485BPOS 1 advsel-complete.txt As filed with the Securities and Exchange Commission on April 23, 2008 Securities Act Registration No. 333-122109 Investment Act Registration No. 811-07661 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. 5 [X] REGISTRATION STATEMENT UNDER THE INVESTMENT ACT OF 1940 Amendment No. 29 [X] ------------------------ AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA (Registrant) ------------------------ AMERITAS LIFE INSURANCE CORP. (Depositor) 5900 "O" Street Lincoln, Nebraska 68510 402-467-1122 ------------------------ Robert G. Lange Vice President, General Counsel & Assistant Secretary Ameritas Life Insurance Corp. 5900 "O" Street Lincoln, Nebraska 68510 Approximate Date of Proposed Public Offering: As soon as practicable after effective date. It is proposed that this filing will become effective: [ ] 60 days after filing pursuant to paragraph a of Rule 485 [X] on May 1, 2008 pursuant to paragraph b of Rule 485 [ ] on _________ pursuant to paragraph a of Rule 485 [ ] immediately upon filing pursuant to paragraph b 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. Title of Securities Being Registered: Ameritas Advisor Select No-Load Variable Annuity PROSPECTUS: May 1, 2008 Ameritas Life Insurance Corp. Logo A UNIFI Company Ameritas Advisor Select No Load Variable Annuity (sm) POLICY FORM 6151 Flexible Premium Deferred Variable Annuity Policy Ameritas Life Insurance Corp. Separate Account LLVA This prospectus describes the Policy, especially its Separate Account. The Policy is designed to help you, the Policy Owner, invest on a tax-deferred basis and meet long-term financial goals. As an annuity, it also provides you with several ways to receive regular income from your investment. An initial minimum payment is required. Further investment is optional. If you agree to perform transfers electronically and accept other electronic and automated processing and delivery of Policy services and disclosure, as they become available, this Policy permits frequent trading subject to certain requirements; otherwise, this Policy includes usual and customary variable annuity restrictions upon frequent trading.
------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ CLASSIC PROFUNDS VP ULTRA PROFUNDS VP SECTOR PROFUNDS VP ------------------------------------------------------------------------------------------------------ Bull UltraBull Oil & Gas ------------------------------------------------------------------------------------------------------ Small-Cap UltraMid-Cap Precious Metals ------------------------------------------------------------------------------------------------------ NASDAQ-100 UltraSmall-Cap Real Estate ------------------------------------------------------------------------------------------------------ Mid-Cap Value UltraNASDAQ-100 NON-EQUITY PROFUNDS VP ------------------------------------------------------------------------------------------------------ Small-Cap Value INVERSE PROFUNDS VP U.S. Government Plus ------------------------------------------------------------------------------------------------------ Europe 30 Bear Rising Rates Opportunity ------------------------------------------------------------------------------------------------------ Dow 30 Short Small-Cap ACCESS VP HIGH YIELD FUNDSM ------------------------------------------------------------------------------------------------------ Short NASDAQ-100 PROFUND VP MONEY MARKET ------------------------------------------------------------------------ Short Dow 30 ------------------------------------------------------------------------
You may allocate all or part of your investment among variable investment options (where you have the investment risk, including possible loss of principal), with allocated indirect interests in these non-publicly traded portfolios of ProFunds - VP Series and Access One Trust - VP Series, both advised by ProFunds Advisors LLC. A Statement of Additional Information and other information about us and the Policy, with the same date as this prospectus, is on file with the Securities and Exchange Commission ("SEC") and is incorporated into this prospectus by reference. For a free copy, access it on the SEC's Web site (www.sec.gov, select "Search for Company Filings," then "Companies," then type in file number 333-122109), or write or call us. The Table of Contents for the Statement of Additional Information is on the last page of this prospectus. Please Read this Prospectus Carefully and Keep It for Future Reference. It provides information you should consider before investing in a Policy. Prospectuses for the portfolios underlying the Subaccount variable investment options are available without charge from our Service Center. The SEC does not pass upon the accuracy or adequacy of this prospectus, and has not approved or disapproved the Policy. Any representation to the contrary is a criminal offense. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE Ameritas Life Insurance Corp. (we, us, our) Ameritas Life Insurance Corp., P.O. BOX 82549, Lincoln NE 68501-2549 1-800-255-9678. www.advisorva.com. Contacting Us. To answer your questions or to send additional premium, write or call us at: Ameritas Life Insurance Corp. P.O. Box 82549 Lincoln NE 68501-2549 Or 5900 "O" Street Lincoln, Nebraska 68510 Telephone: 1-800-255-9678 Fax: 1-402-467-7335 Interfund Transfer Request Fax: 1-402-467-7923 e-mail: direct@ameritas.com Express mail packages should be sent to our street address, not our P.O. Box address. The Correct Form of Written Notice "in good order" is important for us to get the information we require to accurately process your Policy elections and changes. Many forms can be found on the on-line services section of our Web site. Or, call us at our toll-free number and we'll send you the form you need and tell you the information we require. Facsimile Written Notice. To provide you with timely service you want, we accept some Written Notice by facsimile. However, by not requiring your original signature, there is a greater risk unauthorized persons can manipulate your signature and make changes on your Policy (including withdrawals) without your knowledge. We are entitled to act upon facsimile signatures that reasonably appear to us to be genuine. Make checks payable to: "Ameritas Life Insurance Corp." TABLE OF CONTENTS Begin on Page DEFINED TERMS...............................................3 POLICY OVERVIEW.............................................4 CHARGES.....................................................5 FINANCIAL INFORMATION.......................................7 Accumulation Unit Values................................7 Financial Statements....................................7 CHARGES EXPLAINED...........................................7 Mortality and Expense Risk Charge.......................7 Transfer Fee............................................7 Tax Charges.............................................7 Fees Charged by the Portfolios..........................7 Waiver of Certain Charges...............................8 INVESTMENT OPTIONS..........................................8 Separate Account Variable Investment Options............8 Transfers..............................................10 Third-Party Services...................................10 Short-Term Trading.....................................10 IMPORTANT POLICY PROVISIONS................................11 Policy Application and Issuance........................11 Your Policy Value......................................12 Telephone Transactions.................................13 Delay of Payments......................................13 Beneficiary............................................13 Minor Owner or Beneficiary.............................13 Policy Changes.........................................14 Policy Termination.....................................14 POLICY DISTRIBUTIONS.......................................14 Withdrawals............................................14 Death Benefits.........................................15 Annuity Income Benefits................................17 FEDERAL INCOME TAX MATTERS.................................19 MISCELLANEOUS..............................................21 About Our Company......................................21 Distribution of the Policies...........................21 Voting Rights..........................................21 Legal Proceedings......................................21 APPENDIX A: Accumulation Unit Values......................A:1 APPENDIX B: Tax-Qualified Plan Disclosures................B:1 IMSA..................................................Last Page Thank You. If You Have Questions,....................Last Page Statement of Additional Information Table of Contents.Last Page -2- DEFINED TERMS ......... Accumulation Units are an accounting unit of measure used to calculate the Policy value allocated to Subaccounts of the Separate Account. It is similar to a share of a mutual fund. The Policy describes how Accumulation Units are calculated. Annuitant is the person on whose life annuity payments involving life contingencies are based and who receives Policy annuity payments. Annuity Date is the date annuity income payouts are scheduled to begin. This date is identified on the Policy Specifications page of your Policy. You may change this date, as permitted by the Policy and described in this prospectus. Business Day is each day that the New York Stock Exchange is open for trading. Cash Surrender Value is the Policy value less applicable Policy fee, and any premium tax charge not previously deducted. Owner, you, your is you -- the person(s) or legal entity who may exercise all rights and privileges under the Policy. If there are joint Owners, the signatures of both Owners are needed to exercise rights under the Policy. Policy Year/Month/Anniversary are measured from respective anniversary dates of the date of issue of this Policy. Subaccount is a division within the Separate Account for which Accumulation Units are separately maintained. Each Subaccount corresponds to a single underlying non-publicly traded portfolio issued through a series fund. We, Us, Our, Ameritas, ALIC - Ameritas Life Insurance Corp. Written Notice -- Written notice, signed by you, on a form approved by or acceptable to us, that gives us the information we require and is received at Ameritas Life Insurance Corp., P.O. BOX 82549, Lincoln NE 68501-2549 (or 5900 "O" Street, Lincoln, NE 68510), fax 1-402-467-7335. Call us if you have questions about what form or information is required. This prospectus may only be used to offer the Policy where the Policy may lawfully be sold. The Policy, and certain features described in this prospectus, may not be available in all states. If your Policy is issued as part of a qualified plan under the Internal Revenue Code, refer to any plan documents and disclosures for information about how some of the benefits and rights of the Policy may be affected. -3- POLICY OVERVIEW The following is intended as a summary. Please read each section of this prospectus for additional detail. The Policy 6151 Ameritas Advisor Select No Load Variable Annuity is a variable annuity savings vehicle offering a variety of investment options to help meet long-term financial goals. Its costs are discussed in this prospectus' CHARGES and CHARGES EXPLAINED sections. You have a short time period to review your Policy and cancel it. The terms of this "right to examine" period vary by state (see the cover of your Policy). You can allocate your premiums among a wide spectrum of investments and transfer money from one underlying investment portfolio to another without tax liability. In the Separate Account variable investment options, you may gain or lose money on your investment. The investment options are described on this prospectus' first page and the INVESTMENT OPTIONS section. The Policy is designed for use by market-timing organizations or other persons or entities that use programmed or frequent transfers among investment options and other lower-cost on-line and automated procedures, except as otherwise stated. More information about short-term trading is in the INVESTMENT OPTIONS - TRANSFERS section. A significant advantage of the Policy is that it provides the ability to accumulate capital on a tax-deferred basis. The purchase of a Policy to fund a tax-qualified retirement account does not provide any additional tax deferred treatment beyond the treatment provided by the tax-qualified retirement plan itself. However, the Policy does provide benefits such as lifetime income payments, family protection through death benefits and guaranteed fees. The Policy is a deferred annuity: it has an accumulation (or deferral) period and an annuity income period. Accumulation Period. During the accumulation period, any earnings that you leave in the Policy are not taxed. During this period you can invest additional money into the Policy, transfer amounts among the investment options, and withdraw some or all of the value of your Policy. Some restrictions may apply to transfers. Withdrawals may be subject to income tax and a penalty tax. Annuity Income Period. The accumulation period ends and the annuity income period begins on a date you select (or the later of the fifth Policy Anniversary or the Policy Anniversary nearest the Annuitant's 85th birthday). During the annuity income period, we will make periodic payments to the Annuitant, unless you specify otherwise. You can select payments that are guaranteed to last for the Annuitant's entire life or for some other period. Some or all of each payment will be taxable. A feature of the Policy distinguishing it from non-annuity investments is its ability to guarantee annuity payments to you for as long as the Annuitant lives or for some other period you select. In addition, if you die before those payments begin, the Policy will pay a death benefit to your beneficiary. POLICY OPERATION & FEATURES Premiums. o Minimum initial premium: $10,000. o Minimum additional premium: $250, or $50 per month if through a regularly billed program. o No additional premiums will be accepted after the earlier of the Annuity Date or the Policy Anniversary nearest your 85th birthday without our approval. Investment Options. o You may transfer among investments, subject to limits. Deductions from Assets. (See CHARGES on next pages.) Withdrawals. o There are no withdrawal charges. o Each withdrawal must be at least $250. Annuity Income. o Several fixed annuity income options are available. Death Benefit. o A death benefit is paid upon the death of the Owner. TAX-QUALIFIED PLANS The Policy can be used to fund a tax-qualified plan such as an IRA or Roth IRA (including for rollovers from tax-sheltered annuities), SEP, or SIMPLE IRA, etc. This Prospectus generally addresses the terms that affect a non-tax-qualified annuity. If your Policy funds a tax-qualified plan, read the Tax Qualified Plan Disclosures in this prospectus' Appendix B to see how they might change your Policy rights and requirements. Contact us if you have questions about the use of the Policy in these or other tax-qualified plans. -4- CHARGES BASE POLICY CHARGES The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Policy. The first table describes the fees and expenses that you will pay at the time that you buy the Policy, surrender the Policy, or transfer Policy value between investment options. State premium taxes may also be deducted.
---------------- --------------- Guaranteed Maximum Current Fee Fee ------------------------------------------------------------------------------------- ---------------- --------------- TRANSACTION FEES ------------------------------------------------------------------------------------- ---------------- --------------- SALES LOAD None None ---------------------------------- -------------------------------------------------- ---------------- --------------- WITHDRAWAL CHARGE None None ---------------------------------- -------------------------------------------------- ---------------- --------------- PREMIUM TAXES Levied by some states and municipalities. Rates 0% - 3.5% 0% - 3.5% (upon premium) and timing of the tax vary and may change. ---------------------------------- -------------------------------------------------- ---------------- --------------- TRANSFER FEE (per transfer) ' first 15 transfers per Policy year None None ' over 15 transfers in one Policy Year, we may charge ... $10 None ---------------------------------- -------------------------------------------------- ---------------- --------------- The next table describes the fees and expenses that you will pay periodically during the time that you own the Policy, to equal the annualized charges shown, not including Subaccount portfolio operating fees and expenses. ---------------- --------------- Guaranteed Maximum Current Fee Fee ------------------------------------------------------------------------------------- ---------------- --------------- ANNUAL POLICY FEE None None ---------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT ANNUAL EXPENSES Deducted daily from assets allocated to the Separate Account to equal the annual % shown.) ------------------------------------------------------------------------------------- ---------------- --------------- MORTALITY & EXPENSE RISK CHARGE 0.90% 0.90% ------------------------------------------------------------------------------------- ---------------- ---------------
PORTFOLIO COMPANY OPERATING EXPENSES (as of December 31, 2007) The next table shows the minimum and maximum total operating expenses charged by the portfolio companies, before and after any contractual waivers or reductions, that you may pay periodically during the time that you own the contract. More detail concerning each portfolio company's fees and expenses is contained in the prospectus for each portfolio company.
---------------------------------------------------------------------------- -------------------- -------------------- TOTAL ANNUAL PORTFOLIO COMPANY OPERATING EXPENSES Expenses that are deducted from portfolio company assets, including Minimum Maximum management fees, distribution and/or service (12b-1) fees, and other expenses ------------------------------------------------------------------------------ ------------------- ------------------ Before any Waivers and Reductions 1.37% (1) 2.27% (2) ------------------------------------------------------------------------------ ------------------- ------------------ After any Waivers and Reductions (explained in the footnotes to these tables) 1.30% (1) 1.63% (3) ------------------------------------------------------------------------------ ------------------- ------------------ (1) ProFund VP Money Market. (2) Inverse ProFunds VP Short Dow 30. (3) See complete chart below for list of portfolios with Total Expenses of 1.63%. ---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Acquired Total Expenses o Subaccount's underlying Fund Fees Total Waivers after Waivers Management 12b-1 Other and Portfolio and and Reductions, Portfolio Name Fees Fees* Fees Expenses Fees Reductions if any ---------------------------------------------------------------------------------------------------------------------- CLASSIC PROFUNDS VP ---------------------------------------------------------------------------------------------------------------------- Bull 0.75% 0.25% 0.67% - 1.67%(1) 0.04% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Small Cap 0.75% 0.25% 0.59% - 1.59%(1) - 1.59%(2) ---------------------------------------------------------------------------------------------------------------------- NASDAQ-100 0.75% 0.25% 0.69% - 1.69%(1) 0.06% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Mid-Cap Value 0.75% 0.25% 0.72% - 1.72%(1) 0.09% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Small-Cap Value 0.75% 0.25% 0.76% - 1.76%(1) 0.13% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Europe 30 0.75% 0.25% 0.66% - 1.66%(1) 0.03% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Dow 30 0.75% 0.25% 0.38% - 1.38%(1) - 1.38%(2) ---------------------------------------------------------------------------------------------------------------------- ULTRA PROFUNDS VP ---------------------------------------------------------------------------------------------------------------------- UltraBull 0.75% 0.25% 0.68% - 1.68%(1) 0.05% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- -5- ---------------------------------------------------------------------------------------------------------------------- Acquired Total Expenses o Subaccount's underlying Fund Fees Total Waivers after Waivers Management 12b-1 Other and Portfolio and and Reductions, Portfolio Name Fees Fees* Fees Expenses Fees Reductions if any ---------------------------------------------------------------------------------------------------------------------- UltraMid-Cap 0.75% 0.25% 0.69% - 1.69%(1) 0.06% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- UltraSmall-Cap 0.75% 0.25% 0.73% - 1.73%(1) 0.10% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- UltraNASDAQ-100 0.75% 0.25% 0.69% - 1.69%(1) 0.06% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- INVERSE PROFUNDS VP ---------------------------------------------------------------------------------------------------------------------- Bear 0.75% 0.25% 0.70% - 1.70%(1) 0.07% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Short Small-Cap 0.75% 0.25% 0.66% - 1.66%(1) 0.03% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Short NASDAQ-100 0.75% 0.25% 0.71% - 1.71%(1) 0.08% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Short Dow 30 0.75% 0.25% 1.27% - 2.27%(1) 0.64% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- SECTOR PROFUNDS VP ---------------------------------------------------------------------------------------------------------------------- Oil & Gas 0.75% 0.25% 0.71% - 1.71%(1) 0.08% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Precious Metals 0.75% 0.25% 0.70% - 1.70%(1) 0.07% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- Real Estate 0.75% 0.25% 0.73% - 1.73%(1) 0.10% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- NON-EQUITY PROFUNDS VP ---------------------------------------------------------------------------------------------------------------------- US Government Plus 0.50% 0.25% 0.68% - 1.43%(1) 0.10% 1.33%(2) ---------------------------------------------------------------------------------------------------------------------- Rising Rates Opportunity 0.75% 0.25% 0.62% - 1.62%(1) - 1.62%(2) ---------------------------------------------------------------------------------------------------------------------- ACCESS VP HIGH YIELD FUND 0.75% 0.25% 0.88% - 1.88%(1) 0.25% 1.63%(2) ---------------------------------------------------------------------------------------------------------------------- PROFUND VP MONEY MARKET 0.75% 0.25% 0.37% - 1.37%(1) 0.07% 1.30%(2) ----------------------------------------------------------------------------------------------------------------------
(1) ProFund Advisors LLC has contractually agreed to waive Investment Advisory and Management Services Fees and to reimburse other expenses to the extent Total Portfolio Fees, as a percentage of average daily net assets, exceed 1.63% (1.33% for ProFund VP U.S. Government Plus and 1.30% for ProFund VP Money Market) through April 30, 2009. After such date, any of the expense limitations may be terminated or revised. Amounts waived or reimbursed in a particular fiscal year may be repaid to ProFund Advisors LLC within 3 years of the waiver or reimbursement to the extent that recoupment will not cause the Portfolio's expenses to exceed any expense limitation in place at that time. A waiver or reimbursement lowers the expense ratio and increases overall returns to investors. (2) Reflects fee waivers, reimbursement of expenses, and expense reductions, if any. * 12b-1 fees are paid to us by the portfolio pursuant to Rule 12b-1 under the Investment Company Act of 1940, which allows investment companies to pay fees out of portfolio assets to those who sell and distribute portfolio shares. We provide shareholder support and marketing services for some Subaccount portfolio investment advisers in return for annual compensation of between 0.05% and 0.25% of Subaccount assets. This compensation is reflected in the Portfolio expenses shown above. EXAMPLES OF EXPENSES The Examples below are intended to help you compare the cost of investing in the Policy with the cost of investing in other variable annuity policies. These costs include Policy owner transaction expenses, contract charges, separate account annual expenses, and Subaccount underlying portfolio fees and expenses. The Examples assume that you invest $10,000 in the Policy for the time periods indicated. The Examples also assume that your investment has a 5% return each year and assume the underlying portfolio and Policy fees and expenses indicated. The example amounts are illustrative only, and should not be considered a representation of past or future expenses. Your actual expenses may be higher or lower than those shown in the chart.
------------------------------------------------------------------------------- The Policy's expenses are the same whether the Policy is surrendered, annuitized, or continues at the end of the time period shown. -------------------------------------------------------------------------------------------------------------- EXAMPLE 1 Yr 3 Yr 5 Yr 10 Yr -------------------------------------------------------------------------------------------------------------- Maximum Policy Expenses (1) $320 $977 $1,659 $3,476 -------------------------------------------------------------------------------------------------------------- Minimum Policy Expenses (2) $223 $688 $1,180 $2,534 --------------------------------------------------------------------------------------------------------------
(1) Maximum Policy Expenses. This example assumes maximum charges of 0.90% for Separate Account annual expenses plus the maximum fees and expenses before any waivers or reductions of any of the portfolio companies (2.27%). (2) Minimum Policy Expenses. This example assumes current charges of 0.90% for Separate Account annual expenses plus the minimum fees and expenses after any waivers or reductions of any of the portfolio companies (1.30%). -6- FINANCIAL INFORMATION ACCUMULATION UNIT VALUES We provide Accumulation Unit value history for each of the Separate Account variable investment options in Appendix A. FINANCIAL STATEMENTS Financial statements of the Subaccounts of the Separate Account and our company are included in the Statement of Additional Information; to learn how to get a copy, see the front or back page of this prospectus. CHARGES EXPLAINED The Policy has no sales load, withdrawal charges, or separate charge for administrative expenses including no Policy fee. MORTALITY AND EXPENSE RISK CHARGE We impose a daily fee to compensate us for the mortality and expense risks we have under the Policy. This fee is reflected in the Accumulation Unit values for each Subaccount. Our mortality risk arises from our obligation to make annuity payments and to pay death benefits prior to the Annuity Date. The mortality risk we assume is that Annuitants will live longer than we project, so our cost in making annuity payments will be higher than projected. However, an Annuitant's own longevity, or improvement in general life expectancy, will not affect the periodic annuity payments we pay under your Policy. Another mortality risk we assume is that at your death the death benefit we pay will be greater than the Policy value. Our expense risk is that our costs to administer your Policy will exceed the amount we collect through administrative charges. If the mortality and expense risk charge does not cover our costs, we bear the loss, not you. If the charge exceeds our costs, the excess is our profit. TRANSFER FEE The first 15 transfers per Policy Year from Subaccounts are free. A transfer fee may be imposed for any transfer in excess of 15 per Policy Year. The transfer fee is deducted pro rata from each Subaccount in which the Owner is invested. TAX CHARGES Some states and municipalities levy a tax on annuities, currently ranging from 0% to 3.5% of your premiums. These tax rates, and the timing of the tax, vary and may change. Presently, we deduct the charge for the tax in those states with a tax either (a) from premiums as they are received, or (b) upon applying proceeds to an annuity income option. No charges are currently made for taxes other than premium taxes. We reserve the right to levy charges in the future for taxes or other costs resulting from taxes that we determine are properly attributable to the Separate Account. FEES CHARGED BY THE PORTFOLIOS Each Subaccount's underlying portfolio has investment advisory fees and expenses. They are set forth in this prospectus' CHARGES section and described in more detail in each fund's prospectus. A portfolio's fees and expenses are not deducted from your Policy value. Instead, they are reflected in the daily value of portfolio shares which, in turn, will affect the daily Accumulation Unit value of the Subaccounts. These fees and expenses help to pay the portfolio's investment advisory and operating expenses. -7- WAIVER OF CERTAIN CHARGES When the Policy is sold in a manner that results in savings of sales or administrative expenses, we reserve the right to waive all or part of any fee we charge under the Policy (excluding fees charged by the portfolios). Factors we consider include one or more of the following: size and type of group to whom the Policy is issued; amount of expected premiums; relationship with us (employee of us or an affiliated company, receiving distributions or making transfers from other policies we or one of our affiliates issue or transferring amounts held under qualified retirement plans we or one of our affiliates sponsor); type and frequency of administrative and sales services provided; or level of annual maintenance fee. Any fee waiver will not be discriminatory and will be done according to our rules in effect at the time the Policy is issued. We reserve the right to change these rules. The right to waive any charges may be subject to state approval. INVESTMENT OPTIONS The Policy allows you to choose from a wide array of investment options - each chosen for its potential to meet specific investment objectives. You may allocate your premiums among the Separate Account variable investment options. Allocations must be in whole percentages and total 100%. The variable investment options, which invest in underlying portfolios, are listed and described below. The value of your Policy will go up or down based on the investment performance of the variable investment options you choose. Please consider carefully, and on a continuing basis, which investment options best suit your long-term investment objectives and risk tolerance. SEPARATE ACCOUNT VARIABLE INVESTMENT OPTIONS The Separate Account provides you with variable investment options in the form of underlying portfolio investments. Each underlying portfolio is an open-end investment management company. When you allocate investments to an underlying portfolio, those investments are placed in a Subaccount of the Separate Account corresponding to that portfolio, and the Subaccount in turn invests in the portfolio. The Policy value of your Policy depends directly on the investment performance of the portfolios that you select. The Separate Account is registered with the SEC as a unit investment trust. However, the SEC does not supervise the management or the investment practices or policies of the Separate Account or Ameritas. The Separate Account was established as a separate investment account of Ameritas under Nebraska law on October 26, 1995. Under Nebraska law, we own the Separate Account assets, but they are held separately from our other assets and are not charged with any liability or credited with any gain of business unrelated to the Separate Account. Any and all distributions made by the underlying portfolios, with respect to the shares held by the Separate Account, will be reinvested in additional shares at net asset value. We are responsible to you for meeting the obligations of the Policy, but we do not guarantee the investment performance of any of the variable investment options' underlying portfolios. We do not make any representations about their future performance. The underlying portfolios in the Separate Account are NOT publicly traded mutual funds, and are NOT the same as other publicly traded mutual funds with very similar names. They are only available as separate account investment options in life insurance or variable annuity policies issued by insurance companies, or through participation in certain qualified pension or retirement plans. Even if the investment options and policies of some underlying portfolios available under the Policy may be very similar to the investment objectives and policies of publicly traded mutual funds that may be managed by the same investment adviser, the investment performance and results of the portfolios available under the Policy may vary significantly from the investment results of such other publicly traded mutual funds. You should read the prospectuses for the underlying portfolios together with this prospectus for more information. You bear the risk that the variable investment options you select may fail to meet their objectives, that they could go down in value, and that you could lose principal. Each Subaccount's underlying portfolio operates as a separate investment fund, and the income or losses of one generally has no effect on the investment performance of any other. Complete descriptions of each variable investment option's investment objectives and restrictions and other material information related to an investment in the variable investment option are contained in the prospectuses for each of the series funds which accompany this prospectus. -8- The Separate Account Subaccount underlying portfolios listed below are designed primarily as investments for variable annuity and variable life insurance policies issued by insurance companies. They are not publicly traded mutual funds available for direct purchase by you. There is no assurance the investment objectives will be met. This information is just a summary for each underlying portfolio. You should read the series fund prospectus for an underlying portfolio accompanying this prospectus for more information about that portfolio, including detailed information about the portfolio's fees and expenses, investment strategy and investment objective, and potential risks such as those related to mixed and shared funding for portfolios that are also offered through variable life insurance policies and qualified pension and retirement plans. To get a copy of any portfolio prospectus, contact your representative or us as shown on the Table of Contents page or the last page of this prospectus.
-------------------------------------------------------------------------------------------------------------------- FUND NAME INVESTMENT ADVISER Portfolio Name Portfolio Type / Summary of Investment Strategy -------------------------------------------------------------------------------------------------------------------- ProFunds(R) ProFunds Advisors LLC -------------------------------------------------------------------------------------------------------------------- Classic ProFunds VP Daily, before fees and expenses, match stated index: -------------------------------------------------------------------------------------------------------------------- Bull S&P 500 Index(R) -------------------------------------------------------------------------------------------------------------------- Small Cap Russell 2000 Index(R) -------------------------------------------------------------------------------------------------------------------- NASDAQ-100 NASDAQ-100 Index(R) -------------------------------------------------------------------------------------------------------------------- Mid-Cap Value S&P MidCap 400/Citigroup Value Index -------------------------------------------------------------------------------------------------------------------- Small-Cap Value S&P SmallCap 600/Citigroup Value Index -------------------------------------------------------------------------------------------------------------------- Europe 30 ProFunds Europe 30 Index -------------------------------------------------------------------------------------------------------------------- Dow 30 Dow Jones Industrial Average -------------------------------------------------------------------------------------------------------------------- Ultra ProFunds VP Daily, before fees and expenses, double stated index: -------------------------------------------------------------------------------------------------------------------- UltraBull S&P 500 Index(R) -------------------------------------------------------------------------------------------------------------------- UltraMid-Cap S&P MidCap 400 Index -------------------------------------------------------------------------------------------------------------------- UltraSmall-Cap Russell 2000 Index -------------------------------------------------------------------------------------------------------------------- UltraNASDAQ-100 NASDAQ-100 Index(R) -------------------------------------------------------------------------------------------------------------------- Inverse ProFunds VP Daily, before fees and expenses, match inverse of stated index: -------------------------------------------------------------------------------------------------------------------- Bear S&P 500 Index(R) -------------------------------------------------------------------------------------------------------------------- Short Small-Cap Russell 2000 Index -------------------------------------------------------------------------------------------------------------------- Short NASDAQ-100 NASDAQ-100 Index(R) -------------------------------------------------------------------------------------------------------------------- Short Dow 30 Dow Jones Industrial Average -------------------------------------------------------------------------------------------------------------------- Sector ProFunds VP Daily, before fees and expenses, match stated index: -------------------------------------------------------------------------------------------------------------------- Oil & Gas Dow Jones U.S. Oil & Gas Index -------------------------------------------------------------------------------------------------------------------- Precious Metals Dow Jones Precious Metals Index -------------------------------------------------------------------------------------------------------------------- Real Estate Dow Jones U.S. Real Estate Index -------------------------------------------------------------------------------------------------------------------- Non-Equity ProFunds VP Daily, before fees and expenses, correspond to 125% of bond performance. -------------------------------------------------------------------------------------------------------------------- US Government Plus Most recently issued 30-year U.S. Treasury Bond -------------------------------------------------------------------------------------------------------------------- Rising Rates Opportunity Inverse of most recently issued 30-year U.S. Treasury Bond -------------------------------------------------------------------------------------------------------------------- Access VP High Yield Fund SM Daily investment results, before fees and expenses, that correspond to total return of high yield market. -------------------------------------------------------------------------------------------------------------------- ProFund VP Money Market Money market. --------------------------------------------------------------------------------------------------------------------
"S&P 500 Index," "S&P MidCap 400 Index," and "S&P SmallCap 600 Index" are trademarks of The McGraw-Hill Companies, Incl. and Barra, Inc. and have been licensed for use by ProFunds. "Dow Jones" and the name of each Dow Jones sector index are trademarks of Dow Jones & Company, Inc. and have been licensed for use for certain purposes by ProFunds VPs. "NASDAQ-100(R) Index" is a trademark of The NASDAQ Stock Market, Inc. "Russell 2000(R) Index" is a trademark of the Frank Russell Company. The ProFunds VP portfolios and the Policy are not sponsored, endorsed, sold or promoted by these organizations and the organizations make no representations regarding the advisability of investing in ProFunds VP or purchasing the Policy. o Adding, Deleting, or Substituting Variable Investment Options We do not control the Subaccounts' underlying portfolios, so we cannot guarantee that any of the portfolios will always be available. We retain the right to change the investments of the Separate Account, and to eliminate the shares of any Subaccount's underlying portfolio and substitute shares of another series fund portfolio. If the shares of the underlying portfolio are no longer available for investment or if, in our judgment, investment in the portfolio would be inappropriate in view of the purposes of the Separate Account, we will first notify you and receive any necessary SEC and state approval before making such a change. New Separate Account underlying portfolios may be added, or existing funds eliminated, when, in our sole discretion, conditions warrant a change. If a portfolio is eliminated, we will ask you to reallocate any amount in the eliminated portfolio. If you do not reallocate these amounts, we will automatically reinvest them in the ProFund VP Money Market Subaccount. -9- If we make a portfolio substitution or change, we may change the Policy to reflect the substitution or change. Our Separate Account may be (i) operated as an investment management company or any other form permitted by law, (ii) deregistered with the SEC if registration is no longer required, or (iii) combined with one or more other separate accounts. To the extent permitted by law, we also may transfer assets of the Separate Account to other accounts. TRANSFERS Subject to restrictions during the "right to examine period" and prior to the Annuity Date, you may transfer Policy value from one Subaccount to another, subject to these rules: Transfer Rules: o A transfer is considered any single request to move assets from one or more Subaccounts to one or more of the other Subaccounts. o We must receive notice of the transfer by either Written Notice, an authorized telephone transaction, or by Internet when available. For same day processing, transfer requests by facsimile, telephone, or Internet must be sent to us by 3:20 p.m. Eastern Time for the Access VP High Yield Fund SM and Sector ProFunds VP portfolios, and 3:45 p.m. Eastern Time for all other portfolios. Requests received later are processed on the next trading day. Fax requests must be sent to our trade desk at 402-467-7923. If requests are faxed elsewhere, we will process them as of the day they are received by our trading unit. o The transferred amount must be at least $250, or the entire Subaccount if it is less. (If the value remaining after a transfer will be less than $250 in a Subaccount, we will include that amount as part of the transfer.) o The first 15 transfers each Policy Year are free. Thereafter, transfers may result in a $10 charge for each transfer. This fee is deducted on a pro-rata basis from balances in all Subaccounts; it is not subtracted from the amount of the transfer. o If the Policy value in any Subaccount falls below $250, we may transfer the remaining balance, without charge, to the ProFund VP Money Market Subaccount. o We reserve the right to limit transfers, or to modify transfer privileges, and we reserve the right to change the transfer rules at any time, subject to Policy restrictions. o In the event you authorize telephone or Internet transfers, we are not liable for telephone or Internet instructions that we in good faith believe you authorized. We will employ reasonable procedures to confirm that instructions are genuine. THIRD-PARTY SERVICES Where permitted and subject to our rules, we may accept your authorization to have a third party exercise transfers or investment allocations on your behalf. Third-party transfers and allocations are subject to the same rules as all other transfers and allocations. You can make this election by sending us Written Notice. Please note that any person or entity you authorize to make transfers or allocations on your behalf, including any investment advisory, asset allocation, money management or timing service, does so independently from any agency relationship they may have with us for the sale of the Policies. They are accountable to you alone for such transfers or allocations. We are not responsible for such transfers or allocations on your behalf, or recommendations to you, by such third-party services. You should be aware that fees charged by such third parties for their service are separate from and in addition to fees paid under the Policy. SHORT-TERM TRADING Unlike most variable annuity policies, the Policy can serve as a vehicle for short-term trading and includes investment options designed for use by investors and their investment advisors who use frequent trading. Subaccount underlying portfolios' prospectuses describe each portfolio's position regarding short-term trading. To engage in short-term trading, you must elect (on a form we will provide to you) to perform trades using only an electronic 'on-line' process we make available, and must consent to receive disclosures (trade confirmations, annual statements, updated disclosure information, etc.) electronically. We reserve the right, however, to deliver documents to you on paper at any time. We may charge a fee for producing paper copies of documents at your request and which have been previously delivered to you electronically. (There is no charge for paper notices if you do not elect to do on-line trading or have not otherwise elected to receive electronic disclosure, or if you revoke in writing your on-line trading privileges or receipt of electronic disclosure.) You may also revoke your consent to further delivery of electronic documents at any time by Written Notice to us. -10- If you do not elect the requirements for short-term trading outlined above, we reserve the right to reject or restrict, in our sole discretion, transfers initiated by a market timing organization or individual or other party authorized to give transfer instructions. Frequent trading, programmed transfers, or transfers that are large in relation to the total assets of a Subaccount's underlying portfolio can disrupt management of the Subaccount and underlying portfolio and raise expenses. This in turn can hurt performance of an affected Subaccount and therefore hurt your Policy's performance. We further reserve the right to impose restrictions on transfers that we determine, in our sole discretion, will disadvantage or potentially hurt the rights or interests of other Policy Owners. Restrictions may include changing, suspending or terminating telephone, on-line and facsimile transfer privileges. We will also enforce any Subaccount underlying portfolio manager's own restrictions imposed upon transfers considered by the manager to be disruptive. Our disruptive trading procedures may vary from Subaccount to Subaccount, and may also vary due to differences in operational systems and contract provisions. Any Subaccount restrictions will be uniformly applied. We will notify affected Policy Owners before we limit transfers, modify transfer procedures or refuse to complete a transfer. IMPORTANT POLICY PROVISIONS Many key rights and benefits under the Policy are summarized in this prospectus. Your Policy contains the complete terms of your agreement with Ameritas. You may obtain a copy of the Policy from us. The Policy remains in force until surrendered for its Cash Surrender Value, or until all proceeds have been paid under an annuity income option or as a death benefit. POLICY APPLICATION AND ISSUANCE To purchase a Policy, you must submit an application and a minimum initial premium. A Policy usually will be issued only if you and the Annuitant are age 0 through 85, rounded to the nearest birthday. We reserve the right to reject any application or premium for any reason. Replacing an existing annuity policy is not always your best choice. Evaluate any replacement carefully. If your application is in good order upon receipt, we will credit your initial premium (less premium tax, if applicable) to the Policy value in accordance with the Policy's "right to examine" provision within two Business Days after the later of the date we receive your application or the date we receive your premium. If the application is incomplete or otherwise not in good order, we will contact you within five Business Days to explain the delay; at that time we will refund your initial premium unless you consent to our retaining it to apply it to your Policy once all Policy issuance requirements are met. The Policy Date is the date two Business Days after we receive your application and initial premium. It is the date used to determine Policy Anniversaries and Policy Years. No Policy will be dated on or after the 29th day of a month. (This does not affect how premium is credited; see the paragraph above.) o Application in Good Order All application questions must be answered, but particularly note these requirements: o The Owner's and the Annuitant's full name, Social Security number, and date of birth must be included. o Your premium allocations must be completed in whole percentages, and total 100%. o Initial premium must meet minimum premium requirements. o Your signature must be on the application. o Identify the type of plan, whether it is nonqualified or, if it is qualified, state the type of qualified plan. o City, state and date application was signed must be completed. o If you have one, please give us your e-mail address to facilitate receiving updated Policy information by electronic delivery. o There may be forms in addition to the application required by law or regulation, especially when a qualified plan or replacement is involved. -11- o Premium Requirements Your premium checks should be made payable to "Ameritas Life Insurance Corp." We may postpone crediting any payment made by check to your Policy value until the check has been honored by your bank. Payment by certified check, banker's draft, or cashier's check will be promptly applied. Under our electronic fund transfer program, you may select a monthly payment schedule for us to automatically deduct premiums from your bank account or other sources. We must consent to any premium that would result in more than $5 million total premium held with us for the same Annuitant or Owner ($1 million for policies issued prior to June 1, 2006). Initial Premium o The only premium required. All others are optional. o Must be at least $10,000. We have the right to change these premium requirements, and to accept a smaller initial premium if payments are established as part of a regularly billed program (electronic funds transfer, payroll deduction, etc.) or as part of a tax-qualified plan. Additional Premiums o Must be at least $250; $50 if payments are established as electronic funds transfer. We have the right to change these premium requirements. o Will not be accepted, without our approval, on or after the earlier of (i) the Policy Anniversary nearest your 85th birthday or (ii) the Annuity Date. Allocating Your Premiums You may allocate your premiums among the variable investment options. Initial allocations in your Policy application will be used for additional premiums until you change your allocation. o Allocations must be in whole percentages, and total 100%. o You may change your allocation by sending us Written Notice or through an authorized telephone transaction. The change will apply to premiums received on or after the date we receive your Written Notice or authorized telephone transaction. o All premiums will be allocated pursuant to your instructions on record with us, except your initial premium and any additional premiums received during your Policy's "right to examine" period may be subject to special requirements. o "Right to Examine" Period Allocations Return of Value States. In states that permit us to refund your Policy value upon your cancellation of the Policy during the "right to examine" period, we will allocate your initial premium to your selected variable investment options on the date of issue of the Policy. Return of Premium States and IRA plan Policies. In states that require us to refund at least your full premium upon your cancellation of the Policy during the "right to examine" period, we will hold your initial premium in the ProFund VP Money Market Subaccount for 13 days. Then, we will invest your initial premium in the investment options pursuant to your application instruction. (Any additional premiums we receive during the "right to examine" period plus 3 days will be allocated in the same manner.) If, at the end of the "right to examine" period, you decide to cancel your Policy, we will refund the greater of the Policy value or premiums paid. YOUR POLICY VALUE On your Policy's date of issue, the Policy value equals the initial premium less any charge for applicable premium taxes. On any Business Day thereafter, the Policy value equals the sum of the values in the Separate Account variable investment options. The Policy value is expected to change from day to day, reflecting the expenses and investment experience of the selected variable investment options as well as the deductions for charges under the Policy. o Separate Account Value Premiums or transfers allocated to Subaccounts are accounted for in Accumulation Units. The Policy value held in the Separate Account Subaccounts on any Business Day is determined by multiplying each Subaccount's Accumulation Unit value by the number of Subaccount units allocated to the Policy. Each Subaccount's Accumulation Unit value is calculated at the end of each Business Day as follows: (a) the per share net asset value of the Subaccount's underlying portfolio as of the end of the current Business Day plus any dividend or capital gain distribution declared and unpaid by the underlying portfolio during that Business Day, times the number of shares held by the Subaccount, before the purchase or redemption of any shares on that date; minus -12- (b) the daily mortality and expense risk charge; and this result divided by (c) the total number of Accumulation Units held in the Subaccount on the Business Day before the purchase or redemption of any Accumulation Units on that day. When transactions are made to or from a Subaccount, the actual dollar amounts are converted to Accumulation Units. The number of Accumulation Units for a transaction is equal to the dollar amount of the transaction divided by the Accumulation Unit value on the Business Day the transaction is made. An investment in money market funds is neither insured nor guaranteed by the U.S. Government. There can be no assurance that the funds will be able to maintain a stable net asset value of $1.00 per share. TELEPHONE TRANSACTIONS Telephone Transactions Permitted o Transfers among investment options. o Change of premium allocations. How to Authorize Telephone Transactions o Upon your authorization on the Policy application or in Written Notice to us, you or a third person named by you may do telephone transactions on your behalf. You bear the risk of the accuracy of any designated person's instructions to us. Telephone Transaction Rules: o Must be received by the times listed in this prospectus' TRANSFERS section "Transfer Rules" on a day the New York Stock Exchange ("NYSE") is open; if later, the transaction will be processed the next day the NYSE is open. o Calls will be recorded for your protection. o For security, you or your authorized designee must provide your Social Security number and/or other identification information. o May be discontinued at any time as to some or all Owners. We are not liable for following telephone transaction instructions we reasonably believe to be genuine. DELAY OF PAYMENTS We will usually pay any amounts requested as a full surrender or partial withdrawal from the Separate Account within 7 days after we receive your Written Notice. We can postpone such payments or any transfers out of a Subaccount if: (i) the NYSE is closed for other than customary weekend and holiday closings; (ii) trading on the NYSE is restricted; (iii) an emergency exists as determined by the SEC, as a result of which it is not reasonably practical to dispose of securities, or not reasonably practical to determine the value of the net assets of the Separate Account; or (iv) the SEC permits delay for the protection of security holders. The applicable rules of the SEC will govern as to whether the conditions in (iii) or (iv) exist. BENEFICIARY You may change your beneficiary by sending Written Notice to us, unless the named beneficiary is irrevocable. Once we record and acknowledge the change, it is effective as of the date you signed the Written Notice. The change will not apply to any payments made or other action taken by us before recording. If the named beneficiary is irrevocable you may change the named beneficiary only by Written Notice signed by both you and the beneficiary. If more than one named beneficiary is designated, and you fail to specify their interest, they will share equally. If there are joint Owners, the surviving joint Owner will be deemed the beneficiary, and the beneficiary named in the Policy application or subsequently changed will be deemed the contingent beneficiary. If both joint Owners die simultaneously, the death benefit will be paid to the contingent beneficiary. If the beneficiary is your surviving spouse, the spouse may elect either to receive the death benefit, in which case the Policy will terminate, or to continue the Policy in force with the spouse as Owner. If the named beneficiary dies before you, then your estate is the beneficiary until you name a new beneficiary. MINOR OWNER OR BENEFICIARY A minor may not own the Policy solely in the minor's name and cannot receive payments directly as a Policy beneficiary. Contrary to common belief, in most states parental status does not automatically give parents the -13- power to provide an adequate release to us to make beneficiary payments to the parent for the minor's benefit. A minor can "own" a Policy through the trustee of a trust established for the minor's benefit, or through the minor's named and court appointed guardian, who owns the Policy in his or her capacity as trustee or guardian. Where a minor is a named beneficiary, we are able to pay the minor's beneficiary payments to the minor's trustee or guardian. Some states allow us to make such payments up to a limited amount directly to parents. Parents seeking to have a minor's interest made payable to them for the minor's benefit are encouraged to check with their local court to determine the process to be appointed as the minor's guardian; it is often a very simple process that can be accomplished without the assistance of an attorney. If there is no adult representative able to give us an adequate release for payment of the minor's beneficiary interest, we will retain the minor's interest on deposit until the minor attains the age of majority. POLICY CHANGES Any change to your Policy is only effective if on a form acceptable to us, and then only once it is received at our Service Office and recorded on our records. Information on how to contact us to determine what information is needed and where you can get various forms for Policy changes is shown on this Prospectus' first two pages and last page. POLICY TERMINATION We may treat any partial withdrawal that leaves a Cash Surrender Value of less than $1,000 as a complete surrender of the Policy. See this prospectus' POLICY DISTRIBUTIONS: Withdrawals section for more information. If you have paid no premiums during the previous 36-month period, we have the right to pay you the total value of your Policy in a lump sum and cancel the Policy if (i) the Cash Surrender Value is less than $1,000 (does not apply to IRAs), or (ii) the paid-up life-time income annuity benefit at maturity, based on an accumulation of the Policy value to maturity, would be less than $20 per month. POLICY DISTRIBUTIONS There are several ways to take all or part of your investment out of your Policy, both before and after the Annuity Date. Tax penalties may apply to amounts taken out of your Policy before the Annuity Date. Your Policy also provides a death benefit that may be paid upon your death prior to the Annuity Date. All or part of a death benefit may be taxable. WITHDRAWALS You may withdraw, by Written Notice, all or part of your Policy's Cash Surrender Value prior to the Annuity Date. Following a full surrender of the Policy, or at any time the Policy value is zero, all your rights in the Policy end. Total surrender requires you to return your Policy to us. Withdrawals may be subject to: - Income Tax - Penalty Tax Withdrawal Rules o Withdrawals must be by Written Notice. A request for a systematic withdrawal plan must be on our form and must specify a date for the first payment, which must be the 1st through 28th day of the month. o Minimum withdrawal is $250. o We may treat any partial withdrawal that leaves a Cash Surrender Value of less than $1,000 as a complete surrender of the Policy. o Withdrawal results in cancellation of Accumulation Units from each applicable Subaccount. If you do not specify which investment option(s) from which to take the withdrawal, it will be taken from each investment option in the proportion that the Policy value in each investment option bears to the total Policy value. o The amount paid to you upon total surrender of the Policy (taking any prior partial withdrawals into account) may be less than the total premiums made, because we will deduct any charges owed but not -14- yet paid, a premium tax charge may apply to withdrawals, and because you bear the investment risk for all amounts you allocate to the Separate Account. o Unless you give us Written Notice not to withhold taxes from a withdrawal, we must withhold 10% of the taxable amount withdrawn to be paid as a federal tax, as well as any amounts required by state laws to be withheld for state income taxes. ALIC and the Separate Account may allow facsimile request forms and signatures to be used for the purpose of a "Written Notice" authorizing withdrawals from your Policy. You may complete and execute a withdrawal form and send it to our Service Center fax number, 402-467-7335. We may offer this method of withdrawal as a service to meet your needs when turnaround time is critical. However, by not requiring an original signature there is a greater possibility that unauthorized persons can manipulate your signature and make changes on your Policy (including withdrawals) without your knowledge. o Systematic Withdrawal Plan The systematic withdrawal plan allows you to automatically withdraw payments of a pre-determined dollar amount or fixed percentage of Policy value from a specified investment option monthly, quarterly, semi-annually or annually. We can support and encourage your use of electronic fund transfer of systematic withdrawal plan payments to an account of yours that you specify to us. The fixed dollar amount of systematic withdrawals may be calculated in support of Internal Revenue Service minimum distribution requirements over the lifetime of the Annuitant. No systematic withdrawal may be established after the 28th of each month. Although this plan mimics annuity payments, each distribution is a withdrawal that may be taxable and subject to the charges and expenses described above; you may wish to consult a tax advisor before requesting this plan. DEATH BENEFITS o Death Benefit Upon Owner's Death We will pay the death benefit after we receive Due Proof of Death of an Owner's death or as soon thereafter as we have sufficient information about the beneficiary to make the payment. Death benefits may be paid pursuant to an annuity income option to the extent allowed by applicable law and any settlement agreement in effect at your death. If the beneficiary does not make an annuity income option election within 60 days of our receipt of Due Proof of Death, we will issue a lump-sum payment to the beneficiary. A death benefit is payable upon: - Your Policy being in force; - Receipt of Due Proof of Death of the first Owner to die; - Election of an annuity income option; and - Proof that the Owner died before any annuity payments begin. "Due Proof of Death" is a certified copy of a death certificate, a certified copy of a decree of a court of competent jurisdiction as to the finding of death, a written statement by the attending physician, or any other proof satisfactory to us. If an Owner of the Policy is a corporation, trust or other non-individual, we treat the primary Annuitant as an Owner for purposes of the death benefit. The "primary Annuitant" is that individual whose life affects the timing or the amount of the death benefit payout under the Policy. A change in the primary Annuitant will be treated as the death of an Owner. If the Annuitant is an Owner or joint Owner, the Annuitant's death is treated as the Owner's death. If the Annuitant is not an Owner and the Annuitant dies before the Annuity Date, the Owner may name a new Annuitant if such Owner(s) is not a corporation or other non-individual or if such Owner is the trustee of an Internal Revenue Code Section 401(a) retirement plan. If the Owner does not name a new Annuitant, the Owner will become the Annuitant. If your spouse is the Policy beneficiary, Annuitant, or a joint Owner, special tax rules apply. See the IRS Required Distribution Upon Death of Owner section below. We will deduct any applicable premium tax not previously deducted from the death benefit payable. o Standard Death Benefit Upon any Owner's death before the Annuity Date, the Policy will end, and we will pay a death benefit to your beneficiary. The death benefit equals the larger of: - your Policy value on the later of the date we receive Due Proof of Death or an annuity payout option is elected less any charge for applicable premium taxes; or - adjusted guaranteed death benefit premiums. -15- For policies issued on or after June 1, 2006, if death occurs after age 69, the death benefit is equal to your Policy value on the later of the date we receive Due Proof of Death or an annuity payout option is elected less any charge for applicable premium taxes. We define adjusted guaranteed death benefit premiums as total premiums paid into the policy less an adjustment for each withdrawal. If you have not taken any withdrawals from the policy, the adjusted guaranteed death benefit premiums is equal to the total premiums paid into the policy. To calculate the adjustment amount for the first withdrawal made under the policy, we determine the percentage by which the withdrawal reduces the policy value. For example, a $10,000 withdrawal from a policy with a $100,000 value is a 10% reduction in policy value. This percentage is calculated by dividing the amount of the withdrawal by the policy value immediately prior to taking that withdrawal. The resulting percentage is multiplied by the total premiums paid into the policy immediately prior to the withdrawal and then subtracted from the total premiums paid into the policy immediately prior to the withdrawal. The resulting amount is the adjusted guaranteed death benefit premiums. To arrive at the adjusted guaranteed death benefit premiums for subsequent withdrawals, we determine the percentage by which the policy value is reduced by taking the amount of the withdrawal in relation to the policy value immediately prior to taking the withdrawal. We then multiply the adjusted guaranteed death benefit premiums as determined immediately prior to the withdrawal by this percentage. We subtract that result from the adjusted guaranteed death benefit premiums determined immediately prior to the withdrawal to arrive at the subsequent guaranteed death benefit premiums. Upon any Owner's death on or after the Annuity Date and before all proceeds have been paid, no death benefit is payable, but any remaining proceeds will be paid to the designated annuity benefit payee based on the annuity income option in effect at the time of death. In most cases, when death benefit proceeds are paid in a lump sum, we will pay the death benefit proceeds by establishing an interest bearing account for the beneficiary, in the amount of the death benefit proceeds payable. The same interest rate schedule and other account terms will apply to all beneficiary accounts in place at any given time. We will send the beneficiary a checkbook within 7 days after we receive all the required documents, and the beneficiary will have immediate access to the account simply by writing a check for all or any part of the amount of the death benefit proceeds payable. The account is part of our general account. It is not a bank account and it is not insured by the FDIC or any other government agency. As part of our general account, it is subject to the claims of our creditors. We receive a benefit from all amounts left in the general account. IRS Required Distribution Upon Death of Owner Federal law requires that if your Policy is tax non-qualified and you die before the Annuity Date, then the entire value of your Policy must be distributed within 5 years of your death. The 5-year rule does not apply to that portion of the proceeds which (a) is for the benefit of an individual beneficiary; and (b) will be paid over the lifetime or the life expectancy of that beneficiary as long as payments begin not later than one year after the date of your death. Special rules may apply to your surviving spouse. The Statement of Additional Information has a more detailed description of these rules. Other required distribution rules apply to tax-qualified Policies and are described in this prospectus' Appendix B. o Tables Illustrating Benefits Upon Death The following tables illustrate benefits payable, if any, upon death of a party to the Policy for most, but not necessarily all, situations. The terms of any Policy rider or qualified plan funded by the Policy may change this information. Please consult your own legal and tax advisor for advice. You may contact us for more information.
If death occurs before the Annuity Date: If the deceased is... and... and... then the... --------------------- ------------------- ------------------------- ------------------------------------------------ any Policy Owner - - - - - - Policy beneficiary receives the death benefit. --------------------- ------------------- ------------------------- ------------------------------------------------ any Policy Owner There is no the beneficiary is the surviving spouse may elect to become the surviving joint Policy Owner's Policy Owner and continue the Policy, or may Policy Owner who surviving spouse, have the Policy end and receive the death is the deceased unless the spouse is benefit. Owner's spouse the surviving joint Policy Owner --------------------- ------------------- ------------------------- ------------------------------------------------ the Annuitant a Policy Owner is there is no named the Policy continues with the Policy Owner as living contingent or joint the Policy Annuitant unless the Owner names a Annuitant new Annuitant. --------------------- ------------------- ------------------------- ------------------------------------------------ the Annuitant the Policy Owner - - - the Annuitant's death is treated as a Policy is a non-person Owner's death. --------------------- ------------------- ------------------------- ------------------------------------------------ an Annuitant a Policy Owner is the contingent or joint contingent Annuitant becomes the Annuitant, living Annuitant is living and the Policy continues. --------------------- ------------------- ------------------------- ------------------------------------------------
-16-
If death occurs on or after the Annuity Date: If the deceased is... and... then the... --------------------- ------------------- ------------------------------------------------------------------------- --------------------- ------------------- -------------------------------------------------------------------------- any Policy Owner There is a living surviving Policy Owner remains as Owner for purposes of distributing any joint Owner, and remaining Policy proceeds pursuant to the annuity income option then in the Annuitant is effect. If the annuity benefit payee was the deceased Policy Owner, the living surviving Owner receives the proceeds. If the payee is other than the deceased Owner, proceeds continue to be paid to the payee until the payee's death, then are paid to the Policy beneficiary. --------------------- ------------------- -------------------------------------------------------------------------- any Policy Owner There is no Policy beneficiary becomes the Policy Owner for purposes of distributing surviving joint any remaining Policy proceeds pursuant to the annuity income option then Owner, and in effect. If the annuity benefit payee was the Owner, then the Policy the Annuitant is beneficiary receives the proceeds. If the payee is other than the living Owner, proceeds continue to be paid to the payee until the payee's death, then are paid to the Policy beneficiary. --------------------- ------------------- -------------------------------------------------------------------------- any Policy Annuitant any Policy Owner Policy Owner (or other named payee) receives distribution of any is living remaining Policy proceeds pursuant to the annuity income option then in effect. --------------------- ------------------- -------------------------------------------------------------------------- the Annuitant the Annuitant is Policy beneficiary becomes the Policy Owner for purposes of distributing also the Policy any remaining Policy proceeds pursuant to the annuity income option then Owner in effect. If the annuity benefit payee was the Owner, then the Policy beneficiary receives the proceeds. If the payee is other than the Owner, proceeds continue to be paid to the payee until the payee's death, then are paid to the Policy beneficiary. --------------------- ------------------- --------------------------------------------------------------------------
ANNUITY INCOME BENEFITS A primary function of an annuity contract, like this Policy, is to provide annuity payments to the payee(s) you name. You will receive the annuity benefits unless you designate another payee(s). The level of annuity payments is determined by your Policy value, the Annuitant's sex (except where prohibited by law) and age, and the annuity income option selected. All or part of your Policy Cash Surrender Value may be placed under one or more annuity income options. Annuity payments: - require investments to be allocated to our general account, so are not variable. - may be taxable and, if premature, subject to a tax penalty. Annuity payments must be made to individuals receiving payments on their own behalf, unless otherwise agreed to by us. Any annuity income option is only effective once we acknowledge it. We may require initial and ongoing proof of the Owner's or Annuitant's age or survival. Unless you specify otherwise, the payee is the Owner. Payments under the annuity income options are fixed annuity payments based on a fixed rate of interest at or higher than the minimum effective annual rate which is guaranteed to yield 1.5% on an annual basis. We have sole discretion whether or not to pay a higher interest rate for all annuity income options. Current annuity income option amounts for all options are used if higher than the guaranteed amounts (guaranteed amounts are based upon the tables contained in the Policy). The guaranteed amounts for all annuity income options are based on the interest rate described above. Guaranteed amounts for options 4 and 5 are also based on the A2000 Valuation Mortality Table, projected 20 years. Current interest rates, and further information, may be obtained from us. The amount of each fixed annuity payment is set and begins on the Annuity Date, and does not change. o When Annuity Income Payments Begin You select the Annuity Date by completing an election form that you can request from us at any time. This date may not be any earlier than the fifth Policy Anniversary. If you do not specify a date, the Annuity Date will be the later of the Policy Anniversary nearest the Annuitant's 85th birthday or the fifth Policy Anniversary. Tax-qualified Policies may require an earlier Annuity Date. You may change this date by sending Written Notice for our receipt at least 30 days before the then current Annuity Date. o Selecting an Annuity Income Option You choose the annuity income option by completing an election form that you can request from us at any time. You may change your selection during your life by sending Written Notice for our receipt at least 30 days before the date annuity payments are scheduled to begin. If no selection is made by then, we will apply the Policy Cash Surrender Value to make annuity payments under annuity income option 4 providing lifetime income payments. The longer the guaranteed or projected annuity income option period, the lower the amount of each annuity payment. If you die before the Annuity Date (and the Policy is in force), your beneficiary may elect to receive the death benefit under one of the annuity income options (unless applicable law or a settlement agreement dictate otherwise). -17- o Annuity Income Options Once fixed annuity payments under an annuity income option begin, they cannot be changed. (We may allow the Annuitant or Beneficiary to transfer amounts applied under options 1, 2 or 3 to option 4, 5 or 6 after the Annuity Date. However, we reserve the right to discontinue this practice.) When the Owner dies, we will pay any unpaid guaranteed payments to your beneficiary. Upon the last payee's death, we will pay any unpaid guaranteed payments to that payee's estate. Note: Unless you elect an annuity income option with a guaranteed period or option 1, it is possible that only one annuity payment would be made under the annuity payout option if the Annuitant dies before the due date of the second annuity payment, only two annuity payments would be made if the Annuitant died before the due date of the third annuity payment, etc. This would not happen if you elect an annuity option guaranteeing either the amount or duration of payments, or just paying interest (options 1, 2, or 3). Part or all of any annuity payment may be taxable as ordinary income. If, at the time annuity payments begin, you have not given us Written Notice to not withhold federal income taxes, we must by law withhold such taxes from the taxable portion of each annuity payment and remit it to the Internal Revenue Service. (Withholding is mandatory for certain tax-qualified Policies.) We may pay your Policy proceeds to you in one sum if they are less than $1,000, or when the annuity income option chosen would result in periodic payments of less than $20. If any annuity payment would be or becomes less than $20, we also have the right to change the frequency of payments to an interval that will result in payments of at least $20. In no event will we make payments under an annuity option less frequently than annually. The annuity income options are: (1) Interest Payment. While proceeds remain on deposit, we annually credit interest to the proceeds. The interest may be paid to the payee or added to the amount on deposit. (2) Designated Amount Annuity. Proceeds are paid in monthly installments of a specified amount over at least a 5-year period until proceeds, with interest, have been fully paid. (3) Designated Period Annuity. Proceeds are paid in monthly installments for the specified period chosen. Monthly incomes for each $1,000 of proceeds, which include interest, are illustrated by a table in the Policy. (4) Lifetime Income Annuity. Proceeds are paid as monthly income during the Annuitant's life. Variations provide for guaranteed payments for a period of time. (5) Joint and Last Survivor Lifetime Income Annuity. Proceeds are paid as monthly income during the joint Annuitants' lives and until the last of them dies. (6) Lump Sum. Proceeds are paid in one sum. -18- FEDERAL INCOME TAX MATTERS This discussion of how federal income tax laws may affect investment in your variable annuity is based on our understanding of current laws as interpreted by the Internal Revenue Service ("IRS"). It is NOT intended as tax advice. All information is subject to change without notice. We make no attempt to review any state or local laws, or to address estate or inheritance laws or other tax consequences of annuity ownership or receipt of distributions. You should consult a competent tax adviser to learn how tax laws apply to your annuity interests. Section 72 of the Internal Revenue Code of 1986, as amended, (the "Code") governs taxation of annuities in general and Code Section 817 provides rules regarding the tax treatment of variable annuities. Other Code sections may also impact taxation of your variable annuity investment and/or earnings. o Tax Deferrals During Accumulation Period An important feature of variable annuities is tax-deferred treatment of earnings during the accumulation phase. An individual owner is not taxed on increases in the value of a Policy until a withdrawal occurs, either in the form of a non-periodic payment or as annuity payments under the settlement option selected. o Taxation of Withdrawals Withdrawals are included in gross income to the extent of any allocable income. Any amount in excess of the investment in the Policy is allocable to income. Accordingly, withdrawals are treated as coming first from the earnings, then, only after the income portion is exhausted, as coming from principal. If you make a withdrawal, not only is the income portion of such a distribution subject to federal income taxation, but a 10% penalty may apply. However, the penalty does not apply to distributions: o after the taxpayer reaches age 59 1/2; o upon the death of the owner; o if the taxpayer is defined as totally disabled; o as periodic withdrawals that are 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 the beneficiary; o under an immediate annuity; or o under certain other limited circumstances. o Taxation of Annuity Payments Earnings from a variable annuity are taxable only upon withdrawal and are treated as ordinary income. Generally, the Code provides for the return of your investment in an annuity policy in equal tax-free amounts over the annuity payout period. Fixed annuity payment amounts may be excluded from taxable income based on the ratio of the investment in the Policy to the total expected value of annuity payments. If you elect variable annuity payments, the amount excluded from taxable income is determined by dividing the investment in the Policy by the total number of expected payments. The balance of each payment is taxable income. After you recover your investment in the Policy, any payment you receive is fully taxable. (If a variable payment is less than the excludable amount you should contact your tax adviser to determine how to report any investment not recovered.) The taxable portion of any annuity payment is taxed at ordinary income tax rates. o Taxation of Death Proceeds A death benefit paid under the Policy is taxable income to the beneficiary. The rules on taxation of an annuity apply. Estate taxes may also apply to your estate, even if all or a portion of the benefit is subject to federal income taxes. To be treated as an annuity, a Policy must provide that: (1) if an annuitant dies: (a) on or after the annuity starting date, and (b) before the entire interest in the Policy is distributed, the balance will be distributed at least as rapidly as under the method being used at the date of death, and (2) if the annuitant dies before the annuity starting date, the entire interest must be distributed within five years of death. If distributed in a lump sum, the death benefit amount is taxed in the same manner as a full withdrawal. If the beneficiary is the surviving spouse of the owner it is possible to continue deferring taxes on the accrued and future income of the Policy until payments are made to the surviving spouse. -19- Tax Treatment of Assignments and Transfers An assignment or pledge of an annuity Policy is treated as a withdrawal. Also, the Code (particularly for tax-qualified plans) and ERISA in some circumstances prohibit such transactions, subjecting them to income tax penalties and additional excise tax. Therefore, you should consult a competent tax adviser if you wish to assign or pledge your Policy. o Tax Treatments by Type of Owner A Policy held by an entity other than a natural person, such as a corporation, estate or trust, usually is not treated as an annuity for federal income tax purposes unless annuity payments start within a year. The income on such a Policy is taxable in the year received or accrued by the owner. However, this rule does not apply if the entity as owner is acting as an agent for an individual or is an estate that acquired the Policy as a result of the death of the decedent. Nor does it apply if the Policy is held by certain qualified plans, is held pursuant to a qualified funding trust (structured settlement plan), or if an employer purchased the Policy under a terminated qualified plan. You should consult your tax adviser before purchasing a Policy to be owned by a non-natural person. o Annuity Used to Fund Qualified Plan The Policy is designed for use with various qualified plans. The Policy will not provide additional tax deferral benefits if it is used to fund a tax-deferred qualified plan. However, Policy features and benefits other than tax deferral may make it an appropriate investment for a qualified plan. Tax rules for qualified plans are very complex and vary according to the type and terms of the plan, as well as individual facts and circumstances. Each purchaser should obtain advice from a competent tax advisor prior to purchasing a Policy issued under a qualified plan. The income on tax sheltered annuity (TSA) and individual retirement annuity (IRA) investments is tax deferred; therefore, any income on variable annuities held by such plans does not receive an additional tax deferral. You should review the annuity features, including all benefits and expenses, prior to purchasing a variable annuity as a TSA or IRA. Tax qualified annuities may be purchased as investments for: o Individual Retirement Annuities (IRAs), Code Section 408(b); o Simplified Employee Pension (SEP IRA), Code Section 408(k); o Savings Incentive Match Plans for Employees (SIMPLE IRA), Code Section 408(p); and o Roth IRAs, Code Section 408A. The Company reserves the right to limit the availability of the Policy for use with any of the plans listed above or to modify the Policy to conform to tax requirements. Some retirement plans are subject to requirements that we have not incorporated into our administrative procedures. Unless we specifically consent, we are not bound by plan requirements to the extent that they conflict with the terms of the Policy o Tax Impact on Account Value Certain Policy credits are treated as taxable "earnings" and not "investments" for tax purposes. Taxable earnings are considered paid out first, followed by the return of your premiums (investment amounts). In addition, taxation order generally considers the last premium withdrawn first ("last-in, first-out"). -20- MISCELLANEOUS ABOUT OUR COMPANY Ameritas Life Insurance Corp. ("Ameritas") issues the Policy described in this prospectus and is responsible for providing each Policy's insurance and annuity benefits. We are a stock life insurance company organized under the insurance laws of the State of Nebraska - Nebraska's first insurance company - in business since 1887. We are engaged in the business of issuing individual life insurance, annuities and group dental and vision insurance, retirement plans and 401(k) plans throughout the United States, except the State of New York. We are an indirectly wholly owned subsidiary of UNIFI Mutual Holding Company ("UNIFI"). Our address is 5900 "O" Street, Lincoln, Nebraska, 68510. (See the TABLE OF CONTENTS page of this prospectus, or the cover page or last page for information on how to contact us.) DISTRIBUTION OF THE POLICIES Ameritas Investment Corp. ("AIC"), 5900 "O" Street, Lincoln, Nebraska 68510, a majority-owned subsidiary of Ameritas is the principal underwriter of the Policies. AIC enters into contracts with various broker-dealers ("Distributors") to distribute Policies. All persons selling the Policy will be registered representatives of the Distributors, and will also be licensed as insurance agents to sell variable insurance products. AIC is a federally registered broker-dealer and member of the NASD. There is no premium load to cover sales and distribution expenses. All compensation or expense reimbursement received by AIC for serving as principal underwriter of the Policies will be paid by us from our other assets or surplus in our general account, which may include profits derived from mortality and expense risk charges and other charges made under the Policies. Policies can also be purchased from us through salaried employees who are registered representatives of AIC and who will not receive compensation related to the purchase. The Policies are also sold by individuals who are registered representatives of AIC or other broker-dealers. In these situations, we may pay AIC at a rate of up to 0.05% of all premium received, and other broker-dealers at a rate of up to 0.50% of premium plus an asset based administrative compensation of 0.10% (annualized) beginning in the second Policy Year. VOTING RIGHTS As required by law, we will vote the Subaccount shares in the underlying portfolios at regular and special shareholder meetings of the series funds pursuant to instructions received from persons having voting interests in the underlying portfolios. The underlying portfolios may not hold routine annual shareholder meetings. If you send us written voting instructions, we will follow your instructions in voting the Portfolio shares attributable to your Policy. If you do not send us written instructions, we will vote the shares attributable to your Policy in the same proportions as we vote the shares for which we have received instructions from other Policy Owners. We will vote shares that we hold in the same proportions as we vote the shares for which we have received instructions from other Policy Owners. It is possible that a small number of Policy owners can determine the outcome of a voting proposal. LEGAL PROCEEDINGS As of the date of this Prospectus, there are no proceedings affecting the Separate Account, or that are material in relation to our total assets. -21- APPENDIX A: Accumulation Unit Values The following table shows Accumulation Unit values at the beginning and end of the periods indicated and the number of Accumulation Units outstanding for each Subaccount variable investment option portfolio at the end of the periods indicated. The financial statements for the Subaccounts of the Separate Account can be found in the Statement of Additional Information. (See the cover and back page to learn how to get a copy of the Statement of Additional Information.)
------------------------------------------------- --------- ------------------ ------------------ ------------------- Number (#) of Subaccount (date Subaccount was added to the Value ($) at Accumulation Units Policy) Value ($) at End of Year At End of Year Year Inception (December 31) (December 31) ------------------------------------------------- --------- ------------------ ------------------ ------------------- CLASSIC PROFUNDS VP ------------------------------------------------- --------- ------------------ ------------------ ------------------- Bull (4-13-2005) 2005 26.72 28.221 19,017 2006 31.789 45,737 2007 32.622 21,372 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Small-Cap (4-13-2005) 2005 33.09 36.779 11,363 2006 41.829 8,293 2007 40.533 264 ------------------------------------------------- --------- ------------------ ------------------ ------------------- NASDAQ-100 (4-13-2005) 2005 14.78 14.984 40,009 2006 15.662 61,857 2007 18.256 15,006 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Mid-Cap Value (4-13-2005) 2005 33.88 34.645 14,013 2006 38.559 6,505 2007 38.583 866 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Small-Cap Value (4-13-2005) 2005 31.93 32.800 13,386 2006 38.173 2,435 2007 35.098 886 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Europe 30 (4-13-2005) 2005 27.52 27.896 207 2006 32.488 30,515 2007 36.890 33,583 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Dow 30 (5-1-2006) 2006 30.00 34.158 20,527 2007 38.231 7,922 --------------------------------------------------------------------------------------------------------------------- ULTRA PROFUNDS VP ------------------------------------------------- --------- ------------------ ------------------ ------------------- UltraBull (4-13-2005) 2005 21.27 20.619 98 2006 25.147 5,976 2007 25.134 71,811 ------------------------------------------------- --------- ------------------ ------------------ ------------------- UltraMid-Cap (4-13-2005) 2005 33.39 37.858 154 2006 41.512 44 2007 43.596 141 ------------------------------------------------- --------- ------------------ ------------------ ------------------- UltraSmall-Cap (4-13-2005) 2005 25.88 30.635 658 2006 38.256 1,278 2007 32.917 7,657 ------------------------------------------------- --------- ------------------ ------------------ ------------------- UltraNASDAQ-100 (4-13-2005) 2005 2.46 2.956 110,287 2006 43.695 2,034 2007 55.637 13,543 --------------------------------------------------------------------------------------------------------------------- INVERSE PROFUNDS VP ------------------------------------------------- --------- ------------------ ------------------ ------------------- Bear (4-13-2005) 2005 29.55 28.103 59,086 2006 25.771 5,920 2007 25.840 820 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Short Small-Cap (4-13-2005) 2005 18.40 16.620 0 2006 14.566 5,273 2007 15.185 20,065 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Short NASDAQ-100 (4-13-2005) 2005 20.44 18.481 17,318 2006 18.066 7,955 2007 16.022 10,417 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Short Dow 30 (5-1-2006) 2006 30.00 28.064 219 2007 27.357 93 ------------------------------------------------- --------- ------------------ ------------------ ------------------- -A:1- ------------------------------------------------- --------- ------------------ ------------------ ------------------- Number (#) of Subaccount (date Subaccount was added to the Value ($) at Accumulation Units Policy) Value ($) at End of Year At End of Year Year Inception (December 31) (December 31) --------------------------------------------------------------------------------------------------------------------- SECTOR PROFUNDS VP ------------------------------------------------- --------- ------------------ ------------------ ------------------- Oil & Gas (4-13-2005) 2005 41.54 47.888 646 2006 57.251 7,065 2007 75.162 5,476 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Precious Metals (4-13-2005) 2005 29.62 41.116 695 2006 43.749 10,039 2007 53.094 30,790 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Real Estate (4-13-2005) 2005 46.95 53.379 31 2006 70.088 5,846 2007 55.835 3,043 --------------------------------------------------------------------------------------------------------------------- NON-EQUITY PROFUNDS VP ------------------------------------------------- --------- ------------------ ------------------ ------------------- U.S. Government Plus (4-13-2005) 2005 31.64 32.744 8,112 2006 30.977 4,786 2007 33.803 28,719 ------------------------------------------------- --------- ------------------ ------------------ ------------------- Rising Rates Opportunity (4-13-2005) 2005 19.99 19.097 113,830 2006 20.848 8,742 2007 18.479 965 --------------------------------------------------------------------------------------------------------------------- ACCESS VP HIGH YIELD FUNDSM ------------------------------------------------- --------- ------------------ ------------------ ------------------- Access VP High Yield FundSM (5-02-2005) 2005 30.00 30.940 0 2006 31.743 1,284 2007 28.916 851 --------------------------------------------------------------------------------------------------------------------- PROFUND VP MONEY MARKET ------------------------------------------------- --------- ------------------ ------------------ ------------------- Profound VP Money Market (4-13-2005) 2005 1.00 1.007 4,935,612 2006 1.036 15,408,022 2007 1.065 10,708,522 ------------------------------------------------- --------- ------------------ ------------------ -------------------
-A:2- APPENDIX B: Tax-Qualified Plan Disclosures -------------------------------------------- ----------------------------------- DISCLOSURE SUMMARY For annuity policies issued as a: | Traditional IRA AMERITAS LIFE INSURANCE CORP. | SEP IRA | SIMPLE IRA | Roth IRA -------------------------------------------- ----------------------------------- The Internal Revenue Service (IRS) requires us to provide you this disclosure statement. This Disclosure Statement explains the rules governing your Individual Retirement Account (IRA). The disclosure reflects our current understanding of the law, but for personal tax advice you should consult a lawyer or other licensed tax expert to learn how the applicable tax laws apply to your situation. This Disclosure Summary is NOT intended as, nor does it constitute, legal or tax advice. For further information about IRAs, contact any district office of the IRS, or consult IRS Publication 590: Individual Retirement Arrangements. If you have any questions about your Policy, please contact us at the address and telephone number shown below. YOUR RIGHT TO CANCEL You may cancel your IRA within seven days after the date you receive this disclosure statement. To revoke your plan and receive a refund for the amount paid for your IRA, you must send a signed and dated Written Notice to cancel your Policy no later than the seventh day after issuance to us at: Ameritas Life Insurance Corp., P.O. BOX 82549, Lincoln NE 68501-2549, Telephone 1-800-255-9678. Your revocation will be effective on the date of the postmark (or certification or registration, if applicable), if sent by United States mail, properly addressed and by first class postage prepaid. After seven days following receipt of this Disclosure Statement, you cannot cancel. PROVISIONS OF IRA LAW This disclosure is applicable when our variable annuity policy is used for a traditional IRA, Spousal IRA, Rollover IRA, or a Roth IRA. Additionally, this disclosure provides basic information for when our variable annuity policy is used for a Simplified Employee Pension (SEP)-IRA, or Savings Incentive Match Plan for Employees (SIMPLE)-IRA. A separate policy must be purchased for each individual under each arrangement/plan. While Internal Revenue Code ("IRC") provisions for IRAs are similar for all such arrangements/plans, certain differences are set forth below. TRADITIONAL IRA Eligibility You are eligible to establish a traditional IRA if you are younger than age 70 1/2 and if, at any time during the year, you receive compensation or earned income that is includible in your gross income. Your spouse may also establish a "spousal IRA" that you may contribute to out of your compensation or earned income for any year before the year in which your spouse reaches age 70 1/2. To contribute to a spousal IRA, you and your spouse must file a joint tax return for the taxable year. Additionally, regardless of your age, you may transfer funds from another IRA or certain qualified plans to a "Rollover IRA", which is described below. Annual Contribution Limits You may make annual contributions to a traditional IRA of up to the Annual Contribution Limit ($4,000 for 2005 through 2007, and $5,000 in 2008 and after), or 100% of your earned income or compensation, whichever is less. If you are age 50 or older, the Annual Contribution Limits are increased by $1,000, so long as your earned income or compensation is greater than the Annual Contribution Limit. Beginning in 2009, the Annual Contribution Limits will be increased by the IRS to reflect inflation. If you and your spouse both work and have compensation that is includible in your gross income, each of you can annually contribute to a separate traditional IRA up to the lesser of the Annual Contribution Limit or 100% of your compensation or earned income. However, if one spouse earns less than the Annual Contribution limit, but both spouses together earn at least twice the Annual Contribution Limit, it may be advantageous to use the spousal IRA. The total contributions to both IRAs may not exceed the lesser of twice the Annual Contribution Limit or 100% of you and your spouse's combined compensation or earned income. The combined limit on contributions to both traditional and Roth IRAs for a single calendar year for you may not exceed the Annual Contribution Limit (or twice the Annual Contribution Limit for a couple filing jointly). Distributions from another IRA or certain other qualified plans may be "rolled over" into a traditional IRA and such rollover contributions are not limited by this annual maximum. Contributions must be made by the due date, not including extensions, for filing your tax return. A contribution made between January 1 and the filing due date for your return -B:1- must be submitted with written direction that it is being made for the prior tax year or it will be treated as made for the current tax year. The amount of permissible contributions may or may not be tax-deductible depending on whether you are an active participant in an employer sponsored retirement plan and whether your adjusted gross income ("AGI") is above the phase-out level. Deductibility of Contributions Contributions made for the tax year are fully deductible if neither you nor your spouse (if married) is an active participant in an employer-sponsored retirement plan (including qualified pension, profit sharing, stock bonus, 401(k), or 403(b) plans, SEP plans, SIMPLE IRA, SIMPLE 401(k) plans, and certain governmental plans for any part of such year. If you are an active participant in an employer sponsored requirement plan you may make deductible contributions if your Adjusted Gross Income (AGI) is below a threshold level of income. For single taxpayers and married taxpayers (who are filing jointly and are both active participants) the available deduction is reduced proportionately over a phaseout range. If you are married and an active participant in an employer retirement plan, but file a separate tax return from your spouse, your deduction is phased out between $0 and $10,000 of AGI. Active participants with income above the phaseout range are not entitled to an IRA deduction. The phaseout limits are scheduled to increase as follows: Married Filing Jointly Single/Head of Household ----------------------------- ------------------------ Year AGI AGI ---- 2005 $70,000 - $ 80,000 $50,000 - $60,000 2006 $75,000 - $ 85,000 $50,000 - $60,000 2007 $80,000 - $ 100,000 $50,000 - $60,000 2008+ $85,000 - $105,000 $53,000 - $63,000 If you are not an active participant in an employer sponsored plan, but your spouse is an active participant, you may take a full deduction for your IRA contribution (other than to a Roth IRA) if your AGI is below $159,000; if you are not an active participant but your spouse is, the maximum deductible contribution for you is phased out at AGIs between $159,000 and $169,000. Even if you will not be able to deduct the full amount of your traditional IRA contribution, you can still contribute up to the Annual Contribution Limit with all or part of the contribution being non-deductible. The combined total must not exceed your Annual Contribution Limit. Any earnings on all your traditional IRA contributions accumulate tax-free until you withdraw them. Excess Contributions If you contribute in excess of the maximum contribution limit allowed in any year, the excess contribution could be subject to a 6% excise tax. The excess is taxed in the year the excess contribution is made and each year that the excess remains in your traditional IRA. If you should contribute more than the maximum amount allowed, you can eliminate the excess contribution as follows: You may withdraw the excess contribution and net earnings attributable to it before the due date for filing your federal income tax in the year the excess contribution was made. Any earnings so distributed will be taxable in the year for which the contribution was made. If you elect not to withdraw an excess contribution, you may apply the excess against the contribution limits in a later year. This is allowed to the extent you under-contribute in the later year. The 6% excise tax will be imposed in the year you make the excess contribution and each subsequent year, until eliminated. To the extent an excess contribution is absorbed in a subsequent year by contributing less than the maximum deduction allowable for that year, the amount absorbed will be deductible in the year applied (provided you are eligible to take a deduction). Distributions From Your traditional IRA During Your Life You may take distributions from your traditional IRA at any time. However, there is a 10% premature distribution tax on the amount includible in your gross income distributed prior to you attaining age 59 1/2, unless: (1) the distributions made to a beneficiary on or after the owner's death; (2) distribution is made because of your permanent disability; (3) the distribution is part of a series of substantially equal periodic payments (made at least annually) that do not exceed your life expectancy or the life expectancy of you and your designated beneficiary; (4) the distribution is made for medical expenses which exceed 7.5% of your adjusted gross income; (5) the distribution is made to purchase health insurance for the individual and/or his or her spouse and dependents if he or she: (a) has received unemployment compensation for 12 consecutive weeks or more; (b) the distributions are made during the tax year that the unemployment compensation is paid or the following tax year; and (c) the individual has not been re-employed for 60 days or more; (6) the distribution is made for certain qualified higher education expenses of the taxpayer, the taxpayer's spouse, or any child or grandchild of the taxpayer or the taxpayer's spouse; (7) the distribution is made for the qualified first-time home buyer expenses (up to a lifetime maximum of $10,000) incurred by you or your spouse or a child, grandchild, parent or grandparent of you or your spouse; or (8) distributions to satisfy a levy issued by the IRS. Generally, the part of a distribution attributable to non-deductible contributions is not includable in income and is not subject to the 10% penalty. When you reach age 70 1/2 you must elect to receive Required Minimum Distributions (RMD) no later than April 1 following the year in which you reach age 70 1/2 whether or not you have retired (Required Distribution Date). There is a minimum amount which you must withdraw by the Required Distribution Date and by each December 31 thereafter. We can provide the RMD amount for you, if you request us to make the calculation. Your own tax or financial advisor may calculate the amount of your minimum distribution each year to make sure this requirement is met, coordinating it with other IRA's you may own. Failure to take the Required Minimum Distribution could result in an additional tax of 50% of the amount not taken. Distributions From Your traditional IRA After Your Death If you die before all the funds in your traditional IRA have been distributed, the remaining funds will be distributed to your designated beneficiary as required below and as selected by such beneficiary. If you die before the Required Distribution Date, your designated beneficiary must withdraw the funds remaining as -B:2- follows: 1) distributed no later than December 31 of the calendar year in which the fifth anniversary of your death occurs; or 2) distributed over the life or life expectancy of the named beneficiary and must begin on or before December 31 of the calendar year following the year of your death. However, if the named beneficiary is your spouse; payments may begin before December 31 of the calendar year in which you would have reached age 70 1/2. If you did not designate a proper beneficiary, the funds remaining shall be distributed within five years after your death. If you die after the Required Beginning Date, your designated beneficiary must select to have the remaining amount of your traditional IRA distributed over the longer of 1) the beneficiary's life expectancy or 2) your remaining life expectancy beginning no later than December 31 of the calendar year following the year of your death. If you do not designate a proper beneficiary, your interest is distributed over your remaining life expectancy. Your surviving spouse, if the sole beneficiary, may elect to treat your traditional IRA as his or her own traditional IRA. Tax Consequences Amounts paid to you or your beneficiary from your traditional IRA are taxable as ordinary income, except that you recover your nondeductible traditional IRA contributions tax-free. If a minimum distribution is not made from your IRA for a tax year in which it is required, the excess of the amount that should have been distributed over the amount that was actually distributed is subject to an excise tax of 50%. Tax-Free Rollovers Under certain circumstances, you, your spouse, or your former spouse (pursuant to a qualified domestic relations order) may roll over all or a portion of your distribution from another traditional IRA, a 401(a) qualified retirement plan, 401(k) plan, 403(b) plan, governmental 457 plan, SEP plan or SIMPLE plan into a traditional IRA. Such an event is called a Rollover and is a method for accomplishing continued tax deferral on otherwise taxable distributions from said plans. Rollover contributions are not subject to the contribution limits on traditional IRA contributions, but also are not tax deductible. There are two ways to make a Tax-Free Rollover to your IRA: 1. Participant Rollovers are accomplished by contributing part or all of the eligible Rollover distribution (which includes amounts withheld for federal income tax purposes) to your new IRA within 60 days following receipt of the distribution. Participant Rollover amounts are subject to a mandatory 20% federal income tax withholding. Traditional IRA to traditional IRA Rollovers are limited to one per distributing plan per 12 month period. However, you may transfer traditional IRA assets to another traditional IRA (where you do not directly receive a distribution) and such transfers are not subject to this limitation. Distributions from a SIMPLE IRA may not be rolled over or transferred to an IRA (which isn't a SIMPLE IRA) during the 2-year period following the date you first participate in any SIMPLE Plan maintained by your employer. 2. Direct Rollovers are made by instructing the plan trustee, custodian, or issuer to pay the eligible portion of your distribution directly to the trustee, custodian or issuer of the receiving IRA. Direct Rollover amounts are not subject to mandatory federal income tax withholding. Certain distributions are not considered to be eligible for Rollover and include: a. distributions which are part of a series of substantially equal periodic payments (made at least annually) for 10 years or more; b. required minimum distributions made during or after the year you reach age 70 1/2; c. any hardship distributions made under the terms of the plan; and d. amounts in excess of the cash (except for certain loan offset amounts) or in excess of the proceeds from the sale of property distributed. Under certain circumstances, you may roll over all or a portion of your eligible distribution from your traditional IRA to a 401(a) qualified retirement plan, 401(k) plan, 403(b) plan, or governmental 457 (No traditional IRA Rollovers to Simple IRAs are allowed). However, you may not roll after-tax contributions from your traditional IRA to a 401(a), 401(k) plan, 403(b) plan, or governmental 457 plan. For rules applicable to rollovers or transfers to Roth IRAs, see the paragraphs on Roth IRA, next page. SEP IRA A SEP Plan allows self-employed people and small business owners to establish SEP IRAs for the business owner and eligible employees, if any. SEP IRAs have specific eligibility and contribution limits (as described in IRS Form 5305-SEP); otherwise SEP IRAs follow the same rules as traditional IRAs. SIMPLE IRA SIMPLE IRAs operate in connection with a SIMPLE Plan maintained by an eligible employer. Each participating employee has a SIMPLE IRA to receive contributions under the plan. SIMPLE IRAs have specific eligibility, contribution, and tax-withdrawal penalties (as described in IRS Form 5304-SIMPLE); otherwise, SIMPLE IRAs follow the same rules as traditional IRAs. ROTH IRA Eligibility You are eligible to make annual contributions to a Roth IRA if you receive compensation from employment, earnings from self-employment, or alimony, and your (and your spouse's) AGI is within the limits described below. Also, you may contribute to a different Roth IRA, established by your spouse (spousal Roth IRA), out of your compensation or earned income for any year. Unlike traditional IRAs, if eligible, you may contribute to a Roth IRA even after age 70 1/2. -B:3- Limit on Annual Contributions You can make annual contributions to a Roth IRA of up to the Annual Contribution Limit or 100% of your compensation or earned income, whichever is less, subject to the limitations below. The Annual Contribution Limit is $4,000 for 2005 through 2007, and $5,000 thereafter. If you are age 50 or older, the Annual Contribution Limits are increased by $1,000 per year, so long as your earned income or compensation is greater than the Annual Contribution Limit. Beginning in 2009, the Annual Contribution Limits will be increased by the IRS to reflect inflation. If each spouse earns at least the Annual Contribution Limit, each of you may make the maximum contribution to your Roth IRA respectfully, subject to the limitations discussed below. However, if one spouse earns less than the Annual Contribution limit, but both spouses together earn at least twice the Annual Contribution Limit, it may be advantageous to use the spousal Roth IRA. The total contributions to both Roth IRAs may not exceed the lesser of twice the Annual Contribution Limit or 100% of you and your spouse's combined compensation or earned income. The Annual Contribution limit is the maximum that can be contributed to all IRAs (Roth and traditional) by an individual in a year. The maximum amount that may be contributed to your Roth IRA is always reduced by any amount that you have contributed to your traditional IRAs for the year. The maximum amount you or your spouse may contribute to a Roth IRA is limited based on your tax filing status and your (and your spouse's) AGI. You may contribute the maximum contribution to your Roth IRA if you are single and your AGI is less than $101,000. Your ability to contribute to your Roth IRA is phased out at $110,000. You may contribute the maximum contribution to your Roth IRA if you are married filing jointly and your AGI is less than $159,000. Your ability to contribute to your Roth IRA is phased out at $169,000. Roth IRA contributions must be made by the due date, not including extensions, for filing your tax return. A contribution made between January 1 and the filing due date for your return, must be submitted with written direction that it is being made for the prior tax year or it will be treated as made for the current tax year. Deductibility of Contributions Unlike a traditional IRA, contributions to your Roth IRA are not deductible. Excess Contributions If you contribute in excess of the maximum contribution limit allowed in any year, the excess contribution could be subject to a 6% excise tax. The excess is taxed in the year the excess contribution is made and each year that the excess remains in your Roth IRA. If you should contribute more than the maximum amount allowed, you can eliminate the excess contribution as follows: o You may withdraw the excess contribution and net earnings attributable to it before the due date for filing your federal income tax in the year the excess contribution was made. Any earnings so distributed will be taxable in the year for which the contribution was made and may be subject to the 10% premature distribution tax. o If you elect not to withdraw an excess contribution, you may apply the excess against the contribution limits in a later year. This is allowed to the extent you under-contribute in the later year. The 6% excise tax will be imposed in the year you make the excess contribution and each subsequent year, until eliminated. To the extent an excess contribution is absorbed in a subsequent year by contributing less than the maximum deduction allowable for that year, the amount absorbed will be deductible in the year applied (provided you are eligible to take a deduction). Tax on Withdrawals From Your Roth IRA You can make withdrawals from your Roth IRA at any time and the principal amounts that you contributed are always available to be withdrawn by you tax-free. Withdrawal of amounts considered earnings or growth will also be tax-free if the following qualified distribution requirements are met: 1) the withdrawal must satisfy the five-year holding period and be made either on or after you reach 59 1/2, due to your death or disability, or for qualified first-time homebuyer expenses. If the requirements for a tax-free withdrawal are not met, a withdrawal consisting of your own prior contribution amounts for your Roth IRA will not be considered taxable in the year you receive it, nor will the 10% penalty apply. A non-qualified withdrawal that is considered earnings on your contributions is includible in your gross income and may be subject to the 10% withdrawal penalty. Also, the 10% premature distribution penalty tax may apply to conversion amounts distributed even though they are not includable in income, if the distribution is made within the 5-taxable-year period beginning on the first day of the individual's taxable year in which the conversion contribution was made. Required Payments From Your Roth IRA Unlike a traditional IRA, while you are living, there are no distribution requirements for your Roth IRA. After your death, if you have begun to receive distributions under an annuity option (not including an interest only option), the remaining Policy value will continue to be distributed to your designated beneficiary according to the terms of the elected options, provided that method satisfies IRC requirements. If you die before your entire interest in the Policy is distributed, your entire interest in your Roth IRA generally must be distributed no later than the end of the fifth calendar year after your death occurs ("five-year payout rule"). Your designated beneficiary may elect to receive distributions over a period not longer than his or her life expectancy, if the election is made and distributions begin on or before the end of the year following the year of your death. Otherwise, the entire benefit must be paid under the five-year payout rule. If the designated beneficiary is your surviving spouse, the spouse may elect to treat the Roth IRA as his or her own. Rollovers and Conversions You may roll over any amount from an existing Roth IRA to another Roth IRA. Under certain circumstances, you may also convert an existing traditional IRA to a Roth IRA. You can roll over distributions from a traditional IRA to a Roth IRA if your AGI is $100,000 or less and you convert such amounts within 60 days after distribution. Note that contributions to a Roth IRA are not deductible and income limits apply. There may be additional income tax consequences upon such a conversion. You will have excess contributions if the amount you convert to a Roth IRA plus your contributions to all of your IRAs exceed your IRA contribution limits for the year. To avoid the 6% excise tax on excess contributions, you must withdraw the excess contributions plus earnings before your tax return due date or recharacterize the contribution, if permitted. Consult your financial adviser to determine other considerations when converting a traditional IRA to a Roth IRA. -B:4- Rollovers from a qualified retirement plan, 403(b) plan, or governmental 457 plan to a Roth IRA were not allowed prior to January 1, 2008. After that date, distributions from such eligible retirement plans may be rolled over into a Roth IRA, subject to the same rules that apply to rollovers from a traditional IRA to a Roth IRA. Such a rollover would be included as taxable income. Recharacterization You may correct an IRA contribution or conversion by recharacterizing your contribution or conversion. For example, you may have converted from a traditional IRA to a Roth IRA and learn later you were not eligible to make the conversion. You may accomplish a recharacterization by making a trustee-to-trustee transfer (including any net income attributable to the contribution) from the first IRA to the second IRA, on or before your tax return due date for reporting the contribution to the first IRA. Once the transfer is made, the election is irrevocable. Recharacterizing a contribution treats it as contributed to the second IRA on the same date as initially contributed to the first IRA. If you elect to recharacterize a contribution, you must report it on your Federal income tax return as made to the second IRA, instead of the first. Consult your tax adviser before recharacterizing a contribution. GENERAL INFORMATION AND RESTRICTIONS FOR ALL IRAS Lump Sum Distribution If you decide to receive the entire value of your IRA Plan in one lump sum, the full amount is taxable when received (except as to non-deductible contributions in a traditional IRA or to "qualified distributions" from a Roth IRA), and is not eligible for the special 5 or 10 year averaging tax rules under IRC Section 402 on lump sum distributions which may be available for other types of Qualified Retirement Plans Nontransferability You may not transfer, assign or sell your IRA to anyone (except in the case of transfer incident to divorce). Nonforfeitability The value of your IRA belongs to you at all times, without risk of forfeiture. Loans and Prohibited Transactions If you engage in a so-called prohibited transaction as defined by the Internal Revenue Code, your IRA will be disqualified and the entire taxable balance in your traditional IRA account, and the amount of earnings or gains in your Roth IRA account, will be taxed as ordinary income in the year of the transaction. You may also have to pay the 10% penalty tax. For example, IRAs do not permit loans. You may not borrow from your IRA (including Roth IRAs) or pledge it as security for a loan. A loan would disqualify your entire IRA and be treated as a distribution. It would be includable in your taxable income in the year of violation and subject to the 10% penalty tax on premature distributions. A pledge of your IRA as security for a loan would cause a constructive distribution of the portion pledged and also be subject to the 10% penalty tax. Financial Disclosure Contributions to your IRA will be invested in a variable annuity policy. The variable annuity policy, its operation, and all related fees and expenses are explained in detail in the prospectus to which this Disclosure Statement is attached. Growth in the value of your variable annuity policy IRA cannot be guaranteed or projected. The income and expenses of your variable annuity policy will affect the value of your IRA. Dividends from net income earned are reduced by investment advisory fees and also by certain other costs. For an explanation of these fees and other costs, please refer to this prospectus. STATUS OF OUR IRA PLAN We may, but are not obligated to, seek IRS approval of your traditional IRA or Roth IRA form. Approval by the IRS is optional to us as the issuer. Approval by the IRS is to form only and does not represent a determination of the merits of the traditional IRA or Roth IRA. -B:5- IMSA We are a member of the Insurance Marketplace Standards Association ("IMSA"). IMSA is a voluntary membership organization created by the life insurance industry to promote ethical market conduct for individual life insurance and annuity products. Our membership in IMSA applies to us only and not to our products or affiliates. THANK YOU for reviewing this Prospectus. You should also review the series fund prospectuses for those Subaccount variable investment option underlying portfolios you wish to select. IF YOU HAVE QUESTIONS, for marketing assistance or other product questions prior to issue, call us at: Ameritas Life Insurance Corp. Telephone: 1-800-255-9678 for all other matters, write or call us at: Ameritas Life Insurance Corp. P.O. BOX 82549 Lincoln NE 68501-2549 or 5900 "O" Street Lincoln, Nebraska 68510 Telephone: 1-800-255-9678 Fax: 1-402-467-7335 Interfund Transfer Request Fax: 1-402-467-7923 e-mail: direct@ameritas.com REMEMBER, THE CORRECT FORM is important for us to accurately process your Policy elections and changes. Many can be found on the on-line services section of our Web Site. Or, call us at our toll-free number and we will send you the form you need. STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS A Statement of Additional Information and other information about us and the Policy with the same date as this prospectus is on file with the SEC and is incorporated into this prospectus by reference. For a free copy, access it on the SEC's Web Site (www.sec.gov, select "Search for Company Filings," then "Companies," then type in file number 333-122109), or write or call us. Here is the Table of Contents for the Statement of Additional Information: Begin on Page ------------------------------------------ ----------- General Information and History 1 Services ------------------------------------------ ----------- Purchase of Securities Being Offered 2 Underwriters Calculation of Performance Standardized Performance Reporting Non-Standardized Performance Reporting ------------------------------------------ ----------- Yields 3 ------------------------------------------ ----------- Other Information 4 Service Marks and Copyright Financial Statements ------------------------------------------ ----------- Form 6151 NLVA Last Page SEC Registration # 811- 07661, 333-122109 Statement of Additional Information: May 1, 2008 to accompany Policy Prospectus dated: May 1, 2008 Ameritas Life Insurance Corp. Logo Ameritas Advisor Select No Load Variable Annuity (sm) Policy Form 6151 Flexible Premium Deferred Variable Annuity Policy Ameritas Life Insurance Corp. Separate Account LLVA TABLE OF CONTENTS Page General Information and History....................1 Services Purchase of Securities Being Offered...............2 Underwriters Calculation of Performance Standardized Performance Reporting Non-Standardized Performance Reporting Yields.........................................3 Other Information..................................4 Service Marks and Copyright Financial Statements This Statement of Additional Information is not a prospectus. It contains information in addition to and more detailed than set forth in the Policy prospectus and should be read in conjunction with the prospectus. The Policy prospectus may be obtained from our Service Center by writing us at P.O. Box 81889, Lincoln, Nebraska 68501, by e-mailing us through our Web Site at www.advisorva.com, or by calling us at 1-800-255-9678. Defined terms used in the current prospectus for the Policies are incorporated in this Statement. GENERAL INFORMATION AND HISTORY Ameritas Life Insurance Corp. Separate Account LLVA is a separate investment account of Ameritas Life Insurance Corp. ("we, us, our, Ameritas"). We are a stock life insurance company organized under the insurance laws of the State of Nebraska in 1887. We are an indirect wholly owned subsidiary of UNIFI Mutual Holding Company. We issue life and health insurance and annuities throughout the United States (except New York). SERVICES The statutory statements of admitted assets, liabilities and surplus of Ameritas Life Insurance Corp., a wholly owned subsidiary of Ameritas Holding Company, as of December 31, 2007 and 2006, and the related statutory statements of operations, changes in surplus, and cash flows for each of the three years in the period ended December 31, 2007 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the restatement discussed in Note 20) and the statements of net assets of each of the subaccounts of Ameritas Life Insurance Corp. Separate Account LLVA as of December 31, 2007, and the related statements of operations for the period then ended, the statements of changes in net assets for each of the periods in the two years then ended and the financial highlights for each of the periods in the five years then ended, have been audited by Deloitte & Touche LLP, independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is 1248 "O" Street, Suite 716, Lincoln, Nebraska 68508. All matters of state and federal law pertaining to the Policies have been reviewed by our internal legal staff. Policy 6151 NLVA SAI: 1 Statement of Additional Information PURCHASE OF SECURITIES BEING OFFERED The Policy will be sold by licensed insurance agents in states where the Policies 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. UNDERWRITERS The Policy is offered continuously and is distributed by Ameritas Investment Corp ("AIC"), 5900 "0" Street, Lincoln, Nebraska 68510. We are the direct majority owner of AIC. AIC enters into contracts with various broker-dealers ("Distributors") to distribute Policies.
-------------- --------------- --------------- YEAR: 2005 2006 2007 ---------------------------------------------------------------------- -------------- --------------- --------------- ---------------------------------------------------------------------- -------------- --------------- --------------- Variable annuity commission we paid to AIC that were paid to other $36,808 $1,192,963 $62,507 broker-dealers and representatives (not kept by AIC). ---------------------------------------------------------------------- -------------- --------------- --------------- Variable annuity commission earned and kept by AIC. None None None ---------------------------------------------------------------------- -------------- --------------- --------------- Fees we paid to AIC for variable annuity Principal Underwriter $608 $19,602 $0 services. ---------------------------------------------------------------------- -------------- --------------- ---------------
CALCULATION OF PERFORMANCE When we advertise performance for a Subaccount (except any Money Market Subaccount), 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 a Subaccount will be shown for periods beginning on the date the Subaccount first invested in a corresponding series fund portfolio. We will calculate standardized average annual total return according to the standard methods prescribed by rules of the Securities and Exchange Commission ("SEC"). We report average annual total return information via Internet and periodic printed reports. Average annual total return quotations on our Internet Web Site will be current as of the previous Business Day. Printed average annual total return information may be current to the last Business Day of the previous calendar week, month, or quarter preceding the date on which a report is submitted for publication. Both standardized average annual total return quotations and non-standardized total return quotations will cover at least periods of one, five, and ten years, or a period covering the time the Subaccount has been in existence, if it has not been in existence for one of the prescribed periods. If the corresponding series fund portfolio has been in existence for longer than the Subaccount, the non-standardized total return quotations will show the investment performance the Subaccount would have achieved (reduced by the applicable charges) had it been invested in the series fund portfolio for the period quoted; this is referred to as "adjusted historical" performance reporting. Standardized average annual total return is not available for periods before the Subaccount was in existence. Quotations of standardized average annual total return and non-standardized total return are based on historical earnings and will fluctuate. Any quotation of performance should not be considered a guarantee of future performance. Factors affecting the performance of a Subaccount and its corresponding series fund portfolio include general market conditions, operating expenses and investment management. An Owner's withdrawal value upon surrender of a Policy may be more or less than the premium invested in the Policy. Standardized Performance Reporting Standardized average annual total return for a specific period is calculated by taking a hypothetical $1,000 investment in a Subaccount at the offering on the first day of the period ("initial investment"), and computing the ending redeemable value ("redeemable value") of that investment at the end of the period. The redeemable value is then divided by the initial investment and expressed as a percentage, carried to at least the nearest hundredth of a percent. Standardized average annual total return is annualized and reflects the deduction of the current mortality and expense fee and the current annual Policy Fee. No deduction is made for premium taxes which may be assessed by certain states. Non-Standardized Performance Reporting We may also advertise non-standardized total return. Non-standardized total return may assume: (1) the Policy is not surrendered; (2) the Subaccounts have existed for periods other than those required to be presented; (3) current charges are incurred if they are less than the Policy's guaranteed maximum charges; or (4) may differ from standardized average annual total return in other ways disclosed in the table description. Non-standardized total return may also assume a larger initial investment which more closely approximates the size of a typical Policy. For SAI:2 these reasons, non-standardized total returns for a Subaccount are usually higher than standardized total returns for a Subaccount. Yields We may advertise the current annualized yield for a 30-day period for a Subaccount. The annualized yield of a Subaccount refers to the income generated by the Subaccount over a specified 30-day period. Because this yield is annualized, the yield generated by a Subaccount 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: YIELD=2[(a - b +1)(6) - 1] Cd Where a=net investment income earned during the period by the portfolio company attributable to shares owned by the Subaccount, b=expenses accrued for the period (net of reimbursements), c=the average daily number of Accumulation Units outstanding during the period, and d=the maximum offering price per Accumulation Unit on the last day of the period. The yield reflects the base Policy mortality and expense risk fee and administrative expense charge. Net investment income will be determined according to rules established by the SEC. The yield assumes an average Policy size of $75,000. Because of the charges and deductions imposed by the Separate Account, the yield for a Subaccount will be lower than the yield for the corresponding series fund portfolio. The yield on amounts held in the Subaccount 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. A Subaccount's actual yield will be affected by the types and quality of portfolio securities held by the series fund and the series fund's operating expenses. Any current yield quotations of a money market Subaccount, subject to Rule 482 of the Securities Act of 1933, will consist of a seven calendar day historical yield, carried at least to the nearest hundredth of a percent. We may advertise yield for the Subaccount based on different time periods, but we will accompany it with a yield quotation based on a seven-day calendar period. A money market Subaccount's yield will be calculated by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing Policy having a balance of one Accumulation Unit at the beginning of the base period, subtracting a hypothetical charge reflecting those Policy deductions stated above, and dividing the net change in Policy value by the value of the Policy at the beginning of the period to obtain a base period return and multiplying the base period return by (365/7). A money market Subaccount's effective yield is computed similarly but includes the effect of assumed compounding on an annualized basis of the current yield quotations of the Subaccount. A money market Subaccount's yield and effective yield will fluctuate daily. Actual yields will depend on factors such as the type of instruments in the series fund's portfolio, portfolio quality and average maturity, changes in interest rates, and the series fund's expenses. Although we determine the Subaccount's yield on the basis of a seven calendar day period, we may use a different time period on occasion. The yield quotes may reflect the expense limitations described in the series fund's prospectus or Statement of Additional Information. There is no assurance that the yields quoted on any given occasion will be maintained for any period of time and there is no guarantee that the net asset values will remain constant. It should be noted that neither a Policy owner's investment in a money market Subaccount nor that Subaccount's investment in the underlying money market series fund portfolio is guaranteed or insured. Yields of other money market funds may not be comparable if a different base or another method of calculation is used. SAI:3 OTHER INFORMATION A registration statement has been filed with the SEC under the Securities Act of 1933, as amended, with respect to the Policy described in this Statement. Not all information set forth in the registration statement is addressed in the Policy prospectus or this Statement. Statements in the prospectus and this Statement are intended to be summaries. For a complete statement of the terms of the registration, refer to the documents we file with the SEC. They may be accessed on the SEC's Web Site at www.sec.gov, select "Filings" and type in "Ameritas Life" or you may review and copy it (for a fee) at the SEC's Public Reference Room in Washington D.C. (Call the SEC at 1-202-942-8090 for details and public hours.) SERVICE MARKS AND COPYRIGHT "Ameritas" and the bison symbol are registered service marks of Ameritas Life Insurance Corp. The Policy and Policy prospectus are copyrighted by Ameritas Life Insurance Corp. FINANCIAL STATEMENTS Our financial statements follow this page of this Statement. They bear only on our ability to meet our obligations under the Policy, and should not be considered as bearing on the investment performance of the assets held in the Separate Account. SAI:4 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007 AND FOR EACH OF THE PERIODS IN THE TWO YEARS THEN ENDED AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors Ameritas Life Insurance Corp. Lincoln, Nebraska We have audited the accompanying statements of net assets of each of the subaccounts listed in Note 1 which comprise Ameritas Life Insurance Corp. Separate Account LLVA as of December 31, 2007 and the related statements of operations for the period then ended, the statements of changes in net assets for each of the periods in the two years then ended, and the financial highlights for each of the periods in the five years then ended for each of the subaccounts which comprise the Account. These financial statements and financial highlights are the responsibility of 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. The subaccounts are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of each of the subaccounts' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned at December 31, 2007, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of each of the subaccounts constituting Ameritas Life Insurance Corp. Separate Account LLVA as of December 31, 2007, and the results of their operations for the period then ended and changes in their net assets for each of the periods in the two years then ended, and the financial highlights for each of the periods in the five years then ended for each of the subaccounts which comprise the Account, in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP Lincoln, Nebraska March 6, 2008 FS-1 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA STATEMENTS OF NET ASSETS DECEMBER 31, 2007
ASSETS INVESTMENTS AT FAIR VALUE: Calvert Variable Series, Inc. Calvert Social Portfolios (Calvert): CVS Social Balanced Portfolio (Balanced) - 589,465.193 shares at $1.918 per share (cost $1,141,021) $ 1,130,594 CVS Social International Equity Portfolio (International Equity) - 78,964.729 shares at $18.88 per share (cost $1,714,407) 1,490,854 CVS Social Mid Cap Growth Portfolio (Mid Cap) - 32,094.980 shares at $30.54 per share (cost $909,069) 980,181 CVS Social Equity Portfolio (Social Equity) - 45,157.594 shares at $20.38 per share (cost $847,993) 920,312 Calvert Variable Series, Inc. Ameritas Portfolios (Ameritas): Ameritas Income & Growth Portfolio (Income and Growth) - 13,384.235 shares at $13.80 per share (cost $175,129) 184,702 Ameritas Index 500 Portfolio (Index 500) - 1,816.914 shares at $158.07 per share (cost $292,546) 287,200 Ameritas MidCap Growth Portfolio (MidCap) - 25,221.523 shares at $38.97 per share (cost $1,075,171) 982,883 Ameritas Small Capitalization Portfolio (Small Cap) - 6,217.311 shares at $37.43 per share (cost $230,537) 232,714 DWS Investments VIT Funds (Scudder): DWS Small Cap Index VIP Portfolio - Class A (Small Cap) - 70,372.214 shares at $14.71 per share (cost $1,032,615) 1,035,175 Fidelity Variable Insurance Products (Fidelity): VIP Overseas Portfolio: Initial Class (Overseas IC) - 227,634.729 shares at $25.32 per share (cost $5,101,574) 5,763,711 VIP Investment Grade Bond Portfolio: Initial Class (Inv. Grade Bond IC) - 522,849.047 shares at $12.76 per share (cost $6,504,293) 6,671,554 VIP Equity Income Portfolio: Initial Class (Equity Income IC) - 138,086.190 shares at $23.91 per share (cost $3,556,680) 3,301,641 VIP Growth Portfolio: Initial Class (Growth IC) - 107,786.204 shares at $45.12 per share (cost $3,939,751) 4,863,314 VIP High Income Portfolio: Initial Class (High Income IC) - 206,830.579 shares at $5.98 per share (cost $1,325,542) 1,236,847 VIP High Income Portfolio: Service Class (High Income SC) - 367,077.249 shares at $5.95 per share (cost $2,339,109) 2,184,110 The accompanying notes are an integral part of these financial statements. FS-2 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA STATEMENTS OF NET ASSETS DECEMBER 31, 2007 ASSETS, continued INVESTMENTS AT FAIR VALUE: Fidelity Variable Insurance Products (Fidelity), continued: VIP Contrafund Portfolio: Initial Class (Contrafund IC) - 726,674.984 shares at $27.90 per share (cost $22,454,898) $ 20,274,232 VIP Contrafund Portfolio: Service Class (Contrafund SC) - 319,247.483 shares at $27.80 per share (cost $9,861,233) 8,875,080 VIP Mid Cap Portfolio: Initial Class (Mid Cap IC) - 234,210.277 shares at $36.16 per share (cost $7,742,422) 8,469,044 VIP Mid Cap Portfolio: Service Class (Mid Cap SC) - 45,839.639 shares at $35.98 per share (cost $1,521,664) 1,649,310 AIM Variable Insurance Funds (AIM): AIM V.I. Financial Services Portfolio - Series I (Financial) - 3,181.334 shares at $12.26 per share (cost $49,584) 39,003 AIM V.I. Global Health Care Portfolio - Series I (Health) - 3,234.481 shares at $24.06 per share (cost $73,068) 77,822 AIM V.I. Technology Portfolio - Series I (Technology) - 7,376.009 shares at $15.10 per share (cost $111,175) 111,378 Janus Aspen Series - Institutional Funds (Janus): Growth Portfolio (Growth) - 4,269.630 shares at $26.42 per share (cost $82,416) 112,804 Neuberger Berman Advisers Management Trust (Neuberger Berman): AMT Balanced Portfolio - Class I (Balanced) - 42,894.778 shares at $13.08 per share (cost $431,291) 561,064 AMT Growth Portfolio - Class I (Growth) - 19,669.967 shares at $19.30 per share (cost $339,796) 379,630 AMT Lehman Brothers Short Duration Bond Portfolio - Class I (Limited Maturity Bond) - 18,154.103 shares at $13.00 per share (cost $236,592) 236,003 AMT Partners Portfolio - Class I (Partners) - 34,035.421 shares at $20.77 per share (cost $687,793) 706,916 Rydex Variable Trust (Rydex): Nova Portfolio (Nova) - 93,451.818 shares at $10.06 per share (cost $965,597) 940,125 OTC Portfolio (OTC) - 76,855.333 shares at $18.12 per share (cost $1,342,758) 1,392,619 Precious Metals Portfolio (Precious Metals) - 331,771.696 shares at $15.04 per share (cost $4,760,642) 4,989,846 Inverse S&P 500 Strategy Portfolio (Inv. S&P 500) - 20,778.636 shares at $42.21 per share (cost $880,782) 877,066 Government Long Bond 1.2x Strategy Portfolio (Gov. Long Bond) - 138,085.894 shares at $12.24 per share (cost $1,600,584) 1,690,171 The accompanying notes are an integral part of these financial statements. FS-3 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA STATEMENTS OF NET ASSETS DECEMBER 31, 2007 ASSETS, continued INVESTMENTS AT FAIR VALUE: Rydex Variable Trust (Rydex), continued: Inverse OTC Strategy Portfolio (Inverse OTC) - 5,656.629 shares at $16.99 per share (cost $100,555) $ 96,106 Inverse Government Long Bond Strategy Portfolio (Inv. Long Bond) - 7,599.845 shares at $19.58 per share (cost $166,276) 148,805 Russell 2000 1.5x Strategy Portfolio (Russell) - 23,859.488 shares at $34.20 per share (cost $907,921) 815,994 Sector Rotation Portfolio (Sector Rotation) - 127,799.743 shares at $15.33 per share (cost $1,854,746) 1,959,170 Third Avenue Variable Series Trust (Third Avenue): Third Avenue Value Portfolio (Value) - 572,033.858 shares at $25.92 per share (cost $16,605,955) 14,827,118 Vanguard Variable Insurance Fund (Vanguard): VIF Money Market Portfolio (Money Market) - 54,415,617.340 shares at $1.00 per share (cost $54,415,617) 54,415,617 VIF Equity Index Portfolio (Equity Index) - 901,340.943 shares at $29.54 per share (cost $25,119,579) 26,625,611 VIF Total Bond Market Index Portfolio (Total Bond) - 2,106,586.035 shares at $11.54 per share (cost $23,198,833) 24,310,003 VIF REIT Index Portfolio (REIT Index) - 655,608.795 shares at $18.92 per share (cost $14,283,859) 12,404,118 VIF Mid-Cap Index Portfolio (Mid-Cap) - 973,421.711 shares at $18.58 per share (cost $17,634,322) 18,086,175 VIF Total Stock Market Index Portfolio (Stock Market Index) - 346,877.090 shares at $31.09 per share (cost $9,989,801) 10,784,409 VIF Equity Income Portfolio (Equity Income) - 640,907.559 shares at $19.79 per share (cost $12,381,861) 12,683,561 VIF Growth Portfolio (Growth) - 656,893.425 shares at $14.39 per share (cost $8,322,382) 9,452,696 VIF High Yield Bond Portfolio (High Yield Bond) - 742,980.076 shares at $8.21 per share (cost $6,191,352) 6,099,866 VIF Balanced Portfolio (Balanced) - 518,126.351 shares at $20.76 per share (cost $9,916,379) 10,756,303 VIF International Portfolio (International) - 1,760,186.638 shares at $23.84 per share (cost $33,739,112) 41,962,849 VIF Diversified Value Portfolio (Diversified) - 1,210,569.160 shares at $16.33 per share (cost $18,518,976) 19,768,594 VIF Small Company Growth Portfolio (Small Company Growth) - 634,797.066 shares at $18.15 per share (cost $11,565,808) 11,521,567 The accompanying notes are an integral part of these financial statements. FS-4 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA STATEMENTS OF NET ASSETS DECEMBER 31, 2007 ASSETS, continued INVESTMENTS AT FAIR VALUE: Wells Fargo Variable Trust (Wells Fargo): Advantage VT Discovery Portfolio (Discovery) - 18,680.981 shares at $20.11 per share (cost $293,828) $ 375,675 Advantage VT Opportunity Portfolio (Opportunity) - 31,784.040 shares at $22.03 per share (cost $653,248) 700,202 Classic ProFunds VP (ProFunds): Bull Portfolio (Bull) - 22,563.114 shares at $30.90 per share (cost $699,776) 697,200 Europe 30 Portfolio (Europe) - 34,868.862 shares at $35.53 per share (cost $1,250,553) 1,238,891 Mid-Cap Value Portfolio (Mid-Cap) - 1,060.614 shares at $31.51 per share (cost $36,725) 33,420 VP NASDAQ-100 Portfolio (OTC) - 14,713.255 shares at $18.62 per share (cost $278,811) 273,961 Small-Cap Portfolio (Small-Cap) - 349.090 shares at $30.71 per share (cost $10,782) 10,721 Small-Cap Value Portfolio (Small-Cap Value) - 1,078.949 shares at $28.81 per share (cost $34,490) 31,085 Dow 30 Portfolio (Classic Dow) - 7,845.997 shares at $38.60 per share (cost $313,498) 302,855 Inverse ProFunds VP (ProFunds): Bear Portfolio (Bear) - 850.368 shares at $24.92 per share (cost $20,858) 21,191 VP Short NASDAQ-100 Portfolio (Short OTC) - 11,770.347 shares at $14.18 per share (cost $165,034) 166,904 Short Small-Cap Portfolio (Short Small-Cap) - 20,516.708 shares at $14.85 per share (cost $299,927) 304,673 Short Dow 30 Portfolio (Short Dow) - 95.047 shares at $26.69 per share (cost $2,459) 2,537 Ultra ProFunds VP (ProFunds): Ultra Mid-Cap Portfolio (UltraMid) - 178.518 shares at $34.47 per share (cost $6,286) 6,154 Ultra NASDAQ-100 Portfolio (UltraOTC) - 27,979.893 shares at $26.93 per share (cost $764,205) 753,499 Ultra Small-Cap Portfolio (UltraSmall) - 10,849.873 shares at $23.23 per share (cost $256,500) 252,043 Ultra Bull Portfolio (UltraBull) - 85,783.037 shares at $21.04 per share (cost $1,828,429) 1,804,875 The accompanying notes are an integral part of these financial statements. FS-5 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA STATEMENTS OF NET ASSETS DECEMBER 31, 2007 ASSETS, continued INVESTMENTS AT FAIR VALUE: Bond Benchmarked ProFunds VP (ProFunds): U.S. Government Plus Portfolio (U.S. Gov. Plus) - 30,242.660 shares at $32.10 per share (cost $934,496) $ 970,789 Rising Rates Opportunity Portfolio (Opportunity) - 962.994 shares at $18.52 per share (cost $18,330) 17,835 Sector ProFunds VP (ProFunds): Oil & Gas Portfolio (Oil & Gas) - 6,171.555 shares at $66.69 per share (cost $382,939) 411,581 Precious Metals Portfolio (Precious Metals) - 31,546.521 shares at $51.82 per share (cost $1,574,083) 1,634,741 Real Estate Portfolio (Real Estate) - 3,436.942 shares at $49.44 per share (cost $185,050) 169,922 Access VP (ProFunds): High Yield Fund Portfolio (High Yield) - 850.569 shares at $28.94 per share (cost $24,507) 24,615 Money Market ProFunds VP (ProFunds): Money Market Portfolio (Money Market) - 11,403,573.530 shares at $1.00 per share (cost $11,403,574) 11,403,574 PIMCO Variable Insurance Trust (Pimco): CommodityRealReturn Strategy Portfolio (Commodity) - 668,014.010 shares at $13.35 per share (cost $7,915,381) 8,917,987 ------------------ NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS $ 389,893,397
The accompanying notes are an integral part of these financial statements. FS-6 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Calvert ---------------------------------------- Balanced ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 27,774 Mortality and expense risk charge (6,360) ------------------ Net investment income(loss) 21,414 ------------------ Realized gain(loss) on investments: Net realized gain distributions 63,559 Net realized gain(loss) on sale of fund shares 22,837 ------------------ Net realized gain(loss) 86,396 ------------------ Change in unrealized appreciation/depreciation (80,311) ------------------ Net increase(decrease) in net assets resulting from operations $ 27,499 ================== Balanced ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 21,414 $ 20,725 Net realized gain(loss) 86,396 30,060 Net change in unrealized appreciation/depreciation (80,311) 23,813 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 27,499 74,598 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 44,747 201,224 Subaccounts transfers (including fixed account), net 116,254 485,607 Transfers for policyowner benefits and terminations (148,603) (120,488) Policyowner maintenance charges (391) (170) ------------------ ------------------ Net increase(decrease) from policyowner transactions 12,007 566,173 ------------------ ------------------ Total increase(decrease) in net assets 39,506 640,771 Net assets at beginning of period 1,091,088 450,317 ------------------ ------------------ Net assets at end of period $ 1,130,594 $ 1,091,088 ================== ================== The accompanying notes are an integral part of these financial statements.
FS-7
Calvert -------------------------------------------------------------------------------------------------------------------- International Equity Mid Cap Social Equity ------------------- ------------------- ------------------- 2007 2007 2007 ------------------- ------------------- ------------------ $ 16,884 $ ---- $ ---- (8,838) (4,148) (4,374) ------------------- ------------------- ------------------ 8,046 (4,148) (4,374) ------------------- ------------------- ------------------ 218,566 19,803 45,262 117,457 7,374 11,438 ------------------- ------------------- ------------------ 336,023 27,177 56,700 ------------------- ------------------- ------------------ (339,402) 30,895 18,371 ------------------- ------------------- ------------------ $ 4,667 $ 53,924 $ 70,697 =================== =================== ==================
International Equity Mid Cap Social Equity -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 8,046 $ 2,497 $ (4,148) $ (1,961) $ (4,374) $ (1,810) 336,023 132,494 27,177 3,165 56,700 561 (339,402) 68,391 30,895 21,216 18,371 52,641 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 4,667 203,382 53,924 22,420 70,697 51,392 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 119,414 417,392 63,950 162,253 65,587 245,231 31,069 196,392 369,261 121,701 145,050 264,455 (86,102) (59,277) (47,311) (2,094) (14,730) (4,975) (463) (154) (167) (48) (103) (8) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 63,918 554,353 385,733 281,812 195,804 504,703 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 68,585 757,735 439,657 304,232 266,501 556,095 1,422,269 664,534 540,524 236,292 653,811 97,716 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 1,490,854 $ 1,422,269 $ 980,181 $ 540,524 $ 920,312 $ 653,811 =================== ================== ================== =================== ================== ===================
FS-8 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Ameritas ---------------------------------------- Income and Growth ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 2,962 Mortality and expense risk charge (1,056) ------------------ Net investment income(loss) 1,906 ------------------ Realized gain(loss) on investments: Net realized gain distributions 9,106 Net realized gain(loss) on sale of fund shares 1,663 ------------------ Net realized gain(loss) 10,769 ------------------ Change in unrealized appreciation/depreciation (8,977) ------------------ Net increase(decrease) in net assets resulting from operations $ 3,698 ================== Income and Growth ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 1,906 $ 431 Net realized gain(loss) 10,769 7,303 Net change in unrealized appreciation/depreciation (8,977) 17,144 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 3,698 24,878 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 600 11,498 Subaccounts transfers (including fixed account), net 6,259 8,915 Transfers for policyowner benefits and terminations (6,718) (7,752) Policyowner maintenance charges (78) (72) ------------------ ------------------ Net increase(decrease) from policyowner transactions 63 12,589 ------------------ ------------------ Total increase(decrease) in net assets 3,761 37,467 Net assets at beginning of period 180,941 143,474 ------------------ ------------------ Net assets at end of period $ 184,702 $ 180,941 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-9
Ameritas -------------------------------------------------------------------------------------------------------------------- Index 500 MidCap Small Cap ------------------- ------------------- ------------------- 2007 2007 2007 ------------------- ------------------- ------------------ $ 4,984 $ ---- $ ---- (2,051) (2,854) (1,107) ------------------- ------------------- ------------------ 2,933 (2,854) (1,107) ------------------- ------------------- ------------------ ---- 193,272 ---- 41,244 18,212 13,333 ------------------- ------------------- ------------------ 41,244 211,484 13,333 ------------------- ------------------- ------------------ (43,865) (80,869) (4,164) ------------------- ------------------- ------------------ $ 312 $ 127,761 $ 8,062 =================== =================== ==================
Index 500 MidCap Small Cap -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 2,933 $ 5,413 $ (2,854) $ (1,358) $ (1,107) $ (534) 41,244 33,584 211,484 21,075 13,333 3,640 (43,865) 32,867 (80,869) (15,743) (4,164) 3,491 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 312 71,864 127,761 3,974 8,062 6,597 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 2,873 2,471 3,436 3,968 ---- ---- (258,451) (86,948) 731,121 (157,710) 146,067 70,130 (483) (10,508) (63,512) (4,085) (37,787) ---- (149) (178) (184) (104) (50) (20) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (256,210) (95,163) 670,861 (157,931) 108,230 70,110 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (255,898) (23,299) 798,622 (153,957) 116,292 76,707 543,098 566,397 184,261 338,218 116,422 39,715 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 287,200 $ 543,098 $ 982,883 $ 184,261 $ 232,714 $ 116,422 =================== ================== ================== =================== ================== ===================
FS-10 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Scudder ---------------------------------------- Small Cap ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 9,917 Mortality and expense risk charge (6,550) ------------------ Net investment income(loss) 3,367 ------------------ Realized gain(loss) on investments: Net realized gain distributions 72,679 Net realized gain(loss) on sale of fund shares 43,386 ------------------ Net realized gain(loss) 116,065 ------------------ Change in unrealized appreciation/depreciation (162,265) ------------------ Net increase(decrease) in net assets resulting from operations $ (42,833) ================== Small Cap ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 3,367 $ 2,387 Net realized gain(loss) 116,065 103,507 Net change in unrealized appreciation/depreciation (162,265) 75,275 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (42,833) 181,169 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 1,727 10,197 Subaccounts transfers (including fixed account), net (147,026) (199,706) Transfers for policyowner benefits and terminations (55,590) (90,345) Policyowner maintenance charges (230) (285) ------------------ ------------------ Net increase(decrease) from policyowner transactions (201,119) (280,139) ------------------ ------------------ Total increase(decrease) in net assets (243,952) (98,970) Net assets at beginning of period 1,279,127 1,378,097 ------------------ ------------------ Net assets at end of period $ 1,035,175 $ 1,279,127 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-11
Fidelity ------------------------------------------------------------------------------------------------------------------- Inv. Grade Equity Income Overseas IC Bond IC IC ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 171,136 $ 212,727 $ 62,558 (27,831) (32,324) (19,843) ------------------ ------------------- ------------------- 143,305 180,403 42,715 ------------------ ------------------- ------------------- 302,674 ---- 275,893 115,977 3,351 67,948 ------------------ ------------------- ------------------- 418,651 3,351 343,841 ------------------ ------------------- ------------------- 165,382 40,299 (365,464) ------------------ ------------------- ------------------- $ 727,338 $ 224,053 $ 21,092 ================== =================== ===================
Overseas IC Inv. Grade Bond IC Equity Income IC -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 143,305 $ (9,123) $ 180,403 $ 56,149 $ 42,715 $ 43,877 418,651 1,459 3,351 (20,465) 343,841 224,254 165,382 496,647 40,299 138,419 (365,464) 109,917 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 727,338 488,983 224,053 174,103 21,092 378,048 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 418,506 2,146,515 507,860 2,331,624 359,832 1,936,388 563,258 1,615,543 1,316,409 893,458 (180,033) 1,296,516 (200,427) (40,051) (265,198) (77,930) (375,995) (161,156) (1,133) (9) (717) (342) (594) (8) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 780,204 3,721,998 1,558,354 3,146,810 (196,790) 3,071,740 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 1,507,542 4,210,981 1,782,407 3,320,913 (175,698) 3,449,788 4,256,169 45,188 4,889,147 1,568,234 3,477,339 27,551 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 5,763,711 $ 4,256,169 $ 6,671,554 $ 4,889,147 $ 3,301,641 $ 3,477,339 =================== ================== ================== =================== ================== ===================
FS-12 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Fidelity ---------------------------------------- Growth IC ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 30,405 Mortality and expense risk charge (20,267) ------------------ Net investment income(loss) 10,138 ------------------ Realized gain(loss) on investments: Net realized gain distributions 3,975 Net realized gain(loss) on sale of fund shares 85,931 ------------------ Net realized gain(loss) 89,906 ------------------ Change in unrealized appreciation/depreciation 706,243 ------------------ Net increase(decrease) in net assets resulting from operations $ 806,287 ================== Growth IC ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 10,138 $ (6,917) Net realized gain(loss) 89,906 9,444 Net change in unrealized appreciation/depreciation 706,243 217,196 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 806,287 219,723 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 341,266 1,835,214 Subaccounts transfers (including fixed account), net 875,186 1,106,591 Transfers for policyowner benefits and terminations (245,646) (86,999) Policyowner maintenance charges (995) (5) ------------------ ------------------ Net increase(decrease) from policyowner transactions 969,811 2,854,801 ------------------ ------------------ Total increase(decrease) in net assets 1,776,098 3,074,524 Net assets at beginning of period 3,087,216 12,692 ------------------ ------------------ Net assets at end of period $ 4,863,314 $ 3,087,216 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-13
Fidelity ------------------------------------------------------------------------------------------------------------------- High Income High Income Contrafund IC SC IC ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 102,584 $ 180,694 $ 181,441 (6,794) (12,310) (99,870) ------------------ ------------------- ------------------- 95,790 168,384 81,571 ------------------ ------------------- ------------------- ---- ---- 4,832,349 10,381 116,458 201,665 ------------------ ------------------- ------------------- 10,381 116,458 5,034,014 ------------------ ------------------- ------------------- (76,259) (105,308) (2,270,786) ------------------ ------------------- ------------------- $ 29,912 $ 179,534 $ 2,844,799 ================== =================== ===================
High Income IC High Income SC Contrafund IC -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 95,790 $ 70,155 $ 168,384 $ 269,196 $ 81,571 $ 83,332 10,381 5,391 116,458 (290,441) 5,034,014 1,151,535 (76,259) (10,438) (105,308) 413,731 (2,270,786) 64,442 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 29,912 65,108 179,534 392,486 2,844,799 1,299,309 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 290,167 337,656 743 318 933,737 8,208,843 34,356 589,254 (1,893,350) (4,029,623) 2,502,318 5,735,655 (104,531) (37,200) (14,972) (319,238) (1,712,425) (239,102) (164) ---- (90) (112) (3,575) (71) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 219,828 889,710 (1,907,669) (4,348,655) 1,720,055 13,705,325 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 249,740 954,818 (1,728,135) (3,956,169) 4,564,854 15,004,634 987,107 32,289 3,912,245 7,868,414 15,709,378 704,744 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 1,236,847 $ 987,107 $ 2,184,110 $ 3,912,245 $ 20,274,232 $ 15,709,378 =================== ================== ================== =================== ================== ===================
FS-14 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Fidelity ---------------------------------------- Contrafund SC ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 73,159 Mortality and expense risk charge (51,032) ------------------ Net investment income(loss) 22,127 ------------------ Realized gain(loss) on investments: Net realized gain distributions 2,201,730 Net realized gain(loss) on sale of fund shares (36,658) ------------------ Net realized gain(loss) 2,165,072 ------------------ Change in unrealized appreciation/depreciation (892,219) ------------------ Net increase(decrease) in net assets resulting from operations $ 1,294,980 ================== Contrafund SC ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 22,127 $ 63,946 Net realized gain(loss) 2,165,072 1,289,478 Net change in unrealized appreciation/depreciation (892,219) (434,910) ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 1,294,980 918,514 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 6,221 90,586 Subaccounts transfers (including fixed account), net (3,962,849) 9,162,202 Transfers for policyowner benefits and terminations (1,424,050) (536,637) Policyowner maintenance charges (1,010) (1,027) ------------------ ------------------ Net increase(decrease) from policyowner transactions (5,381,688) 8,715,124 ------------------ ------------------ Total increase(decrease) in net assets (4,086,708) 9,633,638 Net assets at beginning of period 12,961,788 3,328,150 ------------------ ------------------ Net assets at end of period $ 8,875,080 $ 12,961,788 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-15
Fidelity AIM ---------------------------------------------------------------------------- -------------------------------------- Mid Cap IC Mid Cap SC Financial ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 70,648 $ 14,948 $ 758 (42,951) (12,181) (424) ------------------ ------------------- ------------------- 27,697 2,767 334 ------------------ ------------------- ------------------- 647,197 221,953 2,863 58,068 85,737 2,521 ------------------ ------------------- ------------------- 705,265 307,690 5,384 ------------------ ------------------- ------------------- 296,338 9,815 (17,685) ------------------ ------------------- ------------------- $ 1,029,300 $ 320,272 $ (11,967) ================== =================== ===================
Mid Cap IC Mid Cap SC Financial -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 27,697 $ (15,110) $ 2,767 $ (8,198) $ 334 $ 1,092 705,265 50,971 307,690 824,460 5,384 7,134 296,338 415,106 9,815 (308,490) (17,685) 370 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 1,029,300 450,967 320,272 507,772 (11,967) 8,596 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 683,039 4,353,088 6,482 74,314 180 880 403,492 1,660,085 (597,881) (4,342,245) (47,301) (4,709) (309,158) (93,096) (137,331) (145,584) (19,097) (263) (1,669) (55) (427) (617) (108) (96) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 775,704 5,920,022 (729,157) (4,414,132) (66,326) (4,188) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 1,805,004 6,370,989 (408,885) (3,906,360) (78,293) 4,408 6,664,040 293,051 2,058,195 5,964,555 117,296 112,888 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 8,469,044 $ 6,664,040 $ 1,649,310 $ 2,058,195 $ 39,003 $ 117,296 =================== ================== ================== =================== ================== ===================
FS-16 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
AIM ---------------------------------------- Health ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ ---- Mortality and expense risk charge (511) ------------------ Net investment income(loss) (511) ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares 3,732 ------------------ Net realized gain(loss) 3,732 ------------------ Change in unrealized appreciation/depreciation 1,137 ------------------ Net increase(decrease) in net assets resulting from operations $ 4,358 ================== Health ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ (511) $ (712) Net realized gain(loss) 3,732 8,267 Net change in unrealized appreciation/depreciation 1,137 (5,033) ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 4,358 2,522 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 123 823 Subaccounts transfers (including fixed account), net (14,448) (3,484) Transfers for policyowner benefits and terminations (616) (21,403) Policyowner maintenance charges (35) (55) ------------------ ------------------ Net increase(decrease) from policyowner transactions (14,976) (24,119) ------------------ ------------------ Total increase(decrease) in net assets (10,618) (21,597) Net assets at beginning of period 88,440 110,037 ------------------ ------------------ Net assets at end of period $ 77,822 $ 88,440 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-17
AIM Janus Neuberger Berman ----------------------------- ---------------------------------------------- -------------------------------------- Technology Growth Balanced ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ ---- $ 783 $ 6,213 (595) (610) (2,886) ------------------ ------------------- ------------------- (595) 173 3,327 ------------------ ------------------- ------------------- ---- ---- ---- 11,259 3,133 15,244 ------------------ ------------------- ------------------- 11,259 3,133 15,244 ------------------ ------------------- ------------------- (9,912) 10,828 51,249 ------------------ ------------------- ------------------- $ 752 $ 14,134 $ 69,820 ================== =================== ===================
Technology Growth Balanced -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------ ------------------- ------------------ ------------------ ------------------ ------------------- $ (595) $ (777) $ 173 $ (678) $ 3,327 $ 1,545 11,259 11,833 3,133 80,142 15,244 22,083 (9,912) 5,831 10,828 (90,608) 51,249 27,368 ------------------ ------------------- ------------------ ------------------ ------------------ ------------------- 752 16,887 14,134 (11,144) 69,820 50,996 ------------------ ------------------- ------------------ ------------------ ------------------ ------------------- 100 1,850 ---- ---- 3,942 2,627 (25,574) (82,665) (16,012) (1,272,910) (21,569) (1,305) (1,628) (2,670) (2,342) (29,999) (9,725) (25,880) (71) (66) (50) (127) (249) (279) ------------------ ------------------- ------------------ ------------------ ------------------ ------------------- (27,173) (83,551) (18,404) (1,303,036) (27,601) (24,837) ------------------ ------------------- ------------------ ------------------ ------------------ ------------------- (26,421) (66,664) (4,270) (1,314,180) 42,219 26,159 137,799 204,463 117,074 1,431,254 518,845 492,686 ------------------ ------------------- ------------------ ------------------ ------------------ ------------------- $ 111,378 $ 137,799 $ 112,804 $ 117,074 $ 561,064 $ 518,845 ================== =================== ================== ================== ================== ===================
FS-18 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Neuberger Berman ---------------------------------------- Growth ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ ---- Mortality and expense risk charge (1,885) ------------------ Net investment income(loss) (1,885) ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares 57,677 ------------------ Net realized gain(loss) 57,677 ------------------ Change in unrealized appreciation/depreciation (3,480) ------------------ Net increase(decrease) in net assets resulting from operations $ 52,312 ================== Growth ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ (1,885) $ (1,233) Net realized gain(loss) 57,677 21,942 Net change in unrealized appreciation/depreciation (3,480) 2,080 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 52,312 22,789 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 1,590 4,583 Subaccounts transfers (including fixed account), net 187,823 (44,939) Transfers for policyowner benefits and terminations (59,968) (18,498) Policyowner maintenance charges (168) (212) ------------------ ------------------ Net increase(decrease) from policyowner transactions 129,277 (59,066) ------------------ ------------------ Total increase(decrease) in net assets 181,589 (36,277) Net assets at beginning of period 198,041 234,318 ------------------ ------------------ Net assets at end of period $ 379,630 $ 198,041 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-19
Neuberger Berman Rydex ---------------------------------------------------------------------------- -------------------------------------- Limited Maturity Bond Partners Nova ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 6,458 $ 4,563 $ 7,893 (1,300) (4,208) (9,632) ------------------ ------------------- ------------------- 5,158 355 (1,739) ------------------ ------------------- ------------------- ---- 71,402 ---- 229 32,918 183,040 ------------------ ------------------- ------------------- 229 104,320 183,040 ------------------ ------------------- ------------------- 4,452 (33,705) (303,635) ------------------ ------------------- ------------------- $ 9,839 $ 70,970 $ (122,334) ================== =================== ===================
Limited Maturity Bond Partners Nova -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 5,158 $ 8,049 $ 355 $ 1,998 $ (1,739) $ 37,191 229 (4,384) 104,320 184,976 183,040 167,293 4,452 6,928 (33,705) (92,662) (303,635) 203,014 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 9,839 10,593 70,970 94,312 (122,334) 407,498 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 2,072 72 1,025 11,337 21,119 19,386 (16,534) (111,977) (111,393) (442,583) (3,674,264) 479,468 (3,119) (14,170) (141,352) (60,779) (613,886) (725,151) (40) (56) (327) (419) (333) (440) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (17,621) (126,131) (252,047) (492,444) (4,267,364) (226,737) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (7,782) (115,538) (181,077) (398,132) (4,389,698) 180,761 243,785 359,323 887,993 1,286,125 5,329,823 5,149,062 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 236,003 $ 243,785 $ 706,916 $ 887,993 $ 940,125 $ 5,329,823 =================== ================== ================== =================== ================== ===================
FS-20 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Rydex ---------------------------------------- OTC ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 1,218 Mortality and expense risk charge (10,102) ------------------ Net investment income(loss) (8,884) ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares 425,260 ------------------ Net realized gain(loss) 425,260 ------------------ Change in unrealized appreciation/depreciation (304,337) ------------------ Net increase(decrease) in net assets resulting from operations $ 112,039 ================== OTC ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ (8,884) $ (12,339) Net realized gain(loss) 425,260 (21,524) Net change in unrealized appreciation/depreciation (304,337) 328,734 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 112,039 294,871 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 37,759 245,874 Subaccounts transfers (including fixed account), net (3,057,205) (165,064) Transfers for policyowner benefits and terminations (556,465) (415,450) Policyowner maintenance charges (304) (295) ------------------ ------------------ Net increase(decrease) from policyowner transactions (3,576,215) (334,935) ------------------ ------------------ Total increase(decrease) in net assets (3,464,176) (40,064) Net assets at beginning of period 4,856,795 4,896,859 ------------------ ------------------ Net assets at end of period $ 1,392,619 $ 4,856,795 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-21
Rydex ------------------------------------------------------------------------------------------------------------------- Precious Gov. Metals Inv. S&P 500 Long Bond ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ ---- $ 21,802 $ 41,157 (21,428) (4,266) (6,281) ------------------ ------------------- ------------------- (21,428) 17,536 34,876 ------------------ ------------------- ------------------- ---- ---- ---- 585,893 (114,544) (10,786) ------------------ ------------------- ------------------- 585,893 (114,544) (10,786) ------------------ ------------------- ------------------- 34,335 41,702 58,685 ------------------ ------------------- ------------------- $ 598,800 $ (55,306) $ 82,775 ================== =================== ===================
Precious Metals Inv. S&P 500 Gov. Long Bond -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ (21,428) $ (13,340) $ 17,536 $ 32,384 $ 34,876 $ 21,928 585,893 373,805 (114,544) (320,854) (10,786) (13,884) 34,335 61,793 41,702 (49,990) 58,685 21,794 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 598,800 422,258 (55,306) (338,460) 82,775 29,838 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 132,559 998,690 38,145 99,282 44,053 93,725 753,586 1,017,351 450,444 (47,773) 432,622 696,858 (235,460) (162,507) (20,434) (175,583) (73,921) (114,097) (850) (418) (220) (274) (248) (45) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 649,835 1,853,116 467,935 (124,348) 402,506 676,441 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 1,248,635 2,275,374 412,629 (462,808) 485,281 706,279 3,741,211 1,465,837 464,437 927,245 1,204,890 498,611 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 4,989,846 $ 3,741,211 $ 877,066 $ 464,437 $ 1,690,171 $ 1,204,890 =================== ================== ================== =================== ================== ===================
FS-22 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Rydex ---------------------------------------- Inverse OTC ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 3,119 Mortality and expense risk charge (591) ------------------ Net investment income(loss) 2,528 ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares (40,083) ------------------ Net realized gain(loss) (40,083) ------------------ Change in unrealized appreciation/depreciation (1,446) ------------------ Net increase(decrease) in net assets resulting from operations $ (39,001) ================== Inverse OTC ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 2,528 $ 829 Net realized gain(loss) (40,083) (12,077) Net change in unrealized appreciation/depreciation (1,446) (3,004) ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (39,001) (14,252) ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 8,656 59,643 Subaccounts transfers (including fixed account), net 66,159 15,680 Transfers for policyowner benefits and terminations (141) (616) Policyowner maintenance charges (22) ---- ------------------ ------------------ Net increase(decrease) from policyowner transactions 74,652 74,707 ------------------ ------------------ Total increase(decrease) in net assets 35,651 60,455 Net assets at beginning of period 60,455 ---- ------------------ ------------------ Net assets at end of period $ 96,106 $ 60,455 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-23
Rydex ------------------------------------------------------------------------------------------------------------------- Inv. Long Sector Bond Russell Rotation ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 7,162 $ 20,622 $ ---- (1,110) (5,606) (8,417) ------------------ ------------------- ------------------- 6,052 15,016 (8,417) ------------------ ------------------- ------------------- ---- 69,218 151,692 (12,199) 74,122 80,842 ------------------ ------------------- ------------------- (12,199) 143,340 232,534 ------------------ ------------------- ------------------- (8,992) (209,757) 49,538 ------------------ ------------------- ------------------- $ (15,139) $ (51,401) $ 273,655 ================== =================== ===================
Inv. Long Bond Russell Sector Rotation -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 6,052 $ 8,444 $ 15,016 $ 124 $ (8,417) $ (4,015) (12,199) (108) 143,340 19,717 232,534 61,384 (8,992) (8,480) (209,757) 119,343 49,538 50,327 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (15,139) (144) (51,401) 139,184 273,655 107,696 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 11,778 111,480 203,763 481,445 67,608 513,904 (65,899) 128,363 (332,901) 351,828 402,982 586,100 (16,601) (4,988) (48,583) (8,500) (68,606) (34,756) (40) (5) (192) (19) (231) (4) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (70,762) 234,850 (177,913) 824,754 401,753 1,065,244 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (85,901) 234,706 (229,314) 963,938 675,408 1,172,940 234,706 ---- 1,045,308 81,370 1,283,762 110,822 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 148,805 $ 234,706 $ 815,994 $ 1,045,308 $ 1,959,170 $ 1,283,762 =================== ================== ================== =================== ================== ===================
FS-24 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Third Avenue ---------------------------------------- Value ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 363,294 Mortality and expense risk charge (86,724) ------------------ Net investment income(loss) 276,570 ------------------ Realized gain(loss) on investments: Net realized gain distributions 1,047,039 Net realized gain(loss) on sale of fund shares 173,432 ------------------ Net realized gain(loss) 1,220,471 ------------------ Change in unrealized appreciation/depreciation (2,276,748) ------------------ Net increase(decrease) in net assets resulting from operations $ (779,707) ================== Value ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 276,570 $ 89,896 Net realized gain(loss) 1,220,471 1,497,821 Net change in unrealized appreciation/depreciation (2,276,748) (198,702) ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (779,707) 1,389,015 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 987,941 3,213,158 Subaccounts transfers (including fixed account), net 2,804,499 (558,691) Transfers for policyowner benefits and terminations (803,921) (420,930) Policyowner maintenance charges (2,378) (1,369) ------------------ ------------------ Net increase(decrease) from policyowner transactions 2,986,141 2,232,168 ------------------ ------------------ Total increase(decrease) in net assets 2,206,434 3,621,183 Net assets at beginning of period 12,620,684 8,999,501 ------------------ ------------------ Net assets at end of period $ 14,827,118 $ 12,620,684 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-25
Vanguard ------------------------------------------------------------------------------------------------------------------ Money Market Equity Index Total Bond ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 2,626,967 $ 379,349 $ 681,200 (282,033) (136,270) (109,386) ------------------ ------------------- ------------------- 2,344,934 243,079 571,814 ------------------ ------------------- ------------------- ---- 944,336 ---- ---- 312,933 14,948 ------------------ ------------------- ------------------- ---- 1,257,269 14,948 ------------------ ------------------- ------------------- ---- (368,692) 731,361 ------------------ ------------------- ------------------- $ 2,344,934 $ 1,131,656 $ 1,318,123 ================== =================== ===================
Money Market Equity Index Total Bond -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 2,344,934 $ 1,993,859 $ 243,079 $ 1,659 $ 571,814 $ 158,030 ---- ---- 1,257,269 223,594 14,948 1,283 ---- ---- (368,692) 1,738,482 731,361 365,339 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 2,344,934 1,993,859 1,131,656 1,963,735 1,318,123 524,652 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 29,775,621 94,094,016 3,409,871 9,459,405 3,491,604 6,431,073 (12,629,040) (61,493,335) 2,631,135 6,705,828 4,655,283 4,518,600 (11,423,610) (10,095,623) (1,335,951) (291,456) (1,100,567) (407,815) (4,911) (3,896) (2,701) (665) (1,682) (605) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 5,718,060 22,501,162 4,702,354 15,873,112 7,044,638 10,541,253 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 8,062,994 24,495,021 5,834,010 17,836,847 8,362,761 11,065,905 46,352,623 21,857,602 20,791,601 2,954,754 15,947,242 4,881,337 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 54,415,617 $ 46,352,623 $ 26,625,611 $ 20,791,601 $ 24,310,003 $ 15,947,242 =================== ================== ================== =================== ================== ===================
FS-26 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Vanguard ---------------------------------------- REIT Index ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 344,125 Mortality and expense risk charge (91,639) ------------------ Net investment income(loss) 252,486 ------------------ Realized gain(loss) on investments: Net realized gain distributions 1,406,425 Net realized gain(loss) on sale of fund shares 128,993 ------------------ Net realized gain(loss) 1,535,418 ------------------ Change in unrealized appreciation/depreciation (4,590,154) ------------------ Net increase(decrease) in net assets resulting from operations $ (2,802,250) ================== REIT Index ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 252,486 $ 15,338 Net realized gain(loss) 1,535,418 298,115 Net change in unrealized appreciation/depreciation (4,590,154) 2,544,279 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (2,802,250) 2,857,732 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 1,593,768 8,870,756 Subaccounts transfers (including fixed account), net (3,747,473) 4,859,473 Transfers for policyowner benefits and terminations (1,093,371) (416,100) Policyowner maintenance charges (3,181) (530) ------------------ ------------------ Net increase(decrease) from policyowner transactions (3,250,257) 13,313,599 ------------------ ------------------ Total increase(decrease) in net assets (6,052,507) 16,171,331 Net assets at beginning of period 18,456,625 2,285,294 ------------------ ------------------ Net assets at end of period $ 12,404,118 $ 18,456,625 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-27
Vanguard ------------------------------------------------------------------------------------------------------------------- Stock Market Equity Mid-Cap Index Income ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 221,488 $ 101,220 $ 308,792 (101,296) (56,304) (67,621) ------------------ ------------------- ------------------- 120,192 44,916 241,171 ------------------ ------------------- ------------------- 1,865,614 413,809 825,426 150,324 96,199 280,114 ------------------ ------------------- ------------------- 2,015,938 510,008 1,105,540 ------------------ ------------------- ------------------- (1,257,615) (171,411) (763,716) ------------------ ------------------- ------------------- $ 878,515 $ 383,513 $ 582,995 ================== =================== ===================
Mid-Cap Stock Market Index Equity Income -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 120,192 $ (23,217) $ 44,916 $ (18,446) $ 241,171 $ 54,805 2,015,938 141,894 510,008 53,929 1,105,540 170,499 (1,257,615) 1,520,642 (171,411) 963,878 (763,716) 1,032,352 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 878,515 1,639,319 383,513 999,361 582,995 1,257,656 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 1,479,682 9,160,178 774,679 5,200,731 60,347 2,962,619 292,946 4,387,847 962,555 2,694,016 2,430,502 3,336,019 (959,682) (395,177) (321,676) (64,477) (603,383) (150,592) (3,053) (448) (1,639) ---- (1,449) (429) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 809,893 13,152,400 1,413,919 7,830,270 1,886,017 6,147,617 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 1,688,408 14,791,719 1,797,432 8,829,631 2,469,012 7,405,273 16,397,767 1,606,048 8,986,977 157,346 10,214,549 2,809,276 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 18,086,175 $ 16,397,767 $ 10,784,409 $ 8,986,977 $ 12,683,561 $ 10,214,549 =================== ================== ================== =================== ================== ===================
FS-28 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Vanguard ---------------------------------------- Growth ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 63,260 Mortality and expense risk charge (48,721) ------------------ Net investment income(loss) 14,539 ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares 235,137 ------------------ Net realized gain(loss) 235,137 ------------------ Change in unrealized appreciation/depreciation 533,282 ------------------ Net increase(decrease) in net assets resulting from operations $ 782,958 ================== Growth ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 14,539 $ (18,389) Net realized gain(loss) 235,137 96,725 Net change in unrealized appreciation/depreciation 533,282 516,312 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 782,958 594,648 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 918,252 4,676,630 Subaccounts transfers (including fixed account), net 492,520 817,686 Transfers for policyowner benefits and terminations (882,103) (122,931) Policyowner maintenance charges (1,929) (169) ------------------ ------------------ Net increase(decrease) from policyowner transactions 526,740 5,371,216 ------------------ ------------------ Total increase(decrease) in net assets 1,309,698 5,965,864 Net assets at beginning of period 8,142,998 2,177,134 ------------------ ------------------ Net assets at end of period $ 9,452,696 $ 8,142,998 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-29
Vanguard ------------------------------------------------------------------------------------------------------------------- High Yield Bond Balanced International ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 406,586 $ 289,183 $ 603,471 (33,292) (58,299) (206,423) ------------------ ------------------- ------------------- 373,294 230,884 397,048 ------------------ ------------------- ------------------- ---- 436,226 1,357,810 (9,979) 197,461 777,280 ------------------ ------------------- ------------------- (9,979) 633,687 2,135,090 ------------------ ------------------- ------------------- (296,786) (73,927) 2,932,877 ------------------ ------------------- ------------------- $ 66,529 $ 790,644 $ 5,465,015 ================== =================== ===================
High Yield Bond Balanced International -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 373,294 $ 123,073 $ 230,884 $ (7,880) $ 397,048 $ (2,131) (9,979) (6,732) 633,687 44,360 2,135,090 203,643 (296,786) 233,983 (73,927) 913,193 2,932,877 4,452,060 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 66,529 350,324 790,644 949,673 5,465,015 4,653,572 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 651,771 2,351,668 1,838,065 5,438,392 3,074,987 15,243,450 230,875 1,352,661 (840,763) 3,777,142 3,823,755 6,616,070 (590,661) (238,442) (1,074,553) (299,885) (2,255,375) (918,722) (961) (274) (1,766) (51) (5,114) (1,226) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 291,024 3,465,613 (79,017) 8,915,598 4,638,253 20,939,572 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 357,553 3,815,937 711,627 9,865,271 10,103,268 25,593,144 5,742,313 1,926,376 10,044,676 179,405 31,859,581 6,266,437 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 6,099,866 $ 5,742,313 $ 10,756,303 $ 10,044,676 $ 41,962,849 $ 31,859,581 =================== ================== ================== =================== ================== ===================
FS-30 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
Vanguard ---------------------------------------- Diversified ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 345,577 Mortality and expense risk charge (106,578) ------------------ Net investment income(loss) 238,999 ------------------ Realized gain(loss) on investments: Net realized gain distributions 590,825 Net realized gain(loss) on sale of fund shares 403,588 ------------------ Net realized gain(loss) 994,413 ------------------ Change in unrealized appreciation/depreciation (646,204) ------------------ Net increase(decrease) in net assets resulting from operations $ 587,208 ================== Diversified ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 238,999 $ 37,196 Net realized gain(loss) 994,413 188,493 Net change in unrealized appreciation/depreciation (646,204) 1,577,972 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations 587,208 1,803,661 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 1,271,045 5,484,941 Subaccounts transfers (including fixed account), net 4,307,536 4,064,070 Transfers for policyowner benefits and terminations (1,032,770) (499,613) Policyowner maintenance charges (2,690) (831) ------------------ ------------------ Net increase(decrease) from policyowner transactions 4,543,121 9,048,567 ------------------ ------------------ Total increase(decrease) in net assets 5,130,329 10,852,228 Net assets at beginning of period 14,638,265 3,786,037 ------------------ ------------------ Net assets at end of period $ 19,768,594 $ 14,638,265 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-31
Vanguard Wells Fargo -------------------------------------- ---------------------------------------------------------------------------- Small Company Growth Discovery Opportunity ------------------ ------------------ ------------------- 2007 2007 2007 ------------------ ------------------ ------------------- $ 58,835 $ ---- $ 4,024 (65,346) (1,947) (3,677) ------------------ ------------------ ------------------- (6,511) (1,947) 347 ------------------ ------------------ ------------------- 1,038,641 ---- 94,294 73,908 54,726 1,267 ------------------ ------------------ ------------------- 1,112,549 54,726 95,561 ------------------ ------------------ ------------------- (760,184) 11,486 (58,866) ------------------ ------------------ ------------------- $ 345,854 $ 64,265 $ 37,042 ================== ================== ===================
Small Company Growth Discovery Opportunity -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ (6,511) $ (24,095) $ (1,947) $ (1,556) $ 347 $ (3,623) 1,112,549 209,759 54,726 2,940 95,561 127,298 (760,184) 614,070 11,486 37,309 (58,866) (44,868) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 345,854 799,734 64,265 38,693 37,042 78,807 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 917,784 6,592,586 2,391 2,280 8,953 6,775 74,311 2,365,244 (20,055) 50,999 34,214 (235,742) (745,257) (269,696) (1,099) (3,634) (50) (27,197) (2,167) (341) (193) (192) (239) (243) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 244,671 8,687,793 (18,956) 49,453 42,878 (256,407) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 590,525 9,487,527 45,309 88,146 79,920 (177,600) 10,931,042 1,443,515 330,366 242,220 620,282 797,882 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 11,521,567 $ 10,931,042 $ 375,675 $ 330,366 $ 700,202 $ 620,282 =================== ================== ================== =================== ================== ===================
FS-32 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
ProFunds ---------------------------------------- Bull ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 3,749 Mortality and expense risk charge (7,229) ------------------ Net investment income(loss) (3,480) ------------------ Realized gain(loss) on investments: Net realized gain distributions 8,248 Net realized gain(loss) on sale of fund shares 33,160 ------------------ Net realized gain(loss) 41,408 ------------------ Change in unrealized appreciation/depreciation (39,483) ------------------ Net increase(decrease) in net assets resulting from operations $ (1,555) ================== Bull ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ (3,480) $ (5,444) Net realized gain(loss) 41,408 103,379 Net change in unrealized appreciation/depreciation (39,483) 31,700 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (1,555) 129,635 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 3,175 220,840 Subaccounts transfers (including fixed account), net (707,622) 606,427 Transfers for policyowner benefits and terminations (50,727) (39,638) Policyowner maintenance charges ---- ---- ------------------ ------------------ Net increase(decrease) from policyowner transactions (755,174) 787,629 ------------------ ------------------ Total increase(decrease) in net assets (756,729) 917,264 Net assets at beginning of period 1,453,929 536,665 ------------------ ------------------ Net assets at end of period $ 697,200 $ 1,453,929 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-33
ProFunds ------------------------------------------------------------------------------------------------------------------- Europe Mid-Cap OTC ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 10,030 $ 254 $ ---- (7,763) (2,086) (2,781) ------------------ ------------------- ------------------- 2,267 (1,832) (2,781) ------------------ ------------------- ------------------- 4,088 1,376 ---- 98,521 11,918 67,592 ------------------ ------------------- ------------------- 102,609 13,294 67,592 ------------------ ------------------- ------------------- (59,272) (7,730) (27,681) ------------------ ------------------- ------------------- $ 45,604 $ 3,732 $ 37,130 ================== =================== ===================
Europe Mid-Cap OTC -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 2,267 $ (2,326) $ (1,832) $ (3,680) $ (2,781) $ (2,645) 102,609 5,549 13,294 31,148 67,592 3,618 (59,272) 47,447 (7,730) (3,690) (27,681) 37,552 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 45,604 50,670 3,732 23,778 37,130 38,525 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 27,078 182,543 16,706 ---- 58 21,550 308,373 784,265 (214,774) (228,391) (692,140) 325,799 (133,526) (31,880) (23,066) (30,046) (39,859) (16,585) ---- ---- ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 201,925 934,928 (221,134) (258,437) (731,941) 330,764 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 247,529 985,598 (217,402) (234,659) (694,811) 369,289 991,362 5,764 250,822 485,481 968,772 599,483 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 1,238,891 $ 991,362 $ 33,420 $ 250,822 $ 273,961 $ 968,772 =================== ================== ================== =================== ================== ===================
FS-34 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
ProFunds ---------------------------------------- Small-Cap ----------------- STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 256 Mortality and expense risk charge (1,555) ------------------ Net investment income(loss) (1,299) ------------------ Realized gain(loss) on investments: Net realized gain distributions 4,979 Net realized gain(loss) on sale of fund shares (6,708) ------------------ Net realized gain(loss) (1,729) ------------------ Change in unrealized appreciation/depreciation (8,979) ------------------ Net increase(decrease) in net assets resulting from operations $ (12,007) ================== Small-Cap ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ (1,299) $ (5,112) Net realized gain(loss) (1,729) 113,591 Net change in unrealized appreciation/depreciation (8,979) 12,508 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (12,007) 120,987 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners ---- 21,550 Subaccounts transfers (including fixed account), net (271,138) (168,725) Transfers for policyowner benefits and terminations (53,006) (44,851) Policyowner maintenance charges ---- ---- ------------------ ------------------ Net increase(decrease) from policyowner transactions (324,144) (192,026) ------------------ ------------------ Total increase(decrease) in net assets (336,151) (71,039) Net assets at beginning of period 346,872 417,911 ------------------ ------------------ Net assets at end of period $ 10,721 $ 346,872 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-35
ProFunds ------------------------------------------------------------------------------------------------------------------- Small-Cap Value Classic Dow Bear ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ ---- $ 3,340 $ 3,787 (1,277) (6,119) (1,309) ------------------ ------------------- ------------------- (1,277) (2,779) 2,478 ------------------ ------------------- ------------------- 2,398 ---- ---- (13,500) 49,128 (21,163) ------------------ ------------------- ------------------- (11,102) 49,128 (21,163) ------------------ ------------------- ------------------- (8,513) (14,611) (1,025) ------------------ ------------------- ------------------- $ (20,892) $ 31,738 $ (19,710) ================== =================== ===================
Small-Cap Value Classic Dow Bear -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ (1,277) $ (935) $ (2,779) $ (1,769) $ 2,478 $ (251) (11,102) 35,461 49,128 3,477 (21,163) 4,052 (8,513) 5,115 (14,611) 3,968 (1,025) (17,241) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (20,892) 39,641 31,738 5,676 (19,710) (13,440) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 14,356 14,293 22,630 ---- ---- ---- (39,431) (398,540) (373,329) 711,776 (106,633) (1,432,916) (15,900) (1,500) (79,364) (16,272) (5,021) (61,553) ---- ---- ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (40,975) (385,747) (430,063) 695,504 (111,654) (1,494,469) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (61,867) (346,106) (398,325) 701,180 (131,364) (1,507,909) 92,952 439,058 701,180 ---- 152,555 1,660,464 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 31,085 $ 92,952 $ 302,855 $ 701,180 $ 21,191 $ 152,555 =================== ================== ================== =================== ================== ===================
FS-36 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
ProFunds ---------------------------------------- Short OTC ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 23,530 Mortality and expense risk charge (6,679) ------------------ Net investment income(loss) 16,851 ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares (135,435) ------------------ Net realized gain(loss) (135,435) ------------------ Change in unrealized appreciation/depreciation 6 ------------------ Net increase(decrease) in net assets resulting from operations $ (118,578) ================== Short OTC ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 16,851 $ 8,049 Net realized gain(loss) (135,435) (47,241) Net change in unrealized appreciation/depreciation 6 (3,159) ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (118,578) (42,351) ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners ---- ---- Subaccounts transfers (including fixed account), net 354,906 21,212 Transfers for policyowner benefits and terminations (213,131) (155,216) Policyowner maintenance charges ---- ---- ------------------ ------------------ Net increase(decrease) from policyowner transactions 141,775 (134,004) ------------------ ------------------ Total increase(decrease) in net assets 23,197 (176,355) Net assets at beginning of period 143,707 320,062 ------------------ ------------------ Net assets at end of period $ 166,904 $ 143,707 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-37
ProFunds ------------------------------------------------------------------------------------------------------------------- Short Small-Cap Short Dow UltraMid ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 1,292 $ 12,257 $ 2,073 (1,438) (1,259) (2,204) ------------------ ------------------- ------------------- (146) 10,998 (131) ------------------ ------------------- ------------------- ---- ---- 15,708 (65,262) (32,405) 122,507 ------------------ ------------------- ------------------- (65,262) (32,405) 138,215 ------------------ ------------------- ------------------- 4,656 591 (26) ------------------ ------------------- ------------------- $ (60,752) $ (20,816) $ 138,058 ================== =================== ===================
Short Small-Cap Short Dow UltraMid -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ (146) $ (1,167) $ 10,998 $ (2,998) $ (131) $ (1,242) (65,262) 86,287 (32,405) (76,822) 138,215 (69,329) 4,656 91 591 (513) (26) 14 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (60,752) 85,211 (20,816) (80,333) 138,058 (70,557) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- ---- ---- ---- ---- ---- 510 296,867 (7,475) 59,800 253,200 (119,706) 87,283 (8,244) (934) (42,580) (166,734) (14,018) (21,236) ---- ---- ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 288,623 (8,409) 17,220 86,466 (133,724) 66,557 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 227,871 76,802 (3,596) 6,133 4,334 (4,000) 76,802 ---- 6,133 ---- 1,820 5,820 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 304,673 $ 76,802 $ 2,537 $ 6,133 $ 6,154 $ 1,820 =================== ================== ================== =================== ================== ===================
FS-38 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
ProFunds ---------------------------------------- UltraOTC ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ ---- Mortality and expense risk charge (8,353) ------------------ Net investment income(loss) (8,353) ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares 2,883 ------------------ Net realized gain(loss) 2,883 ------------------ Change in unrealized appreciation/depreciation (8,325) ------------------ Net increase(decrease) in net assets resulting from operations $ (13,795) ================== UltraOTC ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ (8,353) $ (5,266) Net realized gain(loss) 2,883 226,439 Net change in unrealized appreciation/depreciation (8,325) 3,585 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (13,795) 224,758 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 40,106 220,840 Subaccounts transfers (including fixed account), net 1,319,091 (664,173) Transfers for policyowner benefits and terminations (680,762) (18,544) Policyowner maintenance charges ---- ---- ------------------ ------------------ Net increase(decrease) from policyowner transactions 678,435 (461,877) ------------------ ------------------ Total increase(decrease) in net assets 664,640 (237,119) Net assets at beginning of period 88,859 325,978 ------------------ ------------------ Net assets at end of period $ 753,499 $ 88,859 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-39
ProFunds ------------------------------------------------------------------------------------------------------------------- U.S. Gov. UltraSmall UltraBull Plus ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ 8,830 $ 6,114 $ 22,897 (4,290) (6,564) (5,802) ------------------ ------------------- ------------------- 4,540 (450) 17,095 ------------------ ------------------- ------------------- ---- 100,789 ---- 146,900 (381,898) 45,257 ------------------ ------------------- ------------------- 146,900 (281,109) 45,257 ------------------ ------------------- ------------------- (4,105) (21,852) 42,348 ------------------ ------------------- ------------------- $ 147,335 $ (303,411) $ 104,700 ================== =================== ===================
UltraSmall UltraBull U.S. Gov. Plus -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 4,540 $ (3,714) $ (450) $ (4,035) $ 17,095 $ 22,441 146,900 17,440 (281,109) (10,560) 45,257 135,952 (4,105) 773 (21,852) (1,706) 42,348 (6,310) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 147,335 14,499 (303,411) (16,301) 104,700 152,083 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- ---- 510 40,000 221,350 28,712 220,840 88,607 46,118 2,048,629 (32,874) 748,801 (442,737) (32,778) (32,392) (130,632) (23,901) (59,689) (47,549) ---- ---- ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 55,829 14,236 1,957,997 164,575 717,824 (269,446) ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 203,164 28,735 1,654,586 148,274 822,524 (117,363) 48,879 20,144 150,289 2,015 148,265 265,628 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 252,043 $ 48,879 $ 1,804,875 $ 150,289 $ 970,789 $ 148,265 =================== ================== ================== =================== ================== ===================
FS-40 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
ProFunds ---------------------------------------- Opportunity ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ ---- Mortality and expense risk charge (2,881) ------------------ Net investment income(loss) (2,881) ------------------ Realized gain(loss) on investments: Net realized gain distributions ---- Net realized gain(loss) on sale of fund shares (26,355) ------------------ Net realized gain(loss) (26,355) ------------------ Change in unrealized appreciation/depreciation (5,850) ------------------ Net increase(decrease) in net assets resulting from operations $ (35,086) ================== Opportunity ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ (2,881) $ (6,267) Net realized gain(loss) (26,355) 40,642 Net change in unrealized appreciation/depreciation (5,850) 2,926 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (35,086) 37,301 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners ---- ---- Subaccounts transfers (including fixed account), net (107,035) (1,993,154) Transfers for policyowner benefits and terminations (22,297) (35,757) Policyowner maintenance charges ---- ---- ------------------ ------------------ Net increase(decrease) from policyowner transactions (129,332) (2,028,911) ------------------ ------------------ Total increase(decrease) in net assets (164,418) (1,991,610) Net assets at beginning of period 182,253 2,173,863 ------------------ ------------------ Net assets at end of period $ 17,835 $ 182,253 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-41
ProFunds ------------------------------------------------------------------------------------------------------------------- Precious Oil & Gas Metals Real Estate ------------------ ------------------- ------------------- 2007 2007 2007 ------------------ ------------------- ------------------- $ ---- $ 19,702 $ 1,224 (4,333) (5,748) (1,728) ------------------ ------------------- ------------------- (4,333) 13,954 (504) ------------------ ------------------- ------------------- 11,359 ---- 688 43,896 14,100 8,071 ------------------ ------------------- ------------------- 55,255 14,100 8,759 ------------------ ------------------- ------------------- 20,045 51,581 (22,612) ------------------ ------------------- ------------------- $ 70,967 $ 79,635 $ (14,357) ================== =================== ===================
Oil & Gas Precious Metals Real Estate -------------------------------------- -------------------------------------- -------------------------------------- 2007 2006 2007 2006 2007 2006 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ (4,333) $ (4,026) $ 13,954 $ (66) $ (504) $ 145 55,255 (25,199) 14,100 (21,295) 8,759 34,873 20,045 9,251 51,581 7,293 (22,612) 7,515 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 70,967 (19,974) 79,635 (14,068) (14,357) 42,533 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 64,469 64,940 40,000 64,430 56,951 29,244 (17,631) 346,918 1,195,406 376,668 (282,336) 338,564 (110,683) (18,342) (119,496) (16,399) (56) (2,280) ---- ---- ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- (63,845) 393,516 1,115,910 424,699 (225,441) 365,528 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- 7,122 373,542 1,195,545 410,631 (239,798) 408,061 404,459 30,917 439,196 28,565 409,720 1,659 ------------------- ------------------ ------------------ ------------------- ------------------ ------------------- $ 411,581 $ 404,459 $ 1,634,741 $ 439,196 $ 169,922 $ 409,720 =================== ================== ================== =================== ================== ===================
FS-42 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA FOR THE PERIODS ENDED DECEMBER 31
ProFunds ---------------------------------------- High Yield ------------------ STATEMENTS OF OPERATIONS 2007 ------------------ Investment income: Dividend distributions received $ 7,575 Mortality and expense risk charge (399) ------------------ Net investment income(loss) 7,176 ------------------ Realized gain(loss) on investments: Net realized gain distributions 305 Net realized gain(loss) on sale of fund shares (12,551) ------------------ Net realized gain(loss) (12,246) ------------------ Change in unrealized appreciation/depreciation (61) ------------------ Net increase(decrease) in net assets resulting from operations $ (5,131) ================== High Yield ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ------------------ ------------------ Increase(decrease) in net assets from operations: Net investment income(loss) $ 7,176 $ 2,719 Net realized gain(loss) (12,246) (59) Net change in unrealized appreciation/depreciation (61) 168 ------------------ ------------------ Net increase(decrease) in net assets resulting from operations (5,131) 2,828 ------------------ ------------------ Net increase(decrease) from policyowner transactions: Payments received from policyowners 1,207 ---- Subaccounts transfers (including fixed account), net (11,697) 38,084 Transfers for policyowner benefits and terminations (530) (146) Policyowner maintenance charges ---- ---- ------------------ ------------------ Net increase(decrease) from policyowner transactions (11,020) 37,938 ------------------ ------------------ Total increase(decrease) in net assets (16,151) 40,766 Net assets at beginning of period 40,766 ---- ------------------ ------------------ Net assets at end of period $ 24,615 $ 40,766 ================== ==================
The accompanying notes are an integral part of these financial statements. FS-43 ProFunds Pimco ------------------------------------ --------------------------------------- Money Market Commodity ------------------ ------------------- 2007 2007 ------------------ ------------------- $ 495,654 $ 343,585 (119,754) (41,077) ------------------ ------------------- 375,900 302,508 ------------------ ------------------- ---- ---- ---- 907 ------------------ ------------------- ---- 907 ------------------ ------------------- ---- 1,273,763 ------------------ ------------------- $ 375,900 $ 1,577,178 ================== =================== Money Market Commodity ------------------------------------ --------------------------------------- 2007 2006 2007 2006 ------------------ ----------------- -------------------- ------------------ $ 375,900 $ 387,282 $ 302,508 $ 213,976 ---- ---- 907 30,412 ---- ---- 1,273,763 (270,322) ------------------ ----------------- -------------------- ------------------ 375,900 387,282 1,577,178 (25,934) ------------------ ----------------- -------------------- ------------------ 5,299,058 13,625,523 638,940 5,213,608 (3,475,667) 1,334,489 109,775 1,513,147 (6,751,293) (4,364,300) (122,002) (13,700) ---- ---- (498) (10) ------------------ ----------------- -------------------- ------------------ (4,927,902) 10,595,712 626,215 6,713,045 ------------------ ----------------- -------------------- ------------------ (4,552,002) 10,982,994 2,203,393 6,687,111 15,955,576 4,972,582 6,714,594 27,483 ------------------ ----------------- -------------------- ------------------ $ 11,403,574 $ 15,955,576 $ 8,917,987 $ 6,714,594 ================== ================= ==================== ================== FS-44 AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA NOTES TO FINANCIAL STATEMENTS FOR THE PERIODS ENDED DECEMBER 31, 2007 AND 2006 1. ORGANIZATION Ameritas Life Insurance Corp. Separate Account LLVA (the Account) was established on October 26, 1995, under Nebraska law. The assets of the Account are held by Ameritas Life Insurance Corp. (ALIC) (an indirect wholly owned subsidiary of UNIFI Mutual Holding Company), are segregated from all of ALIC's other assets and are used only to support the variable annuity products issued by ALIC. Management believes these financial statements should be read in conjunction with the policyowner statements and policy and fund prospectuses. The Account is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. The Account is made up of variable investment options called subaccounts for which accumulation units are separately maintained. Each subaccount corresponds to a single underlying non-publicly traded portfolio issued through a series fund. At December 31, 2007 there are seventy-five subaccounts available within the Account:
Calvert Asset Management Company, Inc. Fidelity Management & Research Company (Advisor) (See Note 3) Fidelity Calvert (Fund) *Overseas IC *Balanced (Subaccount) (Commenced December 28, 2005) (Commenced June 20, 2000) *Inv. Grade Bond IC *International Equity (Commenced June 20, 2000) (Commenced July 31, 2000) *Equity Income IC *Mid Cap (Commenced October 10, 2005) (Commenced August 28, 2000) *Growth IC *Social Equity (Commenced November 17, 2005) (Commenced August 15, 2005) *High Income IC (Commenced August 29, 2005) Ameritas *High Income SC *Income and Growth (Commenced July 27, 2000) (Commenced November 18, 2005) *Contrafund IC *Index 500 (Commenced August 18, 2005) (Commenced June 2, 2000) *Contrafund SC *MidCap (Commenced May 30, 2000) (Commenced June 20, 2000) *Mid Cap IC *Small Cap (Commenced June 30, 2005) (Commenced December 11, 2000) *Mid Cap SC (Commenced July 10, 2000) Deutsche Investment Management Americas Inc. Invesco AIM Advisors, Inc. Scudder AIM *Small Cap *Financial (Commenced August 11, 2000) (Commenced May 21, 2001) *Health (Commenced May 21, 2001) *Technology (Commenced May 21, 2001) FS-45 1. ORGANIZATION, continued Janus Capital Management LLC The Vanguard Group. Inc., continued Janus Vanguard, continued *Growth *REIT Index (Commenced March 21, 2003) (Commenced August 6, 2001) *Mid-Cap Neuberger Berman Management Inc. (Commenced June 25, 2001) Neuberger Berman *Stock Market Index *Balanced (Commenced November 3, 2005) (Commenced February 12, 1997) *Growth The Vanguard Group. Inc. and Wellington Management (Commenced March 5, 1997) Company, LLP *Limited Maturity Bond Vanguard (Commenced February 12, 1997) *Equity Income *Partners (Commenced May 21, 2001) (Commenced March 18, 1997) AllianceBernstein L.P. and William Blair & Company, Rydex Investments L.L.C. Rydex Vanguard *Nova *Growth (Commenced November 1, 1999) (Commenced May 22, 2001) *OTC (Commenced July 25, 1999) Wellington Management Company, LLP *Precious Metals Vanguard (Commenced August 13, 1999) *High Yield Bond *Inv. S&P 500 (Commenced May 22, 2001) (Commenced November 1, 1999) *Balanced *Gov. Long Bond (Commenced October 28, 2005) (Commenced July 20, 1999) *Inverse OTC Schroder Investment Management North America, Inc. (Commenced August 22, 2005) and Baillie Gifford Overseas Ltd. *Inv. Long Bond Vanguard (Commenced January 30, 2006) *International *Russell (Commenced June 25, 2001) (Commenced August 8, 2005) *Sector Rotation Barrow, Hanley, Mewhinney & Strauss, Inc. (Commenced October 5, 2005) Vanguard *Diversified Third Avenue Management LLC (Commenced August 15, 2001) Third Avenue *Value Granahan Investment Management, Inc. and Grantham, (Commenced May 1, 2001) Mayo, Van Otterloo & Co. LLC Vanguard The Vanguard Group. Inc. *Small Company Growth Vanguard (Commenced June 25, 2001) *Money Market (Commenced May 25, 2001) Wells Fargo Funds Management, LLC *Equity Index Wells Fargo (Commenced May 22, 2001) *Discovery *Total Bond (Commenced April 8, 2005) (Commenced May 22, 2001) *Opportunity (Commenced February 10, 1997) FS-46 1. ORGANIZATION, continued ProFunds Advisors LLC ProFunds Advisors LLC, continued ProFunds ProFunds, continued *Bull *UltraSmall (Commenced July 6, 2005) (Commenced September 6, 2005) *Europe *UltraBull (Commenced September 5, 2005) (Commenced June 24, 2005) *Mid-Cap *U.S. Gov. Plus (Commenced June 30, 2005) (Commenced August 24, 2005) *OTC *Opportunity (Commenced July 6, 2005) (Commenced August 8, 2005) *Small-Cap *Oil & Gas (Commenced July 6, 2005) (Commenced July 5, 2005) *Small-Cap Value *Precious Metals (Commenced September 30, 2005) (Commenced September 15, 2005) *Classic Dow *Real Estate (Commenced May 5, 2006) (Commenced September 23, 2005) *Bear *High Yield (Commenced June 24, 2005) (Commenced October 28, 2005) *Short OTC *Money Market (Commenced June 30, 2005) (Commenced June 9, 2005) *Short Small-Cap (Commenced August 8, 2005) Pacific Investment Management Company LLC *Short Dow Pimco (Commenced May 12, 2006) *Commodity *UltraMid (Commenced December 14, 2005) (Commenced September 6, 2005) *UltraOTC (Commenced June 24, 2005)
2. ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted 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 at 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 those estimates. INVESTMENTS The assets of the subaccounts are carried at the net asset value of the underlying portfolios, adjusted for the accrual of dividends. The value of the policyowners' units corresponds to the investment in the underlying subaccounts. Share transactions and security transactions are accounted for on a trade date basis. Income from dividends and gains from realized gain distributions are recorded on the ex-distribution date. Realized gains and losses on the sales of investments represent the difference between the proceeds from sales of investments by the subaccounts and the cost of such shares, which is determined on a weighted average cost basis. FEDERAL AND STATE TAXES The operations of the Account form a part of and are taxed with the operations of ALIC. ALIC is taxed as a life insurance company under Subchapter L of the Internal Revenue Code. Under existing federal income tax law, separate account investment income and capital gains are not taxed to the extent they are applied to increase reserves under a contract issued in connection with the Account. Investment income and realized capital gains and losses on assets of the Account are automatically applied to increase or decrease reserves under the contract. Accordingly, no provision for federal income taxes or unrecognized tax benefits are reflected in these financial statements. FS-47 3. RELATED PARTIES Affiliates of ALIC provided management, administrative and investment advisory services for the Ameritas and Calvert subaccounts for a fee. These fees are reflected in the daily value of the underlying portfolio share price. The fee is computed separately for each underlying portfolio on daily average net assets, at an annual rate, as of December 31, 2007 and 2006, as follows:
Investment Advisory Management/ Fee Administrative Fee(1) ---------------------- ----------------------- Ameritas: Income and Growth 0.00570(2) 0.00050 Index 500 0.00240 0.00050 MidCap 0.00800 0.00050 Small Cap 0.00850 0.00050 Calvert: Balanced 0.00425 0.00275 International Equity 0.00750 0.00350 Mid Cap 0.00650 0.00250 Social Equity 0.00500 0.00200
(1) Effective November 18, 2006, the $50,000 minimum for Ameritas portfolios no longer applies. (2) Effective August 7, 2007, Calvert Asset Management Company reduced the .00625 investment advisory fee by .00055. 4. PURCHASES AND SALES OF INVESTMENTS The cost of purchases and proceeds from sales of investments in the subaccounts for the periods ended December 31, 2007 were as follows:
Purchases Sales ---------------------- ----------------------- Calvert: Balanced $ 431,107 $ 334,127 International Equity 1,753,981 1,463,452 Mid Cap 467,269 65,881 Social Equity 346,020 109,328 Ameritas: Income and Growth 23,064 11,989 Index 500 656,076 909,353 MidCap 1,191,165 329,885 Small Cap 311,941 204,818 Scudder: Small Cap 430,224 555,296 Fidelity: Overseas IC 2,429,030 1,202,846 Inv. Grade Bond IC 2,462,828 724,071 Equity Income IC 1,445,259 1,323,440 Growth IC 1,647,027 663,102 High Income IC 1,021,992 706,374 FS-48 4. PURCHASES AND SALES OF INVESTMENTS, continued Purchases Sales ---------------------- ----------------------- Fidelity, continued: High Income SC $ 5,798,560 $ 7,537,845 Contrafund IC 9,171,683 2,537,708 Contrafund SC 3,547,205 6,705,035 Mid Cap IC 2,365,364 914,766 Mid Cap SC 826,869 1,331,305 AIM: Financial 98,122 161,251 Health 172,918 188,406 Technology 161,716 189,483 Janus: Growth 780 19,011 Neuberger Berman: Balanced 59,562 83,836 Growth 549,880 422,487 Limited Maturity Bond 38,784 51,246 Partners 151,581 331,872 Rydex: Nova 7,954,168 12,223,272 OTC 2,772,811 6,357,911 Precious Metals 10,551,501 9,923,093 Inv. S&P 500 4,405,872 3,920,400 Gov. Long Bond 1,616,783 1,179,401 Inverse OTC 836,151 758,971 Inv. Long Bond 443,364 508,075 Russell 575,677 669,356 Sector Rotation 1,379,628 834,601 Third Avenue: Value 8,493,999 4,184,249 Vanguard: Money Market 52,816,803 44,753,809 Equity Index 10,164,556 4,274,786 Total Bond 8,807,015 1,190,562 REIT Index 4,287,656 5,879,001 Mid-Cap 4,951,184 2,155,486 Stock Market Index 2,886,396 1,013,752 Equity Income 6,920,798 3,968,184 Growth 2,844,456 2,303,176 High Yield Bond 1,944,241 1,279,923 Balanced 3,270,096 2,682,003 International 10,933,190 4,540,078 Diversified 9,164,241 3,791,296 Small Company Growth 3,342,377 2,065,576 FS-49 4. PURCHASES AND SALES OF INVESTMENTS, continued Purchases Sales ---------------------- ----------------------- Wells Fargo: Discovery $ 185,576 $ 206,478 Opportunity 144,026 6,507 ProFunds: Bull 1,021,096 1,771,502 Europe 2,603,642 2,395,361 Mid-Cap 1,133,734 1,355,322 OTC 889,705 1,624,427 Small-Cap 5,017,003 5,337,466 Small-Cap Value 709,740 749,593 Classic Dow 39,396,265 39,829,107 Bear 7,146,636 7,255,812 Short OTC 77,735,216 77,576,590 Short Small-Cap 14,390,303 14,101,825 Short Dow 7,681,679 7,653,461 UltraMid 19,138,255 19,256,402 UltraOTC 84,629,162 83,959,081 UltraSmall 48,331,684 48,271,315 UltraBull 40,064,514 38,006,178 U.S. Gov. Plus 5,845,094 5,110,176 Opportunity 12,840,207 12,972,420 Oil & Gas 1,690,104 1,746,922 Precious Metals 2,703,540 1,573,675 Real Estate 1,947,998 2,173,253 High Yield 375,815 379,354 Money Market 202,983,020 207,535,023 Pimco: Commodity 1,921,860 993,138
5. FINANCIAL HIGHLIGHTS The unit value, units, net assets, investment income ratio (Inv. Income Ratio), expense ratio and total return (certain of which are defined below) are included in the following table (amounts have been rounded). Inv. Income Ratio - The Inv. Income Ratio represents the dividend distributions received divided by average daily net assets. This ratio excludes the mortality and expense risk charge and is affected by the timing of the declaration of dividends by the underlying fund portfolio. Expense Ratio - The Expense Ratio represents the annualized contract expenses of the subccounts for the period indicated and includes only those expenses that are charged through a reduction of the unit value. Included in this category are mortality and expense charges. These fees range between .55 percent and .90 percent (annualized) of net assets, depending on the product selected. Expenses of the underlying fund portfolios and charges made directly to policyowner accounts through the redemption of units are excluded. For this separate account, charges made through the redemption of units ranged up to $25 per policy annually, depending on the product selected. Total Return - The Total Return represents the change in the unit value reported year-to-date, however, subaccounts which commenced during a year, as shown in Note 1, are based on shorter return periods. These percentages do not include any expenses assessed through the redemption of units. FS-50 5. FINANCIAL HIGHLIGHTS, continued Total returns and expense ratios in this disclosure may not be applicable to all policies.
At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Calvert: Balanced 2007 2.15 2.51 485,571 1,130,594 2.41 0.55 2.19 2.19 2006 2.10 2.46 481,854 1,091,088 3.50 0.55 6.48 8.18 2005 2.27 2.27 198,390 450,317 1.75 0.55 5.07 5.07 2004 2.16 2.16 183,833 397,125 1.98 0.55 7.66 7.66 2003 2.01 2.01 114,772 230,288 2.11 0.55 18.67 18.67 International Equity 2007 23.41 26.75 61,574 1,490,854 1.05 0.55 2.01 2.01 2006 22.95 26.22 60,303 1,422,269 0.83 0.55 26.83 26.83 2005 18.09 20.67 32,530 664,534 0.64 0.55 7.69 9.34 2004 18.91 18.91 26,277 496,824 3.21 0.55 17.30 17.30 2003 16.12 16.12 3,234 52,128 2.09 0.55 30.97 30.97 Mid Cap 2007 30.80 32.07 31,613 980,181 ---- 0.55 9.56 9.56 2006 28.11 29.28 18,987 540,524 ---- 0.55 6.29 6.29 2005 26.45 27.54 8,629 236,292 ---- 0.55 (0.13) 3.87 2004 27.58 27.58 6,369 175,641 ---- 0.55 8.73 8.73 2003 25.36 25.36 5,847 148,305 ---- 0.55 30.96 30.96 Social Equity 2007 21.16 21.16 43,493 920,312 ---- 0.55 9.38 9.38 2006 19.34 19.34 33,799 653,811 ---- 0.55 9.46 9.46 2005 17.67 17.67 5,529 97,716 0.10 0.55 0.36 0.36 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Ameritas: Income and Growth 2007 14.76 14.76 12,510 184,702 1.55 0.55 2.03 2.03 2006 14.47 14.47 12,505 180,941 0.77 0.55 9.63 9.63 2005 13.20 13.20 10,870 143,474 0.35 0.55 1.29 1.29 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- FS-51 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Ameritas, continued: Index 500 2007 177.32 177.32 1,620 287,200 1.35 0.55 4.57 4.57 2006 169.56 169.56 3,203 543,098 1.50 0.55 14.74 14.74 2005 147.77 147.77 3,833 566,397 1.72 0.55 4.01 4.01 2004 142.08 142.08 9,825 1,396,013 1.45 0.55 9.90 9.90 2003 129.28 129.28 25,365 3,279,309 3.10 0.55 27.54 27.54 MidCap 2007 60.31 60.31 16,296 982,883 ---- 0.55 33.94 33.94 2006 45.03 45.03 4,092 184,261 ---- 0.55 8.65 8.65 2005 41.44 41.44 8,161 338,218 ---- 0.55 10.67 10.67 2004 37.45 37.45 9,506 355,995 ---- 0.55 12.78 12.78 2003 33.20 33.20 9,539 316,736 ---- 0.55 46.49 46.49 Small Cap 2007 36.09 36.09 6,448 232,714 ---- 0.55 11.18 11.18 2006 32.46 32.46 3,586 116,422 ---- 0.55 19.90 19.90 2005 27.07 27.07 1,467 39,715 ---- 0.55 2.06 2.06 2004 26.53 26.53 5,844 155,012 ---- 0.55 1.78 1.78 2003 26.06 26.06 3,543 92,350 ---- 0.55 38.13 38.13 Scudder: Small Cap 2007 18.04 18.04 57,376 1,035,175 0.84 0.55 (2.44) (2.44) 2006 18.49 18.49 69,169 1,279,127 0.73 0.55 16.85 16.85 2005 15.83 15.83 87,077 1,378,097 0.57 0.55 3.69 3.69 2004 15.26 15.26 71,810 1,096,009 0.47 0.55 17.11 17.11 2003 13.03 13.03 25,279 329,447 0.34 0.55 45.63 45.63 Fidelity: Overseas IC 2007 28.24 28.24 204,122 5,763,711 3.38 0.55 16.67 16.67 2006 24.20 24.20 175,855 4,256,169 0.07 0.55 17.44 17.44 2005 20.61 20.61 2,193 45,188 ---- 0.55 0.24 0.24 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Inv. Grade Bond IC 2007 13.71 17.73 464,686 6,671,554 3.62 0.55 3.77 3.77 2006 13.21 17.09 347,466 4,889,147 2.30 0.55 3.78 3.78 2005 12.73 16.46 100,187 1,568,234 3.46 0.55 (.30) 1.63 2004 16.20 16.20 57,536 932,067 4.52 0.55 3.88 3.88 2003 15.59 15.59 9,808 152,954 2.32 0.55 4.63 4.63 FS-52 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Fidelity, continued: Equity Income IC 2007 30.73 30.73 107,439 3,301,641 1.74 0.55 0.97 0.97 2006 30.43 30.43 114,257 3,477,339 3.69 0.55 19.54 19.54 2005 25.46 25.46 1,082 27,551 ---- 0.55 6.35 6.35 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Growth IC 2007 45.19 45.19 107,623 4,863,314 0.82 0.55 26.27 26.27 2006 35.79 35.79 86,264 3,087,216 0.01 0.55 6.27 6.27 2005 33.68 33.68 377 12,692 ---- 0.55 0.92 0.92 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- High Income IC 2007 7.51 7.51 164,712 1,236,847 8.30 0.55 2.22 2.22 2006 7.35 7.35 134,373 987,107 15.79 0.55 10.63 10.63 2005 6.64 6.64 4,863 32,289 17.01 0.55 0.76 0.76 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- High Income SC 2007 9.34 9.34 233,765 2,184,110 8.20 0.55 2.09 2.09 2006 9.15 9.15 427,486 3,912,245 7.91 0.55 10.57 10.57 2005 8.28 8.28 950,658 7,868,414 13.95 0.55 1.96 1.96 2004 8.12 8.12 997,681 8,098,576 0.23 0.55 8.87 8.87 2003 7.46 7.46 816,096 6,085,043 0.33 0.55 26.28 26.28 Contrafund IC 2007 40.24 40.24 503,855 20,274,232 1.00 0.55 16.95 16.95 2006 34.41 34.41 456,566 15,709,378 1.65 0.55 11.11 11.11 2005 30.97 30.97 22,757 704,744 ---- 0.55 8.85 8.85 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Contrafund SC 2007 40.81 40.81 217,488 8,875,080 0.80 0.55 16.86 16.86 2006 34.92 34.92 371,194 12,961,788 1.47 0.55 10.98 10.98 2005 31.46 31.46 105,776 3,328,150 0.14 0.55 16.21 16.21 2004 27.08 27.08 44,592 1,207,332 0.21 0.55 14.71 14.71 2003 23.60 23.60 29,564 697,816 0.14 0.55 27.66 27.66 FS-53 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Fidelity, continued: Mid Cap IC 2007 45.14 45.14 187,619 8,469,044 0.90 0.55 14.99 14.99 2006 39.25 39.25 169,764 6,664,040 0.05 0.55 12.08 12.08 2005 35.02 35.02 8,368 293,051 ---- 0.55 14.53 14.53 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Mid Cap SC 2007 44.98 44.98 36,668 1,649,310 0.68 0.55 14.85 14.85 2006 39.16 39.16 52,554 2,058,195 0.24 0.55 11.98 11.98 2005 34.97 34.97 170,540 5,964,555 ---- 0.55 17.56 17.56 2004 29.75 29.75 263,270 7,832,424 ---- 0.55 24.09 24.09 2003 23.98 23.98 28,061 672,780 0.15 0.55 37.78 37.78 AIM: Financial 2007 13.83 13.83 2,821 39,003 1.00 0.55 (22.64) (22.64) 2006 17.87 17.87 6,562 117,296 2.08 0.55 15.81 15.81 2005 15.43 15.43 7,314 112,888 1.85 0.55 5.33 5.33 2004 14.65 14.65 5,630 82,500 0.68 0.55 8.08 8.08 2003 13.56 13.56 5,048 68,438 0.74 0.55 28.88 28.88 Health 2007 23.28 23.28 3,343 77,822 ---- 0.55 11.24 11.24 2006 20.93 20.93 4,226 88,440 ---- 0.55 4.66 4.66 2005 20.00 20.00 5,503 110,037 ---- 0.55 7.56 7.56 2004 18.59 18.59 6,295 117,023 ---- 0.55 6.98 6.98 2003 17.38 17.38 10,701 185,968 ---- 0.55 27.09 27.09 Technology 2007 14.56 14.56 7,649 111,378 ---- 0.55 7.11 7.11 2006 13.59 13.59 10,137 137,799 ---- 0.55 9.88 9.88 2005 12.37 12.37 16,526 204,463 ---- 0.55 1.62 1.62 2004 12.18 12.18 9,651 117,507 ---- 0.55 4.06 4.06 2003 11.70 11.70 5,429 63,519 ---- 0.55 44.51 44.51 FS-54 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Janus: Growth 2007 26.20 26.20 4,306 112,804 0.71 0.55 14.46 14.46 2006 22.89 22.89 5,115 117,074 0.48 0.55 10.77 10.77 2005 20.66 20.66 69,274 1,431,254 0.37 0.55 3.72 3.72 2004 19.92 19.92 33,296 663,269 0.57 0.55 3.94 3.94 2003 19.16 19.16 3,583 68,666 0.09 0.55 26.00 26.00 Neuberger Berman: Balanced 2007 32.38 32.38 17,328 561,064 1.19 0.55 14.97 14.97 2006 28.16 28.16 18,422 518,845 0.85 0.55 10.06 10.06 2005 25.59 25.59 19,254 492,686 0.77 0.55 8.59 8.59 2004 23.57 23.57 38,806 914,487 2.50 0.55 8.71 8.71 2003 21.68 21.68 6,263 135,774 1.69 0.55 15.64 15.64 Growth 2007 51.12 51.12 7,427 379,630 ---- 0.55 22.02 22.02 2006 41.89 41.89 4,728 198,041 ---- 0.55 13.45 13.45 2005 36.93 36.93 6,346 234,318 ---- 0.55 12.88 12.88 2004 32.71 32.71 9,741 318,649 ---- 0.55 15.96 15.96 2003 28.21 28.21 5,083 143,397 ---- 0.55 30.69 30.69 Limited Maturity Bond 2007 20.76 20.76 11,367 236,003 2.74 0.55 4.20 4.20 2006 19.93 19.93 12,235 243,785 3.26 0.55 3.63 3.63 2005 19.23 19.23 18,688 359,323 2.85 0.55 0.89 0.89 2004 19.06 19.06 15,003 285,919 2.33 0.55 0.23 0.23 2003 19.01 19.01 15,429 293,374 3.78 0.55 1.86 1.86 Partners 2007 37.24 37.24 18,981 706,916 0.60 0.55 8.73 8.73 2006 34.25 34.25 25,926 887,993 0.73 0.55 11.63 11.63 2005 30.68 30.68 41,916 1,286,125 1.16 0.55 17.40 17.40 2004 26.14 26.14 23,615 617,180 0.01 0.55 18.32 18.32 2003 22.09 22.09 23,147 511,263 ---- 0.55 34.36 34.36 Rydex: Nova 2007 10.23 13.87 78,090 940,125 0.47 0.55 0.57 0.57 2006 10.17 13.79 395,249 5,329,823 1.55 0.55 18.62 18.62 2005 8.57 11.62 447,444 5,149,062 0.57 0.55 0.74 3.40 2004 11.24 11.24 880,971 9,902,849 0.02 0.55 14.00 14.00 2003 9.86 9.86 70,894 699,073 ---- 0.55 38.43 38.43 FS-55 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Rydex, continued: OTC 2007 17.90 18.41 77,132 1,392,619 0.07 0.55 17.18 17.18 2006 15.28 15.71 310,432 4,856,795 ---- 0.55 5.20 5.20 2005 14.52 14.93 328,201 4,896,859 ---- 0.55 0.56 0.86 2004 14.85 14.85 279,555 4,151,581 ---- 0.55 8.75 8.75 2003 13.66 13.66 56,178 767,171 ---- 0.55 44.62 44.62 Precious Metals 2007 14.34 14.85 340,976 4,989,846 ---- 0.55 18.90 18.90 2006 12.06 12.49 304,041 3,741,211 ---- 0.55 20.77 20.77 2005 9.99 10.34 146,643 1,465,837 ---- 0.55 20.23 32.24 2004 8.31 8.31 140,385 1,165,996 ---- 0.55 (14.69) (14.69) 2003 9.74 9.74 162,986 1,586,826 ---- 0.55 40.14 40.14 Inv. S&P 500 2007 4.75 5.28 172,085 877,066 2.80 0.55 0.27 0.27 2006 4.74 5.27 93,469 464,437 2.47 0.55 (8.01) (8.01) 2005 5.15 5.73 162,666 927,245 ---- 0.55 (3.57) (1.31) 2004 5.80 5.80 36,374 211,085 ---- 0.55 (10.70) (10.70) 2003 6.50 6.50 19,281 125,298 ---- 0.55 (24.07) (24.07) Gov. Long Bond 2007 13.01 17.05 122,027 1,690,171 3.59 0.55 9.16 9.16 2006 11.92 15.62 92,526 1,204,890 3.64 0.55 (3.87) (3.67) 2005 16.21 16.21 30,759 498,611 3.14 0.55 7.13 7.13 2004 15.13 15.13 1,825 27,622 3.37 0.55 7.82 7.82 2003 14.03 14.03 2,057 28,878 3.20 0.55 (1.17) (1.17) Inverse OTC 2007 18.62 18.62 5,161 96,106 2.91 0.55 (11.77) (11.77) 2006 21.11 21.11 2,864 60,455 1.35 0.55 (1.70) (1.70) 2005 21.51 21.51 ---- ---- ---- 0.55 (6.24) (6.24) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Inv. Long Bond 2007 21.25 21.25 7,004 148,805 3.57 0.55 (5.04) (5.04) 2006 22.37 22.37 10,490 234,706 6.09 0.55 5.19 5.19 2005 ---- ---- ---- ---- ---- ---- ---- ---- 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- FS-56 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Rydex, continued: Russell 2007 38.90 38.90 20,979 815,994 2.03 0.55 (7.25) (7.25) 2006 41.94 41.94 24,926 1,045,308 0.56 0.55 20.19 20.19 2005 34.89 34.89 2,332 81,370 0.42 0.55 1.73 1.73 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Sector Rotation 2007 17.14 17.14 114,316 1,959,170 ---- 0.55 22.07 22.07 2006 14.04 14.04 91,439 1,283,762 ---- 0.55 10.78 10.78 2005 12.67 12.67 8,744 110,822 ---- 0.55 4.22 4.22 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Third Avenue: Value 2007 30.83 32.13 472,613 14,827,118 2.30 0.55 (5.33) (5.33) 2006 32.57 33.94 381,483 12,620,684 1.43 0.55 15.15 15.15 2005 28.28 29.47 306,348 8,999,501 1.24 0.55 11.14 14.00 2004 25.86 25.86 168,797 4,364,316 0.55 0.55 19.24 19.24 2003 21.68 21.68 62,363 1,352,262 0.19 0.55 41.76 41.76 Vanguard: Money Market 2007 1.11 1.17 48,131,794 54,415,617 5.10 0.55 4.66 4.66 2006 1.06 1.12 42,795,654 46,352,623 4.99 0.55 4.46 4.46 2005 1.02 1.07 20,580,095 21,857,602 3.11 0.55 1.58 2.62 2004 1.04 1.04 16,560,178 17,244,326 1.28 0.55 0.72 0.72 2003 1.03 1.03 15,664,418 16,194,841 0.99 0.55 0.45 0.45 Equity Index 2007 35.52 40.87 762,415 26,625,611 1.53 0.55 4.80 4.80 2006 31.99 38.99 631,029 20,791,601 0.56 0.55 15.08 15.08 2005 27.80 33.89 92,141 2,954,754 1.44 0.55 4.22 5.05 2004 32.51 32.51 53,526 1,740,260 0.98 0.55 10.20 10.20 2003 29.50 29.50 63,356 1,869,265 0.95 0.55 27.77 27.77 Total Bond 2007 12.34 14.61 1,935,914 24,310,003 3.42 0.55 6.40 6.40 2006 11.60 13.73 1,344,627 15,947,242 2.24 0.55 3.74 3.74 2005 11.18 13.23 405,719 4,881,337 2.41 0.55 0.09 1.84 2004 13.00 13.00 57,321 744,899 3.77 0.55 3.63 3.63 2003 12.54 12.54 20,081 251,804 5.58 0.55 3.45 3.45 FS-57 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Vanguard, continued: REIT Index 2007 22.50 28.99 539,700 12,404,118 2.08 0.55 (17.06) (17.06) 2006 27.13 34.95 661,898 18,456,625 0.71 0.55 34.19 34.19 2005 20.22 26.04 96,607 2,285,294 3.34 0.55 5.35 11.22 2004 23.41 23.41 86,135 2,016,796 6.81 0.55 29.80 29.80 2003 18.04 18.04 242,740 4,378,848 0.31 0.55 34.75 34.75 Mid-Cap 2007 21.86 24.22 822,552 18,086,175 1.20 0.55 5.56 5.56 2006 20.71 22.94 787,017 16,397,767 0.26 0.55 13.13 13.13 2005 18.31 20.28 82,297 1,606,048 0.79 0.55 5.11 13.35 2004 17.89 17.89 45,218 808,957 0.58 0.55 19.66 19.66 2003 14.95 14.95 33,814 505,553 0.27 0.55 33.33 33.33 Stock Market Index 2007 35.43 35.43 304,394 10,784,409 0.99 0.55 4.59 4.59 2006 33.88 33.88 265,291 8,986,977 0.10 0.55 14.89 14.89 2005 29.48 29.48 5,337 157,346 ---- 0.55 2.70 2.70 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Equity Income 2007 23.15 30.49 482,703 12,683,561 2.51 0.55 3.96 3.96 2006 22.27 29.33 411,421 10,214,549 1.46 0.55 20.04 20.04 2005 18.55 24.43 122,247 2,809,276 2.24 0.55 3.17 3.57 2004 23.59 23.59 60,232 1,420,992 1.86 0.55 12.70 12.70 2003 20.93 20.93 18,830 394,194 1.28 0.55 23.76 23.76 Growth 2007 14.36 15.05 656,471 9,452,696 0.72 0.55 9.61 9.61 2006 13.10 13.73 619,520 8,142,998 0.11 0.55 1.36 1.36 2005 12.92 13.55 165,618 2,177,134 0.22 0.55 6.53 10.88 2004 12.22 12.22 19,449 237,587 0.32 0.55 6.66 6.66 2003 11.45 11.45 5,120 58,633 0.25 0.55 25.44 25.44 High Yield Bond 2007 9.36 12.10 621,014 6,099,866 6.73 0.55 1.39 1.39 2006 9.23 11.93 589,079 5,742,313 3.96 0.55 7.68 7.68 2005 8.57 11.08 180,994 1,926,376 7.05 0.55 0.52 2.19 2004 10.85 10.85 85,431 926,544 17.25 0.55 7.93 7.93 2003 10.05 10.05 58,993 592,805 5.88 0.55 16.23 16.23 FS-58 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max Vanguard, continued: Balanced 2007 23.42 23.42 459,356 10,756,303 2.73 0.55 7.76 7.76 2006 21.73 21.73 462,269 10,044,676 0.37 0.55 14.33 14.33 2005 19.00 19.00 9,440 179,405 ---- 0.55 3.12 3.12 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- International 2007 25.50 27.51 1,624,733 41,962,849 1.61 0.55 16.77 16.77 2006 21.84 23.56 1,439,558 31,859,581 0.53 0.55 26.06 26.06 2005 17.32 18.69 340,392 6,266,437 1.03 0.55 15.67 17.20 2004 16.15 16.15 120,638 1,948,874 0.91 0.55 18.77 18.77 2003 13.60 13.60 42,822 582,469 0.58 0.55 34.14 34.14 Diversified 2007 17.51 18.54 1,107,816 19,768,594 1.78 0.55 3.36 3.36 2006 16.94 17.94 850,501 14,638,265 0.98 0.55 18.23 18.23 2005 14.32 15.17 251,942 3,786,037 1.27 0.55 2.47 7.03 2004 14.18 14.18 153,437 2,175,006 1.16 0.55 19.80 19.80 2003 11.83 11.83 23,492 277,957 0.91 0.55 30.41 30.41 Small Company Growth 2007 22.13 23.81 518,349 11,521,567 0.50 0.55 3.20 3.20 2006 21.45 23.07 506,669 10,931,042 0.11 0.55 9.61 9.61 2005 19.57 21.05 70,417 1,443,515 ---- 0.55 3.53 5.68 2004 19.92 19.92 30,773 612,887 0.07 0.55 14.67 14.67 2003 17.37 17.37 25,276 439,014 ---- 0.55 40.31 40.31 Wells Fargo: Discovery 2007 19.81 19.81 18,963 375,675 ---- 0.55 21.65 21.65 2006 16.29 16.29 20,286 330,366 ---- 0.55 14.02 14.02 2005 14.28 14.28 16,959 242,220 ---- 0.55 15.37 15.37 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Opportunity 2007 54.28 54.28 12,901 700,202 0.60 0.55 6.09 6.09 2006 51.16 51.16 12,124 620,282 ---- 0.55 11.61 11.61 2005 45.84 45.84 17,405 797,882 ---- 0.55 7.30 7.30 2004 42.72 42.72 20,682 883,612 ---- 0.55 17.57 17.57 2003 36.34 36.34 16,729 607,911 0.08 0.55 36.26 36.26 FS-59 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max ProFunds: Bull 2007 32.62 32.62 21,372 697,200 0.47 0.90 2.62 2.62 2006 31.79 31.79 45,737 1,453,929 0.26 0.90 12.64 12.64 2005 28.22 28.22 19,017 536,665 0.25 0.90 3.93 3.93 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Europe 2007 36.89 36.89 33,583 1,238,891 1.16 0.90 13.55 13.55 2006 32.49 32.49 30,515 991,362 0.20 0.90 16.46 16.46 2005 27.90 27.90 207 5,764 0.41 0.90 0.15 0.15 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Mid-Cap 2007 38.58 38.58 866 33,420 0.11 0.90 0.06 0.06 2006 38.56 38.56 6,505 250,822 0.01 0.90 11.30 11.30 2005 34.64 34.64 14,013 485,481 ---- 0.90 3.20 3.20 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- OTC 2007 18.26 18.26 15,006 273,961 ---- 0.90 16.57 16.57 2006 15.66 15.66 61,857 968,772 ---- 0.90 4.52 4.52 2005 14.98 14.98 40,009 599,483 ---- 0.90 8.40 8.40 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Small-Cap 2007 40.53 40.53 264 10,721 0.16 0.90 (3.10) (3.10) 2006 41.83 41.83 8,293 346,872 ---- 0.90 13.73 13.73 2005 36.78 36.78 11,363 417,911 ---- 0.90 3.28 3.28 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Small-Cap Value 2007 35.10 35.10 886 31,085 ---- 0.90 (8.06) (8.06) 2006 38.17 38.17 2,435 92,952 ---- 0.90 16.38 16.38 2005 32.80 32.80 13,386 439,058 ---- 0.90 (0.49) (0.49) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- FS-60 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max ProFunds, continued: Classic Dow 2007 38.23 38.23 7,922 302,855 0.46 0.90 11.92 11.92 2006 34.16 34.16 20,527 701,180 ---- 0.90 5.23 5.23 2005 ---- ---- ---- ---- ---- ---- ---- ---- 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Bear 2007 25.84 25.84 820 21,191 2.16 0.90 (3.05) (3.05) 2006 25.77 25.77 5,920 152,555 0.84 0.90 (7.05) (7.05) 2005 28.10 28.10 59,086 1,660,464 ---- 0.90 (3.59) (3.59) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Short OTC 2007 16.02 16.02 10,417 166,904 3.00 0.90 (12.26) (12.26) 2006 18.07 18.07 7,955 143,707 2.34 0.90 (2.25) (2.25) 2005 18.48 18.48 17,318 320,062 ---- 0.90 (7.87) (7.87) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Short Small-Cap 2007 15.18 15.18 20,065 304,673 0.63 0.90 2.33 2.33 2006 14.57 14.57 5,273 76,802 0.27 0.90 (7.38) (7.38) 2005 16.62 16.62 ---- ---- ---- 0.90 (2.33) (2.33) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Short Dow 2007 27.36 27.36 93 2,537 5.37 0.90 (5.53) (5.53) 2006 28.06 28.06 219 6,133 ---- 0.90 (6.46) (6.46) 2005 ---- ---- ---- ---- ---- ---- ---- ---- 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- UltraMid 2007 43.60 43.60 141 6,154 0.82 0.90 5.02 5.02 2006 41.51 41.51 44 1,820 ---- 0.90 9.65 9.65 2005 37.86 37.86 154 5,820 ---- 0.90 3.53 3.53 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- FS-61 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max ProFunds, continued: UltraOTC 2007 55.64 55.64 13,543 753,499 ---- 0.90 27.33 27.33 2006 43.70 43.70 2,034 88,859 ---- 0.90 (8.40) (8.40) 2005 2.96 2.96 110,287 325,978 ---- 0.90 8.04 8.04 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- UltraSmall 2007 32.92 32.92 7,657 252,043 1.91 0.90 (13.96) (13.96) 2006 38.26 38.26 1,278 48,879 0.01 0.90 24.88 24.88 2005 30.63 30.63 658 20,144 ---- 0.90 (3.32) (3.32) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- UltraBull 2007 25.13 25.13 71,811 1,804,875 0.84 0.90 (0.05) (0.05) 2006 25.15 25.15 5,976 150,289 0.09 0.90 21.96 21.96 2005 20.62 20.62 98 2,015 ---- 0.90 4.91 4.91 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- U.S. Gov. Plus 2007 33.80 33.80 28,719 970,789 3.52 0.90 9.12 9.12 2006 30.98 30.98 4,786 148,265 3.32 0.90 (5.40) (5.40) 2005 32.74 32.74 8,112 265,628 0.75 0.90 (4.30) (4.30) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Opportunity 2007 18.48 18.48 965 17,835 ---- 0.90 (5.32) (5.32) 2006 20.85 20.85 8,742 182,253 0.01 0.90 9.17 9.17 2005 19.10 19.10 113,830 2,173,863 ---- 0.90 (2.11) (2.11) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Oil & Gas 2007 75.16 75.16 5,476 411,581 ---- 0.90 31.28 31.28 2006 57.25 57.25 7,065 404,459 ---- 0.90 19.55 19.55 2005 47.89 47.89 646 30,917 ---- 0.90 4.44 4.44 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- FS-62 5. FINANCIAL HIGHLIGHTS, continued At December 31 For the Periods Ended December 31 ---------------------------------------------- ------------------------------------------------- Inv. Unit Net Assets Income Expense Total Value ($) Units ($) Ratio % Ratio % Return % ------------------ ------------- ------------- ----------- ------------- ----------------------- Min Max Min Max ProFunds, continued: Precious Metals 2007 53.09 53.09 30,790 1,634,741 3.07 0.90 21.36 21.36 2006 43.75 43.75 10,039 439,196 0.86 0.90 6.40 6.40 2005 41.12 41.12 695 28,565 ---- 0.90 15.20 15.20 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Real Estate 2007 55.84 55.84 3,043 169,922 0.65 0.90 (20.34) (20.34) 2006 70.09 70.09 5,846 409,720 0.97 0.90 31.30 31.30 2005 53.38 53.38 31 1,659 0.09 0.90 0.50 0.50 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- High Yield 2007 28.92 28.92 851 24,615 10.59 0.90 (1.32) (1.32) 2006 31.74 31.74 1,284 40,766 5.57 0.90 5.31 5.31 2005 30.94 30.94 ---- ---- ---- 0.90 (0.89) (0.89) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Money Market 2007 1.06 1.06 10,708,522 11,403,574 3.71 0.90 2.84 2.84 2006 1.04 1.04 15,408,022 15,955,576 3.67 0.90 2.78 2.78 2005 1.01 1.01 4,935,612 4,972,582 1.31 0.90 0.75 0.75 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ---- Pimco: Commodity 2007 14.62 14.62 610,037 8,917,987 4.61 0.55 22.56 22.56 2006 11.93 11.93 562,938 6,714,594 7.34 0.55 (3.63) (3.63) 2005 12.38 12.38 2,221 27,483 1.14 0.55 (3.16) (3.16) 2004 ---- ---- ---- ---- ---- ---- ---- ---- 2003 ---- ---- ---- ---- ---- ---- ---- ----
FS-63 6. CHANGES IN UNITS OUTSTANDING The change in units outstanding for the periods ended December 31, were as follows:
2007 2006 --------------------- -------------------- Calvert: Balanced Units issued 476,451 480,903 Units redeemed (472,734) (197,439) --------------------- -------------------- Net increase(decrease) 3,717 283,464 ===================== ==================== International Equity Units issued 84,873 94,678 Units redeemed (83,602) (66,905) --------------------- -------------------- Net increase(decrease) 1,271 27,773 ===================== ==================== Mid Cap Units issued 21,673 20,874 Units redeemed (9,047) (10,516) --------------------- -------------------- Net increase(decrease) 12,626 10,358 ===================== ==================== Social Equity Units issued 16,594 36,273 Units redeemed (6,900) (8,003) --------------------- -------------------- Net increase(decrease) 9,694 28,270 ===================== ==================== Ameritas: Income and Growth Units issued 24,053 35,872 Units redeemed (24,048) (34,237) --------------------- -------------------- Net increase(decrease) 5 1,635 ===================== ==================== Index 500 Units issued 5,243 6,547 Units redeemed (6,826) (7,177) --------------------- -------------------- Net increase(decrease) (1,583) (630) ===================== ==================== MidCap Units issued 23,026 5,267 Units redeemed (10,822) (9,336) --------------------- -------------------- Net increase(decrease) 12,204 (4,069) ===================== ==================== Small Cap Units issued 10,430 15,902 Units redeemed (7,568) (13,783) --------------------- -------------------- Net increase(decrease) 2,862 2,119 ===================== ==================== FS-64 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- Scudder: Small Cap Units issued 24,146 98,986 Units redeemed (35,939) (116,894) --------------------- -------------------- Net increase(decrease) (11,793) (17,908) ===================== ==================== Fidelity: Overseas IC Units issued 138,531 217,884 Units redeemed (110,264) (44,222) --------------------- -------------------- Net increase(decrease) 28,267 173,662 ===================== ==================== Inv. Grade Bond IC Units issued 320,278 445,483 Units redeemed (203,058) (198,204) --------------------- -------------------- Net increase(decrease) 117,220 247,279 ===================== ==================== Equity Income IC Units issued 50,380 136,712 Units redeemed (57,198) (23,537) --------------------- -------------------- Net increase(decrease) (6,818) 113,175 ===================== ==================== Growth IC Units issued 51,859 91,254 Units redeemed (30,500) (5,367) --------------------- -------------------- Net increase(decrease) 21,359 85,887 ===================== ==================== High Income IC Units issued 158,925 178,871 Units redeemed (128,586) (49,361) --------------------- -------------------- Net increase(decrease) 30,339 129,510 ===================== ==================== High Income SC Units issued 608,471 1,033,676 Units redeemed (802,192) (1,556,848) --------------------- -------------------- Net increase(decrease) (193,721) (523,172) ===================== ==================== Contrafund IC Units issued 286,324 520,664 Units redeemed (239,035) (86,855) --------------------- -------------------- Net increase(decrease) 47,289 433,809 ===================== ==================== Contrafund SC Units issued 293,939 677,273 Units redeemed (447,645) (411,855) --------------------- -------------------- Net increase(decrease) (153,706) 265,418 ===================== ==================== FS-65 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- Fidelity, continued: Mid Cap IC Units issued 63,997 192,867 Units redeemed (46,142) (31,471) --------------------- -------------------- Net increase(decrease) 17,855 161,396 ===================== ==================== Mid Cap SC Units issued 28,381 36,712 Units redeemed (44,267) (154,698) --------------------- -------------------- Net increase(decrease) (15,886) (117,986) ===================== ==================== AIM: Financial Units issued 14,290 16,389 Units redeemed (18,031) (17,141) --------------------- -------------------- Net increase(decrease) (3,741) (752) ===================== ==================== Health Units issued 8,343 12,996 Units redeemed (9,226) (14,273) --------------------- -------------------- Net increase(decrease) (883) (1,277) ===================== ==================== Technology Units issued 12,125 21,276 Units redeemed (14,613) (27,665) --------------------- -------------------- Net increase(decrease) (2,488) (6,389) ===================== ==================== Janus: Growth Units issued ---- ---- Units redeemed (809) (64,159) --------------------- -------------------- Net increase(decrease) (809) (64,159) ===================== ==================== Neuberger Berman: Balanced Units issued 1,980 12,517 Units redeemed (3,074) (13,349) --------------------- -------------------- Net increase(decrease) (1,094) (832) ===================== ==================== Growth Units issued 15,408 2,395 Units redeemed (12,709) (4,013) --------------------- -------------------- Net increase(decrease) 2,699 (1,618) ===================== ==================== Limited Maturity Bond Units issued 3,786 7,570 Units redeemed (4,654) (14,023) --------------------- -------------------- Net increase(decrease) (868) (6,453) ===================== ==================== FS-66 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- Neuberger Berman, continued: Partners Units issued 6,259 18,415 Units redeemed (13,204) (34,405) --------------------- -------------------- Net increase(decrease) (6,945) (15,990) ===================== ==================== Rydex: Nova Units issued 684,153 4,039,152 Units redeemed (1,001,312) (4,091,347) --------------------- -------------------- Net increase(decrease) (317,159) (52,195) ===================== ==================== OTC Units issued 197,079 436,554 Units redeemed (430,379) (454,323) --------------------- -------------------- Net increase(decrease) (233,300) (17,769) ===================== ==================== Precious Metals Units issued 949,861 698,557 Units redeemed (912,926) (541,159) --------------------- -------------------- Net increase(decrease) 36,935 157,398 ===================== ==================== Inv. S&P 500 Units issued 1,024,009 3,531,900 Units redeemed (945,393) (3,601,097) --------------------- -------------------- Net increase(decrease) 78,616 (69,197) ===================== ==================== Gov. Long Bond Units issued 121,953 179,305 Units redeemed (92,452) (117,538) --------------------- -------------------- Net increase(decrease) 29,501 61,767 ===================== ==================== Inverse OTC Units issued 42,055 27,619 Units redeemed (39,758) (24,755) --------------------- -------------------- Net increase(decrease) 2,297 2,864 ===================== ==================== Inv. Long Bond Units issued 17,624 37,849 Units redeemed (21,110) (27,359) --------------------- -------------------- Net increase(decrease) (3,486) 10,490 ===================== ==================== Russell Units issued 14,697 33,384 Units redeemed (18,644) (10,790) --------------------- -------------------- Net increase(decrease) (3,947) 22,594 ===================== ==================== FS-67 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- Rydex, continued: Sector Rotation Units issued 94,125 113,786 Units redeemed (71,248) (31,091) --------------------- -------------------- Net increase(decrease) 22,877 82,695 ===================== ==================== Third Avenue: Value Units issued 545,113 727,697 Units redeemed (453,983) (652,562) --------------------- -------------------- Net increase(decrease) 91,130 75,135 ===================== ==================== Vanguard: Money Market Units issued 88,957,088 209,975,468 Units redeemed (83,620,948) (187,759,909) --------------------- -------------------- Net increase(decrease) 5,336,140 22,215,559 ===================== ==================== Equity Index Units issued 685,459 688,572 Units redeemed (554,073) (149,684) --------------------- -------------------- Net increase(decrease) 131,386 538,888 ===================== ==================== Total Bond Units issued 1,544,400 1,548,249 Units redeemed (953,113) (609,341) --------------------- -------------------- Net increase(decrease) 591,287 938,908 ===================== ==================== REIT Index Units issued 248,215 729,713 Units redeemed (370,413) (164,422) --------------------- -------------------- Net increase(decrease) (122,198) 565,291 ===================== ==================== Mid-Cap Units issued 245,962 829,876 Units redeemed (210,427) (125,156) --------------------- -------------------- Net increase(decrease) 35,535 704,720 ===================== ==================== Stock Market Index Units issued 128,989 292,877 Units redeemed (89,886) (32,923) --------------------- -------------------- Net increase(decrease) 39,103 259,954 ===================== ==================== Equity Income Units issued 547,240 375,549 Units redeemed (475,958) (86,375) --------------------- -------------------- Net increase(decrease) 71,282 289,174 ===================== ==================== FS-68 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- Vanguard, continued: Growth Units issued 383,974 739,115 Units redeemed (347,023) (285,213) --------------------- -------------------- Net increase(decrease) 36,951 453,902 ===================== ==================== High Yield Bond Units issued 420,683 767,313 Units redeemed (388,748) (359,228) --------------------- -------------------- Net increase(decrease) 31,935 408,085 ===================== ==================== Balanced Units issued 149,969 496,073 Units redeemed (152,882) (43,244) --------------------- -------------------- Net increase(decrease) (2,913) 452,829 ===================== ==================== International Units issued 861,315 1,648,027 Units redeemed (676,140) (548,861) --------------------- -------------------- Net increase(decrease) 185,175 1,099,166 ===================== ==================== Diversified Units issued 1,324,123 1,025,689 Units redeemed (1,066,808) (427,130) --------------------- -------------------- Net increase(decrease) 257,315 598,559 ===================== ==================== Small Company Growth Units issued 311,314 603,596 Units redeemed (299,634) (167,344) --------------------- -------------------- Net increase(decrease) 11,680 436,252 ===================== ==================== Wells Fargo: Discovery Units issued 12,161 4,403 Units redeemed (13,484) (1,076) --------------------- -------------------- Net increase(decrease) (1,323) 3,327 ===================== ==================== Opportunity Units issued 1,452 421 Units redeemed (675) (5,702) --------------------- -------------------- Net increase(decrease) 777 (5,281) ===================== ==================== FS-69 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- ProFunds: Bull Units issued 38,020 435,069 Units redeemed (62,385) (408,349) --------------------- -------------------- Net increase(decrease) (24,365) 26,720 ===================== ==================== Europe Units issued 100,348 76,805 Units redeemed (97,280) (46,497) --------------------- -------------------- Net increase(decrease) 3,068 30,308 ===================== ==================== Mid-Cap Units issued 37,897 81,811 Units redeemed (43,536) (89,319) --------------------- -------------------- Net increase(decrease) (5,639) (7,508) ===================== ==================== OTC Units issued 69,104 435,914 Units redeemed (115,955) (414,066) --------------------- -------------------- Net increase(decrease) (46,851) 21,848 ===================== ==================== Small-Cap Units issued 121,630 327,332 Units redeemed (129,659) (330,402) --------------------- -------------------- Net increase(decrease) (8,029) (3,070) ===================== ==================== Small-Cap Value Units issued 19,816 57,540 Units redeemed (21,365) (68,491) --------------------- -------------------- Net increase(decrease) (1,549) (10,951) ===================== ==================== Classic Dow Units issued 2,242,078 857,195 Units redeemed (2,254,683) (836,668) --------------------- -------------------- Net increase(decrease) (12,605) 20,527 ===================== ==================== Bear Units issued 339,075 455,361 Units redeemed (344,175) (508,527) --------------------- -------------------- Net increase(decrease) (5,100) (53,166) ===================== ==================== Short OTC Units issued 5,087,139 1,792,209 Units redeemed (5,084,677) (1,801,572) --------------------- -------------------- Net increase(decrease) 2,462 9,363 ===================== ==================== FS-70 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- ProFunds, continued: Short Small-Cap Units issued 1,147,981 1,825,554 Units redeemed (1,133,189) (1,820,281) --------------------- -------------------- Net increase(decrease) 14,792 5,273 ===================== ==================== Short Dow Units issued 283,269 63,984 Units redeemed (283,395) (63,765) --------------------- -------------------- Net increase(decrease) (126) 219 ===================== ==================== UltraMid Units issued 754,137 496,413 Units redeemed (754,040) (496,523) --------------------- -------------------- Net increase(decrease) 97 (110) ===================== ==================== UltraOTC Units issued 2,906,994 11,653,822 Units redeemed (2,895,485) (11,762,075) --------------------- -------------------- Net increase(decrease) 11,509 (108,253) ===================== ==================== UltraSmall Units issued 1,925,775 2,300,744 Units redeemed (1,919,396) (2,300,124) --------------------- -------------------- Net increase(decrease) 6,379 620 ===================== ==================== UltraBull Units issued 3,045,224 3,655,217 Units redeemed (2,979,389) (3,649,339) --------------------- -------------------- Net increase(decrease) 65,835 5,878 ===================== ==================== U.S. Gov. Plus Units issued 202,273 3,431,813 Units redeemed (178,340) (3,435,139) --------------------- -------------------- Net increase(decrease) 23,933 (3,326) ===================== ==================== Opportunity Units issued 735,015 3,311,381 Units redeemed (742,792) (3,416,469) --------------------- -------------------- Net increase(decrease) (7,777) (105,088) ===================== ==================== Oil & Gas Units issued 46,683 117,806 Units redeemed (48,272) (111,387) --------------------- -------------------- Net increase(decrease) (1,589) 6,419 ===================== ==================== FS-71 6. CHANGES IN UNITS OUTSTANDING, continued 2007 2006 --------------------- -------------------- ProFunds, continued: Precious Metals Units issued 60,545 75,392 Units redeemed (39,794) (66,048) --------------------- -------------------- Net increase(decrease) 20,751 9,344 ===================== ==================== Real Estate Units issued 34,904 40,208 Units redeemed (37,707) (34,393) --------------------- -------------------- Net increase(decrease) (2,803) 5,815 ===================== ==================== High Yield Units issued 12,105 6,407 Units redeemed (12,538) (5,123) --------------------- -------------------- Net increase(decrease) (433) 1,284 ===================== ==================== Money Market Units issued 869,122,128 1,091,153,627 Units redeemed (873,821,628) (1,080,681,217) --------------------- -------------------- Net increase(decrease) (4,699,500) 10,472,410 ===================== ==================== Pimco: Commodity Units issued 184,523 603,216 Units redeemed (137,424) (42,499) --------------------- -------------------- Net increase(decrease) 47,099 560,717 ===================== ====================
FS-72 AMERITAS LIFE INSURANCE CORP. STATUTORY FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007 AND 2006 (RESTATED) AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2007 AND INDEPENDENT AUDITORS' REPORT INDEPENDENT AUDITORS' REPORT To the Board of Directors Ameritas Life Insurance Corp. Lincoln, Nebraska We have audited the accompanying statutory statements of admitted assets, liabilities and surplus of Ameritas Life Insurance Corp. (the Company), a wholly owned subsidiary of Ameritas Holding Company, as of December 31, 2007 and 2006, and the related statutory statements of operations, changes in surplus, and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements give retroactive effect to the merger of the Company and Ameritas Variable Life Insurance Company, which has been accounted for as a statutory merger as described in Note 2 to the financial statements. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As described more fully in Note 1 to the financial statements, the Company prepared these financial statements using accounting practices prescribed or permitted by the Insurance Department of the State of Nebraska, and such practices differ from accounting principles generally accepted in the United States of America. The effects on such financial statements of the differences between the statutory basis of accounting and accounting principles generally accepted in the United States of America are described in Note 19. In our opinion, because of the effects of the matter discussed in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of Ameritas Life Insurance Corp. as of December 31, 2007 and 2006, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2007. In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities and surplus of Ameritas Life Insurance Corp. as of December 31, 2007 and 2006, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2007, on the basis of accounting described in Note 1. As discussed in Note 20, the accompanying 2006 and 2005 statutory financial statements have been restated. /s/ Deloitte & Touche LLP Lincoln, Nebraska March 28, 2008 AMERITAS LIFE INSURANCE CORP. STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND SURPLUS (in thousands)
December 31 -------------------------------------- 2006 As Restated, ADMITTED ASSETS 2007 See Note 20 ------------------ ------------------- Bonds $ 1,610,609 $ 1,594,673 Preferred stocks - unaffiliated 31,921 8,970 - affiliated 17,510 20,000 Common stocks - unaffiliated 207,390 204,837 - affiliated 83,043 49,192 Mortgage loans 370,356 341,542 Real estate - properties occupied by the company 28,417 28,500 - properties held for the production of income 37,446 37,910 - properties held for sale - 10,229 Cash and cash equivalents (10,494) 12,085 Short-term investments 19,495 26,285 Loans on insurance contracts 105,747 101,699 Partnerships and limited liability companies - real estate 26,243 18,231 Partnerships - joint ventures 76,401 63,367 Other investments 3,455 962 Receivable for securities 8,066 4,593 ------------------ ------------------- Total Cash and Invested Assets 2,615,605 2,523,075 ------------------ ------------------- Accrued investment income 23,937 24,615 Deferred and uncollected premiums 18,984 21,098 Current federal income taxes receivable - affiliates 9,050 - Deferred tax asset 15,763 14,813 Accounts receivable - affiliates 1,333 4,672 Data processing and other admitted assets 8,072 7,929 Goodwill 4,587 5,667 Separate accounts 3,694,975 3,378,838 ------------------ ------------------- Total Admitted Assets $ 6,392,306 $ 5,980,707 ================== ===================
The accompanying notes are an integral part of these statutory financial statements. 2 AMERITAS LIFE INSURANCE CORP. STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND SURPLUS (in thousands, except share data)
December 31 -------------------------------------- 2006 As Restated, LIABILITIES AND SURPLUS 2007 See Note 20 ------------------ ------------------- Policy reserves $ 1,580,554 $ 1,566,418 Deposit-type funds 109,239 91,531 Reserves for unpaid claims 33,770 34,531 Dividends payable to policyowners 10,171 10,260 Interest maintenance reserve 2,323 2,786 Accrued separate account transfers (87,191) (91,802) Current federal income taxes payable - affiliates - 2,936 Asset valuation reserve 68,603 62,456 Accounts payable - affiliates 2,179 375 Borrowed money - affiliates 17,479 27,466 Payable for securities 5,375 385 Other liabilities 76,709 80,291 Separate accounts 3,694,975 3,378,838 ------------------ ------------------- Total Liabilities 5,514,186 5,166,471 ------------------ ------------------- Common stock, par value $0.10 per share; 25,000,000 shares authorized, issued and outstanding 2,500 2,500 Additional paid-in capital 5,000 5,000 Unassigned surplus 870,620 806,736 ------------------ ------------------- Total Surplus 878,120 814,236 ------------------ ------------------- Total Liabilities and Surplus $ 6,392,306 $ 5,980,707 ================== ===================
The accompanying notes are an integral part of these statutory financial statements. 3 AMERITAS LIFE INSURANCE CORP. STATUTORY STATEMENTS OF OPERATIONS (in thousands)
Years Ended December 31 ---------------------------------------------------------- 2006 2005 As Restated, As Restated, 2007 See Note 20 See Note 20 ------------------- ------------------ ------------------- INCOME Premium income $ 1,056,206 $ 1,124,557 $ 934,158 Net investment income 137,185 133,519 141,899 Miscellaneous income 53,054 50,072 50,283 ------------------- ------------------ ------------------- Total income 1,246,445 1,308,148 1,126,340 ------------------- ------------------ ------------------- EXPENSES Benefits to policyowners 900,640 902,088 859,355 Change in policy reserves 14,136 (58,306) (10,671) Commissions 57,760 63,961 66,225 General insurance expenses 136,709 118,429 126,358 Taxes, licenses and fees 17,709 15,091 14,674 Net premium transferred to(from) separate accounts 32,454 180,736 (17,044) ------------------- ------------------ ------------------- Total expenses 1,159,408 1,221,999 1,038,897 ------------------- ------------------ ------------------- Income before dividends, federal income taxes, and realized capital gains 87,037 86,149 87,443 Dividends appropriated for policyowners 10,157 10,202 10,479 ------------------- ------------------ ------------------- Income before federal income taxes and 76,880 75,947 76,964 realized capital gains Federal income tax expense 21,484 23,409 21,468 ------------------- ------------------ ------------------- Income from operations before realized capital gains 55,396 52,538 55,496 Realized capital gains on investments, net of tax expense of $13,432, $12,671 and $6,106 and transfers to(from) the interest maintenance reserve of $45, ($54) and $1,343 in 2007, 2006 and 2005, respectively 22,269 18,107 12,595 ------------------- ------------------ ------------------- Net income $ 77,665 $ 70,645 $ 68,091 =================== ================== ===================
The accompanying notes are an integral part of these statutory financial statements. 4
AMERITAS LIFE INSURANCE CORP. STATUTORY STATEMENTS OF CHANGES IN SURPLUS FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) Common Stock Additional ------------------------------ Paid-in Unassigned Total Shares Amount Capital Surplus Surplus -------------- --------------- ----------------- ----------------- ------------------ BALANCE, January 1, 2005 25,000 $ 2,500 $ 5,000 $ 696,276 $ 703,776 Net income - - - 68,091 68,091 Change in net unrealized gains on investments, net of taxes - - - 9,556 9,556 Change in net deferred income taxes - - - (620) (620) Change in non-admitted assets - - - (5,282) (5,282) Change in liability for reinsurance in unauthorized companies, net of tax (1) (1) Cumulative effect of change in accounting principle - - - (831) (831) Change in asset valuation reserve - - - (17,058) (17,058) -------------- --------------- ----------------- ----------------- ------------------ BALANCE, December 31, 2005 25,000 $ 2,500 $ 5,000 $ 750,131 $ 757,631 Net income - - - 70,645 70,645 Change in net unrealized gains on investments, net of taxes - - - (23,358) (23,358) Change in net deferred income taxes - - - 2,114 2,114 Change in non-admitted assets - - - 514 514 Change in liability for reinsurance in unauthorized companies, net of tax - - - 3 3 Cumulative effect of change in accounting principle - - - (676) (676) Change in asset valuation reserve - - - 7,363 7,363 -------------- --------------- ----------------- ----------------- ------------------ BALANCE, December 31, 2006 25,000 $ 2,500 $ 5,000 $ 806,736 $ 814,236 Net income - - - 77,665 77,665 Change in net unrealized gains on investments, net of taxes - - - (3,629) (3,629) Change in net deferred income taxes - - - 4,124 4,124 Change in non-admitted assets - - - (6,811) (6,811) Change in liability for reinsurance in unauthorized companies, net of tax - - - (26) (26) Correction of error (see Note 20) - - - (1,292) (1,292) Change in asset valuation reserve - - - (6,147) (6,147) -------------- --------------- ----------------- ----------------- ------------------ BALANCE, December 31, 2007 25,000 $ 2,500 $ 5,000 $ 870,620 $ 878,120 ============== =============== ================= ================= ==================
The accompanying notes are an integral part of these statutory financial statements. 5 AMERITAS LIFE INSURANCE CORP. STATUTORY STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31 ----------------------------------------------------- 2006 2005 As Restated, As Restated, 2007 See Note 20 See Note 20 OPERATING ACTIVITIES ----------------- ---------------- ------------------ Premium collected net of reinsurance $ 1,055,551 $ 1,125,683 $ 931,119 Net investment income received 141,558 136,426 146,546 Miscellaneous income 67,577 61,080 60,019 Benefits paid to policyowners (896,566) (899,323) (853,533) Net transfers (to) from separate accounts (30,007) (178,620) 22,806 Commissions, expenses and taxes paid (225,802) (206,404) (220,092) Dividends paid to policyowners (10,233) (10,393) (10,532) Federal income taxes paid (46,206) (28,368) (33,164) ----------------- ---------------- ------------------ Net cash from operating activities 55,872 81 43,169 ----------------- ---------------- ------------------ INVESTING ACTIVITIES Proceeds from investments sold, matured or repaid 570,314 455,198 424,171 Cost of investments acquired (654,460) (475,883) (497,133) Net change in loans on insurance contracts (4,021) (1,265) (6,611) ----------------- ---------------- ------------------ Net cash from investing activities (88,167) (21,950) (79,573) ----------------- ---------------- ------------------ FINANCING AND MISCELLANEOUS ACTIVITIES Payments on borrowed funds (9,942) (2,485) - Change in deposit-type funds without life contingencies 13,880 5,793 (9,784) Other miscellaneous, net (1,012) 4,241 3,237 ----------------- ---------------- ------------------ Net cash from financing and miscellaneous activities 2,926 7,549 (6,547) ----------------- ---------------- ------------------ NET DECREASE IN CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (29,369) (14,320) (42,951) CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - BEGINNING OF YEAR 38,370 52,690 95,641 ----------------- ---------------- ------------------ CASH AND CASH EQUIVALENTS AND SHORT- TERM INVESTMENTS - END OF YEAR $ 9,001 $ 38,370 $ 52,690 ================= ================ ==================
Non-cash transactions: Deferred gain on sale of other invested assets $ - $ - $ 2,067 Proceeds on real estate partnerships dissolved and converted - - 5,793 Acquisition cost on partnerships converted to direct real estate - - 5,796 Note payable to affiliate on subsidiary stock redemption - 29,825 - Mortgage loan foreclosed and transferred to real estate - 595 - Mortgage loan from a real estate partnership basis adjustment due to refinance - 4,400 - Common stock adjustments on dissolution of affiliates 10,855 45,987 -
The accompanying notes are an integral part of these statutory financial statements. 6 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Ameritas Life Insurance Corp. (the Company), a stock life insurance company domiciled in the state of Nebraska, is a wholly owned subsidiary of Ameritas Holding Company (AHC), which is a wholly owned subsidiary of UNIFI Mutual Holding Company (UNIFI). Effective January 1, 2006, Ameritas Acacia Mutual Holding Company (AAMHC) and Union Central Mutual Holding Company (UCMHC) merged to form UNIFI in a business combination accounted for as a pooling of interests. In a concurrent event, The Union Central Life Insurance Company (UCL) was converted from an Ohio mutual life insurance company to an Ohio stock life insurance company, wholly owned by the newly formed UCMHC. Also in a concurrent event, the capital stock of Union Central was contributed to UNIFI's wholly-owned holding company, AHC. AHC owns three stock life insurance companies, the Company, Acacia Life Insurance Company (Acacia Life) and UCL. AHC also wholly-owns Summit Investment Advisors, Inc. (SIA), an advisor providing investment management services. UNIFI is a mutual insurance holding company. Owners of designated policies issued by the Company have a membership interest in UNIFI, while contractual rights remain with the Company. The Company owns 100% of First Ameritas Life Insurance Corp. of New York (FALIC), a New York domiciled life insurance subsidiary, LifeRe Insurance Company (acquired July 3, 2007) (LifeRe), a Texas domiciled life insurance subsidiary, and Pathmark Administrators Inc., a third-party administrator. Ameritas Investment Advisors, Inc. (AIA), an advisor providing investment management services, was wholly owned by the Company until July 1, 2007 when it was sold to AHC. Ameritas owns 80% of Ameritas Investment Corp. (AIC), a broker dealer, and the remaining 20% ownership is with Centralife Annuities Services, Inc., a wholly owned subsidiary of Aviva USA (formerly AmerUs Life Insurance Company). Effective September 1, 2006, AMAL Corporation (AMAL) repurchased its outstanding shares of stock from Acacia Life and Acacia Financial Corporation (AFCO) and issued two notes payable. On this date, AMAL became a wholly owned subsidiary of the Company. Effective September 30, 2006 AMAL was dissolved into its parent, the Company. Prior to September 1, 2006, the Company owned 85.77% of AMAL, which wholly owned Ameritas Variable Life Insurance Company (now merged with the Company, see Note 2) (AVLIC), The Advisors Group, Inc. (TAG), a former broker dealer (dissolved as of December 29, 2006), and a 66.41% interest in Ameritas Investment Corp. (AIC), a broker dealer. Prior to September 26, 2005, the Company owned 52.41% of AMAL. Acacia Life is an insurance company domiciled in the District of Columbia. Acacia Life is a 100% owner of AFCO, which is a holding company comprised of several financial service companies. Principal subsidiaries of AFCO include: Calvert Group Ltd. (Calvert), a provider of investment advisory, management and administrative services to The Calvert Group of mutual funds; Acacia Federal Savings Bank (AFSB), a federally chartered savings bank; and Acacia Realty Corporation, owner of real estate properties. UCL is an insurance company domiciled in the state of Ohio. UCL's wholly owned subsidiaries include Summit Investment Partners, Inc., an investment advisor (SIP); Carillon Investments, Inc., (prior to June 30, 2006) a broker-dealer (now merged with AIC); PRBA, Inc., the holding company of a pension administration company; Summit Investment Partners, LLC, an investment advisor (liquidated as of July 1, 2007) and Union Central Mortgage Funding, Inc, a mortgage banking business. 7 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Nature of Operations, (continued) The Company's insurance operations consist of life and health insurance, annuity, group pension, and retirement contracts. The Company and its subsidiaries operate in all 50 states and the District of Columbia. Basis of Presentation The Company's statutory financial statements are presented on the basis of accounting practices prescribed or permitted by the Insurance Department of the State of Nebraska (the Department). Accounting practices and procedures of the National Association of Insurance Commissioners ("NAIC") as prescribed or permitted by the Department comprise a comprehensive basis of accounting ("NAIC SAP") other than accounting principles generally accepted in the United States of America ("GAAP"). The more significant differences are as follows: (a) Investments in bonds are generally carried at amortized cost, while under GAAP, they are carried at either amortized cost or fair value based on their classification according to the Company's ability and intent to hold or trade the securities; (b) Investments in common stocks are valued as prescribed by the Securities Valuation Office ("SVO") of the NAIC, while under GAAP, common stocks are reported at fair value; (c) Investments in preferred stocks are carried at cost if the NAIC designation is RP3 and P3 or above. Preferred stocks with NAIC designations of RP4 and P4 or below are carried at the lower of cost or fair value. Under GAAP, preferred stocks are carried at amortized cost or fair value depending upon the characteristics of the security; (d) Subsidiaries are included as common stock carried under the equity method, with the equity in net income of subsidiaries credited directly to the Company's unassigned surplus for NAIC SAP, while GAAP requires either consolidation or the equity interest in net income of subsidiaries to be credited to the income statement; (e) Investments in limited partnerships, limited liability companies and joint venture investments are accounted for on the GAAP equity method, while under GAAP, such investments are accounted for at cost or the equity method depending upon ownership percentage and control; (f) Acquisition costs, such as commissions and other costs related to acquiring new business, are expensed as incurred, while under GAAP, they are deferred and amortized to income as premiums are earned or in relation to estimated gross profits; (g) NAIC SAP requires an amount be recorded for deferred taxes, however, there are limitations as to the amount of deferred tax assets that may be reported as "admitted assets"; and a federal income tax provision is required on a current basis for the statutory statements of operations; (h) Statutory policy reserves are based on mortality and interest assumptions prescribed or permitted by state statutes, without consideration of withdrawals. Statutory policy reserves generally differ from policy reserves under GAAP, which are based on the Company's estimates of mortality, interest and withdrawals; 8 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Basis of Presentation, (continued) (i) Asset valuation reserves ("AVR") and interest maintenance reserves ("IMR") are established only in the statutory financial statements; (j) Assets are reported under NAIC SAP at "admitted-asset" value and "non-admitted" assets are excluded through a charge against unassigned surplus, while under GAAP, "non-admitted assets" are reinstated to the balance sheet, net of any valuation allowance; (k) Premium receipts and benefits on universal life-type contracts are recorded as income and expense for statutory purposes. Under GAAP, revenues on universal life-type contracts are comprised of contract charges and fees which are recognized when assessed against the policyowner account balance. Additionally, premium receipts on universal life-type contracts are considered deposits and are recorded as interest-bearing liabilities while benefits are recognized as expenses in excess of the policyowner account balance; (l) Reinsurance recoverables on unpaid losses are reported as a reduction of policy reserves, while under GAAP, they are reported as an asset; (m) Comprehensive income and its components are not presented in the statutory financial statements; and (n) Goodwill under GAAP is calculated as the difference between the cost of acquiring the entity and the fair value of the assets received and liabilities assumed. Under NAIC SAP, goodwill is calculated as the difference between the cost of acquiring the entity and the reporting entity's share of the historical book value of the acquired entity; or as the amount that liabilities exceed assets in assumptive reinsurance transactions. However, under NAIC SAP, the amount of goodwill recorded as an "admitted asset" is subject to limitation. Use of Estimates The preparation of financial statements in accordance with statutory accounting practices requires management to 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 income and expenses during the reporting period. Actual results could differ significantly from those estimates. Material estimates susceptible to significant change include reserves and income taxes. Cash Equivalents The Company considers all highly liquid securities purchased with an original maturity of three months or less to be cash equivalents. Investments Investments are reported according to valuation procedures prescribed by the NAIC. Bonds not backed by other loans are generally stated at amortized cost using the interest method, except for those with an NAIC designation of 6, which are stated at the lower of amortized cost or fair value. Mortgage and asset backed securities are stated at either amortized cost or the lower of amortized cost or fair value. Premiums and discounts on mortgage and asset backed bonds and structured securities are amortized 9 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Investments, (continued) using the retrospective method based on anticipated prepayments at the date of purchase. Prepayment assumptions are obtained from broker dealer survey values or internal estimates. Changes in estimated cash flows from the original purchase assumptions are accounted for using the retrospective method. Preferred stocks are stated at cost as the NAIC designation is RP3 and P3 or above. Common stocks are generally carried at NAIC fair value. The change in the stated value is generally recorded as a change in net unrealized losses on investments, a component of unassigned surplus. The Company carries subsidiaries and affiliates as follows: FALIC and LifeRe at audited statutory equity; Pathmark, AFSB, AIC and affiliated mutual funds in which the Company has an interest of 10% or more at the Company's proportionate share of the audited GAAP equity; and AIA as non-admitted unaudited GAAP equity (2006 only). Mortgage loans are stated at aggregate carrying value less accrued interest. The Company records a reserve for losses on mortgage loans as part of the asset valuation reserve. Investments in real estate are stated at the lower of depreciated cost or fair value less encumbrances. The intent to sell a property exists when management has committed to a plan to dispose of the property by sale to an outside party. Short-term investments include all investments whose maturities, at the time of acquisition, are one year or less and are stated at amortized cost, which approximates fair value. Loans on insurance contracts are carried at the unpaid principal balances. If the unpaid balance of the loan exceeds the policy reserves, the excess is considered a non-admitted asset. Investments in real estate partnerships, limited liability companies and joint ventures are carried based on the underlying GAAP equity of the investee with unrealized gains and losses reflected in unassigned surplus. Other than temporary impairments of $1,078, $670 and $276 were recorded as realized losses during 2007, 2006 and 2005, respectively. Other investments are primarily collateral loans (2007 only) and low-income housing tax credits carried under the amortized cost method in 2007 and 2006. In 2005, prior to the change in accounting principle, low-income housing tax credits were carried under the equity method. Derivative instruments are stated at fair value. The Company has issued covered call options outstanding with a fair value of $0 and $24 at December 31, 2007 and 2006, respectively. The purpose of these options is for income generation and not as a hedging activity. Investment income consists primarily of interest and dividends. Interest is recognized on an accrual basis and dividends are recorded as earned at the ex-dividend date. Interest income on mortgage-backed and asset-backed securities is determined on the effective yield method based on estimated principal repayments. Accrual of income is suspended for bonds and mortgage loans that are in default or when the receipt of interest payments is in doubt. Realized capital gains and losses are determined on a specific identification basis and recorded in operations. 10 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Investments, (continued) Accrued interest more than 180 days past due deemed collectible on mortgage loans in default is non-admitted. All other investment income due and accrued with amounts over 90 days past due is non-admitted. No amount was excluded from unassigned surplus at December 31, 2007, 2006 and 2005, respectively. Property Property and equipment are carried at cost less accumulated depreciation. The Company provides for depreciation of property and equipment using straight-line and accelerated methods over the estimated useful lives of the assets. Buildings are generally depreciated over forty years. Furniture and fixtures are generally depreciated over three to ten years. Depreciation expense was $3,748, $3,758 and $3,648 for the years ended December 31, 2007, 2006 and 2005 respectively. Maintenance and repairs are charged to expense as incurred. EDP Equipment and Software Electronic data processing ("EDP") equipment and operating and nonoperating software are carried at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over the lesser of the estimated useful life of the related asset or three years for EDP equipment and operating system software. Depreciation expense for nonoperating system software is computed using the straight-line method over the lesser of its estimated useful life or five years. Costs incurred for the development of internal use software are capitalized and amortized using the straight-line method over the lesser of the useful lives of the assets or three years. Non-Admitted Assets Certain assets, primarily a portion of deferred tax assets, receivable related to prepaid pension assets, furniture and equipment, and nonoperating system software are designated as non-admitted under statutory reporting requirements. These assets are excluded from the statutory statements of admitted assets, liabilities and surplus by adjustments to unassigned surplus. Total non-admitted assets were $54,618 and $47,807 as of December 31, 2007 and 2006, respectively. Premiums and Related Commissions Life premiums are recognized as income over the premium paying period of the related policies. Annuity considerations are recognized as income when received. Health premiums are earned ratably over the terms of the related insurance and reinsurance contracts or policies. Consideration received on deposit-type funds, which do not contain any life contingencies, is recorded directly to the related liability. Expenses incurred in connection with acquiring new insurance business, including acquisition costs such as sales commissions, are charged to operations as incurred. Policy Reserves and Deposit-type Funds Life policy reserves provide amounts adequate to discharge estimated future obligations in excess of estimated future premiums on policies in force. Reserves for traditional, flexible premium and commissioned variable life insurance are computed principally by using the Commissioners' Reserve Valuation Method ("CRVM") or the Net Level Premium Method with assumed interest rates and mortality 11 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Policy Reserves and Deposit-type Funds, (continued) as prescribed by regulatory authorities. Reserves for annuities are calculated using the Commissioners' Annuity Reserve Valuation Method ("CARVM") with appropriate statutory interest and mortality assumptions. Policy reserves include the estimated future obligations for the fixed account options selected by variable life and annuity policyowners; obligations related to variable account options are in the separate accounts. Tabular interest, tabular less actual reserves released and tabular cost for all life contracts are determined based upon statutory regulations. Other policy reserves are established and maintained on the basis of published mortality tables using assumed interest rates and valuation methods as prescribed by the Department. Reserves for deposit-type funds are equal to deposits received and interest credited to the benefit of policyowners, less withdrawals that represent a return to the policyowner. For the determination of tabular interest to deposit-type funds, the valuation interest rate, which varies by issue year, is multiplied by the average funds in force during the year subject to such valuation interest rate. Reserves for Unpaid Claims The reserves for unpaid group dental and vision claims are estimated using historic claim lags, and then adjusted upward or downward based on the current level of pended/unprocessed claims relative to the historic level of pended/unprocessed claims during the time period used in generating the claim lag factors. The reserves for unpaid claims for group dental and vision insurance includes claims in course of settlement and incurred but not reported claims. Claim adjustment expenses corresponding to the unpaid claims are accounted for by adding an additional load to the reserve for unpaid claims. To the extent the ultimate liability differs from the amounts recorded, such differences are reflected in operations when additional information becomes known. Reserves for unpaid life claims include claims reported and unpaid and claims not yet reported, which is estimated based upon historical experience. As such amounts are necessarily estimates, the ultimate liability will differ from the amount recorded and will be reflected in operations when additional information becomes known. Dividends to Policyowners A portion of the Company's business has been issued on a participating basis. The amount of insurance in force on individual life participating policies was $3,549,574 or 17.1% and $4,603,861 or 20.5% of the individual life policies in force as of December 31, 2007 and 2006, respectively. The Company distributed dividends in the amount of $10,247, $10,421 and $10,533 to policyowners and did not allocate any additional income to such policyowners for the years ended December 31, 2007, 2006 and 2005, respectively. Accrued Separate Account Transfers Accrued separate account transfers primarily consist of the amount of policyowner account values over modified reserves used in the separate account, such as the use of CARVM and CRVM. 12 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Asset Valuation and Interest Maintenance Reserves The AVR is a required appropriation of unassigned surplus to provide for possible losses that may occur on certain investments of the Company. The reserve is computed based on holdings of all investments and realized and unrealized gains and losses, other than those resulting from interest rate changes. Changes in the reserve are charged or credited to unassigned surplus. The IMR is calculated based on the prescribed methods developed by the NAIC. Realized gains and losses, net of tax, resulting from interest rate changes on fixed income investments are deferred and credited to this reserve. These gains and losses are then amortized into investment income over what would have been the remaining years to maturity of the underlying investment. Amortization included in net investment income was $508, $383 and $300 for 2007, 2006 and 2005, respectively. Income Taxes The Company files a life/non-life consolidated tax return with UNIFI and UNIFI includible affiliates and is party to a federal income tax allocation agreement. The Company's income tax allocation is based upon a written agreement which generally specifies separate income tax return calculations with current credit for net operating losses and/or credits which are used to reduce the portion of the consolidated income tax liability. The Company is subject to tax-related audits in the normal course of operations. The Company records a contingency for these tax-related matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company reviews its loss contingencies on an ongoing basis to ensure that the Company has appropriate reserves recorded on the statutory statements of admitted assets, liabilities and surplus. These reserves are based on judgment made by management with respect to the likely outcome of these matters. The Company's judgment could change based on new information, Internal Revenue Service examinations and changes in laws or regulations. The statute of limitations, generally, is closed for the Company through December 31, 2002. In 2007, the Internal Revenue Service completed and settled an examination for the federal income tax returns of the Company and Acacia Life and their affiliates for the tax years of 2004 and 2003. Separate Accounts The Company issues variable annuities, variable life contracts, and experience-rated group annuities, the assets and liabilities of which are legally segregated and recorded in the accompanying statutory statements of admitted assets, liabilities and surplus as assets and liabilities of the separate accounts. Absent any contract provision wherein the Company guarantees either a minimum return or account value upon death or annuitization, the net investment experience of the separate account is credited directly to the policyowner and can be positive or negative. Mortality, policy administration and surrender charges to all separate accounts are included in miscellaneous income in the statutory statements of operations. The assets of separate accounts relating to variable annuity, variable life contracts and experience-rated group annuities are carried at fair value and consist primarily of mutual funds held for the benefit of policyowners. Deposits received from, and benefits paid, to separate account policyowners which were invested in the fixed account are recorded as an increase in, or a direct charge to, policy reserves. Investment income and realized and unrealized capital gains and losses related to the assets which support the variable annuity, variable life contracts and experience-rated group annuities are not reflected in the Company's statutory statements of operations. 13 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Fair Values of Financial Instruments The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Bonds and Preferred Stocks-Unaffiliated - The fair values for bonds and preferred stocks are based on quoted market prices, where available. For bonds and preferred stocks not actively traded, fair values are estimated using values obtained from independent pricing services and based on expected future cash flows using a current market rate applicable to the yield, credit quality and maturity of the investments. The fair values of mortgage and asset backed securities are estimated using values obtained from independent pricing services and based on expected future cash flows using a current market rate applicable to the yield, credit quality and maturity of the investments. Preferred Stocks-Affiliated - The carrying amounts approximate fair value. Common Stocks - For publicly traded securities, fair value is determined using prices published by the NAIC Securities Valuation Office. Stocks in affiliates are carried on the equity method and, therefore, are not included as part of the fair value disclosure. Mortgage Loans - The fair values for mortgage loans are estimated using discounted cash flow calculations which are based on interest rates currently being offered for similar loans to borrowers with similar credit ratings, credit quality, and maturity of the investments. Loans that exceed 100% loan-to-value are valued at the estimated fair value of the underlying collateral. Cash and Cash Equivalents, Short-term Investments, Other Investments, and Accrued Investment Income - The carrying amounts for these instruments approximate their fair values due to the short maturity of these investments, except when an instrument becomes other than temporarily impaired and a new cost basis has been recognized. The fair value for these instruments becomes their new cost basis. Loans on Insurance Contracts - The fair values for loans on insurance contracts are estimated using discounted cash flow analysis at interest rates currently offered for similar loans. Loans on insurance contracts with similar characteristics are aggregated for purposes of the calculations. Deposit-Type Funds - Deposit-type funds which do not have fixed maturities are carried at the amount payable on demand at the reporting date. Borrowed money - The fair value is estimated using discounted cash flow analyses based on current incremental borrowing rates for similar types of borrowing arrangements. Separate Account Assets and Liabilities - The fair values of separate account assets are based upon net asset values provided by the fund managers. Separate account liabilities are carried at the fair value of the underlying assets. 14 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Vulnerability due to Certain Concentrations The Company operates in a business environment which is subject to various risks and uncertainties. Such risks and uncertainties include, but are not limited to, interest rate risk, market risk, credit risk and legal and regulatory changes. Federal legislation has allowed banks and other financial organizations to have greater participation in securities and insurance businesses. This legislation may present an increased level of competition for sales of the Company's products. Furthermore, the market for deferred annuities and interest-sensitive life insurance is enhanced by the tax incentives available under current law. Any legislative changes that lessen these incentives are likely to negatively impact the demand for these products. The demand for life insurance products that are used to address a customer's estate planning needs may be impacted to the extent any legislative changes occur to the current estate tax laws. During 2007, decreased liquidity in certain markets adversely impacted the fair value of the Company's investments, in particular mortgage-backed and asset-backed fixed maturity securities. The Company anticipates these conditions will continue over the next year and will continue to evaluate the reasonableness of the fair value of the impacted securities by comparison to alternative market sources along with consideration of credit spreads for similar securities and the characteristics and performance of the underlying collateral. The Company has an exposure to subprime mortgage loans within its total investments in residential mortgage backed securities (RMBS). The Company manages its exposure to subprime mortgage loans in several ways. First, the Company monitors its exposure level to RMBS against defined restrictions prescribed by its Investment Policy. Restrictions include exposure at the aggregate level to RMBS along with exposure to ratings classes and subsectors. Also, the Company continually tracks subprime RMBS for factors including credit performance, rating agency actions, prepayment trends and de-levering. Loans with trends that may indicate underperformance are monitored closely for any further deterioration that may result in action by the Company. As of December 31, 2007, the Company's total investment in RMBS represents securities with an adjusted cost basis of $66,367 and a fair value of $62,965. As of December 31, 2007, the Company's subprime exposure related to subprime RMBS represents securities with an adjusted cost basis of $3,485 and a fair value of $3,600. Reclassifications Certain items on the prior year financial statements have been reclassified to conform to current year presentation. Such reclassifications were not material, either individually or in the aggregate. Accounting Pronouncements SETTLEMENT REQUIREMENTS FOR INTERCOMPANY TRANSACTIONS, AN AMENDMENT TO SSAP NO. 25 - ACCOUNTING FOR AND DISCLOSURES ABOUT TRANSACTIONS WITH AFFILIATES AND OTHER RELATED PARTIES. STATEMENT OF STATUTORY ACCOUNTING PRINCIPLE NO. 96. Effective January 1, 2007, the Company adopted SSAP No. 96, "Settlement Requirements for Intercompany Transactions, An Amendment to SSAP No. 25 - Accounting for and Disclosures about Transactions with Affiliates and Other Related Parties". This statement required transactions between related parties to be in the form of a written agreement and the agreement must provide for timely settlement of amounts owed. The adoption of this statement did not have a material impact on the financial statements. 15 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 1. Nature of Operations and Summary of Significant Accounting Policies, (continued) Accounting Pronouncements, (continued) INVESTMENTS IN SUBSIDIARY, CONTROLLED AND AFFILIATED ENTITIES, A REPLACEMENT OF SSAP NO. 88. STATEMENT OF STATUTORY ACCOUNTING PRINCIPLE NO. 97. Effective January 1, 2007, the Company adopted SSAP No. 97, "Investments in Subsidiary, Controlled and Affiliated Entities, A Replacement of SSAP No. 88". This statement provided additional guidance on the audit requirements for subsidiaries. The adoption of this statement did not have a material impact on the financial statements. ACCOUNTING FOR LOW INCOME HOUSING TAX CREDIT PROPERTY INVESTMENTS, STATEMENT OF STATUTORY ACCOUNTING PRINCIPLE NO. 93 Effective January 1, 2006, the Company adopted SSAP No. 93, "Accounting for Low Income Housing Tax Credit Property Investments". This statement establishes the valuation method for recording investments in low income housing tax credit properties. As a result, the cumulative effect of the change in accounting principle from implementing SSAP No. 93 was a reduction in unassigned surplus of $676 which was comprised of a reduction to other investments of $788 and a reduction to the AVR beginning balance of $112. The Company has up to 8 remaining years of unexpired tax credits and is required to hold these investments for up to 12 years. The prior period has not been restated as it was not permitted by SSAP No. 93. INVESTMENTS IN SUBSIDIARY, CONTROLLED, AND AFFILIATED ENTITIES, STATEMENT OF STATUTORY ACCOUNTING PRINCIPLE NO. 88 Effective January 1, 2005, the Company adopted SSAP No. 88, "Investments in Subsidiary, Controlled, and Affiliated Entities, A Replacement of SSAP No. 46". SSAP No. 88 addresses the valuation of subsidiary, controlled, and affiliated entities. As a result, the cumulative effect of the change in accounting principle from implementing SSAP No. 88 was a reduction in unassigned surplus of $831. 2. Statutory Merger and Business Combination The Company merged with AVLIC, a wholly owned subsidiary of the Company, on May 1, 2007. This transaction was accounted for as a statutory merger. No additional shares of the Company were issued. Prior year has been adjusted to reflect comparative merged company financial information. The following information is provided "as if" the merger occurred at the balance sheet date of December 31:
2006 -------------------------------------------------------------------------------------------------- Ameritas Life Ameritas Life AVLIC As Merged, Correction Ameritas Life As Previously As Previously Prior To Of Error, As Merged Reported Reported Eliminations Restatement See Note 20 And Restated -------------------------------------------------------------------------------------------------------------------- Income $ 867,257 $ 277,090 $ (7,463) $ 1,136,884 $ 171,264 $ 1,308,148 Net Income 54,214 19,331 (2,900) 70,645 - 70,645 Total Surplus 814,236 141,740 (141,740) 814,236 - 814,236 --------------------------------------------------------------------------------------------------------------------
16 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 2. Statutory Merger and Business Combination, (continued) The following information is provided "as if" the merger occurred at the balance sheet date of December 31:
2005 --------------------------------------------------------------------------------------------------- Ameritas Life Ameritas Life AVLIC As Merged, Correction Ameritas Life As As Previously As Previously Prior To Of Error, Merged And Reported Reported Eliminations Restatement See Note 20 Restated -------------------------------------------------------------------------------------------------------------------- Income $ 668,693 $ 283,233 $ (15,280) $ 936,646 $ 189,694 $ 1,126,340 Net Income 52,690 15,401 - 68,091 - 68,091 Total Surplus 757,631 125,913 (125,913) 757,631 - 757,631 --------------------------------------------------------------------------------------------------------------------
Effective July 3, 2007, the Company purchased 100% of the outstanding common stock of LifeRe Corporation, a Texas domiciled holding company, which owned 100% of LifeRe Insurance Company, a Texas domiciled life, accident and health insurance company for $21,262 in cash. The transaction was accounted for as a statutory purchase and resulted in goodwill recorded in the investment carrying value in the amount of $11,331. Goodwill amortization relating to this purchase was $2,518 for the year ended December 31, 2007. 3. Investments Bonds The table below provides additional information relating to bonds held at December 31, 2007:
Gross Gross Book/Adjusted Unrealized Unrealized Carrying Value Gains Losses Fair Value -------------------------------------------------------------------------------------------------------------------- Bonds: U.S. Governments $ 189,139 $ 6,117 $ 616 $ 194,640 All Other Governments 1,428 28 - 1,456 Special Revenue & Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions 200,613 1,111 1,189 200,535 Public Utilities (Unaffiliated) 101,460 1,900 971 102,389 Industrial & Miscellaneous (Unaffiliated) 1,117,969 24,720 13,678 1,129,011 -------------------------------------------------------------------------------------------------------------------- Total Bonds $ 1,610,609 $ 33,876 $ 16,454 $ 1,628,031 ====================================================================================================================
17 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 3. Investments, (continued) Bonds, (continued) The table below provides additional information relating to bonds held at December 31, 2006:
Gross Gross Book/Adjusted Unrealized Unrealized Carrying Value Gains Losses Fair Value -------------------------------------------------------------------------------------------------------------------- Bonds: U.S. Governments $ 220,309 $ 3,745 $ 3,443 $ 220,611 All Other Governments 2,239 40 - 2,279 Special Revenue & Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions 205,040 243 4,510 200,773 Public Utilities (Unaffiliated) 108,451 1,741 1,842 108,350 Industrial & Miscellaneous (Unaffiliated) 1,058,634 20,296 14,116 1,064,814 -------------------------------------------------------------------------------------------------------------------- Total Bonds $ 1,594,673 $ 26,065 $ 23,911 $ 1,596,827 ====================================================================================================================
Bonds and Stocks An aging of unrealized losses on the Company's investments in bonds, preferred stocks - unaffiliated and common stocks - unaffiliated were as follows:
December 31, 2007 ----------------------------------------------------------------------------- Less than 12 months 12 months or more Total ------------------------- ------------------------- ------------------------- Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses -------------------------------------------------------------------------------------------------------------------- Bonds: U.S. Governments $ 34,820 $ 200 $ 18,922 $ 416 $ 53,742 $ 616 Special Revenue & Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions 13,931 107 81,004 1,082 94,935 1,189 Public Utilities (Unaffiliated) 21,157 253 27,421 718 48,578 971 Industrial & Miscellaneous (Unaffiliated) 212,128 7,272 237,063 6,406 449,191 13,678 -------------------------------------------------------------------------------------------------------------------- Total Bonds 282,036 7,832 364,410 8,622 646,446 16,454 -------------------------------------------------------------------------------------------------------------------- Preferred Stocks (Unaffiliated) 13,374 785 - - 13,374 785 Common Stocks (Unaffiliated) 59,100 4,710 1,213 240 60,313 4,950 -------------------------------------------------------------------------------------------------------------------- Total $ 354,510 $ 13,327 $ 365,623 $ 8,862 $ 720,133 $ 22,189 --------------------------------------------------------------------------------------------------------------------
18 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 3. Investments, (continued) Bonds and Stocks, (continued)
December 31, 2006 ----------------------------------------------------------------------------- Less than 12 months 12 months or more Total ------------------------- ------------------------- ------------------------- Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses -------------------------------------------------------------------------------------------------------------------- Bonds: U.S. Governments $ 36,777 $ 277 $ 111,613 $ 3,167 $ 148,390 $ 3,443 Special Revenue & Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions 32,409 254 153,425 4,255 185,834 4,510 Public Utilities (Unaffiliated) 24,234 312 40,969 1,531 65,203 1,842 Industrial & Miscellaneous (Unaffiliated) 137,195 1,210 405,745 12,905 542,940 14,116 -------------------------------------------------------------------------------------------------------------------- Total Bonds 230,615 2,053 711,752 21,858 942,367 23,911 -------------------------------------------------------------------------------------------------------------------- Preferred Stocks (Unaffiliated) 1,020 2 1,566 58 2,586 60 Common Stocks (Unaffiliated) 16,611 768 - - 16,611 768 -------------------------------------------------------------------------------------------------------------------- Total $ 248,246 $ 2,823 $ 713,318 $ 21,916 $ 961,564 $ 24,739 --------------------------------------------------------------------------------------------------------------------
The Company regularly reviews its investment portfolio for factors that may indicate that a decline in fair value of an investment is other than temporary. Based on an evaluation of the prospects of the issuers, including, but not limited to, the Company's intentions to sell or ability to hold the investments; the length of time and magnitude of the unrealized loss; and the credit ratings of the issuers of the investments in the above bonds, the Company has concluded that the declines in the fair values of the Company's investments in bonds at December 31, 2007 or 2006 are temporary. For substantially all preferred stocks - unaffiliated and common stocks - unaffiliated securities with an unrealized loss greater than 12 months, such unrealized loss was less than 25% of the Company's carrying value of each preferred stock or common stock security. The Company considers various factors when considering if a decline in the fair value of a preferred stock and common stock security is other than temporary, including but not limited to, the length of time and magnitude of the unrealized loss; the volatility of the investment; analyst recommendations and price targets; opinions of the Company's investment managers; market liquidity; and the Company's intentions to sell or ability to hold the investments. Based on an evaluation of these factors, the Company has concluded that the declines in the fair values of the Company's investments in both unaffiliated preferred stocks and common stocks at December 31, 2007 or 2006 are temporary. The Company's bond and short-term investment portfolios are predominantly comprised of investment grade securities. At December 31, 2007 and 2006, bonds totaling $68,903 and $58,365, respectively, (4.3% and 3.5%, respectively, of the total bond and short-term portfolios) are considered "below investment grade". Securities are classified as "below investment grade" by utilizing rating criteria established by the NAIC. During 2007, 2006 and 2005, the Company recorded realized losses for other than temporary impairments on bonds of $1,657, $1,890 and $405, respectively. 19 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 3. Investments, (continued) Bonds and Stocks, (continued) The carrying value and fair value of bonds at December 31, 2007 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Book/Adjusted Carrying Value Fair Value -------------------------------------------------------------------------------------------------------------------- Due in one year or less $ 80,795 $ 81,054 Due after one year through five years 387,442 396,708 Due after five years through ten years 636,140 639,285 Due after ten years 362,479 361,514 Bonds with multiple repayment dates 143,753 149,470 -------------------------------------------------------------------------------------------------------------------- Total Bonds $ 1,610,609 $ 1,628,031 ====================================================================================================================
Bonds not due at a single maturity date have been included in the table above in the year of final maturity. Sales of bond investments in 2007, 2006 and 2005 resulted in proceeds of $91,850, $35,770 and $65,311, respectively, on which the Company realized gross gains of $3,474, $983 and $1,867, respectively, and gross losses of $420, $520 and $1,540, respectively. Mortgage Loans The Company invests in mortgage loans collateralized principally by commercial real estate. The maximum and minimum lending rates for mortgage loans issued during 2007 are 6.75% and 5.93%. The maximum percentage of any one loan to the value of security at the time the loan was originated, exclusive of insured, guaranteed or purchase money mortgages, was 75% with the exception of two loans for which the portion exceeding 75% is admitted under investment "basket" provisions. The Company has not included taxes, assessments or other amounts advanced in mortgage loans at December 31, 2007, 2006 and 2005. The Company's mortgage loans finance various types of commercial and multi-family residential properties throughout the United States. The geographic distributions of the mortgage loans at December 31, 2007 and 2006 are as follows:
2007 2006 -------------------------------------------------------------------------------------------------------------------- California $ 44,024 $ 38,930 Utah 25,533 19,140 Minnesota 25,363 19,757 Ohio 25,281 18,224 Arizona 22,344 24,197 Oklahoma 21,775 18,805 Texas 21,086 26,945 All other states 184,950 175,544 -------------------------------------------------------------------------------------------------------------------- $ 370,356 $ 341,542 ====================================================================================================================
At December 31, 2007, 2006 and 2005, the Company does not have any impaired mortgage loans or interest income on impaired mortgage loans. Interest income on impaired mortgage loans is generally recognized on a cash basis. 20 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 3. Investments, (continued) Fair Value of Financial Instruments The book/adjusted carrying value and fair value of financial instruments at December 31 are as follows:
2007 2006 ------------------------------------------------------------------- Book/Adjusted Book/Adjusted Carrying Value Fair Value Carrying Value Fair Value -------------------------------------------------------------------------------------------------------------------- Financial Assets: Bonds $ 1,610,609 $ 1,628,031 $ 1,594,673 $ 1,596,827 Preferred stocks - unaffiliated 31,921 31,507 8,970 9,352 Preferred stocks - affiliated 17,510 17,510 20,000 20,000 Common stocks - unaffiliated 207,390 207,390 204,837 204,856 Mortgage loans 370,356 380,775 341,542 339,909 Cash and cash equivalents (10,494) (10,494) 12,085 12,085 Short-term investments 19,495 19,495 26,285 26,285 Loans on insurance contracts 105,747 104,421 101,699 101,699 Other investments 3,455 3,455 962 962 Accrued investment income 23,937 23,937 24,615 24,615 Assets related to separate accounts 3,694,975 3,694,975 3,378,838 3,378,838 Financial Liabilities: Deposit-type funds $ 109,239 $ 109,239 $ 91,531 $ 91,531 Borrowed money - affiliates 17,479 17,526 27,466 27,359 Liabilities related to separate accounts 3,694,975 3,694,975 3,378,838 3,378,838 --------------------------------------------------------------------------------------------------------------------
4. Income Taxes The following are federal income taxes paid in the current and prior years that will be available for recoupment in the event of future losses: $ 2007 32,002 2006 37,944 2005 27,998 Federal income taxes incurred at December 31 consist of the following major components:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Current federal income taxes Operations $ 21,484 $ 23,409 $ 21,468 Capital gains 13,432 12,671 6,106 Correction of error (see Note 20) (696) - - -------------------------------------------------------------------------------------------------------------------- 34,220 36,080 27,574 Change in net deferred income taxes (4,124) (2,114) 620 -------------------------------------------------------------------------------------------------------------------- Total federal income taxes incurred $ 30,096 $ 33,966 $ 28,194 ====================================================================================================================
21 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 4. Income Taxes, (continued) The difference between the U.S. federal income tax rate and the federal income taxes incurred at December 31 is summarized as follows:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Income before federal income taxes and realized capital gains $ 76,880 $ 75,947 $ 76,964 Net realized capital gains before federal income taxes and transfers to IMR 35,746 30,724 20,044 Correction of error (see Note 20) (1,988) - - -------------------------------------------------------------------------------------------------------------------- Total pretax income 110,638 106,671 97,008 Change in non-admitted assets (6,588) (1,096) (2,377) Tax exempt income (10,784) (11,467) (12,278) Nondeductible expenses (114) 5,337 614 Change in accounting principle - (788) - Other (4,479) (1,446) (1,339) -------------------------------------------------------------------------------------------------------------------- 88,673 97,211 81,628 Statutory tax rate 0.35 0.35 0.35 -------------------------------------------------------------------------------------------------------------------- 31,036 34,024 28,570 Change in federal income tax reserve (647) 221 115 Tax credits (293) (279) (491) -------------------------------------------------------------------------------------------------------------------- Total federal income taxes incurred $ 30,096 $ 33,966 $ 28,194 ====================================================================================================================
The items that give rise to deferred tax assets and liabilities at December 31 relate to the following:
2007 2006 -------------------------------------------------------------------------------------------------------------------- Deferred tax assets: Unrealized investment losses $ 3,008 $ 2,458 Deferred policy acquisition costs 18,042 18,416 Future policy and contract benefits 6,810 7,429 Policyowner dividends 3,560 3,591 Acacia Life Insurance Company distribution 2,420 2,814 Pension and postretirement benefits 10,884 9,364 Non-admitted assets 13,655 11,349 Other 1,958 1,563 -------------------------------------------------------------------------------------------------------------------- Gross deferred tax assets 60,337 56,984 -------------------------------------------------------------------------------------------------------------------- Deferred tax liabilities: Unrealized investment gains 18,365 18,209 Acacia National Life Insurance Company inforce 1,134 1,461 Other 9,472 7,999 -------------------------------------------------------------------------------------------------------------------- Gross deferred tax liabilities 28,971 27,669 -------------------------------------------------------------------------------------------------------------------- Net deferred tax asset 31,366 29,315 Less: non-admitted deferred tax assets 15,603 14,502 -------------------------------------------------------------------------------------------------------------------- Net admitted deferred tax asset $ 15,763 $ 14,813 ==================================================================================================================== Increase (decrease) in deferred tax assets non-admitted $ 1,101 $ (1,657) ====================================================================================================================
22 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 4. Income Taxes, (continued) The change in net deferred income taxes is comprised of the following:
December 31 2007 2006 Change -------------------------------------------------------------------------------------------------------------------- Gross deferred tax assets $ 60,337 $ 56,984 $ 3,353 Gross deferred tax liabilities 28,971 27,669 1,302 -------------------------------------------------------------------------------------------------------------------- Net deferred tax asset $ 31,366 $ 29,315 2,051 ================================================================================================== Tax effect of unrealized gains 2,073 ------------------- Change in net deferred income tax $ 4,124 =================== December 31 2006 2005 Change -------------------------------------------------------------------------------------------------------------------- Gross deferred tax assets $ 56,984 $ 55,508 $ 1,476 Gross deferred tax liabilities 27,669 24,266 3,403 -------------------------------------------------------------------------------------------------------------------- Net deferred tax asset $ 29,315 $ 31,242 (1,927) ================================================================================================== Tax effect of unrealized gains 4,041 ------------------- Change in net deferred income tax $ 2,114 =================== December 31 2005 2004 Change -------------------------------------------------------------------------------------------------------------------- Gross deferred tax assets $ 55,508 $ 56,315 $ (807) Gross deferred tax liabilities 24,266 35,523 (11,257) -------------------------------------------------------------------------------------------------------------------- Net deferred tax asset $ 31,242 $ 20,792 10,450 ================================================================================================== Tax effect of unrealized gains (11,070) ------------------- Change in net deferred income tax $ (620) ===================
The Company files income tax returns with the Internal Revenue Service and various state tax jurisdictions. From time to time, the Company is subject to routine audits by those agencies and those audits may result in proposed adjustments. The Company has considered the alternative interpretations that may be assumed by the various taxing agencies and believes its positions taken regarding its filings are valid. Based upon review of the Company's tax contingencies, the reserve held for tax related contingencies was decreased by $647 in 2007. 5. Information Concerning Parent, Subsidiaries and Affiliates Effective June 30, 2007, the Company sold 100% of the outstanding common shares of AIA to the Company's parent, AHC, for $660 in cash resulting in a realized capital gain of $559. AIA subsequently changed its name to SIA. SIA is an advisor providing investment management services to all the insurance companies within UNIFI. Effective July 1, 2007, Summit Investment Partners LLC, an advisor that provided investment management services, was liquidated into its parent company, UCL. UCL contributed its unaffiliated investment service contracts to SIP. 23 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 5. Information Concerning Parent, Subsidiaries and Affiliates, (continued) On November 7, 2007, LifeRe Corporation was dissolved into the Company whereby the Company is currently a 100% owner of LifeRe Insurance Company. Upon dissolution, the Company received consideration in the amount of $17 resulting in no realized capital gain or loss. Included in the book/adjusted carrying value of LifeRe Corporation was $8,813 of goodwill, which was released upon the dissolution. With the AMAL dissolution into the Company as of September 30, 2006, included in the book/adjusted carry value of AMAL was $21,711 of goodwill, which was released at that time. The Company received assets totaling $2,766 and liabilities of $40,856 (including $29,825 as disclosed in Note 6 - Borrowed Money and $10,000 related to a note with the Company, which was subsequently retired upon the dissolution). On December 29, 2006, TAG was dissolved into the Company. Upon dissolution the Company received consideration in the amount of $807 resulting in no realized capital gain or loss. On January 30, 2003, the Company purchased 520,562 shares of common stock from AFSB valued on that date for $10,000. During 2005, the Company made additional contributions of $1,479 as paid in capital to AFSB. On December 20, 1999, the Company purchased $25,000 of redeemable preferred stock from Acacia Life. The stock, which pays dividends in an amount per annum equal to 6.66% in 2007, 2006 and 2005, and is non-voting, provides for redemption beginning in 2005 with final redemption on or by January 1, 2015. On June 1, 2007 and 2006, the Company redeemed 100,000 shares at $2,500. In 2003, the Company received $2,452 in bonds and related accrued interest as of November 30, 2003 in payment of a $2,500 dividend declared by Pathmark Administrators, Inc. The remaining $48 was paid in cash. The bonds were transferred at fair value with the Company recording a deferred gain of $120 to be amortized over the life of the bonds. On December 30, 2005, Veritas Corp. was dissolved into the Company. Upon dissolution, the Company received consideration in the amount of $159 resulting in a realized capital gain of $23. Effective April 1, 2002, AVLIC (now merged with the Company) and Acacia National Life Insurance Company (merged with Acacia as of January 1, 2004) entered into agreements under which the Company accepted, either on a coinsurance (the fixed account business) or on a modified coinsurance basis (the separate account business), the rights, liabilities and obligations of the variable life and annuity products of Acacia. In addition, the Company entered into an assumptive reinsurance agreement to assume these ceded policies upon regulatory or policyowner approval as required. In connection with these agreements, assets and liabilities were transferred from Acacia to the Company at fair value, which resulted in recording goodwill of $10,794, which is being amortized over 10 years. Amortization of goodwill was $1,080, $1,079 and $1,080 for the years ended December 31, 2007, 2006 and 2005, respectively. The Company's variable life and annuity products are distributed through affiliated broker dealers. Policies placed by these affiliates generated commission expense of $20,449, $21,528 and $23,793 for the years ended December 31, 2007, 2006 and 2005, respectively. 24 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 5. Information Concerning Parent, Subsidiaries and Affiliates, (continued) The Company has a variable insurance trust (VIT). The Company offers, in conjunction with FALIC, the VIT as an investment option to policyowners through their separate accounts. The Company had separate account investments of $637,900 and $604,966 in the VIT as of December 31, 2007 and 2006, respectively. FALIC had separate account investments of $238 and $259 in the VIT as of December 31, 2007 and 2006, respectively. Affiliates of the Company provide investment advisory and administrative services to the VIT on a fee basis. The Company offers mutual funds of Calvert Variable Series, Inc. (CVS) and Summit Mutual Funds, Inc. (SMF), affiliates, to policyowners through the separate accounts. Separate account investments in the mutual funds offered through CVS and SMF were $312,611 and $253,367 as of December 31, 2007 and 2006, respectively. The Company had short-term investments of $116 and $491 in mutual funds of an affiliate at December 31, 2007 and 2006, respectively, included in short-term investments. The Company reported the following amounts due from (to) the below listed affiliates. The terms of the intercompany agreements require that these amounts be settled within 30 days.
Receivable (Payable) -------------------------------------------------------------------------------------------------------------------- Ameritas Holding Company $ (425) Union Central Life Insurance Company (1,392) LifeRe Insurance Company 287 First Ameritas Life Insurance Corp. of New York 487 Pathmark Administrators Inc. (209) Ameritas Investment Corp. 379 Summit Investment Advisors, Inc. (11) Acacia Life Insurance Company (142) Acacia Federal Savings Bank 4 Acacia Financial Corporation 2 Calvert Group, LTD 146 Summit Investment Partners, Inc. 28 --------------------------------------------------------------------------------------------------------------------
Aviva USA, through assumption reinsurance, has assumed approximately 99% of the Company's equity indexed annuity business as of December 31, 2007 and 2006, reducing the respective ceded allowance to $82 and $81 which is included as a reduction of policy reserves. As a condition to assumption reinsurance, certain states have required the Company remain contingently liable in the event the assuming reinsurer is unable to fulfill its obligations. The Company is contingently liable for $1,290 and $1,806 of additional reserves as of December 31, 2007 and 2006, respectively. The Company provides technical, financial, legal and marketing support to its affiliates under various administrative service and cost-sharing agreements. Included in miscellaneous income is $271, $827 and $1,147 received under administrative service agreements for the years ended December 31, 2007, 2006 and 2005, respectively. Reimbursements of $14,006, $7,006 and $3,777 for the years ended December 31, 2007, 2006 and 2005 related to cost-sharing agreements with affiliates have been recorded as a reduction in general insurance expenses. In addition, the Company receives investment 25 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 5. Information Concerning Parent, Subsidiaries and Affiliates, (continued) advisory services from an affiliate. Costs related to this agreement, included as an investment expense and reducing net investment income, totaled $2,570, $2,041 and $2,001 for the years ended December 31, 2007, 2006 and 2005, respectively. 6. Borrowed Money Effective September 1, 2006 the Company has an outstanding liability for borrowed money in the amount of $29,825 payable to two affiliates, Acacia Life and AFCO. These notes were issued by a 100% owned subsidiary, AMAL, during the repurchase of its outstanding common stock from Acacia Life and AFCO. These notes are payable in twelve equal quarterly installments beginning on December 1, 2006 with the final installment due on September 1, 2009. The notes carry a fixed interest rate of 5.56% based on the Bloomberg Fair Value 3-year Single "A" U.S. Insurer Index plus 0.020%. The Company may not prepay the notes in whole or in part at any time prior to the maturity date. There are no collateral requirements associated with these notes. The Company has a $15,000 unsecured line of credit available at December 31, 2007. No balance was outstanding at any time during 2007 or 2006. The line of credit expires May 31, 2008. 7. Benefit Plans Defined Benefit Plan The Company participates in a non-contributory defined benefit plan (the Plan or the Pension Plan) sponsored by AHC. The Plan was formerly sponsored by the Company as a non-contributory defined benefit pension plan (Ameritas Plan) covering substantially all employees of the Company. During 2000, the Ameritas Plan was merged with the Acacia Retirement Plan (Acacia Plan), sponsored by Acacia Life. Upon the merger of the Ameritas and Acacia Plans, accumulated benefits of the Plan were frozen, and AHC became the Plan sponsor. Accordingly, the Company's prepaid benefit cost was transferred to AHC, and the Company holds a pre-funded pension expense receivable, due from AHC. During 2007, 2006 and 2005, the Company paid $5,000, $5,000 and $15,650, respectively to AHC which in turn contributed the money to the Plan. The balance of the prefunded pension expense receivable was $13,982 and $12,085 at December 31, 2007 and 2006, respectively, and is a non-admitted asset. While their pension plans were merged, the separate benefit formulas of the Ameritas Plan and Acacia Plan still exist within the Plan and are used to determine the amount of Plan expense to allocate from AHC to the participating companies. The Company incurred pension expense of $3,103, $3,447 and $14,041 in 2007, 2006 and 2005, respectively, for its participation in the Plan. The Plan's assets include investments in a deposit administration contract with the Company and investments in two pension separate accounts of the Company, Ameritas Retirement Equity Account and Ameritas Separate Account D. The carrying value of the assets of the Plan invested in the Company and its separate accounts were approximately $102,960 and $98,000 at December 31, 2007 and 2006, respectively. A portion of the separate accounts' assets are invested in mutual funds which are advised by an affiliate of Acacia Life. 26 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 7. Benefit Plans, (continued) Defined Contribution Plans The Company's employees and agents participate in defined contribution plans sponsored by AHC that cover substantially all full-time employees and agents. Company matching contributions under the defined contribution plan range from 0.5% to 3% of the participant's compensation. In addition, for eligible employees who are not Pension Plan participants, the Company makes a contribution of 6% of the participant's compensation for those employees hired prior to January 1, 2006 and 5% of the participant's compensation for those hired after January 1, 2006. Contributions by the Company to the employee and agents defined contribution plans were $4,230, $3,410 and $3,383 in 2007, 2006 and 2005, respectively. The defined contribution plans' assets also include investments in a deposit administration contract with the Company and investments in two pension separate accounts of the Company, the Ameritas Retirement Equity Account and Ameritas Separate Account D. The carrying value of the assets of the Plan invested in the Company and its separate accounts were approximately $229,191 and $207,500 at December 31, 2007 and 2006, respectively. A portion of the separate accounts' assets are invested in mutual funds which are advised by an affiliate of Acacia Life. Postretirement Benefit Plans The Company provides certain health care benefits to retired employees who were hired prior to January 1, 2005. For associates eligible to retire at January 1, 2000, these benefits are a specified percentage of premium until age 65 and a flat dollar amount thereafter. For associates eligible for retirement after January 1, 2000, benefits will be provided until the associate becomes eligible for Medicare. Employees become eligible for these benefits upon the attainment of age 55, 15 years of service and participation in the Company's medical plan for the immediately preceding five years. In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) became law. The Act introduces a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The postretirement benefit obligation and net periodic postretirement benefit cost in the financial statements and accompanying notes do reflect the effects of the Act on the Plan. In May 2004, additional guidance became available to specific companies who elected deferral and were able to determine if their plans are actuarially equivalent to recognize the impact of the Act no later than the first annual reporting period beginning after June 15, 2004. In January 2005, the Center for Medicare and Medicaid Services issued the final regulations for the Act including the determination of actuarial equivalence. The Company has determined that its plans are actuarially equivalent. The Company qualified for and elected to receive the 28% federal subsidy on allowable gross prescription drug costs of qualified retirees. The Company received subsidy payments of $77 and $47 in 2007 and 2006, respectively. The Company did not receive any subsidy payments in 2005. The measures of benefit obligations and net periodic pension cost reflect effects of the Act. 27 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 7. Benefit Plans, (continued) Postretirement Benefit Plans, (continued) The following tables provide a reconciliation of the changes in the postretirement benefit obligations and fair value of assets for the years ended December 31, 2007, 2006 and 2005 and a statement of the funded status as of the December 31 measurement date of all years:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Reconciliation in benefit obligation Benefit obligation at beginning of year $ 6,503 $ 5,558 $ 6,693 Transfer of obligation from dissolution of AMAL - 106 - Service cost 71 69 57 Interest cost 368 331 315 Actuarial (gain) or loss (140) 1,164 (1,279) Special termination benefits - - 81 Federal subsidy receipts 77 47 - Benefits paid (735) (772) (309) -------------------------------------------------------------------------------------------------------------------- Benefit obligation at end of year $ 6,144 $ 6,503 $ 5,558 -------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- Reconciliation of fair value of plan assets Fair value of plan assets at beginning of year $ 2,795 $ 2,754 $ 2,557 Transfer of plan assets from dissolution of AMAL - 156 - Actual return on plan assets 139 147 131 Employer contributions 496 401 303 Benefits paid (584) (663) (237) -------------------------------------------------------------------------------------------------------------------- Fair value of plan assets at end of year $ 2,846 $ 2,795 $ 2,754 -------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- Funded status Funded status at end of year $ (3,298) $ (3,708) $ (2,804) Unrecognized net actuarial loss 2,658 3,009 1,995 Unrecognized prior service cost (1) (1) (1) -------------------------------------------------------------------------------------------------------------------- Accrued benefit cost $ (641) $ (700) $ (810) --------------------------------------------------------------------------------------------------------------------
28 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 7. Benefit Plans, (continued) Postretirement Benefit Plans, (continued) The amount of the postretirement obligation for nonvested employees was $901 and $849 at December 31, 2007 and 2006, respectively. Periodic postretirement medical expense included the following components:
Years Ended December 31 -------------------------------------------------------------------------------------------------------------------- 2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Service cost $ 71 $ 69 $ 57 Interest cost 368 331 315 Expected return on plan assets (148) (156) (139) Early retirement one-time cost - - 81 Amortization of net loss 219 175 176 -------------------------------------------------------------------------------------------------------------------- Net periodic benefit cost $ 510 $ 419 $ 490 --------------------------------------------------------------------------------------------------------------------
Plan assets are invested in 100% fixed income investments. The expected rate of return on these investments is 6%. The Company expects to contribute $640 to its postretirement benefits plans and 401(h) account in 2008. The following net benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
Expected Net Fiscal Year Benefit Payments -------------------------------------------------------------------------------------------------------------------- 2008 $ 774 2009 788 2010 800 2011 787 2012 746 2013 - 2017 3,523 --------------------------------------------------------------------------------------------------------------------
The assumptions used in the measurement of the postretirement benefit obligations are:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Weighted-average assumptions as of December 31 Discount rate 6.25% 6.00% 5.75% Expected long term rate of return on plan assets 6.00% 6.00% 6.00% --------------------------------------------------------------------------------------------------------------------
29 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 7. Benefit Plans, (continued) The assumptions used to determine net periodic post retirement benefit costs are:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Weighted-average assumptions as of December 31 Discount rate 6.00% 5.75% 6.00% Expected long term rate of return on plan assets 6.00% 6.00% 6.00% -------------------------------------------------------------------------------------------------------------------- The assumed health care cost trend rates as of December 31 were: 2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Healthcare Cost Trend Rate Assumed for Next Year 8.0% 9.0% 7.0% Rate to which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate) 5.0% 5.0% 5.0% Year the Rate Reaches the Ultimate Trend Rate 2011 2011 2008 --------------------------------------------------------------------------------------------------------------------
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A 1% change in health care trend rates would have the following effects:
-------------------------------------------------------------------------------------------------------------------- 1% increase 1% decrease -------------------------------------------------------------------------------------------------------------------- Effect on total of service and interest cost components of net periodic postretirement health care benefit cost $ 50 $ (45) Effect on the health care component of the accumulated postretirement benefit obligation $ 568 $ (519) --------------------------------------------------------------------------------------------------------------------
Other Plans Separate supplemental retirement agreements totaled $12,584 and $11,696 included in other liabilities at December 31, 2007 and 2006, respectively, cover certain active and retired employees. These plans are unfunded. 8. Dividend Restrictions and Surplus The Company is subject to regulation by the Department, which restricts the advancement of funds to parent and affiliated companies as well as the amount of dividends that may be paid without prior approval. Dividend payments by the Company cannot exceed the greater of 10% of surplus as of the preceding year-end or the statutory net gain from operations for the previous calendar year, without prior approval from the Department. Based on this limitation, the Company would be able to pay $87,812 in dividends in 2008 without prior approval. No dividends to parent or affiliated companies were paid in 2007, 2006 or 2005. 30 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 8. Dividend Restrictions and Surplus, (continued) Unassigned surplus represents the undistributed and unappropriated amount of surplus at the statement date. The cumulative effect related to the portion of unassigned surplus represented or reduced by each of the following items as of December 31:
2007 2006 2005 ------------------------------------------------------------------------------------------------------------------- Unrealized gains on investments, net of taxes of $20,075, $18,002 and $13,961 $ 45,221 $ 57,355 $ 60,568 Nonadmitted asset values (54,618) (47,807) (46,651) Asset valuation reserves (68,603) (62,456) (69,931) Liability for reinsurance in unauthorized companies, net of tax (26) - (3) -------------------------------------------------------------------------------------------------------------------
9. Commitments and Contingencies As a condition of doing business, all states and jurisdictions have adopted laws requiring membership in life and health insurance guaranty funds. Member companies are subject to assessments each year based on life, health or annuity premiums collected in the state. In some states these assessments may be applied against premium taxes. The Company estimated its cost related to past insolvencies and has provided a reserve included in other liabilities of $526 and $520 as of December 31, 2007 and 2006, respectively, and estimated recoveries from premium taxes included in data processing and other admitted assets of $454 and $427 as of December 31, 2007 and 2006, respectively. From time to time the Company is involved in pending and threatened litigation in the normal course of business in which claims for monetary damages are asserted. In the opinion of management, the ultimate liability, if any, arising from such pending or threatened litigation is not expected to have a material effect on the results of operations, liquidity or financial position of the Company. The Company had no claims (per claim or claimant) where amounts were paid to settle claims related to extra contractual obligations or bad faith claims resulting from lawsuits during 2007, 2006 or 2005. Securities commitments of $28,275 and $20,990 and mortgage loan and real estate commitments of $23,346 and $26,375 were outstanding for investments to be purchased in subsequent years as of December 31, 2007 and 2006, respectively. Low income housing tax credit property investment commitments were $442 and $139 as of December 31, 2007 and 2006, respectively. These commitments have been made in the normal course of business and are not reflected in the accompanying financial statements. The Company's exposure to credit loss is represented by the contractual notional amount of these commitments. The Company uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance sheet instruments. Companies operating in the insurance and financial services markets have come under the scrutiny of regulators with respect to market conduct and compliance issues. Under certain circumstances, companies have been held responsible for providing incomplete or misleading sales materials and for replacing existing policies with policies that were less advantageous to the policyowner. The Company monitors its sales materials and enforces compliance procedures to mitigate any exposure to potential litigation. The Company and its life insurance subsidiaries are members of the Insurance Marketplace Standards Association, an organization which advocates ethical market conduct. 31 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 9. Commitments and Contingencies, (continued) The Company engages in securities lending transactions to generate additional income. The program is administered by an authorized financial institution and requires the borrower to provide collateral, primarily consisting of cash and government securities, on a daily basis, in amounts equal to or exceeding 102% of the fair value of the loaned securities. The Company maintains effective control over all loaned securities and, therefore, continues to report such securities as bonds and common stocks in the statutory statements of admitted assets, liabilities, and surplus. The carrying value of bonds loaned as of December 31, 2007 and 2006 were $25,744 and $33,449 respectively. The carrying value of common stocks loaned as of December 31, 2007 and 2006 were $28,077 and $5,414, respectively. The fair value of cash collateral held was $56,998 and $39,958 as of December 31, 2007 and 2006, respectively. There was no non-cash collateral on deposit at December 31, 2007 and 2006. In 2007, assets are held by the Federal Home Loan Bank (FHLB) of Topeka, as custodian, to use as collateral to support the issuance of funding agreements. The Company maintains control over these assets and the estimated fair value at December 31, 2007 is $20,386. As of December 31, 2007, the Company had issued $12,000 of funding agreements with the FHLB of Topeka. 10. Gain or Loss to the Reporting Entity from Uninsured Accident and Health Plans ASO Plans The gain from operations from administrative services only (ASO) uninsured plans is as follows for the year ended December 31:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Net reimbursement for administrative expenses (including $ 3,205 $ 3,793 $ 3,602 administrative fees) in excess of actual expenses Total net other income (expense) (including interest paid to or received from ASO uninsured plans) - - - -------------------------------------------------------------------------------------------------------------------- Net gain from operations $ 3,205 $ 3,793 $ 3,602 -------------------------------------------------------------------------------------------------------------------- Total claim payment volume $ 82,313 $ 65,044 $ 55,611 -------------------------------------------------------------------------------------------------------------------- ASC Plans The gain from operations from administrative services contract (ASC) uninsured plans is as follows for the year ended December 31: 2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Gross reimbursement for medical cost incurred $ 543 $ 430 $ 380 Other income or expenses (including interest paid to or received from plans) 35 27 24 Gross expenses incurred (claims and administrative) 571 452 399 -------------------------------------------------------------------------------------------------------------------- Net gain from operations $ 7 $ 5 $ 5 ====================================================================================================================
32 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 11. Other Items Troubled Debt Restructuring The Company has several long-term bond holdings with restructured terms. The carrying value at December 31, 2007 and 2006, has been written down to $0, whereby the Company recorded no realized capital losses. The Company incurred no amount of commitments to lend additional funds to debtors owing receivables whose terms have been modified in troubled debt restructuring. The Company's income recognition policy for interest income on an impaired loan is the cash basis/cost recovery method. Securities on Deposit Securities with a book/adjusted carrying value of $7,684 and $10,466 at December 31, 2007 and 2006, respectively, were on deposit with government agencies as required by law in various jurisdictions in which the Company conducts business. Uncollectibility of Assets The Company had admitted assets of $953 and $995 at December 31, 2007 and 2006, respectively, in accounts receivable for uninsured plans and included with data processing and other admitted assets on the statutory statements of admitted assets, liabilities and surplus. The Company routinely assesses the collectibility of these receivables. Based upon Company experience, less than 1% of the balance may become uncollectible and the potential loss is not material to the Company's financial condition. Participating Contracts Effective October 1, 1998 (the Effective Date) the Company formed a closed block (the Closed Block) of policies, under an arrangement approved by the Department, to provide for dividends on policies that were in force on the Effective Date and which were within the classes of individual policies for which the Company had a dividend scale in effect on the Effective Date. The Closed Block was designed to give reasonable assurance to owners of affected policies that the assets will be available to support such policies including maintaining dividend scales in effect at the Effective Date, if the experience underlying such scales continues. The assets, including revenue thereon, will accrue solely to the benefit of the owners of policies included in the block until the block is no longer in effect. 33 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 12. Reinsurance Amounts recoverable from reinsurers are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Management believes the recoverables are appropriately established. The Company conducts reinsurance business with FALIC, Acacia Life, Aviva USA, and other non-affiliated companies. Following is a summary of the transactions through reinsurance operations:
Years Ended December 31 -------------------------------------------- 2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Premium Income: Assumed (related party $80, $115 and $100 in 2007, 2006 and 2005) $ 56,885 $ 71,398 $ 77,951 Ceded (related party $2,125, $3,955 and $3,964 in 2007, 2006 and 2005) 29,231 27,904 26,931 Benefits To Policyowners: Assumed (related party $214, $0 and $0 in 2007, 2006 and 2005) 47,418 54,910 54,397 Ceded (related party $1,588, $2,694 and $907 in 2007, 2006 and 2005) 18,115 18,835 8,394 Policy Reserves: Assumed (related party $36 and $42 in 2007 and 2006) 402 1,523 NA Ceded (related party $1,061 and $1,582 in 2007 and 2006) 63,732 58,218 NA --------------------------------------------------------------------------------------------------------------------
The Company is not relieved of its primary liability in the event that a reinsurer is unable to meet the obligations ceded under a reinsurance agreement. 34 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 13. Changes in Unpaid Claims and Claim Adjustment Expenses The change in the liability for unpaid accident and health claims and claim adjustment expenses which is reported within reserves for unpaid claims is summarized as follows:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Balance at January 1 $ 31,820 $ 30,599 $ 28,215 Less reinsurance recoveries (8,776) (9,929) (9,835) -------------------------------------------------------------------------------------------------------------------- Net balance at January 1 23,044 20,670 18,380 -------------------------------------------------------------------------------------------------------------------- Incurred related to: Current year 307,896 280,572 252,232 Prior year (4,871) (3,739) (4,634) -------------------------------------------------------------------------------------------------------------------- Total incurred 303,025 276,833 247,598 -------------------------------------------------------------------------------------------------------------------- Paid related to: Current year 284,128 257,528 231,562 Prior year 18,172 16,931 13,746 -------------------------------------------------------------------------------------------------------------------- Total paid 302,300 274,459 245,308 -------------------------------------------------------------------------------------------------------------------- Net balance at December 31 23,769 23,044 20,670 Plus reinsurance recoveries 6,487 8,776 9,929 -------------------------------------------------------------------------------------------------------------------- Total reserve for unpaid claims $ 30,256 $ 31,820 $ 30,599 ====================================================================================================================
As a result of favorable settlement of prior years' estimated claims, the provision for claims and claim adjustment expenses decreased by $4,871, $3,739 and $4,634 for the years ended December 31, 2007, 2006 and 2005, respectively. The Company paid assumed reinsurance claims of $49,224, $55,422 and $54,530, and incurred assumed reinsurance claims of $46,929, $54,919 and $54,405 for the years ended December 31, 2007, 2006 and 2005, respectively. The Company paid ceded reinsurance claims of $549, $598 and $661, and incurred ceded reinsurance claims of $537, $601 and $652 for the years ended December 31, 2007, 2006 and 2005, respectively. 14. Policy Reserves The Company waives deduction of deferred fractional premiums due upon death of the insured and returns any portion of the final premium beyond the date of death on traditional business. Surrender values are not provided in excess of legally computed reserves. Additional premiums are charged for policies issued on substandard lives according to underwriting classification. Reserves for substandard policies are included in the policy reserve. 35 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 14. Policy Reserves, (continued) As of December 31, 2007 and 2006, respectively, the Company had $1,380,130 and $1,630,085 of insurance in force for which the gross premiums are less than the net premiums according to the standard valuation set by the Department. Reserves to cover the above insurance totaled $10,679 and $10,462 at December 31, 2007 and 2006, respectively. 15. Analysis of Annuity Reserves and Deposit-type Funds by Withdrawal Characteristics Withdrawal characteristics of annuity reserves and deposit-type funds at December 31 are as follows:
2007 ------------------------------------ Amount % of Total -------------------------------------------------------------------------------------------------------------------- Subject to discretionary withdrawal: With fair value adjustment $ 509,088 13.2% At book value less current surrender charge of 5% or more 517,349 13.4% At fair value 976,074 25.3% -------------------------------------------------------------------------------------------------------------------- Total with adjustment or at fair value 2,002,511 51.9% At book value without adjustment (minimal or no charge) 1,784,313 46.3% Not subject to discretionary withdrawal 65,034 1.7% -------------------------------------------------------------------------------------------------------------------- Total gross $ 3,851,858 100.0% Reinsurance ceded (165) 0.0% -------------------------------------------------------------------------------------------------------------------- Total Net $ 3,851,693 100.0% ==================================================================================================================== 2006 ------------------------------------ Amount % of Total -------------------------------------------------------------------------------------------------------------------- Subject to discretionary withdrawal: With fair value adjustment $ 437,643 12.3% At book value less current surrender charge of 5% or more 564,490 15.9% At fair value 792,670 22.4% -------------------------------------------------------------------------------------------------------------------- Total with adjustment or at fair value 1,794,803 50.6% At book value without adjustment (minimal or no charge) 1,683,692 47.4% Not subject to discretionary withdrawal 69,861 2.0% -------------------------------------------------------------------------------------------------------------------- Total gross $ 3,548,356 100.0% Reinsurance ceded (23) 0.0% -------------------------------------------------------------------------------------------------------------------- Total Net $ 3,548,333 100.0% ====================================================================================================================
36 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 15. Analysis of Annuity Reserves and Deposit-type Funds by Withdrawal Characteristics, (continued) The following information is obtained from the applicable Exhibit in the Company's December 31 Annual Statement and related Separate Accounts Annual Statement, both of which are filed with the Department, and is provided to reconcile annuity reserves and deposit-type funds to amounts reported in the statutory statements of admitted assets, liabilities and surplus as of December 31:
2007 2006 -------------------------------------------------------------------------------------------------------------------- Life and Accident and Health Annual Statement: Exhibit 5, Annuities Section, Total (net) $ 869,434 $ 856,491 Exhibit 5, Supplementary Contracts with Life Contingencies Section, Total (net) 10,735 10,800 Exhibit 7, Deposit-Type Contracts, Line 14, Column 1 109,239 91,531 -------------------------------------------------------------------------------------------------------------------- 989,408 958,822 Separate Accounts Annual Statement: Exhibit 3, Line 0299999, Column 2 2,862,285 1,796,841 Page 3, Line 2, Column 3 - 792,670 -------------------------------------------------------------------------------------------------------------------- Total $ 3,851,693 $ 3,548,333 ====================================================================================================================
16. Premium and Annuity Considerations Deferred and Uncollected Deferred and uncollected life insurance premiums and annuity considerations as of December 31 are as follows:
2007 2006 2005 -------------------------------------------------------------------------------- Net of Net of Net of Type Gross Loading Gross Loading Gross Loading -------------------------------------------------------------------------------------------------------------------- Ordinary new business $ 23 $ 20 $ 71 $ 60 $ 345 $ 195 Ordinary renewal 4,838 4,430 5,221 4,785 5,011 8,213 -------------------------------------------------------------------------------------------------------------------- Totals $ 4,861 $ 4,450 $ 5,292 $ 4,845 $ 5,356 $ 8,408 ====================================================================================================================
37 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 17. Separate Accounts Information regarding the nonguaranteed separate accounts of the Company is as follows:
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- For the years ended December 31: Premiums, considerations or deposits $ 480,315 $ 605,460 $ 613,898 -------------------------------------------------------------------------------------------------------------------- At December 31: Reserves by valuation basis Fair value $ 3,604,435 $ 3,285,850 ==================================================================================================== Reserves by withdrawal characteristic: Subject to discretionary withdrawal At book value without fair value adjustment and with current surrender charge of 5% or more $ 418,760 $ 696,736 At fair value 976,074 792,670 At book value without adjustment (minimal or no charge) 2,208,875 1,796,444 ---------------------------------------------------------------------------------------------------- Sub-total $ 3,603,709 $ 3,285,850 Not subject to discretionary withdrawal 726 - ---------------------------------------------------------------------------------------------------- Total $ 3,604,435 $ 3,285,850 ==================================================================================================== -------------------------------------------------------------------------------------------------------------------- Reconciliation of net transfers to (from) separate accounts at December 31: Transfers as reported in the statutory statement of operations of the separate accounts annual statement: Transfers to separate accounts $ 480,315 $ 458,918 $ 265,126 Transfers from separate accounts (447,861) (324,135) (335,397) -------------------------------------------------------------------------------------------------------------------- Net transfers to (from) separate accounts 32,454 134,783 (70,271) -------------------------------------------------------------------------------------------------------------------- Net transfers as reported in the statutory statements of $ 32,454 $ 134,783 $ (70,271) operations of the Company Correction of error (see Note 20) - 45,953 53,227 -------------------------------------------------------------------------------------------------------------------- Net transfers $ 32,454 $ 180,736 $ (17,044) ==================================================================================================================== 18. EDP Equipment and Software Electronic data processing ("EDP") equipment and operating and nonoperating software consisted of the following at December 31: 2007 2006 -------------------------------------------------------------------------------------------------------------------- Electronic data processing equipment $ 12,289 $ 12,156 Operating system software 3,868 3,198 Nonoperating system software 18,468 13,673 -------------------------------------------------------------------------------------------------------------------- Subtotal 34,625 29,027 Accumulated depreciation (26,731) (25,605) -------------------------------------------------------------------------------------------------------------------- Balance, net $ 7,894 $ 3,422 ====================================================================================================================
38 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 18. EDP Equipment and Software, (continued) EDP equipment and operating software included in data processing and other admitted assets are $3,167 and $2,419 at December 31, 2007 and 2006, respectively. Depreciation expense related to EDP equipment and operating and nonoperating software totaled $2,948, $2,956 and $3,413 for the year ended December 31, 2007, 2006 and 2005, respectively. 19. Reconciliation of Statutory Net Income and Surplus to GAAP Net Income and Equity As described in Note 1, the Company has prepared these financial statements in conformity with statutory accounting practices prescribed or permitted by the Department. These practices differ from accounting principles generally accepted in the United States of America (GAAP). The following tables reconcile statutory net income to GAAP net income and statutory surplus to GAAP equity.
2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Statutory net income as reported $ 77,665 $ 70,645 $ 68,091 Insurance reserves 3,751 2,777 4,631 Deferred policy acquisition costs (4,196) 15,657 241 Deferred income taxes and other tax reclassifications 6 (5,287) 19,140 Statutory investment reserves (463) (437) 1,043 Goodwill amortization 1,080 1,079 1,080 Earnings of subsidiaries 4,887 2,561 (5,353) Other 5,231 456 (805) -------------------------------------------------------------------------------------------------------------------- GAAP net income $ 87,961 $ 87,451 $ 88,068 ==================================================================================================================== 2007 2006 2005 -------------------------------------------------------------------------------------------------------------------- Statutory surplus as reported $ 878,120 $ 814,236 $ 757,631 Insurance reserves (107,633) (121,757) (119,484) Deferred policy acquisition costs 262,741 272,602 254,014 Deferred income taxes (58,652) (62,809) (58,679) Valuation of investments (5,545) (13,420) (2,580) Statutory investment reserves 70,926 65,242 73,155 Goodwill (4,587) (5,667) (6,746) Subsidiary equity 13,474 974 (30,076) Statutory non-admitted assets 54,618 47,807 48,321 Post retirement and pension benefit obligations (21,490) - - Other (3,185) 5,736 (518) -------------------------------------------------------------------------------------------------------------------- GAAP equity $ 1,078,787 $ 1,002,944 $ 915,038 ====================================================================================================================
20. Correction of Errors Subsequent to the issuance of the Company's 2006 statutory financial statements, the Company's management determined that there was an error in the calculation of reinsurance assumed reserves and reinsurance ceded premium income on term life products with one reinsurer. As a result, unassigned surplus and net income as reported in the Company's statutory financial statements and its statutory filing with the Department at December 31, 2006 were overstated by $1,292, net of taxes of $696. As the amount is not material to the prior year financial statements, in accordance with SSAP No. 3, "Accounting Changes and Corrections of Errors", it is recorded in unassigned surplus during the year ended December 31, 2007. 39 AMERITAS LIFE INSURANCE CORP. NOTES TO THE STATUTORY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 (in thousands) -------------------------------------------------------------------------------- 20. Correction of Errors, (continued) In addition, subsequent to the issuance of the Company's 2006 statutory financial statements, the Company's management determined that certain group annuity products should have been accounted for as life contracts rather than deposit-type contracts. As a result, the statutory statement of admitted assets, liabilities, and surplus at December 31, 2006 has been restated to classify $436,866 as policy reserves rather than deposit-type funds. The statutory statements of operations for the years ended December 31, 2006 and 2005 have been restated to reflect premium income, benefits to policyowners, change in policy reserves and net premiums transferred to separate accounts on a gross basis. A summary of the impact of the restatement on the statutory statements of operations for the years ended December 31, 2006 and 2005 is presented in the following table:
------------------------------------------------------------------------------------------------------------------- Financial Financial Statement, Prior Correction Statement, as to Restatement of Error Restated ------------------------------------------------------------------------------------------------------------------- For the year ended December 31, 2006 Income Premium income $ 953,293 $ 171,264 $ 1,124,557 Total income 1,136,884 171,264 1,308,148 ------------------------------------------------------------------------------------------------------------------- Expenses Benefits to policyowners 793,688 108,400 902,088 Change in policy reserves (75,217) 16,911 (58,306) Net premiums transferred to (from) separate accounts 134,783 45,953 180,736 Total expenses 1,050,735 171,264 1,221,999 ------------------------------------------------------------------------------------------------------------------- Net income $ 70,645 $ - $ 70,645 ------------------------------------------------------------------------------------------------------------------- For the year ended December 31, 2005 Income Premium income $ 744,464 $ 189,694 $ 934,158 Total income 936,646 189,694 1,126,340 ------------------------------------------------------------------------------------------------------------------- Expenses Benefits to policyowners 756,086 103,269 859,355 Change in policy reserves (43,869) 33,198 (10,671) Net premiums transferred to (from) separate accounts (70,271) 53,227 (17,044) Total expenses 776,156 189,694 1,038,897 ------------------------------------------------------------------------------------------------------------------- Net income $ 68,091 $ - $ 68,091 -------------------------------------------------------------------------------------------------------------------
There was no impact to total assets, total liabilities, surplus or net income in 2006 or 2005. 40 PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits a) Financial Statements: The financial statements of the subaccounts of Ameritas Life Insurance Corp. Separate Account LLVA and Ameritas Life Insurance Corp. are filed in Part B. They include: Subaccounts of Ameritas Life Insurance Corp. Separate Account LLVA: Report of Deloitte & Touche LLP, independent registered public accounting firm. Statements of Net Assets as of December 31, 2007. Statements of Operations for the period ended December 31, 2007. Statements of Changes in Net Assets for the periods ended December 31, 2007 and 2006. Notes to Financial Statements for the periods ended December 31, 2007 and 2006. Ameritas Life Insurance Corp.: Report of Deloitte & Touche LLP, independent auditors. Statutory Statements of Admitted Assets, Liabilities, and Surplus as of December 31, 2007 and 2006 Statutory Statements of Operations for the years ended December 31, 2007, 2006 and 2005. Statutory Statements of Changes in Surplus for the years ended December 31, 2007, 2006 and 2005. Statutory Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005. Notes to the Statutory Financial Statements for the years ended December 31, 2007, 2006 and 2005. All schedules of Ameritas Life Insurance Corp. for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are inapplicable or have been disclosed in the Notes to the Statutory Financial Statements and therefore have been omitted. There are no financial statements included in Part A or Part C. Item 24. Financial Statements and Exhibits b) Exhibits Exhibit Number Description of Exhibit (1) Resolution of Board of Directors of Ameritas Life Insurance Corp. Establishing Ameritas Life Insurance Corp. Separate Account LLVA. (1) (2) Custody Agreements. Not applicable. (3) (a) Principal Underwriting Agreement. (2) (3) (b) Form of Selling Agreement. (2) (4) Form of Variable Annuity Contract. (3) (5) Form of Application for Variable Annuity Contract. (4) (6) (a) Certificate of Incorporation of Ameritas Life Insurance Corp.(1) (6) (b) Bylaws of Ameritas Life Insurance Corp. (5) (7) Reinsurance Agreements. Not Applicable. (8) (a) Form of Participation Agreement - ProFunds. (4) (9) Opinion and consent of Robert G. Lange. (10) Consents of Independent Auditors and Independent Registered Public Accounting Firm. (11) Omitted Financial Statements. Not Applicable (12) Initial capital Agreements. Not applicable. (13) Powers of Attorney. (6) Footnotes: 1. Incorporated by reference to the initial registration statement for Ameritas Life Insurance Corp. Separate Account LLVA (File No. 333-05529), filed on June 7, 1996. 2. Incorporated by reference to the Pre-Effective Amendment No. 1 for Ameritas Life Insurance Corp. Separate Account LLVA (File No. 333-05529), filed on October 3, 1996. 3. Incorporated by reference to the initial registration statement for Ameritas Life Insurance Corp. Separate Account LLVA (File No. 333-122109), filed on January 14, 2005. 4. Incorporated by reference to Pre-Effective Amendment No. 1 for Ameritas Life Insurance Corp. Separate Account LLVA (File No. 333-120972), filed on March 22, 2005. 5. Incorporated by reference to Post-Effective Amendment No. 4 for Ameritas Life Insurance Corp. Separate Account LLVA (File No. 333-05529), filed on February 26, 1999. 6. Incorporated by reference to Post-Effective Amendment No. 1 for Ameritas Life Insurance Corp. Separate Account LLVA (File No. 333-122109), filed February 28, 2006. Item 25. Directors and Officers of the Depositor
Name and Principal Business Address * Position and Offices with Depositor ------------------ ----------------------------------- Lawrence J. Arth Director, Chairman JoAnn M. Martin Director, President & Chief Executive Officer James P. Abel Director William W. Cook, Jr. Director Bert A. Getz Director James R. Knapp Director Tonn M. Ostergard Director Paul C. Schorr, III Director Winston J. Wade Director Robert C. Barth Senior Vice President, Controller, & Chief Accounting Officer Jan M. Connolly Senior Vice President & Corporate Secretary Nancy A. Dalessio Senior Vice President & Chief Information Officer Raymond M. Gilbertson Vice President, Corporate Compliance Arnold D. Henkel Senior Vice President, Individual Distribution Dale D. Johnson Senior Vice President and Corporate Actuary Robert P. Kocher Senior Vice President, Strategic Thinking Robert G. Lange Vice President, General Counsel & Assistant Secretary William W. Lester Senior Vice President, Investments & Treasurer Kevin W. O'Toole Senior Vice President Mitchell F. Politzer Senior Vice President, Ameritas Direct Robert-John H. Sands Senior Vice President Janet L. Schmidt Senior Vice President, Human Resources Steven J. Valerius Senior Vice President Kenneth L. VanCleave Senior Vice President, Group Division
* Principal business address: Ameritas Life Insurance Corp., 5900 "O" Street, Lincoln, Nebraska 68510. Item 26. Organizations under common control with the depositor include:
Name of Corporation (state where organized) Principal Business UNIFI Mutual Holding Company (NE)......................................mutual insurance holding company Ameritas Holding Company (NE).....................................stock insurance holding company Acacia Life Insurance Company (DC)............................life insurance company Acacia Financial Corporation (MD)........................holding company Acacia Federal Savings Bank (DE).....................federally chartered bank Acacia Service Corp. (VA)........................deposit solicitation Calvert Group, Ltd. (DE).............................holding company Calvert Asset Management Company (DE)............asset management services Calvert Shareholder Services, Inc. (DE)..........administrative services Calvert Administrative Services Company (DE).....administrative services Calvert Distributors, Inc. (DE)..................broker-dealer Ameritas Life Insurance Corp. (NE)............................life/health insurance company Ameritas Investment Corp. (NE)...........................securities broker dealer and investment adviser owned by Ameritas Life Insurance Corp. (80%) and Centralife Annuities Service, Inc. (20%) First Ameritas Life Insurance Corp. of New York (NY).....life insurance company Life Re Insurance Company (TX)...........................life insurance company Pathmark Administrators, Inc. (NE).......................third-party administrator of dental and eye care insurance plans The Union Central Life Insurance Company (OH).................life insurance company Union Central Mortgage Funding, Inc. (OH)................mortgage loan and servicing PBRA, Inc. (CA)..........................................holding company Price, Raffel & Browne Administrators, Inc. (DE).....pension administration services Summit Investment Partners, Inc. (OH)....................investment adviser Summit Investment Advisors, Inc. (NE).........................investment adviser
Subsidiaries are indicated by indentations. Ownership is 100% by the parent company except as noted. Item 27. Number of Contract Owners As of March 31, 2008, there were 542 qualified contracts and 3,350 non-qualified contracts in the Separate Account. Item 28. Indemnification Ameritas Life Insurance Corp.'s By-laws provide as follows: "The Corporation shall indemnify any person who was, or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he or she is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses including attorney's fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding to the full extent authorized by the laws of Nebraska." Section 21-2004 of the Nebraska Business Corporation Act, in general, allows a corporation to indemnify any director, officer, employee or agent of the corporation for amount paid in settlement actually and reasonably incurred by him or her in connection with an action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interest of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In a case of a derivative action, no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the corporation, unless a court in which the action was brought shall determine that such person is fairly and reasonably entitled to indemnify for such expenses which the Court shall deem proper. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 29. Principal Underwriter a) Ameritas Investment Corp. ("AIC") which serves as the principal underwriter for the variable annuity contracts issued through Ameritas Life Insurance Corp. Separate Account LLVA, also serves as the principal underwriter for variable annuity contracts issued through Ameritas Variable Separate Account VA-2, Ameritas Variable Separate Account VA, First Ameritas Variable Annuity Separate Account, and Carillon Account and for variable life insurance contracts issued through Ameritas Life Insurance Corp. Separate Account LLVL, Ameritas Variable Separate Account V, Ameritas Variable Separate Account VL, First Ameritas Variable Life Separate Account, and Carillon Life Account. b) The following table sets forth certain information regarding the officers and directors of the principal underwriter, Ameritas Investment Corp.
Name and Principal Positions and Offices Business Address and Underwriter JoAnn M. Martin* Director & Chair Salene Hitchcock-Gear* Director, President & Chief Executive Officer Kent M. Campbell** Director William W. Lester* Director, Vice President & Treasurer Gary T. Huffman*** Director Billie B. Beavers**** Senior Vice President Cheryl L. Heilman* Vice President, Chief Operating Officer Robert G. Lange* Vice President, Secretary & General Counsel Bruce D. Lefler**** Senior Vice President, Public Finance Gregory C. Sernett* Vice President, Chief Compliance Officer, and Assistant Secretary Michael M. Van Horne*** Senior Vice President
* Principal business address: Ameritas Investment Corp., 5900 "O" Street, Lincoln, Nebraska 68510. ** Principal business address: AVIVA USA, 611 Fifth Avenue, Des Moines, Iowa 50309. *** Principal business address: The Union Central Life Insurance Company, 1876 Waycross Road, Cincinnati, Ohio 45240 **** Principal business address: Ameritas Investment Corp., 440 Regency Parkway Drive, Suite 222, Omaha, Nebraska 68114.
c) Commissions Received by Each Principal Underwriter from the Registrant during the Registrant's Last Fiscal Year: ----------------------- -------------------- --------------------- -------------------- -------------------- (1) (2) (3) (4) (5) Net Underwriting Name of Principal Discounts and Compensation on Brokerage Underwriter Commissions Redemption Commissions Compensation ----------------------- -------------------- --------------------- -------------------- -------------------- Ameritas Investment $62,507 $0 $0 $0 Corp. ("AIC") ----------------------- -------------------- --------------------- -------------------- --------------------
(2)+(4)+(5) = Gross variable annuity compensation received by AIC. (3) = Sales compensation received and paid out by AIC as underwriter; AIC retains 0. (4) = Sales compensation received by AIC for retail sales. (5) = Sales compensation received by AIC and retained as underwriting fee. Item 30. Location of Separate Account and Records The Books, records and other documents required to be maintained by Section 31(a) of the 1940 Act and Rules 31a-1 to 31a-3 thereunder are maintained at Ameritas Life Insurance Corp., 5900 "O" Street, Lincoln, Nebraska 68510. Item 31. Management Services Not Applicable. Item 32. Undertakings (a) Registrant undertakes to file a post-effective amendment to this registration statement as frequently as necessary to ensure that the audited financial statement in the registration statement are never more than 16 months old for so long as payment under the variable annuity contracts my be accepted. (b) Registrant 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 post card or similar written communication affixed to or included in the prospectus that the applicant can remove and send for a Statement of Additional Information. (c) Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this form promptly upon written or oral request. (d) The registrant is relying upon the Division of Investment Management (Division) no-action letter of November 28, 1988 concerning annuities sold in 403 (b) plans and represents that the requirements of the no-action letter have been, are and/or will be complied with. (e) Ameritas Life Insurance Corp. represents that the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. SIGNATURES As required by the Securities Act of 1933, the Registrant, Ameritas Life Insurance Corp. Separate Account LLVA, certifies that this Post-Effective Amendment No. 5 to Registration Statement Number 333-122109 meets all the requirements of effectiveness pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to be signed on its behalf by the undersigned thereunto duly authorized in the City of Lincoln, County of Lancaster, State of Nebraska on this 18th day of April, 2008. AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVA, Registrant AMERITAS LIFE INSURANCE CORP., Depositor By: Lawrence J. Arth* ------------------------ Chairman As required by the Securities Act of 1933, this Amendment to the Registration Statement has been signed by the following persons in the capacities indicated on April 18, 2008.
SIGNATURE TITLE Lawrence J. Arth * Director, Chairman JoAnn M. Martin * Director, President & Chief Executive Officer James P. Abel * Director William W. Cook, Jr. * Director Bert A. Getz * Director James R. Knapp * Director Tonn M. Ostergard * Director Paul C. Schorr, III * Director Winston J. Wade * Director Robert C. Barth * Senior Vice President, Controller, & Chief Accounting Officer Jan M. Connolly** Senior Vice President & Corporate Secretary William W. Lester * Senior Vice President, Investments & Treasurer /s/ Robert G. Lange -------------------------- Robert G. Lange Vice President, General Counsel & Assistant Secretary
* Signed by Robert G. Lange under Powers of Attorney executed effective as of February 24, 2006. ** Signed by Robert G. Lange under Power of Attorney executed effective as of February 1, 2008. Exhibit Index Exhibit 9 Opinion and Consent of Robert G. Lange 10 Consents of Independent Auditors and Independent Registered Public Accounting Firm 13 Powers of Attorney