.207404 Total Return * n/a n/a n/a 1.88%*** 12.96%*** Ratio of Expenses ** n/a n/a n/a 3.71% 3.06% JNL/ JNL/ JNL/ JNL/ JNL/ PPM America PPM America PPM America PPM America Red Rocks Listed High Yield Mid Cap Value Small Cap Value Value Equity Private Equity Bond Portfolio Portfolio(b) Portfolio(b) Portfolio Portfolio(c) -------------- ------------- --------------- ------------ ---------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 7.488176 $ 5.576767 $ 6.178402 $ 8.304331 $ 5.901213 Total Return * -33.21% -47.15%*** -33.43%*** -49.03% -24.84%*** Ratio of Expenses ** 3.61% 2.91% 2.91% 3.51% 3.095% Period ended December 31, 2007 Unit Value $ 11.211535 n/a n/a $ 16.293261 n/a Total Return * -4.63% n/a n/a -7.99%*** n/a Ratio of Expenses ** 3.61% n/a n/a 3.51% n/a Period ended December 31, 2006 Unit Value $ 11.755761 n/a n/a $ 15.286772 n/a Total Return * 5.00%*** n/a n/a 9.27% n/a Ratio of Expenses ** 3.61% n/a n/a 3.395% n/a Period ended December 31, 2005 Unit Value $ 11.070629 n/a n/a $ 16.589654 n/a Total Return * -1.13%*** n/a n/a 2.22%*** n/a Ratio of Expenses ** 3.56% n/a n/a 3.395% n/a Period ended December 31, 2004 Unit Value $ 11.593620 n/a n/a $ 16.757063 n/a Total Return * 0.99%*** n/a n/a 8.02%*** n/a Ratio of Expenses ** 3.16% n/a n/a 3.145% n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations March 31, 2008. (c) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/ JNL/PAM JNL/PAM JNL/PIMCO JNL/PIMCO PPM America Asia ex-Japan China-India Real Return Total Return Core Equity Portfolio(b) Portfolio(b) Portfolio(a) Bond Portfolio Portfolio ------------- ------------ ------------- -------------- ----------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 4.833989 $ 4.180148 $ 10.469333 $ 15.867781 $ 13.482237 Total Return * -47.99%*** -49.76%*** -8.88%*** -0.60% -41.18% Ratio of Expenses ** 1.10% 1.10% 1.00% 1.00% 1.15% Period ended December 31, 2007 Unit Value n/a n/a $ 10.973974 $ 15.963557 $ 22.922528 Total Return * n/a n/a 9.72%*** 7.16% -8.31% Ratio of Expenses ** n/a n/a 1.10% 1.00% 1.15% Period ended December 31, 2006 Unit Value n/a n/a n/a $ 14.896380 $ 25.000877 Total Return * n/a n/a n/a 2.45% 12.45% Ratio of Expenses ** n/a n/a n/a 1.00% 1.15% Period ended December 31, 2005 Unit Value n/a n/a n/a $ 14.540662 $ 22.233139 Total Return * n/a n/a n/a 1.29% 7.51% Ratio of Expenses ** n/a n/a n/a 1.00% 1.15% Period ended December 31, 2004 Unit Value n/a n/a n/a $ 14.354794 $ 20.680819 Total Return * n/a n/a n/a 3.41% 11.75% Ratio of Expenses ** n/a n/a n/a 1.00% 1.15% JNL/ JNL/ JNL/ JNL/ JNL/ PPM America PPM America PPM America PPM America Red Rocks Listed High Yield Mid Cap Value Small Cap Value Value Equity Private Equity Bond Portfolio Portfolio(b) Portfolio(b) Portfolio Portfolio(c) -------------- ------------- --------------- ------------ ---------------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 9.942050 $ 5.653172 $ 6.263202 $ 11.536294 $ 5.930376 Total Return * -31.44% -47.05%*** -40.61%*** -47.79% -31.82%*** Ratio of Expenses ** 1.00% 1.10% 1.10% 1.10% 1.00% Period ended December 31, 2007 Unit Value $ 14.502044 n/a n/a $ 22.095438 n/a Total Return * -2.09% n/a n/a -6.66% n/a Ratio of Expenses ** 1.00% n/a n/a 1.10% n/a Period ended December 31, 2006 Unit Value $ 14.812194 n/a n/a $ 23.672826 n/a Total Return * 9.42% n/a n/a 11.79% n/a Ratio of Expenses ** 1.00% n/a n/a 1.10% n/a Period ended December 31, 2005 Unit Value $ 13.537400 n/a n/a $ 21.175540 n/a Total Return * 0.68% n/a n/a 9.10%*** n/a Ratio of Expenses ** 1.00% n/a n/a 1.10% n/a Period ended December 31, 2004 Unit Value $ 13.446454 n/a n/a $ 20.312647 n/a Total Return * 3.01%*** n/a n/a 8.50% n/a Ratio of Expenses ** 1.00% n/a n/a 1.15% n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations March 31, 2008. (c) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/ JNL/PAM JNL/PAM JNL/PIMCO JNL/PIMCO PPM America Asia ex-Japan China-India Real Return Total Return Core Equity Portfolio(b) Portfolio(b) Portfolio(a) Bond Portfolio Portfolio ------------- ------------ ------------- -------------- ----------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 3,934 $ 24,871 $ 423,346 $ 871,072 $ 37,459 Units Outstanding (in thousands) 819 5,964 41,005 59,558 3,362 Investment Income Ratio * 1.34% 0.00% 1.51% 4.36% 0.18% Period ended December 31, 2007 Net Assets (in thousands) n/a n/a $ 75,390 $ 598,012 $ 75,771 Units Outstanding (in thousands) n/a n/a 6,906 40,603 4,013 Investment Income Ratio * n/a n/a 0.00% 5.28% 0.32% Period ended December 31, 2006 Net Assets (in thousands) n/a n/a n/a $ 435,179 $ 103,219 Units Outstanding (in thousands) n/a n/a n/a 31,702 5,014 Investment Income Ratio * n/a n/a n/a 3.97% 0.36% Period ended December 31, 2005 Net Assets (in thousands) n/a n/a n/a $ 324,438 $ 118,699 Units Outstanding (in thousands) n/a n/a n/a 24,289 6,488 Investment Income Ratio * n/a n/a n/a 4.46% 0.76% Period ended December 31, 2004 Net Assets (in thousands) n/a n/a n/a $ 233,210 $ 135,415 Units Outstanding (in thousands) n/a n/a n/a 17,736 7,956 Investment Income Ratio * n/a n/a n/a 1.79% 0.57% JNL/ JNL/ JNL/ JNL/ JNL/ PPM America PPM America PPM America PPM America Red Rocks Listed High Yield Mid Cap Value Small Cap Value Value Equity Private Equity Bond Portfolio Portfolio(b) Portfolio(b) Portfolio Portfolio(c) -------------- ------------- --------------- ------------ ---------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 172,415 $ 3,373 $ 4,763 $ 55,567 $ 12,102 Units Outstanding (in thousands) 19,370 599 764 5,526 2,044 Investment Income Ratio * 8.88% 0.72% 0.90% 2.47% 0.97% Period ended December 31, 2007 Net Assets (in thousands) $ 267,490 n/a n/a $ 119,369 n/a Units Outstanding (in thousands) 20,646 n/a n/a 6,245 n/a Investment Income Ratio * 7.54% n/a n/a 0.60% n/a Period ended December 31, 2006 Net Assets (in thousands) $ 284,124 n/a n/a $ 154,997 n/a Units Outstanding (in thousands) 21,538 n/a n/a 7,582 n/a Investment Income Ratio * 7.15% n/a n/a 0.03% n/a Period ended December 31, 2005 Net Assets (in thousands) $ 209,499 n/a n/a $ 169,897 n/a Units Outstanding (in thousands) 17,807 n/a n/a 9,315 n/a Investment Income Ratio * 7.01% n/a n/a 0.96% n/a Period ended December 31, 2004 Net Assets (in thousands) $ 235,740 n/a n/a $ 195,303 n/a Units Outstanding (in thousands) 20,283 n/a n/a 11,118 n/a Investment Income Ratio * 0.36% n/a n/a 1.34% n/a
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations January 16, 2007. (b) Commencement of operations March 31, 2008. (c) Commencement of operations October 6, 2008. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/S&P JNL/S&P JNL/S&P JNL/S&P Disciplined Competitive Disciplined Disciplined Moderate JNL/S&P 4 Advantage Growth Moderate Growth Portfolio(c) Portfolio(c) Portfolio(b) Portfolio(b) Portfolio(b) ------------ ------------ ------------ ------------ ------------ Highest expense ratio Period ended December 31, 2008 Unit Value $ 6.531198 $ 6.765550 $ 6.103657 $ 7.306311 $ 6.545258 Total Return * -31.69%*** -28.46%*** -0.30%*** -27.88%*** -36.78% Ratio of Expenses ** 3.61% 3.26% 3.01% 3.695% 3.145% Period ended December 31, 2007 Unit Value $ 9.909378 $ 9.904249 $ 10.364266 $ 10.396421 $ 10.353901 Total Return * -0.63%*** -0.96%*** 0.66%*** 2.35%*** -0.92%*** Ratio of Expenses ** 2.71% 2.845% 2.845% 3.01% 3.145% Period ended December 31, 2006 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a JNL/S&P JNL/S&P Growth JNL/ JNL/ Dividend Income Retirement JNL/S&P S&P Managed S&P Managed & Growth Strategy Intrinsic Value Aggressive Conservative Portfolio(c) Portfolio(b) Portfolio(c) Growth Portfolio Portfolio(a) --------------- ------------ --------------- ---------------- ------------ Highest expense ratio Period ended December 31, 2008 Unit Value $ 6.991175 $ 7.237286 $ 6.144531 $ 7.755799 $ 9.075254 Total Return * -23.25%*** -32.15% -33.54%*** -41.40% -16.88% Ratio of Expenses ** 3.26% 1.05% 3.26% 3.75% 3.695% Period ended December 31, 2007 Unit Value $ 9.755667 $ 10.666237 $ 9.906975 $ 13.234462 $ 10.918213 Total Return * 0.38%*** 5.69%*** -0.93%*** 5.13% 2.42% Ratio of Expenses ** 2.71% 1.05% 2.845% 3.75% 3.695% Period ended December 31, 2006 Unit Value n/a n/a n/a $ 12.588579 $ 10.660437 Total Return * n/a n/a n/a 11.32% 3.25%*** Ratio of Expenses ** n/a n/a n/a 3.75% 3.695% Period ended December 31, 2005 Unit Value n/a n/a n/a $ 11.308090 $ 10.304722 Total Return * n/a n/a n/a 4.49% 1.62%*** Ratio of Expenses ** n/a n/a n/a 3.75% 3.31% Period ended December 31, 2004 Unit Value n/a n/a n/a $ 10.821744 $ 10.276433 Total Return * n/a n/a n/a 6.71%*** -0.01%*** Ratio of Expenses ** n/a n/a n/a 3.75% 2.96%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations January 16, 2007. (c) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/S&P JNL/S&P Disciplined Competitive JNL/S&P JNL/S&P Moderate JNL/S&P 4 Advantage Disciplined Disciplined Growth Portfolio(c) Portfolio(c) Growth Portfolio(b) Moderate Portfolio(b) Portfolio(b) ------------ ------------ ------------------- --------------------- ------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 6.710374 $ 6.924855 $ 6.336449 $ 7.679321 $ 6.805842 Total Return * -28.15%*** -24.77%*** -34.40%*** -27.44% -35.51% Ratio of Expenses ** 1.10% 1.10% 1.10% 1.15% 1.15% Period ended December 31, 2007 Unit Value $ 9.921241 $ 9.917140 $ 10.534013 $ 10.582996 $ 10.553448 Total Return * -1.84%*** -1.88%*** -0.78%*** 3.79%*** 4.34%*** Ratio of Expenses ** 1.15% 1.15% 1.15% 1.15% 1.15% Period ended December 31, 2006 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a JNL/S&P JNL/S&P Growth JNL/ JNL/ Dividend Income Retirement JNL/S&P S&P Managed S&P Managed & Growth Strategy Intrinsic Value Aggressive Conservative Portfolio(c) Portfolio(b) Portfolio(c) Growth Portfolio Portfolio(a) --------------- ------------ --------------- ---------------- ------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 7.155794 $ 7.315572 $ 6.289289 $ 10.420786 $ 10.131175 Total Return * -22.85%*** -31.77% -31.17%*** -39.76% -14.69% Ratio of Expenses ** 1.10% 0.50% 1.10% 1.00% 1.10% Period ended December 31, 2007 Unit Value $ 9.766570 $ 10.722463 $ 9.919101 $ 17.299623 $ 11.876307 Total Return * -2.62%*** 0.17%*** -0.81%*** 8.08% 5.13% Ratio of Expenses ** 1.25% 0.50% 1.25% 1.00% 1.10% Period ended December 31, 2006 Unit Value n/a n/a n/a $ 16.006541 $ 11.297247 Total Return * n/a n/a n/a 14.42% 6.67% Ratio of Expenses ** n/a n/a n/a 1.00% 1.10% Period ended December 31, 2005 Unit Value n/a n/a n/a $ 13.989395 $ 10.590688 Total Return * n/a n/a n/a 7.40% 2.60% Ratio of Expenses ** n/a n/a n/a 1.00% 1.10% Period ended December 31, 2004 Unit Value n/a n/a n/a $ 13.025544 $ 10.322593 Total Return * n/a n/a n/a 11.50% 0.07%*** Ratio of Expenses ** n/a n/a n/a 1.00% 1.10%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations January 16, 2007. (c) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/S&P JNL/S&P JNL/S&P JNL/S&P Disciplined Competitive Disciplined Disciplined Moderate JNL/S&P 4 Advantage Growth Moderate Growth Portfolio(c) Portfolio(c) Portfolio(b) Portfolio(b) Portfolio(b) ------------- ------------- -------------- -------------- -------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 255,729 $ 26,645 $ 25,007 $ 55,788 $ 71,319 Units Outstanding (in thousands) 38,346 3,872 3,996 7,341 10,574 Investment Income Ratio * 0.01% 1.47% 1.75% 1.30% 1.40% Period ended December 31, 2007 Net Assets (in thousands) $ 22,022 $ 6,231 $ 15,683 $ 33,591 $ 38,400 Units Outstanding (in thousands) 2,221 629 1,496 3,190 3,658 Investment Income Ratio * 0.00% 0.07% 0.00% 0.00% 0.00% Period ended December 31, 2006 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2005 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a JNL/S&P JNL/S&P JNL/ Dividend Growth JNL/S&P S&P Managed JNL/ Income Retirement Intrinsic Aggressive S&P Managed & Growth Strategy Value Growth Conservative Portfolio(c) Portfolio(b) Portfolio(c) Portfolio Portfolio(a) ------------- ------------- -------------- -------------- -------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 33,656 $ 548 $ 29,551 $ 334,779 $ 374,871 Units Outstanding (in thousands) 4,731 75 4,725 34,273 38,038 Investment Income Ratio * 4.82% 7.24% 1.24% 0.37% 4.19% Period ended December 31, 2007 Net Assets (in thousands) $ 738 $ 815 $ 11,822 $ 606,719 $ 240,837 Units Outstanding (in thousands) 76 76 1,193 37,210 20,751 Investment Income Ratio * 0.13% 3.57% 0.09% 1.91% 3.16% Period ended December 31, 2006 Net Assets (in thousands) n/a n/a n/a $ 577,628 $ 126,364 Units Outstanding (in thousands) n/a n/a n/a 38,011 11,361 Investment Income Ratio * n/a n/a n/a 0.58% 2.06% Period ended December 31, 2005 Net Assets (in thousands) n/a n/a n/a $ 547,590 $ 73,694 Units Outstanding (in thousands) n/a n/a n/a 40,948 7,023 Investment Income Ratio * n/a n/a n/a 0.77% 0.43% Period ended December 31, 2004 Net Assets (in thousands) n/a n/a n/a $ 575,961 $ 11,968 Units Outstanding (in thousands) n/a n/a n/a 45,907 1,161 Investment Income Ratio * n/a n/a n/a 0.22% 0.00%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations October 1, 2004. (b) Commencement of operations January 16, 2007. (c) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/S&P JNL/ Moderate JNL/S&P JNL/ JNL/ S&P Managed Growth Moderate S&P Managed S&P Managed Moderate Retirement Retirement Growth Moderate Growth Strategy Strategy Portfolio Portfolio(a) Portfolio Portfolio(C) Portfolio(C) -------------- -------------- -------------- -------------- -------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 8.130179 $ 8.861798 $ 8.468455 $ 7.883524 $ 8.549218 Total Return * -37.77% -24.10% -30.35% -25.51% -18.27% Ratio of Expenses ** 3.80% 3.695% 4.01% 1.05% 1.05% Period ended December 31, 2007 Unit Value $ 13.064157 $ 11.675144 $ 12.159040 $ 10.583715 $ 10.460704 Total Return * 4.63% 3.81% 4.36% 2.90%*** 1.22%*** Ratio of Expenses ** 3.80% 3.695% 4.01% 1.05% 1.05% Period ended December 31, 2006 Unit Value $ 12.486478 $ 11.247113 $ 11.651023 n/a n/a Total Return * 9.90% 3.88%*** 10.48%*** n/a n/a Ratio of Expenses ** 3.80% 3.695% 4.01% n/a n/a Period ended December 31, 2005 Unit Value $ 11.361577 $ 10.628068 $ 11.030655 n/a n/a Total Return * 3.44% 4.67%*** 2.51% n/a n/a Ratio of Expenses ** 3.80% 3.26% 3.75% n/a n/a Period ended December 31, 2004 Unit Value $ 10.983719 $ 10.465081 $ 10.760930 n/a n/a Total Return * 4.36%*** 1.24%*** 9.35%*** n/a n/a Ratio of Expenses ** 3.80% 2.96% 3.75% n/a n/a JNL/ JNL/S&P JNL/S&P JNL/S&P S&P Retirement JNL/S&P Retirement 2015 Retirement 2020 Retirement 2025 Income Total Yield Portfolio(b) Portfolio(b) Portfolio(b) Portfolio(b) Portfolio(d) --------------- --------------- --------------- -------------- -------------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 7.649318 $ 7.456312 $ 7.293231 $ 8.586287 $ 6.240794 Total Return * -26.84%*** -35.22% -37.48% -19.28%*** -35.57%*** Ratio of Expenses ** 3.145% 2.91% 2.845% 3.06% 3.51% Period ended December 31, 2007 Unit Value $ 11.381800 $ 11.510162 $ 11.665172 $ 10.861365 $ 10.052412 Total Return * 6.21% -3.78%*** 3.16%*** 0.64%*** 0.52%*** Ratio of Expenses ** 2.76% 2.91% 2.845% 2.845% 2.845% Period ended December 31, 2006 Unit Value $ 10.716011 $ 10.857985 $ 10.947109 $ 10.467614 n/a Total Return * 8.03%*** 1.07%*** 11.83%*** 2.80%*** n/a Ratio of Expenses ** 2.76% 2.61% 2.41% 2.71% n/a Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations January 17, 2006. (c) Commencement of operations January 16, 2007. (d) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/S&P JNL/S&P JNL/ JNL/ Moderate Growth Moderate JNL/ S&P Managed S&P Managed Retirement Retirement S&P Managed Moderate Moderate Strategy Strategy Growth Portfolio Portfolio(a) Growth Portfolio Portfolio(c) Portfolio(c) ---------------- ------------ ---------------- --------------- ------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 10.980959 $ 9.892894 $ 11.573735 $ 7.968799 $ 8.641694 Total Return * -36.00% -22.10% -28.30% -25.10% -17.82% Ratio of Expenses ** 1.00% 1.10% 1.10% 0.50% 0.50% Period ended December 31, 2007 Unit Value $ 17.157763 $ 12.699683 $ 16.140967 $ 10.639521 $ 10.515865 Total Return * 4.78%*** 6.55% 7.46% 1.38%*** 2.24%*** Ratio of Expenses ** 1.00% 1.10% 1.10% 0.50% 0.50% Period ended December 31, 2006 Unit Value $ 15.805175 $ 11.918971 $ 15.020558 n/a n/a Total Return * 13.33% 9.19% 10.95% n/a n/a Ratio of Expenses ** 1.15% 1.10% 1.10% n/a n/a Period ended December 31, 2005 Unit Value $ 13.945611 $ 10.916193 $ 13.538173 n/a n/a Total Return * 6.21% 3.84% 5.25% n/a n/a Ratio of Expenses ** 1.15% 1.10% 1.10% n/a n/a Period ended December 31, 2004 Unit Value $ 13.130178 $ 10.512096 $ 12.862656 n/a n/a Total Return * 10.14% 1.11%*** 1.11%*** n/a n/a Ratio of Expenses ** 1.15% 1.10% 1.10% n/a n/a JNL/ JNL/S&P JNL/S&P JNL/S&P S&P Retirement JNL/S&P Retirement 2015 Retirement 2020 Retirement 2025 Income Total Yield Portfolio(b) Portfolio(b) Portfolio(b) Portfolio(b) Portfolio(d) --------------- --------------- --------------- -------------- ------------ Lowest expense ratio Period ended December 31, 2008 Unit Value $ 8.113663 $ 7.854190 $ 7.667635 $ 9.097796 $ 6.404924 Total Return * -30.92% -34.07% -36.41% 6.48%*** -29.41%*** Ratio of Expenses ** 1.15% 1.15% 1.15% 1.10% 1.10% Period ended December 31, 2007 Unit Value $ 11.744841 $ 11.912837 $ 12.057863 $ 11.226931 $ 10.064737 Total Return * 7.96%*** 8.21% 0.17%*** 4.86%*** 0.65%*** Ratio of Expenses ** 1.15% 1.15% 1.15% 1.15% 1.25% Period ended December 31, 2006 Unit Value $ 10.870432 $ 11.009327 $ 11.068092 $ 10.613478 n/a Total Return * 9.46%*** 7.61%*** 9.88%*** 6.07%*** n/a Ratio of Expenses ** 1.25% 1.15% 1.25% 1.25% n/a Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations October 1, 2004. (b) Commencement of operations January 17, 2006. (c) Commencement of operations January 16, 2007. (d) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/S&P JNL/ JNL/ JNL/S&P Moderate JNL/ S&P Managed S&P Managed Moderate Growth Retirement S&P Managed Moderate Moderate Retirement Strategy Growth Portfolio Portfolio(a) Growth Portfolio Strategy Portfolio(c) Portfolio(c) ---------------- ------------ ---------------- --------------------- ------------ Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 721,594 $ 511,031 $ 902,365 $ 583 $ 1,108 Units Outstanding (in thousands) 70,370 53,018 83,111 74 129 Investment Income Ratio * 0.55% 4.00% 2.28% 10.21% 11.33% Period ended December 31, 2007 Net Assets (in thousands) $ 1,201,073 $ 475,928 $ 1,251,889 $ 673 $ 295 Units Outstanding (in thousands) 74,650 38,280 82,230 63 28 Investment Income Ratio * 1.70% 3.14% 2.24% 4.37% 9.07% Period ended December 31, 2006 Net Assets (in thousands) $ 1,081,171 $ 284,241 $ 993,884 n/a n/a Units Outstanding (in thousands) 71,760 24,211 69,732 n/a n/a Investment Income Ratio * 0.98% 2.01% 1.28% n/a n/a Period ended December 31, 2005 Net Assets (in thousands) $ 938,302 $ 140,109 $ 759,013 n/a n/a Units Outstanding (in thousands) 69,873 12,958 58,758 n/a n/a Investment Income Ratio * 1.19% 0.30% 1.91% n/a n/a Period ended December 31, 2004 Net Assets (in thousands) $ 548,951 $ 886,560 $ 17,714 n/a n/a Units Outstanding (in thousands) 44,169 69,610 1,688 n/a n/a Investment Income Ratio * 0.63% 0.00% 1.12% n/a n/a JNL/ JNL/S&P JNL/S&P JNL/S&P S&P Retirement JNL/S&P Retirement 2015 Retirement 2020 Retirement 2025 Income Total Yield Portfolio(b) Portfolio(b) Portfolio(b) Portfolio(b) Portfolio(d) --------------- --------------- --------------- -------------- ------------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 25,132 $ 10,276 $ 6,118 $ 45,552 $ 28,399 Units Outstanding (in thousands) 3,143 1,329 808 5,098 4,462 Investment Income Ratio * 0.79% 1.33% 1.22% 1.84% 1.84% Period ended December 31, 2007 Net Assets (in thousands) $ 15,824 $ 8,361 $ 4,777 $ 29,044 $ 3,265 Units Outstanding (in thousands) 1,359 710 400 2,615 325 Investment Income Ratio * 0.56% 0.43% 0.56% 1.10% 0.05% Period ended December 31, 2006 Net Assets (in thousands) $ 4,568 $ 1,847 $ 939 $ 8,220 n/a Units Outstanding (in thousands) 422 168 85 777 n/a Investment Income Ratio * 0.00% 0.00% 0.00% 0.00% n/a Period ended December 31, 2005 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations October 1, 2004. (b) Commencement of operations January 17, 2006. (c) Commencement of operations January 16, 2007. (d) Commencement of operations December 3, 2007. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/Select JNL/Select JNL/ Balanced Money Market Select Value Portfolio Portfolio Portfolio ----------- ------------ ------------ Highest expense ratio Period ended December 31, 2008 Unit Value $ 16.007656 $ 9.646545 $ 12.659714 Total Return * -23.68% -1.57% -35.77% Ratio of Expenses ** 3.80% 3.75% 3.70% Period ended December 31, 2007 Unit Value $ 20.974344 $ 9.800591 $ 19.709046 Total Return * 3.46% 0.86% 3.91% Ratio of Expenses ** 3.80% 3.75% 3.70% Period ended December 31, 2006 Unit Value $ 20.272182 $ 9.716797 $ 18.967476 Total Return * 9.43% 0.68% 16.54% Ratio of Expenses ** 3.80% 3.75% 3.70% Period ended December 31, 2005 Unit Value $ 18.525561 $ 9.651380 $ 16.275491 Total Return * 1.38% -1.06% 4.23% Ratio of Expenses ** 3.80% 3.75% 3.70% Period ended December 31, 2004 Unit Value $ 18.272679 $ 9.754873 $ 15.614300 Total Return * 4.59%*** -1.26%*** 8.43%*** Ratio of Expenses ** 3.80% 3.75% 3.70% JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- ----------- Highest expense ratio Period ended December 31, 2008 Unit Value $ 13.143650 $ 19.052733 $ 7.689738 Total Return * -45.04% -42.92% -42.75% Ratio of Expenses ** 3.91% 3.91% 3.91% Period ended December 31, 2007 Unit Value $ 23.914187 $ 33.381368 $ 13.432137 Total Return * 5.87% 12.70% -3.04% Ratio of Expenses ** 3.91% 3.91% 3.91% Period ended December 31, 2006 Unit Value $ 22.588231 $ 29.620681 $ 13.853319 Total Return * 9.35% 2.71% 15.43% Ratio of Expenses ** 3.91% 3.91% 3.91% Period ended December 31, 2005 Unit Value $ 20.657198 $ 28.839211 $ 12.001742 Total Return * 3.35%*** 2.74%*** 2.74%*** Ratio of Expenses ** 3.91% 3.91% 3.91% Period ended December 31, 2004 Unit Value $ 20.840862 $ 26.410043 $ 11.900897 Total Return * 5.44%*** 10.12%*** 11.32%*** Ratio of Expenses ** 3.61% 3.86% 3.65%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/T.Rowe JNL/T.Rowe JNL/Select Price Price JNL/Select Money JNL/Select Established Mid-Cap JNL/T.Rowe Balanced Market Value Growth Growth Price Value Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ------------ ------------ ----------- ------------ ------------ ----------- Lowest expense ratio Period ended December 31, 2008 Unit Value $ 23.451105 $ 14.036344 $ 14.988548 $ 19.548020 $ 28.337674 $ 9.897450 Total Return * -21.51% 1.17% -34.01% -43.41% -41.24% -41.06% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2007 Unit Value $ 29.878778 $ 13.873622 $ 22.712971 $ 34.546285 $ 48.224532 $ 16.792708 Total Return * 6.42% 3.69% 6.77% 9.01% 16.05% -0.16% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 28.076791 $ 13.379856 $ 21.272921 $ 31.689645 $ 41.556156 $ 16.819769 Total Return * 12.53% 3.48% 19.72% 12.57% 5.74% 18.83% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2005 Unit Value $ 24.951112 $ 12.930219 $ 17.768770 $ 28.151511 $ 39.302036 $ 14.154707 Total Return * 4.26% 1.69% 7.08% 5.04% 12.96% 5.09% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2004 Unit Value $ 23.932714 $ 12.715315 $ 16.594003 $ 26.801645 $ 34.792013 $ 13.468747 Total Return * 7.81%*** -0.02%*** 13.63% 8.79% 16.86% 9.56%*** Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return for portfolios with no investment activity at period end is calculated based on the total return of the underlying mutual fund less expenses that are charged directly to the separate account. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued) -----------------------------------------
JNL/T.Rowe JNL/T.Rowe JNL/Select JNL/ Price Price JNL/Select Money Select Established Mid-Cap JNL/T.Rowe Balanced Market Value Growth Growth Price Value Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ---------- ---------- ---------- ----------- ----------- ----------- Portfolio data Period ended December 31, 2008 Net Assets (in thousands) $ 432,806 $1,200,692 $ 153,537 $ 301,125 $ 309,196 $ 204,240 Units Outstanding (in thousands) 20,425 94,661 10,667 17,567 12,488 21,770 Investment Income Ratio * 2.44% 2.06% 0.04% 0.08% 0.00% 1.90% Period ended December 31, 2007 Net Assets (in thousands) $ 497,884 $ 618,006 $ 217,135 $ 558,543 $ 510,648 $ 367,321 Units Outstanding (in thousands) 18,482 48,897 9,897 18,570 12,275 22,938 Investment Income Ratio * 2.57% 4.60% 3.53% 1.07% 1.71% 2.29% Period ended December 31, 2006 Net Assets (in thousands) $ 413,630 $ 247,194 $ 165,654 $ 366,621 $ 395,854 $ 323,913 Units Outstanding (in thousands) 16,395 20,137 8,007 13,352 11,280 20,028 Investment Income Ratio * 2.69% 4.18% 3.24% 0.13% 0.80% 1.26% Period ended December 31, 2005 Net Assets (in thousands) $ 371,851 $ 129,697 $ 79,288 $ 345,756 $ 380,759 $ 254,751 Units Outstanding (in thousands) 16,635 10,933 4,555 14,267 11,678 18,573 Investment Income Ratio * 3.94% 2.72% 3.32% 0.21% 0.29% 2.00% Period ended December 31, 2004 Net Assets (in thousands) $ 347,227 $ 95,569 $ 58,415 $ 323,719 $ 357,292 $ 240,614 Units Outstanding (in thousands) 16,217 8,010 3,567 14,111 12,521 18,259 Investment Income Ratio * 0.11% 0.78% 0.48% 0.39% 0.00% 0.73%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. Independent Auditors' Report The Board of Directors of Jackson National Life Insurance Company and Contract Owners of Jackson National Separate Account I: We have audited the accompanying statements of assets and liabilities of each of the sub-accounts within Jackson National Separate Account I (Separate Account) as set forth herein as of December 31, 2008, and the related statements of operations for the year or period then ended, the statements of changes in net assets for each of the years or periods in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned at December 31, 2008, by correspondence with the transfer agent of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each sub-account within Jackson National Separate Account I as set forth herein as of December 31, 2008, and the results of their operations for the year or period then ended, the changes in their net assets for each of the years or periods in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP February 27, 2009 Jackson National Life Insurance [GRAPHIC OMITTED][GRAPHIC OMITTED] Company and Subsidiaries Consolidated Financial Statements December 31, 2008 JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2008 -------------------------------------------------------------------------------- Report of Independent Registered Public Accounting Firm 1 Consolidated Balance Sheets 2 Consolidated Income Statements 3 Consolidated Statements of Stockholder's Equity and Comprehensive Income 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Jackson National Life Insurance Company: We have audited the accompanying consolidated balance sheets of Jackson National Life Insurance Company and Subsidiaries as of December 31, 2008 and 2007, and the related consolidated income statements and the consolidated statements of stockholder's equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements. 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Jackson National Life Insurance Company and Subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008 in conformity with U.S. generally accepted accounting principles. KPMG LLP Chicago, Illinois March 13, 2009 JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE INFORMATION) ------------------------------------------------------------------------------------------------------------------------------------ DECEMBER 31, ASSETS 2008 2007 ------------------ ------------------ ------------------ ------------------ Investments: Cash and short-term investments $ 715,994 $ 642,600 Securities available for sale, at fair value: Fixed maturities (amortized cost: 2008, $38,419,522; 2007, $37,320,138) 34,305,761 37,050,644 Equities (cost: 2008, $389,516; 2007, $299,050) 343,668 315,730 Trading securities, at fair value 523,969 622,470 Commercial mortgage loans 6,376,535 5,475,604 Policy loans 841,054 829,493 Derivative instruments 970,800 776,276 Other invested assets 935,010 841,681 ------------------ ------------------ ------------------ ------------------ Total investments 45,012,791 46,554,498 Accrued investment income 496,787 455,208 Deferred acquisition costs 4,889,889 3,438,686 Deferred sales inducements 565,942 359,857 Reinsurance recoverable 1,527,403 1,024,241 Income taxes receivable from Parent 169,331 7,459 Deferred income taxes 994,874 75,609 Other assets 234,196 189,117 Separate account assets 20,902,191 29,912,139 ------------------ ------------------ ------------------ ------------------ Total assets $ 74,793,404 $ 82,016,814 ================== ================== ================== ================== LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES Policy reserves and liabilities: Reserves for future policy benefits and claims payable $ 4,091,774 $ 2,505,096 Deposits on investment contracts 35,891,064 33,323,783 Guaranteed investment contracts 1,903,276 1,950,925 Trust instruments supported by funding agreements 4,647,874 5,189,453 Federal Home Loan Bank funding agreements 1,752,399 1,403,203 Short-term borrowings from Parent - 32,020 Short-term borrowings 150,000 250,000 Long-term borrowings 288,915 270,446 Securities lending payable 127,897 225,516 Derivative instruments 1,258,036 313,603 Other liabilities 1,152,864 1,211,567 Separate account liabilities 20,902,191 29,912,139 ------------------ ------------------ ------------------ ------------------ Total liabilities 72,166,290 76,587,751 ------------------ ------------------ ------------------ ------------------ Minority interest 126,411 131,210 ------------------ ------------------ ------------------ ------------------ STOCKHOLDER'S EQUITY Common stock, $1.15 par value; authorized 50,000 shares; issued and outstanding 12,000 shares 13,800 13,800 Additional paid-in capital 2,968,985 2,934,881 Accumulated other comprehensive income (loss), net of tax of $(851,672) in 2008 and $(49,127) in 2007 (1,627,525) (91,235) Retained earnings 1,145,443 2,440,407 ------------------ ------------------ ------------------ ------------------ Total stockholder's equity 2,500,703 5,297,853 ------------------ ------------------ ------------------ ------------------ Total liabilities and stockholder's equity $ 74,793,404 $ 82,016,814 ================== ================== ================== ================== ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
CONSOLIDATED INCOME STATEMENTS (IN THOUSANDS) ------------------------------------------------------------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2008 2007 2006 ------------- ------------- -------------- ------------- ------------- -------------- Revenues Premiums $ 170,161 $ 190,300 $ 196,201 Net investment income 2,662,099 2,945,516 2,904,787 Net realized losses on investments and capital assets (1,203,234) (90,574) (57,710) Risk management activity (466,638) 36,458 (105,227) Fee income 1,069,910 1,000,661 711,584 Other income 107,763 27,783 62,532 ------------- ------------- -------------- ------------- ------------- -------------- Total revenues 2,340,061 4,110,144 3,712,167 ------------- ------------- -------------- ------------- ------------- -------------- BENEFITS AND EXPENSES Death and other policy benefits 514,148 488,280 490,527 Interest credited on deposit liabilities 1,406,066 1,409,771 1,450,048 Interest expense on trust instruments supported by funding agreements 196,175 278,604 269,577 Interest expense on Federal Home Loan Bank advances, notes and reverse repurchase agreements 71,295 66,647 52,817 Increase (decrease) in reserves, net of reinsurance 164,027 (29,437) (37,266) Commissions 739,798 796,876 663,176 General and administrative expenses 478,320 468,582 387,011 Deferral of policy acquisition costs (719,724) (777,230) (675,098) Deferral of sales inducements (113,232) (140,722) (101,525) Amortization of acquisition costs: Attributable to operations 926,903 552,626 318,443 Attributable to risk management activity (103,491) 17,182 (3,302) Attributable to net realized losses on investments (164,503) (23,142) (10,501) Amortization of deferred sales inducements: Attributable to operations 39,836 95,102 109,043 Attributable to risk management activity 59,694 15,979 (35,058) Attributable to net realized losses on investments (15,770) (2,940) (2,576) Amortization of acquired insurance - - 23,578 ------------- ------------- -------------- ------------- ------------- -------------- Total benefits and expenses 3,479,542 3,216,178 2,898,894 ------------- ------------- -------------- ------------- ------------- -------------- Pretax income (loss) before minority interest (1,139,481) 893,966 813,273 Minority interest (5,825) (22,396) (17,236) ------------- ------------- -------------- ------------- ------------- -------------- Pretax income (loss) (1,145,306) 871,570 796,037 Federal income tax expense (benefit) (172,081) 252,291 263,416 ------------- ------------- -------------- ------------- ------------- -------------- Income (loss) before extraordinary gain (973,225) 619,279 532,621 Extraordinary gain (loss), net of tax benefit of $4,651, $0 and $908 in 2008, 2007 and 2006, respectively (8,638) - 8,944 ------------- ------------- -------------- ------------- ------------- -------------- NET INCOME (LOSS) $ (981,863) $ 619,279 $ 541,565 ============= ============= ============== ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY AND COMPREHENSIVE INCOME (IN THOUSANDS) ------------------------------------------------------------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2008 2007 2006 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- COMMON STOCK, BEGINNING AND END OF YEAR $ 13,800 $ 13,800 $ 13,800 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ADDITIONAL PAID-IN-CAPITAL Beginning of year 2,934,881 2,904,276 2,854,533 Capital contributions 34,104 30,605 49,743 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- End of year 2,968,985 2,934,881 2,904,276 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Beginning of year (91,235) 110,807 263,203 Net unrealized investment losses, net of reclassification adjustment and net of tax (1,536,290) (202,042) (152,396) ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- End of year (1,627,525) (91,235) 110,807 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- RETAINED EARNINGS Beginning of year 2,440,407 2,067,128 1,734,621 Net income (loss) (981,863) 619,279 541,565 Dividends paid to stockholder (313,101) (246,000) (209,058) ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- End of year 1,145,443 2,440,407 2,067,128 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- TOTAL STOCKHOLDER'S EQUITY $ 2,500,703 $ 5,297,853 $ 5,096,011 ================ ================ ================ ================ ================ ================ YEARS ENDED DECEMBER 31, 2008 2007 2006 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Net income (loss) $ (981,863) $ 619,279 $ 541,565 Net unrealized holding losses arising during the period, net of tax of $(1,045,509) in 2008; $(102,737) in 2007 and $(86,061) in 2006 (1,987,509) (190,798) (159,828) Reclassification adjustment for losses (gains) included in net income, net of tax of $242,964 in 2008; $(6,055)in 2007 and $4,001 in 2006 451,219 (11,244) 7,432 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- COMPREHENSIVE INCOME (LOSS) $ (2,518,153) $ 417,237 $ 389,169 ================ ================ ================ ================ ================ ================ ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) ------------------------------------------------------------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2008 2007 2006 --------------- --------------- --------------- --------------- --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (981,863) $ 619,279 $ 541,565 Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities: Net realized losses on investments 1,203,234 90,574 57,710 Unrealized (gains) losses on trading portfolio 91,472 6,496 (10,937) Risk management activity 466,638 (36,458) 105,227 Interest credited on deposit liabilities 1,406,066 1,409,771 1,450,048 Interest expense on trust instruments supported by funding agreements 196,175 278,604 269,577 Interest expense on Federal Home Loan Bank funding agreements 57,928 50,178 18,147 Mortality, expense and surrender charges (321,484) (298,384) (282,931) Amortization of discount and premium on investments 28,168 65,787 76,919 Deferred income tax provision (113,368) 50,254 22,558 Change in (net of effects of contribution of subsidiary in 2006): Accrued investment income (41,579) 78,679 19,233 Deferred sales inducements and acquisition costs (90,287) (263,145) (401,934) Trading portfolio activity, net 9,592 (91,761) (25,082) Value of acquired insurance - - 23,578 Income taxes payable to Parent (161,872) 46,340 (3,166) Other assets and liabilities, net 218,797 (147,951) 50,624 --------------- --------------- --------------- --------------- --------------- --------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,967,617 1,858,263 1,911,136 --------------- --------------- --------------- --------------- --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Sales of fixed maturities and equities available for sale 2,248,000 4,810,384 5,384,731 Principal repayments, maturities, calls and redemptions: Fixed maturities available for sale 2,964,781 3,074,597 2,593,502 Commercial mortgage loans 407,640 845,333 770,151 Purchases of: Fixed maturities and equities available for sale (7,622,992) (7,542,552) (6,300,678) Commercial mortgage loans (1,310,760) (1,031,580) (1,067,685) Other investing activities 473,947 (143,207) (543,162) --------------- --------------- --------------- --------------- --------------- --------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (2,839,384) 12,975 836,859 --------------- --------------- --------------- --------------- --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Policyholders' account balances: Deposits 12,846,221 13,262,218 11,232,706 Withdrawals (9,029,910) (8,425,907) (8,095,806) Net transfers to separate accounts (2,442,002) (6,915,504) (5,363,753) Proceeds from borrowings 550,000 250,000 - Payments on borrowings (634,047) (131,831) (119,543) Proceeds from short-term borrowings from Parent (32,000) 32,000 - Payment of cash dividends to Parent (313,101) (246,000) (209,058) Capital contribution - - 24,150 --------------- --------------- --------------- --------------- --------------- --------------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 945,161 (2,175,024) (2,531,304) --------------- --------------- --------------- --------------- --------------- --------------- NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS 73,394 (303,786) 216,691 CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF YEAR 642,600 946,386 729,695 --------------- --------------- --------------- --------------- --------------- --------------- TOTAL CASH AND SHORT-TERM INVESTMENTS, END OF PERIOD $ 715,994 $ 642,600 $ 946,386 =============== =============== =============== =============== =============== =============== ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements. JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2008 -------------------------------------------------------------------------------- 1. NATURE OF OPERATIONS Jackson National Life Insurance Company (the "Company" or "Jackson") is wholly owned by Brooke Life Insurance Company ("Brooke Life" or the "Parent"), which is ultimately a wholly owned subsidiary of Prudential plc ("Prudential"), London, England. Jackson, together with its New York life insurance subsidiary, is licensed to sell group and individual annuity products (including immediate, index linked and deferred fixed annuities and variable annuities), guaranteed investment contracts ("GICs") and individual life insurance products, including variable universal life, in all 50 states and the District of Columbia. The consolidated financial statements include the accounts of the following: o Life insurers: Jackson and its wholly owned subsidiaries Jackson National Life Insurance Company of New York, Squire Reassurance Company LLC and Jackson National Life (Bermuda) LTD; o Wholly owned broker-dealer, investment management and investment advisor subsidiaries: Jackson National Life Distributors, LLC, Jackson National Asset Management, LLC, Curian Clearing, LLC and Curian Capital, LLC; o Wholly owned insurance agency: JNL Southeast Agency, LLC; o PGDS (US One) LLC ("PGDS"), a wholly owned subsidiary that provides information technology services to Jackson and certain affiliates; o Tuscany CDO, Limited ("Tuscany"), a variable interest entity created in 2001 to securitize certain fixed maturities owned by Jackson. Jackson was the primary beneficiary of Tuscany until February 2007, when Tuscany was dissolved; o Other partnerships, limited liability companies and variable interest entities in which Jackson has a controlling interest or is deemed the primary beneficiary. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions about future events that affect the amounts reported in the financial statements and the accompanying notes. Significant estimates or assumptions, as further discussed in the notes, include: 1) valuation of investments and derivative instruments, including fair values of securities deemed to be in an illiquid market and the determination of when an unrealized loss is other-than-temporary; 2) assessments as to whether certain entities are variable interest entities, the existence of reconsideration events and the determination of which party, if any, should consolidate the entity; 3) assumptions impacting future gross profits, including lapse and mortality rates, expenses, investment returns and policy crediting rates, used in the calculation of amortization of deferred acquisition costs and deferred sales inducements; 4) assumptions used in calculating policy reserves and liabilities, including lapse and mortality rates, expenses and investment returns; 5) assumptions as to future earnings levels being sufficient to realize deferred tax benefits; 6) estimates related to establishment of loan loss reserves, liabilities for lawsuits and the liability for state guaranty fund assessments; 7) assumptions and estimates associated with the Company's tax positions which impact the amount of recognized tax benefits recorded by the Company; and, 8) the value of guarantee obligations. These estimates and assumptions are based on management's best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors deemed appropriate. As facts and circumstances dictate, these estimates and assumptions may be adjusted. Since future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates, including those resulting from continuing changes in the economic environment, will be reflected in the financial statements for those periods. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CHANGES IN ACCOUNTING PRINCIPLES On January 1, 2008, the Company adopted Statement of Financial Accounting Standards ("FAS") No. 159, "Fair Value Option for Financial Assets and Financial Liabilities" ("FAS 159"), which was issued by the Financial Accounting Standards Board ("FASB") in 2007. FAS 159 allows an entity to make an irrevocable election, on specific election dates, to measure eligible items at fair value, with changes in fair value recognized in the income statement. Jackson did not elect to measure any eligible items at fair value and, as a result, adoption did not have an initial impact on the Company's consolidated financial statements. On January 1, 2008, the Company adopted FAS No. 157, "Fair Value Measurements" ("FAS 157"), which was issued by the FASB in September 2006. The Company also adopted the FAS 157 related FASB Staff Positions ("FSPs") described below. For financial statement elements measured at fair value, FAS 157 establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Prior to FAS 157, the fair value of a liability was often based on a settlement price concept, which assumed the liability was extinguished. Under FAS 157, fair value is based on the amount that would be paid to transfer a liability to a third party with the same credit standing, thereby requiring that an issuer's credit standing be considered when measuring a liability at fair value. FAS 157 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels ("Level 1, 2, and 3"). The Company applied the provisions of FAS 157 prospectively to financial assets and liabilities measured at fair value under existing GAAP. The impact of adopting FAS 157 changed the valuation of the Company's embedded derivatives, most significantly the valuation of embedded derivatives associated with certain guarantees on variable annuity contracts. The change in the valuation of embedded derivatives associated with the variable annuity guarantees resulted from a change to implied volatility with no reference to historical volatility levels. At January 1, 2008, the impact of adopting FAS 157 on net income was $54.3 million and was recognized as a change in estimate in the accompanying consolidated financial statements, where the changes were presented in the respective income statement captions. The Company's adoption of FAS 157 did not materially impact the fair values of other financial instruments. However, management expects that as a result of adoption, risk management activity for 2008 and future years is likely to be more volatile than amounts recorded in prior years due to the potential variability in the relevant inputs. See note 4 for additional information regarding FAS 157. In February 2008, the FASB issued FSP FAS No. 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13" ("FSP FAS 157-1"). FSP FAS 157-1 provides a scope exception from FAS 157 for the evaluation criteria on lease classification and capital lease measurement under FAS No. 13, "Accounting for Leases" and other related accounting pronouncements. Due to the scope exception, the Company did not apply the provisions of FAS 157 in determining the classification of and accounting for leases. Accordingly, the adoption of FSP FAS 157-1 did not have an impact on the Company's consolidated financial statements. In February 2008, the FASB issued FSP FAS No. 157-2, "Effective Date of FASB Statement No. 157" ("FSP FAS 157-2") which delays the effective date of FAS 157 to fiscal years beginning after November 15, 2008 for certain nonfinancial assets and liabilities. Examples of applicable nonfinancial assets and liabilities to which FSP FAS 157-2 applies include, but are not limited to, nonfinancial assets and liabilities initially measured at fair value in a business combination that are not subsequently remeasured at fair value and nonfinancial long-lived assets measured at fair value for impairment assessment. As a result of the issuance of FSP FAS 157-2, the Company did not apply the provisions of FAS 157 to the nonfinancial assets and liabilities within the scope of FSP FAS 157-2 and does not expect such application to have a significant impact on the Company's consolidated financial statements. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active" ("FSP FAS 157-3"). This FSP clarifies the application of FAS 157 in a market that is not active and provides an example to illustrate key considerations in the determination of the fair value of a financial asset when the market for that asset is not active. The key considerations illustrated in FSP FAS 157-3 include the use of an entity's own assumptions about future cash flows and appropriate risk-adjusted discount rates, appropriate risk adjustments for nonperformance and liquidity risks, and the reliance that an entity should place on quotes that do not reflect the result of market transactions. FSP FAS 157-3 was preceded by a press release that was jointly issued by the Office of the Chief Accountant of the SEC and the FASB staff on September 30, 2008, which provided immediate clarification on fair value accounting based on the measurement guidance of FAS 157. FSP FAS 157-3 was effective upon issuance and did not have a significant impact on the Company's consolidated financial statements. In December 2008, the FASB issued FSP 140-4 and FIN 46(R)-8, "Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities" ("FSP 140-4/FIN 46(R)-8"). This staff position amends both FASB Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" and FASB Interpretation No. 46 (revised) "Consolidation of Variable Interest Entities" ("FIN 46R") to require additional disclosures beginning in financial statements for reporting periods ending after December 15, 2008. Accordingly, any additional disclosures required by this statement are included in the accompanying notes to consolidated financial statements. In March 2008, the FASB issued FAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133" ("FAS 161"). FAS 161 amends and expands disclosures about an entity's derivative and hedging activities with the intent of providing the users of financial statements with an enhanced understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under FAS 133 and its related interpretations and how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. FAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company will incorporate the additional disclosures required by FAS 161 in the 2009 consolidated financial statements. In December 2007, the FASB issued FAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51" ("FAS 160"). FAS 160 establishes accounting and reporting standards for noncontrolling interests in a subsidiary. FAS 160 is effective for fiscal years beginning on or after December 15, 2008. FAS 160 will not have a significant effect on the Company's consolidated financial statements. Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made. There was no change in the liability for unrecognized tax benefits resulting from the implementation of FIN 48 and, therefore, the Company did not recognize a cumulative effect adjustment to the balance of retained earnings as of January 1, 2007. The adoption did not have an initial impact on the Company's consolidated financial statements. See note 12 for information on unrecognized tax benefits arising subsequent to adoption. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In April 2006, the FASB issued FSP on Interpretation 46(R)-6, "Determining the Variability to be Considered in Applying FASB Interpretation No. 46(R)" ("FIN 46(R)-6"). The FSP affects the identification of which entities are Variable Interest Entities ("VIE") through a "by design" approach in identifying and measuring the variable interests of the variable interest entity and its primary beneficiary. The requirements became effective beginning in the third quarter of 2006 and are to be applied to all new variable interest entities. The new requirements did not need to be applied to entities that were previously analyzed under FIN 46R unless a reconsideration event occurs. The adoption of this guidance did not have an initial impact on the Company's consolidated financial statements. Effective January 1, 2007, the Company adopted FAS No. 155, "Accounting for Certain Hybrid Financial Instruments" ("FAS 155"). This statement allows companies to include changes in fair value of certain hybrid financial instruments in earnings on an instrument-by-instrument basis. Further guidance issued in October 2006 provided an exemption from the provisions of FAS 133 for certain financial instruments that would have otherwise been required to recognize embedded derivatives arising as a result of prepayment risk in certain structured securities. As a result, adoption of FAS 155 did not have an initial impact on the Company's consolidated financial statements. In September 2005, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 05-1, "Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts" ("SOP 05-1"). SOP 05-1 addresses the accounting for deferred acquisition costs on internal replacements other than those described in FAS No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments." An internal replacement is defined by SOP 05-1 as a modification in product benefits, features, rights or coverages that occurs by (a) exchanging the contract for a new contract, (b) amending, endorsing or attaching a rider to the contract, or (c) electing a feature or coverage within a contract. Contract modifications resulting in a substantially changed contract should be accounted for as an extinguishment of the replaced contract, and any unamortized deferred acquisition costs, unearned revenue and deferred sales inducements must be written-off. SOP 05-1 was required to be applied prospectively and was effective for internal replacements occurring in fiscal years beginning after December 15, 2006. The adoption of SOP 05-1 did not have an initial impact on the Company's consolidated financial statements. COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss) includes all changes in stockholder's equity (except those arising from transactions with owners/stockholders) and, in the Company's case, includes net income and net unrealized gains or losses on securities. INVESTMENTS Cash and short-term investments, which primarily include high quality, non-asset-backed commercial paper, money market instruments and deposits in the Federal Home Loan Bank of Indianapolis ("FHLBI"), are carried at amortized cost. These investments have original maturities of three months or less and are considered cash equivalents for reporting cash flows. Fixed maturities consist primarily of bonds, notes, redeemable preferred stocks, asset-backed securities and structured securities. Acquisition discounts and premiums on fixed maturities are amortized into investment income through call or maturity dates using the interest method. Asset-backed and structured securities are amortized over the estimated redemption period. With regard to structured securities that are considered to be other than high quality or otherwise deemed to be high-risk, meaning the Company might not recover substantially all of its recorded investment due to unanticipated prepayment events, changes in investment yields due to changes in estimated future cash flows are accounted for on a prospective basis. The carrying value of such securities was $604.3 million and $494.2 million as of December 31, 2008 and 2007, respectively. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) All fixed maturities are classified as available for sale and are carried at fair value. For declines in fair value considered to be other-than-temporary, the amortized cost basis of fixed maturities is reduced to fair value through an impairment charge included in net realized losses on investments and capital assets. In determining whether an other-than-temporary impairment has occurred, the Company considers a number of factors, which are further detailed in note 5. Equities, which include common stocks, non-redeemable preferred stocks and shares of mutual funds purchased as seed money supporting newly established variable funds are carried at fair value. Book value of equity securities are reduced to fair value for declines in fair value considered to be other-than-temporary. Impairment charges of $84.6 million and $10.5 million are included in net realized losses on investments and capital assets in 2008 and 2007, respectively. Trading securities primarily consist of private equity securities and investments in mutual funds that support liabilities of the Company's non-qualified voluntary deferred compensation plans. Trading securities are carried at fair value with changes in value included in net investment income. During 2008, 2007 and 2006, $(85.7) million, $44.6 million and $26.3 million of investment income (loss) was recognized on trading securities held at December 31, 2008, 2007 and 2006, respectively. Commercial mortgage loans are carried at aggregate unpaid principal balances, net of unamortized discounts and premiums and an allowance for loan losses. The allowance for loan losses represents the estimated risk of loss for individual mortgages in the portfolio. Policy loans are carried at the unpaid principal balances. Real estate is carried at the lower of depreciated cost or fair value. Limited partnership investments are accounted for using the equity method. Pursuant to the guidance provided by FIN 46R, the Company has concluded that it owns interests in VIEs that represent primary beneficial interests. These VIEs are included in the consolidated financial statements and include entities structured to hold and manage investments, including real estate properties and interests in commercial loans. In addition, Jackson had investments of $72.5 million and $81.5 million as of December 31, 2008 and 2007, respectively, in debt issued by a VIE structured to hold and manage investments in commercial loans, for which it is not the primary beneficiary. Realized gains and losses on sales of investments are recognized in income at the date of sale and are determined using the specific cost identification method. The changes in unrealized gains and losses on investments classified as available for sale, net of tax and the effect of the adjustment for deferred acquisition costs and deferred sales inducements, are excluded from net income (loss) and included as a component of other comprehensive income (loss) and stockholder's equity. DERIVATIVE INSTRUMENTS, EMBEDDED DERIVATIVES AND RISK MANAGEMENT ACTIVITY The Company enters into financial derivative transactions, including swaps, spread cap options, put-swaptions, futures and options to reduce and manage business risks. These transactions manage the risk of a change in the value, yield, price, cash flows, credit quality or degree of exposure with respect to assets, liabilities or future cash flows which the Company has acquired or incurred. The Company manages the potential credit exposure for over-the-counter derivative contracts through careful evaluation of the counterparty credit standing, collateral agreements, and master netting agreements. The Company is exposed to credit-related losses in the event of nonperformance by counterparties, however, it does not anticipate nonperformance. During 2008, nonperformance by one derivative counterparty resulted in a loss on the related transactions. The related charge of $17.2 million is included as a component of net investment income. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Company generally uses freestanding derivative instruments for hedging purposes. Additionally, certain liabilities, primarily trust instruments supported by funding agreements, index linked annuities and guarantees offered in connection with variable annuities issued by the Company, contain embedded derivatives as defined by FAS 133. The Company generally does not account for such derivatives as either fair value or cash flow hedges as might be permitted if specific hedging documentation requirements of FAS 133 were followed. Financial derivatives, including derivatives embedded in certain host liabilities that have been separated for accounting and financial reporting purposes, are carried at fair value. The results from derivative financial instruments and embedded derivatives, including net payments, realized gains and losses and changes in value, are reported in risk management activity. Interest rate swap agreements generally involve the exchange of fixed and floating payments over the life of the agreement without an exchange of the underlying principal amount and are used for hedging purposes. Interest rate swaps are carried at fair value. Spread cap options, with maturities of up to five years, are used as a macro-economic hedge against declining interest rates. Jackson receives quarterly settlements based on the spread between the 2-year and the 10-year constant maturity swap rates in excess of a specified spread. Spread cap options are carried at fair value. Put-swaption contracts provide the purchaser with the right, but not the obligation, to require the writer to pay the present value of a long-term interest rate swap at future exercise dates. The Company purchases and writes put-swaptions for hedging purposes with original maturities of up to 10 years. On a net basis, put-swaptions hedge against significant upward movements in interest rates. Written put-swaptions are entered into in conjunction with associated put-swaptions purchased from the same counterparties ("linked put-swaptions"). Linked put-swaptions have identical notional amounts and strike prices, but have different underlying swap terms. Due to the right of offset, linked put-swaptions are presented at net fair value. Non-linked put-swaptions are carried at fair value. Equity index futures contracts and equity index options (including call and put options, put spreads, written calls and knock-out put options), which are used to hedge the Company's obligations associated with its index linked annuities and guarantees in variable annuity products, are carried at fair value. These annuities contain embedded options whose fair value is included in deposits on investment contracts. Credit default swaps, with maturities up to five years, represent agreements under which the Company has purchased default protection on certain underlying corporate bonds held in its portfolio. The Company does not currently sell default protection using credit default swaps or other similar derivative instruments. These contracts allow the Company to sell the protected bonds at par value to the counterparty if a defined "default event" occurs in exchange for periodic payments made by the Company for the life of the agreement. Credit default swaps are carried at fair value. Total return swaps, in which the Company receives equity returns or returns based on reference pools of assets in exchange for short-term floating rate payments based on notional amounts, are held for both hedging and investment purposes, and are carried at fair value. Cross-currency swaps, which embody spot and forward currency swaps and, in some cases, interest rate and equity index swaps, are entered into for the purpose of hedging the Company's foreign currency denominated trust instruments supported by funding agreements. Cross-currency swaps serve to hedge derivatives embedded in the funding agreements and are included at fair value. The fair value of derivatives embedded in funding agreements, as well as foreign currency translation gains and losses, are included in the carrying value of the trust instruments supported by funding agreements. Foreign currency translation gains and losses associated with funding agreement hedging activities are included in risk management activity. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DEFERRED ACQUISITION COSTS Certain costs of acquiring new business, principally commissions and certain costs associated with policy issue and underwriting, which vary with and are primarily related to the production of new business, have been capitalized as deferred acquisition costs. Deferred acquisition costs are increased by interest thereon and amortized in proportion to anticipated premium revenues for traditional life policies and in proportion to estimated gross profits for annuities and interest-sensitive life products. Unamortized deferred acquisition costs are written off when a contract is internally replaced and substantially changed, as defined in SOP 05-1. As certain fixed maturities and equities available for sale are carried at fair value, an adjustment is made to deferred acquisition costs equal to the change in amortization that would have occurred if such securities had been sold at their stated fair value and the proceeds reinvested at current yields. This adjustment is included with the change in fair value of fixed maturities and equities available for sale, net of applicable tax, that is credited or charged directly to stockholder's equity and is a component of other comprehensive income (loss). Deferred acquisition costs have been increased by $1.5 billion and $98.8 million at December 31, 2008 and 2007, respectively, to reflect this adjustment. DEFERRED SALES INDUCEMENTS Bonus interest on deferred fixed annuities and contract enhancements on index linked annuities and variable annuities have been capitalized as deferred sales inducements. Deferred sales inducements are increased by interest thereon and amortized in proportion to estimated gross profits. Unamortized deferred sales inducements are written off when a contract is internally replaced and substantially changed, as defined in SOP 05-1. As certain fixed maturities and equities available for sale are carried at fair value, an adjustment is made to deferred sales inducements equal to the change in amortization that would have occurred if such securities had been sold at their stated fair value and the proceeds reinvested at current yields. This adjustment is included with the change in fair value of fixed maturities and equities available for sale, net of applicable tax, that is credited or charged directly to stockholder's equity and is a component of other comprehensive income (loss). Deferred sales inducements have been increased by $201.0 million and $13.7 million at December 31, 2008 and 2007, respectively, to reflect this adjustment. VALUE OF ACQUIRED INSURANCE The value of acquired insurance in-force at acquisition date represents the present value of anticipated profits of the business in-force on November 25, 1986 (the date the Company was acquired by Prudential) net of amortization. The value of acquired insurance in-force is amortized in proportion to anticipated premium revenues for traditional life insurance contracts and estimated gross profits for annuities and interest-sensitive life products over a period of 20 years and was fully amortized as of December 31, 2006. FEDERAL INCOME TAXES The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as certain foreign jurisdictions. With few exceptions, the Company is generally no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2005. Jackson files a consolidated federal income tax return with Brooke Life and Jackson National Life Insurance Company of New York. Jackson National Life (Bermuda) LTD is taxed as a controlled foreign corporation of Jackson. The other affiliated subsidiary entities are limited liability companies with all of their interests owned by Jackson. Accordingly, they are not considered separate entities for income tax purposes; and therefore, are taxed as part of the operations of Jackson. Income tax expense is calculated on a separate company basis. Deferred federal income taxes arise from the recognition of temporary differences between the basis of assets and liabilities determined for financial reporting purposes and the basis determined for income tax purposes. Such temporary differences are principally related to the effects of recording certain invested assets at market value, the deferral of policy acquisition costs and the provisions for future policy benefits and expenses. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when such benefits are realized. Under GAAP, Jackson periodically tests the value of deferred tax assets for realizability. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. In determining the need for 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) a valuation allowance, the Company considers the carryback capacity of losses, reversal of existing temporary differences, estimated future taxable income and tax planning strategies. The determination of the valuation allowance for Jackson's deferred tax assets requires management to make certain judgments and assumptions regarding future operations that are based on historical experience and expectations of future performance. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken in an income tax return and provides guidance on disclosure. Additionally, FIN 48 requires, in order to recognize a benefit in the consolidated financial statements, that there must be a greater than 50 percent chance of success with the relevant taxing authority with regard to that tax position. Management's judgments are potentially subject to change given the inherent uncertainty in predicting future performance, which is impacted by such factors as policyholder behavior, competitor pricing and specific industry and market conditions. POLICY RESERVES AND LIABILITIES RESERVES FOR FUTURE POLICY BENEFITS AND CLAIMS PAYABLE: For traditional life insurance contracts, reserves for future policy benefits are determined using the net level premium method and assumptions as of the issue date or acquisition date as to mortality, interest, policy lapsation and expenses plus provisions for adverse deviations. Mortality assumptions range from 25% to 160% of the 1975-1980 Basic Select and Ultimate tables depending on policy duration. Interest rate assumptions range from 4.0% to 8.0%. Lapse and expense assumptions are based on Company experience. DEPOSITS ON INVESTMENT CONTRACTS: For the Company's interest-sensitive life contracts, liabilities approximate the policyholder's account value. For deferred annuities, the fixed option on variable annuities, guaranteed investment contracts and other investment contracts, the liability is the policyholder's account value. The liability for index linked annuities is based on two components, 1) the imputed value of the underlying guaranteed host contract, and 2) the fair value of the embedded option component of the contract. Obligations in excess of the guaranteed contract value are hedged through the use of futures contracts and call options. TRUST INSTRUMENTS SUPPORTED BY FUNDING AGREEMENTS Jackson and Jackson National Life Funding, LLC have established a European Medium Term Note program, with up to $7 billion in aggregate principal amount outstanding at any one time. Jackson National Life Funding, LLC was formed as a special purpose vehicle solely for the purpose of issuing Medium Term Note instruments to institutional investors, the proceeds of which are deposited with Jackson and secured by the issuance of funding agreements. Carrying values totaled $1.1 billion and $1.6 billion at December 31, 2008 and 2007, respectively. Jackson and Jackson National Life Global Funding have established a $10.8 billion aggregate Global Medium Term Note program. Jackson National Life Global Funding was formed as a statutory business trust, solely for the purpose of issuing Medium Term Note instruments to institutional investors, the proceeds of which are deposited with Jackson and secured by the issuance of Funding Agreements. The carrying values at December 31, 2008 and 2007 totaled $3.5 billion and $3.6 billion, respectively. Instruments issued representing obligations denominated in a foreign currency have been hedged for changes in exchange rates using cross-currency swaps. The fair value of derivatives embedded in funding agreements, as well as foreign currency transaction gains and losses, are included in the carrying value of the trust instruments supported by funding agreements. Trust instrument liabilities are adjusted to reflect the effects of foreign currency transaction gains and losses using exchange rates as of the reporting date. Foreign currency transaction gains and losses are included in risk management activity. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FEDERAL HOME LOAN BANK ADVANCES Jackson is a member of the FHLBI primarily for the purpose of participating in its mortgage-collateralized loan advance program and its short-term funding facility. Membership requires the Company to purchase and hold a minimum amount of FHLBI capital stock plus additional stock based on outstanding advances. Advances are in the form of short-term notes or funding agreements issued to FHLBI. At December 31, 2008 and 2007, Jackson held $117.5 million and $82.5 million, respectively, in FHLBI capital stock, supporting $1.9 billion and $1.7 billion, respectively, in funding agreements and short-term borrowings. SEPARATE ACCOUNT ASSETS AND LIABILITIES The assets and liabilities resulting from individual variable life and annuity contracts, which aggregated $20.8 billion and $29.8 billion at December 31, 2008 and 2007, respectively, are segregated in separate accounts. The Company receives administrative fees for managing the funds and other fees for assuming mortality and certain expense risks. Such fees are recorded as earned and included in fee income in the consolidated income statements. The Company has issued a group variable annuity contract designed for use in connection with and issued to the Company's Defined Contribution Retirement Plan. These deposits are allocated to the Jackson National Separate Account - II and aggregated $106.4 million and $153.8 million at December 31, 2008 and 2007, respectively. The Company receives administrative fees for managing the funds. These fees are recorded as earned and included in fee income in the consolidated income statements. REVENUE AND EXPENSE RECOGNITION Premiums for traditional life insurance are reported as revenues when due. Benefits, claims and expenses are associated with earned revenues in order to recognize profit over the lives of the contracts. This association is accomplished through provisions for future policy benefits and the deferral and amortization of acquisition costs. Deposits on interest-sensitive life products and investment contracts, principally deferred annuities and guaranteed investment contracts, are treated as policyholder deposits and excluded from revenue. Revenues consist primarily of the investment income and charges assessed against the policyholder's account value for mortality charges, surrenders and administrative expenses. Fee income also includes revenues related to asset management fees and 12b-1 service fees. Surrender benefits are treated as repayments of the policyholder account. Annuity benefit payments are treated as reductions to the policyholder account. Death benefits in excess of the policyholder account are recognized as an expense when incurred. Expenses consist primarily of the interest credited to policyholder deposits. Underwriting and other acquisition expenses are associated with gross profit in order to recognize profit over the life of the business. This is accomplished through deferral and amortization of acquisition costs and sales inducements. Expenses not related to policy acquisition are recognized as incurred. Investment income is not accrued on securities in default and otherwise where the collection is uncertain. Subsequent receipts of interest on such securities are generally used to reduce the cost basis of the securities. During 2008 and 2006, the Company received $18.6 million and $16.0 million, respectively, from class action settlements against certain underwriters of WorldCom securities. These settlements were recorded in other income in the year received. Jackson also terminated, at the customers' requests, a number of Medium Term Note contracts at a discounted rate during 2008. The income on these early terminations, totaling $48.8 million, is included in other income. JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2008 -------------------------------------------------------------------------------- 3. ACQUISITIONS On May 18, 2005, Brooke Life purchased, in exchange for $260.7 million in cash, 100% of the interest in Life Insurance Company of Georgia ("Life of Georgia"), a life insurance company domiciled in Georgia, from ING Groep, N.V. ("ING"). Direct costs of $4.4 million were capitalized in connection with the acquisition. On May 31, 2005, Brooke Life contributed 100% of its interest in Life of Georgia to Jackson. The acquisition expanded Jackson's life insurance base while taking advantage of Jackson's low cost structure. The results of Life of Georgia's operations have been included in these consolidated financial statements since acquisition. On December 31, 2005, Life of Georgia was merged into Jackson. The preliminary purchase price was subject to post-closing adjustments and was initially allocated to the assets acquired and liabilities assumed using management's best estimate of fair value as of the acquisition date. In 2006, an arbitrator ruled in Jackson's favor on certain purchase price adjustments. As a result of this determination and other previously settled amounts, the purchase price was reduced by $11.7 million within the purchase price allocation period. As of December 31, 2005, Jackson recorded in other assets the value of business acquired totaling $1.1 million. As a result of subsequent purchase price adjustments, this asset was reversed in 2006 and the remaining adjustment resulted in negative goodwill, which was recorded as an extraordinary gain of $8.9 million. 4. FAIR VALUE MEASUREMENTS The following chart summarizes the fair value and carrying value of Jackson's financial instruments (in thousands). The basis for determining the fair value of each instrument is also described below.
DECEMBER 31, 2008 DECEMBER 31, 2007 ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ASSETS Cash and short-term investments $ 715,994 $ 715,994 $ 642,600 $ 642,600 Fixed maturities 34,305,761 34,305,761 37,050,644 37,050,644 Equities 343,668 343,668 315,730 315,730 Trading securities 523,969 523,969 622,470 622,470 Commercial mortgage loans 6,376,535 6,139,750 5,475,604 5,755,929 Policy loans 841,054 665,817 829,493 654,991 Derivative instruments 970,800 970,800 776,276 776,276 GMIB reinsurance recoverable (1) 249,468 249,468 - - Separate account assets 20,902,191 20,902,191 29,912,139 29,912,139 LIABILITIES Annuity reserves (2) $ 30,775,340 $ 23,631,193 $ 27,123,582 $ 20,864,149 Reserves for guaranteed investment contracts 1,903,276 1,998,027 1,950,925 1,963,506 Trust instruments supported by funding agreements 4,647,874 4,797,590 5,189,453 5,215,734 Federal Home Loan Bank funding agreements 1,752,399 1,816,734 1,403,203 1,415,165 Borrowings 438,915 413,026 552,466 593,349 Derivative instruments 1,258,036 1,258,036 313,603 313,603 Separate account liabilities 20,902,191 20,902,191 29,912,139 29,912,139 MINORITY INTEREST 126,411 126,411 131,210 131,210 (1) - Reinsurance recoverable in 2008 represents the asset balance on the embedded derivative associated with the reinsurance of Jackson's GMIB product. In 2007, this embedded derivative was a liability and was included in annuity reserves in this table. (2) - Annuity reserves represent only the components of deposits on investment contracts that constitute financial instruments. Non- financial instruments are not included in either the carrying value or fair value columns.
Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's view of market assumptions in the absence of observable market information. Jackson utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. FAS 157 requires all assets and liabilities measured at fair value on a recurring basis to be classified into one of the following categories: 4. FAIR VALUE MEASUREMENTS (CONTINUED) Level 1 Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 1 securities include U.S. Treasury securities and exchange traded equity and derivative securities. Level 2 Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Most debt securities and preferred stocks that are model priced using observable inputs are classified within Level 2. Level 2 also includes freestanding and embedded derivative instruments that are priced using models with observable market inputs. Level 3 Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Level 3 securities include less liquid securities such as highly structured or lower quality asset-backed securities. Embedded derivative instruments that are valued using unobservable inputs are also included in Level 3. Because Level 3 fair values, by their nature, contain unobservable market inputs, considerable judgment may be used to determine the Level 3 fair values. Level 3 fair values represent the Company's best estimate of an amount that could be realized in a current market exchange absent actual market exchanges. In many situations, inputs used to measure the fair value of an asset or liability may fall into different levels of the fair value hierarchy. In these situations, the Company will determine the level in which the fair value falls based upon the lowest level input that is significant to the determination of the fair value. As a result, both observable and unobservable inputs may be used in the determination of fair values that the Company has classified within Level 3. The Company determines the fair values of certain financial assets and liabilities based on quoted market prices, where available. The Company also determines fair value based on estimated future cash flows discounted at the appropriate current market rate. As appropriate, fair values reflect adjustments for counterparty credit quality, the Company's credit standing, liquidity and risk margins on unobservable inputs. Where quoted market prices are not available, fair value estimates are made at a point in time, based on relevant market data, as well as the best information about the individual financial instrument. Illiquid market conditions have resulted in inactive markets for certain of the Company's financial instruments. As a result, there is generally no or limited observable market data for these assets and liabilities. Fair value estimates for financial instruments deemed to be in an illiquid market are based on judgments regarding current economic conditions, liquidity discounts, currency, credit and interest rate risks, loss experience and other factors. These fair values are estimates and involve considerable uncertainty and variability as a result of the inputs selected and may differ significantly from the values that would have been used had a ready market existed, and the differences could be material. As a result, such calculated fair value estimates may not be realizable in an immediate sale or settlement of the instrument. In addition, changes in the underlying assumptions used in the fair value measurement technique could significantly affect these fair value estimates. The following is a discussion of the methodologies used to determine fair values of the financial instruments listed in the above table. FIXED MATURITY AND EQUITY SECURITIES The fair values for fixed maturity and equity securities are determined by management using information available from independent pricing services, broker-dealer quotes, or internally derived estimates. Priority is given to publicly available prices from independent sources, when available. Securities for which the independent pricing service does not provide a quotation are either submitted to independent broker-dealers for prices or priced internally. Typical inputs used by these three pricing methods include, but are not limited to, reported trades, benchmark yields, credit spreads, liquidity premiums, and/or estimated cash flows based on default and prepayment assumptions. 4. FAIR VALUE MEASUREMENTS (CONTINUED) As a result of typical trading volumes and the lack of quoted market prices for most fixed maturities, independent pricing services will normally derive the security prices through recently reported trades for identical or similar securities, making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recently reported trades, the independent pricing services and brokers may use matrix or pricing model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at relevant market rates. Included in the pricing of asset-backed securities are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment assumptions believed to be relevant for the underlying collateral. Actual prepayment experience may vary from these estimates. Prices from independent pricing services are sometimes unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced using broker-dealer quotes, which utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these quotes are non-binding. Internally derived estimates may be used to develop a fair value for securities for which the Company is unable to obtain either a reliable price from an independent pricing service or a suitable broker-dealer quote. These estimates may incorporate Level 2 and Level 3 inputs and are generally derived using expected future cash flows, discounted at market interest rates available from market sources based on the credit quality and duration of the instrument to determine fair value. For securities that may not be reliably priced using these internally developed pricing models, a fair value may be estimated using indicative market prices. These prices are indicative of an exit price, but the assumptions used to establish the fair value may not be observable or corroborated by market observable information, and, therefore, represent Level 3 inputs. The Company performs a monthly analysis on the prices and credit spreads received from third parties to ensure that the prices represent a reasonable estimate of the fair value. This process involves quantitative and qualitative analysis and is overseen by investment and accounting professionals. Examples of procedures performed include, but are not limited to, initial and on-going review of third party pricing service methodologies, review of pricing statistics and trends, back testing recent trades and monitoring of trading volumes. In addition, the Company considers whether prices received from independent brokers represent a reasonable estimate of fair value through the use of internal and external cash flow models developed based on spreads and, when available, market indices. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly. During 2008, the Company determined that reliable market prices were no longer available on certain securities. As a result, these securities are valued using internal estimates at December 31, 2008. These securities are reflected as transfers into Level 3 during 2008. At December 31, 2008, the related securities had an amortized cost and fair value of $5,469.4 million and $4,783.3 million, respectively and were primarily asset-backed securities. An internally developed model is used to price certain asset-backed securities for which the Company is unable to obtain a reasonable price from either a third party pricing service or an independent broker quotation. The pricing model used by the Company begins with current spread levels of similarly-rated securities to determine the market discount rate for the security. Additional risk premiums for illiquidity and non-performance are incorporated, if warranted, and included in the discount rate. Cash flows, as estimated by the Company using issuer-specific default statistics and prepayment assumptions are discounted to determine an estimated fair value. The Company reviewed the independent pricing services' valuation methodologies and related inputs, and evaluated the various types of securities in its investment portfolio to determine an appropriate FAS 157 fair value hierarchy level based upon trading activity and the observability of market inputs. Based on the results of this evaluation, each price was classified into Level 1, 2, or 3. Most prices provided by independent pricing services are classified into Level 2 because the most significant inputs used in pricing the securities are market observable. 4. FAIR VALUE MEASUREMENTS (CONTINUED) Due to a general lack of transparency in the process that the brokers use to develop prices, most valuations that are based on brokers' prices are classified as Level 3. Some valuations may be classified as Level 2 if the price can be corroborated. Matrix-priced securities, primarily consisting of certain private placement debt, are classified as Level 2 as values are determined using observable market inputs. COMMERCIAL MORTGAGE LOANS Fair values are determined by discounting the future cash flows at current market interest rates. POLICY LOANS Fair values are determined using projected future cash flows discounted at current market interest rates. Projected future cash flows include assumptions regarding mortality and lapse expectations. FREESTANDING DERIVATIVE INSTRUMENTS Freestanding derivative instruments are reported on the consolidated balance sheets at fair value. Changes in fair value are included in risk management activity on the consolidated income statement. Derivatives priced using valuation models incorporate inputs that are predominantly observable in the market. Inputs used to value derivatives include, but are not limited to, interest rate swap curves, credit spreads, interest rates, counterparty credit risk, equity volatility and equity index levels. Derivative instruments classified as Level 1 include futures, which are traded on active exchanges. Derivative instruments classified as Level 2 include interest rate swaps, cross currency swaps, credit default swaps, put swaptions and equity index call and put options. The derivative valuations are determined using pricing models with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Spread cap options are classified as Level 3 as the fair values are determined through non-binding broker quotes. As noted above, due to a general lack of transparency in the process that the brokers use to develop prices, most valuations that are based on brokers' prices are classified as Level 3. Although no other freestanding derivatives are currently classified as Level 3, a derivative instrument containing Level 1 or Level 2 inputs could be classified as a Level 3 financial instrument in its entirety if it includes at least one significant Level 3 input. FAIR VALUES OF SEPARATE ACCOUNT ASSETS Separate account assets are invested in mutual funds, which are categorized as Level 1 assets. ANNUITY RESERVES Fair values for immediate annuities without mortality features, are derived by discounting the future estimated cash flows using current market interest rates for similar maturities. Fair values for deferred annuities, including equity indexed annuities, are determined using projected future cash flows discounted at the rate that would be required to transfer the liability to a willing third party. RESERVES FOR GUARANTEED INVESTMENT CONTRACTS Fair value is based on the present value of future cash flows discounted at current market interest rates. TRUST INSTRUMENTS SUPPORTED BY FUNDING AGREEMENTS Fair value is based on the present value of future cash flows discounted at current market interest rates, plus the fair value of any embedded derivatives. FEDERAL HOME LOAN BANK FUNDING AGREEMENTS Fair value of the FHLBI funding agreements is based on present value of future cash flows discounted at current market interest rates. 4. FAIR VALUE MEASUREMENTS (CONTINUED) BORROWINGS Carrying value of the short-term borrowings is considered a reasonable estimate for fair value due to the short-term maturity. Fair value of other borrowings is based on future cash flows discounted at current market interest rates. FAIR VALUES OF CERTAIN GUARANTEED BENEFITS Variable annuity contracts issued by the Company offer various guaranteed minimum death, withdrawal, income and accumulation benefits. Certain benefits, primarily non-life contingent guaranteed minimum withdrawal benefits ("GMWB"), guaranteed minimum accumulation benefits ("GMAB") and the reinsured portion of the Company's guaranteed minimum income benefits ("GMIB"), are accounted for under FAS 133. Guaranteed benefits that do not meet the requirements of FAS 133 are accounted for as insurance benefits under the American Institute of Certified Public Accountants Statement of Position 03-1 ("SOP 03-1"). Non-life contingent GMWBs and GMABs are recorded at fair value with changes in fair value recorded in risk management activity. The fair value of the reserve is based on the expectations of future fees and future benefits associated with the benefit. At inception of the contract, the Company attributes to the derivative a portion of total fees collected from the contract holder, which are then held static in future valuations. Those fees, generally referred to as the attributed fees, are set such that the present value of the attributed fees is equal to the present value of future claims expected to be paid for the benefit at the inception of the contract. In subsequent valuations, both the present value of future benefits expected to be paid and the present value of attributed fees expected to be collected are revalued based on current market conditions and policyholder behavior assumptions. The difference between each of the two components represents the fair value of the embedded derivative. Jackson's GMIBs are reinsured through an unrelated party and, due to the net settlement provisions of the reinsurance agreement, this contract meets the definition of a freestanding derivative. Accordingly, the GMIB reinsurance agreement is recorded at fair value on the Company's balance sheets, with changes in fair value recorded in risk management activity. Fair values for GMWB and GMAB embedded derivatives as well as reinsured GMIB derivatives, are calculated based upon internally developed models because active, observable markets do not exist for those items. Prior to January 1, 2008, the Company used the guidance prescribed in FAS 133 and other related accounting literature on fair value which represented the amount for which a financial instrument could be exchanged in a current transaction between knowledgeable, unrelated willing parties. However, under that accounting literature, when an estimate of fair value was made for liabilities where no market observable transactions existed for that liability or similar liabilities, market risk margins were only included in the valuation if the margin was identifiable, measurable and significant. If a reliable estimate of market risk margins was not obtainable, the present value of expected future cash flows under a risk neutral framework, discounted at a risk-adjusted rate of interest, was deemed to be the best available estimate of fair value in the circumstances. Prior to January 1, 2008, fair value was calculated based on actuarial and capital market assumptions related to projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior such as lapses, fund selection, resets and withdrawal utilization. Because of the dynamic and complex nature of these cash flows, best estimate assumptions and a stochastic process involving the generation of thousands of scenarios that assumed risk neutral returns consistent with swap rates and incorporating implied volatility data and evaluations of historical volatilities for various indices were used. Estimating these cash flows involved numerous estimates and subjective judgments including those regarding expected market rates of return, market volatility, correlations of market index returns to funds, fund performance, discount rates, utilization of the benefit by policyholders under varying conditions and policyholder lapsation. 4. FAIR VALUE MEASUREMENTS (CONTINUED) At each valuation date prior to January 1, 2008, the Company assumed expected returns based on risk-adjusted spot rates as represented by the LIBOR forward curve as of that date and market volatility as determined with reference to implied volatility and evaluations of historical volatilities for various indices. The risk-adjusted spot rates as represented by the LIBOR spot curve as of the valuation date were used to determine the present value of expected future cash flows produced in the stochastic process. GMWB obligations are relatively new in the marketplace, thus actual policyholder behavior experience is limited. As a result, estimates of future policyholder behavior are subjective and based on both internal and external data. As markets change, mature and evolve and actual policyholder behavior emerges, management continually evaluates the appropriateness of its assumptions for this component of the fair value model. Effective January 1, 2008, the FAS 157 basis fair value is also calculated using the methods previously described. However, as a result of adoption, Jackson now bases its volatility assumptions solely on implied market volatility with no reference to historical volatility levels and explicitly incorporates Jackson's own credit risk in place of the risk-adjusted rates referenced above. Volatility assumptions are now based on a weighting of available market data on implied volatility for durations up to 10 years, at which point the projected volatility is held constant. Additionally, non-performance risk is incorporated into the calculation through the use of interest rates based on a AA corporate credit curve, which approximates Jackson's own credit risk. Other risk margins required by FAS 157, particularly for market illiquidity and policyholder behavior are also incorporated into the model through the use of best estimate assumptions plus a risk margin. On a periodic basis, the Company validates the resulting fair values based on comparisons to other models and market movements. The use of the models and assumptions described above requires a significant amount of judgment. Management believes the aggregation of each of these components results in an amount that the Company would be required to transfer for a liability, or receive for an asset, to or from a willing buyer or seller, if one existed, for those market participants to assume the risks associated with the guaranteed benefits and the related reinsurance. However, the ultimate settlement amount of the liability, which is currently unknown, will likely be significantly different than the FAS 157 fair value as the Company believes settlement will be based on our best estimate assumptions rather than those best estimate assumptions plus margins for risk. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS The following table presents the Company's assets and liabilities that are carried at fair value by FAS 157 hierarchy levels, as of December 31, 2008 (in thousands):
TOTAL LEVEL 1 LEVEL 2 LEVEL 3 ----------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- ASSETS Fixed maturities $ 34,305,761 $ 5,118 $ 28,992,848 $ 5,307,795 Equities and trading securities 867,637 529,989 2,178 335,470 Derivative instruments 970,800 - 899,741 71,059 GMIB reinsurance recoverable 249,468 - - 249,468 Separate account assets (1) 20,902,191 20,902,191 - - ----------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- Total $ 57,295,857 $ 21,437,298 $ 29,894,767 $ 5,963,792 =================================================================================== =================================================================================== LIABILITIES Embedded derivative instruments $ 5,978,422 $ - $ 4,854,475 $ 1,123,947 Derivative instruments 1,258,036 14,013 1,141,437 102,586 MINORITY INTEREST 125,130 32,390 - 92,740 ----------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- Total $ 7,361,588 $ 46,403 $ 5,995,912 $ 1,319,273 =================================================================================== =================================================================================== (1) Pursuant to the conditions set forth in SOP 03-1, the value of the separate account liabilities is set equal to the value of the separate account assets. (2) Includes the embedded derivative liabilities related to GMWB reserves and equity indexed annuities.
4. FAIR VALUE MEASUREMENTS (CONTINUED) ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) The table below provides a rollforward from January 1, 2008 to December 31, 2008 for the financial instruments for which significant unobservable inputs (Level 3) are used in the fair value measurement on a recurring basis. Gains and losses in the table below include changes in fair value due partly to observable and unobservable factors. In addition, the Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments hedging the relevant risks may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the impact of the derivative instruments reported in Level 3 below may vary significantly from the total income effect.
TOTAL REALIZED/UNREALIZED GAINS (LOSSES) INCLUDED IN ------------------------------- ------------------------------- (in thousands) FAIR VALUE AS OF OTHER PURCHASES, TRANSFERS IN FAIR VALUE JANUARY 1, 2008 NET INCOME COMPREHENSIVE ISSUANCES AND AND/OR OUT OF AS OF DECEMBER INCOME SETTLEMENTS LEVEL 3 31, 2008 --------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------- ASSETS Fixed maturities $ 2,465,994 (361,528) (597,879) 144,839 3,656,369 $ 5,307,795 Equities and trading securities 334,297 (6,778) 4 7,947 - 335,470 Derivative instruments 229,887 25,829 - (184,657) - 71,059 GMIB reinsurance recoverable 38,502 210,966 - - - 249,468 LIABILITIES Embedded derivative instruments $ 242,707 881,240 - - - $ 1,123,947 Derivative instruments (11,349) 93,761 - - 20,174 102,586 MINORITY INTEREST 94,411 8,127 - (9,798) - 92,740
The portion of gains and losses included in net income or other comprehensive income attributable to the change in unrealized gains and losses related to financial statement instruments still held at December 31, 2008 are as follows (in thousands): DECEMBER 31, 2008 ASSETS Fixed maturities $ (597,575) Equities and trading securities (11,379) Derivative instruments (25,168) Reinsurance recoverable 210,966 LIABILITIES Embedded derivative instruments $ (881,240) Derivative instruments (113,935) MINORITY INTEREST 8,126
5. INVESTMENTS Investments are comprised primarily of fixed-income securities, primarily publicly traded industrial, utility and government bonds, asset-backed securities and mortgage loans. Asset-backed securities include mortgage-backed and other structured securities. The Company generates the majority of its general account deposits from interest-sensitive individual annuity contracts, life insurance products and guaranteed investment contracts on which it has committed to pay a declared rate of interest. The Company's strategy of investing in fixed-income securities and loans aims to ensure matching of the asset yield with the interest-sensitive liabilities and to earn a stable return on its investments. 5. INVESTMENTS (CONTINUED) FIXED MATURITIES The following table sets forth fixed maturity investments at December 31, 2008, classified by rating categories as assigned by nationally recognized statistical rating organizations ("NRSRO"), the National Association of Insurance Commissioners ("NAIC"), or if not rated by such organizations, the Company's affiliated investment advisor. At December 31, 2008, the carrying value of investments rated by the Company's affiliated investment advisor totaled $218.5 million. For purposes of the table, if not otherwise rated higher by a NRSRO, NAIC Class 1 investments are included in the A rating; Class 2 in BBB; Class 3 in BB and Classes 4 through 6 in B and below. PERCENT OF TOTAL FIXED MATURITIES INVESTMENT RATING DECEMBER 31, 2008 ---------------------- AAA 25.8% AA 7.9% A 28.1% BBB 32.8% ---------------------- ---------------------- Investment grade 94.6% ---------------------- BB 4.0% B and below 1.4% ---------------------- Below investment grade 5.4% ---------------------- Total fixed maturities 100.0% ====================== The amortized cost and carrying value of fixed maturities in default that were anticipated to be income producing when purchased were $4.3 million and $4.2 million, respectively, at December 31, 2008. The amortized cost and carrying value of fixed maturities that have been non-income producing for the 12 months preceding December 31, 2008 were $0 and $3 thousand, respectively, and for the 12 months preceding December 31, 2007 were zero and $0.1 million, respectively. The cost or amortized cost, gross unrealized gains and losses and fair value of available for sale fixed maturities and equities were as follows (in thousands):
COST OR GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR DECEMBER 31, 2008 COST GAINS LOSSES VALUE --------------- --------------- ---------------- --------------- Fixed Maturities U.S. Treasury securities $ 4,618 $ 501 $ - $ 5,119 Foreign governments 1,337 513 - 1,850 Public utilities 3,330,471 34,805 223,085 3,142,191 Corporate securities 23,004,416 158,542 2,861,785 20,301,173 Asset-backed securities 12,078,680 209,923 1,433,175 10,855,428 --------------- --------------- ---------------- --------------- --------------- ---------------- --------------- Total fixed maturities $ 38,419,522 $ 404,284 $ 4,518,045 $ 34,305,761 =============== =============== ================ =============== Equities $ 389,516 $ 5,347 $ 51,195 $ 343,668 =============== =============== ================ ===============
5. INVESTMENTS (CONTINUED)
COST OR GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR DECEMBER 31, 2007 COST GAINS LOSSES VALUE --------------- --------------- ---------------- --------------- Fixed Maturities U.S. Treasury securities $ 11,664 $ 376 $ - $ 12,040 Foreign governments 1,339 343 - 1,682 Public utilities 2,066,395 50,330 17,537 2,099,188 Corporate securities 23,639,876 417,174 534,342 23,522,708 Asset-backed securities 11,600,864 131,850 317,688 11,415,026 --------------- --------------- ---------------- --------------- --------------- --------------- ---------------- --------------- Total fixed maturities $37,320,138 $ 600,073 $ 869,567 $37,050,644 =============== =============== ================ =============== Equities $ 299,050 $ 17,260 $ 580 $ 315,730 =============== =============== ================ ===============
The amortized cost and fair value of fixed maturities at December 31, 2008, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities where securities can be called or prepaid with or without early redemption penalties. AMORTIZED COST FAIR VALUE --------------- ---------------- Due in 1 year or less $ 991,361 $ 962,818 Due after 1 year through 5 years 9,801,031 9,105,800 Due after 5 years through 10 years 11,834,974 10,169,679 Due after 10 years through 20 years 2,509,731 2,201,234 Due after 20 years 1,203,745 1,010,802 Asset-backed securities 12,078,680 10,855,428 --------------- ---------------- Total $ 38,419,522 $ 34,305,761 =============== ================ U.S. Treasury securities with a carrying value of $4.0 million at both December 31, 2008 and 2007 were on deposit with regulatory authorities, as required by law in various states in which business is conducted. Asset-backed securities include investments in mortgage-backed securities which are collateralized by residential mortgage loans and are neither explicitly nor implicitly guaranteed by U.S. government agencies ("non-agency mortgage-backed securities"). The Company's non-agency mortgage-backed securities at December 31, 2008 include investments in securities backed by prime, Alt-A, and subprime loans as follows (in thousands):
COST OR GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR DECEMBER 31, 2008 COST GAINS LOSSES VALUE -------------- --------------- ---------------- --------------- Prime $ 1,940,054 $ 14,343 $ 288,964 $ 1,665,433 Alt-A 1,124,057 25,081 226,179 922,959 Subprime 494,948 935 78,631 417,252 -------------- --------------- ---------------- -------------- --------------- ---------------- --------------- Total non-agency RMBS $ 3,559,059 $ 40,359 $ 593,774 $ 3,005,644 ============== =============== ================ ===============
5. INVESTMENTS (CONTINUED) The Company defines its exposure to non-agency residential mortgage loans as follows. Prime loan-backed securities are collateralized by mortgage loans made to the highest rated borrowers. Alt-A loan-backed securities are collateralized by mortgage loans made to borrowers who lack credit documentation or necessary requirements to obtain prime borrower rates. Subprime loan-backed securities are collateralized by mortgage loans made to borrowers that have a FICO score of 680 or lower. 93% of the Company's investments in Alt-A related mortgage-backed securities are rated investment grade by at least one NRSRO. 93% of the Company's investments in subprime related mortgage-backed securities are rated triple-A by at least one NRSRO. In 2008, the Company recorded other-than-temporary impairment charges of $47.0 million, $255.0 million, and $7.3 million on securities backed by prime, Alt-A and subprime loans, respectively. No other-than-temporary impairment charges were recorded on securities backed by prime, Alt-A or subprime loans during either 2007 or 2006. Asset-backed securities also include investments in securities which are collateralized by commercial mortgage loans ("CMBS"). The amortized cost and fair value of the Company's investment in CMBS is $3.2 billion and $2.6 billion, respectively, at December 31, 2008. 99% of these investments are rated investment grade by at least one NRSRO. No other-than-temporary impairment charges were recorded on CMBS during 2008. Jackson recorded $4.2 million and $0.4 million in other-than-temporary impairment charges on CMBS during 2007 and 2006, respectively. Corporate securities include direct investments in below investment grade syndicated bank loans. Unlike most corporate debentures, syndicated bank loans are collateralized by specific tangible assets of the borrowers. As such, investors in these securities that become impaired have historically experienced less severe losses versus corporate bonds. The amortized cost and fair value of the Company's direct investments in bank loans is $549.2 million and $441.8 million, respectively, at December 31, 2008. The fair value and the amount of gross unrealized losses included in accumulated other comprehensive income (loss) in stockholder's equity were as follows (in thousands):
------------------------------------------------------------------------------------------------------------------------------ LESS THAN 12 MONTHS 12 MONTHS OR LONGER TOTAL ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ GROSS GROSS GROSS UNREALIZED UNREALIZED UNREALIZED DECEMBER 31, 2008 LOSSES FAIR VALUE LOSSES FAIR VALUE LOSSES FAIR VALUE ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Public utilities $ 147,809 $ 1,925,535 $ 75,276 $ 426,786 $ 223,085 $ 2,352,321 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Corporate securities 1,574,476 11,778,214 1,287,309 4,435,724 2,861,785 16,213,938 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Asset-backed securities 766,457 3,251,281 666,718 2,883,592 1,433,175 6,134,873 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Subtotal - fixed maturities 2,488,742 16,955,030 2,029,303 7,746,102 4,518,045 24,701,132 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Equities 48,797 127,534 2,398 7,676 51,195 135,210 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Total temporarily impaired ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ securities $2,537,539 $17,082,564 $2,031,701 $ 7,753,778 $4,569,240 $ 24,836,342 -------------------------------================================-==============-===============-==============-================ -------------------------------================================-==============-===============-==============-================
------------------------------------------------------------------------------------------------------------------------------ LESS THAN 12 MONTHS 12 MONTHS OR LONGER TOTAL ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ GROSS GROSS GROSS UNREALIZED UNREALIZED UNREALIZED DECEMBER 31, 2007 LOSSES FAIR VALUE LOSSES FAIR VALUE LOSSES FAIR VALUE ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Public utilities $ 885 $ 226,092 $ 16,652 $ 666,783 $ 17,537 $ 892,875 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Corporate securities 225,670 5,771,382 308,672 7,277,319 534,342 13,048,701 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Asset-backed securities 177,235 3,358,791 140,453 3,154,953 317,688 6,513,744 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Subtotal - fixed maturities 403,790 9,356,265 465,777 11,099,055 869,567 20,455,320 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Equities 580 68,174 - - 580 68,174 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Total temporarily impaired ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ securities $ 404,370 $ 9,424,439 $ 465,777 $11,099,055 $ 870,147 $ 20,523,494 -------------------------------================================-==============-===============-==============-================ -------------------------------================================-==============-===============-==============-================
5. INVESTMENTS (CONTINUED) The Company periodically reviews its fixed maturities and equities on a case-by-case basis to determine if any decline in fair value to below cost or amortized cost is other-than-temporary. Factors considered in determining whether a decline is other-than-temporary include the length of time a security has been in an unrealized loss position, reasons for the decline in value, expectations for the amount and timing of a recovery in fair value and the Company's intent and ability to hold a security to recovery in fair value. If it is determined that a decline in fair value of an investment is temporary, the decline is recorded as an unrealized loss in accumulated other comprehensive income (loss) in stockholder's equity. If the decline is considered to be other-than-temporary, a realized loss is recognized in the consolidated income statements. Generally, securities with fair values that are less than 80% of amortized cost and other securities the Company determines are underperforming or potential problem securities are subject to regular review. To facilitate the review, securities with significant declines in value, or where other objective criteria evidencing credit deterioration have been met, are included on a watch list. Among the criteria for securities to be included on a watch list are: credit deterioration that has led to a significant decline in value of the security; a significant covenant related to the security has been breached; or an issuer has filed or indicated a possibility of filing for bankruptcy, has missed or announced it intends to miss a scheduled interest or principal payment, or has experienced a specific material adverse change that may impair its creditworthiness. In performing these reviews, the Company considers the relevant facts and circumstances relating to each investment and must exercise considerable judgment in determining whether a security is other-than-temporarily impaired. Assessment factors include judgments about an obligor's current and projected financial position, an issuer's current and projected ability to service and repay its debt obligations, the existence of, and realizable value of, any collateral backing obligations, the macro-economic and micro-economic outlooks for specific industries and issuers. Assessing the duration of asset-backed securities can also involve assumptions regarding underlying collateral such as prepayment rates, default and recovery rates, and third-party servicing capabilities. Among the specific factors considered are whether the decline in fair value results from a change in the credit quality of the security itself, or from a downward movement in the market as a whole, the likelihood of recovering the carrying value based on the near term prospects of the issuer and the Company's ability and intent to hold the security until such a recovery may occur. Unrealized losses that are considered to be primarily the result of market conditions are usually determined to be temporary, e.g., minor increases in interest rates, unusual market illiquidity or volatility or industry-related events, and where the Company also believes there exists a reasonable expectation for recovery in the near term and, furthermore, has the intent and ability to hold the investment until maturity or the market recovery. To the extent factors contributing to impairment losses recognized affect other investments, such investments are also reviewed for other-than-temporary impairment and losses are recorded when appropriate. In addition to the review procedures described above, investments in structured securities where market prices are depressed are subject to a rigorous review of their future estimated cash flows, including expected and stress case scenarios, to identify potential shortfalls in contractual payments. Even in the case of severely depressed market values on structured securities, the Company places significant importance on the results of its cash flow testing and its ability and intent to hold these securities until their fair values recover when reaching other-than-temporary impairment conclusions with regard to these securities. Impairment charges are generally recorded on structured securities when the Company forecasts a contractual payment shortfall. The Company applies the provisions of EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets" ("EITF 99-20") when evaluating whether impairments on other than high quality asset-backed securities are other-than-temporary. In general, the Company considers an asset-backed security as other than high quality if it is not rated investment grade by at least one NRSRO. The Company regularly updates estimates of cash flows on impaired other than high quality asset-backed securities and, in accordance with EITF 99-20, if there has been an adverse change, an impairment charge is recorded in the consolidated income statement. 5. INVESTMENTS (CONTINUED) In 2008, the impairment model described in EITF 99-20 was modified by FASB Staff Position EITF 99-20-1 to make its impairment model more consistent with FAS 115, Accounting for Certain Investments in Debt and Equity Securities. This modification eliminated EITF 99-20's exclusive reliance on "market participant" estimates of future cash flows used in determining whether there has been a probable adverse change when assessing whether an other-than-temporary impairment has occurred. The Company has applied this new guidance effective in the fourth quarter of 2008. There are inherent uncertainties in assessing the fair values assigned to the Company's investments and in determining whether a decline in fair value is other-than-temporary. The Company's review of fair value involves several criteria including economic conditions, credit loss experience, other issuer-specific developments and future cash flows. These assessments are based on the best available information at the time. Factors such as market liquidity, the widening of bid/ask spreads and a change in the cash flow assumptions can contribute to future price volatility. If actual experience differs negatively from the assumptions and other considerations used in the consolidated financial statements, unrealized losses currently in accumulated other comprehensive income (loss) may be recognized in the consolidated income statement in future periods. The Company currently intends to hold available for sale securities with unrealized losses not considered other-than-temporary until they mature or recover in value. However, if the specific facts and circumstances surrounding an individual security, or the outlook for its industry sector change, the Company may sell the security prior to its maturity or recovery and realize a loss. Based on ratings by NRSROs, of the total carrying value for fixed maturities in an unrealized loss position at December 31, 2008, 79% were investment grade, 6% were below investment grade and 15% were not rated. Unrealized losses from fixed maturities that were below investment grade or not rated represented approximately 24% of the aggregate gross unrealized losses on available for sale fixed maturities. Corporate securities in an unrealized loss position were diversified across industries. As of December 31, 2008, the industries representing the larger unrealized losses included energy (13% of fixed maturities gross unrealized losses) and financial institutions and services (12%). The largest unrealized loss related to a single corporate obligor was $93.5 million at December 31, 2008. The amount of gross unrealized losses for fixed maturities in a loss position by maturity date of the fixed maturities as of December 31, 2008 were as follows (in thousands): Less than one year $ 30,650 One to five years 748,940 Five to ten years 1,758,201 More than ten years 547,079 Asset-backed securities 1,433,175 ------------------ Total gross unrealized losses $ 4,518,045 ================== COMMERCIAL MORTGAGE LOANS Commercial mortgage loans of $6.4 billion and $5.5 billion at December 31, 2008 and 2007, respectively, are reported net of an allowance for loan losses of $16.0 million and $13.4 million at each date, respectively. At December 31, 2008, mortgage loans were collateralized by properties located in 39 states. Jackson's mortgage loan portfolio does not include single-family residential mortgage loans, and is therefore not exposed to the risk of defaults associated with residential subprime mortgage loans. 5. INVESTMENTS (CONTINUED) SECURITIZATIONS In November 2003, Jackson executed the Piedmont CDO Trust ("Piedmont") securitization transaction. In this transaction, Jackson contributed $1,159.6 million of asset-backed securities, ultimately to Piedmont, which issued several classes of debt to acquire such securities. The transaction was recorded as a sale; however, Jackson retained beneficial interests in the contributed asset-backed securities of approximately 80% by acquiring certain securities issued by Piedmont. Piedmont is a Qualified Special Purpose Entity and accordingly, is not consolidated in the accompanying financial statements. Jackson's carrying value in securities issued by Piedmont totaled $494.0 million and $546.2 million at December 31, 2008 and 2007, respectively, and was reported in asset-backed securities. OTHER INVESTED ASSETS Other invested assets primarily include investments in limited partnerships and real estate. Investments in limited partnerships have carrying values of $741.0 million and $651.1 million at December 31, 2008 and 2007, respectively. Real estate totaling $135.8 million and $118.9 million at December 31, 2008 and 2007, respectively, includes foreclosed properties with a book value of $12.9 million and $10.9 million at December 31, 2008 and 2007, respectively. In 2001, Jackson acquired a $71.3 million debt interest in a limited purpose entity, SERVES 2001-6 ("SERVES 2") formed to pass through leveraged investment returns based on the performance of an underlying reference pool of syndicated bank loans totaling up to $400.0 million. Jackson's interest represented 95% of the capital structure of the entity. At acquisition, the Company performed an analysis, which produced return scenarios based on various assumptions for the reference pool, including spread income, default and recovery ratios and holding period appreciation/depreciation, to determine whether the structure was a variable interest entity and, if so, whether Jackson was the primary beneficiary. Based on the results of this analysis, the Company concluded that SERVES 2 was a VIE and Jackson was the primary beneficiary. This structure is consolidated by Jackson. As a result of this consolidation at December 31, 2008, the underlying assets of $70.5 million and net liabilities of $55.4 million have been included in Jackson's consolidated financial statements. At December 31, 2007, the underlying assets of $84.8 million and net liabilities of $13.5 million were included in Jackson's consolidated financial statements. The creditors of the entity do not have recourse to the general credit of Jackson. In 2004, Jackson acquired a $47.5 million debt interest in a limited purpose entity, SERVES 2004-2 ("SERVES 3"), formed to pass through leveraged investment returns based on the performance of an underlying reference pool of syndicated bank loans totaling up to $300.0 million. Jackson's interest represented 95% of the capital structure of the entity. At acquisition, the Company performed an analysis, which produced return scenarios based on various assumptions for the reference pool, including spread income, default and recovery ratios and holding period appreciation/depreciation, to determine whether the structure was a variable interest entity and, if so, whether Jackson was the primary beneficiary status. Based on the results of this initial analysis, the Company concluded that SERVES 3 was a VIE and that Jackson was not the primary beneficiary. Thus, the Company's investment was reported at the fair value of this debt instrument. During 2008, Jackson entered into "Option Put and Forbearance Agreements" with the counterparty to SERVES 2 and SERVES 3 entities in exchange for the counterparty forbearing its right to initiate forced liquidations of the entities under certain market value triggers. The support provided by the agreements could potentially expose Jackson to maximum losses of $170.0 million and $148.0 million for SERVES 2 and SERVES 3, respectively, if circumstances allowed the forbearance period to cease. Jackson believes that, so long as the forbearance period continues, the risk of loss under the agreements is remote. As a result of the additional exposure to SERVES 3 upon entering into the "Option Put and Forbearance Agreement", Jackson determined during 2008 that it is the primary beneficiary of SERVES 3 and, accordingly, consolidated SERVES 3 in its financial statements. As a result of this consolidation, Jackson recognized an extraordinary loss of $8.6 million as the value of the net assets held by SERVES 3 were lower than the value of Jackson's previous net holdings in SERVES 3. The accompanying consolidated financial statements include the underlying assets of $51.7 million and net liabilities of $54.2 million of this entity. The creditors of SERVES 3 do not have recourse to the general credit of Jackson. 5. INVESTMENTS (CONTINUED) In 2006 and 2008, Jackson acquired $25.2 million and $40.0 million of debt interests, respectively, in a limited purpose entity, SERVES 2006-1 ("SERVES 4"), formed to pass through leveraged investment returns based on the performance of an underlying reference pool of syndicated bank loans totaling up to $500.0 million. At each acquisition date, the Company performed an analysis, which produced return scenarios based on various assumptions for the reference pool, including spread income, default and recovery ratios, and holding period appreciation/depreciation, to determine whether the structure was a variable interest entity and, if so, whether Jackson was the primary beneficiary. Based on the results of this analysis, the Company concluded that SERVES 4 was a VIE and that Jackson was not the primary beneficiary. Thus, the Company's investment is reported at the fair value of this debt instrument. DERIVATIVE INSTRUMENTS The fair value of freestanding derivative instruments reflects the estimated amounts, net of payment accruals, that the Company would receive or pay upon sale or termination of the contracts at the reporting date. With respect to swaps, spread cap options and put-swaptions, the notional amount represents the stated principal balance used as a basis for calculating payments. With respect to futures and options, the contractual amount represents the market exposure of open positions. A summary of the aggregate contractual or notional amounts and fair values of freestanding derivative instruments outstanding is as follows (in thousands):
------------------------------------------------------------------------------------------------------------------ DECEMBER 31, 2008 ------------------------------------------------------------------------------------------------------------------ ASSETS LIABILITIES ------------------------------------------------------------------------------------------------------------------ CONTRACTUAL/ CONTRACTUAL/ NET NOTIONAL FAIR NOTIONAL FAIR FAIR AMOUNT VALUE AMOUNT VALUE VALUE ------------------------------------------------------------------------------------------------------------------ Cross-currency swaps $ 644,807 $ 149,312 $ 314,033 $ (67,209) $ 82,103 Credit default swaps 45,000 305 255,000 (25,818) (25,513) Equity index call options 1,442,100 10,314 6,897 (301) 10,013 Equity index put options 9,450,000 527,435 - - 527,435 Spread cap options 4,000,000 71,059 - - 71,059 Put-swaptions 41,500,000 31,416 - - 31,416 Futures - - 661,063 (14,012) (14,012) Total return swaps - - 700,000 (102,587) (102,587) Interest rate swaps 2,450,000 180,959 6,490,000 (1,048,109) (867,150) Total $ 59,531,907 $ 970,800 $ 8,426,993 $ (1,258,036) $ (287,236) --------------------------================--================--================--================--================ --------------------------================--================--================--================--================
5. INVESTMENTS (CONTINUED)
DECEMBER 31, 2007 ASSETS LIABILITIES ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- CONTRACTUAL/ CONTRACTUAL/ NET NOTIONAL FAIR NOTIONAL FAIR FAIR AMOUNT VALUE AMOUNT VALUE VALUE ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Cross-currency swaps $ 1,198,115 $ 230,759 $ - $ - $ 230,759 Credit default swaps 6,000 287 40,000 (797) (510) Equity index call options 1,038,700 93,984 22,718 (17,130) 76,854 Equity index put options 7,250,000 97,973 - - 97,973 Spread cap options 10,000,000 229,887 - - 229,887 Put-swaptions 51,000,000 53,160 2,000,000 (1) 53,159 Futures - - 738,600 (10,125) (10,125) Total return swaps 450,000 11,349 - - 11,349 Interest rate swaps 3,400,000 58,877 7,140,000 (285,551) (226,674) ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total $ 74,342,815 $ 776,276 $ 9,941,318 $ (313,603) $ 462,673 ================ ================ ================ ================ ================ ================ ================ ================ ================ ================
SECURITIES LENDING The Company has entered into securities lending agreements with an agent bank whereby blocks of securities are loaned to third parties, primarily major brokerage firms. As of December 31, 2008 and 2007, the estimated fair value of loaned securities was $112.1 million and $215.2 million, respectively. The agreements require a minimum of 102 percent of the fair value of the loaned securities to be held as collateral, calculated on a daily basis. To further minimize the credit risks related to this program, the financial condition of counterparties is monitored on a regular basis. Cash collateral received, in the amount of $127.9 million and $225.5 million at December 31, 2008 and 2007, respectively, was invested by the agent bank and included in short-term investments of the Company. Securities lending payable is included in liabilities for cash collateral received. Securities lending transactions are used to generate income. Income and expenses associated with these transactions are reported as net investment income. 6. INVESTMENT INCOME, RISK MANAGEMENT ACTIVITY AND REALIZED GAINS AND LOSSES The sources of net investment income by major category were as follows (in thousands): YEARS ENDED DECEMBER 31, 2008 2007 2006 ------------- ------------- --------------- ------------- ------------- --------------- Fixed maturities $2,283,388 $2,320,597 $2,363,953 Commercial mortgage loans 347,483 328,830 329,047 Limited partnerships 10,618 177,941 120,320 Other investment income 85,555 158,062 137,363 ------------- ------------- --------------- ------------- ------------- --------------- Total investment income 2,727,044 2,985,430 2,950,683 Less investment expenses (64,945) (39,914) (45,896) ------------- ------------- --------------- ------------- ------------- --------------- Net investment income $2,662,099 $2,945,516 $2,904,787 ============= ============= =============== ============= ============= =============== 6. INVESTMENT INCOME, RISK MANAGEMENT ACTIVITY AND REALIZED GAINS AND LOSSES (CONTINUED) Risk management activity, including gains (losses) and change in fair value of derivative instruments and embedded derivatives, was as follows (in thousands): YEARS ENDED DECEMBER 31, 2008 2007 2006 ------------ ----------- ---------- ------------ ----------- ---------- Interest rate swaps $ (790,029) $ (167,141) $ 106,907 Put-swaptions (20,493) 33,710 (10,572) Futures 353,607 14,382 (40,993) Equity index call options (103,769) (850) 33,460 Equity index put options 760,135 31,439 (64,046) Total return swaps (91,138) (9,180) 10,486 Spread cap options 76,414 194,444 - Fixed index annuity embedded derivatives 262,028 (27,623) (154,696) Credit default swaps (34,845) (653) 1,447 Variable annuity embedded derivatives (878,548) (32,070) 12,780 ------------ ----------- ---------- ------------ ----------- ---------- Risk management activity $ (466,638) $ 36,458 $(105,227) ============ =========== ========== ============ =========== ========== Net realized gains (losses) on investments and capital assets were as follows (in thousands): YEARS ENDED DECEMBER 31, 2008 2007 2006 ------------ ----------- ---------- ------------ ----------- ---------- Sales of fixed maturities Gross gains $ 51,981 $ 128,634 $ 96,911 Gross losses (320,378) (163,380) (113,800) Sales of equities Gross gains 6,078 261 7,796 Gross losses (27,223) (44) (1,562) Sales of capital assets - 4,350 - Impairment losses (913,692) (60,395) (47,055) ------------ ----------- ---------- ------------ ----------- ---------- Total $(1,203,234) $ (90,574) $ (57,710) ============ =========== ========== ============ =========== ========== Net realized losses on investments, net of amounts allocated to minority interest, totaled $1,203.9 million, $93.1 million and $66.7 million in 2008, 2007 and 2006, respectively. JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2008 -------------------------------------------------------------------------------- 7. VALUE OF ACQUIRED INSURANCE The value of acquired insurance in-force at acquisition date represents the present value of anticipated profits of the business in-force on November 25, 1986 (the date the Company was acquired by Prudential). The value of acquired insurance in-force was determined by using assumptions as to interest, persistency and mortality. Profits were then discounted to arrive at the value of the insurance in-force. The value of acquired insurance in-force was fully amortized as of December 31, 2006. The amortization of acquired insurance was as follows (in thousands): 2006 --------------- --------------- Value of acquired insurance: Balance, beginning of year $ 23,578 Interest, at rates varying from 6.5% to 9.5% 1,108 Amortization (24,686) --------------- --------------- Balance, end of year $ - =============== =============== 8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES The Company issues variable contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contract holder (traditional variable annuities). The Company also issues variable annuity and life contracts through separate accounts where the Company contractually guarantees to the contract holder (variable contracts with guarantees) either a) return of no less than total deposits made to the contract adjusted for any partial withdrawals, b) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return, or c) the highest contract value on a specified anniversary date adjusted for any withdrawals following the contract anniversary. These guarantees include benefits that are payable in the event of death (GMDB), annuitization (GMIB), at specified dates during the accumulation period (GMWB) or at the end of a specified period (GMAB). The assets supporting the variable portion of both traditional variable annuities and variable contracts with guarantees are carried at fair value and reported as summary total separate account assets with an equivalent summary total reported for separate account liabilities. Amounts assessed against the contract holders for mortality, administrative, and other services are included in revenue. Changes in liabilities for minimum guarantees are included in increase in reserves, net of reinsurance in the consolidated income statement, with the exception of changes in embedded derivatives, which are included in risk management activity. Separate account net investment income, net investment gains and losses, and the related liability changes are offset within the same line item in the consolidated income statements. 8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES (CONTINUED) At December 31, 2008 and 2007, the Company had variable contracts with guarantees, where net amount at risk ("NAR") is the amount of guaranteed benefit in excess of current account value, as follows (dollars in millions):
DECEMBER 31, 2008 Period Weighted until Minimum Account Net Amount Average Expected Return Value at Risk Attained Age Annuitization ------------ ----------- ------------ ------------ ----------- ------------ ----------- ------------ ------------ ----------- Return of net deposits plus a minimum return GMDB 0-5% $ 15,907.9 $ 7,285.1 64.2 years GMWB - Premium only 0-5% $ 3,401.1 $ 1,019.1 GMWB - For life 0-5% $ 596.9 $ 200.2 GMAB - Premium only 0% $ 16.2 $ 6.8 Highest specified anniversary account value minus withdrawals post-anniversary GMDB $ 3,330.1 $ 1,807.3 62.5 years GMWB - Highest anniversary only $ 2,112.7 $ 1,261.6 GMWB - For life $ 1,160.0 $ 661.4 Combination net deposits plus minimum return, highest specified anniversary account value minus withdrawals post-anniversary GMDB 0-5% $ 1,526.1 $ 869.3 64.7 years GMIB 0-6% $ 1,965.3 $ 1,107.4 6.6 years GMWB - For life 0-5% $ 4,067.6 $ 2,063.0
DECEMBER 31, 2007 Period Weighted until Minimum Account Net Amount Average Expected Return Value at Risk Attained Age Annuitization ------------- ------------ ---------------- ---------------- ---------------- ------------- ------------ ---------------- ---------------- ---------------- Return of net deposits plus a minimum return GMDB 0% - 5% $ 22,618.6 $ 1,234.5 63.6 years GMWB - Premium only $ 5,646.3 $ 12.5 GMWB - For life 0% - 5% $ 1,032.9 $ 1.2 GMAB - Premium only $ 19.1 $ 0.1 Highest specified anniversary account value minus withdrawals post-anniversary GMDB $ 4,791.8 $ 129.7 62.0 years GMWB - Highest anniversary only $ 3,164.6 $ 65.7 GMWB - For life $ 1,690.1 $ 37.5 Combination net deposits plus minimum return, highest specified anniversary account value minus withdrawals post-anniversary GMDB 0% - 5% $ 2,310.0 $ 48.4 64.1 years GMIB 0% - 6% $ 2,650.7 $ 87.2 6.7 years GMWB - For life 0% - 5% $ 3,348.7 $ 81.7
8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES (CONTINUED) Account balances of contracts with guarantees were invested in variable separate accounts as follows (in millions): DECEMBER 31, ---------------------------- ---------------------------- Fund Type: 2008 2007 ------------- ------------- ------------- ------------- Equity $ 15,312.4 $ 24,744.1 Bond 2,291.7 1,881.2 Balanced 1,918.4 2,445.5 Money market 1,243.2 651.2 ------------- ------------- ------------- ------------- Total $ 20,765.7 $ 29,722.0 ============= ============= ============= ============= GMDB liabilities, before reinsurance, reflected in the general account are as follows (in millions): 2008 2007 2006 ---------- ------------- ------------ Balance at January 1 $ 118.0 $ 56.6 $ 37.0 Incurred guaranteed benefits 392.0 86.7 43.6 Paid guaranteed benefits (75.7) (25.3) (24.0) ---------- ------------- ------------ Balance at December 31 $ 434.3 $ 118.0 $ 56.6 ========== ============= ============ Balance at December 31, net of reinsurance $ 301.0 $ 4.6 $ 1.9 ========== ============= ============ The GMDB liability is determined at each period end by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. In 2007, the Company lowered lapse rate assumptions for policies with deep in-the-money GMDB benefits. The following assumptions and methodology were used to determine the GMDB liability at both December 31, 2008 and 2007 (except where noted): 1) Use of a series of deterministic investment performance scenarios. 2) Mean investment performance assumption of 8.4% after investment management fees, but before investment advisory fees and mortality and expense charges. 3) Mortality equal to 80.0% of the Annuity 2000 table. 4) Lapse rates varying by contract type, duration and degree the benefit is in-the-money and ranging from 0.5% to 49.0%, with an average of 5.0% during the surrender charge period and 11.0% thereafter at December 31, 2008 and from 0.5% to 50.0%, with an average of 6.0% during the surrender charge period and 11.0% thereafter at December 31, 2007. 5) Discount rate of 8.4%. Most GMWB reserves are considered to be derivatives under FAS 133 and are recognized at fair value, with the change in fair value included in risk management activity. The fair value of these liabilities is determined using stochastic modeling and inputs as further described in Note 4. The GMWB reserve totaled $1,123.9 million at December 31, 2008 and was included in reserves for future policy benefits. At December 31, 2007, the GMWB reserve was a negative reserve included in other assets of $10.4 million. Jackson has also issued certain GMWB products that guarantee payments over a lifetime. Reserves for these lifetime benefits are calculated as required by SOP 03-1. At December 31, 2008 and 2007, these SOP 03-1 reserves totaled $22.6 million and $4.8 million, respectively. GMAB benefits are offered on some variable annuity plans starting in 2007 and issues have been minimal as of December 31, 2008. 8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES (CONTINUED) The direct GMIB liability is determined at each period end by estimating the expected value of the annuitization benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used for calculating the direct GMIB liability at December 31, 2008 and 2007, are consistent with those used for calculating the GMDB liability. GMIB SOP 03-1 reserves totaled $6.4 million at December 31, 2008 and were minimal at December 31, 2007. OTHER LIABILITIES - INSURANCE AND ANNUITIZATION BENEFITS The Company has established additional reserves for life insurance business due to: universal life ("UL") plans with secondary guarantees, interest-sensitive life ("ISWL") plans that exhibit "profits followed by loss" patterns and account balance adjustments to tabular guaranteed cash values on one interest-sensitive life plan. The Company also has a small closed block of two-tier annuities, where different crediting rates are used for annuitization and surrender benefit calculations, for which a liability was established to cover future annuitization benefits in excess of surrender values. The total liability for this block is the low tier funding using the lower credited rate associated with surrenders, plus the SOP 03-1 annuitization reserve. Liabilities for these benefits have been established according to the methodology prescribed in SOP 03-1, as follows:
December 31, 2008 December 31, 2007 ------------------------------------------- --------------------------------------------------- -------------------------------------------- --------------------------------------------------- Benefit Type Liability Net Amount Weighted Liability Net Amount Weighted Average (in millions) at Risk Average (in millions) at Risk Attained Age (in millions)* Attained Age (in millions)* -------------------------- ---------------------------------------------- --------------------------------------------------- -------------------------- ---------------------------------------------- --------------------------------------------------- UL insurance benefit $46.7 $5,387.8 55.1 years $50.7 $5,332.3 54.4 years Two-tier annuitization $6.2 $33.4 62.2 years $ 6.5 $ 34.6 61.5 years ISWL account balance adjustment $54.9 n/a n/a $46.9 n/a n/a -------------------------- ---------------------------------------------- ---------------------------------------------------
* NAR for the UL benefits is for the total of the plans containing any policies having projected non-zero excess benefits, and thus may include NAR for some policies with zero projected excess benefits. The following assumptions and methodology were used to determine the UL insurance benefit liability at December 31, 2008 and 2007: 1) Use of a series of deterministic premium persistency scenarios. 2) Other experience assumptions similar to those used in amortization of deferred acquisition costs. 3) Discount rates equal to the credited interest rates, approximately 4% to 5% projected. The following assumptions and methodology were used to determine the two-tier annuitization benefit liability at December 31, 2008 and 2007: 1) Use of a series of deterministic scenarios, varying by surrender rate and annuitization rate. 2) Other experience assumptions similar to those used in amortization of deferred acquisition costs. 3) Discount rates are equal to credited interest rates, approximately 3% to 4%. JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2008 -------------------------------------------------------------------------------- 9. BORROWINGS The aggregate carrying value of borrowings at December 31, 2008 and 2007 were as follows (in thousands): DECEMBER 31, 2008 2007 --------------- ---------------- Surplus notes $ 249,296 $ 249,280 Mortgage loans 33,369 17,416 VIE equity classes 6,250 3,750 FHLBI short-term notes 150,000 250,000 Short-term borrowings from Parent - 32,020 ---------------- ---------------- ---------------- ---------------- Total $ 438,915 $ 552,466 ================ ================ ================ ================ Due in 2009 $ 150,000 Due in more than 1 to 5 years 20,567 Due after 5 years 268,348 ---------------- ---------------- Total $ 438,915 ================ ================ SURPLUS NOTES On March 15, 1997, the Company issued 8.15% Surplus Notes (the "Notes") in the principal amount of $250.0 million due March 15, 2027. The Notes were issued pursuant to Rule 144A under the Securities Act of 1933, and are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims. Under Michigan Insurance law, for statutory reporting purposes, the Notes are not part of the legal liabilities of the Company and are considered capital and surplus. Payments of interest or principal may only be made with the prior approval of the Commissioner of Insurance of the State of Michigan and only out of surplus earnings which the Commissioner determines to be available for such payments under Michigan Insurance law. The Notes may not be redeemed at the option of the Company or any holder prior to maturity. Interest is payable semi-annually on March 15 and September 15 of each year. Interest paid on the Notes was $20.4 million in each of 2008, 2007 and 2006. MORTGAGE LOANS At December 31, 2008 and 2007, certain consolidated real estate VIEs had outstanding mortgage loans at a weighted average interest rate of 7.1% and 6.8%, respectively, with maturities through 2011 and 2016. Interest paid totaled $1.9 million, $1.2 million and $2.8 million in 2008, 2007 and 2006, respectively. VIE EQUITY CLASSES Certain of the VIEs have "equity" classes issued in the form of non-investment grade debt maturing in November 2013. Accordingly, these equity classes are classified as notes payable rather than minority interest in the consolidated balance sheets. These notes accrue contingent interest in addition to the stated coupon. The outstanding principal amounts accrued interest at a weighted average interest rate of 8.9% and 7.0% at December 31, 2008 and 2007, respectively. Interest paid on the notes in 2008, 2007 and 2006 totaled $554 thousand, $384 thousand and $20.0 million, respectively. FHLBI SHORT-TERM NOTES Jackson has entered into a short-term note program with the FHLBI, securing advances made throughout the year. Interest rates were fixed or variable and based on the FHLBI cost of funds or market rates. Short term notes averaged $260.3 million in 2008 at an average interest rate of 2.2%. Jackson paid $7.0 million of interest on these notes during 2008. Previously, during 2007, Jackson entered into a short-term note program with the FHLBI that expired on March 11, 2008. Jackson paid $92 thousand of interest on the 2007 notes. 9. BORROWINGS (CONTINUED) SHORT-TERM BORROWINGS FROM PARENT During 2007, Jackson entered into an unsecured cash advance facility with Prudential. The $32.0 million advance was repaid in full during 2008. Jackson paid $1.1 million and $20 thousand in interest on this loan during 2008 and 2007. TUSCANY NOTES On December 19, 2001, Tuscany CDO, Limited ("Tuscany"), a VIE in which Jackson was the primary beneficiary, issued $900.0 million of senior and subordinated notes. The remaining notes were paid in full during 2007 and interest paid totaled $3.5 million and $11.0 million in 2007 and 2006, respectively. 10. REVERSE REPURCHASE AGREEMENTS During 2008 and 2007, the Company entered into reverse repurchase and dollar roll repurchase agreements whereby the Company agreed to sell and repurchase securities. These activities have been accounted for as financing transactions, with the assets and associated liabilities included in the consolidated balance sheets. Short-term borrowings under such agreements averaged $7.0 million and $14.2 million during 2008 and 2007, respectively, at weighted average interest rates of 2.9% and 5.1%, respectively. There was no outstanding balance as of December 31, 2008 or 2007. Interest paid totaled $0.2 million, $0.7 million and $1.5 million in 2008, 2007 and 2006, respectively. The highest level of short-term borrowings at any month end was $50.0 million in 2008 and $100.0 million in 2007. 11. REINSURANCE The Company assumes and cedes reinsurance from and to other insurance companies in order to limit losses from large exposures; however, if the reinsurer is unable to meet its obligations, the originating issuer of the coverage retains the liability. The maximum amount of life insurance risk retained by the Company on any one life is generally $2.0 million. Amounts not retained are ceded to other companies on a yearly renewable-term or a coinsurance basis. In connection with the purchase of Life of Georgia, Jackson acquired certain lines of business that were wholly ceded to non-affiliates. These include both direct and assumed accident and health business, direct and assumed life insurance business, and certain institutional annuities. Jackson's GMIBs are reinsured through an unrelated party and, due to the net settlement provisions of the reinsurance agreement, this contract meets the definition of a freestanding derivative. Accordingly, the GMIB reinsurance agreement is recorded at fair value on the Company's balance sheets, with changes in fair value recorded in risk management activity. Jackson also cedes the GMDB coverage associated with certain variable annuities issued prior to 2002 to an affiliate, Prudential Atlantic Reinsurance Company, Dublin, Ireland ("PARC"). PARC is a wholly owned subsidiary of Prudential. JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2008 -------------------------------------------------------------------------------- 11. REINSURANCE (CONTINUED) The effect of reinsurance on premiums was as follows (in thousands): YEARS ENDED DECEMBER 31, 2008 2007 2006 -------------- ---------------- ---------------- -------------- ---------------- ---------------- Direct premiums: Life $ 314,096 $ 328,787 $ 345,020 Accident and health 13,048 20,211 22,018 Plus reinsurance assumed: Life 18,830 21,834 23,444 Accident and health 1,273 1,744 2,101 Less reinsurance ceded: Life (133,308) (131,537) (137,715) Accident and health (14,321) (21,955) (24,119) Guaranteed annuity benefits (29,457) (28,784) (34,548) -------------- ---------------- ---------------- -------------- ---------------- ---------------- Total net premiums $ 170,161 $ 190,300 $ 196,201 ============== ================ ================ ============== ================ ================ Premiums ceded for guaranteed annuity benefits included $15.6 million, $17.2 million and $24.5 million to PARC during 2008, 2007 and 2006, respectively. Components of the reinsurance recoverable asset were as follows (in thousands): DECEMBER 31, 2008 2007 --------------- ---------------- --------------- ---------------- Reserves: Life $ 891,955 $ 785,467 Accident and health 24,105 27,231 Guaranteed minimum income benefits 249,468 - Guaranteed minimum death benefits 290,218 113,346 Other annuity benefits 29,516 27,127 Claims liability 27,166 57,205 Other 14,975 13,865 --------------- ---------------- --------------- ---------------- Total $1,527,403 $1,024,241 =============== ================ =============== ================ Reserves reinsured through Brooke Life were $52.6 million and $54.9 million at December 31, 2008 and 2007, respectively. Reserves reinsured through PARC were $290.2 million and $113.3 million at December 31, 2008 and 2007, respectively. 12. FEDERAL INCOME TAXES The components of the provision for federal income taxes were as follows (in thousands):
YEARS ENDED DECEMBER 31, 2008 2007 2006 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Current tax expense (benefit) $ (58,713) $ 202,037 $ 240,858 Deferred tax expense (benefit) (113,368) 50,254 22,558 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Federal income tax expense (benefit) $ (172,081) $ 252,291 $ 263,416 ================ ================ ================ ================ ================ ================
12. FEDERAL INCOME TAXES (CONTINUED) The Company recognizes interest and penalties, if any, accrued related to unrecognized tax benefits as a component of tax expense. The federal income tax provisions differ from the amounts determined by multiplying pretax income by the statutory federal income tax rate of 35% for 2008, 2007 and 2006 as follows (in thousands):
YEARS ENDED DECEMBER 31, 2008 2007 2006 -------------- ---------------- ---------------- -------------- ---------------- ---------------- Income taxes at statutory rate $ (400,857) $ 305,050 $ 278,612 Dividends received deduction (73,524) (15,156) (48,896) Deferred tax valuation allowance 302,731 - - Other (431) (3,863) (40) -------------- ---------------- ---------------- -------------- ---------------- ---------------- Provision for federal income taxes $ (172,081) $ 252,291 $ 263,416 ============== ================ ================ ============== ================ ================ Effective tax rate 15.0% 28.9% 33.1% ============== ================ ================ ============== ================ ================
Federal income taxes paid were $69.0 million, $126.0 million and $214.0 million in 2008, 2007 and 2006, respectively. The tax effects of significant temporary differences that give rise to deferred tax assets and liabilities were as follows (in thousands):
DECEMBER 31, 2008 2007 ---------------- ---------------- ---------------- ---------------- Gross deferred tax asset Difference between financial reporting and the tax basis of: Policy reserves and other insurance items $1,122,067 $ 917,329 Other-than-temporary impairments and other investment items 428,558 117,960 Deferred compensation 61,433 67,737 Net unrealized losses on available for sale securities 1,456,039 88,501 Other, net 100,599 52,402 ---------------- ---------------- ---------------- ---------------- Total gross deferred tax asset 3,120,499 1,292,126 ---------------- ---------------- ---------------- ---------------- Valuation allowance (318,778) - ---------------- ---------------- ---------------- ---------------- Gross deferred tax asset, net of valuation allowance 2,801,721 1,292,126 ---------------- ---------------- ---------------- ---------------- GROSS DEFERRED TAX LIABILITY Difference between financial reporting and the tax basis of: Deferred acquisition costs and sales inducements (1,768,108) (1,152,693) Other assets (50,607) (9,574) Other, net (13,217) (29,165) ---------------- ---------------- ---------------- ---------------- Total gross deferred tax liability (1,806,847) (1,216,517) ---------------- ---------------- ---------------- ---------------- Net deferred tax asset $ 994,874 $ 75,609 ================ ================ ================ ================
12. FEDERAL INCOME TAXES (CONTINUED) During 2008, Jackson recorded a valuation allowance, included in deferred tax expense, of $302.7 million against the deferred tax assets associated with realized losses and losses on trading securities where management no longer believes that it is more likely than not that the full tax benefit of the losses will be realized. Jackson also recorded a valuation allowance against the deferred tax assets associated with certain equity securities in an unrealized loss position for which recovery in value cannot be anticipated. This valuation allowance, which was recorded in other comprehensive income, totaled $16.0 million. Management will monitor these assets and, if the circumstances which required the establishment of this allowance reverse in the future, the valuation allowance may be reduced or eliminated. Realization of Jackson's deferred tax assets is dependent on generating sufficient taxable income. Although realization is not assured, management believes that it is more likely than not that the results of future operations and investment activity will generate sufficient taxable income to realize the remaining gross deferred tax asset. At December 31, 2008, the Company had no federal tax capital loss carryforwards and federal tax capital loss carrybacks totaled $281.0 million. In August, 2007, the Internal Revenue Service ("IRS") issued Revenue Ruling 2007-54 that would have changed accepted industry and IRS interpretations of the statutes governing the computation of the Dividends Received Deduction ("DRD") on separate account assets held in connection with variable annuity and life contracts, but that ruling was suspended by Revenue Ruling 2007-61. Revenue Ruling 2007-61 also announced the Treasury Department's and the IRS' intention to issue regulations with respect to certain computational aspects of the DRD on separate account assets held in connection with variable contracts. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. Although regulations that represent a substantial change in an interpretation of the law are generally given a prospective effective date, there is no assurance that the change will not be retrospectively applied. As a result, depending on the ultimate timing and substance of any such regulations, which are unknown at this time, such future regulations could result in the elimination of some or all of the separate account DRD tax benefit that the Company receives. The Company recognized an income tax benefit related to the separate account DRD of $73.5 million, $48.9 million and $15.2 million during 2008, 2007 and 2006, respectively. During 2008, Jackson established a reserve for an unrecognized tax benefit as required by the provisions of FIN 48. The following table summarizes the changes in the Company's unrecognized tax benefits, including interest, for the year ended December 31, 2008 (in thousands). There were no unrecognized tax benefits at December 31, 2007. Unrecognized tax benefit at December 31, 2007 $ - Additions for tax positions identified in 2008 19,171 Reduction of tax positions of closed prior years (2,379) ------------ Unrecognized tax benefit at December 31, 2008 $ 16,792 ============ The Company has considered both permanent and temporary positions in determining the unrecognized tax benefit rollforward. The total amount of unrecognized benefits, if recognized, that would affect the effective tax rate at December 31, 2008 is approximately $16.8 million. Interest totaling $3.4 million related to these unrecognized tax benefits has been included in income tax expense in the consolidated income statement. The Company has not recorded any amounts for penalties related to unrecognized tax benefits during 2008, 2007 or 2006. 12. FEDERAL INCOME TAXES (CONTINUED) Using the information available as of December 31, 2008, the Company believes that, in the next 12 months, there are no positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease. In general, the Company is no longer subject to United States federal, state or local income tax examinations by taxing authorities for tax years that began before 2005. 13. COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are involved in litigation arising in the ordinary course of business. It is the opinion of management that the ultimate disposition of such litigation will not have a material adverse affect on the Company's financial condition or results of operations. Jackson has been named in civil litigation proceedings, which appear to be substantially similar to other class action litigation brought against many life insurers alleging misconduct in the sale of insurance products. The Company accrues for legal contingencies once the contingency is deemed to be probable and estimable. Accordingly, at December 31, 2008 and 2007 Jackson had recorded accruals totaling $31.0 million and $35.0 million, respectively. Additionally, in connection with the purchase of Life of Georgia, Jackson assumed a $9.4 million liability related to a class action lawsuit. This liability has been fully indemnified by ING and an indemnification receivable equal to the liability has been included in other assets. The liability and indemnification receivable are adjusted as claims are reported and payments are made by ING and totaled $2.2 million and $2.0 million at December 31, 2008 and 2007, respectively. State guaranty funds provide payments for policyholders of insolvent life insurance companies. These guaranty funds are financed by assessments to solvent insurance companies based on location, volume and types of business. The Company estimated its reserve for future state guaranty fund assessments based on data received from the National Organization of Life and Health Insurance Guaranty Associations. Based on data received at the end of 2008 and 2007, the Company's reserve for future state guaranty fund assessments was $26.0 million and $17.7 million, respectively. The Company believes the reserve is adequate for all anticipated payments for known insolvencies. The Company had unfunded commitments related to its investments in limited partnerships and limited liability companies totaling $517.1 million at December 31, 2008. Unfunded fixed-rate commercial mortgage loan commitments and available lines of credit totaled $11.8 million and $14.4 million, respectively, at December 31, 2008. The Company leases office space, land and equipment under several operating leases that expire at various dates through 2051. Certain leases include escalating lease rates, lease abatements and other incentives and, as a result, at December 31, 2008, Jackson recorded a liability of $9.2 million for future lease payments. Lease expense was $22.7 million, $17.1 million and $23.0 million in 2008, 2007 and 2006, respectively. Future minimum payments under these noncancellable operating leases are as follows (in thousands): 2009 $ 8,539 2010 8,314 2011 8,399 2012 8,558 2013 9,129 Thereafter 25,143 ---------------- Total $ 68,082 ================ Jackson subleased office space under several operating leases that expire at various dates through 2009. Total future lease income to be received on the subleased property is $0.3 million. Lease income for the subleased property totaled $0.7 million per year in 2008, 2007 and 2006. 14. STOCKHOLDER'S EQUITY Under Michigan Insurance Law, dividends on capital stock can only be distributed out of earned surplus, adjusted to exclude any unrealized capital gains and the effect of permitted practices, unless the Commissioner approves the dividend prior to payment. At December 31, 2008, adjusted earned surplus was $104.8 million. Furthermore, without the prior approval of the Commissioner, dividends are also subject to restrictions relating to statutory surplus and/or statutory earnings. The maximum dividend which can be paid in 2009, subject to the availability of earned surplus, without prior approval of the Michigan Commissioner of Insurance, is $288.7 million. The Company received capital contributions from its parent of $34.1 million, $30.6 million and $49.7 million in 2008, 2007 and 2006, respectively. The capital contributions included $34.1 million, $30.6 million and $29.1 million in 2008, 2007 and 2006, respectively, from Brooke Life's forgiveness of an intercompany tax liability. Contributions received in 2006 also included the transfer of $6.9 million in net assets of an affiliate. Dividend payments were $313.1 million, $246.0 million and $209.1 million in 2008, 2007 and 2006, respectively. Statutory capital and surplus of the Company, as reported in its Annual Statement, was $3.7 billion and $4.0 billion at December 31, 2008 and 2007, respectively. Statutory net income (loss) of the Company, as reported in its Annual Statement, was $(623.4) million, $490.0 million and $412.3 million in 2008, 2007 and 2006, respectively. Effective for 2008 reporting, the Commissioner granted Jackson three permitted practices, which expire October 1, 2009, unless extended by the Commissioner. One permitted practice allows Jackson to carry interest rate swaps at book value, as if statutory hedge accounting were in place, instead of at fair value as would have been otherwise required. Jackson must also demonstrate the effectiveness of its interest rate swap program pursuant to the Michigan Insurance Code. The Commissioner also granted a permitted practice to allow Jackson to recognize book to tax differences that will reverse within the next 3 years (instead of 1 year as required by the NAIC) in determining the admissable deferred tax asset (subject to a limitation of 15% of capital and surplus versus the 10% limitation imposed by the NAIC guidance). Finally, the Commissioner granted a permitted practice to allow Jackson to use an average interest rate in calculating certain regulatory capital requirements. This permitted practice requires that Jackson maintain certain minimum capital levels excluding the effect of the permitted practices. The total effect of these permitted practices was to increase statutory surplus by $845.0 million and reduce authorized control level required capital by $81.5 million at December 31, 2008. These permitted practices had no impact on statutory net income (loss). 15. OTHER RELATED PARTY TRANSACTIONS The Company's investment portfolio is managed by PPM America, Inc. ("PPMA"), a registered investment advisor, and PPM Finance, Inc. (collectively, "PPM"). PPM is ultimately a wholly owned subsidiary of Prudential. The Company paid $35.9 million, $34.1 million and $35.9 million to PPM for investment advisory services during 2008, 2007 and 2006, respectively. National Planning Holdings, Inc. ("NPH"), Jackson's affiliated broker-dealer network, distributes products issued by Jackson and receives commissions and fees from Jackson. Commissions and fees paid by Jackson to NPH during 2008, 2007 and 2006 totaled $57.4 million, $65.9 million and $58.6 million, respectively. Jackson has entered into shared services administrative agreements with affiliates, NPH and PPMA. Under the shared services administrative agreements, Jackson charged $5.1 million, $5.0 million and $5.2 million of certain management and corporate services expenses to these affiliates in 2008, 2007 and 2006, respectively. Jackson provides a $40.0 million revolving credit facility to PPMA. The loan is unsecured, matures in September 2013, accrues interest at LIBOR plus 2% per annum, and has a commitment fee of 0.25% per annum. There was no balance outstanding at December 31, 2008 or 2007. The highest outstanding loan balance during 2008 and 2007 was $20.0 million and $26.0 million, respectively. Interest and commitment fees totaled $177 thousand, $524 thousand and $175 thousand during 2008, 2007 and 2006, respectively. 15. OTHER RELATED PARTY TRANSACTIONS (CONTINUED) Beginning in 2008, Jackson provides, through its PGDS subsidiary, information technology services to certain Prudential affiliates. During 2008, Jackson recognized $10.4 million in revenue associated with these services. This revenue is included in other income on the accompanying consolidated income statement. 16. BENEFIT PLANS The Company has a defined contribution retirement plan covering substantially all employees. To be eligible to participate in the Company's contribution, an employee must have attained the age of 21, have completed at least 1,000 hours of service in a 12-month period and passed their 12-month employment anniversary. In addition, the employee must be employed on the applicable January 1 or July 1 entry date. The Company's annual contributions, as declared by the board of directors, are based on a percentage of eligible compensation paid to participating employees during the year. In addition, the Company matches up to 6 percent of a participant's elective contribution to the plan during the year. The Company's expense related to this plan was $12.1 million, $12.3 million and $8.9 million in 2008, 2007 and 2006, respectively. The Company maintains non-qualified voluntary deferred compensation plans for certain agents and employees. At December 31, 2008 and 2007, the liability for such plans totaled $171.2 million and $194.0 million, respectively and is included in other liabilities. Jackson invests general account assets in selected mutual funds in amounts similar to participant elections as a hedge against significant movement in the payout liability. The Company's (income) expense related to these plans, including a match of elective deferrals for the agents' deferred compensation plan, was $(54.6) million, $18.4 million and $21.5 million in 2008, 2007 and 2006, respectively. Investment income (expense) on the mutual funds totaled $(62.9) million, $15.0 million and $18.3 million in 2008, 2007 and 2006, respectively. PART C. OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial Statements: (1) Financial statements and schedules included in Part A: Not Applicable (a) Financial Statements: (1) Financial statements and schedules included in Part A: Not Applicable (2) Jackson National Separate Account - I: Report of Independent Registered Public Accounting Firm Statements of Assets and Liabilities as of December 31, 2008 Statements of Operations for the period ended December 31, 2008 Statements of Changes in Net Assets for the periods ended December 31, 2008 and 2007 Notes to Financial Statements Jackson National Life Insurance Company: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2008 and 2007 Consolidated Income Statements for the years ended December 31, 2008, 2007, and 2006 Consolidated Statements of Stockholder's Equity and Comprehensive Income for the years ended December 31, 2008, 2007, and 2006 Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007, and 2006 Notes to Consolidated Financial Statements Item 24.(b) Exhibits Exhibit Description No. 1. Resolution of Depositor's Board of Directors authorizing the establishment of the Registrant, incorporated by reference to the Registrant's Post-Effective Amendment No. 9 filed on April 21, 1999 (File Nos. 033-82080 and 811-08664). 2. Not applicable 3.a. Amended and Restated General Distributor Agreement dated June 1, 2006, incorporated by reference to the Registrant's Registration Statement filed on August 10, 2006 (File Nos. 333-136472 and 811-08664). 4. a. Specimen of the Curiangard Simplified Retirement Annuity Fixed and Variable Annuity Contract, incorporated by reference to the Registrant's Registration Statement filed on August 10, 2006 (File Nos. 333-136472 and 811-08664). b. Specimen of Tax Sheltered Annuity Endorsement, incorporated by reference to the Registrant's Pre-Effective Amendment No. 1 filed on December 19, 2001 (File Nos. 333-70472 and 811-08664). c. Specimen of Retirement Plan Endorsement, incorporated by reference to the Registrant's Pre-Effective Amendment No. 1 filed on December 19, 2001 (File Nos. 333-70472 and 811-08664). d. Specimen of Individual Retirement Annuity Endorsement, incorporated by reference to the Registrant's Pre-Effective Amendment No. 1 filed on December 19, 2001 (File Nos. 333-70472 and 811-08664). e. Specimen of Roth IRA Endorsement, incorporated by reference to the Registrant's Pre-Effective Amendment No. 1 filed on December 19, 2001 (File Nos. 333-70472 and 811-08664). f. Specimen of Charitable Remainder Trust Endorsement, incorporated by reference to the Registrant's Pre-Effective Amendment filed on December 23, 2004 (File Nos. 333-118368 and 811-08664). g. Specimen of the Return of Premium Death Benefit Endorsement, incorporated by reference to the Registrant's Registration Statement filed on September 30, 2004 (File Nos. 333-119427 and 811-08664). h. Specimen of 5% Guaranteed Minimum Withdrawal Benefit With Annual Step-up Endorsement, incorporated by reference to the Registrant's Post-Effective Amendment No. 17 filed on June 20, 2005 (File Nos. 333-70472 and 811-08664). h. Specimen of 5% For Life Guaranteed Minimum Withdrawal Benefit with Annual Step-Up, incorporated by reference to the Registrant's Post-Effective Amendment No. 24 filed on January 31, 2006 (File Nos. 333-70472 and 811-08664). j. Specimen of Joint 5% for Life Guaranteed Minimum Withdrawal Benefit with Annual Step-Up, incorporated by reference to the Registrant's Post-Effective Amendment No. 26 filed on June 23, 2006 (File Nos. 333-70472 and 811-08664). k. Specimen of the Highest Anniversary Value Endorsement, incorporated by reference to the Registrant's Registration Statement filed on August 10, 2006 (File Nos. 333-136472 and 811-08664). 5. a. Form of the Curiangard Simplified Retirement Annuity Fixed and Variable Annuity Application, incorporated by reference to the Registrant's Pre-Effective Amendment No. 1 filed on December 15, 2006 (File Nos. 333-136472 and 811-08664). b. Form of the Curiangard Simplified Retirement Annuity Fixed and Variable Annuity Application, incorporated by reference to Registrant's Post-Effective Amendment No. 2, filed on April 25, 2007 (File Nos. 333-136472 and 811-08664). c. Form of the Curiangard Simplified Retirement Annuity Fixed and Variable Annuity Application, incorporated by reference to Registrant's Post-Effective Amendment No. 3, filed on November 27, 2007 (File Nos. 333-136472 and 811-08664). 6. a. Articles of Incorporation of Depositor, incorporated by reference to the Registrant's Post-Effective Amendment No. 3 filed on April 30, 1996 (File Nos. 033-82080 and 811-08664). b. By-laws of Depositor, incorporated by reference to the Registrant's Post-Effective Amendment No. 3 filed on April 30, 1996 (File Nos. 033-82080 and 811-08664). 7.a. Not applicable 8. Not applicable 9. Opinion and Consent of Counsel, attached hereto. 10. Consent of Independent Registered Public Accounting Firm, attached hereto. 11. Not applicable 12. Not applicable Item 25. Directors and Officers of the Depositor Name and Principal Positions and Offices Business Address with Depositor Richard D. Ash Vice President - 1 Corporate Way Actuary & Appointed Actuary Lansing, MI 48951 John B. Banez Vice President 1 Corporate Way Lansing, MI 48951 Maureen Bernacchi Assistant Vice President 7601 Technology Way Denver, CO 80237 James P. Binder Senior Vice President & Treasurer 1 Corporate Way Lansing, MI 48951 Steve Binioris Assistant Vice President 1 Corporate Way Lansing, MI 48951 Michele Binkley Assistant Vice President 1 Corporate Way Lansing, MI 48951 Dennis Blue Assistant Vice President 1 Corporate Way Lansing, MI 48951 Barrett Bonemer Assistant Vice President 1 Corporate Way Lansing, MI 48951 Jeff Borton Assistant Vice President 1 Corporate Way Lansing, MI 48951 Pamela L. Bottles Assistant Vice President 1 Corporate Way Lansing, MI 48951 John H. Brown Vice President 1 Corporate Way Lansing, MI 48951 James Carter Assistant Vice President 1 Corporate Way Lansing, MI 48951 Joseph Mark Clark Vice President 1 Corporate Way Lansing, MI 48951 Marianne Clone Vice President 1 Corporate Way Lansing, MI 48951 Michael Costello Assistant Vice President 1 Corporate Way Lansing, MI 48951 James B. Croom Vice President 1 Corporate Way Lansing, MI 48951 George D. Daggett Assistant Vice President & Illustration 7601 Technology Way Officer Denver, CO 80237 Robert H. Dearman Assistant Vice President 1 Corporate Way Lansing, MI 48951 Lisa C. Drake Senior Vice President & Chief Actuary 1 Corporate Way Lansing, MI 48951 Phillip Brian Eaves Vice President 1 Corporate Way Lansing, MI 48951 Charles F. Field Assistant Vice President 1 Corporate Way Lansing, MI 48951 Terence M. Finan Assistant Vice President 1 Corporate Way Lansing, MI 48951 Dana Malesky Flegler Assistant Vice President 1 Corporate Way Lansing, MI 48951 Robert A. Fritts Senior Vice President & Controller 1 Corporate Way Lansing, MI 48951 Patrick W. Garcy Assistant Vice President 1 Corporate Way Lansing, MI 48951 James D. Garrison Vice President 1 Corporate Way Lansing, MI 48951 Julia A. Goatley Vice President & Assistant Secretary 1 Corporate Way Lansing, MI 48951 John A. Gorgenson Assistant Vice President 1 Corporate Way Lansing, MI 48951 Robert W. Hajdu Assistant Vice President 1 Corporate Way Lansing, MI 48951 Cliff S. Hale, M.D. Vice President 1 Corporate Way Lansing, MI 48951 Laura L. Hanson Vice President 1 Corporate Way Lansing, MI 48951 Robert L. Hill Assistant Vice President 1 Corporate Way Lansing, MI 48951 Andrew B. Hopping Executive Vice President, Chief 1 Corporate Way Financial Officer & Director Lansing, MI 48951 H. Dean Hosfield Assistant Vice President 1 Corporate Way Lansing, MI 48951 Stephen A. Hrapkiewicz, Jr. Senior Vice President 1 Corporate Way Lansing, MI 48951 Thomas J. Hruska Assistant Vice President 1 Corporate Way Lansing, MI 48951 Julie A. Hughes Assistant Vice President 1 Corporate Way Lansing, MI 48951 Roger G. Hutchison Assistant Vice President 1 Corporate Way Lansing, MI 48951 Clifford J. Jack Executive Vice President & Chief 7601 Technology Way Distribution Officer Denver, CO 80237 Scott Klus Assistant Vice President 1 Corporate Way Lansing, MI 48951 Daniel W. Koors Assistant Vice President 225 W. Wacker Drive Suite 1200 Chicago, IL 60606 Everett W. Kunzelman Vice President 1 Corporate Way Lansing, MI 48951 Richard Liphardt Assistant Vice President 1 Corporate Way Lansing, MI 48951 Lynn W. Lopes Vice President 1 Corporate Way Lansing, MI 48951 Ab B. Manning Assistant Vice President 1 Corporate Way Lansing, MI 48951 Clark P. Manning, Jr. President, Chief Executive Officer, 1 Corporate Way & Director Lansing, MI 48951 Thomas J. Meyer Senior Vice President, General Counsel & 1 Corporate Way Secretary Lansing, MI 48951 Dean M. Miller Vice President 1 Corporate Way Lansing, MI 48951 Keith R. Moore Vice President 1 Corporate Way Lansing, MI 48951 Jacky Morin Vice President 1 Corporate Way Lansing, MI 48951 P. Chad Myers Senior Vice President 1 Corporate Way Lansing, MI 48951 J. George Napoles Executive Vice President & Chief 1 Corporate Way Administration Officer Lansing, MI 48951 Mark D. Nerud Vice President 225 W. Wacker Drive Suite 1200 Chicago, IL 60606 Timothy J. Padot Assistant Vice President 1 Corporate Way Lansing, MI 48951 Russell E. Peck Vice President 1 Corporate Way Lansing, MI 48951 Laura L. Prieskorn Vice President 1 Corporate Way Lansing, Michigan 48951 Dana S. Rapier Assistant Vice President 1 Corporate Way Lansing, MI 48951 Susan S. Rhee Assistant Vice President 1 Corporate Way Lansing, MI 48951 William R. Schulz Vice President 1 Corporate Way Lansing, MI 48951 Muhammad S. Shami Assistant Vice President 1 Corporate Way Lansing, MI 48951 Christian J. Shiemke Assistant Vice President 1 Corporate Way Lansing, MI 48951 Kathleen M. Smith Vice President 1 Corporate Way Lansing, MI 48951 Gary L. Stone Assistant Vice President 1 Corporate Way Lansing, MI 48951 Heather R. Strang Vice President 1 Corporate Way Lansing, MI 48951 James R. Sopha Executive Vice President & Director 1 Corporate Way Lansing, MI 48951 Eamon J. Twomey Vice President 1 Corporate Way Lansing, MI 48951 Robert M. Tucker, Jr. Vice President 1 Corporate Way Lansing, MI 48951 Marcia L. Wadsten Assistant Vice President 1 Corporate Way Lansing, MI 48951 Michael A. Wells Chief Operating Officer 401 Wilshire Boulevard Suite 1200 Santa Monica, CA 90401 Toni Zvonar Assistant Vice President 1 Corporate Way Lansing, MI 48951 David A. Zyble Assistant Vice President 1 Corporate Way Lansing, MI 48951
Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant. Alcona Funding LLC Delaware 100% Jackson National Investment Related Life Insurance Company Company Berrien Funding LLC Delaware 100% Jackson National Investment Related Life Insurance Company Company Brooke GP Delaware 99% Brooke (Holdco 1) Holding Company Inc. Activities 1% Brooke (Holdco 2) Inc. Brooke LLC Delaware 77% Prudential (US Holding Company Holdco 2) Limited Activities 23% Brooke (Jersey) Limited Brooke (Holdco 1) Inc. Delaware 100% Prudential (US Holding Company Holdco 3) BV Activities Brooke (Holdco 2) Inc. Delaware 100% Brooke (Holdco 1) Holding Company Inc. Activities Brooke Holdings LLC Delaware 100% Nicole Finance Holding Company Inc. Activities Brooke Holdings (UK) United Kingdom 100% Brooke GP Holding Company Limited Activities Brooke Investment, Inc. Delaware 100% Brooke Holdings Investment Related LLC Company Brooke Life Insurance Michigan 100% Brooke Holdings Life Insurance Company LLC Brooke (Jersey) Limited United Kingdom 100% Prudential (US Holding Company Holdco 2) Limited Activities Calhoun Funding LLC Delaware 100% Jackson National Investment Related Life Insurance Company Company Curian Capital, LLC Michigan 100% Jackson National Registered Investment Life Insurance Company Advisor Curian Clearing LLC Michigan 100% Jackson National Broker/Dealer (formerly, BH Clearing Life Insurance Company LLC) GCI Holding Corporation Delaware 75.8% Jackson National Holding Company/ Life Insurance Company Jackson Investment Hermitage Management, LLC Michigan 100% Jackson National Advertising Agency Life Insurance Company Holborn Delaware LLC Delaware 100% Prudential Four Holding Company Limited Activities Horizon Capital Delaware 35.8% Jackson National Jackson Investment Partners I, L.P. Life Insurance Company IFC Holdings, Inc. Delaware 100% National Planning Broker/Dealer and d/b/a INVEST Financial Holdings Inc. Investment Adviser Corporation Investment Centers of North Dakota 100% IFC Holdings, Inc. Broker/Dealer and America, Inc. Investment Adviser JNL Investors Series Trust Massachusetts 100% Jackson National Investment Company Life Insurance Company Jackson Investment Michigan 100% Brooke Holdings Investment Adviser Management LLC LLC Jackson National Asset Michigan 100% Jackson National Investment Adviser and Management, LLC Life Insurance Company Transfer Agent Jackson National Life Bermuda 100% Jackson National Life Insurance (Bermuda) Ltd. Life Insurance Company Jackson National Life Delaware 100% Jackson National Advertising/Marketing Distributors LLC Life Insurance Company Corporation and Broker/Dealer Jackson National Life New York 100% Jackson National Life Insurance Insurance Company Life Insurance Company of New York JNLI LLC Delaware 100% Jackson National Tuscany Notes Life Insurance Company JNL Series Trust Massachusetts Common Law Trust with Investment Company contractual association with Jackson National Life Insurance Company of New York JNL Southeast Agency LLC Michigan 100% Jackson National Insurance Agency Life Insurance Company JNL Variable Fund LLC Delaware 100% Jackson National Investment Company Separate Account - I JNLNY Variable Fund I LLC Delaware 100% JNLNY Separate Investment Company Account I Mercantile Capital Delaware 37.7% Jackson National Jackson Investment Partners I, L.P. Life Insurance Company Mercantile Equity I Delaware 99% Jackson National Jackson Investment LP (B) Life Insurance Company Mercantile Equity III Delaware 99% Jackson National Jackson Investment LP (B) Life Insurance Company National Planning Delaware 100% National Planning Broker/Dealer and Corporation Holdings, Inc. Investment Adviser National Planning Delaware 100% Brooke Holdings Holding Company Holdings, Inc. LLC Activities Nicole Finance Inc. Delaware 100% Brooke GP Holding Company Activities PGDS (US One) LLC Delaware 100% Jackson National Holding Company Life Insurance Company Activities PGDS (US Two) LLC Delaware 100% PGDS (US One) LLC Holding Company Activities Piedmont CDO Trust Delaware 100% Piedmont Funding LLC Investment Company (Piedmont Notes) Piedmont Funding LLC Delaware 100% Jackson National Investment Related Life Insurance Company Company PPM America Private Delaware 50% Jackson National Jackson Investment Equity Fund LP Life Insurance Company PPM America Private Delaware 50% Jackson National Jackson Investment Equity Fund II, LP Life Insurance Company PPM America Private Delaware 50% Jackson National Jackson Investment Equity Fund III, LP Life Insurance Company PPM Holdings, Inc. Delaware 100% Brooke Holdings Holding Company LLC Activities Prudential plc United Kingdom Publicly Traded Financial Institution Prudential Corporation United Kingdom 100% Prudential Holdings Holding Company Holdings, Limited Limited Activities Prudential Holdings Scotland 100% Prudential plc Holding Company Limited Activities Prudential Four Limited United Kingdom 98% Prudential Holding Company Corporation Holdings, Activities Limited 2% Prudential plc Prudential Netherlands 100% Prudential (US Holding Company (US Holdco 1) BV Holdco 1) Limited Activities Prudential Netherlands 100% Prudential (US Holding Company (US Holdco 2) BV Holdco 1) BV Activities Prudential Netherlands 100% Prudential (US Holding Company (US Holdco 3) BV Holdco 2) BV Activities Prudential United Kingdom 76.72% Brooke LLC Holding Company (US Holdco 1) Limited Activities 23.28% Prudential Four Limited Prudential Gibraltar 100% Holborn Delaware Holding Company (US Holdco 2) Limited LLC Activities SII Investments, Inc. Wisconsin 100% National Planning Broker/Dealer and Holdings, Inc. Investment Adviser Squire Reassurance Michigan 100% Jackson National Special Purpose Company LLC Life Insurance Financial Captive Company Insurance Company Squire Capital I LLC Michigan 100% Jackson National Investment Related Life Insurance Company Company Squire Capital II LLC Michigan 100% Jackson National Investment Related Life Insurance Company Company The Holliston Mills Delaware 100% GCI Holding Jackson Investment Corporation Wynnefield Equity I, LP Pennsylvania 99% Jackson National Jackson Investment Life Insurance Company
Item 27. Number of Contract Owners as of January 31, 2009 Qualified - 12 Non-Qualified - 6 Item 28. Indemnification Provision is made in the Company's Amended By-Laws for indemnification by the Company of any person who was or is a party or is threatened to be made a party to a civil, criminal, administrative or investigative action by reason of the fact that such person is or was a director, officer or employee of the Company, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceedings, to the extent and under the circumstances permitted by the General Corporation Law of the State of Michigan. Insofar as indemnification for liabilities arising under the Securities Act of 1933 ("Act") may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company 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 Company 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 Act and will be governed by the final adjudication of such issue. Item 29. Principal Underwriter (a) Jackson National Life Distributors LLC acts as general distributor for the Jackson National Separate Account - I. Jackson National Life Distributors LLC also acts as general distributor for the Jackson National Separate Account III, the Jackson National Separate Account IV, the Jackson National Separate Account V, the JNLNY Separate Account I, the JNLNY Separate Account II, and the JNLNY Separate Account IV. (b) Directors and Officers of Jackson National Life Distributors LLC: Name and Business Address Positions and Offices with Underwriter Michael A. Wells Manager 401 Wilshire Blvd. Suite 1200 Santa Monica, CA 90401 Andrew B. Hopping Chief Financial Officer 1 Corporate Way Lansing, MI 48951 Clifford J. Jack Manager, President and Chief Executive Officer 7601 Technology Way Denver, CO 80237 Stephen M. Ash Vice President 7601 Technology Way Denver, CO 80237 Pamela Aurbach Vice President 7601 Technology Way Denver, CO 80237 Jeffrey Bain Vice President 7601 Technology Way Denver, CO 80237 Brad Baker Assistant Vice President 7601 Technology Way Denver, CO 80237 Lawrence Barredo Assistant Vice President 7601 Technology Way Denver, CO 80237 Mercedes Biretto Vice President 7601 Technology Way Denver, CO 80237 Janice Blanchard Vice President 7601 Technology Way Denver, CO 80237 James Bossert Senior Vice President 7601 Technology Way Denver, CO 80237 Amy Bozic Regional Vice President 7601 Technology Way Denver, CO 80237 J. Edward Branstetter, Jr. Assistant Vice President 7601 Technology Way Denver, CO 80237 (Christian) Alex Bremer Assistant Vice President 7601 Technology Way Denver, CO 80237 Kristina Brendlinger Assistant Vice President 7601 Technology Way Denver, CO 80237 William Britt Vice President 7601 Technology Way Denver, CO 80237 Tori Bullen Senior Vice President 210 Interstate North Parkway Suite 401 Atlanta, GA 30339-2120 Greg Cicotte Executive Vice President, 7601 Technology Way National Sales Manager Denver, CO 80237 Maura Collins Vice President 7601 Technology Way Denver, CO 80237 Christopher Cord Assistant Vice President 7601 Technology Way Denver, CO 80237 George Daggett Assistant Vice President 7601 Technology Way Denver, CO 80237 Carl Donahue Assistant Vice President 7601 Technology Way Denver, CO 80237 Paul Fitzgerald Senior Vice President 7601 Technology Way Denver, CO 80237 Julia A. Goatley Assistant Secretary 1 Corporate Way Lansing, MI 48951 Luis Gomez Vice President 7601 Technology Way Denver, CO 80237 Kevin Grant Senior Vice President 7601 Technology Way Denver, CO 80237 Rupert T. Hall, Jr. Regional Vice President 7601 Technology Way Denver, CO 80237 Jason T. Heinhorst Assistant Vice President 7601 Technology Way Denver, CO 80237 Bonnie Howe Vice President and Deputy General Counsel 7601 Technology Way Denver, CO 80237 Thomas Hurley Senior Vice President 7601 Technology Way Denver, CO 80237 Mark Jones Vice President 7601 Technology Way Denver, CO 80237 Steve Johnson Regional Vice President 7601 Technology Way Denver, CO 80237 Georgette Kraag Regional Vice President 7601 Technology Way Denver, CO 80237 Steve Kluever Senior Vice President 7601 Technology Way Denver, CO 80237 John Koehler Vice President 7601 Technology Way Denver, CO 80237 Brian Lane Vice President 7601 Technology Way Denver, CO 80237 James Livingston Executive Vice President 7601 Technology Way Denver, CO 80237 Barbara Logsdon Assistant Vice President 7601 Technology Way Denver, CO 80237 Doug Mantelli Vice President 7601 Technology Way Denver, CO 80237 James McCorkle Vice President 7601 Technology Way Denver, CO 80237 Tamu McCreary Assistant Vice President 7601 Technology Way Denver, CO 80237 Brooke Meyer Vice President 1 Corporate Way Lansing, MI 48951 Thomas J. Meyer Manger and Secretary 1 Corporate Way Lansing, MI 48951 Megan Meyers Regional Vice President 7601 Technology Way Denver, CO 80237 Jack Mishler Senior Vice President 7601 Technology Way Denver, CO 80237 Diane Montana Assistant Vice President 7601 Technology Way Denver, CO 80237 Kenneth Naes Vice President 7601 Technology Way Denver, CO 80237 Tony Natale Assistant Vice President 38705 Seven Mile Road, Suite 251 Livonia, MI 48152-1058 Steve Papa Regional Vice President 7601 Technology Way Denver, CO 80237 Eric Palumbo Vice President 7601 Technology Way Denver, CO 80237 Allison Pearson Assistant Vice President 7601 Technology Way Denver, CO 80237 Jeremy Rafferty Assistant Vice President 7601 Technology Way Denver, CO 80237 Justin Rafferty Vice President 7601 Technology Way Denver, CO 80237 Alison Reed Vice President 7601 Technology Way Denver, CO 80237 Traci Reiter Assistant Vice President 7601 Technology Way Denver, CO 80237 Gregory B. Salsbury Executive Vice President 7601 Technology Way Denver, CO 80237 Sharon Santella Assistant Vice President 7601 Technology Way Denver, CO 80237 Marilynn Scherer Vice President 7601 Technology Way Denver, CO 80237 Kathleen Schofield Vice President 7601 Technology Way Denver, CO 80237 Jennifer (Seamount) Miller Vice President 7601 Technology Way Denver, CO 80237 David Sprague Senior Vice President 7601 Technology Way Denver, CO 80237 Daniel Starishevsky Senior Vice President 7601 Technology Way Denver, CO 80237 David Stebenne Regional Vice President 7601 Technology Way Denver, CO 80237 Brian Sward Assistant Vice President 7601 Technology Way Denver, CO 80237 Jeremy Swartz Assistant Vice President 7601 Technology Way Denver, CO 80237 Robin Tallman Assistant Vice President 7601 Technology Way Denver, CO 80237 Doug Townsend Vice President and Controller and FinOp 7601 Technology Way Denver, CO 80237 C. Ray Trueblood Vice President 7601 Technology Way Denver, CO 80237 Stephanie Valentine Assistant Vice President 7601 Technology Way Denver, CO 80237 Asa Wood Vice President 7601 Technology Way Denver, CO 80237 Daniel Wright Vice President and Chief Compliance Officer 7601 Technology Way Denver, CO 80237 Phil Wright Vice President 7601 Technology Way Denver, CO 80237 Matthew Yellott Assistant Vice President 7601 Technology Way Denver, CO 80237 (c)
Name of Principal Net Underwriting Compensation on Brokerage Compensation Underwriter Discounts and Redemption or Commissions Commissions Annuitization Jackson National Life Not Applicable Not Applicable Not Applicable Not Applicable Distributors LLC
Item. 30. Location of Accounts and Records Jackson National Life Insurance Company 1 Corporate Way Lansing, Michigan 48951 Jackson National Life Insurance Company Institutional Marketing Group Service Center 1 Corporate Way Lansing, Michigan 48951 Jackson National Life Insurance Company 7601 Technology Way Denver, Colorado 80237 Jackson National Life Insurance Company 225 West Wacker Drive, Suite 1200 Chicago, IL 60606 Item. 31. Management Services Not applicable Item. 32. Undertakings and Representations a. Jackson National Life Insurance Company hereby undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen (16) months old for so long as payment under the variable annuity contracts may be accepted. b. Jackson National Life Insurance Company hereby undertakes to include either (1) as part of any application to purchase a contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard 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. Jackson National Life Insurance Company hereby undertakes to deliver any Statement of Additional Information and any financial statement required to be made available under this Form promptly upon written or oral request. d. Jackson National Life Insurance Company represents that the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Jackson National Life Insurance Company. e. The Registrant hereby represents that any contract offered by the prospectus and which is issued pursuant to Section 403(b) of the Internal Revenue Code of 1986 as amended, is issued by the Registrant in reliance upon, and in compliance with, the Securities and Exchange Commission's industry-wide no-action letter to the American Council of Life Insurance (publicly available November 28, 1988) which permits withdrawal restrictions to the extent necessary to comply with IRS Section 403(b)(11). SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this post-effective amendment and has caused this post-effective amendment to be signed on its behalf, in the City of Lansing, and State of Michigan, on this 2nd day of April, 2009. Jackson National Separate Account - I (Registrant) Jackson National Life Insurance Company By: THOMAS J. MEYER Thomas J. Meyer Senior Vice President, Secretary, and General Counsel Jackson National Life Insurance Company (Depositor) By: THOMAS J. MEYER Thomas J. Meyer Senior Vice President, Secretary, and General Counsel As required by the Securities Act of 1933, this post-effective amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. THOMAS J. MEYER* April 2, 2009 Clark P. Manning, Jr., President, Chief Executive Officer and Director THOMAS J. MEYER* April 2, 2009 Michael A. Wells, Director THOMAS J. MEYER* April 2, 2009 Andrew B. Hopping, Executive Vice President - Chief Financial Officer and Director THOMAS J. MEYER* April 2, 2009 Robert A. Fritts, Senior Vice President and Controller THOMAS J. MEYER* April 2, 2009 James R. Sopha, Executive Vice President and Director * Thomas J. Meyer, Senior Vice President, Secretary, General Counsel, and Attorney-in-Fact pursuant to Power of Attorney executed on January 2, 2009 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned as directors and/or officers of JACKSON NATIONAL LIFE INSURANCE COMPANY (the Depositor), a Michigan corporation, hereby appoint Clark P. Manning, Jr., Andrew B. Hopping, Thomas J. Meyer, Patrick W. Garcy, Susan S. Rhee, and Anthony L. Dowling (each with power to act without the others) his attorney-in-fact and agent, with full power of substitution and resubstitution, for and in his name, place and stead, in any and all capacities, to sign applications and registration statements, and any and all amendments, with power to affix the corporate seal and to attest it, and to file the applications, registration statements, and amendments, with all exhibits and requirements, in accordance with the Securities Act of 1933, the Securities and Exchange Act of 1934, and/or the Investment Company Act of 1940. This Power of Attorney concerns JNL Separate Account - I (033-82080, 333-70472, 333-73850, 333-118368, 333-119656, 333-132128 and 333-136472, 333-155675), JNL Separate Account III (333-41153), JNL Separate Account IV (333-108433 and 333-118131), and JNL Separate Account V (333-70697), as well as any future separate accounts the Depositor establishes through which securities, particularly variable annuity contracts and variable universal life insurance policies, are to be offered for sale. The undersigned grant to each attorney-in-fact and agent full authority to take all necessary actions to effectuate the above as fully, to all intents and purposes, as he/she could do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof. This instrument may be executed in one or more counterparts. IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney as of the 2nd day of January, 2009. CLARK P. MANNING Clark P. Manning, Jr., President, Chief Executive Officer and Director MICHAEL A. WELLS Michael A. Wells, Chief Operating Officer and Director ANDREW B. HOPPING Andrew B. Hopping, Executive Vice President, Chief Financial Officer and Director ROBERT A. FRITTS Robert A. Fritts, Senior Vice President and Controller JAMES R. SOPHA James R. Sopha, Executive Vice President, and Director EXHIBIT LIST Exhibit No. Description 9. Opinion and Consent of Counsel, attached hereto as EX-9. 10. Consent of Independent Registered Public Accounting Firm, attached hereto as EX-10.