-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V5a5v48fKwbWKBxHsZomJf4n1uLNd2tmVmxrpR25wX+KAW5QNkbWlLMGfNHatAPt 9W/3hg38uhWJ7GBze6PEUg== 0000930413-02-000662.txt : 20020415 0000930413-02-000662.hdr.sgml : 20020415 ACCESSION NUMBER: 0000930413-02-000662 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASHINGTON NATIONAL VARIABLE ANNUITY FUND B CENTRAL INDEX KEY: 0000110764 IRS NUMBER: 361933760 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01662 FILM NUMBER: 02564349 BUSINESS ADDRESS: STREET 1: ONE PRESIDENTIAL PARKWAY CITY: KOKOMO STATE: IL ZIP: 46904 BUSINESS PHONE: 7654530602 MAIL ADDRESS: STREET 1: ONE PRESIDENTIAL PARKWAY CITY: KOKOMO STATE: IL ZIP: 46904 N-30D 1 c22752_n30d.txt [LOGO](R) CONSECO(R) Step up.(sm) WASHINGTON NATIONAL INSURANCE COMPANY ANNUAL REPORT TO CONTRACT OWNERS DECEMBER 31, 2001 Washington National Variable Annuity Fund B ANNUAL REPORT TO CONTRACT OWNERS TABLE OF CONTENTS DECEMBER 31, 2001 ================================================================================ WASHINGTON NATIONAL VARIABLE ANNUITY FUND B PAGE Statement of Assets and Liabilities as of December 31, 2001................. 1 Statements of Operations for the Years Ended December 31, 2001 and 2000..... 2 Statements of Changes in Net Assets for the Years Ended December 31, 2001 and 2000.................................................................. 2 Notes to Financial Statements............................................... 3 Report of Independent Accountants........................................... 4 WASHINGTON NATIONAL VARIABLE ANNUITY FUND B STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2001 ================================================================================
VALUE ----- Assets: Investments in portfolio shares at net asset value (Note 2) Fundamental Investors, 34,875 shares (cost $322,074)................................................. $ 957,319 Amount due from Washington National Insurance Company.................................................. 43,187 - -------------------------------------------------------------------------------------------------------------------- Total assets ...................................................................................... $1,000,506 - --------------------------------------------------------------------------------------------------------------------- TOTAL VALUE UNITS UNIT VALUE OF UNITS ------------------------------------- Net assets attributable to: Contract owners' deferred annuity reserves: Fundamental Investors..................................................... 24,114.2 $28.339271 $ 683,379 - --------------------------------------------------------------------------------------------------------------------- Net assets attributable to contract owners' deferred annuity reserves... 683,379 - --------------------------------------------------------------------------------------------------------------------- Contract owners' annuity payment reserves: Fundamental Investors..................................................... 317,127 - --------------------------------------------------------------------------------------------------------------------- Net assets attributable to contract owners' annuity payment reserves.... 317,127 - --------------------------------------------------------------------------------------------------------------------- Net assets ........................................................... $1,000,506 - --------------------------------------------------------------------------------------------------------------------- UNIT PROGRESSION DECEMBER 31, 2001 - --------------------------------------------------------------------------------------------------------------------- Number of units, beginning of year............................................. 25,581.0 Units Purchased................................................................ 0.0 Units Redeemed................................................................. (1,466.8) - --------------------------------------------------------------------------------------------------------------------- Number of units, end of year................................................... 24,114.2 - --------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. 1
WASHINGTON NATIONAL VARIABLE ANNUITY FUND B STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 =================================================================================================================================== 2001 2000 - ----------------------------------------------------------------------------------------------------------------------------------- Investment income: Income dividends and short-term capital gains from investments in portfolio shares................ $ 14,545 $14,552 Expenses Mortality and expense risk fees................................................................... 9,229 11,802 - ----------------------------------------------------------------------------------------------------------------------------------- Net investment income........................................................................... 5,316 2,750 - ----------------------------------------------------------------------------------------------------------------------------------- Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares........................... (9,306) 2,552 Net realized long-term capital gain distributions from investments in portfolio shares............ 14,255 83,915 - ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments in portfolio shares............................................ 4,949 86,467 - ----------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized depreciation of investments in portfolio shares............................. (129,573) (49,722) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations......................................... $(119,308) $39,495 - ----------------------------------------------------------------------------------------------------------------------------------- Total return (Note 5)................................................................................ (10.47%) ===================================================================================================================== Investment ratio (Note 5)............................................................................ 1.61% ===================================================================================================================== STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 ================================================================================================================================== 2001 2000 - ---------------------------------------------------------------------------------------------------------------------------------- Changes from operations: Net investment income............................................................................. $ 5,316 $ 2,750 Net realized gain on investments in portfolio shares ............................................. 4,949 86,467 Net change in unrealized depreciation of investments in portfolio shares.......................... (129,573) (49,722) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations........................................... (119,308) 39,495 - ----------------------------------------------------------------------------------------------------------------------------------- Changes from contract owners' transactions: Contract redemptions.............................................................................. (83,524) (57,884) - ---------------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets from contract owners' transactions................................... (83,524) (57,884) - ---------------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets.................................................................... (202,832) (18,389) - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, beginning of year........................................................................ 1,203,338 1,221,727 - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of year....................................................................... $1,000,506 $1,203,338 ================================================================================================================================== The accompanying notes are an integral part of these financial statements.
2 WASHINGTON NATIONAL VARIABLE ANNUITY FUND B NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 AND 2000 ================================================================================ (1) GENERAL The Washington National Variable Annuity Fund B (the "Fund") is a segregated investment account for individual variable annuity contracts which are registered under the Securities Act of 1933. The Fund is registered as a unit investment trust under the Investment Company Act of 1940, as amended. The Fund invests solely in shares of Fundamental Investors, Inc., a diversified open-end management investment company. The operations of the Fund are included in the operations of the Washington National Insurance Company (the "Company") pursuant to the provisions of the Illinois Insurance Code. The Company is an indirect wholly owned subsidiary of Conseco, Inc., a publicly-held specialized financial services holding company listed on the New York Stock Exchange. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENT VALUATION, TRANSACTIONS, AND INCOME Investments in portfolio shares are valued using the net asset value of Fundamental Investors, Inc., at the end of each New York Stock Exchange business day. Investment share transactions are accounted for on a trade date basis (the date the order to purchase or redeem shares is executed) and dividend income is recorded on the ex-dividend date. The cost of investments in portfolio shares sold is determined on a last-in first-out basis. The Fund does not hold any investments which are restricted as to resale. Net investment income and net realized gains (losses) and unrealized appreciation (depreciation) on investments are allocated to the contracts on each valuation date based on each contract's pro rata share of the assets of the Fund as of the beginning of the valuation date. RECLASSIFICATION Certain prior year amounts have been reclassified to conform with current year presentation. FEDERAL INCOME TAXES No provision for federal income taxes has been made in the accompanying financial statements because the operations of the Fund are included in the total operations of the Company, which is treated as a life insurance company for federal income tax purposes under the Internal Revenue Code. Net investment income and realized gains (losses) are retained in the Fund and are not taxable until received by the contract owner or beneficiary in the form of annuity payments or other distributions. ANNUITY RESERVES Deferred annuity contract reserves are comprised of net contract purchase payments less redemptions and benefits. These reserves are adjusted daily for the net investment income and net realized gains (losses) and unrealized appreciation (depreciation) on investments. Net assets allocated to contracts in the payout period are computed according to the Progressive Annuitant Mortality Table. The assumed investment return is 3.5 percent. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the variable annuity account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company. (3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES The aggregate cost of purchases of investments in portfolio shares was $78,907 and $164,319 for the years ended December 31, 2001 and 2000, respectively. The aggregate proceeds from sales of investments in portfolio shares were $135,990 and $119,696 for the years ended December 31, 2001 and 2000, respectively. (4) DEDUCTIONS AND EXPENSES Although periodic retirement payments to contract owners vary according to the investment performance of the portfolios, such payments are not affected by expense or mortality experience because the Company assumes the mortality risk and the expense risk under the contracts. The mortality risk assumed by the Company results from the life annuity payment option in the contracts in which the Company agrees to make annuity payments regardless of how long a particular annuitant or other payee lives. The annuity payments are determined in accordance with annuity purchase rate provisions established at the time the contracts are issued. Based on the actuarial determination of expected mortality, the Company is required to fund any deficiency in the annuity payment reserves from its general account assets. The expense risk assumed by the Company is the risk that the deductions for contract administrative charges may prove insufficient to cover the actual expenses. The Company deducts daily from the Fund a fee, which is equal on an annual basis to 1.022 percent of the daily value of the total investments of the Fund, for assuming the mortality and expense risks. These fees were $9,229 and $11,802 for the years ended December 31, 2001 and 2000, respectively. (5) TOTAL RETURNS AND INVESTMENT RATIOS Beginning in 2001, disclosure of total returns and investment ratios became a new requirement. The total return is defined as the percentage change of unit values from the beginning of the period represented to the unit value at the end of the period represented. The investment ratio is the ratio of income dividends (including short-term capital gains) to average daily net assets. 3 REPORT OF INDEPENDENT ACCOUNTANTS ================================================================================ TO THE BOARD OF DIRECTORS OF WASHINGTON NATIONAL INSURANCE COMPANY AND CONTRACT OWNERS OF WASHINGTON NATIONAL VARIABLE ANNUITY FUND B In our opinion, the accompanying statement of assets and liabilities and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of the Washington National Variable Annuity Fund B (the "Account") at December 31, 2001, the results of its operations and the changes in its net assets for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Account's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of portfolio shares owned at December 31, 2001 by correspondence with the fund, provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Indianapolis, Indiana February 8, 2002 4 ================================================================================ WASHINGTON NATIONAL VARIABLE ANNUITY FUND B SPONSOR Washington National Insurance Company - Carmel, Indiana. INDEPENDENT PUBLIC ACCOUNTANTS PricewaterhouseCoopers LLP - Indianapolis, Indiana. ================================================================================ WASHINGTON NATIONAL INSURANCE COMPANY IS AN INDIRECT WHOLLY OWNED SUBSIDIARY OF CONSECO, INC., A FINANCIAL SERVICES ORGANIZATION HEADQUARTERED IN CARMEL, INDIANA. CONSECO, INC., THROUGH ITS SUBSIDIARY COMPANIES, IS ONE OF MIDDLE AMERICA'S LEADING SOURCES FOR INSURANCE, INVESTMENT AND LENDING PRODUCTS, HELPING 13 MILLION CUSTOMERS STEP UP TO A BETTER, MORE SECURE FUTURE. Washington National Insurance Company 11815 North Pennsylvania Street Carmel, Indiana 46032 (C) 2001 Washington National Insurance Company WWW.CONSECO.COM INSURANCE INVESTMENTS LENDING - -----------------------------------------------------------------------[LOGO](R) CONSECO (R) Step up.(sm)
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