As filed with the SEC on    April 11, 2014.	Registration No. 333-158637
Registration No. 811-03974
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM N-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 8
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 142
_____________
PRUCO LIFE OF NEW JERSEY
VARIABLE APPRECIABLE ACCOUNT
(Exact Name of Registrant)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Name of Depositor)
213 Washington Street
Newark, New Jersey 07102
(800) 778-2255
(Address and telephone number of principal executive offices)
_____________
Erin C. Schwerzmann
Vice President and Corporate Counsel
Pruco Life Insurance Company of New Jersey
213 Washington Street
Newark, New Jersey 07102
(Name and address of agent for service)
Copy to:
Christopher E. Palmer, Esq.
Goodwin Procter LLP
901 New York Avenue, N.W.
Washington, D.C. 20001
_____________
It is proposed that this filing will become effective (check appropriate space):
□  immediately upon filing pursuant to paragraph (b) of Rule 485
■ on  __May 1, 2014_____ pursuant to paragraph (b) of Rule 485
(date)
□ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
□ on  pursuant to paragraph (a)(1) of Rule 485
(date)
■This Post-Effective Amendment designates a new effective date for a previously filed Post-Effective Amendment.

PART A:

INFORMATION REQUIRED IN THE PROSPECTUS

PROSPECTUS

May 1, 2014

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

VUL Protector®

This prospectus describes an individual flexible premium variable universal life insurance contract, the VUL Protector® Contract (the “Contract”) offered by Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey", "us", "we", or "our"), a stock life insurance company.  Pruco Life of New Jersey is an indirect, wholly-owned subsidiary of The Prudential Insurance Company of America.

You may choose to invest your Contract's premiums and its earnings in one or more of the available Variable Investment Options of the Pruco Life of New Jersey Variable Appreciable Account (the “Account”).  The prospectuses for the Variable Investment Options, including information about their investment objectives, fees, and investment advisers/subadvisers, are printed in the following order after this prospectus.

AST Advanced Strategies Portfolio	AST Schroders Global Tactical Portfolio
AST Balanced Asset Allocation Portfolio	AST Schroders Multi-Asset World Strategies Portfolio
AST BlackRock Global Strategies Portfolio	AST T. Rowe Price Asset Allocation Portfolio
AST FI Pyramis® Quantitative Portfolio (previously AST First Trust Balanced Target Portfolio)	PSF Conservative Balanced Portfolio PSF Flexible Managed Portfolio
AST J.P. Morgan Strategic Opportunities Portfolio	PSF Money Market Portfolio
AST Preservation Asset Allocation Portfolio	TOPS® Managed Risk Balanced ETF Portfolio
AST Prudential Growth Allocation Portfolio	TOPS® Managed Risk Growth ETF Portfolio
AST RCM World Trends Portfolio	TOPS® Managed Risk Moderate Growth ETF Portfolio

You may also choose to invest your Contract’s premiums and its earnings in the Fixed Rate Option, also referred to as "fixed investment option", which pays a guaranteed interest rate.  See The Fixed Rate Option.

Please Read this Prospectus.  Please read this prospectus before purchasing a VUL Protector® variable universal life insurance Contract and keep it for future reference.  Current prospectuses for each of the underlying Funds accompany this prospectus.  These prospectuses contain important information about the Funds.  Please read these prospectuses and keep them for reference.

In compliance with US law, Pruco Life of New Jersey delivers this prospectus to contract owners that currently reside outside of the United States.

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined that this Contract is a good investment, nor has the SEC determined that this prospectus is complete or accurate.  It is a criminal offense to state otherwise.

The Contract may be purchased through registered representatives located in banks and other financial institutions. Investment in a variable life insurance contract is subject to risk, including the possible loss of your money.  An investment in VUL Protector® is not a bank deposit and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other governmental agency.

Pruco Life Insurance Company of New Jersey

213 Washington Street

Newark, New Jersey 07102

Telephone: (800) 944-8786

TABLE OF CONTENTS

Page

SUMMARY OF CHARGES AND EXPENSES	1
SUMMARY OF THE CONTRACT AND CONTRACT BENEFITS	4
SUMMARY OF CONTRACT RISKS	6
SUMMARY OF RISKS ASSOCIATED WITH THE VARIABLE INVESTMENT OPTIONS	10
GENERAL DESCRIPTIONS OF PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY, THE REGISTRANT, AND THE FUNDS	11
CHARGES AND EXPENSES	15
PERSONS HAVING RIGHTS UNDER THE CONTRACT	19
OTHER GENERAL CONTRACT PROVISIONS	20
RIDERS	20
REQUIREMENTS FOR ISSUANCE OF A CONTRACT	23
PREMIUMS	23
DEATH BENEFITS	27
CONTRACT VALUES	30
LAPSE AND REINSTATEMENT	33
TAXES	33
DISTRIBUTION AND COMPENSATION	36
LEGAL PROCEEDINGS	37
FINANCIAL STATEMENTS	39
ADDITIONAL INFORMATION	39
DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS	40

Advanced Series Trust:
AST Advanced Strategies Portfolio	Appendix 1
AST Balanced Asset Allocation Portfolio	Appendix 2
AST BlackRock Global Strategies Portfolio	Appendix 3
AST FI Pyramis® Quantitative Portfolio	Appendix 4
AST J.P. Morgan Strategic Opportunities Portfolio	Appendix 5
AST Preservation Asset Allocation Portfolio	Appendix 6
AST Prudential Growth Allocation Portfolio	Appendix 7
AST RCM World Trends Portfolio	Appendix 8
AST Schroders Global Tactical Portfolio	Appendix 9
AST Schroders Multi-Asset World Strategies Portfolio	Appendix 10
AST T. Rowe Price Asset Allocation Portfolio	Appendix 11
The Prudential Series Fund:
PSF Conservative Balanced Portfolio	Appendix 12
PSF Flexible Managed Portfolio	Appendix 13
PSF Money Market Portfolio	Appendix 14
TOPS-The Optimized Portfolio System®:
TOPS® Managed Risk Balanced ETF Portfolio	Appendix 15
TOPS® Managed Risk Growth ETF Portfolio	Appendix 16
TOPS® Managed Risk Moderate Growth ETF Portfolio	Appendix 17

SUMMARY OF CHARGES AND EXPENSES

Capitalized terms used in this prospectus are defined where first used or in the DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS, which is located at the end of this prospectus.

Expenses other than Portfolio Expenses

The following tables describe the maximum fees and expenses that you could pay when buying, owning, and surrendering the Contract.  Generally, our current fees and expenses are lower than the maximum fees and expenses reflected in the following tables.  For more information about fees and expenses, see CHARGES AND EXPENSES.

The first table describes maximum fees and expenses that we deduct from each premium payment, and maximum fees we charge for transactions and riders.

Table 1: Transaction and Optional Rider Fees
Charge	When Charge is Deducted	Amount Deducted
Maximum Sales Charge on Premiums (Load)	Deducted from premium payments.	6%
Premium Based Administrative Charge	Deducted from premium payments.	7.5%
Surrender Charge per $1,000 of Basic Insurance Amount (1)	Upon lapse, surrender, or decrease in Basic Insurance Amount.	From $2.39 to $28.26
Surrender Charge per $1,000 of an increase in Basic Insurance Amount(1)	Upon lapse or surrender in Basic Insurance Amount.	From $2.39 to $28.26
Transfer fee	Each transfer exceeding 12 in any Contract Year.	$25
Withdrawal fee (Based on the withdrawal amount.)	Upon withdrawal.	The lesser of $25 and 2%
Insurance Amount Change fee	Upon change in Basic Insurance Amount.	$25
Living Needs Benefit Rider fee	When benefit is paid.	$150
Overloan Protection Rider fee (Percentage of the Contract         Fund amount.)	One time charge upon exercising the rider benefit.	3.5%

(1)   The charge decreases to zero by the end of the 10th year for each Coverage Segment.  This charge varies by duration and the insured’s age, sex, and underwriting class.  See CHARGES AND EXPENSES.

The second table describes the maximum Contract fees and expenses that you will pay periodically during the time you own the Contract, not including the Funds’ fees and expenses.

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Table 2: Periodic Contract and Optional Rider Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Cost of Insurance (“COI”) for the Basic Insurance Amount. Minimum and Maximum Charges per $1,000 of the net amount at risk. _____________ Initial COI for a representative Contract Owner, male age 35 in the Nonsmoker Plus underwriting class, no riders. (Charge per $1,000 of the net amount at risk.)	Monthly	From $.02 to $83.34(1)(2) _____________ $0.09
Mortality and Expense Risk fee (Calculated as a percentage of assets in Variable Investment Options.)	Daily	0.45%(3)
Additional Mortality fees for risk associated with certain health conditions, occupations, avocations, or aviation risks.	Monthly	From $0.10 to $2.08(4)
Net interest on loans(5)	Annually	1% for standard loans. 0.10% for preferred loans.
Administrative fee for Basic Insurance Amount(1) Minimum and Maximum Charges (A charge per $1,000 of Basic Insurance Amount plus a flat fee.) _____________ Initial fee for Basic Insurance Amount for a representative Contract Owner, male age 35 in the Nonsmoker Plus underwriting class, no riders. (A chargeper $1,000 of Basic Insurance Amountplus a flat fee.)	Monthly	$0.06 to $1.57 plus $25 _____________ $0.21 plus $25
Administrative fee for an increase to Basic Insurance Amount(1) Minimum and Maximum Charges (A charge per $1,000 of increase to the Basic Insurance Amount plus a flat fee per increase segment.) _____________ Initial fee for increase to Basic Insurance Amount for a representative Contract Owner, male age 35 in the Nonsmoker Plus underwriting class, no riders. (A charge per $1,000 of increase to the Basic Insurance Amount plus a flat fee per increase segment.)	Monthly	$0.06 to $1.57 plus $9 _____________ $0.21 plus $9

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Accidental Death Benefit Rider(6) Minimum and Maximum Charges per $1,000 of the coverage amount. _____________ Accidental Death Benefit Rider fee for a representative Contract Owner, male age 35 in the Nonsmoker Plus underwriting class. (Charge per $1,000 of the coverage amount.)	Monthly	From $0.05 to $0.28(1) _____________ $0.07
Children Level Term Rider(6) (Charge per $1,000 of the coverage amount.)	Monthly	$0.42
Disability Benefit Rider(1)(6) Minimum and Maximum Charges (Calculated as a percentage of the total of the monthly deductions.) _____________ Disability Benefit Rider fee for a representative Contract Owner, male age 35 in the Nonsmoker Plus underwriting class. (Calculated as a percentage of the total of the monthly deductions.)	Monthly	From 19.90% to 28.75% _____________ 28.75%

(1)   The charge varies based on the individual characteristics of the insured, including such characteristics as: age, sex, and underwriting class.  The charge shown in the table may not be representative of the charge that a particular contract owner will pay.  You may obtain more information about the particular charges that apply to you by contacting your Pruco Life representative.

(2)   For example, the highest COI rate is for an insured who is a male/female age 120. You may obtain more information about the particular COI charges that apply to you by contacting your Pruco Life of New Jersey representative.

(3)   The daily charge is based on the effective annual rate shown.

(4)   The amount and duration of the charge will vary based on individual circumstances including issue age, type of risk, and the frequency of exposure to the risk, and is charged per $1,000 of Basic Insurance Amount.  The charge shown in the table may not be representative of the charge that a particular contract owner will pay.  You may obtain more information about the particular charges that apply to you by contacting your Pruco Life representative.

(5)   The net interest on loans reflects the net difference between a standard loan with an effective annual interest rate of 4% and an effective annual interest credit equal to 3%.  Preferred loans are charged a lower effective annual interest rate.  See Loans.

(6)   Duration of the charge is limited.  See CHARGES AND EXPENSES.

Fund Expenses

This table shows the minimum and maximum total operating expenses charged by the Funds that you will pay periodically during the time you own the Contract.  More detail concerning each Fund's fees and expenses is contained in the prospectus for each of the Funds.

Total Annual Fund Operating Expenses	Minimum	Maximum
(Expenses that are deducted from the Funds’ assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.)	0.44%	1.32%

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SUMMARY OF THE CONTRACT

AND CONTRACT BENEFITS

Brief Description of the Contract

VUL Protector® is a form of variable universal life insurance.  A variable universal life insurance contract is a flexible form of life insurance.  It has a Death Benefit and a Contract Fund, the value of which changes every day according to the investment performance of the investment options to which you have allocated your net premiums.   You may invest net premiums in one or more of the available Variable Investment Options or in the Fixed Rate Option. Although the value of your Contract Fund may increase if there is favorable investment performance in the Variable Investment Options you select, investment returns in the Variable Investment Options are NOT guaranteed.  There is a risk that investment performance will be unfavorable and that the value of your Contract Fund will decrease.  The risk will be different, depending upon which investment options you choose.  You bear the risk of any decrease. If you select the Fixed Rate Option, we credit your account with a declared rate of interest, but you assume the risk that the rate may change, although it will never be lower than an effective annual rate of 3%.  Transfers from the Fixed Rate Option may be restricted.  The Contract is designed to be flexible to meet your specific life insurance needs.  Within certain limits, the Contract will provide you with flexibility in determining the amount and timing of your premium payments.  Some Variable Investment Options described in this prospectus may not be available through all brokers.  Your Contract's form number is located in the lower left hand corner of the first page of your Contract.

Types of Death Benefit Available Under the Contract

There are two types of Death Benefit available.  You may choose a Contract with a Type A (fixed) Death Benefit under which the Death Benefit generally remains at the Basic Insurance Amount you initially chose.  However, the Contract Fund (described below) may grow to a point where the Death Benefit may increase and vary with investment experience.  If you choose a Contract with a Type B (variable) Death Benefit, your Death Benefit will vary with investment experience.  As long as the Contract is in-force, the Death Benefit will never be less than the Basic Insurance Amount shown in your Contract.

Either type of Death Benefit, described above, may be increased to ensure that the Contract will satisfy the Internal Revenue Code's definition of life insurance.

You may change your Contract’s Death Benefit type after issue.  See Types of Death Benefit and Changing the Type of Death Benefit.

Rider to Provide Lapse Protection Information

Your Contract is issued with a Rider to Provide Lapse Protection.  This rider provides a guarantee that the Contract will not lapse, regardless of investment results, as long as the No-Lapse Guarantee Value is greater than zero.  See Rider to Provide Lapse Protection.

It’s important to note that your No-Lapse Guarantee Value is calculated only to determine if your Contract is in default and does not represent any amounts actually payable as benefits under the Contract and does not change your actual Contract values.  In addition, any no-lapse charges used to calculate your No-Lapse Guarantee Value are used only to determine whether your Contract is in default and do not affect your actual Contract values.

The Contract Fund

Your Contract Fund value changes daily, reflecting:  (1) increases or decreases in the value of the Variable Investment Options; (2) interest credited on any amounts allocated to the Fixed Rate Option; (3) interest credited on any loan; and (4) the daily asset charge for mortality and expense risks assessed against the Variable Investment Options.  The Contract Fund value also changes to reflect the receipt of premium payments, charges deducted from premium payments, and the monthly deductions described under CHARGES AND EXPENSES.

Premium Payments

You choose the timing and the amount of premium payments, with the exception of the minimum initial premium.  All subsequent premium payments are subject to a minimum of $25 per payment.

If you pay more premium than permitted under section 7702A of the Internal Revenue Code, your Contract would be classified as a Modified Endowment Contract, which would affect the federal income tax treatment of loans and withdrawals.  For more information, see Tax Treatment of Contract Benefits - Modified Endowment Contracts.

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Allocation of Premium Payments

When you apply for the Contract, you tell us how to allocate your premiums. You may change the way in which subsequent premiums are allocated by giving written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephoning a Service Office, provided you are enrolled to use the Telephone Transfer System. See The Pruco Life of New Jersey Variable Appreciable Account and the Allocation of Premiums sections.

On the later of the Contract Date and the end of the Valuation Period in which the initial premium is received, we deduct the charge for sales expenses and the premium based administrative charge from the initial premium.  During the 10 day period following your receipt of the Contract, the remainder of the initial premium and any other net premium will be allocated to the Money Market investment option as of the end of the Valuation Period in which it is received in Good Order at the Payment Office.  After the tenth day, these funds, adjusted for any investment results, will be transferred out of the Money Market investment option and allocated among the Variable Investment Options and/or the Fixed Rate Option according to your current premium allocation.

The charge for sales expenses and the premium based administrative charge will also apply to all subsequent premium payments.  The remainder of each subsequent premium payment will be invested as of the end of the Valuation Period in which it is received in Good Order at the Payment Office, in accordance with the allocation you previously designated.

Investment Choices

You may choose to invest your Contract's premiums and its earnings in one or more of the available Variable Investment Options. You may also invest in the Fixed Rate Option.  See The Funds and The Fixed Rate Option.  You may transfer money among your investment choices, subject to restrictions.  See Transfers/Restrictions on Transfers.

We may add or remove Variable Investment Options in the future.

Increasing or Decreasing Basic Insurance Amount

Subject to conditions determined by us, after the issue of the Contract and after the first Contract Anniversary, you may increase the amount of insurance by increasing the Basic Insurance Amount of the Contract.  When you do this, you create an additional Coverage Segment.  Each Coverage Segment will be subject to its own monthly deductions, surrender charge, and surrender charge period, which begin on that segment’s effective date.  See Increases in Basic Insurance Amount and Surrender Charges.  In addition, if a significant premium is paid in conjunction with an increase, there is a possibility that the Contract will be classified as a Modified Endowment Contract.  See Tax Treatment of Contract Benefits.

Subject to certain limitations, you also have the option of decreasing the Basic Insurance Amount of your Contract after the issue of the Contract.  See Decreases in Basic Insurance Amount.

For Contracts with more than one Coverage Segment, a decrease in Basic Insurance Amount will reduce each Coverage Segment based on the proportion of the Coverage Segment amount to the total of all Coverage Segment amounts in effect just before the change.  A decrease in Basic Insurance Amount may result in a surrender charge. See Surrender Charges.

We may decline a decrease in the Basic Insurance Amount if we determine it would cause the Contract to fail to qualify as "life insurance" for purposes of Section 7702 of the Internal Revenue Code.  In addition, if the Basic Insurance Amount is decreased, there is a possibility that the Contract will be classified as a Modified Endowment Contract.  See Tax Treatment of Contract Benefits.  We may decline a decrease in the Basic Insurance Amount if the Contract Fund value is less than any applicable partial surrender charges.

No administrative processing charge is currently being made in connection with either an increase or a decrease in Basic Insurance Amount.  However, we reserve the right to charge such a fee in an amount of up to $25.  See CHARGES AND EXPENSES.

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Access to Contract Values

A Contract may be surrendered for its Cash Surrender Value (the Contract Fund minus any Contract Debt and minus any applicable surrender charge) while the insured is living.  To surrender a Contract, we may require you to deliver or mail the Contract with a written request in a form that meets our needs, to a Service Office.  The Cash Surrender Value of a Contract will be determined as of the end of the Valuation Period in which such a request is received in Good Order in a Service Office.  Surrender of a Contract may have tax consequences.  See Surrender of a Contract and Tax Treatment of Contract Benefits.

Under certain circumstances, you may withdraw a part of the Contract's Cash Surrender Value without surrendering the Contract.  The amount withdrawn must be at least $500.  We may charge an administrative processing fee for each withdrawal which is the lesser of: (a) $25 and; (b) 2% of the withdrawal amount.  Currently we do not charge a fee for withdrawals.  Withdrawal of the Cash Surrender Value may have tax consequences.  See Withdrawals and Tax Treatment of Contract Benefits.

Contract Loans

You may borrow money from us using your Contract as security for the loan, provided the Contract is not in default.  The maximum loan amount is equal to the sum of (1) 99% of the portion of the cash value attributable to the Variable Investment Options and (2) the balance of the cash value, provided the Contract is not in default.  The cash value is equal to the Contract Fund less any surrender charge.  A Contract in default has no loan value.  There is no minimum loan amount.  See Loans.

Canceling the Contract (“Free-Look”)

Generally, you may return the Contract for a refund within 10 days (60 days for certain circumstances) after you receive it.  In general, you will receive a refund of all premium payments made.  A Contract returned according to this provision shall be deemed void from the beginning.

SUMMARY OF CONTRACT RISKS

Contract Values are Not Guaranteed

Your benefits (including life insurance) are not guaranteed, and may be entirely dependent on the investment performance of the Variable Investment Options you select.  The value of your Contract Fund rises and falls with the performance of the investment options you choose and the charges that we deduct.  Poor investment performance or loans could cause your Contract to lapse and you could lose your insurance coverage.  However, your Death Benefit may be protected under the Rider to Provide Lapse Protection or under the Overloan Protection Rider.

The Variable Investment Options you choose may not perform to your expectations. Investing in the Contract involves risks including the possible loss of your entire investment.  Only the Fixed Rate Option provides a guaranteed rate of return.  For more detail, please see Risks Associated with the Variable Investment Options and The Fixed Rate Option.

Limitation of Benefits on Certain Riders for Claims Due to War or Service in the Armed Forces

We will not pay a benefit on any Accidental Death Benefit type rider or make payments for any disability type rider if the death or injury is caused or contributed to by war or act of war, declared or undeclared, including resistance to armed aggression.  This restriction includes service in the armed forces of any country at war.

Increase in Charges

In several instances we will use the terms “maximum charge” and “current charge.”  The “maximum charge,” in each instance, is the highest charge that we may make under the Contract.  The “current charge,” in each instance, is the amount that we now charge, which may be lower than the maximum charge.  If circumstances change, we reserve the right to increase each current charge, up to the maximum charge, without giving any advance notice.

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Contract Lapse

Each month we determine the value of your Contract Fund and your No-Lapse Guarantee Value.  The No-Lapse Guarantee Value is a benchmark value that is used only to determine whether your Contract is in-force or in default, on a monthly basis, and is not payable under the Contract.  It is equal to the No-Lapse Contract Fund, less any Contract Debt.

The Contract is in default if the Contract Fund, less any applicable surrender charges and less any Contract Debt, is zero or less, unless it remains in-force under the Rider to Provide Lapse Protection as a result of having a No-Lapse Guarantee Value greater than zero.  See the Rider to Provide Lapse Protection section.  Should any event occur that would cause your Contract to lapse, we will notify you of the required payment to prevent your Contract from terminating.  Your payment must be received in Good Order at the Payment Office within the 61-day grace period after the notice of default is mailed or the Contract will end and have no value.  See LAPSE AND REINSTATEMENT.  If you have an outstanding loan when your Contract lapses, you may have taxable income as a result.  See Tax Treatment of Contract Benefits - Pre-Death Distributions.  If your Contract lapses and you reinstate it, the benefits under the Rider to Provide Lapse Protection will no longer be available.

Risks of Using the Contract as a Short Term Savings Vehicle

The Contract is designed to provide benefits on a long-term basis. Consequently, you should not use the Contract as a short-term investment or savings vehicle.  Because of the long-term nature of the Contract, you should consider whether purchasing the Contract is consistent with the purpose for which it is being considered.

Because the Contract provides for an accumulation of a Contract Fund as well as a Death Benefit, you may wish to use it for various insurance planning purposes.  Purchasing the Contract for such purposes may involve certain risks.

For example, a life insurance contract could play an important role in helping you to meet the future costs of a child’s education.  The Contract’s Death Benefit could be used to provide for education costs should something happen to you, and its investment features could help you accumulate savings.  However, if the Variable Investment Options you choose perform poorly, if you do not pay sufficient premiums, or if you access the values in your Contract through withdrawals or Contract loans, your Contract may lapse or you may not accumulate the value you need.  Withdrawals may also affect whether a Contract is kept in-force under the Rider to Provide Lapse Protection.  See Rider to Provide Lapse Protection.

Risks of Taking Withdrawals

If your Contract meets certain requirements, you may make withdrawals from your Contract’s Cash Surrender Value while the Contract is in-force.  The amount withdrawn must be at least $500.  The withdrawal amount is limited by the requirement that the Cash Surrender Value after withdrawal may not be less than or equal to zero after deducting any charges associated with the withdrawal and an amount that we estimate will be sufficient to cover the Contract Fund deductions for two Monthly Dates following the date of withdrawal.  We may charge an administrative processing fee for each withdrawal which is the lesser of: (a) $25 and; (b) 2% of the withdrawal amount.  Currently we do not charge a fee for withdrawals.  Withdrawal of the Cash Surrender Value may have tax consequences.  See Tax Treatment of Contract Benefits.

Whenever a withdrawal is made, the Death Benefit will immediately be reduced by at least the amount of the withdrawal.  Withdrawals under a Contract with a Type B (variable) Death Benefit will not change the Basic Insurance Amount.  However, under a Contract with a Type A (fixed) Death Benefit, the withdrawal may require a reduction in the Basic Insurance Amount.  A surrender charge may be deducted when any withdrawal causes a reduction in the Basic Insurance Amount.  See CHARGES AND EXPENSES.  No withdrawal will be permitted under a Contract with a Type A (fixed) Death Benefit if it would result in a Basic Insurance Amount of less than the minimum Basic Insurance Amount.  See REQUIREMENTS FOR ISSUANCE OF A CONTRACT.

It is important to note, however, that if the Basic Insurance Amount is decreased, there is a possibility that the Contract might be classified as a Modified Endowment Contract.  Accessing the values in your Contract through withdrawals may significantly affect current and future Contract values or Death Benefit proceeds and may increase the chance that your Contract will lapse.  Before making any withdrawal that causes a decrease in Basic Insurance Amount, you should consult with your tax adviser and your Pruco Life of New Jersey representative.  See Withdrawals and Tax Treatment of Contract Benefits.

Limitations on Transfers

You may, up to 12 times each Contract Year, transfer amounts among the Variable Investment Options or to the Fixed Rate Option.  Additional transfers may be made only with our consent.  Currently, we allow you to make additional transfers.  We may charge up to $25 for each transfer made exceeding 12 in any Contract Year.  Currently, we do not charge a fee for transfers.

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For the first 20 transfers in a calendar year, you may transfer amounts by proper written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephone, provided you are enrolled to use the Telephone Transfer System.  We use reasonable procedures to confirm that instructions given by telephone are genuine.  However, we are not liable for following telephone instructions that we reasonably believe to be genuine.  In addition, we cannot guarantee that you will be able to get through to complete a telephone transfer during peak periods such as periods of drastic economic or market change.

After you have submitted 20 transfers in a calendar year, we will accept subsequent transfer requests only if they are in a form that meets our needs, bear an original signature in ink, and are sent to us by U.S. regular mail.  After you have submitted 20 transfers in a calendar year, a subsequent transfer request by telephone, fax, or electronic means will be rejected, even in the event that it is inadvertently processed.

In addition, you may use our dollar cost averaging feature or our automatic rebalancing feature.  Currently, transfers effected systematically under either a dollar cost averaging or an automatic rebalancing program described in this prospectus do not count towards the limit of 12 transfers per Contract Year or the limit of 20 transfers per calendar year.  In the future, we may count such transfers towards the limit.  See Transfers/Restrictions on Transfers, Dollar Cost Averaging, and Auto-Rebalancing.

Multiple transfers received during the same day, but prior to the end of the Valuation Period for that day, will be counted as a single transfer.

Generally, only one transfer from the Fixed Rate Option is permitted during each Contract Year.  The maximum amount per Contract you may transfer out of the Fixed Rate Option each year is the greater of:  (a) 25% of the amount in the Fixed Rate Option; and (b) $2,000.

You may also transfer amounts from the Variable Investment Option to the Fixed Rate Option at anytime within 18 months from the Contract Date, and within the later of 60 days from the effective date of a material change in the investment policy of a Variable Investment Option and 60 days from the notice of that change, with no restriction.  Such transfers do not count toward the twelve transfers allowed in each Contract Year.

Your Contract may include Funds that are not currently accepting additional investments.  See the section titled The Pruco Life of New Jersey Variable Appreciable Account.

We may modify your right to make transfers by restricting the number, timing and/or amount of transfers we find to be disruptive to the investment option or to the disadvantage of other Contract Owners.  We also reserve the right to prohibit transfer requests made by an individual acting under a power of attorney on behalf of more than one Contract Owner.  We will immediately notify you at the time of a transfer request if we exercise this right.

Transfer restrictions will be applied uniformly and will not be waived.  See Transfers/Restrictions on Transfers.

In addition, you may use our dollar cost averaging feature or our automatic rebalancing feature.  For additional information, please see Transfers/Restrictions on Transfers, Dollar Cost Averaging, and Auto-Rebalancing.

Charges on Surrender of the Contract

You may surrender your Contract at any time for its Cash Surrender Value while the insured is living.  We deduct a surrender charge from the surrender proceeds. In addition, the surrender of your Contract may have tax consequences.  See Tax Treatment of Contract Benefits.

We will assess a surrender charge if, during the first 10 Contract Years (or during the first 10 years of a Coverage Segment representing an increase in Basic Insurance Amount), the Contract lapses, is surrendered, or the Basic Insurance Amount is decreased (including as a result of a withdrawal or a Death Benefit type change).  The surrender charge varies and is described in Surrender Charges.  While the amount of the surrender charge decreases over time, it may be a substantial portion or even equal to your Contract Fund.

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Risks of Taking a Contract Loan

Accessing the values in your Contract through Contract loans may significantly affect current and future Contract values or Death Benefit proceeds and may increase the chance that your Contract will lapse.  Your Contract will be in default if, at any time, the Contract Debt equals or exceeds the Contract Fund, less any applicable surrender charges and the No-Lapse Guarantee Value is zero or less.  If the Contract lapses or is surrendered, the amount of unpaid Contract Debt will be treated as a distribution and will be immediately taxable to the extent of the gain in the Contract.  In addition, if your Contract is a Modified Endowment Contract for tax purposes, taking a Contract loan may have tax consequences.  See Tax Treatment of Contract Benefits.

Potential Tax Consequences

Your Contract is structured to meet the definition of life insurance under Section 7702 of the Internal Revenue Code.  At issue, the Contract Owner chooses one of the following definitions of life insurance tests:  (1) Cash Value Accumulation Test or (2) Guideline Premium Test.  Under the Cash Value Accumulation Test, there is a minimum Death Benefit to cash value ratio.  Under the Guideline Premium Test, there is a limit to the amount of premiums that can be paid into the Contract, as well as a minimum Death Benefit to cash value ratio.  Consequently, we reserve the right to refuse to accept a premium payment that would, in our opinion, cause this Contract to fail to qualify as life insurance.  We also have the right to refuse to accept any payment that increases the Death Benefit by more than it increases the Contract Fund.  Although we believe that the Contract should qualify as life insurance for tax purposes, there are some uncertainties, particularly because the Secretary of Treasury has not yet issued permanent regulations that bear on this question.  Accordingly, we reserve the right to make changes -- which will be applied uniformly to all Contract Owners after advance written notice -- that we deem necessary to insure that the Contract will qualify as life insurance.  We require the Guideline Premium Test as the definition of life insurance if you choose to have the Overloan Protection Rider.  See the Riders - Overloan Protection Rider section.

Current federal tax law generally excludes all Death Benefits from the gross income of the beneficiary of a life insurance contract.  However, your Death Benefit could be subject to estate tax.  In addition, you generally are not subject to taxation on any increase in the Contract value until it is withdrawn.  Generally, you are taxed on surrender proceeds and the proceeds of any partial withdrawals only if those amounts, when added to all previous distributions, exceed the total premiums paid.  Amounts received upon surrender or withdrawal (including any outstanding Contract loans) in excess of premiums paid are treated as ordinary income.

Special rules govern the tax treatment of life insurance policies that meet the federal definition of a Modified Endowment Contract.  The Contract could be classified as a Modified Endowment Contract if premiums in amounts that are too large are paid or a decrease in the Basic Insurance Amount is made (or a rider removed).  The addition of a rider or an increase in the Basic Insurance Amount may also cause the Contract to be classified as a Modified Endowment Contract if a significant premium is paid in conjunction with an increase or the addition of a rider.  We will notify you if a premium or a reduction in Basic Insurance Amount would cause the Contract to become a Modified Endowment Contract, and advise you of your options.

Under current tax law, Death Benefit payments under Modified Endowment Contracts, like Death Benefit payments under other life insurance contracts, generally are excluded from the gross income of the beneficiary.  However, amounts you receive under the Contract before the insured's death, including loans and withdrawals, are included in income to the extent that the Contract Fund before surrender charges exceeds the premiums paid for the Contract increased by the amount of any loans previously included in income and reduced by any untaxed amounts previously received other than the amount of any loans excludible from income.  An assignment of a Modified Endowment Contract is taxable in the same way.  These rules also apply to pre-death distributions, including loans and assignments, made during the two-year period before the time that the Contract became a Modified Endowment Contract.

All Modified Endowment Contracts issued by us to you during the same calendar year are treated as a single Contract for purposes of applying these rules.  See Tax Treatment of Contract Benefits.

Any taxable income on pre-death distributions (including full surrenders) is subject to a penalty of 10 percent unless the amount is received on or after age 59½, on account of your becoming disabled or as a life annuity.  It is presently unclear how the penalty tax provisions apply to Contracts owned by businesses.

Replacement of the Contract

The replacement of life insurance is generally not in your best interest.  In most cases, if you require additional life insurance coverage, the benefits of your existing contract can be protected by increasing the insurance amount of your existing contract, if permitted, or by purchasing an additional contract.  If you are considering replacing a contract, you should compare the benefits and costs of supplementing your existing contract with the benefits and costs of purchasing a new contract and you should consult with a tax adviser.

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SUMMARY OF RISKS ASSOCIATED WITH

THE VARIABLE INVESTMENT OPTIONS

You may choose to invest your Contract's premiums and its earnings in one or more of the available Variable Investment Options.  You may also invest in the Fixed Rate Option.  The Fixed Rate Option is the only investment option that offers a guaranteed rate of return.  See The Funds and The Fixed Rate Option.

Risks Associated with the Variable Investment Options

The Separate Account invests in the shares of one or more open-end management investment companies registered under the Investment Company Act of 1940.  Each Variable Investment Option has its own investment objective and associated risks, which are described in the accompanying Fund prospectuses.  The income, gains, and losses of one Variable Investment Option have no effect on the investment performance of any other Variable Investment Option.

We do not promise that the Variable Investment Options will meet their investment objectives.  Amounts you allocate to the Variable Investment Options may grow in value, decline in value or grow less than you expect, depending on the investment performance of the Variable Investment Options you choose.  You bear the investment risk that the Variable Investment Options may not meet their investment objectives.  It is possible to lose your entire investment in the Variable Investment Options.  Although the Series Fund Money Market Portfolio is designed to be a stable investment option, it is possible to lose money in that Portfolio.  For example, when prevailing short-term interest rates are very low, the yield on the Money Market Portfolio may be so low that, when Separate Account and Contract charges are deducted, you experience a negative return.  See The Funds.

This Contract offers Variable Investment Options that invest in Funds offered through the Advanced Series Trust (“AST”).  These Variable Investment Options have the prefix AST.  The AST Variable Investment Options are also available in variable annuity contracts we offer.  Some of these variable annuity contracts offer optional living benefits that utilize a predetermined mathematical formula (the “formula”) to manage the guarantees offered in connection with those optional benefits.  The formula monitors each contract owner’s account value daily and, if necessary, will systematically transfer amounts among investment options.  The formula transfers funds between the Variable Investment Options for those variable annuity contracts and an AST bond portfolio sub-account (those AST bond portfolios are not available in connection with the life contracts offered through this prospectus). You should be aware that the operation of the formula in those variable annuity contracts may result in large-scale asset flows into and out of the underlying Funds that are available with your Contract. These asset flows could adversely impact the underlying Funds, including their risk profile, expenses and performance. Because transfers between the Variable Investment Options and the AST bond sub-account can be frequent and the amount transferred can vary from day to day, any of the underlying Funds could experience the following effects, among others:

(a) a Fund’s investment performance could be adversely affected by requiring a subadvisor to purchase and sell securities at inopportune times or by otherwise limiting the subadvisor’s ability to fully implement the Fund’s investment strategy;

(b) the subadvisor may be required to hold a larger portion of assets in highly liquid securities than it otherwise would hold, which could adversely affect performance if the highly liquid securities underperform other securities (e.g., equities) that otherwise would have been held; and

(c) a Fund may experience higher turnover than it would have experienced without the formula, which could result in higher operating expense ratios and higher transaction costs for the Fund compared to other similar funds.

The efficient operation of the asset flows among Funds triggered by the formula depends on active and liquid markets. If market liquidity is strained, the asset flows may not operate as intended. For example, it is possible that illiquid markets or other market stress could cause delays in the transfer of cash from one fund to another fund, which in turn could adversely impact performance.

Before you allocate to the Variable Investment Options with the AST Portfolios listed below, you should consider the potential effects on the Funds that are the result of the operation of the formula in the variable annuity contracts that are unrelated to your Contract.  Please work with your financial professional to determine which Variable Investment Options are appropriate for your needs.

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Learn More about the Variable Investment Options

Before allocating amounts to the Variable Investment Options, you should read the current Fund prospectuses for detailed information concerning their investment objectives, strategies, and investment risks.

GENERAL DESCRIPTIONS OF PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY, THE REGISTRANT, AND THE FUNDS

Pruco Life Insurance Company of New Jersey

Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey", “us”, “we”, or “our”) is a stock life insurance company, organized on September 17, 1982 under the laws of the state of New Jersey.  It is licensed to sell life insurance and annuities only in the states of New Jersey and New York.  Our principal Executive Office is located at 213 Washington Street, Newark, New Jersey 07102.

The Pruco Life of New Jersey Variable Appreciable Account

We have established a Separate Account, the Pruco Life of New Jersey Variable Appreciable Account (the "Account" or the "Registrant") to hold the assets that are associated with the Contracts.  The Account was established on January 13, 1984 under New Jersey law and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940 as a unit investment trust, which is a type of investment company.  The Account meets the definition of a "Separate Account" under the federal securities laws.  The Account holds assets that are segregated from all of our other assets.  Thus, such assets that are held in support of client accounts are not chargeable with liabilities arising out of any other business Pruco Life Insurance Company of New Jersey conducts.

We are the legal owner of the assets in the Account.  We will maintain assets in the Account with a total market value at least equal to the reserve and other liabilities relating to the variable benefits attributable to the Contracts.  In addition to these assets, the Account's assets may include funds contributed by us to commence operation of the Account and may include accumulations of the charges we make against the Account.  From time to time we will transfer capital contributions and earned fees and charges to its general account.  We will consider any possible adverse impact the transfer might have on the Account before making any such transfer.

Income, gains and losses credited to, or charged against, the Account reflect the Account’s own investment experience and not the investment experience of our other assets.  The assets of the Account may not be charged with liabilities that arise from any other business we conduct.

We are obligated to pay all amounts promised to Contract Owners under the Contract.  The obligations to Contract Owners and beneficiaries arising under the Contracts are our general corporate obligations.

You may invest in one or a combination of the available Variable Investment Options.  When you choose a Variable Investment Option, we purchase shares of a Fund or a separate investment series of a Fund which are held as an investment for that option.  We hold these shares in the Account.  We may remove or add additional Variable Investment Options in the future.

The Funds

Each of these Funds is detailed in separate prospectuses that are provided with this prospectus.  You should read the Fund prospectuses before you decide to allocate assets to the Variable Investment Options.  The Variable Investment Options that you select are your choice – we do not provide investment advice, nor do we recommend any particular Variable Investment Option.  There is no assurance that the investment objectives of the Variable Investment Options will be met.  Please refer to the list below to see which Variable Investment Options you may choose.

The terms “Fund”, “Portfolio”, and “Variable Investment Option” are largely used interchangeably.  Some of the Variable Investment Options use the term “Fund”, and others use the term “Portfolio” in their respective prospectuses.  Funds of the series type, such as the Prudential Series Fund or Advanced Series Trust, are generally described as a "Fund" consisting of a number of underlying "Portfolios."

Investment Managers

Prudential Investments LLC serves as the investment manager for The Prudential Series Fund (PSF).  Prudential Investments LLC and AST Investment Services, Inc. serve as co-investment managers of the Advanced Series Trust (AST).

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The investment management agreements for PSF and AST provide that the investment manager or co-investment managers (the “Investment Managers”) will furnish each applicable Fund with investment advice and administrative services subject to the supervision of the Board of Trustees and in conformity with the stated policies of the applicable Fund. The Investment Managers must also provide, or obtain and supervise, the executive, administrative, accounting, custody, transfer agent and shareholder servicing services that are deemed advisable by the Board.

The chart below reflects the Funds in which the Account invests, their investment objectives, and each Fund’s investment subadvisers.  For Funds with multiple subadvisers, each subadviser manages a portion of the assets for that Fund.

Variable Investment Option	Investment Objective Summary	Subadviser
Affiliated Funds
AST Advanced Strategies Portfolio - Class 1	Seeks a high level of absolute return by using traditional and non-traditional investment strategies and by investing in domestic and foreign equity and fixed income securities, derivative instruments and other investment companies.	Brown Advisory LLC; Loomis, Sayles & Company, L.P.; LSV Asset Management; Pacific Investment Management Company LLC (PIMCO); Quantitative Management Associates LLC; T. Rowe Price Associates, Inc.; William Blair & Company, LLC
AST Balanced Asset Allocation Portfolio - Class 1	Seeks to obtain the highest potential total return consistent with its specified level of risk tolerance.	Prudential Investments LLC; Quantitative Management Associates, LLC
AST BlackRock Global Strategies Portfolio - Class 1	Seeks a high total return consistent with a moderate level of risk.	BlackRock Financial Management, Inc.
AST FI Pyramis® Quantitative Portfolio (previously AST First Trust Balanced Target Portfolio) - Class 1	Seeks long-term capital growth balanced by current income.	Pyramis Global Advisors, LLC a Fidelity Investments Company
AST J.P. Morgan Strategic Opportunities Portfolio - Class 1	Seeks to maximize return compared to the benchmark through security selection and tactical asset allocation.	J.P. Morgan Investment Management, Inc.
AST Preservation Asset Allocation Portfolio - Class 1	Seeks to obtain a total return consistent with its specified level of risk tolerance.	Prudential Investments LLC; Quantitative Management Associates, LLC
AST Prudential Growth Allocation Portfolio - Class 1	Seeks total return.	Prudential Investment Management, Inc.; Quantitative Management Associates LLC
AST RCM World Trends Portfolio - Class 1	Seeks highest potential total return consistent with its specified level of risk tolerance.	Allianz Global Investors U.S. LLC
AST Schroders Global Tactical Portfolio - Class 1	Seeks to outperform its blended performance benchmark.	Schroder Investment Management North America Inc.; Schroder Investment Management North America Ltd.
AST Schroders Multi-Asset World Strategies Portfolio - Class 1	Seeks long-term capital appreciation.	Schroder Investment Management North America Inc.; Schroder Investment Management North America Ltd.
AST T. Rowe Price Asset Allocation Portfolio - Class 1	Seeks a high level of total return by investing primarily in a diversified portfolio of equity and fixed-income securities.	T. Rowe Price Associates, Inc.

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Variable Investment Option	Investment Objective Summary	Subadviser
Affiliated Funds
PSF Conservative Balanced Portfolio - Class 1	Seeks total investment return consistent with a conservatively managed diversified portfolio.	Prudential Investment Management, Inc.; Quantitative Management Associates, LLC
PSF Flexible Managed Portfolio - Class 1	Seeks total return consistent with an aggressively managed diversified portfolio.	Prudential Investment Management, Inc.; Quantitative Management Associates, LLC
PSF Money Market Portfolio - Class 1	Seeks maximum current income that is consistent with the stability of capital and the maintenance of liquidity.	Prudential Investment Management, Inc.

Variable Investment Option Investment Objective Summary Investment Adviser/Subadviser

Unaffiliated Funds
TOPS® Managed Risk Balanced ETF Portfolio - Class 2	Seeks to provide income and capital appreciation with less volatility than the fixed income and equity markets as a whole.	ValMark Advisers, Inc./Milliman Inc.
TOPS® Managed Risk Growth ETF Portfolio - Class 2	Seeks capital appreciation with less volatility than the equity markets as a whole.	ValMark Advisers, Inc./Milliman Inc.
TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2	Seeks capital appreciation with less volatility than the equity markets as a whole.	ValMark Advisers, Inc./Milliman Inc.

The investment managers or subadvisers for the Funds charge a daily investment management fee as compensation for their services.  Allocations made to all AST and PSF Funds benefit us financially because fees are paid to us or our affiliates by the AST and PSF Funds.  More detailed information, including a full description of these fees, is available in the attached Fund prospectuses.

The AST Balanced Asset Allocation Portfolio and the AST Preservation Asset Allocation Portfolio each invests primarily in shares of other underlying Fund Portfolios, which are managed by the subadvisers of those Portfolios.

In the future, it may become disadvantageous for Separate Accounts of variable life insurance and variable annuity contracts to invest in the same underlying Funds.  Neither the companies that invest in the Funds nor the Funds currently foresee any such disadvantage.  The Board of Directors for each Fund intends to monitor events in order to identify any material conflict between variable life insurance and variable annuity Contract Owners and to determine what action, if any, should be taken.  Material conflicts could result from such things as:

(1)    changes in state insurance law;

(2)    changes in federal income tax law;

(3)    changes in the investment management of any Variable Investment Option; or

(4)    differences between voting instructions given by variable life insurance and variable annuity Contract Owners.

A Fund or Portfolio may have a similar name, investment objective, or investment policy resembling those of a mutual fund managed by the same investment adviser or subadviser that is sold directly to the public.  Despite such similarities, there can be no assurance that the investment performance of any such Fund or Portfolio will resemble that of the publicly available mutual fund.

Service Fees Payable to Pruco Life of New Jersey

We have entered into agreements with the principal underwriter, transfer agent, investment advisor, distributor and/or other related entities of the underlying funds.  Under the terms of these agreements, we provide administrative and support services to the Funds, for which it receives an annual fee from the investment adviser, distributor and/or Fund based on the average assets allocated to the Fund.  These agreements, including the fees paid and services provided, can vary for each Fund.

We and/or our affiliates may receive substantial and varying administrative service payments and Rule 12b-1 fees from certain underlying Funds or related parties.  These types of payments and fees are sometimes referred to as “revenue sharing” payments.  Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract Owners invested indirectly in the Funds, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports.  We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Funds.  The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser.  In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund.  The existence of a 12b-1 fee will always increase the overall cost of investing in those Funds.  In addition, because these fees are paid to us, allocations you make to these affiliated underlying Funds may benefit us financially if these fees exceed the costs of the administrative support services.

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The 12b-1 fees and administrative services fees that we receive may vary among the different Funds that are part of our investment platform.  Thus, the fees we collect may be greater or smaller, based on the Funds that you select.  In addition, we may consider these payments and fees, among a number of factors, when deciding to add or keep a Fund on the “menu” of Funds that we offer through the product.  We collect these payments and fees under agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund.    As of May 1, 2014, the administrative service fees we receive range from 0.25% to 0.40% of the average assets allocated to the Fund.  The service fees received from PSF and AST are 0.25% and 0.40%, respectively.  Some Funds pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive will range from 0.10% to 0.25% of the average assets allocated to the Funds indicated below.

The following Funds currently pay a 12b-1 fee of 0.10%:

Affiliated Funds:
AST Advanced Strategies Portfolio	AST Prudential Growth Allocation Portfolio
AST BlackRock Global Strategies Portfolio	AST Schroders Global Tactical Portfolio
AST FI Pyramis® Quantitative Portfolio	AST Schroders Multi-Asset World Strategies Portfolio
AST J.P. Morgan Strategic Opportunities Portfolio	AST T. Rowe Price Asset Allocation Portfolio
AST RCM World Trends Portfolio

The following Funds currently pay a 12b-1 fee of 0.25%:

Unaffiliated Funds:

TOPS® Managed Risk Balanced ETF Portfolio

TOPS® Managed Risk Growth ETF Portfolio

TOPS® Managed Risk Moderate Growth ETF Portfolio

In addition to the payments that we receive from underlying Funds and/or their affiliates, those same Funds and/or their affiliates may make payments to us and/or other insurers within the Prudential Financial group related to the offering of investment options within variable annuities or life insurance offered by different Prudential business units.

Voting Rights

We are the legal owner of the shares of the Funds associated with the Variable Investment Options.  However, we vote the shares  according to voting instructions we receive from Contract Owners.  We will mail you a proxy, which is a form you need to complete and return to us, to tell us how you wish us to vote.  When we receive those instructions, we will vote all of the shares we own on your behalf in accordance with those instructions.  We vote shares for which we do not receive instructions, and any other shares that we own in our own right, in the same proportion as the shares for which instructions are received.  We may change the way your voting instructions are calculated if it is required by federal or state regulation.  We may also elect to vote shares that we own in our own right if the applicable federal securities laws or regulations, or their current interpretation, change so as to permit us to do so.

We may, if required by state insurance regulations, disregard voting instructions if they would require shares to be voted so as to cause a change in the sub-classification or investment objectives of one or more of the available Variable Investment Options or to approve or disapprove an investment advisory contract for the Fund.  In addition, we may disregard voting instructions that would require changes in the investment policy or investment adviser of one or more of the Funds associated with the available Variable Investment Options, provided that we reasonably disapprove such changes in accordance with applicable federal or state regulations.  If we disregard Contract Owner voting instructions, we will advise Contract Owners of our action and the reasons for such action in the next available annual or semi-annual report.

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Substitution of Variable Investment Options

We may substitute one or more of the available Variable Investment Options.  We may also cease to allow investments in any existing Variable Investment Option.  We would not do this without any necessary SEC and/or state approval.  You will be given specific notice in advance of any substitution we intend to make.

The Fixed Rate Option

You may choose to invest, initially or by transfer, all or part of your Contract Fund to the Fixed Rate Option.  This amount becomes part of our general account.  The general account consists of all assets owned by us other than those in the Account and in other Separate Accounts that have been or may be established by us.  Subject to applicable law, we have sole discretion over the investment of the general account assets, and Contract Owners do not share in the investment experience of those assets.  Instead, we guarantee that the part of the Contract Fund allocated to the Fixed Rate Option will accrue interest daily at an effective annual rate that we declare periodically, but not less than an effective annual rate of 3%.  The fulfillment of our guarantee under this benefit is dependent on our claims paying ability.  We are not obligated to credit interest at a rate higher than an effective annual rate of 3%, although we may do so.

Transfers out of the Fixed Rate Option are subject to strict limits.  See Transfers/Restrictions on Transfers.  The payment of any Cash Surrender Value attributable to the Fixed Rate Option may be delayed up to six months.  See When Proceeds Are Paid.

If you exercise the Overloan Protection Rider, any remaining unloaned Contract Fund value will be transferred to the Fixed Rate Option, and transfers out of the Fixed Rate Option and into the Variable Investment Options will no longer be permitted.  See Loans.

Because of exemptive and exclusionary provisions, interests in the Fixed Rate Option under the Contract have not been registered under the Securities Act of 1933 and the general account has not been registered as an investment company under the Investment Company Act of 1940.  Accordingly, interests in the Fixed Rate Option are not subject to the provisions of these Acts, and we have been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the Fixed Rate Option.  Any inaccurate or misleading disclosure regarding the Fixed Rate Option is subject to certain generally applicable provisions of federal securities laws.

CHARGES AND EXPENSES

This section provides a more detailed description of each charge that is described briefly in the SUMMARY OF CHARGES AND EXPENSES beginning on page 1 of this prospectus.  There are charges and other expenses associated with the Contract that reduce the return on your investment. These charges and expenses are described below.

The total amount invested in the Contract Fund, at any time, consists of the sum of the amount credited to the Variable Investment Options, the amount allocated to the Fixed Rate Option, plus any interest credited on amounts allocated to the Fixed Rate Option, and the principal amount of any Contract loan plus the amount of interest credited to the Contract upon that loan.  See Loans.  Most charges, although not all, are made by reducing the Contract Fund.

In several instances we use the terms "maximum charge" and "current charge."  The "maximum charge", in each instance, is the highest charge that we may make under the Contract.  The "current charge", in each instance, is the amount that we now charge, which may be lower than maximum charges.  If circumstances change, we reserve the right to increase each current charge, up to the maximum charge, without giving any advance notice.

Current charges deducted from premium payments and the Contract Fund may change from time to time, subject to maximum charges.  In deciding whether to change any of these current charges, we will periodically consider factors such as mortality, persistency, expenses, taxes and interest and/or investment experience to see if a change in our assumptions is needed.  Premium based administrative charges will be set at one rate for all Contracts like this one.  Changes in other charges will be by class.  We will not recoup prior losses or distribute prior gains by means of these changes.

The charges under the Contract are designed to cover, in the aggregate, our direct and indirect costs of selling, administering and providing benefits under the Contract. They are also designed, in the aggregate, to compensate us for the risks of loss we assume pursuant to the Contract. If, as we expect, the charges that we collect from the Contract exceed our total costs in connection with the Contract, we will earn a profit. Otherwise, we will incur a loss. The rates of certain of our charges have been set with reference to estimates of the amount of specific types of expenses or risks that we will incur. In most cases, this prospectus identifies such expenses or risks in the name of the charge; however, the fact that any charge bears the name of, or is designed primarily to defray a particular expense or risk does not mean that the amount we collect from that charge will never be more than the amount of such expense or risk. Nor does it mean that we may not also be compensated for such expense or risk out of any other charges we are permitted to deduct by the terms of the Contract. We may reduce stated fees under particular contracts as to which, due to economies of scale and other factors, our administrative costs are reduced.

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Sales Load Charges

We may charge up to 6% of premiums received in all Contract Years.  This charge, often called a “sales load”, is deducted to compensate us for the costs of selling the Contracts, including commissions, advertising and the printing and distribution of prospectuses and sales literature.

Currently, we charge 4% of premiums for sales expenses in the first four Contract Years, 3% in Contract Years five through 10, and zero thereafter, of each Coverage Segment.

Premium Based Administrative Charge

We may charge up to 7.5% of premiums received for a premium based administrative charge, which includes any federal, state or local income, premium, excise, business tax or any other type of charge (or component thereof) measured by or based upon the amount of premium we receive.

This charge is made up of two parts, which currently equal a total of 3.75% of the premiums received.

The first part is a charge for state and local premium taxes.  The current amount for this first part is 2.5% of the premium and is our estimate of the average burden of state taxes generally.  The rate applies uniformly to all Contract Owners without regard to location of residence.  We may collect more for this charge than we actually pay for state and local premium taxes.

The second part is a charge for federal income taxes measured by premiums. The current amount for this second part is 1.25% of the premium.  We believe that this charge is a reasonable estimate of an increase in our federal income taxes resulting from a change in the Internal Revenue Code.  It is intended to recover this increased tax.

Under current law, we may incur state and local taxes (in addition to premium taxes) in several states.  Currently, these taxes are not significant and they are not charged against the Account.  If there is a material change in the applicable state or local tax laws, we may impose a corresponding charge against the Account.

Cost of Insurance

We deduct a monthly cost of insurance ("COI") charge. The charge is determined by multiplying the amount by which the Contract’s Death Benefit exceeds the Contract Fund (“net amount at risk”) by a monthly COI rate.  The purpose of this charge is to provide insurance coverage.  When an insured dies, the amount payable to the beneficiary (assuming there is no Contract Debt) is larger than the Contract Fund - significantly larger if the insured dies in the early years of a Contract.  The COI charges collected from all Contract Owners enables us to pay this larger Death Benefit.  The maximum COI charge is determined by multiplying the amount by which the Contract’s Death Benefit exceeds the Contract Fund (“net amount at risk”) under a Contract by maximum COI rates.  The COI charge is generally deducted proportionately (or as you directed, see Allocated Charges) from the dollar amounts held in each of the chosen investment options.

The net amount at risk is based on your Death Benefit and your Contract Fund; therefore it is impacted by such factors as investment performance, charges, fees, and premium payments. The current, monthly COI rates vary by Basic Insurance Amount and Contract duration, as well as the issue age, sex, and underwriting class of the insured, and each Coverage Segment amount.  The rates generally increase over time but are never more than the maximum charges listed in the Contract data pages. The maximum COI rates are based upon the 2001 Commissioner's Standard Ordinary (“CSO”) Mortality Tables.  Our current COI charges range from $0.01 to $83.34 per $1,000 of net amount at risk.  For information regarding COI charges where there are two or more Coverage Segments in effect, see Increases in Basic Insurance Amount.

Monthly Deductions from the Contract Fund

In addition to the COIs, we generally deduct the following monthly charges proportionately (or as you directed, see Allocated Charges) from the dollar amounts held in each of the chosen investment options.

(a)   We deduct an administrative charge for the Basic Insurance Amount.  This charge is made up of two parts and is intended to compensate us for things like processing claims, keeping records, and communicating with Contract Owners.  The first part of the charge is a flat monthly fee of $25 per month in the first Contract Year and $9 per month thereafter.  The second part of the fee is an amount of up to $1.57 per $1,000 of the Basic Insurance Amount.  The fee varies by issue age, sex, underwriting class, and extra ratings.  Generally, the rate per $1,000 of Basic Insurance Amount is higher for older issue ages and for higher risk classifications.

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The following table provides samples of the initial administrative charges per $1,000 of Basic Insurance Amount:

Issue Age	Male Nonsmoker	Male Smoker	Female Nonsmoker	Female Smoker
35	$0.21	$0.24	$0.18	$0.19
45	$0.31	$0.35	$0.27	$0.31
55	$0.53	$0.59	$0.45	$0.50
65	$0.83	$1.00	$0.80	$0.80

The amount of the maximum charge that applies to a particular Contract is shown on the Contract Data pages under the heading “Adjustments to the Contract Fund.”

(b)   Similarly, we charge an administrative charge for each Coverage Segment representing an increase in Basic Insurance Amount.  This charge is also made up of two parts.  The first part of the charge is a flat monthly fee of $9 per month the first two years of the Coverage Segment and zero thereafter.  The second part of the fee is based on the Coverage Segment insurance amount.  The sample per $1,000 charges are the same as those shown in (a) above. The amount per $1,000 of increase in Basic Insurance Amount varies by sex, issue age, underwriting class, extra rating class, if any, and the effective date of the increase.

The highest charge per thousand for either of the instances described above applies to male, smokers above age 74 at certain rating classes.  The lowest charge per thousand for either of the instances described above is $0.06 and applies to females age 0.

You may add one or more riders to the Contract.  Some riders are charged for separately.  If you add such a rider to the basic Contract, additional charges will be deducted.  See Charges for Rider Coverage.

If an insured is in a substandard risk classification (for example, a person with a health condition), additional charges will be deducted.

The earnings of the Account are taxed as part of our operations.  Currently, no charge is being made to the Account for Pruco Life of New Jersey’s federal income taxes, other than the 1.25% charge for federal income taxes measured by premiums.  See Premium Based Administrative Charge.  We periodically review the question of a charge to the Account for our federal income taxes.  We may charge such a fee in the future for any federal income taxes that would be attributable to the Contracts.

Daily Deduction from the Variable Investment Options

Each day we deduct a charge from the assets of the Variable Investment Options in an amount equivalent to an effective annual rate of up to 0.45%.  Currently, we charge 0.25%.  This charge is intended to compensate us for assuming mortality and expense risks under the Contract.  The mortality risk we assume is that insureds may live for shorter periods of time than we estimated when mortality charges were determined.  The expense risk we assume is that expenses incurred in issuing and administering the Contract will be greater than we estimated in fixing our administrative charges.  This charge is not assessed against amounts allocated to the Fixed Rate Option.

Surrender Charges

We assess a surrender charge if, during the first 10 Contract Years (or during the first 10 years of a Coverage Segment representing an increase in Basic Insurance Amount), the Contract lapses, is surrendered, or the Basic Insurance Amount is decreased (including as a result of a withdrawal or a Death Benefit type change).  These surrender charges compensate us for costs associated with the Contracts, such as: processing applications, conducting examinations, determining insurability and the insured’s rating class, and establishing records.  While the amount of the surrender charge decreases over time, it may be a substantial portion of, or even equal to, your Contract Fund.  We do not deduct a surrender charge from the Death Benefit if the insured dies during this period.

We deduct the maximum surrender charge that applies to your Contract in the early durations.  The maximum surrender charge we deduct ranges from $2.39 to $28.26 per $1,000 of Basic Insurance Amount.  For example, the maximum surrender charge for a Contract Owner, male age 35 in the Nonsmoker Plus underwriting class, with no riders is $8.37 per $1,000 of Basic Insurance Amount.  The range of maximum surrender charge is the same for segments representing an increase in Basic Insurance Amount.  Your actual charge will vary by duration, and the insured’s age, sex, rating class, and underwriting class.  A schedule showing maximum surrender charges for a full surrender occurring each year that a surrender charge may be payable is found in the Contract Data pages of your Contract.  The charge decreases to zero by the end of the 10th year for each Coverage Segment.

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We will show a surrender charge threshold for each Coverage Segment in the Contract Data pages.  This threshold amount is the segment’s lowest coverage amount since its effective date.  If during the first 10 Contract Years (or during the first 10 years of a Coverage Segment representing an increase in Basic Insurance Amount), the Basic Insurance Amount is decreased (including as a result of a withdrawal or a change in type of Death Benefit), and the new Basic Insurance Amount for any Coverage Segment is below the threshold for that segment, we will deduct a percentage of the surrender charge for that segment.  The percentage will be the amount by which the new Coverage Segment is less than the threshold, divided by the Basic Insurance Amount at issue.  After this transaction, the threshold will be updated and a corresponding new surrender charge schedule will also be determined to reflect that portion of surrender charges deducted in the past.

Transaction Charges

(a)   We may charge a transaction fee of up to $25 for each transfer exceeding 12 in any Contract Year.  Currently, we do not charge a fee for transfers.

(b)   We may charge an administrative processing fee equal to the lesser of $25 and 2% of the withdrawal amount in connection with each withdrawal.  Currently, we do not charge a fee for withdrawals.

(c)   We may charge a transaction fee of up to $25 for any change in Basic Insurance Amount.  Currently, we do not charge a fee for a change in the Basic Insurance Amount.

(d)   We charge a transaction fee of 3.5% of your Contract Fund amount for exercising the Overloan Protection Rider.

(e)   We charge a transaction fee of up to $150 for Living Needs Benefit payments.

Allocated Charges

You may select up to two Variable Investment Options from which we deduct your Contract's monthly charges.  Monthly charges include:  (1) monthly administrative charges, (2) COI charges, (3) any rider charges, and (4) any charge for substandard risk classification.  Allocations must be designated in whole percentages and total 100%.  For example, 33% can be selected but 331/3% cannot.  The Fixed Rate Option is not available as one of your allocation options.  See Monthly Deductions from the Contract Fund.

If there are insufficient funds in one or both of your selected Variable Investment Options to cover the monthly charges, the selected Variable Investment Option(s) will be reduced to zero.  Any remaining charge will generally be deducted from your other Variable Investment Options and the Fixed Rate Option proportionately to the dollar amount in each.  Furthermore, if you do not specify an allocation of monthly charges, we will generally deduct monthly charges proportionately from all your Variable Investment Options and the Fixed Rate Option.

Charges After Age 121

Beginning on the first Contract Anniversary on or after the insured’s 121st birthday, we will no longer accept premiums or deduct monthly charges from the Contract Fund.  You may continue the Contract until the insured's death, or until you surrender the Contract for its Cash Surrender Value.  You may continue to make transfers, loans, loan repayments, and withdrawals, subject to the limitations on these transactions described elsewhere in this prospectus.  We will continue to make daily deductions for mortality and expense risk charges, and the funds will continue to charge operating expenses if you have amounts in the Variable Investment Options.  Any Contract loan will remain outstanding and continue to accrue interest until it is repaid.  The Contract can only lapse if Contract Debt grows to be equal to or more than the cash value.

Fund Charges

The Funds deduct charges from and pay expenses out of the Variable Investment Options as described in the Fund prospectuses.

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Charges for Rider Coverage

·   Accidental Death Benefit Rider - We deduct a monthly charge for this rider, which provides an additional Death Benefit if the insured’s death is accidental.  The charge ranges from $0.05 to $0.28 per $1,000 of coverage based on issue age and sex of the insured, and is charged until the first Contract Anniversary on or after the insured’s 100th birthday.

·   Children Level Term Rider - We deduct a monthly charge for this rider, which provides term life insurance on all dependent children that are covered under this rider.  The charge is $0.42 per $1,000 of coverage and is charged until the earliest of: the primary insured’s death, and the first Contract Anniversary on or after the primary insured’s 75th birthday, or you notify us to discontinue the rider coverage.

·   Disability Benefit Rider - We deduct a monthly charge for this rider, which pays certain amounts into the Contract if the insured is totally disabled.  The charge is based on issue age, sex, and underwriting class of the insured.  We charge up to 28.75% of the total disability benefit which is equal to the total charges deducted on each Monthly Date, and is charged until the first Contract Anniversary on or after the insured’s 60th birthday.

·   Living Needs Benefit Rider - We deduct a transaction fee of up to $150 for this rider if benefits are paid.

·   Overloan Protection Rider - We deduct a transaction fee of 3.5% of your Contract Fund amount if you exercise this rider.

PERSONS HAVING RIGHTS UNDER THE CONTRACT

Contract Owner

There are circumstances when the Contract Owner is not the insured.  There may also be more than one Contract Owner.  If the Contract Owner is not the insured or there is more than one Contract Owner, they will be named in an endorsement to the Contract.  This ownership arrangement will remain in effect unless you ask us to change it.

You may change the ownership of the Contract by sending us a request in a form that meets our needs.  We may ask you to send us the Contract to be endorsed.  If we receive your request in a form that meets our needs, and the Contract if we ask for it, we will file and record the change, and it will take effect as of the date the request is received in our Service Office.

While the insured is living, the Contract Owner is entitled to any Contract benefit and value.  Only the Contract Owner is entitled to exercise any right and privilege granted by the Contract or granted by us.  For example, the Contract Owner is entitled to surrender the Contract, access Contract values through loans or withdrawals, assign the Contract, and to name or change the beneficiary.

Beneficiary

The beneficiary is entitled to receive any benefit payable on the death of the insured.  You may designate or change a beneficiary by sending us a request in a form that meets our needs.  We may ask you to send us the Contract to be endorsed.  If we receive your request in a form that meets our needs, and the Contract if we ask for it, we will file and record the change and it will take effect as of the date you sign the request.  However, if we make any payment(s) before we receive the request, we will not have to make the payment(s) again.  When we are made aware of an assignment, we will recognize the assignee’s rights before any claim payments are made to the beneficiary.  When a beneficiary is designated, any relationship shown is to the insured, unless otherwise stated.

OTHER GENERAL CONTRACT PROVISIONS

Assignment

This Contract may not be assigned if the assignment would violate any federal, state or local law or regulation prohibiting sex distinct rates for insurance.  Generally, the Contract may not be assigned to an employee benefit plan or program without our consent. We assume no responsibility for the validity or sufficiency of any assignment.  We will not be obligated to comply with any assignment unless we receive a copy at a Service Office.

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Incontestability

We will not contest the Contract after it has been in-force during the insured’s lifetime for two years from the issue date, the reinstatement date, or the effective date of any change made to the Contract that requires our approval and would increase our liability.

Misstatement of Age or Sex

If the insured's stated age or sex or both are incorrect in the Contract, we will adjust the Death Benefit payable and any amount to be paid, as required by law, to reflect the correct age and sex.  Any such benefit will be based on what the most recent deductions from the Contract Fund would have provided at the insured's correct age and sex.

Settlement Options

The Contract grants to most Contract Owners, or to the beneficiary, a variety of optional ways of receiving Contract proceeds.  Under the Contract, the Death Benefit may be paid in a single sum or under one of the optional modes of settlement.  Any Pruco Life of New Jersey representative authorized to sell this Contract can explain these options upon request.

Suicide Exclusion

Generally, if the insured, whether sane or insane, dies by suicide within two years from the Contract Date, the Contract will end and we will return the premiums paid, less any Contract Debt, and less any withdrawals.  Generally, if the insured, whether sane or insane, dies by suicide after two years from the issue date, but within two years of the effective date of an increase in the Basic Insurance Amount, we will pay, as to the increase in amount, no more than the sum of the premiums paid on and after the effective date of an increase.

RIDERS

Contract Owners may be able to obtain extra fixed benefits, which may require additional charges.  These optional insurance benefits will be described in what is known as a "rider" to the Contract.  Additionally, each Contract is issued with an attached Rider to Provide Lapse Protection that is not optional.  There is no charge for the Rider to Provide Lapse Protection.  Charges applicable to the riders will be deducted from the Contract Fund on each Monthly Date, with the exception of the Rider to Provide Lapse Protection, the Overloan Protection Rider, and the Living Needs Benefit Rider.  For more details about each rider, see below.

The amounts of these benefits, except for the Disability Benefit Rider and the Rider to Provide Lapse Protection, do not depend on the performance of the Account, although they will no longer be available if the Contract lapses, or you choose to keep the Contract in-force under the Overloan Protection Rider.  Additional restrictions may apply and are clearly described in the applicable rider.  A Pruco Life of New Jersey representative can explain all of these extra benefits further.  We will provide samples of the provisions upon receiving a written request.

Rider to Provide Lapse Protection

Your Contract is issued with an attached Rider to Provide Lapse Protection.  Under the Rider to Provide Lapse Protection, we agree to keep your Contract in-force and guarantee that your Contract will not lapse, as long as the No-Lapse Guarantee Value is greater than zero.

On the Contract Date and on each Monthly Date thereafter, we will calculate your No-Lapse Guarantee Value (your No-Lapse Contract Fund, less any Contract Debt).  Your No-Lapse Contract Fund is the accumulated value of the prior No-Lapse Contract Fund, plus any no-lapse invested premium amounts, plus no-lapse interest, and minus a no-lapse charge factor.  Additionally, the No-Lapse Contract Fund is adjusted for any withdrawals, loans, and administrative fees.  If the No-Lapse Guarantee Value is greater than zero, your Contract will remain in-force until the next Monthly Date, even if you experience poor investment results and your Net Cash Value falls to zero or less.

Under the Rider to Provide Lapse Protection, if we receive your initial premium within 30 days after the Contract Date, we apply it to your No-Lapse Contract Fund as if we received it on your Contract Date.  For any premium we receive in the 21-day period preceding a Contract Anniversary on which the sale charges decrease, we will subtract a no-lapse charge for sales expenses no greater than the amount we would subtract if that premium were received on the Contract Anniversary.

Your No-Lapse Guarantee Value is calculated solely to determine whether your Contract is in-force or in default.  These are not cash values that you realize by surrendering the Contract, nor are they payable Death Benefits, and they do not change your Contract values. The process to calculate your No-Lapse Guarantee Value is similar to the process that determines your actual contract values, however, the No-Lapse Guarantee Value will not be impacted by any investment loss or gain of the Contract Fund.

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The charge factor used to determine the No-Lapse Guarantee Contract Fund and No-Lapse Guarantee Value will vary based on Basic Insurance Amount, duration, age, sex, underwriting class, and extra ratings.  In addition, the charge factor is used only to determine whether your Contract is in default and does not affect your actual Contract values.  The charges that are specific to your Contract will appear in the section titled Lapse Protection Rider Data in your Contract.

The Contract is in default if the Contract Fund, less any applicable surrender charges and less any Contract Debt, is zero or less, unless it remains in-force under the Rider to Provide Lapse Protection as a result of having a No-Lapse Guarantee Value greater than zero.  If the Contract Fund, less any applicable surrender charges and less any Contract Debt, is zero or less and the No-Lapse Guarantee Value equals zero or less, your Contract will be in default.  If you take withdrawals and loans from your Contract, you increase the risk that your Contract will go into default.

Should any event occur that would cause your Contract to go into default or lapse, we will notify you of the required payment to keep your Contract in-force.  Your payment must be received at the Payment Office within the 61-day grace period after the notice of default is mailed or the Contract will end and have no value.  If you have an outstanding loan when your Contract lapses, you may have taxable income as a result.  See Tax Treatment of Contract Benefits - Pre-Death Distributions.  If your Contract lapses, and you meet the requirements to reinstate it, you will no longer have a Rider to Provide Lapse Protection.  See LAPSE AND REINSTATEMENT.

If you elected the Guideline Premium Test for the definition of life insurance test, you may not be able to pay enough to get the guarantee for the duration you desire without violating the definition of life insurance.   This is not true when choosing the Cash Value Accumulation Test for the definition of life insurance.  See PREMIUMS and Tax Treatment of Contract Benefits - Treatment as Life Insurance.

Overloan Protection Rider

The Overloan Protection Rider guarantees protection against lapse due to loans, even if the Contract Debt exceeds the accumulated Cash Surrender Value of your Contract.  Currently, the rider may be added only at the time your Contract is issued; however, this rider is not available on Contracts that have the Accidental Death Benefit Rider.  There is no charge for adding the Overloan Protection Rider to your Contract, however, a one-time fee will apply when this rider is exercised.

The following eligibility requirements must be met to exercise the rider:

(a)   We must receive a written request in Good Order to exercise the rider benefits;

(b)   Contract Debt must exceed the Basic Insurance Amount;

(c)   The Contract must be in-force for the later of 15 years and the Contract Anniversary after the insured’s 75th birthday;

(d)   The Guideline Premium test must be used as the Contract’s definition of life insurance;

(e)   Contract Debt must be a minimum of 95% of the cash value;

(f)   The Cash Surrender Value must be sufficient to pay the cost of exercising the rider; and

(g)   Your Contract must not be classified as a Modified Endowment Contract and must not qualify as a Modified Endowment Contract as a result of exercising this rider.

We will send you a notification upon your becoming eligible for this benefit.

We deduct a transaction fee of 3.5% of your Contract Fund amount if you exercise this rider.

When you exercise the rider, the effective date will be the next date that monthly charges are deducted following our receipt of your request in Good Order at a Service Office.  The charges and benefits of other riders available under your Contract will be discontinued, except for the Living Needs Benefit Rider.  Any benefits you may currently be receiving under the Disability Benefit Rider will also be discontinued.

Any remaining unloaned Contract Fund value will be transferred to the Fixed Rate Option.  Additionally, fund transfers into or out of any of the Variable Investment Options will no longer be permitted.  Any Auto Rebalance, Dollar Cost Averaging, directed charges, or premium allocation instructions will be discontinued.

Premium payments will no longer be accepted for the Contract.  Instead, all payments received will be applied as loan or loan interest repayments.  We will no longer send any regularly scheduled bills, and Electronic Fund Transfer of Premium Payments will be cancelled.

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If you have a Type B Death Benefit, we will change it to a Type A Death Benefit.  You will no longer be permitted to make Death Benefit changes as long as your Contract remains in-force under the Overloan Protection Rider.  The Basic Insurance Amount will be changed to the greater of the Type A Death Benefit and the amount of the Contract Debt multiplied by the Attained Age factor that applies.  The Attained Age factors are shown in your Contract.

Increases and decreases to your Basic Insurance Amount, rating reductions, and withdrawals, will no longer be permitted.

If you exercise this rider, you may no longer execute the Reduced Paid Up option.  Doing so would cause the Contract to be classified as a Modified Endowment Contract.

Please note that the Internal Revenue Service may take a position that the outstanding loan balance should be treated as a distribution when the Contract Owner elects the Overloan Protection benefit.  Distributions are subject to income tax.  Were the Internal Revenue Service to take this position, we would take reasonable steps to attempt to avoid this result, including modifying the Contract's loan provisions, but cannot guarantee that such efforts would be successful. You should consult a tax advisor as to the tax risks associated with exercising the Overloan Protection Rider.

Other Optional Riders

We will not pay a benefit on any Accidental Death Benefit type rider or make payments for any disability type rider if the death or injury is caused or contributed to by war or act of war, declared or undeclared, including resistance to armed aggression.  This restriction includes service in the armed forces of any country at war.

Accidental Death Benefit Rider - The Accidental Death Benefit Rider provides an additional Death Benefit that is payable if the insured's death is accidental, as defined in the benefit provision.  This benefit will end on the earliest of: the end of the day before the first Contract Anniversary on or after the insured’s 100th birthday and the first Monthly Date on or after the date a request to discontinue the Rider is received in Good Order at a Service Office.  This rider is not available on Contracts that have the Overloan Protection Rider.

Children Level Term Rider - The Children Level Term Rider provides term life insurance coverage on the life of the insured's children.  The rider coverage will end on the earliest of: (1) the primary insured’s death, (2) the first Contract Anniversary on or after the primary insured’s 75th birthday, (3) the first Monthly Date on or after the date a request to discontinue the Rider is received in Good Order at a Service Office, (4) the first Contract Anniversary on or after the child’s 25th birthday, and (5) the date a rider is converted to a new Contract.

Disability Benefit Rider - The Disability Benefit Rider pays certain amounts into the Contract if the insured is totally disabled, as defined by the benefit provisions.  The rider coverage will end as of the first Contract Anniversary on or after the insured’s 60th birthday.

Living Needs Benefit Rider - The Living Needs BenefitSM Rider may be available on your Contract.  There is no charge for adding the benefit to a Contract.  However, when a claim is paid under this rider, a reduction for early payment is applied and a processing fee of up to $150 per Contract will be deducted.

The Living Needs Benefit allows you to elect to receive an accelerated payment of all or part of the Contract's Death Benefit, adjusted to reflect current value, at a time when certain special needs exist.  The adjusted Death Benefit will always be less than the Death Benefit, but will not be less than the Contract’s Cash Surrender Value.

The Terminal Illness Option is available on the Living Needs Benefit Rider when a licensed physician certifies the insured as terminally ill with a life expectancy of six months or less.  When that evidence is provided and confirmed by us, we will provide an accelerated payment of the portion of the Death Benefit selected by the Contract Owner as a Living Needs Benefit.  The Contract Owner will receive this benefit in a single sum.

All or part of the Contract's Death Benefit may be accelerated under the Living Needs Benefit.  If the benefit is only partially accelerated, a Death Benefit of at least $25,000 must remain under the Contract.  The minimum amount that may be accelerated for a Living Needs Benefit claim is $50,000.  However, we currently have an administrative practice to allow a reduced minimum of $25,000.  We reserve the right to discontinue this administrative practice in a non-discriminatory manner.

No benefit will be payable if you are required to elect it in order to meet the claims of creditors or to obtain a government benefit.  We can furnish details about the amount of Living Needs Benefit that is available to an eligible Contract Owner, and the effect on the Contract if less than the entire Death Benefit is accelerated.

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You should consider whether adding this settlement option is appropriate in your given situation.  Adding the Living Needs Benefit to the Contract has no adverse consequences; however, electing to use it could.  With the exception of certain business-related Contracts, the Living Needs Benefit is excluded from incomeif the insured is terminally ill or chronically ill as defined in any applicable tax law (although the exclusion in the latter case may be limited).  You should consult a tax adviser before electing to receive this benefit.  Receipt of a Living Needs Benefit payment may also affect your eligibility for certain government benefits or entitlements.

REQUIREMENTS FOR ISSUANCE OF A CONTRACT

Generally, the Contract may be issued on insureds through age 85.  Currently, the minimum Basic Insurance Amount for a Contract issued for insureds ages 18 through 75 is $75,000 ($50,000 for insureds issue ages 0 through 17, $100,000 for insureds issue ages 76 through 80 and $250,000 for insureds issue ages 81 and above).  We may change the minimum Basic Insurance Amounts of the Contracts we will issue.

We require evidence of insurability, which may include a medical examination, before issuing any Contract. Preferred Best nonsmokers are offered more favorable cost of insurance rates than smokers.  We charge a higher cost of insurance rate and/or an extra amount if an additional mortality risk is involved.  We will not allow a change to your Contract if it will cause the Death Benefit to exceed our retention limits or violate any other underwriting rule.  These are the current underwriting requirements.  We reserve the right to change them on a non-discriminatory basis.

PREMIUMS

Minimum Initial Premium

The Contract offers flexibility in paying premiums.  The minimum initial premium is due on or before the Contract Date.  It is the premium needed to start the Contract.  The minimum initial premium is equal to 2.35 times the first month’s No-Lapse Contract Fund charge.  There is no insurance under the Contract unless the minimum initial premium is paid.  Thereafter, you decide when to make premium payments and, subject to a $25 minimum, in what amounts.

We may require an additional premium if adjustments to premium payments exceed the minimum initial premium or there are Contract Fund charges due on or before the payment date.  We reserve the right to refuse to accept any payment that increases the Death Benefit by more than it increases the Contract Fund.  Furthermore, there are circumstances under which the payment of premiums in amounts that are too large may cause the Contract to be characterized as a Modified Endowment Contract, which could be significantly disadvantageous.  If you make a payment that would cause the Contract to be characterized as a Modified Endowment Contract, we will send you a letter to advise you of your options.  Generally, you have 60 days from when we received your payment to remove the excess premiums and any accrued interest.  If you choose not to remove the excess premium and accrued interest, your Contract will become permanently characterized as a Modified Endowment Contract.  We will not accept a premium payment that exceeds the Guideline Premium limit if your Contract uses the Guideline Premium definition of life insurance.  See Tax Treatment of Contract Benefits.

Generally, your initial net premium is applied to your Contract as of the Contract Date.  If we do not receive your initial premium before the Contract Date, we apply the initial premium to your Contract as of the end of the Valuation Period in which it is received in Good Order at the Payment Office.

Available Types of Premium

After the minimum initial premium is paid, no other specific premiums are required and you have a certain amount of flexibility with respect to the amount and timing for future premium payments.  Two suggested patterns of premiums are described below.  Contracts with no riders or extra risk charges will have level premiums for each premium type described below.  Understanding them may help you understand how the Contract works.

·   The Single Premium No-Lapse Premium is a premium that, if paid on the Contract Date, will keep the Contract in-force during the lifetime of the insured, regardless of investment performance and assuming no loans or withdrawals.

·   The Lifetime Modal No-Lapse Premiums are premiums that, if paid on the Contract Date and each modal date up to the insured’s Attained Age 121, will keep the Contract in-force during the lifetime of the insured, regardless of investment performance and assuming no loans or withdrawals.

You should note that either one or both of the premiums defined above may not be payable as desired if you elect the Guideline Premium Test for the definition of life insurance test.  In that case, you may not be able to pay enough premium to obtain a guarantee for the duration you desire, without violating the definition of life insurance.   If a premium payment would otherwise cause the definition of life insurance test to be violated, we will return the portion of the premium in excess of the allowable amount.  This will not occur if you choose the Cash Value Accumulation Test as the definition of life insurance.  If the Contract subsequently enters default, we will tell you the amount you need to pay to keep the Contract in-force, and when you will need to pay that amount.  It’s important to know that these additional payment amounts could be substantial.  For an explanation of the Guideline Premium Test and the Cash Value Accumulation Test, see Tax Treatment of Contract Benefits - Treatment as Life Insurance.

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We can bill you for the amount you select annually, semi-annually, or quarterly.  Because the Contract is a flexible premium Contract, there are no scheduled premium due dates.  When you receive a premium notice, you are not required to pay this amount, however, paying premiums in a different manner than described in a Contract illustration may shorten the duration of your lapse protection provided by the Rider to Provide Lapse Protection.  When you do make a premium payment, the minimum amount that we will accept is $25.

You may also pay premiums automatically through pre-authorized monthly electronic fund transfers from a bank checking account.  If you elect to use this feature, you choose the day of the month on which premiums will be paid and the premium amount.  We will then draft the same amount from your account on the same date each month.  When you apply for the Contract, you and your Pruco Life of New Jersey representative should discuss how frequently you would like to be billed (if at all) and for what amount.

Allocation of Premiums

On the later of the Contract Date and the end of the Valuation Period in which the initial premium is received, we deduct the charge for sales expenses and the premium based administrative charge from the initial premium.  During the 10 day period following your receipt of the Contract, the remainder of the initial premium and any other net premium will be allocated to the Money Market investment option as of the end of the Valuation Period in which it is received in Good Order at the Payment Office.  The first monthly deductions are made after the remainder of the initial premium and any other net premium is allocated to the Money Market investment option. After the 10th day, these funds, adjusted for any investment results, will be transferred out of the Money Market investment option and allocated among the Variable Investment Options and/or the Fixed Rate Option according to your current premium allocation.  Your Contract may include Funds that are not currently accepting additional investments.  See The Pruco Life of New Jersey Variable Appreciable Account.  The transfer from the Money Market investment option on the 10th day following receipt of the Contract will not be counted as one of your 12 free transfers per Contract Year or the 20 transfers per calendar year described under Transfers/Restrictions on Transfers.  If the first premium is received before the Contract Date, there will be a period during which the Contract Owner's initial premium will not be invested.

The charge for sales expenses and the premium based administrative charge will also apply to all subsequent premium payments.  The remainder of each subsequent premium payment will be invested as of the end of the Valuation Period in which it is received in Good Order at the Payment Office, in accordance with the allocation you previously designated.  The “Valuation Period” means the period of time from one determination of the value of the amount invested in a Variable Investment Option to the next.  Such determinations are made when the net asset values of the Variable Investment Options are calculated, which is as of the close of regular trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time).  With respect to any initial premium payment received before the contract date and any premium payment that is not in Good Order, we may temporarily hold the premium in a suspense account and we may earn interest on such amount. You will not be credited interest on those amounts during that period. The monies held in the suspense account may be subject to claims of our general creditors. The premium payment will not be reduced nor increased due to market fluctuations during that period.

Provided the Contract is neither in default, nor in-force under the provisions of the Overloan Protection Rider, you may change the way in which subsequent premiums are allocated by giving written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephoning a Service Office, provided you are enrolled to use the Telephone Transfer System.  There is no charge for reallocating future premiums.  All percentage allocations must be in whole numbers.  For example, 33% can be selected but 33⅓% cannot.  Of course, the total allocation to all selected investment options must equal 100%.

Transfers/Restrictions on Transfers

You may, up to 12 times each Contract Year, transfer amounts among the Variable Investment Options or to the Fixed Rate Option.  Additional transfers may be made only with our consent.  Currently, we will allow you to make additional transfers.  For the first 20 transfers in a calendar year, you may transfer amounts by proper written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephone, provided you are enrolled to use the Telephone Transfer System.  You will automatically be enrolled to use the Telephone Transfer System unless the Contract is jointly owned or you elect not to have this privilege. Telephone transfers may not be available on Contracts that are assigned, depending on the terms of the assignment.  See Assignment.

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After you have submitted 20 transfers in a calendar year, we will accept subsequent transfer requests only if they are in a form that meets our needs, bear an original signature in ink, and are sent to us by U.S. regular mail.  After you have submitted 20 transfers in a calendar year, a subsequent transfer request by telephone, fax or electronic means will be rejected, even in the event that it is inadvertently processed.

Multiple transfers that occur during the same day, but prior to the end of the Valuation Period for that day, will be counted as a single transfer.

There is no transaction charge for the first 12 transfers per Contract Year among investment options.  We may charge up to $25 for each transfer made exceeding 12 in any Contract Year.

Currently, certain transfers effected systematically under a dollar cost averaging or an automatic rebalancing program do not count towards the limit of 12 transfers per Contract Year or the limit of 20 transfers per calendar year.  In the future, we may count such transfers towards the limit.

Transfers out of the Money Market investment option will not be made until 10 days after you receive the Contract.  Such transfers and any transfers due to any fund closures or mergers will not be considered towards the 12 transfers per Contract Year or the 20 transfers per calendar year.

You may also transfer amounts from the Variable Investment Option to the Fixed Rate Option at anytime within 18 months from the Contract Date, and within the later of 60 days from the effective date of a material change in the investment policy of a Variable Investment Option and 60 days from the notice of that change, with no restriction.  Such transfers do not count toward the 12 transfers allowed in each Contract Year.

Transfers among Variable Investment Options will take effect as of the end of the Valuation Period in which a transfer request is received in Good Order at a Service Office.  The request may be in terms of dollars, such as a request to transfer $5,000 from one Variable Investment Option to another, or may be in terms of a percentage reallocation among Variable Investment Options.  In the latter case, as with premium reallocations, the percentages must be in whole numbers.

We will use reasonable procedures, such as asking you to provide certain personal information provided on your application for insurance, to confirm that instructions given by telephone are genuine.  We will not be held liable for following telephone instructions that we reasonably believe to be genuine.  We cannot guarantee that you will be able to get through to complete a telephone transfer during peak periods such as periods of drastic economic or market change.

Only one transfer from the Fixed Rate Option will be permitted during each Contract Year.  The maximum amount per Contract you may transfer out of the Fixed Rate Option each year is the greater of:  (a) 25% of the amount in the Fixed Rate Option; and (b) $2,000.

If you exercise the Overloan Protection Rider, we will then transfer any amounts you have in the Variable Investment Options to the Fixed Rate Option.  The transfer is not counted as one of the 12 transfers we allow per Contract Year and there is no charge.  Transfers out of the Fixed Rate Option and into the Variable Investment Options will not be permitted while your Contract is kept in-force under the Overloan Protection Rider.

The Contract was not designed for professional market timing organizations, other organizations, or individuals using programmed, large, or frequent transfers.  Large or frequent transfers among Variable Investment Options in response to short-term fluctuations in markets, sometimes called “market timing”, can make it very difficult for Fund advisers/sub-advisers to manage the Variable Investment Options.  Large or frequent transfers may cause the Fund to hold more cash than otherwise necessary, disrupt management strategies, increase transaction costs, or affect performance to the disadvantage of other Contract Owners.  If we (in our own discretion) believe that a pattern of transfers or a specific transfer request, or group of transfer requests, may have a detrimental effect on the performance of the Variable Investment Options, or we are informed by a Fund (e.g., by the Fund’s adviser/sub-advisers) that the purchase or redemption of shares in the Variable Investment Option must be restricted because the Fund believes the transfer activity to which such purchase or redemption relates would have a detrimental effect on the performance of the affected Variable Investment Option, we may modify your right to make transfers by restricting the number, timing, and amount of transfers.  We reserve the right to prohibit transfer requests made by an individual acting under a power of attorney on behalf of more than one Contract Owner.  We will immediately notify you at the time of a transfer request if we exercise this right.

Any restrictions on transfers will be applied in a uniform manner to all persons who own Contracts like this one, and will not be waived.  However, due to the discretion involved in any decision to exercise our right to restrict transfers, it is possible that some Contract Owners may be able to effect transactions that could affect Fund performance to the disadvantage of other Contract Owners.

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In addition, Contract Owners who own variable life insurance or variable annuity Contracts that do not impose the transfer restrictions described above, might make more numerous and frequent transfers than Contract Owners who are subject to such limitations.  Contract Owners who are not subject to the same transfer restrictions may have the same underlying Variable Investment Options available to them, and unfavorable consequences associated with such frequent trading within the underlying Variable Investment Option (e.g., greater Portfolio turnover, higher transaction costs, or performance or tax issues) may affect all Contract Owners.

The Funds have adopted their own policies and procedures with respect to excessive trading of their respective shares, and we reserve the right to enforce these policies and procedures.  The prospectuses for the Funds describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted.  Under SEC rules, we are required to: (1) enter into a written agreement with each Portfolio or its principal underwriter that obligates us to provide to the Fund promptly upon request certain information about the trading activity of individual Contract Owners, and (2) execute instructions from the Fund to restrict or prohibit further purchases or transfers by specific Contract Owners who violate the excessive trading policies established by the Fund.  In addition, you should be aware that some Funds may receive “omnibus” purchase and redemption orders from other insurance companies or intermediaries such as retirement plans.  The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance contracts and/or individual retirement plan participants.  The omnibus nature of these orders may limit the Funds in their ability to apply their excessive trading policies and procedures.  In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations.  For these reasons, we cannot guarantee that the Funds (and thus Contract Owners) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the Funds.

The Funds may assess a short term trading fee in connection with a transfer out of any available Variable Investment Option if the transfer occurs within a certain number of days following the date of allocation to the Variable Investment Option.  Each Fund determines the amount of the short term trading fee and when the fee is imposed. The fee is retained by or paid to the Fund and is not retained by us.  The fee will be deducted from your Contract Value to the extent allowed by law.  At present, no Fund has adopted a short-term trading fee.

Although our transfer restrictions are designed to prevent excessive transfers, they are not capable of preventing every potential occurrence of excessive transfer activity.

Dollar Cost Averaging

As an administrative practice, we are currently offering a feature called Dollar Cost Averaging ("DCA").  Under this feature, either fixed dollar amounts or a percentage of the amount designated for use under the DCA option will be transferred periodically from the DCA Money Market investment option into other Variable Investment Options available under the Contract, excluding the Fixed Rate Option and any Funds that are not currently accepting additional investments.  See The Pruco Life of New Jersey Variable Appreciable Account section.  If DCA allocates money to a Fund at a time when the Fund no longer accepts additional investments, automatic transfers to that Fund will be directed to the Money Market Portfolio. You may choose to have periodic transfers made monthly or quarterly.  DCA transfers will not begin until the Monthly Date after 10 days following your receipt of the Contract.

Each automatic transfer will take effect as of the end of the Valuation Period on the date coinciding with the periodic timing you designate provided the New York Stock Exchange is open on that date.  If the New York Stock Exchange is not open on that date, or if the date does not occur in that particular month, the transfer will take effect as of the end of the Valuation Period, which immediately follows that date.  Automatic transfers will continue until: (1) $50 or less remains of the amount designated for Dollar Cost Averaging, at which time the remaining amount will be transferred; or (2) you give us notification of a change in DCA allocation or cancellation of the feature.  Currently, a transfer that occurs under the DCA feature is not counted towards the 20 transfers permitted each calendar year or the 12 free transfers permitted each Contract Year.  We reserve the right to change this practice, modify the requirements, or discontinue the feature.  Dollar cost averaging will not be available on Contracts kept in-force under the provisions of the Overloan Protection Rider.

Auto-Rebalancing

As an administrative practice, we are currently offering a feature called Auto-Rebalancing.  This feature allows you to automatically rebalance Variable Investment Option assets at specified intervals based on percentage allocations that you choose. For example, suppose your initial investment allocation of Variable Investment Options X and Y is split 40% and 60%, respectively, and investment results cause that split to change.  You may instruct that those assets be rebalanced to your original or different allocation percentages.  Auto-Rebalancing is not available until the Monthly Date after 10 days following your receipt of the Contract.

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Auto-Rebalancing can be performed on a quarterly, semi-annual, or annual basis.  Each rebalance will take effect as of the end of the Valuation Period on the date coinciding with the periodic timing you designate, provided the New York Stock Exchange is open on that date.  If the New York Stock Exchange is not open on that date, or if the date does not occur in that particular month, the transfer will take effect as of the end of the Valuation Period immediately following that date.  The Fixed Rate Option cannot participate in this administrative procedure, nor can any Funds that are no longer accepting additional investments.  See The Pruco Life of New Jersey Variable Appreciable Account section.  If Auto-Rebalancing involves allocating to a Fund that became closed to additional investments, the Auto-Rebalancing feature will be turned off.  Currently, a transfer that occurs under the Auto-Rebalancing feature is not counted towards the 20 transfers permitted each calendar year or the 12 free transfers permitted each Contract Year.  We reserve the right to change this practice, modify the requirements, or discontinue the feature.  Auto-rebalancing will not be available on Contracts kept in-force under the provisions of the Overloan Protection Rider.

DEATH BENEFITS

Contract Date

There is no insurance under this Contract until the minimum initial premium is paid.  If a medical examination is required, the Contract Date will ordinarily be the date the examination is completed.  Under certain circumstances, we may allow the Contract to be backdated up to six months prior to the application date for the purpose of lowering the insured's issue age.  This may be advantageous for some Contract Owners as a lower issue age may result in lower current charges.

When Proceeds Are Paid

Generally, we will pay any Death Benefit, Cash Surrender Value, loan proceeds or withdrawal within seven days after all the documents required for such a payment are received in Good Order at the office designated to receive that request.  Other than the Death Benefit, which is determined as of the date of death, the amount will be determined as of the end of the Valuation Period in which the necessary documents are received in Good Order at the office designated to receive that request.  However, we may delay payment of proceeds from the Variable Investment Option[s] and the variable portion of the Death Benefit due under the Contract if the disposal or valuation of the Account's assets is not reasonably practicable because the New York Stock Exchange is closed for other than a regular holiday or weekend, trading is restricted by the SEC, or the SEC declares that an emergency exists.

We have the right to delay payment of the Cash Surrender Value attributable to the Fixed Rate Option for up to six months, including surrenders of fixed reduced paid-up Contracts.  We will pay interest of at least 1.5% per year if such a payment is delayed for more than 10 days.

Death Claim Settlement Options

The beneficiary may choose to receive death claim proceeds by any of the settlement options described in the Contract or by payment of a lump sum check.  In addition to the settlement options described in your Contract, currently, in certain circumstances, the beneficiary may choose the payment of death claim proceeds by way of Prudential's Alliance Account settlement option (the "Alliance Account").  If the Alliance Account is selected, Prudential will provide a kit to the beneficiary, which includes: (1) an account confirmation describing the death claim proceeds, the current interest rate, and the terms of the Alliance Account; and (2) a guide that explains how the Alliance Account works.  Amounts in an Alliance Account may be withdrawn by the beneficiary at any time.  Any Pruco Life of New Jersey representative authorized to sell this Contract can explain this option upon request.

Types of Death Benefit

You may select from two types of Death Benefit at issue.  A Contract with a Type A (fixed) Death Benefit has a Death Benefit, which will generally equal the Basic Insurance Amount.  Favorable investment results and additional premium payments will generally increase the Cash Surrender Value and decrease the net amount at risk and result in lower charges. This type of Death Benefit does not vary with the investment performance of the investment options you selected, except when the premiums you pay or favorable investment performance causes the Contract Fund to grow to the point where we may increase the Death Benefit to ensure that the Contract will satisfy the Internal Revenue Code’s definition of life insurance.  See How a Contract's Cash Surrender Value Will Vary.

A Contract with a Type B (variable) Death Benefit has a Death Benefit, which will generally equal the Basic Insurance Amount plus the Contract Fund.  Favorable investment performance and additional premium payments will generally increase your Contract's Death Benefit and Cash Surrender Value.  However, the increase in the Cash Surrender Value for a Contract with a Type B (variable) Death Benefit may be less than the increase in Cash Surrender Value for a Contract with a Type A (fixed) Death Benefit because a Type B Contract has a greater cost of insurance charge due to a greater net amount at risk.  As long as the Contract is not in default, there have been no withdrawals, and there is no Contract Debt, the Death Benefit may not fall below the Basic Insurance Amount stated in the Contract.  We may increase the Death Benefit to ensure that the Contract will satisfy the Internal Revenue Code’s definition of life insurance. See How a Contract's Cash Surrender Value Will Vary.

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Contract Owners of a Contract with a Type A Death Benefit should note that any withdrawal may result in a reduction of the Basic Insurance Amount and the deduction of any applicable surrender charges.  We will not allow you to make a withdrawal that will decrease the Basic Insurance Amount below the minimum Basic Insurance Amount.  For a Contract with a Type B Death Benefit, withdrawals will not change the Basic Insurance Amount.  See Withdrawals.

The way in which the Cash Surrender Value and Death Benefit will change depends significantly upon the investment results that are actually achieved.

Changing the Type of Death Benefit

You may change the type of Death Benefit any time after issue and subject to our approval.  We will increase or decrease the Basic Insurance Amount so that the Death Benefit immediately after the change matches the Death Benefit immediately before the change. The Basic Insurance Amount after a change may not be lower than the minimum Basic Insurance Amount applicable to the Contract.  See REQUIREMENTS FOR ISSUANCE OF A CONTRACT.  We may deduct a transaction charge of up to $25 for any change in the Basic Insurance Amount, although we do not currently do so.  A type change that reduces the Basic Insurance Amount may result in the assessment of surrender charges.  See CHARGES AND EXPENSES.

If you are changing your Contract from a Type A Death Benefit to a Type B Death Benefit, we will reduce the Basic Insurance Amount by the amount in your Contract Fund on the date the change takes place.

If you are changing your Contract from a Type B Death Benefit to a Type A Death Benefit, we will increase the Basic Insurance Amount by the amount in your Contract Fund on the date the change takes place.  We will not allow a change to your Contract if it will cause the Death Benefit to exceed our retention limits or violate any other underwriting rule.

The following chart illustrates the changes in Basic Insurance Amount with each change of Death Benefit type described above.  The chart assumes a $50,000 Contract Fund and a $300,000 Death Benefit.

	Changing the Death Benefit from Type A      Type B	Changing the Death Benefit from Type B       Type A
Basic Insurance Amount	$300,000 ® $250,000	$250,000 ® $300,000
Contract Fund	$50,000 ® $50,000	$50,000 ® $50,000
Death Benefit*	$300,000 ® $300,000	$300,000 ® $300,000
* assuming there is no Contract Debt

You may request a change in the type of Death Benefit by sending us a request in a form that meets our needs.  If the change is approved, we will re-calculate the Contract's charges and appropriate tables and send you new Contract Data pages.  We may require you to send us your Contract before making the change.  There may be circumstances under which a change in the Death Benefit type may cause the Contract to be classified as a Modified Endowment Contract, which could be significantly disadvantageous.  See Tax Treatment of Contract Benefits.

Increases in Basic Insurance Amount

After your first Contract Anniversary, you may increase the amount of insurance by increasing the Basic Insurance Amount of the Contract, thus, creating an additional Coverage Segment.  The increase will be subject to the underwriting requirements we determine.

The following conditions must be met:

(1)    you must ask for the change in a form that meets our needs;

(2)    the amount of the increase must be at least equal to the minimum increase in Basic Insurance Amount shown under Contract Limitations in your Contract Data pages;

(3)    you must prove to us that the insured is insurable for any increase;

(4)    the Contract must not be in default;

(5)    we must not be paying premiums into the Contract as a result of the insured's total disability;

(6)    if we ask you to do so, you must send us the Contract to be endorsed; and

(7)    your Contract must not be in-force under the provisions of the Overloan Protection Rider.

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If we approve the change, we will send you new Contract Data pages showing the amount and effective date of the change and the re-calculated charges, values and limitations.  If the insured is not living on the effective date, the change will not take effect.  Currently, no transaction charge is being made in connection with an increase in Basic Insurance Amount.  However, we reserve the right to charge such a fee in an amount of up to $25.

Currently, we charge 4% of premiums for sales expenses in the first four Contract Years, 3% in Contract Years five through 10, and zero thereafter, of each Coverage Segment.

See the definition of Contract Year for an increase in Basic Insurance Amount under DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS.

Each Coverage Segment will have its own surrender charge period beginning on that segment’s effective date and its own surrender charge threshold.  The surrender charge threshold is the segment’s lowest coverage amount since its effective date.  See Decreases in Basic Insurance Amount and Surrender Charges.

The maximum COI rates for a Coverage Segment representing an increase in Basic Insurance Amount are based upon 2001 CSO Mortality Tables, the age at the effective date of the increase and the number of years since then, sex, underwriting class, smoker/nonsmoker status, and extra rating class, if any.  The net amount at risk for the whole Contract (the Death Benefit minus the Contract Fund) is allocated to each Coverage Segment based on the proportion of its Basic Insurance Amount to the total of all Coverage Segments.  In addition, the Attained Age factor for a Contract with an increase in Basic Insurance Amount is based on the insured's Attained Age for the initial Coverage Segment.

If you elect to increase the Basic Insurance Amount of your Contract, you will receive a "free-look" right that will apply only to the increase in Basic Insurance Amount, not the entire Contract.  This right is comparable to the right afforded to the purchaser of a new Contract, except that, any COI charge for the increase in the Basic Insurance Amount will be returned to the Contract Fund instead of a refund of premium.  Generally, the "free-look" right must be exercised no later than 10 days after receipt of the Contract with an increase.

Payment of a significant premium in conjunction with an increase in Basic Insurance Amount may cause the Contract to be classified as a Modified Endowment Contract.  See Tax Treatment of Contract Benefits.  Therefore, before increasing the Basic Insurance Amount, you should consult with your tax adviser and your Pruco Life of New Jersey representative.

Decreases in Basic Insurance Amount

You have the option of decreasing the Basic Insurance Amount of your Contract without withdrawing any Cash Surrender Value.  If a change in circumstances causes you to determine that your amount of insurance is greater than needed, a decrease will reduce your insurance protection and the monthly deductions for the cost of insurance.

The following conditions must be met:

(1)   the amount of the decrease must be at least equal to the minimum decrease in the Basic Insurance Amount shown under Contract Limitations in your Contract Data pages;

(2)   the Basic Insurance Amount after the decrease must be at least equal to the minimum Basic Insurance Amount shown under Contract Limitations in your Contract Data pages;

(3)   the Contract must not be in default;

(4)   the surrender charge on the decrease, if any, plus any transaction charge for the decrease may not exceed the Contract Fund;

(5)   if we ask you to do so, you must send us the Contract to be endorsed; and

(6)   your Contract must not be in-force under the provisions of the Overloan Protection Rider.

If we approve the decrease, we will send you new Contract Data pages showing the amount and effective date of the change and the re-calculated charges, values, and limitations.  Currently, no transaction charge is being made in connection with a decrease in the Basic Insurance Amount.  However, we reserve the right to charge such a fee in an amount of up to $25.

For Contracts with more than one Coverage Segment, a decrease in Basic Insurance Amount will reduce each Coverage Segment based on the proportion of each Coverage Segment amount to the total of all Coverage Segment amounts before the decrease.  Each Coverage Segment will have its own surrender charge threshold equal to the segment’s lowest coverage amount since its effective date.  If the decrease in Basic Insurance Amount reduces a Coverage Segment to an amount less than its surrender charge threshold, we will deduct a surrender charge.  See Surrender Charges.

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We may decline a decrease in the Basic Insurance Amount if we determine it would cause the Contract to fail to qualify as "life insurance" for purposes of Section 7702 of the Internal Revenue Code.  See Tax Treatment of Contract Benefits.

It is important to note, however, that if the Basic Insurance Amount is decreased, there is a possibility that the Contract will be classified as a Modified Endowment Contract.  See Tax Treatment of Contract Benefits.  You should consult with your tax adviser and your Pruco Life of New Jersey representative before requesting any decrease in Basic Insurance Amount.

CONTRACT VALUES

Surrender of a Contract

You may surrender your Contract at any time for its Cash Surrender Value (referred to as Net Cash Value in the Contract) while the insured is living.  To surrender your Contract, we may require you to deliver or mail the following items in Good Order to a Service Office; the Contract, a signed request for surrender, and any tax withholding information required under federal or state law.  Generally, we will pay your Contract’s Cash Surrender Value within seven days after all the documents required for such a payment are received in Good Order at a Service Office.  Surrender of a Contract may have tax consequences.  See Tax Treatment of Contract Benefits.

Fixed reduced paid-up insurance is an alternative to surrendering your Contract.  Fixed reduced paid-up insurance provides paid-up insurance, the amount of which will be paid when the insured dies.  There will be cash values and loan values.  The loan interest rate for fixed reduced paid-up insurance is 5.5%.  Upon surrender of the Contract, the amount of fixed reduced paid-up insurance depends upon the Cash Surrender Value and the insured’s issue age, sex, smoker/nonsmoker status, and the length of time since the Contract Date.

Additional requirements exist if you are exchanging your Contract for a new one at another insurance company.  Specifically, we require a properly signed assignment to change ownership of your Contract to the new insurer and a request for surrender, signed by an authorized officer of the new insurer.  The new insurer should submit these documents directly to us by sending them in Good Order to our Service Office.  Generally, we will pay your Contract’s cash surrender value to the new insurer within seven days after all the documents required for such a payment are received in Good Order at our Service Office.

How a Contract's Cash Surrender Value Will Vary

The Cash Surrender Value will be determined as of the end of the Valuation Period in which a surrender request is received in Good Order at a Service Office.  The Contract's Cash Surrender Value on any date will be the Contract Fund less any applicable surrender charges and less any Contract Debt.  The Contract Fund value changes daily, reflecting:

(1)   increases or decreases in the value of the Variable Investment Option[s];

(2)   interest credited on any amounts allocated to the Fixed Rate Option;

(3)   interest credited on any loan; and

(4)   the daily asset charge for mortality and expense risks assessed against the Variable Investment Options.

The Contract Fund value also changes to reflect the receipt of premium payments after any charges are deducted and the monthly deductions described under CHARGES AND EXPENSES.  Upon request, we will tell you the Cash Surrender Value of your Contract.  It is possible for the Cash Surrender Value of a Contract to decline to zero because of unfavorable investment performance or outstanding Contract Debt.

Loans

You may borrow an amount up to the current loan value of your Contract less any existing Contract Debt using the Contract as the only security for the loan.  The loan value at any time is equal to the sum of (1) 99% of the portion of the cash value attributable to the Variable Investment Options and (2) the balance of the cash value, provided the Contract is not in default.  The cash value is equal to the Contract Fund less any surrender charge.  A Contract in default has no loan value.  There is no minimum loan amount.

Interest charged on a loan accrues daily.  We charge interest on the full loan amount, including all unpaid interest.  Interest is due on each Contract Anniversary or when the loan is paid back, whichever comes first.  If interest is not paid when due, we will increase the loan amount by any unpaid interest.  We charge interest at an effective annual rate of 4% for standard loans.

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A portion of any amount you borrow on or after the 10th Contract Anniversary may be considered a preferred loan. The maximum preferred loan amount is the total amount you may borrow minus the total net premiums paid (net premiums equal premiums paid less total withdrawals, if any).  If the net premium amount is less than zero, we will, for purposes of this calculation, consider it to be zero.  On the 10th Contract Anniversary and each Contract Anniversary thereafter, if the insured is living and the Contract is not in default, any existing loan amount will automatically be converted to a preferred loan to the extent that there is a preferred loan amount available.  Preferred loans are charged interest at an effective annual rate of 3.10%.

When a loan is made, an amount equal to the loan proceeds is transferred out of the Variable Investment Options and/or the Fixed Rate Option, as applicable.  Unless you ask us to take the loan amount from specific Variable Investment Options and we agree, the reduction will be made in the same proportions as the value in each Variable Investment Option and the Fixed Rate Option bears to the total value of the Contract.  While a loan is outstanding, the amount that was transferred will continue to be treated as part of the Contract Fund.  It will be credited with interest at an effective annual rate of 3%.  Generally on each Monthly Date, we will increase the portion of the Contract Fund in the investment options by interest credits accrued on the loan since the last Monthly Date.

The Contract Debt is the amount of all outstanding loans plus any interest accrued, but not yet due.  If, on any Monthly Date, the Contract Debt equals or exceeds the Contract Fund, less any applicable surrender charges, the Contract will go into default, unless it remains in-force under the Rider to Provide Lapse Protection as a result of having a No-Lapse Guarantee Value greater than zero.  It is important to note, that loans reduce your No-Lapse Guarantee Value to the same extent that they reduce your Cash Surrender Value.  We will notify you of a 61-day grace period, within which time you may pay enough to obtain a positive No-Lapse Guarantee Value and thus keep the Contract in-force until your next Monthly Date.  If you send us a payment during the grace period and we receive it after a Monthly Date has occurred, we will credit interest to the Contract Fund from the date your Contract went into default to the date we received your payment, and then return to crediting interest on subsequent Monthly Dates.  If the Contract lapses or is surrendered, the amount of unpaid Contract Debt will be treated as a distribution and will be immediately taxable to the extent of gain in the Contract.  Reinstatement of the Contract after lapse will not eliminate the taxable income, which we are required to report to the Internal Revenue Service.  SeeLAPSE AND REINSTATEMENT and Tax Treatment of Contract Benefits - Pre-Death Distributions.

If your Contract includes the Overloan Protection Rider and you meet the requirements to exercise the rider, you may have protection against lapse due to excessive Contract Debt.  See the Riders - Overloan Protection Rider section.

Loans you take against the Contract are ordinarily treated as debt and are not considered distributions subject to tax. However, you should know that the Internal Revenue Service may take the position that the loan should be treated as a distribution for tax purposes because of the relatively low differential between the loan interest rate and the Contract’s crediting rate.  Distributions are subject to income tax.  Were the Internal Revenue Service to take this position, we would take reasonable steps to attempt to avoid this result, including modifying the Contract’s loan provisions, but cannot guarantee that such efforts would be successful.

Loans from Modified Endowment Contracts may be treated for tax purposes as distributions of income.  See Tax Treatment of Contract Benefits.

Any Contract Debt will directly reduce a Contract's Cash Surrender Value and will be subtracted from the Death Benefit to determine the amount payable.  In addition, even if the loan is fully repaid, it may have an effect on future Death Benefits because the investment results of the selected investment options will apply only to the amount remaining invested under those options.  The longer the loan is outstanding, the greater the effect is likely to be.  The effect could be favorable or unfavorable.  If investment results are greater than the rate being credited on the amount of the loan while the loan is outstanding, values under the Contract will not increase as rapidly as they would have if no loan had been made.  If investment results are below that rate, Contract values will be higher than they would have been had no loan been made.

Loan repayments are applied to reduce the total outstanding Contract Debt, which is equal to the principal plus accrued interest.  Interest accrues daily on the total outstanding Contract Debt, and making a loan repayment will reduce the amount of interest accruing.

Loan repayments will be applied towards the loan according to when they are received.  Loan interest is due 21 days prior to your Contract Anniversary.  If we receive your loan repayment within 21 days prior to your Contract Anniversary, we will apply the repayment towards interest due on a standard loan first, then towards the interest due on a preferred loan, if applicable.  Any loan repayment amount exceeding the interest due is applied towards the existing principal amount of a standard loan first, then towards the principal amount of a preferred loan, if applicable.

If we receive your loan repayment at any time outside of 21 days prior to your Contract Anniversary, we will apply the repayment towards the principal amount of a standard loan first, then to the principal amount of a preferred loan, if applicable.  We will apply the remainder of the loan repayment towards the interest due on a standard loan, then towards the interest due on a preferred loan, if applicable.

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When you repay all or part of a loan, we will increase the portion of the Contract Fund in the investment options by the amount of the loan you repay plus interest credits accrued on the loan since the last transaction date.  Any loan repayment amounts will also be reflected in your No-Lapse Guarantee Value.  We will apply the loan repayment to the investment allocation used for future premium payments as of the loan repayment date.  If loan interest is paid when due, it will not change the portion of the Contract Fund allocated to the investment options.  We reserve the right to change the manner in which we allocate loan repayments.

Withdrawals

You may withdraw a portion of the Contract's Cash Surrender Value without surrendering the Contract, subject to the following restrictions:

(a)   We must receive a request for the withdrawal in a form that meets our needs;

(b)   Your Contract’s Cash Surrender Value after the withdrawal may not be less than or equal to zero after deducting any charges associated with the withdrawal;

(c)   The Cash Surrender Value after the withdrawal must be an amount that we estimate will be sufficient to cover two months of Contract Fund deductions;

(d)   The withdrawal amount must be at least $500;

(e)   The Basic Insurance Amount after withdrawals must be at least equal to the minimum Basic Insurance Amount shown in the Contract; and

(f)   Your Contract must not be in-force under the provisions of the Overloan Protection Rider.

We may charge an administrative processing fee for each withdrawal, which is the lesser of: (a) $25 and; (b) 2% of the withdrawal amount.  Currently, we do not charge a fee for a withdrawal.  A withdrawal may not be repaid except as a premium subject to the applicable charges.  Upon request, we will tell you how much you may withdraw.  Withdrawal of the Cash Surrender Value may have tax consequences.  See Tax Treatment of Contract Benefits.

Whenever a withdrawal is made, the Death Benefit will immediately be reduced by at least the amount of the withdrawal.  Withdrawals under a Contract with a Type B (variable) Death Benefit will not change the Basic Insurance Amount.  However, under a Contract with a Type A (fixed) Death Benefit, the withdrawal may require a reduction in the Basic Insurance Amount.  If a decrease in Basic Insurance Amount reduces a Coverage Segment below its surrender charge threshold, a surrender charge may be deducted.  See Surrender Charges.  No withdrawal will be permitted under a Contract with a Type A (fixed) Death Benefit if it would result in a Basic Insurance Amount of less than the minimum Basic Insurance Amount shown under Contract Limitations in your Contract Data pages.  It is important to note, however, that if the Basic Insurance Amount is decreased, there is a possibility that the Contract might be classified as a Modified Endowment Contract.  Before making any withdrawal that causes a decrease in Basic Insurance Amount, you should consult with your tax adviser and your Pruco Life of New Jersey representative.  See Tax Treatment of Contract Benefits.

Currently, we will provide an authorization form if your withdrawal request causes a decrease in Basic Insurance Amount that results in your Contract being classified as a Modified Endowment Contract.  The authorization form will confirm that you are aware of your Contract becoming a Modified Endowment Contract if the transaction is completed.  We will complete the transaction and send a confirmation notice after we receive the completed authorization form in Good Order at a Service Office.

When a withdrawal is made, the Contract Fund is reduced by the withdrawal amount and any charges associated with the withdrawal.  An amount equal to the reduction in the Contract Fund will be withdrawn proportionally from the investment options unless you direct otherwise.  Withdrawal of any portion of the Cash Surrender Value increases the risk that the Contract Fund may be insufficient to provide Contract benefits.  If such a withdrawal is followed by unfavorable investment experience, the Contract may go into default.  Withdrawals may also affect whether a Contract is kept in-force under the Rider to Provide Lapse Protection, since withdrawals and their associated charges will decrease your No-Lapse Guarantee Value.  See Rider to Provide Lapse Protection.

Generally, we will pay any withdrawal amount within seven days after all the documents required for such a payment are received in Good Order at a Service Office.  See When Proceeds Are Paid.

A Contract returned during the “free-look” period shall be deemed void from the beginning, and not considered a surrender or withdrawal.

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LAPSE AND REINSTATEMENT

We will determine the value of the Contract Fund on each Monthly Date.  If the Contract Fund, less any applicable surrender charges and less any Contract Debt, is zero or less, the Contract is in default, unless it remains in-force under the Rider to Provide Lapse Protection.  See Rider to Provide Lapse Protection.  Should this happen, we will send you a notice of default setting forth the payment which we estimate will keep the Contract in-force for three months from the date of default.  This payment must be received in Good Order at the Payment Office within the 61-day grace period after the notice of default is mailed or the Contract will end and have no value.  A Contract that lapses with an outstanding Contract loan may have tax consequences.  See Tax Treatment of Contract Benefits.  We reserve the right to change the requirements to reinstate a lapsed Contract.

A Contract that ended in default may be reinstated within five years from the date of default, if the following conditions are met:

(1)    we receive a written request for reinstatement;

(2)    renewed evidence of insurability is provided on the insured;

(3)    submission of certain payments sufficient to bring the Contract up to date plus a premium that we estimate will cover all charges and deductions for three months from the date of reinstatement; and

(4)    the Insured is living on the date the Contract is reinstated.

The reinstatement date will be the date we approve your request.  We will deduct all required charges from your payment and the balance will be placed into your Contract Fund.  If we approve the reinstatement, we will credit the Contract Fund with an amount equal to the surrender charge applicable as of the date of reinstatement.  If your Contract is reinstated after lapse, the benefits under the Rider to Provide Lapse Protection will no longer be available.

TAXES

Tax Treatment of Contract Benefits

This summary provides general information on the federal income tax treatment of the Contract.  It is not a complete statement of what the federal income taxes will be in all circumstances.  It is based on current law and interpretations, which may change.  It does not cover state taxes or other taxes.  It is not intended as tax advice.  You should consult your own tax adviser for complete information and advice.

Treatment as Life Insurance.  The Contract must meet certain requirements to qualify as life insurance for tax purposes.  These requirements include certain definitional tests and rules for diversification of the Contract’s investments.  For further information on the diversification requirements, see Taxation of the Fund in the statement of additional information for the Series Fund.

In order to meet the definition of life insurance rules for federal income tax purposes, the Contract must satisfy one of the two following tests:  (1) Cash Value Accumulation Test or (2) Guideline Premium Test.  At issue, the Contract Owner chooses which of these two tests will apply to their Contract.  This choice cannot be changed thereafter.

Under the Cash Value Accumulation Test, the Contract must maintain a minimum ratio of Death Benefit to cash value. Therefore, in order to ensure that the Contract qualifies as life insurance, the Contract's Death Benefit may increase as the Contract Fund value increases.  The Death Benefit, at all times, must be at least equal to the Contract Fund multiplied by the applicable Attained Age factor.  A listing of Attained Age factors can be found on your Contract Data pages.

Under the Guideline Premium Test, there is a limit as to the amount of premium that can be paid into the Contract in relation to the Death Benefit.  In addition, there is a minimum ratio of Death Benefit to cash value associated with this test.  This ratio, however, is less than the required ratio under the Cash Value Accumulation Test.  Therefore, the Death Benefit required under this test is generally lower than that of the Cash Value Accumulation Test.

The selection of the definition of life insurance test most appropriate for you is dependent on several factors, including the insured’s age at issue, actual Contract earnings, and whether or not the Contract is classified as a Modified Endowment Contract.  In addition, the Guideline Premium Test is required for the definition of life insurance if you choose to have the Overloan Protection Rider.  See the Riders - Overloan Protection Rider section.  You should consult your own tax adviser for complete information and advice with respect to the selection of the definition of life insurance test.

We believe we have taken adequate steps to insure that the Contract qualifies as life insurance for tax purposes. Generally speaking, this means that:

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·   you will not be taxed on the growth of the funds in the Contract, unless you receive a distribution from the Contract, or if the Contract lapses or is surrendered, and

·   the Contract's Death Benefit will generally be income tax free to your beneficiary.  However, your Death Benefit may be subject to estate taxes, and

·   we may refuse to accept any payment that increases the Death Benefit by more than it increases the Contract Fund.

Although we believe that the Contract should qualify as life insurance for tax purposes, there are some uncertainties, particularly because the Secretary of Treasury has not yet issued permanent regulations that bear on this question. Accordingly, we reserve the right to make changes -- which will be applied uniformly to all Contract Owners after advance written notice -- that we deem necessary to insure that the Contract will qualify as life insurance.

Pre-Death Distributions.  The tax treatment of any distribution you receive before the insured’s death depends on whether the Contract is classified as a Modified Endowment Contract.

The Contract may not qualify as life insurance under federal tax law after the Insured has attained age 100 and may be subject to adverse tax consequences. A tax advisor should be consulted before you choose to continue the Contract after the insured reaches age 100.

Contracts Not Classified as Modified Endowment Contracts

·   If you surrender the Contract or allow it to lapse, you will be taxed on the amount you received in excess of the premiums you paid less the untaxed portion of any prior withdrawals.  For this purpose, you will be treated as receiving any portion of the Cash Surrender Value used to repay Contract Debt. In other words, you will immediately have taxable income to the extent of gain in the Contract.  Reinstatement of the Contract after lapse will not eliminate the taxable income, which we are required to report to the Internal Revenue Service.  The tax consequences of a surrender may differ if you take the proceeds under an income payment settlement option.

·   Generally, you will be taxed on a withdrawal to the extent the amount you receive exceeds the premiums you paid for the Contract less the untaxed portion of any prior withdrawals.  However, under some limited circumstances, in the first 15 Contract Years, all or a portion of a withdrawal may be taxed if the Contract Fund exceeds the total premiums paid less the untaxed portions of any prior withdrawals, even if total withdrawals do not exceed total premiums paid.

·   Extra premiums for optional benefits and riders generally do not count in computing the premiums paid for the Contract for the purposes of determining whether a withdrawal is taxable.

·   Loans you take against the Contract are ordinarily treated as debt and are not considered distributions subject to tax.  However, you should know that the Internal Revenue Service may take the position that the preferred loan should be treated as a distribution for tax purposes because of the relatively low differential between the loan interest rate and Contract’s crediting rate.  Were the Internal Revenue Service to take this position, we would take reasonable steps to avoid this result, including modifying the Contract’s loan provisions.

Modified Endowment Contracts

·   The rules change if the Contract is classified as a Modified Endowment Contract. The Contract could be classified as a Modified Endowment Contract if premiums in amounts that are too large are paid or a decrease in the Basic Insurance Amount is made (or a rider removed).  The addition of a rider or an increase in the Basic Insurance Amount may also cause the Contract to be classified as a Modified Endowment Contract if a significant premium is paid in conjunction with an increase or the addition of a rider.  We will notify you if a premium or a change in Basic Insurance Amount would cause the Contract to become a Modified Endowment Contract, and advise you of your options.  You should first consult a tax adviser and your Pruco Life of New Jersey representative if you are contemplating any of these steps.

·   If the Contract is classified as a Modified Endowment Contract, then amounts you receive under the Contract before the insured's death, including loans and withdrawals, are included in income to the extent that the Contract Fund before surrender charges exceeds the premiums paid for the Contract increased by the amount of any loans previously included in income and reduced by any untaxed amounts previously received other than the amount of any loans excludible from income.  An assignment of a Modified Endowment Contract is taxable in the same way.  These rules also apply to pre-death distributions, including loans and assignments, made during the two-year period before the time that the Contract became a Modified Endowment Contract.

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·   Any taxable income on pre-death distributions (including full surrenders) is subject to a penalty of 10 percent unless the amount is received on or after age 59½, on account of your becoming disabled or as a life annuity.  It is presently unclear how the penalty tax provisions apply to Contracts owned by businesses.

·   All Modified Endowment Contracts issued by us to you during the same calendar year are treated as a single Contract for purposes of applying these rules.

Investor Control. Treasury Department regulations do not provide specific guidance concerning the extent to which you may direct your investment in the particular Variable Investment Options without causing you, instead of us, to be considered the owner of the underlying assets.  Because of this uncertainty, we reserve the right to make such changes as we deem necessary to assure that the Contract qualifies as life insurance for tax purposes.  Any such changes will apply uniformly to affected Contract Owners and will be made with such notice to affected Contract Owners as is feasible under the circumstances.

Withholding.  You must affirmatively elect that no taxes be withheld from a pre-death distribution.  Otherwise, the taxable portion of any amounts you receive will be subject to withholding.  You are not permitted to elect out of withholding if you do not provide a social security number or other taxpayer identification number.  You may be subject to penalties under the estimated tax payment rules if your withholding and estimated tax payments are insufficient to cover the tax due.

Other Tax Considerations.  If you transfer or assign the Contract to someone else, there may be gift, estate and/or income tax consequences.  If you transfer the Contract to a person two or more generations younger than you (or designate such a younger person as a beneficiary), there may be Generation Skipping Transfer tax consequences.  Deductions for interest paid or accrued on Contract Debt or on other loans that are incurred or continued to purchase or carry the Contract may be denied.  Your individual situation or that of your beneficiary will determine the federal estate taxes and the state and local estate, inheritance and other taxes due if you or the insured dies.

Business-Owned Life Insurance.  If a business, rather than an individual, is the owner of the Contract, there are some additional rules.  Business Contract Owners generally cannot deduct premium payments.  Business Contract Owners generally cannot take tax deductions for interest on Contract Debt paid or accrued after October 13, 1995.  An exception permits the deduction of interest on policy loans on Contracts for up to 20 key persons.  The interest deduction for Contract Debt on these loans is limited to a prescribed interest rate and a maximum aggregate loan amount of $50,000 per key insured person.  The corporate alternative minimum tax also applies to business-owned life insurance.  This is an indirect tax on additions to the Contract Fund or Death Benefits received under business-owned life insurance policies.

For business-owned life insurance coverage issued after August 17, 2006, Death Benefits will generally be taxable as ordinary income to the extent it exceeds cost basis.  Life insurance Death Benefits will continue to be generally income tax free if, prior to policy issuance, the employer provided a prescribed notice to the proposed insured/employee, obtained the employee's consent to the life insurance, and one of the following requirements is met: (a) the insured was an employee at any time during the 12-month period prior to his or her death; (b) the insured was a director or highly compensated employee or individual (as defined in the Code) at the time the policy was issued; or (c) the Death Benefits are paid to the insured's heirs or his or her designated beneficiaries (other than the employer), either directly as a Death Benefit or received from the purchase of an equity (or capital or profits) interest in the applicable policyholder.  Annual reporting and record keeping requirements will apply to employers maintaining such business-owned life insurance.

DISTRIBUTION AND COMPENSATION

Pruco Securities, LLC (“Prusec”), an indirect wholly-owned subsidiary of Prudential Financial, acts as the principal underwriter of the Contract.  Prusec, organized on September 22, 2003 under New Jersey law, is registered as a broker and dealer under the Securities Exchange Act of 1934 and is a registered member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). (Prusec is a successor company to Pruco Securities Corporation, established on February 22, 1971.)  Prusec’s principal business address is 751 Broad Street, Newark, New Jersey 07102.  Prusec serves as principal underwriter of the individual variable insurance Contracts issued by us.  The Contract is sold by registered representatives of Prusec who are also our appointed insurance agents under state insurance law.  The Contract may also be sold through other broker-dealers authorized by Prusec and applicable law to do so.  Prusec received gross distribution revenue for its variable life insurance products of $58,142,132 in 2013, $56,178,356 in 2012, and $60,952,205 in 2011. Prusec passes through the gross distribution revenue it receives to broker-dealers for their sales and does not retain any portion of it in return for its services as distributor for the Contracts.  However, Prusec does retain a portion of compensation it receives with respect to sales by its representatives.  Prusec retained compensation of $2,192,800 in 2013, $2,168,552 in 2012, and $2,477,021 in 2011.  Prusec offers the Contract on a continuous basis.

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Compensation (commissions, overrides, and any expense reimbursement allowance) is paid to broker-dealers that are registered under the Exchange Act and/or entities that are exempt from such registration (“firms”) according to one or more schedules.  The individual representative will receive all or a portion of the compensation, depending on the practice of the firm.   Compensation is based on a premium value referred to as the Commissionable Target Premium.  The Commissionable Target Premium is an amount that is generally somewhat larger than the Lifetime Modal No-Lapse Premium.  See Available Types of Premium.  The Commissionable Target Premium will vary by issue age, sex, underwriting class and rating class of the insured, any extra risk charges, or additional riders selected by the Contract Owner.

Broker-dealers will receive compensation of up to 99% of premiums received in the first 12 months following the Contract Date on total premiums received since issue up to the Commissionable Target Premium, up to 22% of Commissionable Target Premium received in year two, up to 10% in years three and four, and up to 8.5% of the Commissionable Target Premium received in years five through 10.  Moreover, broker-dealers will receive compensation of up to 5% on premiums received in year one, up to 4% on premiums received in years two through four, and up to 2.5% on premiums received in years five through 10 to the extent that premiums paid in any year exceed the Commissionable Target Premium.  Broker-dealers will also receive compensation in years two and beyond of up to 0.25% of the Contract Fund, net of Contract Debt.

If the Basic Insurance Amount is increased, broker-dealers will receive compensation of up to 99% on premiums received up to the Commissionable Target Premium for the increase received in the first 12 months following the effective date of the increase and up to 22% of premiums received in year two, up to 10% in years three and four, and up to 8.5% on premiums received in years five through 10 up to the Commissionable Target Premium for the increase.  Moreover, broker-dealers will receive compensation of up to 5% on premiums received in year one, and up to 4% on premiums received in years two through four, and up to 2.5% on premiums received in years five through 10 following the effective date of the increase to the extent that premiums in any year exceed the Commissionable Target Premium.

Prusec registered representatives who sell the Contract are also our life insurance agents, and may be eligible for various cash bonuses and insurance benefits and non-cash compensation programs that we or our affiliates offer such as conferences, trips, prizes and awards, subject to applicable regulatory requirements.  In some circumstances and to the extent permitted by applicable regulatory requirements, we may also reimburse certain sales and marketing expenses.

In addition, in an effort to promote the sale of our variable products (which may include the placement of our Contracts on a preferred or recommended company or product list and/or access to a broker-dealer’s registered representatives), we or Prusec may enter into compensation arrangements with certain broker-dealer firms authorized by Prusec to sell the Contract, or branches of such firms, with respect to certain or all registered representatives of such firms under which such firms may receive separate compensation or reimbursement for, among other things, training of sales personnel, marketing and/or administrative and/or other services they provide to us or our affiliates.  To the extent permitted by applicable rules, laws, and regulations, Prusec may pay or allow other promotional incentives or payments in the form of cash or non-cash compensation.  These arrangements may not be offered to all firms, and the terms of such arrangements may differ between firms.  You should note that firms and individual registered representatives and branch managers within some firms participating in one of these compensation arrangements might receive greater compensation for selling the Contract than for selling a different Contract that is not eligible for these compensation arrangements.

A list of the names of the firms (or their affiliated broker/dealers) that we are aware of (as of December 31, 2013) that received payment or accrued a payment amount with respect to variable product business during 2013 may be found in the Statement of Additional Information.  The least amount paid or accrued and the greatest amount paid or accrued during 2013 were $1.96 to $3,967,703, respectively.

While compensation is generally taken into account as an expense in considering the charges applicable to a variable life insurance product, any such compensation will be paid by us, and will not result in any additional charge to you or to the Separate Account.  Your registered representative can provide you with more information about the compensation arrangements that apply upon the sale of the Contract.

In addition, we or our affiliates may provide such compensation, payments and/or incentives to firms arising out of the marketing, sale and/or servicing of variable annuities or life insurance offered by different Prudential business units.

LEGAL PROCEEDINGS

Pruco Life of New Jersey is subject to legal and regulatory actions in the ordinary course of our business. Pending legal and regulatory actions include proceedings specific to Pruco Life of New Jersey and proceedings generally applicable to business practices in the industry in which it operates. Pruco Life of New Jersey is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. Pruco Life of New Jersey is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In some of the pending legal and regulatory actions, plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. In addition, Pruco Life of New Jersey, along with other participants in the businesses in which we engage, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of Pruco Life of New Jersey‘s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain. The following is a summary of certain pending proceedings.

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Pruco Life of New Jersey establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed, including matters discussed below. As of December 31, 2013, the aggregate range of reasonably possible losses in excess of accruals established is not currently estimable. Pruco Life of New Jersey reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

In January 2013, a qui tam action on behalf of the State of Florida, Total Asset Recovery Services v. Met Life Inc., et al., Manulife Financial Corporation, et. al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Insurance Agency, LLC, filed in the Circuit Court of Leon County, Florida, was served on The Prudential Insurance Company of America (“Prudential Insurance”). The complaint alleges that Prudential Insurance failed to escheat life insurance proceeds to the State of Florida in violation of the Florida False Claims Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys’ fees and costs. In March 2013, the Company filed a motion to dismiss the complaint. In August 2013, the court dismissed the complaint with prejudice. In September 2013, plaintiff filed an appeal with Florida’s Circuit Court of the Second Judicial Circuit in Leon County.

In January 2012, a Global Resolution Agreement entered into by Pruco Life of New Jersey and a third party auditor became effective upon its acceptance by the unclaimed property departments of 20 states and jurisdictions. Under the terms of the Global Resolution Agreement, the third party auditor acting on behalf of the signatory states will compare expanded matching criteria to the Social Security Master Death File (“SSMDF”) to identify deceased insureds and contractholders where a valid claim has not been made. In February 2012, a Regulatory Settlement Agreement entered into by Pruco Life of New Jersey to resolve a multi-state market conduct examination regarding its adherence to state claim settlement practices became effective upon its acceptance by the insurance departments of 20 states and jurisdictions. The Regulatory Settlement Agreement applies prospectively and requires Pruco Life of New Jersey to adopt and implement additional procedures comparing its records to the SSMDF to identify unclaimed death benefits and prescribes procedures for identifying and locating beneficiaries once deaths are identified. Substantially all other jurisdictions that are not signatories to the Global Resolution Agreement or the Regulatory Settlement Agreement have entered into similar agreements with Pruco Life of New Jersey.

Pruco Life of New Jersey is one of several companies subpoenaed by the New York Attorney General regarding its unclaimed property procedures. Additionally, the New York State Department of Financial Services (“NYDFS”) has requested that 172 life insurers (including Pruco Life of New Jersey) provide data to the NYDFS regarding use of the SSMDF. The New York Office of Unclaimed Funds is conducting an audit of Pruco Life of New Jersey’s compliance with New York’s unclaimed property laws. In February 2012, the Massachusetts Office of the Attorney General requested information regarding Pruco Life of New Jersey’s unclaimed property procedures. In December 2013, this matter was closed without prejudice. In May 2013, Pruco Life of New Jersey entered into a settlement agreement with the Minnesota Department of Commerce, Insurance Division, which requires Pruco Life of New Jersey to take additional steps to identify deceased insureds and contract holders where a valid claim has not been made.

Pruco Life of New Jersey’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that Pruco Life of New Jersey’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of Pruco Life of New Jersey’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on Pruco Life of New Jersey’s financial   position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on Pruco Life of New Jersey’s financial position.

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FINANCIAL STATEMENTS

Our audited financial statements are shown in the Statement of Additional Information and should be considered only as bearing upon our ability to meet its obligations under the Contract.

The Account’s audited financial statements are available in the Statement of Additional Information to this prospectus.

ADDITIONAL INFORMATION

We have filed a registration statement with the SEC under the Securities Act of 1933, relating to the offering described in this prospectus.  This prospectus does not include all the information set forth in the registration statement.  Certain portions have been omitted pursuant to the rules and regulations of the SEC.  The omitted information may, however, be obtained from the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or by telephoning (202) 551-8090, upon payment of a prescribed fee.

To reduce costs, we now generally send only a single copy of prospectuses and shareholder reports to each household ("householding"), in lieu of sending a copy to each Contract Owner that resides in the household.  You should be aware that you can revoke or "opt out" of householding at any time by calling 1-877-778-5008.

Pursuant to the delivery obligations under Section 5 of the Securities Act of 1933 and Rule 159 thereunder, Pruco Life of New Jersey delivers this prospectus to contract owners that reside outside of the United States.

You may contact us for further information at the address and telephone number inside the front cover of this prospectus.  For service or questions about your Contract, please contact our Service Office at the phone number on the back cover, or at P.O. Box 7390, Philadelphia, Pennsylvania 19176.

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DEFINITIONS OF SPECIAL TERMS

USED IN THIS PROSPECTUS

Attained Age - The insured's age on the Contract Date plus the number of years since then.  For any Coverage Segment effective after the Contract Date, the insured's Attained Age is the issue age of that segment plus the length of time since its effective date.

Basic Insurance Amount - The total amount of life insurance as shown in the Contract, including any applicable increases, and no riders.

Cash Surrender Value - The amount payable to the Contract Owner upon surrender of the Contract.  It is equal to the Contract Fund minus any Contract Debt and minus any applicable surrender charge.  Also referred to in the Contract as “Net Cash Value.”

Contract - The variable universal life insurance Contract described in this prospectus.

Contract Anniversary - The same date as the Contract Date in each later year.

Contract Date -The date the Contract is effective, as specified in the Contract.

Contract Debt - The principal amount of all outstanding loans plus any interest accrued thereon.

Contract Fund - The total amount credited to a specific Contract.  On any date it is equal to the sum of the amounts in all the Variable Investment Options and the Fixed Rate Option, and the principal amount of any Contract Debt plus any interest earned thereon.

Contract Owner - You.  Unless a different owner is named in the application, the owner of the Contract is the insured.

Contract Year - A year that starts on the Contract Date or on a Contract Anniversary.  For any Coverage Segment representing an increase, “Contract Year” is a year that starts on the effective date of the increase (referred to as “Target year” in the Contract).

Coverage Segment - The Basic Insurance Amount at issue is the first Coverage Segment.  For each increase in Basic Insurance Amount, a new Coverage Segment is created for the amount of the increase.

Death Benefit - If the Contract is not in default, this is the amount we will pay upon the death of the insured, assuming no Contract Debt.

Fixed Rate Option - An investment option under which interest is accrued daily at a rate that we declare periodically, but not less than an effective annual rate of 3%. Also referred to in the Contract as “fixed investment option.”

Fund/Portfolio/Variable Investment Options - These are terms that may be used interchangeably and represent the underlying investments held in the Separate Account which you may select for your Contract.

Good Order - An instruction utilizing such forms, signatures, and dating as we require, which is sufficiently clear and complete and for which we do not need to exercise any discretion to follow such instructions.

Monthly Date - The Contract Date and the same date in each subsequent month.

Payment Office -The office at which we process premium payments, loan payments, and payments to bring your Contract out of default.  Your correspondence will be picked up at the address on your bill to which you are directed to send these payments and then delivered to our Payment Office.  For items required to be sent to our Payment Office, your correspondence is not considered received by us until it is received at our Payment Office.  Where this Prospectus refers to the day when we receive a premium payment, loan payment or a payment to bring your Contract out of default, we mean the day on which that item (or the last thing necessary for us to process that item) arrives in Good Order at our Payment Office.  There are two main exceptions: if the item is received at our Payment Office (1) on a day that is not a business day or (2) after the close of a business day, then, in each case, we are deemed to have received that item on the next business day.

Pruco Life Insurance Company of New Jersey - Pruco Life of New Jersey, us, we, our.  The company offering the Contract.

Separate Account - Amounts under the Contract that are allocated to the Funds held by us in a Separate Account called the Pruco Life of New Jersey Variable Appreciable Account (the "Account" or the "Registrant").  The Separate Account is set apart from all of our general assets.  Thus, such assets that are held in support of client accounts are not chargeable with liabilities arising out of any other business Pruco Life Insurance Company of New Jersey conducts.

Service Office - The office at which we process allocation change requests, withdrawal requests, surrender requests, transfer requests, ownership change requests and assignment requests.  Correspondence with our Service Office should be sent to P.O. Box 7390, Philadelphia, Pennsylvania 18176.  Your correspondence will be picked up at this address and then delivered to our Service Office.  For requests required to be sent to our Service Office, your request is not considered received by us until it is received at our Service Office.  Where this Prospectus refers to the day when we receive a request from you, we mean the day on which that item (or the last thing necessary for us to process that item) arrives in Good Order at our Service Office or via the appropriate telephone number,

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fax number, or website if the item is a type we accept by those means.  There are two main exceptions: if the request is received (1) on a day that is not a business day or (2) after the close of a business day, then, in each case, we are deemed to have received that item on the next business day.

Valuation Period - The period of time from one determination of the value of the amount invested in a Variable Investment Option to the next. Such determinations are made when the net asset values of the Variable Investment Options are calculated, which would be as of the close of regular trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time).

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To Learn More About VUL Protector®

The Statement of Additional Information (SAI) is legally a part of this prospectus, both of which are filed with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, Registration No. 333-158637.  The SAI contains additional information about the Pruco Life of New Jersey Variable Appreciable Account.  All of these filings can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.  Information on the operation of the public reference room may be obtained by calling the Commission at (202) 551-8090.  The SEC also maintains a Web site (http://www.sec.gov) that contains the VUL Protector® SAI, material incorporated by reference, and other information about us.  Copies of these materials can also be obtained, upon payment of duplicating fees, from the SEC’s Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549.

You can call us at 1-800-944-8786 to ask us questions, request information about the Contract, and obtain copies of the SAI and personalized illustrations, without charge, or other documents.  You can also view the SAI located with the prospectus at www.prudential.com/eprospectus, or request a copy by writing to us at:

Pruco Life Insurance Company of New Jersey

213 Washington Street

Newark, New Jersey  07102

Investment Company Act of 1940: Registration No. 811-3974

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PART B:

INFORMATION REQUIRED IN THE STATEMENT OF ADDITIONAL INFORMATION

STATEMENT OF ADDITIONAL INFORMATION

Pruco Life of New Jersey Variable Appreciable Account

Pruco Life Insurance Company of New Jersey

VUL Protector®

VARIABLE UNIVERSAL LIFE INSURANCE CONTRACTS

This Statement of Additional Information is not a prospectus.  Please review the VUL Protector® prospectus (the “prospectus”), which contains information concerning the Contracts described above.  You may obtain a copy of the prospectus without charge by calling us at 1-800-944-8786.  You can also view the Statement of Additional Information located with the prospectus at www.prudential.com/eprospectus, or request a copy by writing to us.

The defined terms used in this Statement of Additional Information are as defined in the prospectus.

Pruco Life Insurance Company of New Jersey

213 Washington Street

Newark, New Jersey 07102

The Date of this Statement of Additional Information and of the related prospectus is May 1, 2014.

TABLE OF CONTENTS

Page

GENERAL INFORMATION AND HISTORY	1
Description of Pruco Life Insurance Company of New Jersey	1
Control of Pruco Life Insurance Company of New Jersey	1
State Regulation	1
Records	1
Services and Third Party Administration Agreements	1
INITIAL PREMIUM PROCESSING	2
ADDITIONAL INFORMATION ABOUT OPERATION OF CONTRACTS	3
Legal Considerations Relating to Sex-Distinct Premiums and Benefits	3
How a Type A (Fixed) Contract's Death Benefit Will Vary	3
How a Type B (Variable) Contract's Death Benefit Will Vary	4
Reports to Contract Owners	5
UNDERWRITING PROCEDURES	5
ADDITIONAL INFORMATION ABOUT CHARGES	6
Charges for Increases in Basic Insurance Amount	6
ADDITIONAL INFORMATION ABOUT CONTRACTS IN DEFAULT	6
DISTRIBUTION AND COMPENSATION	6
EXPERTS	7
PERFORMANCE DATA	8
Average Annual Total Return	8
Non-Standard Total Return	8
Money Market Subaccount Yield	8
FINANCIAL STATEMENTS	9

GENERAL INFORMATION AND HISTORY

Description of Pruco Life Insurance Company of New Jersey

Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey", “us”, “we”, or “our”) is a stock life insurance company, organized on September 17, 1982 under the laws of the State of New Jersey.  It is licensed to sell life insurance and annuities only in the states of New Jersey and New York.  Pruco Life of New Jersey’s principal Executive Office is located at 213 Washington Street, Newark, New Jersey 07102.

Control of Pruco Life Insurance Company of New Jersey

Pruco Life of New Jersey is an indirect, wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential"), a New Jersey stock life insurance company that has been doing business since October 13, 1875.  Prudential is an indirect wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”), a New Jersey insurance holding company for financial services businesses offering a wide range of insurance, investment management, and other financial products and services.  The principal Executive Office each of Prudential and Prudential Financial is Prudential Plaza, 751 Broad Street, Newark, New Jersey 07102.

As Pruco Life of New Jersey’s ultimate parent, Prudential Financial exercises significant influence over the operations and capital structure of Pruco Life of New Jersey and Prudential.  However, neither Prudential Financial, Prudential, nor any other related company has any legal responsibility to pay amounts that Pruco Life of New Jersey may owe under the Contract.

State Regulation

Pruco Life of New Jersey is subject to regulation and supervision by the Department of Insurance of the State of New Jersey, which periodically examines its operations and financial condition.  It is also subject to the insurance laws and regulations of all jurisdictions in which it is authorized to do business.

Pruco Life of New Jersey is required to submit annual statements of its operations, including financial statements, to the insurance departments of the various jurisdictions in which it does business to determine solvency and compliance with local insurance laws and regulations.

In addition to the annual statements referred to above, Pruco Life of New Jersey is required to file with New Jersey and other jurisdictions, a separate statement with respect to the operations of all of its variable contract accounts, in a form promulgated by the National Association of Insurance Commissioners.

Records

We maintain all records and accounts relating to the Account at our principal Executive Office.  As presently required by the Investment Company Act of 1940, as amended, and regulations promulgated thereunder, reports containing such information as may be required under the Act or by any other applicable law or regulation will be sent to you semi-annually at your last address known to us.

Services and Third Party Administration Agreements

Pruco Life of New Jersey and Prudential have entered into a Service Agreement pursuant to which Prudential furnishes to Pruco Life of New Jersey various services, including preparation, maintenance, and filing of accounts, books, records, and other documents required under federal or state law, and various other accounting, administrative, and legal services, which are customarily performed by the officers and employees of Prudential.  Pruco Life of New Jersey reimburses Prudential for its costs in providing such services.  Under this Agreement, Pruco Life of New Jersey has reimbursed Prudential $4,700,654 in 2013, $3,271,883 in 2012, and $2,889,076 in 2011of which the life business accounted for $738,349, $435,823, and $1,740,589 respectively.

Prudential furnishes Pruco Life of New Jersey the same administrative support services that it provides in the operation of its own business with regard to the payment of death claim proceeds by way of Prudential’s Alliance Account.  As soon as the Pruco Life of New Jersey death claim is processed, the beneficiaries are furnished with an information kit that describes the settlement option and a check book on which they may write checks.

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Our individual life reinsurance treaties covering VUL Protector® Contracts provide for the reinsurance of the mortality risk on a Yearly Renewable Term basis.  Reinsurance is on a first-dollar quota share basis, with Pruco Life of New Jersey retaining 10% of the face amount, up to a limit of $100,000 per Contract, and the remainder is reinsured by Prudential.  Prudential then reinsures some portion of this business with various reinsurers.

On June 30, 2011, Regulus Group, LLC ("Regulus"), a billing and payment services provider for Prudential, Pruco Life Insurance Company ("Pruco Life"), and Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey"), was acquired by Columbus Acquisition Corporation which is a subsidiary of Cerberus Capital Management, L.P.  In connection with this acquisition and subsequent rebranding initiative, Regulus is renamed as TransCentra, Inc. ("TransCentra") effective as of December 22, 2011.  Regulus began performing administrative services for Prudential in 2009 under a temporary arrangement with Prudential and First Tennessee Bank National Association (“First Express”), which had been previously supplying such services.  The services provided and the administrative Agreement between Prudential and Regulus, dated December 23, 2010 (“Agreement”), is unaffected by the Regulus acquisition.   On August 16, 2013, Prudential and Regulus amended the Agreement to update remittance processing requirements in support of Prudential’s Rule 22c1 compliance and related quarterly attestation by Regulus.  Regulus received $1,857,429 in 2013, $2,043,400 in 2012, and $2,249,075 in 2011 from Prudential for services rendered.  TransCentra's principal business address is 4855 Peachtree Industrial Blvd, STE 245, Norcross, GA 30092.

INITIAL PREMIUM PROCESSING

In general, the invested portion of the minimum initial premium will be placed in the Contract Fund as of the later of the Contract Date and the date we receive the premium in Good Order.

Upon receipt of a request for life insurance from a prospective Contract Owner, Pruco Life will follow certain insurance underwriting (i.e., evaluation of risk) procedures designed to determine whether the proposed Insured is insurable.  The process may involve such verification procedures as medical examinations and may require that further information be provided by the proposed Insured before a determination can be made.  A Contract cannot be issued, (i.e., physically issued through Pruco Life’s computerized issue system) until this underwriting procedure has been completed.

These processing procedures are designed to provide temporary life insurance coverage to every prospective Contract Owner who pays the minimum initial premium at the time the request for coverage is submitted, subject to the terms of the Limited Insurance Agreement.  Since a Contract cannot be issued until after the underwriting process has been completed, we will provide temporary life insurance coverage through use of the Limited Insurance Agreement. This coverage is for the total Death Benefit applied for, up to the maximum described by the Limited Insurance Agreement.

The Contract Date is the date specified in the Contract.  This date is used to determine the insurance age of the proposed insured.  It represents the first day of the Contract Year and therefore determines the Contract Anniversary and Monthly Dates.  It also represents the commencement of the suicide and contestable periods for purposes of the Basic Insurance Amount.

If the minimum initial premium is paid with the application and no medical examination is required, the Contract Date will ordinarily be the date of the application.  If a delay is encountered (e.g., if a request for further information is not met promptly), generally, the Contract Date will be 21 days prior to the date on which the Contract is physically issued.  If a medical examination is required, the Contract Date will ordinarily be the date the examination is completed, subject to the same qualification as that noted above.

If the premium paid with the application is less than the minimum initial premium, the Contract Date will be determined as described above.  The balance of the minimum initial premium amount will be applied as of the later of the Contract Date and the date premiums were received in Good Order.

If no premium is paid with the application, the Contract Date will be the Contract Date stated in the Contract, which will generally be the date the minimum initial premium is received in Good Order from the Contract Owner and the Contract is delivered.

There is one principal variation from the foregoing procedure.  If permitted by the insurance laws of the state in which the Contract is issued, the Contract may be backdated up to six months.   The Contract may not be backdated before the product introduction date.

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In situations where the Contract Date precedes the date that the minimum initial premium is received, charges due prior to the initial premium receipt date will be deducted immediately after the net premium has been applied to the Contract Fund.

ADDITIONAL INFORMATION ABOUT

OPERATION OF CONTRACTS

Legal Considerations Relating to Sex-Distinct Premiums and Benefits

The Contract generally employs mortality tables that distinguish between males and females.  Thus, premiums and benefits differ under Contracts issued on males and females of the same age.  However, in those states that have adopted regulations prohibiting sex-distinct insurance rates, premiums and cost of insurance charges will be based on male rates, whether the insureds are male or female.  In addition, employers and employee organizations considering purchase of a Contract should consult their legal advisers to determine whether purchase of a Contract based on sex-distinct actuarial tables is consistent with Title VII of the Civil Rights Act of 1964 or other applicable law.

How a Type A (Fixed) Contract's Death Benefit Will Vary

There are two types of Death Benefit available under the Contract:  (1) Type A, a generally fixed Death Benefit; and (2) Type B, a variable Death Benefit.  The Type A (fixed) Death Benefit does not vary unless it must be increased to comply with the Internal Revenue Code's definition of life insurance, and the Type B (variable) Death Benefit varies with investment performance.

Under the Type A (fixed) Contract, the Death Benefit is generally equal to the Basic Insurance Amount, before the reduction of any Contract Debt.  If the Contract is kept in-force for several years, depending on how much premium you pay, and/or if investment performance is reasonably favorable, the Contract Fund may grow to the point where we will increase the Death Benefit in order to ensure that the Contract will satisfy the Internal Revenue Code's definition of life insurance.

Assuming no Contract Debt, the Death Benefit of a Type A (fixed) Contract will always be the greater of:

(1)    the Basic Insurance Amount; and

(2)    the Contract Fund before the deduction of any monthly charges due on that date, multiplied by the Attained Age factor that applies.

A listing of Attained Age factors can be found on your Contract Data pages.  The latter provision ensures that the Contract will always have a Death Benefit large enough so that the Contract will be treated as life insurance for tax purposes under current law.  Before the Contract is issued, the Contract Owner may choose between two methods that we use to determine the tax treatment of the Contract.

The following table illustrates at different ages how the Attained Age factor affects the Death Benefit for different Contract Fund amounts.  The table assumes a $250,000 Type A (fixed) Contract was issued when the insured was a male nonsmoker, age 35, and there is no Contract Debt.

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Type A (Fixed) Death Benefit

If		Then
The insured is age	and the Contract Fund is	the Attained Age factor is**	the Contract Fund multiplied by the Attained Age factor is	and the Death Benefit is
40 40 40	$ 25,000 $ 75,000 $100,000	4.04 4.04 4.04	101,000 303,000 404,000	$250,000 $303,000* $404,000*
60 60 60	$ 75,000 $125,000 $150,000	2.11 2.11 2.11	158,250 263,750 316,500	$250,000 $263,750* $316,500*
80 80 80	$150,000 $200,000 $225,000	1.32 1.32 1.32	198,000 264,000 297,000	$250,000 $264,000* $297,000*
*  Note that the Death Benefit has been increased to comply with the Internal Revenue Code’s definition of life insurance. ** Assumes the Contract Owner selected the Cash Value Accumulation Test.  These figures are based on the 2001    Commissioner's Standard Ordinary ("CSO") Mortality Tables.

This means, for example, that if the insured has reached the age of 60, and the Contract Fund is $150,000, the Death Benefit will be $316,500, even though the Basic Insurance Amount is $250,000.  In this situation, for every $1 increase in the Contract Fund, the Death Benefit will be increased by $2.11.  We reserve the right to refuse to accept any premium payment that increases the Death Benefit by more than it increases the Contract Fund.

How a Type B (Variable) Contract's Death Benefit Will Vary

Under the Type B (variable) Contract, while the Contract is in-force, the Death Benefit will never be less than the Basic Insurance Amount, before the reduction of any Contract Debt, but will also vary immediately after it is issued, with the investment results of the selected Variable Investment Options.  The Death Benefit may be increased to ensure that the Contract will satisfy the Internal Revenue Code's definition of life insurance.

Assuming no Contract Debt, the Death Benefit of a Type B (variable) Contract will always be the greater of:

(1)    the Basic Insurance Amount plus the Contract Fund before the deduction of any monthly charges due on that date; and

(2)    the Contract Fund before the deduction of any monthly charges due on that date, multiplied by the Attained Age factor that applies.

For purposes of computing the Death Benefit, if the Contract Fund is less than zero, we will consider it to be zero.  A listing of Attained Age factors can be found on your Contract Data pages.  The latter provision ensures that the Contract will always have a Death Benefit large enough so that the Contract will be treated as life insurance for tax purposes under current law.  Before the Contract is issued, the Contract Owner may choose between two methods that we use to determine the tax treatment of the Contract.

The following table illustrates various Attained Age factors and Contract Funds and the corresponding Death Benefits. The table assumes a $250,000 Type B (variable) Contract was issued when the insured was a male nonsmoker, age 35, and there is no Contract Debt.

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Type B (Variable) Death Benefit

If		Then
The insured is age	and the Contract Fund is	the Attained Age factor is**	the Contract Fund multiplied by the Attained Age factor is	and the Death Benefit is
40 40 40	$ 25,000 $ 75,000 $100,000	4.04 4.04 4.04	101,000 303,000 404,000	$275,000 $325,000 $404,000*
60 60 60	$ 75,000 $125,000 $150,000	2.11 2.11 2.11	158,250 263,750 316,500	$325,000 $375,000 $400,000
80 80 80	$150,000 $200,000 $225,000	1.32 1.32 1.32	198,000 264,000 297,000	$400,000 $450,000 $475,000
*  Note that the Death Benefit has been increased to comply with the Internal Revenue Code’s definition of life insurance. ** Assumes the Contract Owner selected the Cash Value Accumulation Test.  These figures are based on the 2001    Commissioner's Standard Ordinary ("CSO") Mortality Tables.

This means, for example, that if the insured has reached the age of 40, and the Contract Fund is $100,000, the Death Benefit will be $404,000, even though the Basic Insurance Amount is $250,000.  In this situation, for every $1 increase in the Contract Fund, the Death Benefit will be increased by $4.04.  We reserve the right to refuse to accept any premium payment that increases the Death Benefit by more than it increases the Contract Fund.

Reports to Contract Owners

Once each year, we will send you a statement that provides certain information pertinent to your Contract.  This statement will detail values, transactions made, and specific Contract data that apply only to your particular Contract.

You will also be sent annual and semi-annual reports of the Funds showing the financial condition of the portfolios and the investments held in each portfolio.

UNDERWRITING PROCEDURES

When you express interest in obtaining insurance from us, you may apply for coverage in one of two ways, via a paper application or through our Worksheet process.  When using the paper application, a registered representative completes a full application and submits it to our underwriting unit to commence the underwriting process.  A registered representative may be an agent/broker who is a representative of Pruco Securities, LLC (“Prusec”), a broker dealer affiliate of Prudential, or in some cases, a broker dealer not directly affiliated with Prudential.

When using the Worksheet process, a registered representative typically collects enough applicant information to start the underwriting process.  The representative will submit the information to our New Business Department to begin processing, which includes scheduling a direct call to the applicant to obtain medical information, and to confirm other data.

Regardless of which of the two underwriting processes is followed, once we receive the necessary information, which may include doctors’ statements, medical examinations from physicians or paramedical vendors, test results, and other information, we will make a decision regarding our willingness to accept the risk, and the price at which we will accept the risk.  We will issue the Contract when the risk has been accepted and priced.

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ADDITIONAL INFORMATION ABOUT CHARGES

Charges for Increases in Basic Insurance Amount

Each time you increase your Basic Insurance Amount, we will send you new Contract Data pages showing the amount and effective date of the change and the recomputed charges, values, and limitations.  No transaction charge is currently being made in connection with an increase in Basic Insurance Amount.  However, we reserve the right to make such a charge in an amount of up to $25.  Increases in Basic Insurance Amount are only available for Contracts issued on Form VULNT-2009-NY.  Your Contract's form number is located in the lower left hand corner on the first page of your Contract.  All VUL Protector Contracts issued prior to May 1, 2014, were issued on Form VULNT-2009-NY.   

ADDITIONAL INFORMATION ABOUT CONTRACTS IN DEFAULT

When your Contract is in default, no part of your Contract Fund is available to you.  Consequently, you are not able to take any loans, partial withdrawals or surrenders, or make any transfers among the investment options.  In addition, during any period in which your Contract is in default, you may not change the way in which subsequent premiums are allocated or increase the amount of your insurance by increasing the Basic Insurance Amount of the Contract.

DISTRIBUTION AND COMPENSATION

In an effort to promote the sale of our variable products (which may include the placement of our Contracts on a preferred or recommended company or product list and/or access to a broker-dealer’s registered representatives), we or Prusec may enter into compensation arrangements with certain broker-dealer firms authorized by Prusec to sell the Contract, or branches of such firms, with respect to certain or all registered representatives of such firms under which such firms may receive separate compensation or reimbursement for, among other things, training of sales personnel, marketing and / or administrative and / or other services they provide to us or our affiliates.  To the extent permitted by applicable rules, laws, and regulations, Prusec may pay or allow other promotional incentives or payments in the form of cash or non-cash compensation.  These arrangements may not be offered to all firms, and the terms of such arrangements may differ between firms.  You should note that firms and individual registered representatives and branch managers within some firms participating in one of these compensation arrangements might receive greater compensation for selling the Contract than for selling a different Contract that is not eligible for these compensation arrangements.  

Pruco Life of New Jersey makes these promotional payments directly to or in sponsorship of the firm (or its affiliated broker/dealers). Examples of arrangements under which such payments may be made currently include, but are not limited to, sponsorships, conferences (national, regional and top producer), speaker fees, promotional items and reimbursements to firms for marketing activities or services paid by the firms and/or their individual representatives.  The amount of these payments varies widely because some payments may encompass only a single event, such as a conference, and others have a much broader scope.

The list below provides the names of the firms (or their affiliated broker/dealers) that we are aware of (as of December 31, 2013) that received payment or accrued a payment amount with respect to variable product business during 2013.  The least amount paid or accrued and the greatest amount paid or accrued during 2013 were $1.96 to $3,967,703, respectively.

Name of Firms:

1st Global Capital Corp; 3 Mark Equities Inc; Allied Beacon Partners Inc; Allstate Financial Services LLC; American Equity Investment Corporation; American Independent Securities Group LLC; American Investors Co; American Portfolios Financial Services Inc; Ameriprise Financial Services; Ameritas Investment Corp; AON Consulting Inc; Arlington Securities Inc; Arvest Investments, Inc; Askar Corporation; Associated Securities Corp; Ausdal Financial Partners Inc; AXA Network LLC; BB&T Investments Services Inc; BBVA Compass Investment Solutions Inc; BCG Securities Inc; Beaconsfield Financial Service; Benefit Funding Services LLC; Berthel Fisher & Company Financial Services Inc.; BG Worldwide Securities; Broker Dealer Financial Services Corporation; Brokers International Financial Services; Cadaret Grant & Co Inc; Cambridge Investment Research; Capital Financial Services Inc; Capital Investment Group Inc; Capital Management Systems LLC; Capital Synergy Partners Inc; CBIZ Financial Solutions Inc; CCO Investment Services Corp; Centara Capital Securities Inc; Centaurus Financial Inc; Centerre Capital LLC;

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Cetera Advisor Networks LLC; Cetera Advisors, LLC; Cetera Financial Specialists, LLC; Cetera Investment Services LLC; CFD Investments Inc; Citigroup Global Markets Inc; Clark Securities Inc; Client One Securities LLC; CMS Investment Resources Inc; Comerica Securities Inc; Commonwealth Financial Network; Comprehensive Asset Management & Services; Coordinated Capital Securities; Country Capital Management Company; CPS Financial & Insurance Services Inc; Crown Capital Securities LP; Curtis Securities LLC; Cuso Financial Services Inc; Cutter & Company Brokerage Inc; Delta Trust Investment Inc; Dempsey Financial Network Inc; Dewaay Financial Network, LLC; Edward Jones & Company LP; Edwin C Blitz Investments Inc; Enterprise Securities Company; Equity Services Inc; Essex Financial Services Inc; Executive Services Securities; Farmers Financial Solutions; FBL Marketing Services LLC; Fifth Third Securities Inc; Financial Network Investment Corporation; Financial Telesis Inc; Financial West Group; Fintegra LLC; First Allied Securities Inc; First Asset Financial Inc; First Brokerage America LLC; First Dakota Inc; First Heartland Capital Inc; First State Financial Mgmt Inc; FNBB Capital Markets LLC; Foothill Securities Inc; Fortune Securities Inc; Founders Financial Securities; FSC Securities; GA Financial Inc; Geneos Wealth Management Inc; Genworth Financial Securities; Girard Securities Inc; Global Link Securities Inc; GWN Securities Inc; H Beck Inc; H&R Block Financial Advisors INC; Hancock Securities Group LLC; Hantz Financial Services, Inc.; Harbor Financial Services LLC; Harbour Investments Inc; HD Vest Investment Securities Inc; Herndon Plant Oakley Limited; Horan Securities Inc; Hornor Townsend & Kent; Huntington Investment Company; Huntleigh Securities Corp; IMS Securities Inc; Independent Financial Group Inc; ING Financial Partners; Interlink Securities Corp; Intervest International Equities; Invest Financial Corporation; Investacorp Inc.; Investment Center Inc;  Investment Centers Of America; Investment Professionals Inc; Investors Capital Corporation; Investors Security Company Inc; J J B Hilliard W L Lyons LLC; J P Turner & Company LLC; J W Cole Financial Inc; J.P. Morgan Securities LLC; Janney Montgomery Scott LLC; KCD Financial Inc; KCG Securities LLC; Key West Investments Llc; KFG Enterprises Inc; KMS Financial Services; Kovack Securities Inc; L M Kohn & Co; La Salle Street Securities Inc; Larson Financial Group LLC; Leaders Group Inc; Legend Equities Corp; Lifemark Securities Corp; Lincoln Financial Advisors Corp; Lincoln Financial Sec Corp; Lincoln Investment Planning Inc; LPL Financial Corporation; Lsy Inc Dba American Investors; M Financial Securities; M Holdings Securities Inc; M&T Securities Inc; MAFG Ria Services Inc; Marsh Executive Benefits Inc; Marsh Insurance & Investments; Mercap Securities LLC; Meridien Financial Group Inc; Merrill Lynch Pierce Fenner & Smith Inc; Metlife Securities Inc; MFAS Corp; Mid Atlantic Capital Corporation; Midamerica Financial Services; MMC Securities Corp; MML Investors Services Inc; Money Concepts Capital Corp; Montage Securities LLC; Morgan Keegan & Co Inc; Morgan Stanley Smith Barney LLC; MTL Equity Products Inc; Multi Financial Sec Corp; Mutual Service Corporation; Mutual Trust Company Of America Securities; MWA Financial Services Inc; National Planning Corp; Network Agency Inc; New England Securities; Newport Group Securities Inc; Next Financial Group; NFP Securities Inc; Northland Securities Inc; Northwestern Mutual Invest Services; NPB Financial Group LLC; NyLife Securities LLC; OBS Brokerage Services Inc; One America Securities Inc; Oppenheimer & Co., Inc.; Packerland Brokerage Services; Park Avenue Securities; PJ Robb Variable Corp; Planmember Securities Corp; Preferred Product Network Inc; Primevest Financial Services; Princor Financial Services Corporation; Proequities Inc; Prospera Financial Services; Purshe Kaplan Sterling Invest; Quest Capital Strategies Inc; Questar Capital Corporation; RA Bench; Rampart Financial Services Inc; Raymond James & Associates Inc; RBC Capital Markets Corporation; Resource Horizons Group Llc; Robert W Baird & Co Inc; Royal Alliance Associates Inc; Rydex Distributors Inc; Sagepoint Financial Inc; Sammons Securities Co LLC; Sanders Morris Harris, Inc.; SCF Securities Inc; Securian Financial Svs Inc; Securities America Inc; Securities Service Network Inc; Sigma Financial Corp; Signal Securities Inc; Signator Financial Services Inc; SII Investments Inc; Smith Brown & Groover Inc; Sorrento Pacific Financial LLC; Spire Securities, LLC; Ssi Equity Services Inc; St Bernard Financial Services; Stanley Laman Group Securities; Stephens Inc; Sterne Agee Financial Services; Stifel Nicholaus & Co Inc; Summit Brokerage Services, Inc; Summit Equities Inc; Sunset Financial Services Inc; SWS Financial Services Inc; Syndicated Capital Inc; TFS Securities Inc; The On Equity Sales Company; The Strategic Financial Alliance Inc; Thoroughbred Financial Services LLC; Tower Square Securities Inc; Trading Services Corp; Transamerica Financial Advisor Inc; Triad Advisors Inc; Trustmont Financial Group Inc; UBS Financial Services; United Planners Financial Services; Univest Insurance Inc; US Bancorp Investments Inc; USA Financial Securities Corp; USI Securities Inc; Uvest Investment Services Inc; Valic Financial Advisors, Inc.; Valmark Securities Inc; VFIC Securities Inc; VSR Financial Services Inc; W S Griffith Sec Inc; Waddell & Reed Inc; Wall Street Financial Group Inc; Walnut Street Securities Inc; Wells Fargo Advisors; Western Equity Group Inc; Western International Securities Inc; Wilbanks Securities Inc; Windham Financial Services Inc; Woodbury Fin Services Inc; World Capital Brokerage Inc; World Equity Group Inc; Worth Financial Group Inc; WRP Investments Inc.

Your registered representative can provide you with more information about the compensation arrangements that apply upon the sale of the Contract.

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EXPERTS

The financial statements of Pruco Life Insurance Company of New Jersey as of December 31, 2013 and 2012 and for each of the three years in the period ended December 31, 2013 and the financial statements of Pruco Life of New Jersey Variable Appreciable Account as of December 31, 2013 and for each of the two years in the period then ended included in this Statement of Additional Information have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP's principal business address is 300 Madison Avenue, New York, New York 10017.

Actuarial matters included in this Statement of Additional Information have been examined by Michael LeBoeuf, FSA, MAAA, Vice President and Actuary of Prudential.

PERFORMANCE DATA

Average Annual Total Return

The Account may advertise average annual total return information calculated according to a formula prescribed by the U.S. Securities and Exchange Commission (“SEC”).  Average annual total return shows the average annual percentage increase, or decrease, in the value of a hypothetical contribution allocated to a Subaccount from the beginning to the end of each specified period of time.  The SEC standardized version of this performance information is based on an assumed contribution of $1,000 allocated to a Subaccount at the beginning of each period and full withdrawal of the value of that amount at the end of each specified period.  This method of calculating performance further assumes that (i) a $1,000 contribution was allocated to a Subaccount and (ii) no transfers or additional payments were made.  Premium taxes are not included in the term “charges” for purposes of this calculation.  Average annual total return is calculated by finding the average annual compounded rates of return of a hypothetical contribution that would compare the Unit Value on the first day of a specified period to the ending redeemable value at the end of the period according to the following formula:

P(1+T)n = ERV

Where T equals average annual total return, where ERV (the ending redeemable value) is the value at the end of the applicable period of a hypothetical contribution of $1,000 made at the beginning of the applicable period, where P equals a hypothetical contribution of $1,000, and where n equals the number of years.

Non-Standard Total Return

In addition to the standardized average annual total return information described above, we may present total return information computed on bases different from that standardized method.  The Account may also present aggregate total return figures for various periods, reflecting the cumulative change in value of an investment in the Account for the specified period.

For the periods prior to the date the Subaccounts commenced operations, non-standard performance information for the Contracts will be calculated based on the performance of the Funds and the assumption that the Subaccounts were in existence for the same periods as those indicated for the Funds, with the level of Contract charges that were in effect at the inception of the Subaccounts (this is referred to as “hypothetical performance data”).  Standard and non-standard average annual return calculations include the mortality and expense risk charge under the Contract, but do not reflect other life insurance Contract charges (sales, administration, and actual cost of insurance) nor any applicable surrender or lapse charges, which would significantly lower the returns.  Information stated for any given period does not indicate or represent future performance.

Money Market Subaccount Yield

The “total return” figures for the Money Market Subaccount are calculated using historical investment returns of the Money Market Portfolio of The Prudential Series Fund as if VUL Protector® had been investing in that subaccount during a specified period.  Fees associated with the Series Fund are reflected; however, all fees, expenses, and charges associated with VUL Protector® are not reflected.

8

The yield is computed by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one accumulation unit of the Money Market Subaccount at the beginning of a specified period, subtracting a hypothetical charge reflecting deductions from Contract Owner accounts, and dividing the difference by the value of the subaccount at the beginning of the base period to obtain the base period return, and then multiplying the base period return by (365/7), with the resulting figure carried to the nearest ten-thousandth of 1%.  The effective yield is obtained by taking the base period return, adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result, according to the following formula: Effective Yield ([base period return + 1] 365/7)-1.

The yields on amounts held in the Money Market Subaccount will fluctuate on a daily basis.  Therefore, the stated yields for any given period are not an indication of future yields.

FINANCIAL STATEMENTS

The financial statements of the Account should be distinguished from the financial statements of Pruco Life of New Jersey, which should be considered only as bearing upon the ability of Pruco Life of New Jersey to meet its obligations under the Contracts.

9

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 2013

	SUBACCOUNTS
	Prudential Money Market Portfolio			Prudential Diversified Bond Portfolio			Prudential Equity Portfolio			Prudential Flexible Managed Portfolio			Prudential Conservative Balanced Portfolio
ASSETS
Investment in the portfolios, at fair value	$	61,871,139		$	133,636,474		$	198,496,537		$	284,781,144		$	134,397,410
Net Assets	$	61,871,139		$	133,636,474		$	198,496,537		$	284,781,144		$	134,397,410
NET ASSETS, representing:
Accumulation units	$	61,871,139		$	133,636,474		$	198,496,537		$	284,781,144		$	134,397,410
	$	61,871,139		$	133,636,474		$	198,496,537		$	284,781,144		$	134,397,410
Units outstanding		44,811,230			49,136,474			18,817,892			31,269,071			18,672,783
Portfolio shares held		6,187,114			12,137,736			5,543,048			13,338,695			6,514,659
Portfolio net asset value per share	$	10.00		$	11.01		$	35.81		$	21.35		$	20.63
Investment in portfolio shares, at cost	$	61,870,700		$	138,021,154		$	125,982,375		$	210,092,294		$	93,584,845
STATEMENTS OF OPERATIONS For the year ended December 31, 2013
	SUBACCOUNTS
	Prudential Money Market Portfolio			Prudential Diversified Bond Portfolio			Prudential Equity Portfolio			Prudential Flexible Managed Portfolio			Prudential Conservative Balanced Portfolio
	01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013
INVESTMENT INCOME
Dividend income	$	988		$	5,393,795		$	0		$	0		$	0
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration		155,375			396,276			1,016,788			1,661,293			804,337
Reimbursement for excess expenses		0			(11,698	)		(117,008	)		(551,119	)		(208,598	)
NET EXPENSES		155,375			384,578			899,780			1,110,174			595,739
NET INVESTMENT INCOME (LOSS)		(154,387	)		5,009,217			(899,780	)		(1,110,174	)		(595,739	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			3,812,412			0			0			0
Realized gain (loss) on shares redeemed		0			78,520			2,513,241			2,166,693			1,481,350
Net change in unrealized gain (loss) on investments		0			(10,276,083	)		48,488,543			46,466,153			17,584,715
NET GAIN (LOSS) ON INVESTMENTS		0			(6,385,151	)		51,001,784			48,632,846			19,066,065
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(154,387	)	$	(1,375,934	)	$	50,102,004		$	47,522,672		$	18,470,326

The accompanying notes are an integral part of these financial statements.

A1

SUBACCOUNTS (Continued)
Prudential High Yield Bond Portfolio		Prudential Stock Index Portfolio			Prudential Value Portfolio			Prudential Natural Resources Portfolio			Prudential Global Portfolio			Prudential Government Income Portfolio			Prudential Jennison Portfolio			Prudential Small Capitalization Stock Portfolio
$	1,363,539,038	$	50,654,542		$	31,424,045		$	17,778,719		$	14,947,139		$	3,149,377		$	35,253,336		$	15,921,128
$	1,363,539,038	$	50,654,542		$	31,424,045		$	17,778,719		$	14,947,139		$	3,149,377		$	35,253,336		$	15,921,128
$	1,363,539,038	$	50,654,542		$	31,424,045		$	17,778,719		$	14,947,139		$	3,149,377		$	35,253,336		$	15,921,128
$	1,363,539,038	$	50,654,542		$	31,424,045		$	17,778,719		$	14,947,139		$	3,149,377		$	35,253,336		$	15,921,128
	450,695,757		14,987,580			3,183,572			957,043			5,677,073			776,374			11,498,143			2,324,336
	257,757,852		1,077,298			1,306,613			476,769			600,046			278,706			948,946			608,606
$	5.29	$	47.02		$	24.05		$	37.29		$	24.91		$	11.30		$	37.15		$	26.16
$	1,308,707,566	$	33,623,894		$	24,935,672		$	14,856,238		$	11,321,132		$	3,298,385		$	21,069,580		$	10,708,146
SUBACCOUNTS (Continued)
Prudential High Yield Bond Portfolio		Prudential Stock Index Portfolio			Prudential Value Portfolio			Prudential Natural Resources Portfolio			Prudential Global Portfolio			Prudential Government Income Portfolio			Prudential Jennison Portfolio			Prudential Small Capitalization Stock Portfolio
01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013
$	80,538,917	$	0		$	0		$	0		$	0		$	62,195		$	0		$	0
	4,103,126		214,881			141,667			101,800			67,294			21,029			144,133			78,551
	0		0			0			0			0			0			0			0
	4,103,126		214,881			141,667			101,800			67,294			21,029			144,133			78,551
	76,435,791		(214,881	)		(141,667	)		(101,800	)		(67,294	)		41,166			(144,133	)		(78,551	)
	0		0			0			0			0			108,345			0			0
	1,348,018		903,662			186,338			351,538			167,907			(14,159	)		531,843			175,760
	5,445,115		11,631,057			7,612,075			1,372,348			3,079,647			(239,748	)		9,206,955			4,372,372
	6,793,133		12,534,719			7,798,413			1,723,886			3,247,554			(145,562	)		9,738,798			4,548,132
$	83,228,924	$	12,319,838		$	7,656,746		$	1,622,086		$	3,180,260		$	(104,396	)	$	9,594,665		$	4,469,581

The accompanying notes are an integral part of these financial statements.

A2

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 2013

	SUBACCOUNTS
	T. Rowe Price International Stock Portfolio			Janus Aspen Janus Portfolio – Institutional Shares			MFS® Growth Series – Initial Class			VP Value Fund		FTVIP Franklin Small-Mid Cap Growth Securities Fund – Class 2
ASSETS
Investment in the portfolios, at fair value	$	35,500		$	267,950		$	135,348		$	346,108	$	322,099
Net Assets	$	35,500		$	267,950		$	135,348		$	346,108	$	322,099
NET ASSETS, representing:
Accumulation units	$	35,500		$	267,950		$	135,348		$	346,108	$	322,099
	$	35,500		$	267,950		$	135,348		$	346,108	$	322,099
Units outstanding		29,519			233,803			124,808			124,103		236,231
Portfolio shares held		2,258			7,835			3,464			40,960		11,859
Portfolio net asset value per share	$	15.72		$	34.20		$	39.07		$	8.45	$	27.16
Investment in portfolio shares, at cost	$	31,476		$	176,825		$	72,002		$	276,644	$	234,004
STATEMENTS OF OPERATIONS For the year ended December 31, 2013
	SUBACCOUNTS
	T. Rowe Price International Stock Portfolio			Janus Aspen Janus Portfolio – Institutional Shares			MFS® Growth Series – Initial Class			VP Value Fund		FTVIP Franklin Small-Mid Cap Growth Securities Fund – Class 2
	01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013
INVESTMENT INCOME
Dividend income	$	291		$	1,824		$	274		$	5,431	$	0
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration		743			2,069			1,030			2,878		2,640
Reimbursement for excess expenses		0			0			0			0		0
NET EXPENSES		743			2,069			1,030			2,878		2,640
NET INVESTMENT INCOME (LOSS)		(452	)		(245	)		(756	)		2,553		(2,640	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0			866			0		20,863
Realized gain (loss) on shares redeemed		3,502			42,759			601			9,617		10,748
Net change in unrealized gain (loss) on investments		4,025			34,867			34,605			74,222		63,394
NET GAIN (LOSS) ON INVESTMENTS		7,527			77,626			36,072			83,839		95,005
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	7,075		$	77,381		$	35,316		$	86,392	$	92,365

The accompanying notes are an integral part of these financial statements.

A3

SUBACCOUNTS (Continued)
Prudential SP Small Cap Value Portfolio			Janus Aspen Janus Portfolio – Service Shares		Prudential SP Prudential U.S. Emerging Growth Portfolio			Prudential SP International Growth Portfolio			Prudential SP International Value Portfolio			Janus Aspen Overseas Portfolio – Service Shares			Goldman Sachs Structured Small Cap Equity Fund		M Large Cap Growth Fund
$	11,176,582		$	1,309,978	$	12,865,825		$	3,404,728		$	3,970,914		$	415,091		$	76,083	$	55,346
$	11,176,582		$	1,309,978	$	12,865,825		$	3,404,728		$	3,970,914		$	415,091		$	76,083	$	55,346
$	11,176,582		$	1,309,978	$	12,865,825		$	3,404,728		$	3,970,914		$	415,091		$	76,083	$	55,346
$	11,176,582		$	1,309,978	$	12,865,825		$	3,404,728		$	3,970,914		$	415,091		$	76,083	$	55,346
	4,049,536			840,074		4,845,771			1,886,869			2,216,893			45,263			31,497		2,286
	593,552			38,826		1,187,980			540,433			499,486			10,144			5,049		2,237
$	18.83		$	33.74	$	10.83		$	6.30		$	7.95		$	40.92		$	15.07	$	24.74
$	6,919,484		$	834,506	$	8,712,902		$	2,975,228		$	3,762,912		$	411,120		$	61,304	$	39,496
SUBACCOUNTS (Continued)
Prudential SP Small Cap Value Portfolio			Janus Aspen Janus Portfolio – Service Shares		Prudential SP Prudential U.S. Emerging Growth Portfolio			Prudential SP International Growth Portfolio			Prudential SP International Value Portfolio			Janus Aspen Overseas Portfolio – Service Shares			Goldman Sachs Structured Small Cap Equity Fund		M Large Cap Growth Fund
01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013
$	0		$	7,602	$	0		$	0		$	0		$	11,406		$	684	$	293
	24,233			2,871		28,479			9,271			12,404			358			131		0
	0			0		0			0			0			0			0		0
	24,233			2,871		28,479			9,271			12,404			358			131		0
	(24,233	)		4,731		(28,479	)		(9,271	)		(12,404	)		11,048			553		293
	0			0		0			0			0			0			8,637		2,648
	173,748			23,423		158,518			10,100			(10,291	)		(3,725	)		669		2,576
	2,876,763			273,356		2,684,444			525,932			676,033			45,280			9,801		9,286
	3,050,511			296,779		2,842,962			536,032			665,742			41,555			19,107		14,510
$	3,026,278		$	301,510	$	2,814,483		$	526,761		$	653,338		$	52,603		$	19,660	$	14,803

The accompanying notes are an integral part of these financial statements.

A4

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 2013

	SUBACCOUNTS
	M International Equity Fund			M Large Cap Value Fund		AST Cohen & Steers Realty Portfolio			AST J.P. Morgan Strategic Opportunities Portfolio			AST Herndon Large-Cap Value Portfolio
ASSETS
Investment in the portfolios, at fair value	$	19,174		$	69,734	$	515,057		$	540,780		$	472,241
Net Assets	$	19,174		$	69,734	$	515,057		$	540,780		$	472,241
NET ASSETS, representing:
Accumulation units	$	19,174		$	69,734	$	515,057		$	540,780		$	472,241
	$	19,174		$	69,734	$	515,057		$	`540,780		$	472,241
Units outstanding		1,018			3,131		31,157			34,262			28,471
Portfolio shares held		1,458			5,064		68,039			34,665			36,808
Portfolio net asset value per share	$	13.15		$	13.77	$	7.57		$	15.60		$	12.83
Investment in portfolio shares, at cost	$	18,565		$	54,937	$	443,921		$	478,900		$	332,036
STATEMENTS OF OPERATIONS For the year ended December 31, 2013
	SUBACCOUNTS
	M International Equity Fund			M Large Cap Value Fund		AST Cohen & Steers Realty Portfolio			AST J.P. Morgan Strategic Opportunities Portfolio			AST Herndon Large-Cap Value Portfolio
	01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013
INVESTMENT INCOME
Dividend income	$	432		$	1,715	$	0		$	0		$	0
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration		0			0		498			853			391
Reimbursement for excess expenses		0			0		0			0			0
NET EXPENSES		0			0		498			853			391
NET INVESTMENT INCOME (LOSS)		432			1,715		(498	)		(853	)		(391	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			5,423		0			0			0
Realized gain (loss) on shares redeemed		(66	)		1,083		21,598			8,223			7,232
Net change in unrealized gain (loss) on investments		2,410			8,799		(9,183	)		38,242			108,293
NET GAIN (LOSS) ON INVESTMENTS		2,344			15,305		12,415			46,465			115,525
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	2,776		$	17,020	$	11,917		$	45,612		$	115,134

The accompanying notes are an integral part of these financial statements.

A5

SUBACCOUNTS (Continued)
AST Federated Aggressive Growth Portfolio			AST Small-Cap Value Portfolio			AST Goldman Sachs Mid-Cap Growth Portfolio			AST Loomis Sayles Large-Cap Growth Portfolio			AST MFS Growth Portfolio			AST Neuberger Berman Mid-Cap Growth Portfolio			AST PIMCO Limited Maturity Bond Portfolio			AST T. Rowe Price Natural Resources Portfolio
$	283,066		$	597,032		$	379,756		$	1,681,489		$	204,610		$	15,544		$	253,671		$	888,164
$	283,066		$	597,032		$	379,756		$	1,681,489		$	204,610		$	15,544		$	253,671		$	888,164
$	283,066		$	597,032		$	379,756		$	1,681,489		$	204,610		$	15,544		$	253,671		$	888,164
$	283,066		$	597,032		$	379,756		$	1,681,489		$	204,610		$	15,544		$	253,671		$	888,164
	14,232			29,133			16,662			109,104			10,859			715			18,884			54,362
	20,875			29,124			54,720			57,625			13,399			480			24,509			39,075
$	13.56		$	20.50		$	6.94		$	29.18		$	15.27		$	32.37		$	10.35		$	22.73
$	197,364		$	376,721		$	274,250		$	1,124,063		$	131,419		$	9,331		$	258,276		$	820,713
SUBACCOUNTS (Continued)
AST Federated Aggressive Growth Portfolio			AST Small-Cap Value Portfolio			AST Goldman Sachs Mid-Cap Growth Portfolio			AST Loomis Sayles Large-Cap Growth Portfolio			AST MFS Growth Portfolio			AST Neuberger Berman Mid-Cap Growth Portfolio			AST PIMCO Limited Maturity Bond Portfolio			AST T. Rowe Price Natural Resources Portfolio
01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013
$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0
	216			487			311			3,084			165			14			232			786
	0			0			0			0			0			0			0			0
	216			487			311			3,084			165			14			232			786
	(216	)		(487	)		(311	)		(3,084	)		(165	)		(14	)		(232	)		(786	)
	0			0			0			0			0			0			0			0
	5,252			8,207			5,660			31,377			3,806			153			(154	)		493
	70,948			144,836			80,820			414,503			48,419			3,732			(5,006	)		112,281
	76,200			153,043			86,480			445,880			52,225			3,885			(5,160	)		112,774
$	75,984		$	152,556		$	86,169		$	442,796		$	52,060		$	3,871			(5,392	)	$	111,988

The accompanying notes are an integral part of these financial statements.

A6

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 2013

	SUBACCOUNTS
	AST MFS Global Equity Portfolio			AST J.P. Morgan International Equity Portfolio			AST Templeton Global Bond Portfolio			M Capital Appreciation Fund		American Century VP Mid Cap Value Fund – Class 1 Shares
ASSETS
Investment in the portfolios, at fair value	$	317,017		$	487,176		$	193,368		$	47,087	$	158,202
Net Assets	$	317,017		$	487,176		$	193,368		$	47,087	$	158,202
NET ASSETS, representing:
Accumulation units	$	317,017		$	487,176		$	193,368		$	47,087	$	158,202
	$	317,017		$	487,176		$	193,368		$	47,087	$	158,202
Units outstanding		15,110			31,594			13,791			1,675		8,877
Portfolio shares held		20,925			19,023			17,954			1,585		8,565
Portfolio net asset value per share	$	15.15		$	25.61		$	10.77		$	29.71	$	18.47
Investment in portfolio shares, at cost	$	260,792		$	385,412		$	196,564		$	37,738	$	120,710
STATEMENTS OF OPERATIONS For the year ended December 31, 2013
	SUBACCOUNTS
	AST MFS Global Equity Portfolio			AST J.P. Morgan International Equity Portfolio			AST Templeton Global Bond Portfolio			M Capital Appreciation Fund		American Century VP Mid Cap Value Fund – Class 1 Shares
	01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013
INVESTMENT INCOME
Dividend income	$	0		$	0		$	0		$	0	$	1,525
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration		156			423			177			0		124
Reimbursement for excess expenses		0			0			0			0		0
NET EXPENSES		156			423			177			0		124
NET INVESTMENT INCOME (LOSS)		(156	)		(423	)		(177	)		0		1,401
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0			0			4,034		1,598
Realized gain (loss) on shares redeemed		2,365			5,103			(417	)		502		2,695
Net change in unrealized gain (loss) on investments		37,912			56,627			(5,569	)		7,931		25,919
NET GAIN (LOSS) ON INVESTMENTS		40,277			61,730			(5,986	)		12,467		30,212
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	40,121		$	61,307		$	(6,163	)	$	12,467	$	31,613

The accompanying notes are an integral part of these financial statements.

A7

SUBACCOUNTS (Continued)
AST Large-Cap Value Portfolio			AST Small-Cap Growth Portfolio			The Dreyfus Socially Responsible Growth  Fund – Service Shares		Prudential Jennison 20/20 Focus Portfolio			JPMorgan Insurance Trust Intrepid Mid Cap Portfolio – Class 1 Shares		MFS® Utilities Series – Initial Class		Neuberger Berman Adviser’s Management Trust Socially Responsive Portfolio  – Service Shares		AST T. Rowe Price Large-Cap Growth  Portfolio
$	4,095,742		$	2,997,828		$	8,086	$	967,427		$	98,179	$	451,268	$	14,052	$	2,637,910
$	4,095,742		$	2,997,828		$	8,086	$	967,427		$	98,179	$	451,268	$	14,052	$	2,637,910
$	4,095,742		$	2,997,828		$	8,086	$	967,427		$	98,179	$	451,268	$	14,052	$	2,637,910
$	4,095,742		$	2,997,828		$	8,086	$	967,427		$	98,179	$	451,268	$	14,052	$	2,637,910
	317,221			162,192			509		67,377			5,819		32,026		942		143,798
	206,231			97,872			185		46,758			4,017		14,155		646		127,992
$	19.86		$	30.63		$	43.76	$	20.69		$	24.44	$	31.88	$	21.76	$	20.61
$	3,026,573		$	1,767,249		$	6,937	$	762,247		$	78,914	$	398,323	$	12,020	$	1,534,447
SUBACCOUNTS (Continued)
AST Large-Cap Value Portfolio			AST Small-Cap Growth Portfolio			The Dreyfus Socially Responsible Growth  Fund – Service Shares		Prudential Jennison 20/20 Focus Portfolio			JPMorgan Insurance Trust Intrepid Mid Cap Portfolio – Class 1 Shares		MFS® Utilities Series – Initial Class		Neuberger Berman Adviser’s Management Trust Socially Responsive Portfolio  – Service Shares		AST T. Rowe Price Large-Cap Growth  Portfolio
01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013
$	0		$	0		$	33	$	0		$	881	$	5,528	$	29	$	0
	7,396			5,940			12		639			74		233		7		5,327
	0			0			0		0			0		0		0		0
	7,396			5,940			12		639			74		233		7		5,327
	(7,396	)		(5,940	)		21		(639	)		807		5,295		22		(5,327	)
	0			0			0		0			0		4,413		0		0
	48,239			92,600			1,985		11,254			8,674		3,908		677		61,612
	1,090,715			688,088			844		155,273			14,114		28,745		1,417		728,601
	1,138,954			780,688			2,829		166,527			22,788		37,066		2,094		790,213
$	1,131,558		$	774,748		$	2,850	$	165,888		$	23,595	$	42,361	$	2,116	$	784,886

The accompanying notes are an integral part of these financial statements.

A8

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 2013

	SUBACCOUNTS
	AST Schroders Multi-Asset World Strategies Portfolio			AST PIMCO Total Return Bond Portfolio			AST T. Rowe Price Asset Allocation Portfolio			AST Wellington Management Hedged Equity Portfolio			AST Balanced Asset Allocation Portfolio
ASSETS
Investment in the portfolios, at fair value	$	233,646		$	9,689,106		$	1,542,400		$	10,260,356		$	17,985,521
Net Assets	$	233,646		$	9,689,106		$	1,542,400		$	10,260,356		$	17,985,521
NET ASSETS, representing:
Accumulation units	$	233,646		$	9,689,106		$	1,542,400		$	10,260,356		$	17,985,521
	$	233,646		$	9,689,106		$	1,542,400		$	10,260,356		$	17,985,521
Units outstanding		13,592			825,141			83,215			683,121			1,220,182
Portfolio shares held		14,778			788,373			69,228			855,743			1,303,299
Portfolio net asset value per share	$	15.81		$	12.29		$	22.28		$	11.99		$	13.80
Investment in portfolio shares, at cost	$	204,506		$	9,378,421		$	1,356,033		$	7,471,502		$	13,860,454
STATEMENTS OF OPERATIONS For the year ended December 31, 2013
	SUBACCOUNTS
	AST Schroders Multi-Asset World Strategies Portfolio			AST PIMCO Total Return Bond Portfolio			AST T. Rowe Price Asset Allocation Portfolio			AST Wellington Management Hedged Equity Portfolio			AST Balanced Asset Allocation Portfolio
	01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013
INVESTMENT INCOME
Dividend income	$	0		$	0		$	0		$	0		$	0
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration		473			23,021			2,424			17,368			35,905
Reimbursement for excess expenses		0			0			0			0			0
NET EXPENSES		473			23,021			2,424			17,368			35,905
NET INVESTMENT INCOME (LOSS)		(473	)		(23,021	)		(2,424	)		(17,368	)		(35,905	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0			0			0			0
Realized gain (loss) on shares redeemed		2,855			26,303			11,513			140,843			237,543
Net change in unrealized gain (loss) on investments		23,191			(204,798	)		145,434			1,564,872			2,399,777
NET GAIN (LOSS) ON INVESTMENTS		26,046			(178,495	)		156,947			1,705,715			2,637,320
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	25,573		$	(201,516	)	$	154,523		$	1,688,347		$	2,601,415

The accompanying notes are an integral part of these financial statements.

A9

SUBACCOUNTS (Continued)
AST Preservation Asset Allocation Portfolio			AST First Trust Balanced Target Portfolio			AST Prudential Growth Allocation Portfolio			AST Advanced Strategies Portfolio			AST Schroders Global Tactical Portfolio			AST RCM World Trends Portfolio			Dreyfus Investment Portfolios, MidCap Stock Portfolio – Service Shares		AST BlackRock Global Strategies Portfolio
$	5,236,293		$	227,839		$	613,616		$	586,062		$	854,829		$	402,466		$	30,045	$	30,556,129
$	5,236,293		$	227,839		$	613,616		$	586,062		$	854,829		$	402,466		$	30,045	$	30,556,129
$	5,236,293		$	227,839		$	613,616		$	586,062		$	854,829		$	402,466		$	30,045	$	30,556,129
$	5,236,293		$	227,839		$	613,616		$	586,062		$	854,829		$	402,466		$	30,045	$	30,556,129
	392,356			12,908			33,849			31,003			44,824			24,487			1,793		2,670,849
	397,895			19,407			51,306			41,624			61,059			35,028			1,442		2,668,658
$	13.16		$	11.74		$	11.96		$	14.08		$	14.00		$	11.49		$	20.83	$	11.45
$	4,530,869		$	200,880		$	549,090		$	500,578		$	732,276		$	354,651		$	16,762	$	26,843,950
SUBACCOUNTS (Continued)
AST Preservation Asset Allocation Portfolio			AST First Trust Balanced Target Portfolio			AST Prudential Growth Allocation Portfolio			AST Advanced Strategies Portfolio			AST Schroders Global Tactical Portfolio			AST RCM World Trends Portfolio			Dreyfus Investment Portfolios, MidCap Stock Portfolio – Service Shares		AST BlackRock Global Strategies Portfolio
01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013
$	0		$	0		$	0		$	0		$	0		$	0		$	292	$	0
	13,038			407			861			1,156			1,538			826			26		53,924
	0			0			0			0			0			0			0		0
	13,038			407			861			1,156			1,538			826			26		53,924
	(13,038	)		(407	)		(861	)		(1,156	)		(1,538	)		(826	)		266		(53,924	)
	0			0			0			0			0			0			0		0
	29,852			2,971			4,096			7,984			11,736			2,671			1,462		190,073
	380,196			21,505			54,521			62,339			89,579			37,433			5,920		2,751,794
	410,048			24,476			58,617			70,323			101,315			40,104			7,382		2,941,867
$	397,010		$	24,069		$	57,756		$	69,167		$	99,777		$	39,278		$	7,648	$	2,887,943

The accompanying notes are an integral part of these financial statements.

A10

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 2013

	SUBACCOUNTS
	TOPS Aggressive Growth ETF Portfolio		TOPS Balanced ETF Portfolio		TOPS Capital Preservation ETF Portfolio			TOPS Growth ETF Portfolio		TOPS Moderate Growth ETF Portfolio
ASSETS
Investment in the portfolios, at fair value	$	31,194	$	5,682	$	5,559		$	28,515	$	15,586
Net Assets	$	31,194	$	5,682	$	5,559		$	28,515	$	15,586
NET ASSETS, representing:
Accumulation units	$	31,194	$	5,682	$	5,559		$	28,515	$	15,586
	$	31,194	$	5,682	$	5,559		$	28,515	$	15,586
Units outstanding		2,055		452		474			1,822		1,164
Portfolio shares held		2,542		494		504			2,185		1,333
Portfolio net asset value per share	$	12.27	$	11.51	$	11.03		$	13.05	$	11.69
Investment in portfolio shares, at cost	$	26,944	$	5,505	$	5,542		$	25,190	$	14,256
STATEMENTS OF OPERATIONS For the year ended December 31, 2013
	SUBACCOUNTS
	TOPS Aggressive Growth ETF Portfolio		TOPS Balanced ETF Portfolio		TOPS Capital Preservation ETF Portfolio			TOPS Growth ETF Portfolio		TOPS Moderate Growth ETF Portfolio
	01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013			01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013
INVESTMENT INCOME
Dividend income	$	181	$	60	$	48		$	201	$	161
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration		23		3		1			20		14
Reimbursement for excess expenses		0		0		0			0		0
NET EXPENSES		23		3		1			20		14
NET INVESTMENT INCOME (LOSS)		158		57		47			181		147
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		35		0		32			1		55
Realized gain (loss) on shares redeemed		413		48		(9	)		746		820
Net change in unrealized gain (loss) on investments		3,881		149		15			2,593		660
NET GAIN (LOSS) ON INVESTMENTS		4,329		197		38			3,340		1,535
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	4,487	$	254	$	85		$	3,521	$	1,682

The accompanying notes are an integral part of these financial statements.

A11

SUBACCOUNTS (Continued)
TOPS Managed Risk Balanced ETF Portfolio		TOPS Managed Risk Growth ETF Portfolio		TOPS Managed Risk Moderate Growth ETF Portfolio		American Funds Growth Fund – Class 2		American Funds Growth-Income Fund – Class 2		Fidelity VIP Contrafund Portfolio – Service Class 2		Fidelity VIP MidCap Portfolio – Service Class 2		Templeton Growth Securities Fund – Class 2
$	54,334	$	184,177	$	86,112	$	3,307	$	5,076	$	1,376	$	292	$	416
$	54,334	$	184,177	$	86,112	$	3,307	$	5,076	$	1,376	$	292	$	416
$	54,334	$	184,177	$	86,112	$	3,307	$	5,076	$	1,376	$	292	$	416
$	54,334	$	184,177	$	86,112	$	3,307	$	5,076	$	1,376	$	292	$	416
	4,662		14,710		7,069		308		463		126		27		39
	4,737		15,728		7,236		42		101		41		8		27
$	11.47	$	11.71	$	11.90	$	77.94	$	50.40	$	33.77	$	35.60	$	15.23
$	51,514	$	166,963	$	79,218	$	3,206	$	5,052	$	1,364	$	291	$	405
SUBACCOUNTS (Continued)
TOPS Managed Risk Balanced ETF Portfolio		TOPS Managed Risk Growth ETF Portfolio		TOPS Managed Risk Moderate Growth ETF Portfolio		American Funds Growth Fund – Class 2		American Funds Growth-Income Fund – Class 2		Fidelity VIP Contrafund Portfolio – Service Class 2		Fidelity VIP MidCap Portfolio – Service Class 2		Templeton Growth Securities Fund – Class 2
01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013		01/01/2013 to 12/31/2013		10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013
$	333	$	1,407	$	489	$	15	$	4	$	0	$	0	$	0
	91		313		140		0		0		0		0		0
	0		0		0		0		0		0		0		0
	91		313		140		0		0		0		0		0
	242		1,094		349		15		4		0		0		0
	0		0		0		0		0		0		0		0
	416		3,047		641		0		0		0		0		0
	2,030		14,607		5,552		102		24		12		1		11
	2,446		17,654		6,193		102		24		12		1		11
$	2,688	$	18,748	$	6,542	$	117	$	28	$	12	$	1	$	11

* Date subaccount became available for investment

The accompanying notes are an integral part of these financial statements.

A12

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 2013

	SUBACCOUNTS
	Hartford Capital Appreciation HLS Fund – Class IB		Hartford Disciplined Equity HLS Fund – Class IB		Hartford Dividend and Growth HLS Fund – Class IB
ASSETS
Investment in the portfolios, at fair value	$	631	$	417	$	1,794
Net Assets	$	631	$	417	$	1,794
NET ASSETS, representing:
Accumulation units	$	631	$	417	$	1,794
	$	631	$	417	$	1,794
Units outstanding		58		38		164
Portfolio shares held		11		23		66
Portfolio net asset value per share	$	59.18	$	18.27	$	26.99
Investment in portfolio shares, at cost	$	612	$	408	$	1,780
STATEMENTS OF OPERATIONS For the year ended December 31, 2013
	SUBACCOUNTS
	Hartford Capital Appreciation HLS Fund – Class IB		Hartford Disciplined Equity HLS Fund – Class IB		Hartford Dividend and Growth HLS Fund – Class IB
	10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013
INVESTMENT INCOME
Dividend income	$	4	$	3	$	7
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration		0		0		0
Reimbursement for excess expenses		0		0		0
NET EXPENSES		0		0		0
NET INVESTMENT INCOME (LOSS)		4		3		7
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		2		0		2
Realized gain (loss) on shares redeemed		0		0		0
Net change in unrealized gain (loss) on investments		19		9		14
NET GAIN (LOSS) ON INVESTMENTS		21		9		16
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	25	$	12	$	23

* Date subaccount became available for investment

The accompanying notes are an integral part of these financial statements.

A13

[THIS PAGE INTENTIONALLY LEFT BLANK]

A14

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	Prudential Money Market Portfolio						Prudential Diversified Bond Portfolio						Prudential Equity Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	(154,387	)	$	(259,097	)	$	5,009,217		$	8,663,981		$	(899,780	)	$	114,901
Capital gains distributions received		0			0			3,812,412			9,532,048			0			0
Realized gain (loss) on shares redeemed		0			0			78,520			28,786,827			2,513,241			1,005,090
Net change in unrealized gain (loss) on investments		0			0			(10,276,083	)		(21,902,499	)		48,488,543			17,443,702
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(154,387	)		(259,097	)		(1,375,934	)		25,080,357			50,102,004			18,563,693
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		9,803,397			15,673,377			2,184,040			1,953,370			5,016,533			5,327,079
Policy loans		(131,456	)		(235,788	)		(684,239	)		(790,695	)		(2,779,112	)		(2,732,875	)
Policy loan repayments and interest		164,698			167,587			542,468			499,290			2,968,995			3,281,739
Surrenders, withdrawals and death benefits		(876,973	)		(5,363,441	)		(1,318,185	)		(1,234,065	)		(4,894,565	)		(4,980,062	)
Net transfers between other subaccounts or fixed rate option		(1,732,413	)		(100,399,510	)		(1,566,934	)		(322,334,685	)		(3,592,137	)		(3,011,078	)
Other charges		(1,566,388	)		(2,296,493	)		(2,339,274	)		(4,853,016	)		(3,987,563	)		(4,038,604	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		5,660,865			(92,454,268	)		(3,182,124	)		(326,759,801	)		(7,267,849	)		(6,153,801	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		5,506,478			(92,713,365	)		(4,558,058	)		(301,679,444	)		42,834,155			12,409,892
NET ASSETS
Beginning of period		56,364,661			149,078,026			138,194,532			439,873,976			155,662,382			143,252,490
End of period	$	61,871,139		$	56,364,661		$	133,636,474		$	138,194,532		$	198,496,537		$	155,662,382
Beginning units		40,437,376			110,815,796			49,779,025			193,012,650			19,442,038			19,935,871
Units issued		7,820,145			10,215,780			990,007			41,864,025			1,288,918			1,601,578
Units redeemed		(3,446,291	)		(80,594,200	)		(1,632,558	)		(185,097,650	)		(1,913,064	)		(2,095,411	)
Ending units		44,811,230			40,437,376			49,136,474			49,779,025			18,817,892			19,442,038

The accompanying notes are an integral part of these financial statements.

A15

SUBACCOUNTS (Continued)
Prudential Flexible Managed Portfolio						Prudential Conservative Balanced Portfolio						Prudential High Yield Bond Portfolio						Prudential Stock Index Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	(1,110,174	)	$	3,630,162		$	(595,739	)	$	1,886,819		$	76,435,791		$	66,932,749		$	(214,881	)	$	472,793
	0			0			0			0			0			0			0			115,939
	2,166,693			1,002,535			1,481,350			1,007,565			1,348,018			407,799			903,662			283,697
	46,466,153			24,225,351			17,584,715			9,019,065			5,445,115			58,459,326			11,631,057			4,459,999
	47,522,672			28,858,048			18,470,326			11,913,449			83,228,924			125,799,874			12,319,838			5,332,428
	8,312,019			8,565,293			4,318,578			4,416,239			91,516,160			954,004			2,526,215			2,391,166
	(3,800,564	)		(3,750,762	)		(1,631,044	)		(1,593,929	)		(300,363	)		(278,751	)		(1,188,356	)		(1,149,329	)
	4,716,059			4,166,719			1,790,173			1,873,055			185,170			289,946			444,032			463,914
	(7,463,840	)		(6,788,737	)		(3,466,716	)		(3,339,896	)		(3,773,701	)		(645,120	)		(1,567,383	)		(1,283,348	)
	(3,973,509	)		(5,099,352	)		(2,042,207	)		(2,238,341	)		(5,831,215	)		416,289,931			(372,308	)		(71,801	)
	(6,546,548	)		(6,700,985	)		(3,355,638	)		(3,441,609	)		(14,115,904	)		(9,742,409	)		(1,276,430	)		(1,254,987	)
	(8,756,383	)		(9,607,824	)		(4,386,854	)		(4,324,481	)		67,680,147			406,867,601			(1,434,230	)		(904,385	)
	38,766,289			19,250,224			14,083,472			7,588,968			150,909,071			532,667,475			10,885,608			4,428,043
	246,014,855			226,764,631			120,313,938			112,724,970			1,212,629,967			679,962,492			39,768,934			35,340,891
$	284,781,144		$	246,014,855		$	134,397,410		$	120,313,938		$	1,363,539,038		$	1,212,629,967		$	50,654,542		$	39,768,934
	32,329,838			33,600,948			19,324,189			20,045,717			422,166,636			234,169,579			15,253,717			15,240,768
	1,678,110			1,844,704			1,009,747			1,161,057			36,822,519			192,925,047			1,462,989			1,761,973
	(2,738,877	)		(3,115,814	)		(1,661,153	)		(1,882,585	)		(8,293,398	)		(4,927,990	)		(1,729,126	)		(1,749,024	)
	31,269,071			32,329,838			18,672,783			19,324,189			450,695,757			422,166,636			14,987,580			15,253,717

The accompanying notes are an integral part of these financial statements.

A16

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	Prudential Value Portfolio						Prudential Natural Resources Portfolio						Prudential Global Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	(141,667	)	$	103,458		$	(101,800	)	$	(23,266	)	$	(67,294	)	$	125,527
Capital gains distributions received		0			0			0			1,478,889			0			0
Realized gain (loss) on shares redeemed		186,338			(150,158	)		351,538			240,533			167,907			(5,508	)
Net change in unrealized gain (loss) on investments		7,612,075			2,999,874			1,372,348			(2,270,102	)		3,079,647			1,643,930
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		7,656,746			2,953,174			1,622,086			(573,946	)		3,180,260			1,763,949
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		1,356,022			1,150,190			546,341			563,532			660,940			706,977
Policy loans		(384,503	)		(393,297	)		(232,881	)		(435,640	)		(205,935	)		(181,150	)
Policy loan repayments and interest		287,628			303,351			355,629			452,762			162,213			120,334
Surrenders, withdrawals and death benefits		(662,696	)		(657,450	)		(517,426	)		(587,038	)		(442,747	)		(374,833	)
Net transfers between other subaccounts or fixed rate option		268,455			(374,631	)		(1,135,512	)		(775,723	)		(38,063	)		(252,530	)
Other charges		(696,078	)		(662,311	)		(402,257	)		(449,203	)		(366,430	)		(368,955	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		168,828			(634,148	)		(1,386,106	)		(1,231,310	)		(230,022	)		(350,157	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		7,825,574			2,319,026			235,980			(1,805,256	)		2,950,238			1,413,792
NET ASSETS
Beginning of period		23,598,471			21,279,445			17,542,739			19,347,995			11,996,901			10,583,109
End of period	$	31,424,045		$	23,598,471		$	17,778,719		$	17,542,739		$	14,947,139		$	11,996,901
Beginning units		3,230,501			3,307,570			1,025,178			1,083,067			5,762,097			5,897,804
Units issued		242,432			211,080			137,430			139,418			586,421			581,235
Units redeemed		(289,361	)		(288,149	)		(205,565	)		(197,307	)		(671,445	)		(716,942	)
Ending units		3,183,572			3,230,501			957,043			1,025,178			5,677,073			5,762,097

The accompanying notes are an integral part of these financial statements.

A17

SUBACCOUNTS (Continued)
Prudential Government Income Portfolio						Prudential Jennison Portfolio						Prudential Small Capitalization Stock Portfolio						T. Rowe Price International Stock Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	41,166		$	54,338		$	(144,133	)	$	(84,781	)	$	(78,551	)	$	1,313		$	(452	)	$	483
	108,345			117,293			0			0			0			532,850			0			0
	(14,159	)		13,196			531,843			301,252			175,760			33,825			3,502			(2,285	)
	(239,748	)		(76,088	)		9,206,955			3,342,461			4,372,372			927,981			4,025			22,058
	(104,396	)		108,739			9,594,665			3,558,932			4,469,581			1,495,969			7,075			20,256
	122,697			125,482			1,633,058			1,710,027			535,042			337,130			3,111			4,474
	(35,614	)		(33,256	)		(577,749	)		(574,441	)		(139,289	)		(196,549	)		0			(1,380	)
	47,924			74,142			459,470			442,969			175,335			172,290			0			406
	(159,687	)		(121,285	)		(1,105,195	)		(953,765	)		(242,297	)		(311,623	)		0			(13,455	)
	(328,726	)		(42,394	)		(69,651	)		79,842			396,368			(98,525	)		(108,114	)		6,078
	(91,337	)		(99,797	)		(877,477	)		(893,908	)		(277,536	)		(250,646	)		(2,600	)		(5,321	)
	(444,743	)		(97,108	)		(537,544	)		(189,276	)		447,623			(347,923	)		(107,603	)		(9,198	)
	(549,139	)		11,631			9,057,121			3,369,656			4,917,204			1,148,046			(100,528	)		11,058
	3,698,516			3,686,885			26,196,215			22,826,559			11,003,924			9,855,878			136,028			124,970
$	3,149,377		$	3,698,516		$	35,253,336		$	26,196,215		$	15,921,128		$	11,003,924		$	35,500		$	136,028
	885,105			908,874			11,705,132			11,703,412			2,269,073			2,354,082			127,851			136,231
	48,213			90,456			1,096,875			1,437,848			282,692			163,170			2,795			10,890
	(156,944	)		(114,225	)		(1,303,864	)		(1,436,128	)		(227,429	)		(248,179	)		(101,127	)		(19,270	)
	776,374			885,105			11,498,143			11,705,132			2,324,336			2,269,073			29,519			127,851

The accompanying notes are an integral part of these financial statements.

A18

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	Janus Aspen Janus Portfolio – Institutional Shares						MFS® Growth Series – Initial Class						VP Value Fund
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	(245	)	$	(575	)	$	(756	)	$	(923	)	$	2,553		$	2,952
Capital gains distributions received		0			5,689			866			0			0			0
Realized gain (loss) on shares redeemed		42,759			1,923			601			5,197			9,617			(777	)
Net change in unrealized gain (loss) on investments		34,867			45,101			34,605			11,336			74,222			33,352
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		77,381			52,138			35,316			15,610			86,392			35,527
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		18,281			18,951			3,982			1,784			6,109			5,570
Policy loans		0			0			(334	)		(15,857	)		0			0
Policy loan repayments and interest		0			0			599			103			0			0
Surrenders, withdrawals and death benefits		(3,082	)		(2,967	)		0			0			0			(6,421	)
Net transfers between other subaccounts or fixed rate option		(170,122	)		0			321			1,007			(38,027	)		10,565
Other charges		(8,716	)		(10,027	)		(665	)		(655	)		(6,464	)		(6,051	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(163,639	)		5,957			3,903			(13,618	)		(38,382	)		3,663
TOTAL INCREASE (DECREASE) IN NET ASSETS		(86,258	)		58,095			39,219			1,992			48,010			39,190
NET ASSETS
Beginning of period		354,208			296,113			96,129			94,137			298,098			258,908
End of period	$	267,950		$	354,208		$	135,348		$	96,129		$	346,108		$	298,098
Beginning units		416,405			410,021			120,229			136,972			139,545			137,620
Units issued		18,494			22,190			5,693			3,838			11,981			8,162
Units redeemed		(201,096	)		(15,806	)		(1,114	)		(20,581	)		(27,423	)		(6,237	)
Ending units		233,803			416,405			124,808			120,229			124,103			139,545

The accompanying notes are an integral part of these financial statements.

A19

SUBACCOUNTS (Continued)
FTVIP Franklin Small-Mid Cap Growth Securities Fund – Class 2						Prudential SP Small Cap Value Portfolio						Janus Aspen Janus Portfolio – Service Shares						Prudential SP Prudential U.S. Emerging Growth Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	(2,640	)	$	(2,282	)	$	(24,233	)	$	15,394		$	4,731		$	1,900		$	(28,479	)	$	14,929
	20,863			17,956			0			0			0			16,584			0			672,894
	10,748			1,818			173,748			86,445			23,423			17,823			158,518			119,662
	63,394			5,211			2,876,763			1,026,910			273,356			117,659			2,684,444			626,498
	92,365			22,703			3,026,278			1,128,749			301,510			153,966			2,814,483			1,433,983
	23,089			24,050			874,119			885,560			113,267			118,346			1,028,564			1,018,392
	0			(1,535	)		(239,720	)		(198,545	)		(30,039	)		(18,635	)		(250,758	)		(223,639	)
	0			406			56,873			54,785			7,997			8,325			67,185			60,624
	0			(8,249	)		(343,015	)		(425,636	)		(35,021	)		(48,847	)		(340,663	)		(501,522	)
	(56,083	)		4,356			46,360			(71,416	)		(13,871	)		(13,513	)		39,050			(9,030	)
	(5,698	)		(7,171	)		(392,295	)		(376,498	)		(41,091	)		(41,301	)		(435,793	)		(443,511	)
	(38,692	)		11,857			2,322			(131,750	)		1,242			4,375			107,585			(98,686	)
	53,673			34,560			3,028,600			996,999			302,752			158,341			2,922,068			1,335,297
	268,426			233,866			8,147,982			7,150,983			1,007,226			848,885			9,943,757			8,608,460
$	322,099		$	268,426		$	11,176,582		$	8,147,982		$	1,309,978		$	1,007,226		$	12,865,825		$	9,943,757
	269,553			257,437			4,040,411			4,103,041			837,485			832,771			4,806,060			4,844,230
	22,648			29,372			455,241			520,935			89,808			116,770			534,129			581,035
	(55,970	)		(17,256	)		(446,116	)		(583,565	)		(87,219	)		(112,056	)		(494,418	)		(619,205	)
	236,231			269,553			4,049,536			4,040,411			840,074			837,485			4,845,771			4,806,060

The accompanying notes are an integral part of these financial statements.

A20

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	Prudential SP International Growth Portfolio						Prudential SP International Value Portfolio						Janus Aspen Overseas Portfolio – Service Shares
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	(9,271	)	$	8,264		$	(12,404	)	$	68,715		$	11,048		$	1,378
Capital gains distributions received		0			0			0			0			0			27,244
Realized gain (loss) on shares redeemed		10,100			(25,808	)		(10,291	)		(58,806	)		(3,725	)		(7,029	)
Net change in unrealized gain (loss) on investments		525,932			514,726			676,033			449,975			45,280			11,987
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		526,761			497,182			653,338			459,884			52,603			33,580
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		364,369			378,658			374,214			387,684			119,710			99,054
Policy loans		(76,995	)		(73,755	)		(52,375	)		(52,658	)		(4,001	)		(142	)
Policy loan repayments and interest		19,048			20,927			13,606			20,962			354			136
Surrenders, withdrawals and death benefits		(81,894	)		(97,072	)		(94,406	)		(128,411	)		(9,019	)		(3,483	)
Net transfers between other subaccounts or fixed rate option		(5,601	)		20,932			(75,288	)		11,106			(7,674	)		(7,490	)
Other charges		(150,669	)		(149,310	)		(133,090	)		(141,896	)		(43,100	)		(39,037	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		68,258			100,380			32,661			96,787			56,270			49,038
TOTAL INCREASE (DECREASE) IN NET ASSETS		595,019			597,562			685,999			556,671			108,873			82,618
NET ASSETS
Beginning of period		2,809,709			2,212,147			3,284,915			2,728,244			306,218			223,600
End of period	$	3,404,728		$	2,809,709		$	3,970,914		$	3,284,915		$	415,091		$	306,218
Beginning units		1,848,039			1,776,511			2,195,771			2,123,854			38,122			31,474
Units issued		274,207			319,966			259,634			337,267			18,749			15,024
Units redeemed		(235,377	)		(248,438	)		(238,512	)		(265,350	)		(11,608	)		(8,376	)
Ending units		1,886,869			1,848,039			2,216,893			2,195,771			45,263			38,122

The accompanying notes are an integral part of these financial statements.

A21

SUBACCOUNTS (Continued)
Goldman Sachs Structured Small Cap Equity Fund						M Large Cap Growth Fund						M International Equity Fund						M Large Cap Value Fund
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	553		$	539		$	293		$	18		$	432		$	350		$	1,715		$	372
	8,637			0			2,648			0			0			0			5,423			0
	669			66			2,576			989			(66	)		(618	)		1,083			466
	9,801			5,137			9,286			5,160			2,410			3,648			8,799			6,022
	19,660			5,742			14,803			6,167			2,776			3,380			17,020			6,860
	4,577			4,630			12,247			12,245			0			0			12,058			12,060
	0			0			(3,774	)		(3,600	)		0			(1	)		0			0
	0			0			1,380			2,715			0			0			0			0
	(2,058	)		(1,902	)		0			0			0			0			0			0
	0			0			(4,740	)		0			0			0			0			0
	(1,043	)		(953	)		(5,167	)		(8,031	)		(1,568	)		(3,317	)		(4,841	)		(6,758	)
	1,476			1,775			(54	)		3,329			(1,568	)		(3,318	)		7,217			5,302
	21,136			7,517			14,749			9,496			1,208			62			24,237			12,162
	54,947			47,430			40,597			31,101			17,966			17,904			45,497			33,335
$	76,083		$	54,947		$	55,346		$	40,597		$	19,174		$	17,966		$	69,734		$	45,497
	30,789			29,927			2,283			2,086			1,109			1,334			2,742			2,356
	2,204			2,577			701			904			0			0			640			827
	(1,496	)		(1,715	)		(698	)		(707	)		(91	)		(225	)		(251	)		(441	)
	31,497			30,789			2,286			2,283			1,018			1,109			3,131			2,742

The accompanying notes are an integral part of these financial statements.

A22

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	AST Cohen & Steers Realty Portfolio						AST J.P. Morgan Strategic Opportunities Portfolio						AST Herndon Large-Cap Value Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	(498	)	$	5,100		$	(853	)	$	3,467		$	(391	)	$	3,017
Capital gains distributions received		0			0			0			0			0			0
Realized gain (loss) on shares redeemed		21,598			8,866			8,223			1,823			7,232			5,132
Net change in unrealized gain (loss) on investments		(9,183	)		34,084			38,242			19,794			108,293			27,821
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		11,917			48,050			45,612			25,084			115,134			35,970
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		117,351			163,696			294,997			209,835			101,161			98,575
Policy loans		(20,357	)		(14,066	)		(3,869	)		(967	)		(10,009	)		(24,446	)
Policy loan repayments and interest		1,400			400			96			12			4,865			3,862
Surrenders, withdrawals and death benefits		(5,947	)		(15,983	)		(7,681	)		(5,888	)		(5,992	)		(20,989	)
Net transfers between other subaccounts or fixed rate option		11,316			37,382			21,749			32,712			(3,268	)		16,572
Other charges		(42,533	)		(44,871	)		(149,631	)		(106,168	)		(44,199	)		(44,746	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		61,230			126,558			155,661			129,536			42,558			28,828
TOTAL INCREASE (DECREASE) IN NET ASSETS		73,147			174,608			201,273			154,620			157,692			64,798
NET ASSETS
Beginning of period		441,910			267,302			339,507			184,887			314,549			249,751
End of period	$	515,057		$	441,910		$	540,780		$	339,507		$	472,241		$	314,549
Beginning units		27,542			19,198			23,848			14,376			25,505			22,942
Units issued		13,605			12,312			23,630			17,406			7,797			10,850
Units redeemed		(9,990	)		(3,968	)		(13,216	)		(7,934	)		(4,831	)		(8,287	)
Ending units		31,157			27,542			34,262			23,848			28,471			25,505

The accompanying notes are an integral part of these financial statements.

A23

SUBACCOUNTS (Continued)
AST Federated Aggressive Growth Portfolio						AST Small-Cap Value Portfolio						AST Goldman Sachs Mid-Cap Growth Portfolio						AST Loomis Sayles Large-Cap Growth Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	(216	)	$	(158	)	$	(487	)	$	1,229		$	(311	)	$	(241	)	$	(3,084	)	$	2,378
	0			0			0			0			0			23,971			0			0
	5,252			1,609			8,207			7,127			5,660			26,218			31,377			14,989
	70,948			24,645			144,836			48,538			80,820			1,331			414,503			105,770
	75,984			26,096			152,556			56,894			86,169			51,279			442,796			123,137
	71,138			67,100			110,677			114,989			95,554			71,318			200,761			217,463
	(6,423	)		(2,330	)		(17,964	)		(17,873	)		(8,353	)		(52,492	)		(36,991	)		(22,805	)
	839			20			3,095			2,499			403			250			8,550			4,413
	(4,071	)		(1,540	)		(6,367	)		(12,241	)		(5,259	)		(10,949	)		(39,225	)		(70,191	)
	6,013			(915	)		8,228			5,446			17,206			(41,524	)		(3,192	)		36,104
	(38,810	)		(35,695	)		(49,150	)		(51,457	)		(51,153	)		(44,531	)		(91,695	)		(94,669	)
	28,686			26,640			48,519			41,363			48,398			(77,928	)		38,208			70,315
	104,670			52,736			201,075			98,257			134,567			(26,649	)		481,004			193,452
	178,396			125,660			395,957			297,700			245,189			271,838			1,200,485			1,007,033
$	283,066		$	178,396		$	597,032		$	395,957		$	379,756		$	245,189		$	1,681,489		$	1,200,485
	12,617			10,661			26,521			23,538			14,206			18,821			106,295			100,414
	5,153			5,479			7,078			8,199			5,718			5,862			17,805			23,449
	(3,538	)		(3,523	)		(4,466	)		(5,216	)		(3,262	)		(10,477	)		(14,996	)		(17,568	)
	14,232			12,617			29,133			26,521			16,662			14,206			109,104			106,295

The accompanying notes are an integral part of these financial statements.

A24

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	AST MFS Growth Portfolio						AST Neuberger Berman Mid-Cap Growth Portfolio						AST PIMCO Limited Maturity Bond Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	(165	)	$	(117	)		(14	)	$	(14	)	$	(232	)	$	1,469
Capital gains distributions received		0			0			0			0			0			4,030
Realized gain (loss) on shares redeemed		3,806			2,050			153			650			(154	)		376
Net change in unrealized gain (loss) on investments		48,419			15,523			3,732			1,000			(5,006	)		1,028
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		52,060			17,456			3,871			1,636			(5,392	)		6,903
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		49,889			40,813			0			0			52,924			49,596
Policy loans		(1,453	)		(1,342	)		(2	)		(4	)		(2,644	)		(807	)
Policy loan repayments and interest		171			127			0			0			123			17
Surrenders, withdrawals and death benefits		(3,270	)		(2,913	)		(8	)		(1,814	)		(3,471	)		(68,273	)
Net transfers between other subaccounts or fixed rate option		4,807			2,485			0			(819	)		29,147			64,822
Other charges		(29,489	)		(24,068	)		(481	)		(890	)		(29,320	)		(26,347	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		20,655			15,102			(491	)		(3,527	)		46,759			19,008
TOTAL INCREASE (DECREASE) IN NET ASSETS		72,715			32,558			3,380			(1,891	)		41,367			25,911
NET ASSETS
Beginning of period		131,895			99,337			12,164			14,055			212,304			186,393
End of period	$	204,610		$	131,895			15,544		$	12,164		$	253,671		$	212,304
Beginning units		9,560			8,422			741			961			15,446			14,183
Units issued		3,520			3,357			0			0			6,176			8,507
Units redeemed		(2,221	)		(2,219	)		(26	)		(220	)		(2,738	)		(7,244	)
Ending units		10,859			9,560			715			741			18,884			15,446

The accompanying notes are an integral part of these financial statements.

A25

SUBACCOUNTS (Continued)
AST T. Rowe Price Natural Resources Portfolio						AST MFS Global Equity Portfolio						AST JPMorgan International Equity Portfolio						AST Templeton Global Bond Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	(786	)	$	2,359		$	(156	)	$	1,162		$	(423	)	$	5,695		$	(177	)	$	3,396
	0			0			0			0			0			0			0			2,468
	493			(7,155	)		2,365			2,067			5,103			1,544			(417	)		97
	112,281			34,330			37,912			17,847			56,627			55,944			(5,569	)		1,673
	111,988			29,534			40,121			21,076			61,307			63,183			(6,163	)		7,634
	234,415			231,075			167,997			26,866			117,228			107,836			53,894			48,881
	(28,275	)		(14,386	)		(2,598	)		(1,804	)		(10,235	)		(3,470	)		(3,050	)		(1,210	)
	4,833			3,635			117			34			1,429			590			192			141
	(30,702	)		(46,974	)		(869	)		(3,173	)		(9,761	)		(14,451	)		(3,398	)		(4,238	)
	(15,959	)		(53,373	)		14,694			7,019			855			18,092			4,139			15,667
	(91,947	)		(104,297	)		(21,917	)		(15,623	)		(47,940	)		(51,266	)		(22,793	)		(28,031	)
	72,365			15,680			157,424			13,319			51,576			57,331			28,984			31,210
	184,353			45,214			197,545			34,395			112,883			120,514			22,821			38,844
	703,811			658,597			119,472			85,077			374,293			253,779			170,547			131,703
$	888,164		$	703,811		$	317,017		$	119,472		$	487,176		$	374,293		$	193,368		$	170,547
	49,655			48,098			7,261			6,357			27,974			23,100			11,695			9,494
	17,046			17,499			9,272			3,078			8,677			10,723			4,520			4,610
	(12,339	)		(15,942	)		(1,423	)		(2,174	)		(5,057	)		(5,849	)		(2,424	)		(2,409	)
	54,362			49,655			15,110			7,261			31,594			27,974			13,791			11,695

The accompanying notes are an integral part of these financial statements.

A26

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	M Capital Appreciation Fund						American Century VP Mid Cap Value Fund – Class 1 Shares						AST Large-Cap Value Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	0		$	90		$	1,401		$	1,562		$	(7,396	)	$	84,548
Capital gains distributions received		4,034			1,818			1,598			3,789			0			0
Realized gain (loss) on shares redeemed		502			207			2,695			790			48,239			(12,265	)
Net change in unrealized gain (loss) on investments		7,931			2,196			25,919			5,353			1,090,715			326,133
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		12,467			4,311			31,613			11,494			1,131,558			398,416
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		8,613			8,613			33,910			28,063			391,407			399,268
Policy loans		0			0			(3,529	)		(70	)		(116,338	)		(61,158	)
Policy loan repayments and interest		0			0			90			1			19,198			14,062
Surrenders, withdrawals and death benefits		0			0			(567	)		(448	)		(118,293	)		(89,567	)
Net transfers between other subaccounts or fixed rate option		0			0			17,818			6,036			136,060			(42,512	)
Other charges		(2,934	)		(4,424	)		(17,042	)		(14,032	)		(171,543	)		(160,547	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		5,679			4,189			30,680			19,550			140,491			59,546
TOTAL INCREASE (DECREASE) IN NET ASSETS		18,146			8,500			62,293			31,044			1,272,049			457,962
NET ASSETS
Beginning of period		28,941			20,441			95,909			64,865			2,823,693			2,365,731
End of period	$	47,087		$	28,941		$	158,202		$	95,909		$	4,095,742		$	2,823,693
Beginning units		1,433			1,189			6,995			5,498			305,177			298,226
Units issued		365			480			3,388			2,840			54,650			51,063
Units redeemed		(123	)		(236	)		(1,506	)		(1,343	)		(42,606	)		(44,112	)
Ending units		1,675			1,433			8,877			6,995			317,221			305,177

The accompanying notes are an integral part of these financial statements.

A27

SUBACCOUNTS (Continued)
AST Small-Cap Growth Portfolio						The Dreyfus Socially Responsible Growth Fund – Service Shares						Prudential Jennison 20/20 Focus Portfolio						JPMorgan Insurance Trust Intrepid Mid Cap Portfolio – Class 1 Shares
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	(5,940	)	$	(4,815	)	$	21		$	11		$	(639	)	$	(435	)	$	807		$	221
	0			0			0			0			0			13,917			0			0
	92,600			28,848			1,985			41			11,254			19,059			8,674			401
	688,088			195,763			844			144			155,273			17,067			14,114			4,395
	774,748			219,796			2,850			196			165,888			49,608			23,595			5,017
	235,302			246,505			2,854			1,269			427,970			192,841			21,116			11,912
	(47,532	)		(36,542	)		0			0			(3,189	)		(624	)		(1,859	)		(259	)
	10,806			11,759			0			0			57			26			101			4
	(140,324	)		(44,729	)		(1,521	)		0			(10,177	)		(25,641	)		(7,268	)		(19	)
	53,525			123,199			2,883			743			(13,442	)		2,924			31,457			2,865
	(114,799	)		(110,610	)		(2,288	)		(609	)		(111,066	)		(92,369	)		(10,043	)		(6,075	)
	(3,022	)		189,582			1,928			1,403			290,153			77,157			33,504			8,428
	771,726			409,378			4,778			1,599			456,041			126,765			57,099			13,445
	2,226,102			1,816,724			3,308			1,709			511,386			384,621			41,080			27,635
$	2,997,828		$	2,226,102		$	8,086		$	3,308		$	967,427		$	511,386		$	98,179		$	41,080
	162,459			148,419			278			161			46,212			38,554			3,419			2,669
	23,412			31,786			1,600			178			32,875			24,345			5,895			1,516
	(23,679	)		(17,746	)		(1,369	)		(61	)		(11,710	)		(16,687	)		(3,495	)		(766	)
	162,192			162,459			509			278			67,377			46,212			5,819			3,419

The accompanying notes are an integral part of these financial statements.

A28

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	MFS® Utilities Series – Initial Class						Neuberger Berman Adviser’s Management Trust Socially Responsive Portfolio – Service Shares						AST T. Rowe Price Large-Cap Growth Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	5,295		$	10,333		$	22		$	(1	)	$	(5,327	)	$	(4,297	)
Capital gains distributions received		4,413			0			0			0			0			0
Realized gain (loss) on shares redeemed		3,908			1,366			677			359			61,612			34,061
Net change in unrealized gain (loss) on investments		28,745			7,399			1,417			171			728,601			226,339
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		42,361			19,098			2,116			529			784,886			256,103
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		253,857			49,553			2,216			2,059			258,809			261,476
Policy loans		(1,608	)		(56	)		(858	)		(1,604	)		(62,474	)		(49,692	)
Policy loan repayments and interest		111			6			103			14			12,126			14,978
Surrenders, withdrawals and death benefits		(4,244	)		(68	)		(1,686	)		(800	)		(68,289	)		(71,174	)
Net transfers between other subaccounts or fixed rate option		19,809			12,938			9,053			74			60,989			11,055
Other charges		(38,160	)		(26,082	)		(1,547	)		(1,676	)		(125,998	)		(107,945	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		229,765			36,291			7,281			(1,933	)		75,163			58,698
TOTAL INCREASE (DECREASE) IN NET ASSETS		272,126			55,389			9,397			(1,404	)		860,049			314,801
NET ASSETS
Beginning of period		179,142			123,753			4,655			6,059			1,777,861			1,463,060
End of period	$	451,268		$	179,142		$	14,052		$	4,655		$	2,637,910		$	1,777,861
Beginning units		15,307			11,988			428			617			139,265			134,428
Units issued		21,231			5,913			828			205			26,519			27,787
Units redeemed		(4,512	)		(2,594	)		(314	)		(394	)		(21,986	)		(22,950	)
Ending units		32,026			15,307			942			428			143,798			139,265

The accompanying notes are an integral part of these financial statements.

A29

SUBACCOUNTS (Continued)
AST Schroders Multi-Asset World Strategies Portfolio						AST PIMCO Total Return Bond Portfolio						AST T. Rowe Price Asset Allocation Portfolio						AST Wellington Management Hedged Equity Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	(473	)	$	2,187		$	(23,021	)	$	222,567		$	(2,424	)	$	5,050		$	(17,368	)	$	7,423
	0			0			0			97,891			0			3,893			0			0
	2,855			298			26,303			20,961			11,513			5,046			140,843			94,166
	23,191			9,505			(204,798	)		436,325			145,434			37,965			1,564,872			679,761
	25,573			11,990			(201,516	)		777,744			154,523			51,954			1,688,347			781,350
	127,570			94,433			959,511			1,190,164			557,037			399,962			1,411,464			1,531,618
	(1,742	)		(198	)		(211,487	)		(132,624	)		(11,802	)		(1,506	)		(207,840	)		(198,714	)
	33			1			42,999			31,690			186			5			47,470			27,024
	(5,974	)		(6,019	)		(227,307	)		(271,762	)		(4,437	)		(5,510	)		(184,805	)		(316,073	)
	(1,713	)		6,065			34,601			23,805			520,025			59,685			(86,836	)		(122,193	)
	(61,132	)		(47,896	)		(416,003	)		(451,608	)		(279,732	)		(185,807	)		(589,932	)		(655,955	)
	57,042			46,386			182,314			389,665			781,277			266,829			389,521			265,707
	82,615			58,376			(19,202	)		1,167,409			935,800			318,783			2,077,868			1,047,057
	151,031			92,655			9,708,308			8,540,899			606,600			287,817			8,182,488			7,135,431
$	233,646		$	151,031		$	9,689,106		$	9,708,308		$	1,542,400		$	606,600		$	10,260,356		$	8,182,488
	10,026			6,819			809,730			777,010			38,141			20,488			655,285			633,239
	8,477			7,028			103,758			118,902			63,199			31,229			114,369			129,219
	(4,911	)		(3,821	)		(88,347	)		(86,182	)		(18,125	)		(13,576	)		(86,533	)		(107,173	)
	13,592			10,026			825,141			809,730			83,215			38,141			683,121			655,285

The accompanying notes are an integral part of these financial statements.

A30

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	AST Balanced Asset Allocation Portfolio						AST Preservation Asset Allocation Portfolio						AST First Trust Balanced Target Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	(35,905	)	$	107,000		$	(13,038	)	$	34,112		$	(407	)	$	1,479
Capital gains distributions received		0			440,846			0			236,075			0			0
Realized gain (loss) on shares redeemed		237,543			122,927			29,852			16,959			2,971			1,061
Net change in unrealized gain (loss) on investments		2,399,777			861,894			380,196			92,309			21,505			5,904
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		2,601,415			1,532,667			397,010			379,455			24,069			8,444
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		3,118,521			2,847,091			688,615			618,675			153,164			87,676
Policy loans		(523,146	)		(437,209	)		(40,872	)		(39,575	)		(657	)		(198	)
Policy loan repayments and interest		204,283			70,744			13,049			12,056			15			0
Surrenders, withdrawals and death benefits		(621,813	)		(628,062	)		(120,910	)		(102,433	)		(3,548	)		(5,397	)
Net transfers between other subaccounts or fixed rate option		111,067			163,612			332,198			66,882			12,580			1,184
Other charges		(1,364,804	)		(1,306,345	)		(317,232	)		(291,226	)		(69,122	)		(44,814	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		924,108			709,831			554,848			264,379			92,432			38,451
TOTAL INCREASE (DECREASE) IN NET ASSETS		3,525,523			2,242,498			951,858			643,834			116,501			46,895
NET ASSETS
Beginning of period		14,459,998			12,217,500			4,284,435			3,640,601			111,338			64,443
End of period	$	17,985,521		$	14,459,998		$	5,236,293		$	4,284,435		$	227,839		$	111,338
Beginning units		1,151,703			1,092,160			349,694			327,077			7,221			4,612
Units issued		263,161			257,540			80,389			57,502			10,172			6,618
Units redeemed		(194,682	)		(197,997	)		(37,727	)		(34,885	)		(4,485	)		(4,009	)
Ending units		1,220,182			1,151,703			392,356			349,694			12,908			7,221

The accompanying notes are an integral part of these financial statements.

A31

SUBACCOUNTS (Continued)
AST Prudential Growth Allocation Portfolio						AST Advanced Strategies Portfolio						AST Schroders Global Tactical Portfolio						AST RCM World Trends Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	(861	)	$	1,734		$	(1,156	)	$	2,750		$	(1,538	)	$	1,009		$	(826	)	$	459
	0			0			0			886			0			1,812			0			4,288
	4,096			945			7,984			1,051			11,736			5,322			2,671			1,040
	54,521			13,486			62,339			23,525			89,579			35,451			37,433			10,397
	57,756			16,165			69,167			28,212			99,777			43,594			39,278			16,184
	307,353			136,156			298,894			220,463			379,245			368,646			193,761			165,519
	(76	)		0			(2,094	)		(800	)		(1,772	)		(253	)		(3,272	)		0
	0			0			827			0			27			0			45			0
	(1,607	)		(273	)		(2,897	)		(277	)		(2,940	)		(335	)		(1,674	)		(5,357	)
	174,436			7,784			18,195			29,100			113,712			34,331			2,039			61,640
	(126,462	)		(65,654	)		(137,308	)		(97,867	)		(203,813	)		(186,719	)		(93,733	)		(70,151	)
	353,644			78,013			175,617			150,619			284,459			215,670			97,166			151,651
	411,400			94,178			244,784			178,831			384,236			259,264			136,444			167,835
	202,216			108,038			341,278			162,447			470,593			211,329			266,022			98,187
$	613,616		$	202,216		$	586,062		$	341,278		$	854,829		$	470,593		$	402,466		$	266,022
	13,022			7,836			20,991			11,327			29,060			15,088			18,153			7,371
	29,226			10,096			19,490			16,086			27,798			26,849			12,883			16,239
	(8,399	)		(4,910	)		(9,478	)		(6,422	)		(12,034	)		(12,877	)		(6,549	)		(5,457	)
	33,849			13,022			31,003			20,991			44,824			29,060			24,487			18,153

The accompanying notes are an integral part of these financial statements.

A32

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	Dreyfus Investment Portfolios, MidCap Stock Portfolio – Service Shares						AST BlackRock Global Strategies Portfolio						TOPS Aggressive Growth ETF Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	266		$	20		$	(53,924	)	$	75,219		$	158		$	3
Capital gains distributions received		0			0			0			0			35			0
Realized gain (loss) on shares redeemed		1,462			563			190,073			10,820			413			52
Net change in unrealized gain (loss) on investments		5,920			2,797			2,751,794			2,665,753			3,881			365
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		7,648			3,380			2,887,943			2,751,792			4,487			420
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		3,981			3,083			4,927,272			4,900,765			20,491			7,168
Policy loans		0			0			(981,153	)		(693,542	)		0			0
Policy loan repayments and interest		0			0			182,644			129,682			0			0
Surrenders, withdrawals and death benefits		(1,078	)		0			(924,435	)		(2,207,287	)		(253	)		0
Net transfers between other subaccounts or fixed rate option		(334	)		541			129,623			357,858			9,266			6,574
Other charges		(2,553	)		(2,012	)		(2,040,746	)		(2,128,789	)		(12,312	)		(5,642	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		16			1,612			1,293,205			358,687			17,192			8,100
TOTAL INCREASE (DECREASE) IN NET ASSETS		7,664			4,992			4,181,148			3,110,479			21,679			8,520
NET ASSETS
Beginning of period		22,381			17,389			26,374,981			23,264,502			9,515			995
End of period	$	30,045		$	22,381		$	30,556,129		$	26,374,981		$	31,194		$	9,515
Beginning units		1,797			1,665			2,550,789			2,512,860			768			94
Units issued		345			383			524,913			561,219			2,037			1,164
Units redeemed		(349	)		(251	)		(404,853	)		(523,290	)		(750	)		(490	)
Ending units		1,793			1,797			2,670,849			2,550,789			2,055			768

The accompanying notes are an integral part of these financial statements.

A33

SUBACCOUNTS (Continued)
TOPS Balanced ETF Portfolio						TOPS Capital Preservation ETF Portfolio						TOPS Growth ETF Portfolio						TOPS Moderate Growth ETF Portfolio
01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
$	57		$	0		$	47		$	0		$	181		$	5		$	147		$	13
	0			0			32			0			1			23			55			0
	48			14			(9	)		1			746			211			820			148
	149			28			15			2			2,593			665			660			678
	254			42			85			3			3,521			904			1,682			839
	5,016			2,004			6,061			284			27,224			16,922			16,129			7,017
	0			0			0			0			(141	)		0			0			0
	0			0			0			0			0			0			0			0
	0			0			0			0			(2	)		0			(258	)		0
	2,744			38			1,685			3			1,490			487			(3,497	)		3,617
	(3,133	)		(1,295	)		(2,428	)		(137	)		(15,092	)		(8,974	)		(8,047	)		(4,087	)
	4,627			747			5,318			150			13,479			8,435			4,327			6,547
	4,881			789			5,403			153			17,000			9,339			6,009			7,386
	801			12			156			3			11,515			2,176			9,577			2,191
$	5,682		$	801		$	5,559		$	156		$	28,515		$	11,515		$	15,586		$	9,577
	69			1			14			0			874			191			807			212
	643			187			675			26			1,966			1,411			1,266			959
	(260	)		(119	)		(215	)		(12	)		(1,018	)		(728	)		(909	)		(364	)
	452			69			474			14			1,822			874			1,164			807

The accompanying notes are an integral part of these financial statements.

A34

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 2013 and 2012

	SUBACCOUNTS
	TOPS Managed Risk Balanced ETF Portfolio						TOPS Managed Risk Growth ETF Portfolio						TOPS Managed Risk Moderate Growth ETF Portfolio
	01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012			01/01/2013 to 12/31/2013			01/01/2012 to 12/31/2012
OPERATIONS
Net investment income (loss)	$	242		$	(15	)	$	1,094		$	(53	)	$	349		$	(18	)
Capital gains distributions received		0			0			0			0			0			0
Realized gain (loss) on shares redeemed		416			155			3,047			292			641			208
Net change in unrealized gain (loss) on investments		2,030			764			14,607			2,558			5,552			1,207
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		2,688			904			18,748			2,797			6,542			1,397
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		52,978			27,586			153,504			46,148			53,776			30,602
Policy loans		(168	)		0			(176	)		0			0			0
Policy loan repayments and interest		0			0			0			0			0			0
Surrenders, withdrawals and death benefits		(15	)		0			(191	)		0			(2	)		0
Net transfers between other subaccounts or fixed rate option		1,922			4,028			7,391			42,337			10,905			15,229
Other charges		(25,233	)		(13,741	)		(72,246	)		(24,590	)		(24,754	)		(13,732	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		29,484			17,873			88,282			63,895			39,925			32,099
TOTAL INCREASE (DECREASE) IN NET ASSETS		32,172			18,777			107,030			66,692			46,467			33,496
NET ASSETS
Beginning of period		22,162			3,385			77,147			10,455			39,645			6,149
End of period	$	54,334		$	22,162		$	184,177		$	77,147		$	86,112		$	39,645
Beginning units		2,046			338			7,126			1,042			3,647			613
Units issued		5,093			3,026			15,123			8,677			5,789			4,451
Units redeemed		(2,477	)		(1,318	)		(7,539	)		(2,593	)		(2,367	)		(1,417	)
Ending units		4,662			2,046			14,710			7,126			7,069			3,647

The accompanying notes are an integral part of these financial statements.

A35

SUBACCOUNTS (Continued)
American Funds Growth Fund – Class 2			American Funds Growth- Income Fund – Class 2			Fidelity VIP Contrafund Portfolio – Service Class 2		Fidelity VIP MidCap Portfolio – Service Class 2		Templeton Growth Securities Fund – Class 2			Hartford Capital Appreciation HLS Fund – Class IB		Hartford Disciplined Equity HLS Fund – Class IB			Hartford Dividend and Growth HLS Fund –Class IB
10/07/2013* to 12/31/2013			10/07/2013* to 12/31/2013			10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013			10/07/2013* to 12/31/2013		10/07/2013* to 12/31/2013			10/07/2013* to 12/31/2013
$	15		$	4		$	0	$	0	$	0		$	4	$	3		$	7
	0			0			0		0		0			2		0			2
	0			0			0		0		0			0		0			0
	102			24			12		1		11			19		9			14
	117			28			12		1		11			25		12			23
	217			28			0		0		0			205		0			24
	0			0			0		0		0			0		0			0
	0			0			0		0		0			1		0			0
	0			0			0		0		0			0		0			0
	3,004			5,055			1,364		291		407			400		407			1,749
	(31	)		(35	)		0		0		(2	)		0		(2	)		(2	)
	3,190			5,048			1,364		291		405			606		405			1,771
	3,307			5,076			1,376		292		416			631		417			1,794
	0			0			0		0		0			0		0			0
$	3,307		$	5,076		$	1,376	$	292	$	416		$	631	$	417		$	1,794
	0			0			0		0		0			0		0			0
	311			466			126		27		39			58		38			164
	(3	)		(3	)		0		0		0			0		0			0
	308			463			126		27		39			58		38			164

* Date subaccount became available for investment

The accompanying notes are an integral part of these financial statements.

A36

NOTES TO FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT

December 31, 2013

Note 1: General

Pruco Life of New Jersey Variable Appreciable Account (the “Account”) was established on January 13, 1984 under New Jersey law as a separate investment account of Pruco Life Insurance Company of New Jersey (“Pruco Life of New Jersey”), which is a wholly-owned subsidiary of Pruco Life Insurance Company (an Arizona domiciled company) and is indirectly wholly-owned by The Prudential Insurance Company of America (“Prudential”), a wholly-owned subsidiary of Prudential Financial, Inc. (“PFI”). Under applicable insurance law, the assets and liabilities of the Account are clearly identified and distinguished from Pruco Life of New Jersey’s other assets and liabilities. The portion of the Account’s assets applicable to the variable life contracts is not chargeable with liabilities arising out of any other business Pruco Life of New Jersey may conduct. Proceeds from purchases of Pruco Life of New Jersey Variable Appreciable Life (“VAL”), Pruco Life of New Jersey PRUvider Variable Appreciable Life (“PRUvider”), Pruco Life of New Jersey PruSelect III (“PSEL III”), Pruco Life of New Jersey Survivorship Variable Universal Life (“SVUL”), Pruco Life of New Jersey PruLife Custom Premier (“VULII”), Pruco Life of New Jersey MPremier VUL (“MPVUL”), Pruco Life of New Jersey PruLife Custom Premier II (“ENVUL”) and Pruco Life of New Jersey Variable Universal Life Protector (“VULP”) contracts are invested in the Account.

The Account is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. The Account is a funding vehicle for individual variable life insurance contracts. There are one hundred thirty two subaccounts within the Account, of which eighty one had activity during 2013. Each contract offers the option to invest in various subaccounts, each of which invests in either a corresponding portfolio of The Prudential Series Fund, the Advanced Series Trust or one of the non-Prudential administered funds (collectively, the “Portfolios”). Investment options vary by contract.

The name of each Portfolio and the corresponding subaccount name are as follows:

American Century VP Income & Growth Fund*

American Century VP Mid Cap Value Fund – Class 1 Shares

VP Value Fund

American Funds Growth Fund – Class 2

American Funds Growth-Income Fund – Class 2

American Funds International Fund – Class 2*

AST Advanced Strategies Portfolio

AST Balanced Asset Allocation Portfolio

AST BlackRock Global Strategies Portfolio

AST Cohen & Steers Realty Portfolio

AST Federated Aggressive Growth Portfolio

AST First Trust Balanced Target Portfolio

AST Goldman Sachs Mid-Cap Growth Portfolio

AST Herndon Large-Cap Value Portfolio (formerly AST BlackRock Value Portfolio)

AST J.P. Morgan International Equity Portfolio (formerly AST JPMorgan International Equity Portfolio)

AST J.P. Morgan Strategic Opportunities Portfolio

AST Large-Cap Value Portfolio

AST Loomis Sayles Large-Cap Growth Portfolio (formerly AST Marsico Capital Growth Portfolio)

AST MFS Global Equity Portfolio

AST MFS Growth Portfolio

AST Neuberger Berman Mid-Cap Growth Portfolio

AST PIMCO Limited Maturity Bond Portfolio

AST PIMCO Total Return Bond Portfolio

AST Preservation Asset Allocation Portfolio

AST Prudential Growth Allocation Portfolio (formerly AST First Trust Capital Appreciation Target Portfolio)

AST RCM World Trends Portfolio (formerly AST Moderate Asset Allocation Portfolio)

AST Schroders Global Tactical Portfolio

AST Schroders Multi-Asset World Strategies Portfolio

AST Small-Cap Growth Portfolio

AST Small-Cap Value Portfolio

AST T. Rowe Price Asset Allocation Portfolio

AST T. Rowe Price Large-Cap Growth Portfolio

AST T. Rowe Price Natural Resources Portfolio

AST Templeton Global Bond Portfolio (formerly AST T. Rowe Price Global Bond Portfolio)

AST Wellington Management Hedged Equity Portfolio

A37

Note 1: General (Continued)

Dreyfus Investment Portfolios, MidCap Stock Portfolio – Initial Shares*

Dreyfus Investment Portfolios, MidCap Stock Portfolio – Service Shares

Dreyfus Variable Investment Fund, Opportunistic Small Cap Portfolio – Initial Shares*

Fidelity VIP Contrafund Portfolio – Service Class 2

Fidelity VIP MidCap Portfolio – Service Class 2

Franklin Income Securities Fund – Class 2*

FTVIP Franklin Small-Mid Cap Growth Securities Fund – Class 2

Goldman Sachs Structured Small Cap Equity Fund

Hartford Capital Appreciation HLS Fund – Class IB

Hartford Disciplined Equity HLS Fund – Class IB

Hartford Dividend and Growth HLS Fund – Class IB

Hartford Growth Opportunities HLS Fund – Class IB*

Invesco V.I. Technology Fund*

Invesco V.I. Utilities Fund*

Janus Aspen Balanced Portfolio – Service Shares*

Janus Aspen Enterprise Portfolio – Service Shares*

Janus Aspen Janus Portfolio – Institutional Shares

Janus Aspen Janus Portfolio – Service Shares

Janus Aspen Overseas Portfolio – Service Shares

JPMorgan Insurance Trust Intrepid Mid Cap Portfolio – Class 1 Shares

M Capital Appreciation Fund

M International Equity Fund

M Large Cap Growth Fund

M Large Cap Value Fund (formerly M Business Opportunity Value)

MFS Research Bond – Initial Class*

MFS Value Series – Initial Class*

MFS® Growth Series – Initial Class

MFS® Utilities Series – Initial Class

Mutual Shares Securities Fund – Class 2*

Neuberger Berman Adviser’s Management Trust Socially Responsive Portfolio – Service Shares

Oppenheimer Discovery Mid-Cap Growth Fund/VA Service Shares (formerly Oppenheimer Small- & Mid-Cap Growth Fund/VA Service Shares)*

ProFund VP Asia 30*

ProFund VP Banks*

ProFund VP Basic Materials*

ProFund VP Bear*

ProFund VP Biotechnology*

ProFund VP Bull*

ProFund VP Consumer Goods Portfolio*

ProFund VP Consumer Services*

ProFund VP Europe 30*

ProFund VP Financials*

ProFund VP Health Care*

ProFund VP Industrials*

ProFund VP Internet*

ProFund VP Japan*

ProFund VP Mid-Cap Growth*

ProFund VP Mid-Cap Value*

ProFund VP Money Market*

ProFund VP NASDAQ-100*

ProFund VP Oil & Gas*

ProFund VP Pharmaceuticals*

ProFund VP Precious Metals*

ProFund VP Real Estate*

ProFund VP Rising Rates Opportunity*

ProFund VP Semiconductor*

ProFund VP Short NASDAQ-100*

ProFund VP Short Small-Cap*

ProFund VP Small-Cap*

ProFund VP Small-Cap Growth*

ProFund VP Small-Cap Value*

ProFund VP Technology*

ProFund VP Telecommunications*

ProFund VP U.S. Government Plus*

ProFund VP UltraBull*

ProFund VP UltraMid-Cap*

ProFund VP UltraNASDAQ-100*

ProFund VP UltraSmall-Cap*

ProFund VP Utilities*

Prudential Conservative Balanced Portfolio

Prudential Diversified Bond Portfolio

Prudential Equity Portfolio

Prudential Flexible Managed Portfolio

Prudential Global Portfolio

Prudential Government Income Portfolio

Prudential High Yield Bond Portfolio

Prudential Jennison 20/20 Focus Portfolio

Prudential Jennison Portfolio

Prudential Money Market Portfolio

Prudential Natural Resources Portfolio

Prudential Small Capitalization Stock Portfolio

Prudential SP International Growth Portfolio

Prudential SP International Value Portfolio

Prudential SP Prudential U.S. Emerging Growth Portfolio

Prudential SP Small Cap Value Portfolio

Prudential Stock Index Portfolio

Prudential Value Portfolio

T. Rowe Price International Stock Portfolio

Templeton Growth Securities Fund – Class 2

The Dreyfus Socially Responsible Growth Fund – Service Shares

TOPS Aggressive Growth ETF Portfolio

TOPS Balanced ETF Portfolio

TOPS Capital Preservation ETF Portfolio

TOPS Growth ETF Portfolio

TOPS Managed Risk Balanced ETF Portfolio (formerly TOPS Protected Balanced ETF Portfolio)

TOPS Managed Risk Growth ETF Portfolio (formerly TOPS Protected Growth ETF Portfolio)

TOPS Managed Risk Moderate Growth ETF Portfolio (formerly TOPS Protected Moderate Growth ETF Portfolio)

TOPS Moderate Growth ETF Portfolio

* Subaccount was available for investment but had no assets as of December 31, 2013.

At December 31, 2013 and 2012 there were no balances or transactions for the periods that ended pertaining to the following funds: American Century VP Income & Growth Fund, American Funds International Fund—Class 2, Dreyfus Investment Portfolios, MidCap Stock Portfolio—Initial Shares, Dreyfus Variable Investment Fund, Opportunistic Small Cap Portfolio—Initial Shares, Franklin Income Securities Fund—Class 2, Hartford Growth Opportunities HLS Fund—Class IB, Invesco V.I.Technology Fund, Invesco V.I. Utilities

A38

Note 1: General (Continued)

Fund, Janus Aspen Balanced Portfolio—Service Shares, Janus Aspen Enterprise Portfolio—Service Shares, MFS Research Bond—Initial Class, MFS Value Series—Initial Class, Mutual Shares Securities Fund—Class 2, Oppenheimer Discovery Mid-Cap Growth Fund/VA Service Shares, ProFund VP Asia 30, ProFund VP Banks, ProFund VP Basic Materials, ProFund VP Bear, ProFund VP Biotechnology, ProFund VP Bull, ProFund VP Consumer Goods Portfolio, ProFund VP Consumer Services, ProFund VP Europe 30, ProFund VP Financials, ProFund VP Health Care, ProFund VP Industrials, ProFund VP Internet, ProFund VP Japan, ProFund VP Mid-Cap Growth, ProFund VP Mid-Cap Value, ProFund VP Money Market, ProFund VP NASDAQ-100, ProFund VP Oil & Gas, ProFund VP Pharmaceuticals, ProFund VP Precious Metals, ProFund VP Real Estate, ProFund VP Rising Rates Opportunity, ProFund VP Semiconductor, ProFund VP Short NASDAQ-100, ProFund VP Short Small-Cap, ProFund VP Small-Cap, ProFund VP Small-Cap Growth, ProFund VP Small-Cap Value, ProFund VP Technology, ProFund VP Telecommunications, ProFund VP U.S. Government Plus, ProFund VP UltraBull, ProFund VP UltraMid-Cap, ProFund VP UltraNASDAQ-100, ProFund VP UltraSmall-Cap, ProFund VP Utilities.

The Portfolios are diversified open-end management investment companies, and each portfolio of The Prudential Series Fund and the Advanced Series Trust is managed by affiliates of Prudential. Each of the variable investment options of the Account indirectly bears exposure to the market, credit, and liquidity risks of the portfolio in which it invests. These financial statements should be read in conjunction with the financial statements and footnotes of the Portfolios. Additional information on these mutual funds is available upon request to the appropriate companies.

Note 2: Significant Accounting Policies

The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and the reported amounts of increases and decreases in net assets resulting from operations during the reporting period. Actual results could differ from those estimates. Subsequent events have been evaluated through the date these financial statements were issued.

Investments—The investments in shares of the Portfolios are stated at the net asset value of the respective Portfolios, which is obtained from the custodian and is based on the fair value of the underlying securities in the respective Portfolios. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the Statements of Operations of the applicable subaccount.

Security Transactions—Realized gains and losses on security transactions are determined based upon an average cost of the investment sold. Purchase and sale transactions are recorded as of the trade date of the security being purchased or sold.

Dividend Income and Distributions Received—Dividend and capital gain distributions received are reinvested in additional shares of the Portfolios and are recorded on the ex-distribution date.

New Accounting Pronouncements

In June 2013, the Financial Accounting Standards Board issued updated guidance clarifying the characteristics of an investment company and requiring new disclosures. Under the guidance, all entities regulated under the Investment Company Act of 1940 automatically qualify as investment companies, while all other entities need to consider both the

A39

Note 2: Significant Accounting Policies (Continued)

fundamental and typical characteristics of an investment company in determining whether they qualify as investment companies. This new guidance is effective for interim or annual reporting periods that begin after December 15, 2013, and should be applied prospectively. This guidance does not have an effect on the Account’s net assets or results of operations.

Note 3: Fair Value

Fair Value Measurement—Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Account for identical investments. These generally provide the most reliable evidence and are used to measure fair value whenever available. Investments which have a net asset value which is readily available to the public are classified as Level 1.

Level 2—Fair value is based on significant inputs, other than Level 1 inputs, that are observable for the investment, either directly or indirectly, for substantially the full term of the investment through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar securities, quoted market prices in markets that are not active for identical or similar securities, and other market observable inputs. Investments which have a net asset value which is only available to institutional clients are classified as Level 2.

Level 3—Fair value is based on at least one or more significant unobservable inputs for the investment. As of December 31, 2013, the Account did not have any Level 3 investments.

As of December 31, 2013, all investments have been classified as Level 1 with the exception of proprietary funds, consisting of The Prudential Series Fund, the Advanced Series Trust and any non-proprietary funds where the net asset value is not readily observable by the public, which are classified as Level 2. The Level 2 investments as of December 31, 2013, are presented below.

Proprietary Funds (The Prudential Series Fund and the Advanced Series Trust)	$	2,472,984,218
M Capital Appreciation Fund	$	47,087

Transfers between Level 1 and Level 2:

Periodically there are transfers between Level 1 and Level 2 for assets held in the Account. The classification of the Account investments may vary dependent on the availability of information to the public. Should an investment’s net asset value become publicly observable, the investment would be transferred from Level 2 to Level 1, and conversely transferred out of Level 1 and into Level 2 when a net asset value is no longer readily available to the public. During 2013, there were no transfers from Level 1 to Level 2. There were transfers from Level 2 to Level 1 as presented below. The transfers are based on values as of December 31, 2012.

Janus Aspen Janus Portfolio – Institutional Shares	$	354,208
Janus Aspen Janus Portfolio – Service Shares	$	1,007,226
Janus Aspen Overseas Portfolio – Service Shares	$	306,218
Goldman Sachs Structured Small Cap Equity Fund	$	54,947
M Large Cap Growth Fund	$	40,597

A40

Note 3: Fair Value (Continued)

M International Equity Fund	$	17,966
M Large Cap Value Fund	$	45,497
The Dreyfus Socially Responsible Growth Fund – Service Shares	$	3,308
Neuberger Berman Adviser’s Management Trust Socially Responsive Portfolio – Service Shares	$	4,655
TOPS Aggressive Growth ETF Portfolio	$	9,515
TOPS Balanced ETF Portfolio	$	801
TOPS Capital Preservation ETF Portfolio	$	156
TOPS Growth ETF Portfolio	$	11,515
TOPS Moderate Growth ETF Portfolio	$	9,577
TOPS Managed Risk Balanced ETF Portfolio	$	22,162
TOPS Managed Risk Growth ETF Portfolio	$	77,147
TOPS Managed Risk Moderate Growth ETF Portfolio	$	39,645

Note 4: Taxes

Pruco Life of New Jersey is taxed as a “life insurance company” as defined by the Internal Revenue Code. The results of operations of the Account form a part of PFI’s consolidated federal tax return. No federal, state or local income taxes are payable by the Account. As such, no provision for tax liability has been recorded in these financial statements. Prudential management will review periodically the status of the policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts.

Note 5: Purchases and Sales of Investments

The aggregate costs of purchases and proceeds from sales, excluding distributions received and reinvested, of investments in the Portfolios for the year ended December 31, 2013 were as follows:

	Purchases		Sales
Prudential Money Market Portfolio	$	10,901,657	$	5,396,168
Prudential Diversified Bond Portfolio	$	1,251,871	$	4,818,574
Prudential Equity Portfolio	$	1,055,347	$	9,222,976
Prudential Flexible Managed Portfolio	$	1,355,983	$	11,222,540
Prudential Conservative Balanced Portfolio	$	880,184	$	5,862,778
Prudential High Yield Bond Portfolio	$	91,248,615	$	27,671,595
Prudential Stock Index Portfolio	$	1,746,496	$	3,395,605
Prudential Value Portfolio	$	1,402,698	$	1,375,538
Prudential Natural Resources Portfolio	$	1,309,690	$	2,797,596
Prudential Global Portfolio	$	706,237	$	1,003,554
Prudential Government Income Portfolio	$	80,403	$	546,175
Prudential Jennison Portfolio	$	1,072,479	$	1,754,156
Prudential Small Capitalization Stock Portfolio	$	1,176,695	$	807,623
T. Rowe Price International Stock Portfolio	$	2,639	$	110,985
Janus Aspen Janus Portfolio – Institutional Shares	$	18,074	$	183,783
MFS® Growth Series – Initial Class	$	4,472	$	1,599
VP Value Fund	$	29,718	$	70,977
FTVIP Franklin Small-Mid Cap Growth Securities Fund – Class 2	$	26,095	$	67,427
Prudential SP Small Cap Value Portfolio	$	564,472	$	586,382
Janus Aspen Janus Portfolio – Service Shares	$	78,404	$	80,034
Prudential SP Prudential U.S. Emerging Growth Portfolio	$	719,399	$	640,292
Prudential SP International Growth Portfolio	$	310,640	$	251,654
Prudential SP International Value Portfolio	$	290,407	$	270,150
Janus Aspen Overseas Portfolio – Service Shares	$	116,317	$	60,406
Goldman Sachs Structured Small Cap Equity Fund	$	4,491	$	3,146
M Large Cap Growth Fund	$	12,301	$	12,355
M International Equity Fund	$	0	$	1,569
M Large Cap Value Fund	$	12,058	$	4,841
AST Cohen & Steers Realty Portfolio	$	186,467	$	125,734
AST J.P. Morgan Strategic Opportunities Portfolio	$	235,629	$	80,822

A41

Note 5: Purchases and Sales of Investments (Continued)

	Purchases		Sales
AST Herndon Large-Cap Value Portfolio	$	75,815	$	33,648
AST Federated Aggressive Growth Portfolio	$	57,077	$	28,608
AST Small-Cap Value Portfolio	$	78,735	$	30,703
AST Goldman Sachs Mid-Cap Growth Portfolio	$	75,600	$	27,513
AST Loomis Sayles Large-Cap Growth Portfolio	$	166,450	$	131,326
AST MFS Growth Portfolio	$	34,544	$	14,055
AST Neuberger Berman Mid-Cap Growth Portfolio	$	0	$	506
AST PIMCO Limited Maturity Bond Portfolio	$	63,082	$	16,555
AST T. Rowe Price Natural Resources Portfolio	$	166,926	$	95,347
AST MFS Global Equity Portfolio	$	167,892	$	10,624
AST J.P. Morgan International Equity Portfolio	$	83,857	$	32,704
AST Templeton Global Bond Portfolio	$	44,873	$	16,065
M Capital Appreciation Fund	$	8,613	$	2,934
American Century VP Mid Cap Value Fund – Class 1 Shares	$	43,459	$	12,902
AST Large-Cap Value Portfolio	$	410,273	$	277,177
AST Small-Cap Growth Portfolio	$	261,172	$	270,135
The Dreyfus Socially Responsible Growth Fund – Service Shares	$	21,215	$	19,299
Prudential Jennison 20/20 Focus Portfolio	$	346,773	$	57,259
JPMorgan Insurance Trust Intrepid Mid Cap Portfolio – Class 1 Shares	$	77,393	$	43,962
MFS® Utilities Series – Initial Class	$	252,754	$	23,222
Neuberger Berman Adviser’s Management Trust Socially Responsive Portfolio – Service Shares	$	10,463	$	3,189
AST T. Rowe Price Large-Cap Growth Portfolio	$	275,856	$	206,021
AST Schroders Multi-Asset World Strategies Portfolio	$	86,254	$	29,685
AST PIMCO Total Return Bond Portfolio	$	769,677	$	610,384
AST T. Rowe Price Asset Allocation Portfolio	$	886,819	$	107,965
AST Wellington Management Hedged Equity Portfolio	$	1,029,792	$	657,640
AST Balanced Asset Allocation Portfolio	$	2,319,129	$	1,430,926
AST Preservation Asset Allocation Portfolio	$	830,076	$	288,266
AST FI Pyramis Quantitative Portfolio	$	130,091	$	38,066
AST Prudential Growth Allocation Portfolio	$	400,477	$	47,695
AST Advanced Strategies Portfolio	$	241,357	$	66,896
AST Schroders Global Tactical Portfolio	$	384,077	$	101,155
AST RCM World Trends Portfolio	$	131,408	$	35,068
Dreyfus Investment Portfolios, MidCap Stock Portfolio – Service Shares	$	3,730	$	3,741
AST BlackRock Global Strategies Portfolio	$	3,586,242	$	2,346,960
TOPS Aggressive Growth ETF Portfolio	$	21,894	$	4,726
TOPS Balanced ETF Portfolio	$	6,872	$	2,247
TOPS Capital Preservation ETF Portfolio	$	7,235	$	1,919
TOPS Growth ETF Portfolio	$	21,728	$	8,269
TOPS Moderate Growth ETF Portfolio	$	15,106	$	10,792
TOPS Managed Risk Balanced ETF Portfolio	$	42,593	$	13,201
TOPS Managed Risk Growth ETF Portfolio	$	129,473	$	41,504
TOPS Managed Risk Moderate Growth ETF Portfolio	$	53,017	$	13,232
American Funds Growth Fund – Class 2	$	3,191	$	0
American Funds Growth-Income Fund – Class 2	$	5,056	$	8
Fidelity VIP Contrafund Portfolio – Service Class 2	$	1,364	$	0
Fidelity VIP MidCap Portfolio – Service Class 2	$	291	$	0
Templeton Growth Securities Fund – Class 2	$	407	$	2
Hartford Capital Appreciation HLS Fund – Class IB	$	606	$	0
Hartford Disciplined Equity HLS Fund – Class IB	$	407	$	2
Hartford Dividend and Growth HLS Fund – Class IB	$	1,772	$	0

Note 6: Related Party Transactions

The Account has extensive transactions and relationships with Prudential and other affiliates. Due to these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties.

PFI and its affiliates perform various services on behalf of the portfolios of The Prudential Series Fund and the Advanced Series Trust in which the Account invests and may receive

A42

Note 6: Related Party Transactions (Continued)

fees for the services performed. These services include, among other things, investment management, subadvisory, shareholder communications, preparation, postage, fund transfer agency and various other record keeping, administrative and customer service functions.

The Prudential Series Fund has entered into a management agreement with Prudential Investments LLC (“PI”) and the Advanced Series Trust has entered into a management agreement with PI and AST Investment Services, Inc., both indirect, wholly-owned subsidiaries of PFI (together the “Investment Managers”). Pursuant to these agreements, the Investment Managers have responsibility for all investment advisory services and supervise the subadvisers’ performance of such services with respect to each portfolio. The Investment Managers entered into subadvisory agreements with several subadvisers, including Prudential Investment Management, Inc., Jennison Associates LLC and Quantitative Management Associates, which are indirect, wholly-owned subsidiaries of PFI.

The Prudential Series Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), an indirect, wholly-owned subsidiary of PFI, which acts as the distributor of the Class I and Class II shares of The Prudential Series Fund. No distribution or service fees are paid to PIMS as distributor of the Class I shares of the portfolios of The Prudential Series Fund. However, service fees are paid to PIMS as distributor of the Class II shares of the portfolios of The Prudential Series Fund. The Account invests only in Class I shares of The Prudential Series Fund, not Class II shares.

The Advanced Series Trust has a distribution agreement with Prudential Annuities Distributors, Inc. (“PAD”) an indirect wholly-owned subsidiary of PFI, which acts as the distributor of the shares of each portfolio. Each portfolio of the Advanced Series Trust (except for AST Balanced Asset Allocation Portfolio and AST Preservation Asset Allocation Portfolio) pays a distribution and service fee to PAD of 0.10% of the average daily net assets of each portfolio.

The Investment Managers have contractually agreed to reimburse certain portfolios of The Prudential Series Fund and the Advanced Series Trust the portion of the management fee for that portfolio equal to the amount that the aggregate annual ordinary operating expenses (excluding interest, taxes, brokerage commissions, and acquired fund expenses, as applicable) exceeds various agreed upon percentages of the portfolio’s average daily net assets.

PI has voluntarily agreed to waive a portion of its management fee equal to an annual rate of 0.05% of the average daily net assets of the Prudential Stock Index Portfolio. In order to support the income yield, PI has also voluntarily agreed to limit the management fees of the Prudential Money Market Portfolio such that the 1-day annualized yield (excluding capital gain or loss) does not fall below 0.00%. The waiver is voluntary and may be modified or terminated by PI at any time without notice.

The Advanced Series Trust has voluntarily agreed to waive two-thirds of the incremental increase in the net management fee received by the Advanced Series Trust as a result of the underlying voluntary subadviser fee discount of the AST T. Rowe Price Large-Cap Growth Portfolio. This expense limitation is voluntary and may be modified or terminated by the Advanced Series Trust at any time without notice.

Prudential Mutual Fund Services LLC, an affiliate of the Investment Managers and an indirect, wholly-owned subsidiary of PFI, serves as the transfer agent of each portfolio of The Prudential Series Fund and The Advanced Series Trust.

A43

Note 7: Financial Highlights

Pruco Life of New Jersey sells a number of variable life insurance products that are funded by the Account. These products have unique combinations of features and fees that are charged against the contract owner’s account balance. Differences in the fee structures result in a variety of unit values, expense ratios and total returns.

The following table was developed by determining which products offered by Pruco Life of New Jersey and funded by the Account have the lowest and highest expense ratio. Only product designs within each subaccount that had units outstanding during the respective periods were considered when determining the lowest and highest expense ratio. The summary may not reflect the minimum and maximum contract charges offered by Pruco Life of New Jersey as contract owners may not have selected all available and applicable contract options.

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		Prudential Money Market Portfolio*****
December 31, 2013		44,811	$	1.15745	to	$	11.80315	$	61,871		0.00%		0.00%	to	0.90%		-0.93%	to	0.00%
December 31, 2012		40,437	$	1.16770	to	$	11.80302	$	56,365		0.01%		0.00%	to	0.90%		-0.91%	to	0.01%
December 31, 2011		110,816	$	1.16827	to	$	11.80130	$	149,078		0.02%		0.00%	to	0.90%		-0.91%	to	0.03%
December 31, 2010		158,507	$	1.16879	to	$	11.79799	$	224,168		0.03%		0.00%	to	0.90%		-0.89%	to	0.04%
December 31, 2009		153,277	$	1.16919	to	$	11.79333	$	212,493		0.41%		0.00%	to	0.90%		-0.50%	to	0.40%
		Prudential Diversified Bond Portfolio
December 31, 2013		49,136	$	1.84865	to	$	18.46284	$	133,636		3.97%		0.00%	to	0.90%		-1.60%	to	-0.71%
December 31, 2012		49,779	$	1.86398	to	$	18.59559	$	138,195		3.89%		0.00%	to	0.90%		9.70%	to	10.68%
December 31, 2011		193,013	$	1.68563	to	$	16.80071	$	439,874		4.31%		0.00%	to	0.90%		6.56%	to	7.51%
December 31, 2010		196,380	$	1.56925	to	$	15.62673	$	417,028		4.24%		0.00%	to	0.90%		9.59%	to	10.57%
December 31, 2009		156,799	$	1.42063	to	$	14.13312	$	304,750		4.81%		0.00%	to	0.90%		19.43%	to	20.51%
		Prudential Equity Portfolio
December 31, 2013		18,818	$	1.81405	to	$	14.83927	$	198,497		0.00%		0.10%	to	0.90%		32.34%	to	33.40%
December 31, 2012		19,442	$	1.37071	to	$	11.17160	$	155,662		0.59%		0.10%	to	0.90%		12.67%	to	13.57%
December 31, 2011		19,936	$	1.21658	to	$	9.87940	$	143,252		0.68%		0.10%	to	0.90%		-4.33%	to	-3.56%
December 31, 2010		20,307	$	1.27159	to	$	10.28701	$	154,186		0.78%		0.10%	to	0.90%		10.91%	to	11.79%
December 31, 2009		20,642	$	1.14646	to	$	9.24053	$	143,537		1.59%		0.10%	to	0.90%		36.95%	to	38.04%
		Prudential Flexible Managed Portfolio
December 31, 2013		31,269	$	1.77667	to	$	19.31512	$	284,781		0.00%		0.25%	to	0.90%		19.07%	to	19.85%
December 31, 2012		32,330	$	1.49209	to	$	16.11645	$	246,015		1.92%		0.25%	to	0.90%		12.35%	to	13.09%
December 31, 2011		33,601	$	1.32802	to	$	14.25121	$	226,765		1.95%		0.25%	to	0.90%		3.41%	to	4.08%
December 31, 2010		34,701	$	1.28426	to	$	13.69306	$	225,640		2.24%		0.25%	to	0.90%		11.03%	to	11.76%
December 31, 2009		35,987	$	1.15666	to	$	6.12740	$	210,128		3.48%		0.60%	to	0.90%		18.88%	to	19.51%
		Prudential Conservative Balanced Portfolio
December 31, 2013		18,673	$	1.75355	to	$	18.05422	$	134,397		0.00%		0.25%	to	0.90%		15.12%	to	15.86%
December 31, 2012		19,324	$	1.52326	to	$	15.58262	$	120,314		2.06%		0.25%	to	0.90%		10.23%	to	10.96%
December 31, 2011		20,046	$	1.38183	to	$	14.04399	$	112,725		2.25%		0.25%	to	0.90%		3.67%	to	4.34%
December 31, 2010		20,849	$	1.33292	to	$	13.46019	$	112,728		2.44%		0.25%	to	0.90%		10.75%	to	11.46%
December 31, 2009		21,547	$	1.20355	to	$	5.17076	$	104,992		3.76%		0.60%	to	0.90%		18.94%	to	19.52%
		Prudential High Yield Bond Portfolio
December 31, 2013		450,696	$	2.19909	to	$	21.91910	$	1,363,539		6.46%		0.00%	to	0.90%		6.31%	to	7.26%
December 31, 2012		422,167	$	2.05286	to	$	20.43631	$	1,212,630		7.17%		0.00%	to	0.90%		13.40%	to	14.43%
December 31, 2011		234,170	$	1.79623	to	$	17.85986	$	679,962		7.51%		0.00%	to	0.90%		4.15%	to	5.10%
December 31, 2010		237,118	$	1.71027	to	$	16.99325	$	657,519		8.39%		0.00%	to	0.90%		13.05%	to	14.05%
December 31, 2009		239,747	$	1.50083	to	$	14.89993	$	585,927		9.45%		0.00%	to	0.90%		45.85%	to	47.16%
		Prudential Stock Index Portfolio
December 31, 2013		14,988	$	1.43327	to	$	20.57494	$	50,655		0.00%		0.00%	to	0.90%		30.72%	to	31.89%
December 31, 2012		15,254	$	1.09647	to	$	15.59974	$	39,769		1.70%		0.00%	to	0.90%		14.65%	to	15.68%
December 31, 2011		15,241	$	0.95640	to	$	13.48550	$	35,341		1.60%		0.00%	to	0.90%		1.04%	to	1.95%
December 31, 2010		15,319	$	0.94652	to	$	13.22764	$	35,229		1.77%		0.00%	to	0.90%		13.55%	to	14.59%
December 31, 2009		15,516	$	0.83357	to	$	11.54386	$	31,878		3.24%		0.00%	to	0.90%		24.94%	to	26.07%

A44

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		Prudential Value Portfolio
December 31, 2013		3,184	$	2.33971	to	$	15.05507	$	31,424		0.00%		0.00%	to	0.90%		31.91%	to	33.09%
December 31, 2012		3,231	$	1.77375	to	$	11.31158	$	23,598		0.97%		0.00%	to	0.90%		13.60%	to	14.62%
December 31, 2011		3,308	$	1.56140	to	$	9.86861	$	21,279		1.01%		0.00%	to	0.90%		-6.42%	to	-5.58%
December 31, 2010		3,357	$	1.66848	to	$	10.45158	$	22,981		0.93%		0.00%	to	0.90%		6.02%	to	13.63%
December 31, 2009		2,441	$	1.47859	to	$	6.90022	$	15,590		2.05%		0.20%	to	0.90%		40.66%	to	41.65%
		Prudential Natural Resources Portfolio
December 31, 2013		957	$	8.63543	to	$	19.38647	$	17,779		0.00%		0.00%	to	0.60%		9.57%	to	10.23%
December 31, 2012		1,025	$	7.84199	to	$	17.69319	$	17,543		0.46%		0.10%	to	0.60%		-3.05%	to	-2.57%
December 31, 2011		1,083	$	8.04868	to	$	18.25048	$	19,348		0.19%		0.10%	to	0.60%		-19.52%	to	-19.11%
December 31, 2010		1,151	$	9.95074	to	$	22.67617	$	25,772		0.41%		0.10%	to	0.60%		27.22%	to	27.86%
December 31, 2009		1,970	$	7.78270	to	$	17.82405	$	34,968		0.77%		0.10%	to	0.60%		76.05%	to	76.93%
		Prudential Global Portfolio
December 31, 2013		5,677	$	1.21215	to	$	3.20572	$	14,947		0.00%		0.10%	to	0.90%		26.15%	to	27.16%
December 31, 2012		5,762	$	0.96087	to	$	2.53361	$	11,997		1.60%		0.10%	to	0.90%		16.48%	to	17.42%
December 31, 2011		5,898	$	0.82495	to	$	2.16888	$	10,583		1.56%		0.10%	to	0.90%		-7.80%	to	-7.07%
December 31, 2010		5,998	$	0.89473	to	$	2.34543	$	11,640		1.56%		0.10%	to	0.90%		11.74%	to	12.63%
December 31, 2009		6,043	$	0.80076	to	$	2.09283	$	10,547		2.91%		0.10%	to	0.90%		30.22%	to	31.28%
		Prudential Government Income Portfolio
December 31, 2013		776	$	4.05652	to	$	4.05652	$	3,149		1.77%		0.60%	to	0.60%		-2.92%	to	-2.92%
December 31, 2012		885	$	4.17862	to	$	4.17862	$	3,699		2.07%		0.60%	to	0.60%		3.01%	to	3.01%
December 31, 2011		909	$	4.05654	to	$	4.05654	$	3,687		2.46%		0.60%	to	0.60%		6.99%	to	6.99%
December 31, 2010		919	$	3.79159	to	$	3.79159	$	3,486		2.86%		0.60%	to	0.60%		6.35%	to	6.35%
December 31, 2009		971	$	3.56518	to	$	3.56518	$	3,461		3.09%		0.60%	to	0.60%		7.07%	to	7.07%
		Prudential Jennison Portfolio
December 31, 2013		11,498	$	1.20695	to	$	4.64261	$	35,253		0.00%		0.10%	to	0.90%		36.44%	to	37.52%
December 31, 2012		11,705	$	0.88463	to	$	3.39279	$	26,196		0.16%		0.10%	to	0.90%		15.14%	to	16.06%
December 31, 2011		11,703	$	0.76828	to	$	2.93786	$	22,827		0.30%		0.10%	to	0.90%		-0.60%	to	0.20%
December 31, 2010		11,844	$	0.77289	to	$	2.94659	$	23,299		0.55%		0.10%	to	0.90%		10.95%	to	11.86%
December 31, 2009		11,373	$	0.69663	to	$	2.64776	$	20,819		0.67%		0.10%	to	0.90%		41.76%	to	42.89%
		Prudential Small Capitalization Stock Portfolio
December 31, 2013		2,324	$	6.72562	to	$	18.56661	$	15,921		0.00%		0.00%	to	0.60%		40.11%	to	40.95%
December 31, 2012		2,269	$	4.80032	to	$	13.11162	$	11,004		0.61%		0.10%	to	0.60%		15.33%	to	15.91%
December 31, 2011		2,354	$	4.16212	to	$	11.31185	$	9,856		0.80%		0.10%	to	0.60%		-0.04%	to	0.46%
December 31, 2010		2,397	$	4.16370	to	$	11.25987	$	10,015		1.29%		0.10%	to	0.60%		25.18%	to	25.80%
December 31, 2009		2,478	$	3.32627	to	$	8.95041	$	8,258		1.85%		0.10%	to	0.60%		24.44%	to	25.06%
		T. Rowe Price International Stock Portfolio
December 31, 2013		30	$	1.20263	to	$	1.20263	$	36		0.35%		0.90%	to	0.90%		13.03%	to	13.03%
December 31, 2012		128	$	1.06396	to	$	1.28558	$	136		1.27%		0.20%	to	0.90%		17.38%	to	18.20%
December 31, 2011		136	$	0.90643	to	$	1.08765	$	125		1.44%		0.20%	to	0.90%		-13.61%	to	-13.02%
December 31, 2010		163	$	1.04924	to	$	1.25041	$	179		0.63%		0.20%	to	0.90%		13.44%	to	14.23%
December 31, 2009		409	$	0.92493	to	$	1.09461	$	385		2.96%		0.20%	to	0.90%		51.03%	to	52.08%
		Janus Aspen Janus Portfolio – Institutional Shares
December 31, 2013		234	$	1.04544	to	$	1.32388	$	268		0.60%		0.20%	to	0.90%		29.18%	to	30.07%
December 31, 2012		416	$	0.80932	to	$	1.01779	$	354		0.56%		0.20%	to	0.90%		17.53%	to	18.35%
December 31, 2011		410	$	0.68861	to	$	0.86001	$	296		0.60%		0.20%	to	0.90%		-6.15%	to	-5.49%
December 31, 2010		485	$	0.73375	to	$	0.90992	$	369		1.10%		0.20%	to	0.90%		13.49%	to	14.30%
December 31, 2009		461	$	0.64654	to	$	0.79610	$	308		0.55%		0.20%	to	0.90%		35.14%	to	36.12%
		MFS® Growth Series – Initial Class
December 31, 2013		125	$	1.08445	to	$	1.08445	$	135		0.24%		0.90%	to	0.90%		35.63%	to	35.63%
December 31, 2012		120	$	0.79955	to	$	0.79955	$	96		0.00%		0.90%	to	0.90%		16.34%	to	16.34%
December 31, 2011		137	$	0.68727	to	$	0.68727	$	94		0.19%		0.90%	to	0.90%		-1.23%	to	-1.23%
December 31, 2010		131	$	0.69580	to	$	0.69580	$	91		0.11%		0.90%	to	0.90%		14.30%	to	14.30%
December 31, 2009		120	$	0.60874	to	$	0.60874	$	73		0.30%		0.90%	to	0.90%		36.47%	to	36.47%

A45

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		VP Value Fund
December 31, 2013		124	$	2.78887	to	$	2.78887	$	346		1.69%		0.90%	to	0.90%		30.55%	to	30.55%
December 31, 2012		140	$	2.13622	to	$	2.13622	$	298		1.93%		0.90%	to	0.90%		13.55%	to	13.55%
December 31, 2011		138	$	1.88133	to	$	1.88133	$	259		2.04%		0.90%	to	0.90%		0.11%	to	0.11%
December 31, 2010		134	$	1.87920	to	$	1.87920	$	252		2.21%		0.90%	to	0.90%		12.41%	to	12.41%
December 31, 2009		141	$	1.67168	to	$	1.67168	$	236		5.48%		0.90%	to	0.90%		18.79%	to	18.79%
		FTVIP Franklin Small-Mid Cap Growth Securities Fund – Class 2
December 31, 2013		236	$	1.36349	to	$	1.36349	$	322		0.00%		0.90%	to	0.90%		36.92%	to	36.92%
December 31, 2012		270	$	0.99582	to	$	1.05640	$	268		0.00%		0.20%	to	0.90%		9.86%	to	10.63%
December 31, 2011		257	$	0.90648	to	$	0.95490	$	234		0.00%		0.20%	to	0.90%		-5.68%	to	-5.03%
December 31, 2010		271	$	0.96110	to	$	1.00543	$	263		0.00%		0.20%	to	0.90%		26.48%	to	27.37%
December 31, 2009		274	$	0.75991	to	$	0.78940	$	209		0.00%		0.20%	to	0.90%		42.30%	to	43.27%
		Prudential SP Small Cap Value Portfolio
December 31, 2013		4,050	$	2.46506	to	$	24.69406	$	11,177		0.00%		0.00%	to	0.90%		36.22%	to	37.44%
December 31, 2012		4,040	$	1.80963	to	$	17.96652	$	8,148		0.45%		0.00%	to	0.90%		15.02%	to	16.06%
December 31, 2011		4,103	$	1.57327	to	$	15.48009	$	7,151		0.67%		0.00%	to	0.90%		-3.64%	to	-2.77%
December 31, 2010		4,028	$	1.62854	to	$	15.92112	$	7,248		0.63%		0.00%	to	0.90%		25.15%	to	26.27%
December 31, 2009		3,921	$	1.29106	to	$	12.60902	$	5,604		1.49%		0.00%	to	0.90%		29.63%	to	30.80%
		Janus Aspen Janus Portfolio – Service Shares
December 31, 2013		840	$	1.55936	to	$	1.55936	$	1,310		0.66%		0.25%	to	0.25%		29.66%	to	29.66%
December 31, 2012		837	$	1.20268	to	$	1.20268	$	1,007		0.45%		0.25%	to	0.25%		17.98%	to	17.98%
December 31, 2011		833	$	1.01935	to	$	1.01935	$	849		0.44%		0.25%	to	0.25%		-5.79%	to	-5.79%
December 31, 2010		853	$	1.08200	to	$	1.08200	$	923		0.38%		0.25%	to	0.25%		13.96%	to	13.96%
December 31, 2009		836	$	0.94948	to	$	0.94948	$	793		0.39%		0.25%	to	0.25%		35.67%	to	35.67%
		Prudential SP Prudential U.S. Emerging Growth Portfolio
December 31, 2013		4,846	$	2.45791	to	$	31.21928	$	12,866		0.00%		0.00%	to	0.90%		27.33%	to	28.47%
December 31, 2012		4,806	$	1.93040	to	$	24.30091	$	9,944		0.40%		0.00%	to	0.90%		15.83%	to	16.88%
December 31, 2011		4,844	$	1.66657	to	$	20.79118	$	8,608		0.58%		0.00%	to	0.90%		1.31%	to	2.22%
December 31, 2010		4,760	$	1.64508	to	$	20.34034	$	8,284		0.42%		0.00%	to	0.90%		19.35%	to	20.43%
December 31, 2009		2,809	$	1.37832	to	$	16.88951	$	4,051		0.73%		0.00%	to	0.90%		40.63%	to	41.89%
		Prudential SP International Growth Portfolio
December 31, 2013		1,887	$	1.64541	to	$	1.96107	$	3,405		0.00%		0.10%	to	0.90%		17.81%	to	18.76%
December 31, 2012		1,848	$	1.39668	to	$	1.65133	$	2,810		0.64%		0.10%	to	0.90%		21.31%	to	22.28%
December 31, 2011		1,777	$	1.15131	to	$	1.35044	$	2,212		1.31%		0.10%	to	0.90%		-15.67%	to	-14.99%
December 31, 2010		1,719	$	1.36526	to	$	1.58849	$	2,523		1.53%		0.10%	to	0.90%		12.99%	to	13.89%
December 31, 2009		1,655	$	1.20832	to	$	1.39474	$	2,134		2.17%		0.10%	to	0.90%		35.93%	to	37.03%
		Prudential SP International Value Portfolio
December 31, 2013		2,217	$	1.72238	to	$	2.07456	$	3,971		0.00%		0.10%	to	0.90%		19.02%	to	19.96%
December 31, 2012		2,196	$	1.43777	to	$	1.72934	$	3,285		2.64%		0.10%	to	0.90%		15.88%	to	16.81%
December 31, 2011		2,124	$	1.23267	to	$	1.48051	$	2,728		2.47%		0.10%	to	0.90%		-13.88%	to	-13.18%
December 31, 2010		2,099	$	1.42208	to	$	1.70612	$	3,116		2.16%		0.10%	to	0.90%		9.82%	to	10.71%
December 31, 2009		1,974	$	1.28655	to	$	1.54278	$	2,642		3.10%		0.10%	to	0.90%		31.18%	to	32.22%
		Janus Aspen Overseas Portfolio – Service Shares
December 31, 2013		45	$	9.17056	to	$	9.22266	$	415		3.18%		0.00%	to	0.10%		14.17%	to	14.28%
December 31, 2012		38	$	8.03257	to	$	8.03257	$	306		0.63%		0.10%	to	0.10%		13.07%	to	13.07%
December 31, 2011		31	$	7.10418	to	$	7.10418	$	224		0.40%		0.10%	to	0.10%		-32.40%	to	-32.40%
December 31, 2010		21	$	10.50986	to	$	10.50986	$	219		0.52%		0.10%	to	0.10%		24.89%	to	24.89%
December 31, 2009		22	$	8.41521	to	$	8.41521	$	184		0.50%		0.10%	to	0.10%		78.90%	to	78.90%
		Goldman Sachs Structured Small Cap Equity Fund
December 31, 2013		31	$	2.41556	to	$	2.41556	$	76		1.04%		0.20%	to	0.20%		35.35%	to	35.35%
December 31, 2012		31	$	1.78465	to	$	1.78465	$	55		1.23%		0.20%	to	0.20%		12.61%	to	12.61%
December 31, 2011		30	$	1.58487	to	$	1.58487	$	47		0.85%		0.20%	to	0.20%		0.47%	to	0.47%
December 31, 2010		29	$	1.57742	to	$	1.57742	$	45		0.61%		0.20%	to	0.20%		29.86%	to	29.86%
December 31, 2009		26	$	1.21475	to	$	1.21475	$	32		1.33%		0.20%	to	0.20%		27.42%	to	27.42%

A46

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		M Large Cap Growth Fund
December 31, 2013		2	$	24.21416	to	$	24.21416	$	55		0.62%		0.00%	to	0.00%		36.15%	to	36.15%
December 31, 2012		2	$	17.78481	to	$	17.78481	$	41		0.05%		0.00%	to	0.00%		19.31%	to	19.31%
December 31, 2011		2	$	14.90583	to	$	14.90583	$	31		0.00%		0.00%	to	0.00%		-0.80%	to	-0.80%
December 31, 2010		2	$	15.02620	to	$	15.02620	$	27		0.41%		0.00%	to	0.00%		23.06%	to	23.06%
December 31, 2009		1	$	12.21001	to	$	12.21001	$	16		0.93%		0.00%	to	0.00%		37.40%	to	37.40%
		M International Equity Fund
December 31, 2013		1	$	18.83652	to	$	18.83652	$	19		2.36%		0.00%	to	0.00%		16.32%	to	16.32%
December 31, 2012		1	$	16.19318	to	$	16.19318	$	18		2.00%		0.00%	to	0.00%		20.68%	to	20.68%
December 31, 2011		1	$	13.41819	to	$	13.41819	$	18		2.70%		0.00%	to	0.00%		-13.56%	to	-13.56%
December 31, 2010		2	$	15.52304	to	$	15.52304	$	28		3.56%		0.00%	to	0.00%		4.61%	to	4.61%
December 31, 2009		1	$	14.83943	to	$	14.83943	$	19		0.76%		0.00%	to	0.00%		25.28%	to	25.28%
		M Large Cap Value Fund
December 31, 2013		3	$	22.27169	to	$	22.27169	$	70		2.94%		0.00%	to	0.00%		34.22%	to	34.22%
December 31, 2012		3	$	16.59343	to	$	16.59343	$	45		0.93%		0.00%	to	0.00%		17.29%	to	17.29%
December 31, 2011		2	$	14.14755	to	$	14.14755	$	33		0.43%		0.00%	to	0.00%		-4.11%	to	-4.11%
December 31, 2010		2	$	14.75415	to	$	14.75415	$	33		0.83%		0.00%	to	0.00%		9.27%	to	9.27%
December 31, 2009		2	$	13.50201	to	$	13.50201	$	21		1.11%		0.00%	to	0.00%		24.58%	to	24.58%
		AST Cohen & Steers Realty Portfolio
December 31, 2013		31	$	16.53090	to	$	16.53090	$	515		0.00%		0.10%	to	0.10%		3.03%	to	3.03%
December 31, 2012		28	$	16.04469	to	$	16.04469	$	442		1.46%		0.10%	to	0.10%		15.23%	to	15.23%
December 31, 2011		19	$	13.92352	to	$	13.92352	$	267		0.65%		0.10%	to	0.10%		6.48%	to	6.48%
December 31, 2010		15	$	13.07588	to	$	13.07588	$	199		1.68%		0.10%	to	0.10%		28.56%	to	28.56%
December 31, 2009		12	$	10.17113	to	$	10.17113	$	127		2.65%		0.10%	to	0.10%		31.80%	to	31.80%
		AST J.P. Morgan Strategic Opportunities Portfolio
December 31, 2013		34	$	15.66161	to	$	15.84616	$	541		0.00%		0.10%	to	0.25%		10.76%	to	10.92%
December 31, 2012		24	$	14.11957	to	$	14.30733	$	340		1.53%		0.10%	to	0.25%		10.45%	to	10.61%
December 31, 2011		14	$	12.76509	to	$	12.95418	$	185		0.79%		0.10%	to	0.25%		-0.02%	to	0.13%
December 31, 2010		6	$	12.74838	to	$	12.95649	$	80		0.42%		0.10%	to	0.25%		7.05%	to	7.21%
December 31, 2009		4	$	11.89089	to	$	11.89089	$	52		0.88%		0.10%	to	0.10%		21.90%	to	21.90%
		AST Herndon Large-Cap Value Portfolio
December 31, 2013		28	$	16.58696	to	$	16.58696	$	472		0.00%		0.10%	to	0.10%		34.49%	to	34.49%
December 31, 2012		26	$	12.33295	to	$	12.33295	$	315		1.14%		0.10%	to	0.10%		13.29%	to	13.29%
December 31, 2011		23	$	10.88617	to	$	10.88617	$	250		0.68%		0.10%	to	0.10%		-0.59%	to	-0.59%
December 31, 2010		20	$	10.95106	to	$	10.95106	$	223		1.49%		0.10%	to	0.10%		12.33%	to	12.33%
December 31, 2009		16	$	9.74919	to	$	9.74919	$	158		0.88%		0.10%	to	0.10%		18.14%	to	18.14%
		AST Federated Aggressive Growth Portfolio
December 31, 2013		14	$	19.88901	to	$	19.88901	$	283		0.00%		0.10%	to	0.10%		40.67%	to	40.67%
December 31, 2012		13	$	14.13882	to	$	14.13882	$	178		0.00%		0.10%	to	0.10%		19.96%	to	19.96%
December 31, 2011		11	$	11.78673	to	$	11.78673	$	126		0.39%		0.10%	to	0.10%		-13.20%	to	-13.20%
December 31, 2010		6	$	13.57902	to	$	13.57902	$	76		0.05%		0.10%	to	0.10%		32.41%	to	32.41%
December 31, 2009		4	$	10.25516	to	$	10.25516	$	43		0.19%		0.10%	to	0.10%		32.53%	to	32.53%
		AST Small-Cap Value Portfolio
December 31, 2013		29	$	20.49319	to	$	20.49319	$	597		0.00%		0.10%	to	0.10%		37.26%	to	37.26%
December 31, 2012		27	$	14.92997	to	$	14.92997	$	396		0.46%		0.10%	to	0.10%		18.04%	to	18.04%
December 31, 2011		24	$	12.64779	to	$	12.64779	$	298		0.53%		0.10%	to	0.10%		-6.07%	to	-6.07%
December 31, 2010		21	$	13.46514	to	$	13.46514	$	288		0.44%		0.10%	to	0.10%		25.87%	to	25.87%
December 31, 2009		19	$	10.69805	to	$	10.69805	$	199		1.71%		0.10%	to	0.10%		26.87%	to	26.87%
		AST Goldman Sachs Mid-Cap Growth Portfolio
December 31, 2013		17	$	22.79208	to	$	22.79208	$	380		0.00%		0.10%	to	0.10%		32.06%	to	32.06%
December 31, 2012		14	$	17.25913	to	$	17.25913	$	245		0.00%		0.10%	to	0.10%		19.50%	to	19.50%
December 31, 2011		19	$	14.44328	to	$	14.44328	$	272		0.00%		0.10%	to	0.10%		-3.07%	to	-3.07%
December 31, 2010		14	$	14.90141	to	$	14.90141	$	210		0.00%		0.10%	to	0.10%		19.70%	to	19.70%
December 31, 2009		13	$	12.44858	to	$	12.44858	$	168		0.00%		0.10%	to	0.10%		56.94%	to	56.94%

A47

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		AST Loomis Sayles Large-Cap Growth Portfolio
December 31, 2013		109	$	13.75290	to	$	17.47747	$	1,681		0.00%		0.10%	to	0.90%		35.39%	to	36.47%
December 31, 2012		106	$	10.15783	to	$	12.80643	$	1,200		0.43%		0.10%	to	0.90%		11.26%	to	12.16%
December 31, 2011		100	$	9.12944	to	$	11.41844	$	1,007		0.27%		0.10%	to	0.90%		-1.80%	to	-1.01%
December 31, 2010		94	$	9.29647	to	$	11.53529	$	956		0.68%		0.10%	to	0.90%		18.68%	to	19.63%
December 31, 2009		81	$	7.83294	to	$	9.64240	$	687		0.88%		0.10%	to	0.90%		28.60%	to	29.63%
		AST MFS Growth Portfolio
December 31, 2013		11	$	18.84230	to	$	18.84230	$	205		0.00%		0.10%	to	0.10%		36.57%	to	36.57%
December 31, 2012		10	$	13.79685	to	$	13.79685	$	132		0.00%		0.10%	to	0.10%		16.97%	to	16.97%
December 31, 2011		8	$	11.79534	to	$	11.79534	$	99		0.34%		0.10%	to	0.10%		-0.69%	to	-0.69%
December 31, 2010		8	$	11.87773	to	$	11.87773	$	95		0.13%		0.10%	to	0.10%		12.67%	to	12.67%
December 31, 2009		4	$	10.54203	to	$	10.54203	$	45		0.16%		0.10%	to	0.10%		24.18%	to	24.18%
		AST Neuberger Berman Mid-Cap Growth Portfolio
December 31, 2013		1	$	21.75145	to	$	21.75145	$	16		0.00%		0.10%	to	0.10%		32.48%	to	32.48%
December 31, 2012		1	$	16.41903	to	$	16.41903	$	12		0.00%		0.10%	to	0.10%		12.27%	to	12.27%
December 31, 2011		1	$	14.62428	to	$	14.62428	$	14		0.00%		0.10%	to	0.10%		1.58%	to	1.58%
December 31, 2010		2	$	14.39631	to	$	14.39631	$	24		0.00%		0.10%	to	0.10%		28.55%	to	28.55%
December 31, 2009		2	$	11.19937	to	$	11.19937	$	23		0.00%		0.10%	to	0.10%		29.66%	to	29.66%
		AST PIMCO Limited Maturity Bond Portfolio
December 31, 2013		19	$	13.43281	to	$	13.43281	$	254		0.00%		0.10%	to	0.10%		-2.27%	to	-2.27%
December 31, 2012		15	$	13.74527	to	$	13.74527	$	212		0.95%		0.10%	to	0.10%		4.59%	to	4.59%
December 31, 2011		14	$	13.14178	to	$	13.14178	$	186		0.90%		0.10%	to	0.10%		2.14%	to	2.14%
December 31, 2010		6	$	12.86642	to	$	12.86642	$	75		2.44%		0.10%	to	0.10%		3.80%	to	3.80%
December 31, 2009		5	$	12.39589	to	$	12.39589	$	60		3.63%		0.10%	to	0.10%		10.12%	to	10.12%
		AST T. Rowe Price Natural Resources Portfolio
December 31, 2013		54	$	16.33792	to	$	16.33792	$	888		0.00%		0.10%	to	0.10%		15.27%	to	15.27%
December 31, 2012		50	$	14.17415	to	$	14.17415	$	704		0.45%		0.10%	to	0.10%		3.52%	to	3.52%
December 31, 2011		48	$	13.69284	to	$	13.69284	$	659		0.54%		0.10%	to	0.10%		-15.00%	to	-15.00%
December 31, 2010		44	$	16.10975	to	$	16.10975	$	704		0.46%		0.10%	to	0.10%		20.33%	to	20.33%
December 31, 2009		37	$	13.38775	to	$	13.38775	$	499		1.41%		0.10%	to	0.10%		49.20%	to	49.20%
		AST MFS Global Equity Portfolio
December 31, 2013		15	$	20.98033	to	$	20.98033	$	317		0.00%		0.10%	to	0.10%		27.51%	to	27.51%
December 31, 2012		7	$	16.45450	to	$	16.45450	$	119		1.21%		0.10%	to	0.10%		22.96%	to	22.96%
December 31, 2011		6	$	13.38242	to	$	13.38242	$	85		0.45%		0.10%	to	0.10%		-3.23%	to	-3.23%
December 31, 2010		4	$	13.82901	to	$	13.82901	$	61		0.50%		0.10%	to	0.10%		11.93%	to	11.93%
December 31, 2009		4	$	12.35465	to	$	12.35465	$	49		1.96%		0.10%	to	0.10%		31.38%	to	31.38%
		AST JPMorgan International Equity Portfolio
December 31, 2013		32	$	15.41982	to	$	15.41982	$	487		0.00%		0.10%	to	0.10%		15.25%	to	15.25%
December 31, 2012		28	$	13.37999	to	$	13.37999	$	374		1.92%		0.10%	to	0.10%		21.79%	to	21.79%
December 31, 2011		23	$	10.98625	to	$	10.98625	$	254		1.20%		0.10%	to	0.10%		-9.24%	to	-9.24%
December 31, 2010		22	$	12.10483	to	$	12.10483	$	262		1.20%		0.10%	to	0.10%		7.06%	to	7.06%
December 31, 2009		19	$	11.30642	to	$	11.30642	$	216		4.19%		0.10%	to	0.10%		35.75%	to	35.75%
		AST Templeton Global Bond Portfolio
December 31, 2013		14	$	14.02102	to	$	14.02102	$	193		0.00%		0.10%	to	0.10%		-3.85%	to	-3.85%
December 31, 2012		12	$	14.58248	to	$	14.58248	$	171		2.36%		0.10%	to	0.10%		5.12%	to	5.12%
December 31, 2011		9	$	13.87198	to	$	13.87198	$	132		2.46%		0.10%	to	0.10%		4.02%	to	4.02%
December 31, 2010		8	$	13.33628	to	$	13.33628	$	104		2.80%		0.10%	to	0.10%		5.64%	to	5.64%
December 31, 2009		6	$	12.62447	to	$	12.62447	$	79		5.05%		0.10%	to	0.10%		12.00%	to	12.00%
		M Capital Appreciation Fund
December 31, 2013		2	$	28.10842	to	$	28.10842	$	47		0.00%		0.00%	to	0.00%		39.20%	to	39.20%
December 31, 2012		1	$	20.19222	to	$	20.19222	$	29		0.36%		0.00%	to	0.00%		17.43%	to	17.43%
December 31, 2011		1	$	17.19477	to	$	17.19477	$	20		0.00%		0.00%	to	0.00%		-7.22%	to	-7.22%
December 31, 2010		1	$	18.53329	to	$	18.53329	$	21		0.24%		0.00%	to	0.00%		27.00%	to	27.00%
December 31, 2009		1	$	14.59268	to	$	14.59268	$	14		0.05%		0.00%	to	0.00%		48.61%	to	48.61%

A48

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		American Century VP Mid Cap Value Fund – Class 1 Shares
December 31, 2013		9	$	17.82173	to	$	17.82173	$	158		1.23%		0.10%	to	0.10%		29.98%	to	29.98%
December 31, 2012		7	$	13.71070	to	$	13.71070	$	96		2.09%		0.10%	to	0.10%		16.21%	to	16.21%
December 31, 2011		5	$	11.79807	to	$	11.79807	$	65		1.43%		0.10%	to	0.10%		-0.79%	to	-0.79%
December 31, 2010		4	$	11.89229	to	$	11.89229	$	48		2.37%		0.10%	to	0.10%		19.13%	to	19.13%
December 31, 2009		3	$	9.98222	to	$	9.98222	$	31		3.14%		0.10%	to	0.10%		29.82%	to	29.82%
		AST Large-Cap Value Portfolio
December 31, 2013		317	$	12.42155	to	$	12.99528	$	4,096		0.00%		0.10%	to	0.90%		38.61%	to	39.72%
December 31, 2012		305	$	8.96129	to	$	9.30099	$	2,824		3.41%		0.10%	to	0.90%		15.84%	to	16.77%
December 31, 2011		298	$	7.73572	to	$	7.96507	$	2,366		1.26%		0.10%	to	0.90%		-5.04%	to	-4.28%
December 31, 2010		283	$	8.14615	to	$	8.32128	$	2,349		1.03%		0.10%	to	0.90%		12.15%	to	13.04%
December 31, 2009		271	$	7.26363	to	$	7.36106	$	1,989		2.88%		0.10%	to	0.90%		18.37%	to	19.32%
		AST Small-Cap Growth Portfolio
December 31, 2013		162	$	17.79202	to	$	18.61344	$	2,998		0.00%		0.10%	to	0.90%		33.97%	to	35.04%
December 31, 2012		162	$	13.28088	to	$	13.78388	$	2,226		0.00%		0.10%	to	0.90%		11.17%	to	12.07%
December 31, 2011		148	$	11.94595	to	$	12.29988	$	1,817		0.00%		0.10%	to	0.90%		-1.86%	to	-1.08%
December 31, 2010		145	$	12.17259	to	$	12.43406	$	1,795		0.23%		0.10%	to	0.90%		35.20%	to	36.28%
December 31, 2009		136	$	9.00344	to	$	9.12396	$	1,236		0.05%		0.10%	to	0.90%		32.71%	to	33.77%
		The Dreyfus Socially Responsible Growth Fund – Service Share****
December 31, 2013		1	$	15.90122	to	$	15.90122	$	8		0.28%		0.10%	to	0.10%		33.86%	to	33.86%
December 31, 2012		0	$	11.87889	to	$	11.87889	$	3		0.53%		0.10%	to	0.10%		11.59%	to	11.59%
December 31, 2011		0	$	10.64546	to	$	10.64546	$	2		0.60%		0.10%	to	0.10%		0.55%	to	0.55%
December 31, 2010		0	$	10.58715	to	$	10.58715	$	1		0.60%		0.10%	to	0.10%		14.43%	to	14.43%
December 31, 2009		0	$	9.25211	to	$	9.25211	$	1		0.52%		0.10%	to	0.10%		33.31%	to	33.31%
		Prudential Jennison 20/20 Focus Portfolio
December 31, 2013		67	$	14.35834	to	$	14.35834	$	967		0.00%		0.10%	to	0.10%		29.75%	to	29.75%
December 31, 2012		46	$	11.06610	to	$	11.06610	$	511		0.00%		0.10%	to	0.10%		10.93%	to	10.93%
December 31, 2011		39	$	9.97615	to	$	9.97615	$	385		0.08%		0.10%	to	0.10%		-4.26%	to	-4.26%
December 31, 2010		35	$	10.42032	to	$	10.42032	$	362		0.00%		0.10%	to	0.10%		7.73%	to	7.73%
December 31, 2009		22	$	9.67279	to	$	9.67279	$	216		0.49%		0.10%	to	0.10%		57.67%	to	57.67%
		JPMorgan Insurance Trust Intrepid Mid Cap Portfolio – Class 1 Shares****
December 31, 2013		6	$	16.87307	to	$	16.87307	$	98		1.18%		0.10%	to	0.10%		40.45%	to	40.45%
December 31, 2012		3	$	12.01376	to	$	12.01376	$	41		0.74%		0.10%	to	0.10%		16.01%	to	16.01%
December 31, 2011		3	$	10.35549	to	$	10.35549	$	28		0.46%		0.10%	to	0.10%		-1.62%	to	-1.62%
December 31, 2010		1	$	10.52627	to	$	10.52627	$	10		1.01%		0.10%	to	0.10%		19.40%	to	19.40%
December 31, 2009		0	$	8.81578	to	$	8.81578	$	4		0.98%		0.10%	to	0.10%		35.53%	to	35.53%
		MFS® Utilities Series – Initial Class
December 31, 2013		32	$	14.09086	to	$	14.09086	$	451		2.37%		0.10%	to	0.10%		20.40%	to	20.40%
December 31, 2012		15	$	11.70362	to	$	11.70362	$	179		6.99%		0.10%	to	0.10%		13.37%	to	13.37%
December 31, 2011		12	$	10.32340	to	$	10.32340	$	124		3.22%		0.10%	to	0.10%		6.68%	to	6.68%
December 31, 2010		9	$	9.67717	to	$	9.67717	$	86		2.84%		0.10%	to	0.10%		13.69%	to	13.69%
December 31, 2009		7	$	8.51168	to	$	8.51168	$	56		3.97%		0.10%	to	0.10%		33.08%	to	33.08%
		Neuberger Berman Adviser’s Management Trust Socially Responsive Portfolio – Service Shares****
December 31, 2013		1	$	14.91861	to	$	14.91861	$	14		0.41%		0.10%	to	0.10%		37.28%	to	37.28%
December 31, 2012		0	$	10.86755	to	$	10.86755	$	5		0.09%		0.10%	to	0.10%		10.63%	to	10.63%
December 31, 2011		1	$	9.82302	to	$	9.82302	$	6		0.27%		0.10%	to	0.10%		-3.25%	to	-3.25%
December 31, 2010		1	$	10.15289	to	$	10.15289	$	6		0.03%		0.10%	to	0.10%		22.64%	to	22.64%
December 31, 2009		0	$	8.27884	to	$	8.27884	$	2		3.06%		0.10%	to	0.10%		31.18%	to	31.18%
		AST T. Rowe Price Large-Cap Growth Portfolio
December 31, 2013		144	$	17.68319	to	$	18.49921	$	2,638		0.00%		0.10%	to	0.90%		42.74%	to	43.88%
December 31, 2012		139	$	12.38824	to	$	12.85728	$	1,778		0.00%		0.10%	to	0.90%		16.53%	to	17.47%
December 31, 2011		134	$	10.63060	to	$	10.94553	$	1,463		0.00%		0.10%	to	0.90%		-2.57%	to	-1.79%
December 31, 2010		129	$	10.91116	to	$	11.14555	$	1,433		0.00%		0.10%	to	0.90%		14.78%	to	15.69%
December 31, 2009		126	$	9.50639	to	$	9.63370	$	1,212		0.00%		0.10%	to	0.90%		52.00%	to	53.22%

A49

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		AST Schroders Multi-Asset World Strategies Portfolio (available January 01, 2010)
December 31, 2013		14	$	17.19053	to	$	17.19053	$	234		0.00%		0.25%	to	0.25%		14.11%	to	14.11%
December 31, 2012		10	$	15.06428	to	$	15.06428	$	151		2.10%		0.25%	to	0.25%		10.86%	to	10.86%
December 31, 2011		7	$	13.58842	to	$	13.58842	$	93		1.01%		0.25%	to	0.25%		-3.62%	to	-3.62%
December 31, 2010		1	$	14.09909	to	$	14.09909	$	15		0.30%		0.25%	to	0.25%		11.53%	to	11.53%
		AST PIMCO Total Return Bond Portfolio (available December 4, 2009)
December 31, 2013		825	$	11.43076	to	$	11.85595	$	9,689		0.00%		0.00%	to	0.90%		-2.71%	to	-1.84%
December 31, 2012		810	$	11.74949	to	$	12.07785	$	9,708		2.70%		0.00%	to	0.90%		8.35%	to	9.32%
December 31, 2011		777	$	10.84440	to	$	11.04780	$	8,541		1.74%		0.00%	to	0.90%		2.26%	to	3.18%
December 31, 2010		764	$	10.60498	to	$	10.70774	$	8,160		1.77%		0.00%	to	0.90%		6.76%	to	7.72%
December 31, 2009		730	$	9.93371	to	$	9.94054	$	7,253		0.00%		0.00%	to	0.90%		-0.32%	to	-0.26%
		AST T. Rowe Price Asset Allocation Portfolio (available January 01, 2010)
December 31, 2013		83	$	18.53521	to	$	18.53521	$	1,542		0.00%		0.25%	to	0.25%		16.54%	to	16.54%
December 31, 2012		38	$	15.90434	to	$	15.90434	$	607		1.40%		0.25%	to	0.25%		13.21%	to	13.21%
December 31, 2011		20	$	14.04797	to	$	14.04797	$	288		0.75%		0.25%	to	0.25%		1.73%	to	1.73%
December 31, 2010		2	$	13.80923	to	$	13.80923	$	34		0.11%		0.25%	to	0.25%		11.26%	to	11.26%
		AST Wellington Management Hedged Equity Portfolio (available November 13, 2009)
December 31, 2013		683	$	14.58693	to	$	15.07499	$	10,260		0.00%		0.10%	to	0.90%		19.43%	to	20.38%
December 31, 2012		655	$	12.21399	to	$	12.52266	$	8,182		0.29%		0.10%	to	0.90%		10.02%	to	10.90%
December 31, 2011		633	$	11.10187	to	$	11.29192	$	7,135		0.30%		0.10%	to	0.90%		-4.32%	to	-3.55%
December 31, 2010		590	$	11.60267	to	$	11.70781	$	6,903		0.49%		0.10%	to	0.90%		13.61%	to	14.52%
December 31, 2009		537	$	10.21245	to	$	10.22336	$	5,487		0.00%		0.10%	to	0.90%		1.37%	to	1.47%
		AST Balanced Asset Allocation Portfolio (available November 13, 2009)
December 31, 2013		1,220	$	14.33414	to	$	14.81348	$	17,986		0.00%		0.10%	to	0.90%		16.60%	to	17.53%
December 31, 2012		1,152	$	12.29364	to	$	12.60414	$	14,460		1.01%		0.10%	to	0.90%		11.47%	to	12.37%
December 31, 2011		1,092	$	11.02843	to	$	11.21707	$	12,218		0.59%		0.10%	to	0.90%		-2.10%	to	-1.32%
December 31, 2010		1,024	$	11.26449	to	$	11.36659	$	11,626		0.84%		0.10%	to	0.90%		11.31%	to	12.20%
December 31, 2009		925	$	10.11979	to	$	10.13062	$	9,372		0.00%		0.10%	to	0.90%		0.69%	to	0.79%
		AST Preservation Asset Allocation Portfolio (available November 20, 2009)
December 31, 2013		392	$	13.01018	to	$	13.44337	$	5,236		0.00%		0.10%	to	0.90%		8.24%	to	9.10%
December 31, 2012		350	$	12.01998	to	$	12.32175	$	4,284		1.13%		0.10%	to	0.90%		9.39%	to	10.27%
December 31, 2011		327	$	10.98823	to	$	11.17453	$	3,641		0.92%		0.10%	to	0.90%		0.10%	to	0.89%
December 31, 2010		286	$	10.97772	to	$	11.07557	$	3,159		1.38%		0.10%	to	0.90%		9.58%	to	10.46%
December 31, 2009		270	$	10.01755	to	$	10.02676	$	2,704		0.00%		0.10%	to	0.90%		0.27%	to	0.36%
		AST First Trust Balanced Target Portfolio (available January 01, 2010)****
December 31, 2013		13	$	17.65126	to	$	17.65126	$	228		0.00%		0.25%	to	0.25%		14.47%	to	14.47%
December 31, 2012		7	$	15.41937	to	$	15.41937	$	111		2.01%		0.25%	to	0.25%		10.36%	to	10.36%
December 31, 2011		5	$	13.97181	to	$	13.97181	$	64		1.00%		0.25%	to	0.25%		-1.75%	to	-1.75%
December 31, 2010		0	$	14.22079	to	$	14.22079	$	4		1.53%		0.25%	to	0.25%		14.08%	to	14.08%
		AST Prudential Growth Allocation Portfolio (available January 01, 2010)
December 31, 2013		34	$	18.12798	to	$	18.12798	$	614		0.00%		0.25%	to	0.25%		16.73%	to	16.73%
December 31, 2012		13	$	15.52936	to	$	15.52936	$	202		1.43%		0.25%	to	0.25%		12.64%	to	12.64%
December 31, 2011		8	$	13.78659	to	$	13.78659	$	108		0.83%		0.25%	to	0.25%		-6.45%	to	-6.45%
December 31, 2010		1	$	14.73691	to	$	14.73691	$	21		0.22%		0.25%	to	0.25%		18.72%	to	18.72%
		AST Advanced Strategies Portfolio (available January 01, 2010)
December 31, 2013		31	$	18.90316	to	$	18.90316	$	586		0.00%		0.25%	to	0.25%		16.27%	to	16.27%
December 31, 2012		21	$	16.25861	to	$	16.25861	$	341		1.39%		0.25%	to	0.25%		13.37%	to	13.37%
December 31, 2011		11	$	14.34163	to	$	14.34163	$	162		0.84%		0.25%	to	0.25%		-0.14%	to	-0.14%
December 31, 2010		2	$	14.36148	to	$	14.36148	$	30		0.20%		0.25%	to	0.25%		13.42%	to	13.42%
		AST Schroders Global Tactical Portfolio (available January 01, 2010)
December 31, 2013		45	$	19.07059	to	$	19.07059	$	855		0.00%		0.25%	to	0.25%		17.76%	to	17.76%
December 31, 2012		29	$	16.19381	to	$	16.19381	$	471		0.56%		0.25%	to	0.25%		15.61%	to	15.61%
December 31, 2011		15	$	14.00668	to	$	14.00668	$	211		0.22%		0.25%	to	0.25%		-2.63%	to	-2.63%
December 31, 2010		3	$	14.38530	to	$	14.38530	$	39		0.06%		0.25%	to	0.25%		14.06%	to	14.06%

A50

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		AST RCM World Trends Portfolio (available January 01, 2010)
December 31, 2013		24	$	16.43612	to	$	16.43612	$	402		0.00%		0.25%	to	0.25%		12.16%	to	12.16%
December 31, 2012		18	$	14.65438	to	$	14.65438	$	266		0.50%		0.25%	to	0.25%		10.01%	to	10.01%
December 31, 2011		7	$	13.32122	to	$	13.32122	$	98		0.30%		0.25%	to	0.25%		-2.06%	to	-2.06%
December 31, 2010		3	$	13.60173	to	$	13.60173	$	37		0.02%		0.25%	to	0.25%		11.64%	to	11.64%
		Dreyfus Investment Portfolios, MidCap Stock Portfolio – Service Shares****
December 31, 2013		2	$	16.75664	to	$	16.75664	$	30		1.12%		0.10%	to	0.10%		34.56%	to	34.56%
December 31, 2012		2	$	12.45270	to	$	12.45270	$	22		0.20%		0.10%	to	0.10%		19.22%	to	19.22%
December 31, 2011		2	$	10.44507	to	$	10.44507	$	17		0.33%		0.10%	to	0.10%		0.10%	to	0.10%
December 31, 2010		1	$	10.43481	to	$	10.43481	$	15		0.93%		0.10%	to	0.10%		26.82%	to	26.82%
December 31, 2009		2	$	8.22815	to	$	8.22815	$	13		0.98%		0.10%	to	0.10%		35.19%	to	35.19%
		AST BlackRock Global Strategies Portfolio (available April 29, 2011)
December 31, 2013		2,671	$	11.22618	to	$	11.46768	$	30,556		0.00%		0.10%	to	0.90%		9.86%	to	10.74%
December 31, 2012		2,551	$	10.21817	to	$	10.35536	$	26,375		0.49%		0.10%	to	0.90%		10.90%	to	11.78%
December 31, 2011		2,513	$	9.21410	to	$	9.26369	$	23,265		0.00%		0.10%	to	0.90%		-7.86%	to	-7.36%
		TOPS Aggressive Growth ETF Portfolio**** (available August 22, 2011)
December 31, 2013		2	$	15.18158	to	$	15.18158	$	31		0.79%		0.10%	to	0.10%		22.51%	to	22.51%
December 31, 2012		1	$	12.39204	to	$	12.39204	$	10		0.21%		0.10%	to	0.10%		16.52%	to	16.52%
December 31, 2011		0	$	10.63492	to	$	10.63492	$	1		0.00%		0.10%	to	0.10%		6.09%	to	6.09%
		TOPS Balanced ETF Portfolio**** (available August 22, 2011)
December 31, 2013		0	$	12.57021	to	$	12.57021	$	6		2.16%		0.10%	to	0.10%		8.99%	to	8.99%
December 31, 2012		0	$	11.53303	to	$	11.53303	$	1		0.06%		0.10%	to	0.10%		11.75%	to	11.75%
December 31, 2011		0	$	10.32021	to	$	10.32021	$	0		0.00%		0.10%	to	0.10%		3.09%	to	3.09%
		TOPS Capital Preservation ETF Portfolio**** (available August 22, 2011)
December 31, 2013		0	$	11.72864	to	$	11.72864	$	6		3.57%		0.10%	to	0.10%		4.46%	to	4.46%
December 31, 2012		0	$	11.22754	to	$	11.22754	$	0		0.00%		0.10%	to	0.10%		10.05%	to	10.05%
December 31, 2011		0	$	10.20246	to	$	10.20246	$	0		0.00%		0.10%	to	0.10%		2.03%	to	2.03%
		TOPS Growth ETF Portfolio**** (available August 22, 2011)
December 31, 2013		2	$	15.65369	to	$	15.65369	$	29		0.98%		0.10%	to	0.10%		18.77%	to	18.77%
December 31, 2012		1	$	13.17957	to	$	13.17957	$	12		0.17%		0.10%	to	0.10%		15.88%	to	15.88%
December 31, 2011		0	$	11.37353	to	$	11.37353	$	2		0.00%		0.10%	to	0.10%		13.60%	to	13.60%
		TOPS Moderate Growth ETF Portfolio**** (available August 22, 2011)
December 31, 2013		1	$	13.39250	to	$	13.39250	$	16		1.13%		0.10%	to	0.10%		12.90%	to	12.90%
December 31, 2012		1	$	11.86191	to	$	11.86191	$	10		0.32%		0.10%	to	0.10%		14.77%	to	14.77%
December 31, 2011		0	$	10.33525	to	$	10.33525	$	2		0.00%		0.10%	to	0.10%		3.24%	to	3.24%
		TOPS Managed Risk Balanced ETF Portfolio**** (available August 22, 2011)
December 31, 2013		5	$	11.11688	to	$	11.66510	$	54		0.89%		0.10%	to	0.25%		7.66%	to	7.82%
December 31, 2012		2	$	10.31049	to	$	10.83511	$	22		0.12%		0.10%	to	0.25%		2.81%	to	8.12%
December 31, 2011		0	$	10.02131	to	$	10.02131	$	3		0.00%		0.25%	to	0.25%		0.22%	to	0.22%
		TOPS Managed Risk Growth ETF Portfolio (available August 22, 2011)
December 31, 2013		15	$	11.89877	to	$	12.53052	$	184		1.11%		0.10%	to	0.25%		15.67%	to	15.84%
December 31, 2012		7	$	10.27170	to	$	10.83326	$	77		0.07%		0.10%	to	0.25%		2.41%	to	7.97%
December 31, 2011		1	$	10.03347	to	$	10.03347	$	10		0.00%		0.25%	to	0.25%		0.23%	to	0.23%
		TOPS Managed Risk Moderate Growth ETF Portfolio (available August 22, 2011)
December 31, 2013		7	$	11.57948	to	$	12.19007	$	86		0.86%		0.10%	to	0.25%		12.11%	to	12.28%
December 31, 2012		4	$	10.31301	to	$	10.87316	$	40		0.13%		0.10%	to	0.25%		2.73%	to	8.39%
December 31, 2011		1	$	10.03171	to	$	10.03171	$	6		0.00%		0.25%	to	0.25%		0.11%	to	0.11%
		American Funds Growth Fund – Class 2**** (available October 07, 2013)
December 31, 2013		0	$	10.73463	to	$	10.73463	$	3		2.88%		0.10%	to	0.10%		8.55%	to	8.55%
		American Funds Growth-Income Fund – Class 2**** (available October 07, 2013)
December 31, 2013		0	$	10.96565	to	$	10.96565	$	5		1.53%		0.10%	to	0.10%		10.61%	to	10.61%

A51

Note 7: Financial Highlights (Continued)

	At year ended									For year ended
	Units (000s)		Unit Value Lowest — Highest					Net Assets (000s)		Investment Income Ratio*		Expense Ratio** Lowest — Highest				Total Return*** Lowest — Highest
		Fidelity VIP Contrafund Portfolio – Service Class 2**** (available October 07, 2013)
December 31, 2013		0	$	10.90655	to	$	10.90655	$	1		0.00%		0.10%	to	0.10%		10.13%	to	10.13%
		Fidelity VIP MidCap Portfolio – Service Class 2**** (available October 07, 2013)
December 31, 2013		0	$	10.88577	to	$	10.88577	$	0		0.00%		0.10%	to	0.10%		10.23%	to	10.23%
		Templeton Growth Securities Fund – Class 2**** (available October 07, 2013)
December 31, 2013		0	$	10.71524	to	$	10.71524	$	0		0.00%		0.10%	to	0.10%		7.61%	to	7.61%
		Hartford Capital Appreciation HLS Fund – Class IB**** (available October 07, 2013)
December 31, 2013		0	$	10.89612	to	$	10.89612	$	1		3.40%		0.10%	to	0.10%		10.05%	to	10.05%
		Hartford Disciplined Equity HLS Fund – Class IB**** (available October 07, 2013)
December 31, 2013		0	$	10.97952	to	$	10.97952	$	0		2.74%		0.10%	to	0.10%		10.92%	to	10.92%
		Hartford Dividend and Growth HLS Fund – Class IB**** (available October 07, 2013)
December 31, 2013		0	$	10.93550	to	$	10.93550	$	2		3.07%		0.10%	to	0.10%		10.27%	to	10.27%

* These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios are annualized and exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

** These ratios represent the annualized contract expenses of the Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded.

*** These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Product designs within a subaccount with no activity during the period were excluded from the range of total return for that period. Product designs within a subaccount which were offered after a fiscal year began are included in the range of total return for that period, and their respective total returns may not correspond to the total returns of a product offering with a comparable expense ratio that was presented for the full period. Contract owners may experience different total returns based on their investment options. Investment options with a date notation indicate the effective date of that investment option in the Account. Total returns for periods less than one year are not annualized. The total return is calculated for each of the five years in the period ended December 31, 2013 or from the effective date of the subaccount through the end of the reporting period.

**** Represents a fund containing less than 1,000 units and/or $1,000 in net assets.

***** Investment Income Ratio for the Prudential Money Market Portfolio is less than 0.01%.

A52

Note 7: Financial Highlights (Continued)

Charges and Expenses

The expense ratio represents the annualized contract expenses of the Account for the period indicated and includes those expenses that are charged through a reduction of the unit value, which consists solely of the mortality and expense charges. These fees range from an effective annual rate from 0.0% to 0.90%, per Contract. Expenses of the underlying portfolios and charges made directly to Contract Owner accounts through either the redemption of units or from premium payments are excluded. Charges deducted from premium payments range from 0% to 22.5%, except that VAL2 and SVAL2 Contracts also assess a $2 premium processing charge for each premium paid. The percentage of the premium payment deducted consists of taxes attributable to premiums, any applicable sales charge, and any premium based administrative charge.

The charges made directly to the contract owner through the redemption of units depend on the product and the options or transactions selected by the client. The following charges are made through the redemption of units.

• The Account charges from $0.01 to $83.34 per $1,000 of basic insurance amount for the cost of insurance plus additional mortality for extra ratings of up to $2.08 per $1,000 of basic insurance amount.

• The Account charges surrender fees that range from 0% to 100% of the Sales Load Target Premium, except for VAL2, SVUL2NJ, and VULPNJ Contracts, where the fees range from $0 to $28.26 per $1,000 of Basic Insurance Amount. We charge a combination of 0% – 50% of the first year’s annual premium plus $0 to $5 per $1,000 of Face Amount for SVAL2 Contracts.

• The Account charges a Guaranteed Death Benefit fee of $0.01 per $1,000 of Face Amount for VAL2 and SVAL2 Contracts.

• The charge for withdrawals range from the lesser of $15 and 2% to the lesser of $25 and 2% of the withdrawal amount.

• The Account charges monthly administrative fees that range from $2.50 to $30.00 per Contract plus $0.00 to $1.87 per $1,000 of basic insurance amount, although it may be less for subsequent increases.

• The Account also charges $15 to $25 per change to the basic insurance amount.

Expense Reimbursement

Expenses, including a management fee charged by PI, are incurred by each portfolio of the Series Fund. Pursuant to a prior merger agreement, the Prudential Money Market, Prudential Diversified Bond, Equity, Prudential Flexible Managed and Prudential Conservative Balanced subaccounts of the Account are reimbursed by Pruco Life of New Jersey for expenses indirectly incurred through their investment in the respective portfolios of the Series Fund when such expenses exceed 0.40% of the average daily net assets of the respective portfolio.

Note 8: Other

Contract owner net payments—represent contract owner contributions under the Variable Life Policies reduced by applicable deductions, charges, and state premium taxes.

Policy loans—represent amounts borrowed by contract owners using the policy as the security for the loan.

Policy loan repayments and interest—represent payments made by contract owners to reduce the total outstanding policy loan balance.

A53

Note 8: Other (Continued)

Surrenders, withdrawals, and death benefits—are payments to contract owners and beneficiaries made under the terms of the Variable Life Policies, and amounts that contract owners have requested to be withdrawn or paid to them.

Net transfers between other subaccounts or Fixed Rate Options—are amounts that contract owners have directed to be moved among subaccounts, including permitted transfers to and from the Fixed Rate Option.

Other charges—are various contract level charges as described in charges and expenses section located above.

A54

Report of Independent Registered Public Accounting Firm

To the Contract Owners of

Pruco Life of New Jersey Variable Appreciable Account

and the Board of Directors of

Pruco Life Insurance Company of New Jersey

In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of each of the subaccounts listed in Note 1 of Pruco Life of New Jersey Variable Appreciable Account at December 31, 2013, and the results of each of their operations and the changes in each of their net assets for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of Pruco Life Insurance Company of New Jersey. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at December 31, 2013 by correspondence with the transfer agents of the investee mutual funds, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

New York, New York

April 11, 2014

A55

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

INDEX TO FINANCIAL STATEMENTS

	Page#
Financial Statements
Management’s Annual Report on Internal Control Over Financial Reporting		B-2
Financial Statements:
Statements of Financial Position - December 31, 2013 and 2012		B-3
Statements of Operations and Comprehensive Income (Loss) Years ended December 31, 2013, 2012 and 2011		B-4
Statements of Equity Years ended December 31, 2013, 2012 and 2011		B-5
Statements of Cash Flows Years ended December 31, 2013, 2012 and 2011		B-6
Notes to Financial Statements		B-8
Report of Independent Registered Public Accounting Firm		B-55

B-1

Management’s Annual Report on Internal Control Over Financial Reporting

Management of Pruco Life Insurance Company of New Jersey (“the Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. Management conducted an assessment of the effectiveness, as of December 31, 2013, of the Company’s internal control over financial reporting, based on the framework established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment under that framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2013.

Our internal control over financial reporting is a process designed by or under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm, PricewaterhouseCoopers LLP, regarding the internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.

March 10, 2014

B-2

Part I- Financial Information

Item 1. Financial Statements

Pruco Life Insurance Company of New Jersey

Statements of Financial Position

As of December 31, 2013 and December 31, 2012 (in thousands, except share amounts)

	December 31,   2013		December 31,   2012
ASSETS
Fixed maturities, available-for-sale, at fair value (amortized cost: 2013–$889,548; 2012–$976,665)	$	927,341	$	1,066,071
Equity securities, available-for-sale, at fair value (cost: 2013–$91; 2012–$1,303)		116		1,381
Trading account assets, at fair value		0		1,390
Policy loans		176,885		173,622
Short-term investments		5,180		2,226
Commercial mortgage and other loans		292,532		221,728
Other long-term investments		37,505		41,312
Total investments		1,439,559		1,507,730
Cash and cash equivalents		40,641		50,596
Deferred policy acquisition costs		439,315		327,832
Accrued investment income		15,024		15,782
Reinsurance recoverables		999,240		870,122
Receivables from parents and affiliates		34,479		29,221
Deferred sales inducements		88,350		70,728
Income taxes		-		33,557
Other assets		8,264		9,131
Separate account assets		10,235,426		8,373,780
TOTAL ASSETS	$	13,300,298	$	11,288,479
LIABILITIES AND EQUITY
LIABILITIES
Policyholders’ account balances	$	1,360,664	$	1,221,932
Future policy benefits and other policyholder liabilities		772,537		825,869
Cash collateral for loaned securities		4,081		2,134
Securities sold under agreements to repurchase		-		-
Income taxes		23,467		-
Short-term debt to affiliates		24,000		24,000
Long-term debt to affiliates		93,000		85,000
Payables to parent and affiliates		4,607		2,383
Other liabilities		132,083		83,541
Separate account liabilities		10,235,426		8,373,780
TOTAL LIABILITIES		12,649,865		10,618,639
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 12)
EQUITY
Common stock, ($5 par value; 400,000 shares, authorized, issued and outstanding)		2,000		2,000
Additional paid-in capital		211,147		211,049
Retained earnings		420,185		409,342
Accumulated other comprehensive income		17,101		47,449
TOTAL EQUITY		650,433		669,840
TOTAL LIABILITIES AND EQUITY	$	13,300,298	$	11,288,479

See Notes to Financial Statements

B-3

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Statements of Operations and Comprehensive Income (Loss)

Years Ended December 31, 2013, 2012 and 2011 (in thousands)

	2013		2012		2011
REVENUES
Premiums	$	14,893	$	14,133	$	15,305
Policy charges and fee income		156,811		146,460		113,472
Net investment income		68,653		79,655		77,556
Asset administration fees		33,752		29,462		21,630
Other income		3,410		4,418		3,253
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities		-		(3,852)		(7,483)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income		-		2,382		7,215
Other realized investment gains (losses), net		22,581		11,947		(109,788)
Total realized investment gains (losses), net		22,581		10,477		(110,056)
TOTAL REVENUES		300,100		284,605		121,160
BENEFITS AND EXPENSES
Policyholders’ benefits		22,893		35,689		27,226
Interest credited to policyholders’ account balances		17,173		31,952		62,222
Amortization of deferred policy acquisition costs		(44,181)		7,145		90,046
General, administrative and other expenses		73,006		66,552		50,061
TOTAL BENEFITS AND EXPENSES		68,891		141,338		229,555
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES		231,209		143,267		(108,395)
Income Taxes:
Current		33,370		64,255		(715)
Deferred		31,996		(25,049)		(47,893)
Total income tax expense (benefit)		65,366		39,206		(48,608)
NET INCOME (LOSS)	$	165,843	$	104,061	$	(59,787)
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments		38		33		(32)
Net unrealized investment gains (losses):
Unrealized investment gains (losses) for the period		(42,217)		12,645		21,317
Reclassification adjustment for (gains) losses included in net income		(4,511)		(12,176)		6,397
Net unrealized investment gains (losses)		(46,728)		469		27,714
Other comprehensive income (loss), before tax		(46,690)		502		27,682
Less: Income tax expense (benefit) related to:
Foreign currency translation adjustments		13		12		(11)
Net unrealized investment gains (losses)		(16,355)		165		9,700
Total		(16,342)		177		9,689
Other comprehensive income (loss), net of tax:		(30,348)		325		17,993
COMPREHENSIVE INCOME (LOSS)	$	135,495	$	104,386	$	(41,794)

See Notes to Financial Statements

B-4

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Statements of Equity

Years Ended December 31, 2013, 2012 and 2011 (in thousands)

	Common   Stock		Additional   Paid-in Capital		Retained   Earnings			Accumulated Other   Comprehensive   Income (Loss)		Total Equity
Balance, December 31, 2010	$	2,000	$	169,742	$	365,068		$	29,131	$	565,941
Contributed Capital		-		38,000		-			-		38,000
Contributed/distributed capital- parent/child asset transfers		-		186		-			-		186
Comprehensive income (loss):
Net income (loss)		-		-		(59,787	)		-		(59,787	)
Other comprehensive income (loss), net of tax		-		-		-			17,993		17,993
Total comprehensive income (loss)											(41,794	)
Balance, December 31, 2011	$	2,000	$	207,928	$	305,281		$	47,124	$	562,333
Contributed capital		-		-		-			-		-
Contributed/distributed capital- parent/child asset transfers		-		3,121		-			-		3,121
Comprehensive income (loss):
Net income (loss)		-		-		104,061			-		104,061
Other comprehensive income (loss), net of tax		-		-		-			325		325
Total comprehensive income (loss)											104,386
Balance, December 31, 2012	$	2,000	$	211,049	$	409,342		$	47,449	$	669,840
Dividend to parent		-		-		(155,000	)		-		(155,000	)
Contributed/distributed capital- parent/child asset transfers		-		98		-			-		98
Comprehensive income (loss):
Net income (loss)		-		-		165,843			-		165,843
Other comprehensive income (loss), net of tax		-		-		-			(30,348)		(30,348	)
Total comprehensive income (loss)											135,495
Balance, December 31, 2013	$	2,000	$	211,147	$	420,185		$	17,101	$	650,433

See Notes to Financial Statements

B-5

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Statements of Cash Flows

Years Ended December 31, 2013, 2012 and 2011 (in thousands)

	2013		2012		2011
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income (loss)	$	165,843	$	104,061	$	(59,787)
Adjustments to reconcile net income to net cash provided by operating activities:
Policy charges and fee income		7,462		(12,488)		(25,622)
Interest credited to policyholders’ account balances		17,173		31,952		62,222
Realized investment (gains) losses, net		(22,581)		(10,477)		110,056
Amortization and other non-cash items		(11,323)		(9,959)		(2,359)
Change in:
Future policy benefits and other insurance liabilities		148,527		132,050		93,600
Reinsurance recoverables		(157,241)		(101,575)		(127,939)
Accrued investment income		757		(247)		(910)
Receivables from parent and affiliates		(3,066)		(6,045)		2,213
Payables to parent and affiliates		2,107		115		(3,569)
Deferred policy acquisition costs		(98,081)		(83,684)		(25)
Income taxes payable		73,312		(12,047)		(73,506)
Deferred sales inducements		(1,793)		(19,219)		(22,392)
Other, net		6,635		(2,598)		(13,260)
Cash flows from (used in) operating activities	$	127,731	$	9,839	$	(61,278)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available for sale	$	239,272	$	156,250	$	171,016
Short-term investments		20,680		13,568		21,230
Policy loans		24,664		18,879		20,142
Ceded policy loans		(3,527)		(337)		-
Commercial mortgage and other loans		25,683		39,474		27,533
Other long-term investments		2,110		2,115		1,373
Equity securities, available for sale		6,650		2,660		474
Trading Account Assets, at fair value		1,499		-		-
Payments for the purchase/origination of:
Fixed maturities, available for sale		(148,365)		(143,093)		(293,216)
Short-term investments		(23,631)		(14,725)		(14,899)
Policy loans		(17,687)		(21,058)		(14,130)
Ceded policy loans		2,224		6,890		-
Commercial mortgage and other loans		(96,841)		(66,362)		(75,298)
Other long-term investments		(8,997)		(12,164)		(7,533)
Equity securities, available for sale		(5,253)		(2,508)		(1,347)
Notes receivable from parent and affiliates, net		(2,235)		(248)		1,334
Other, net		(123)		(103)		24
Cash flows from (used in) investing activities	$	16,123	$	(20,762)	$	(163,297)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Policyholders’ account deposits	$	230,627	$	215,909	$	159,318
Ceded policyholders’ account deposits		(124,909)		(79,417)		-
Policyholders’ account withdrawals		(130,982)		(123,185)		(83,438)
Ceded policyholders’ account withdrawals		10,785		1,436		-
Net change in securities sold under agreement to repurchase and cash collateral for loaned securities		1,947		(18,094)		16,859
Dividend to parent		(155,000)		-		-
Contributed capital		-		-		38,000
Contributed/Distributed capital- parent/child asset transfers		150		-		186
Net change in financing arrangements (maturities 90 days or less)		(13,000)		(13,000)		26,000
Drafts outstanding		5,573		(853)		(37,588)
Net change in long-term borrowing		21,000		52,000		44,000
Cash flows from (used in) financing activities	$	(153,809)	$	34,796	$	163,337

B-6

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(9,955)		23,873		(61,238)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		50,596		26,723		87,961
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	40,641	$	50,596	$	26,723
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid, net of refunds	$	7,265	$	97,799	$	25,000
Interest paid	$	2,341	$	1,683	$	98

See Notes to Financial Statements

Significant Non Cash Transactions

Cash Flows from Investing Activities for the year ended December 31, 2012 Statement of Cash Flows excludes $202 million of decreases in fixed maturities, available for sale and commercial mortgages related to the coinsurance transaction between the Company and PAR U, an affiliate. See Note 13 to the Financial Statements for more information on related party transactions.

B-7

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements

1.    BUSINESS AND BASIS OF PRESENTATION

Pruco Life Insurance Company of New Jersey, or the (“Company”), is a wholly owned subsidiary of the Pruco Life Insurance Company, or (“Pruco Life”), which in turn is a wholly owned subsidiary of The Prudential Insurance Company of America, (“Prudential Insurance”). Prudential Insurance is an indirect wholly owned subsidiary of Prudential Financial, Inc., or (“Prudential Financial”). The Company is a stock life insurance company organized in 1982 under the laws of the State of New Jersey. It is licensed to sell life insurance and annuities, primarily through affiliated and unaffiliated distributors, in New Jersey and New York only.

Basis of Presentation

The Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs and related amortization; amortization of deferred sales inducements; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

2.    SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Investments and Investment Related Liabilities

The Company’s principal investments are fixed maturities; equity securities; commercial mortgage and other loans; policy loans; other long-term investments, including joint ventures (other than operating joint ventures), limited partnerships, and real estate; and short-term investments. Investments and investment-related liabilities also include securities repurchase and resale agreements and securities lending transactions. The accounting policies related to each are as follows:

Fixed maturities are comprised of bonds, notes and redeemable preferred stock. Fixed maturities classified as “available-for-sale” are carried at fair value. See Note 10 for additional information regarding the determination of fair value. Fixed maturities that the Company has both the positive intent and ability to hold to maturity are carried at amortized cost and classified as “held-to-maturity.” The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts to maturity. Interest income, as well as the related amortization of premium and accretion of discount is included in “Net investment income” under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also vary based on other assumptions regarding the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of other-than-temporary impairments recognized in earnings and other comprehensive income. For high credit quality mortgage-backed and asset-backed securities (those rated AA or above), cash flows are provided quarterly, and the amortized cost and effective yield of the security are adjusted as necessary to reflect historical prepayment experience and changes in estimated future prepayments. The adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For mortgage-backed and asset-backed securities rated below AA or those for which an other than temporary impairment has been recorded, the effective yield is adjusted prospectively for any changes in estimated cash flows. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Unrealized gains and losses on fixed maturities classified as “available-for-sale,” net of tax, and the effect on deferred policy acquisition costs (“DAC”), deferred sales inducements (“DSI”), future policy benefits, and policyholder account balances that would result from the realization of unrealized gains and losses, are included in “Accumulated other comprehensive income (loss)” (“AOCI”).

Trading account assets, at fair value, represents equity securities held in support of a deferred compensation plan and other fixed maturity securities carried at fair value. Realized and unrealized gains and losses for these investments are reported in “Asset administration fees and other income.” Interest and dividend income from these investments is reported in “Net investment income.”

Equity securities, available-for-sale, at fair value, are comprised of common stock, and non-redeemable preferred stock, and are carried at fair value. The associated unrealized gains and losses, net of tax, and the effect on deferred policy acquisition costs, DSI, future policy benefits, and

B-8

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

policyholder account balances that would result from the realization of unrealized gains and losses, are included in AOCI. The cost of equity securities is written down to fair value when a decline in value is considered to be other-than-temporary. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Dividends from these investments are recognized in “Net investment income” when earned.

Commercial mortgage and other loans consist of commercial mortgage loans, agricultural loans and uncollateralized loans. Commercial mortgage and other loans held for investment are generally carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses and net of an allowance for losses. Commercial mortgage and other loans acquired, including those related to the acquisition of a business, are recorded at fair value when purchased, reflecting any premiums or discounts to unpaid principal balances.

Interest income, as well as prepayment fees and the amortization of the related premiums or discounts, related to commercial mortgage and other loans, are included in “Net investment income.”

Impaired loans include those loans for which it is probable that amounts due will not all be collected according to the contractual terms of the loan agreement. The Company defines “past due” as principal or interest not collected at least 30 days past the scheduled contractual due date. Interest received on loans that are past due, including impaired and non-impaired loans as well as loans that were previously modified in a troubled debt restructuring, is either applied against the principal or reported as net investment income based on the Company’s assessment as to the collectability of the principal. See Note 3 for additional information about the Company’s past due loans.

The Company discontinues accruing interest on loans after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability. When the Company discontinues accruing interest on a loan, any accrued but uncollectible interest on the loan and other loans backed by the same collateral, if any, is charged to interest income in the same period. Generally, a loan is restored to accrual status only after all delinquent interest and principal are brought current and, in the case of loans where the payment of interest has been interrupted for a substantial period, or the loan has been modified, a regular payment performance has been established.

The Company reviews the performance and credit quality of the commercial mortgage and other loan portfolio on an on-going basis. Loans are placed on watch list status based on a predefined set of criteria and are assigned one of three categories. Loans are placed on “early warning” status in cases where, based on the Company’s analysis of the loan’s collateral, the financial situation of the borrower or tenants or other market factors, it is believed a loss of principal or interest could occur. Loans are classified as “closely monitored” when it is determined that there is a collateral deficiency or other credit events that may lead to a potential loss of principal or interest. Loans “not in good standing” are those loans where the Company has concluded that there is a high probability of loss of principal, such as when the loan is delinquent or in the process of foreclosure. As described below, in determining the allowance for losses, the Company evaluates each loan on the watch list to determine if it is probable that amounts due will not be collected according to the contractual terms of the loan agreement.

Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage loans. The loan-to-value ratio compares the amount of the loan to the fair value of the underlying property collateralizing the loan, and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. A smaller loan-to-value ratio indicates a greater excess of collateral value over the loan amount. The debt service coverage ratio compares a property’s net operating income to its debt service payments. Debt service coverage ratios less than 1.0 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A larger debt service coverage ratio indicates a greater excess of net operating income over the debt service payments. The values utilized in calculating these ratios are developed as part of the Company’s periodic review of the commercial mortgage loan and agricultural loan portfolio, which includes an internal appraisal of the underlying collateral value. The Company’s periodic review also includes a quality re-rating process, whereby the internal quality rating originally assigned at underwriting is updated based on current loan, property and market information using a proprietary quality rating system. The loan-to-value ratio is the most significant of several inputs used to establish the internal credit rating of a loan which in turn drives the allowance for losses. Other key factors considered in determining the internal credit rating include debt service coverage ratios, amortization, loan term, estimated market value growth rate and volatility for the property type and region. See Note 3 for additional information related to the loan-to-value ratios and debt service coverage ratios related to the Company’s commercial mortgage and agricultural loan portfolios.

The allowance for losses includes a loan specific reserve for each impaired loan that has a specifically identified loss and a portfolio reserve for probable incurred but not specifically identified losses. For impaired commercial mortgage and other loans, the allowances for losses are determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or based upon the fair value of the collateral if the loan is collateral dependent. The portfolio reserves for probable incurred but not specifically identified losses in the commercial mortgage and agricultural loan portfolio segments considers the current credit composition of the portfolio based on an internal quality rating, (as described above). The portfolio reserves are determined using past loan experience, including historical credit migration, loss probability and loss severity factors by property type. These factors are reviewed each quarter and updated as appropriate.

The allowance for losses on commercial mortgage and other loans can increase or decrease from period to period based on the factors noted above. “Realized investment gains (losses), net” includes changes in the allowance for losses. “Realized investment gains (losses), net” also includes gains and losses on sales, certain restructurings, and foreclosures.

When a commercial mortgage or other loan is deemed to be uncollectible, any specific valuation allowance associated with the loan is reversed and a direct write down to the carrying amount of the loan is made. The carrying amount of the loan is not adjusted for subsequent recoveries in value.

B-9

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

In situations where a loan has been restructured in a troubled debt restructuring and the loan has subsequently defaulted, this factor is considered when evaluating the loan for a specific allowance for losses in accordance with the credit review process noted above.

See Note 3 for additional information about commercial mortgage and other loans that have been restructured in a troubled debt restructuring.

Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in “Net investment income” at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies.

Securities repurchase and resale agreements and securities loaned transactions are used primarily to earn spread income, to borrow funds, or to facilitate trading activity. As part of securities repurchase agreements or securities loaned transactions, the Company transfers U.S. and foreign debt and equity securities, or as well as U.S. government and government agency securities and receives cash as collateral. As part of securities resale agreements, the Company invests cash and receives as collateral U.S. government securities or other debt securities. For securities repurchase agreements and securities loaned transactions used to earn spread income, the cash received is typically invested in cash equivalents, short-term investments or fixed maturities.

Securities repurchase and resale agreements that satisfy certain criteria are treated as secured borrowing or secured lending arrangements. These agreements are carried at the amounts at which the securities will be subsequently resold or reacquired, as specified in the respective transactions. For securities purchased under agreements to resell, the Company’s policy is to take possession or control of the securities either directly or through a third party custodian. These securities are valued daily and additional securities or cash collateral is received, or returned, when appropriate to protect against credit exposure. Securities to be resold are the same, or substantially the same, as the securities received. For securities sold under agreements to repurchase, the market value of the securities to be repurchased is monitored, and additional collateral is obtained where appropriate, to protect against credit exposure. Securities to be repurchased are the same, or substantially the same, as those sold. Income and expenses related to these transactions executed within the insurance companies used to earn spread income are reported as “Net investment income;” however, for transactions used for funding purposes, the associated borrowing cost is reported as interest expense (included in “General and administrative expenses”).

Securities loaned transactions are treated as financing arrangements and are recorded at the amount of cash received. The Company obtains collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. The Company monitors the market value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company’s securities loaned transactions are with large brokerage firms. Income and expenses associated with securities loaned transactions used to earn spread income are reported as “Net investment income;” however, for securities loaned transactions used for funding purposes the associated rebate is reported as interest expense (included in “General and administrative expenses”).

Other long-term investments consist of the Company’s investments in joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned investment real estate and other investments. Joint venture and partnership interests are either accounted for using the equity method of accounting or under the cost method when the Company’s partnership interest is so minor (generally less than 3%) that it exercises virtually no influence over operating and financial policies. The Company’s income from investments in joint ventures and partnerships accounted for using the equity method or the cost method, other than the Company’s investment in operating joint ventures, is included in “Net investment income.” The carrying value of these investments is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. In applying the equity method or the cost method (including assessment for other-than-temporary impairment), the Company uses financial information provided by the investee, generally on a one to three month lag.

Short-term investments primarily consist of highly liquid debt instruments with a maturity of twelve months or less and greater than three months when purchased. These investments are generally carried at fair value and include certain money market investments, short-term debt securities issued by government sponsored entities and other highly liquid debt instruments.

Realized investment gains (losses) are computed using the specific identification method. Realized investment gains and losses are generated from numerous sources, including the sale of fixed maturity securities, equity securities, investments in joint ventures and limited partnerships and other types of investments, as well as adjustments to the cost basis of investments for net other-than-temporary impairments recognized in earnings. Realized investment gains and losses are also generated from prepayment premiums received on private fixed maturity securities, allowance for losses on commercial mortgage and other loans, and fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment. See “Derivative Financial Instruments” below for additional information regarding the accounting for derivatives.

The Company’s available-for-sale securities with unrealized losses are reviewed quarterly to identify other-than-temporary impairments in value. In evaluating whether a decline in value is other-than-temporary, the Company considers several factors including, but not limited to the following: (1) the extent and the duration of the decline; (2) the reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening); and (3) the financial condition of and near-term prospects of the issuer. With regard to available-for-sale equity securities, the Company also considers the ability and intent to hold the investment for a period of time to allow for a recovery of value. When it is determined that a decline in value of an equity security is other-than-temporary, the carrying value of the equity security is reduced to its fair value, with a corresponding charge to earnings.

An other-than-temporary impairment is recognized in earnings for a debt security in an unrealized loss position when the Company either (a) has the intent to sell the debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery. For all debt securities in unrealized loss positions that do not meet either of these two criteria, the Company analyzes its ability to recover the amortized cost by comparing the net present value of projected future cash flows with the amortized cost of the security. The net present value is calculated by

B-10

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment an other-than-temporary impairment is recognized.

When an other-than-temporary impairment of a debt security has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, the other-than-temporary impairment recognized in earnings is equal to the entire difference between the security’s amortized cost basis and its fair value at the impairment measurement date. For other-than-temporary impairments of debt securities that do not meet these criteria, the net amount recognized in earnings is equal to the difference between the amortized cost of the debt security and its net present value calculated as described above. Any difference between the fair value and the net present value of the debt security at the impairment measurement date is recorded in “Other comprehensive income (loss)” (“OCI”). Unrealized gains or losses on securities for which an other-than-temporary impairment has been recognized in earnings is tracked as a separate component of AOCI.

For debt securities, the split between the amount of an other-than-temporary impairment recognized in other comprehensive income and the net amount recognized in earnings is driven principally by assumptions regarding the amount and timing of projected cash flows. For mortgage-backed and asset-backed securities, cash flow estimates consider the payment terms of the underlying assets backing a particular security, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also include other assumptions regarding the underlying collateral including default rates and recoveries which vary based on the asset type and geographic location, as well as the vintage year of the security. For structured securities, the payment priority within the tranche structure is also considered. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. The Company has developed these estimates using information based on its historical experience as well as using market observable data, such as industry analyst reports and forecasts, sector credit ratings and other data relevant to the collectability of a security, such as the general payment terms of the security and the security’s position within the capital structure of the issuer.

The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an other-than-temporary impairment, the impaired security is accounted for as if it had been purchased on the measurement date of the impairment. For debt securities, the discount (or reduced premium) based on the new cost basis may be accreted into net investment income in future periods, including increases in cash flow on a prospective basis. In certain cases where there are decreased cash flow expectations, the security is reviewed for further cash flow impairments.

Unrealized investment gains and losses are also considered in determining certain other balances, including deferred policy acquisition costs, DSI, certain future policy benefits, policyholder account balances and deferred tax assets or liabilities. These balances are adjusted, as applicable, for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. Each of these balances is discussed in greater detail below.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, amounts due from banks, certain money market investments and other debt instruments with maturities of three months or less when purchased, other than cash equivalents that are included in “Trading account assets, at fair value.” The Company also engages in overnight borrowing and lending of funds with Prudential Financial and affiliates which are considered cash and cash equivalents.

Deferred Policy Acquisition Costs

Costs that vary with and that are directly related to the successful acquisition of new and renewal insurance and annuity business are deferred to the extent such costs are deemed recoverable from future profits. Such DAC primarily include commissions, costs of policy issuance and underwriting, and certain other expenses that are directly related to successfully negotiated contracts. See below under “Adoption of New Accounting Pronouncements” for a discussion of the authoritative guidance adopted effective January 1, 2012, regarding which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. In each reporting period, capitalized DAC is amortized to “Amortization of deferred policy acquisition costs,” net of the accrual of imputed interest on DAC balances. DAC is subject to periodic recoverability testing. DAC, for applicable products, is adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI.

Deferred policy acquisition costs related to interest sensitive and variable life products and fixed and variable deferred annuity products are generally deferred and amortized over the expected life of the contracts (at least 30 years) in proportion to gross profits arising principally from investment margins, mortality and expense margins, and surrender charges, based on historical and anticipated future experience, which is updated periodically. The Company uses a reversion to the mean approach for equities to derive the future equity return assumptions.

However, if the projected equity return calculated using this approach is greater than the maximum equity return assumption, the maximum equity return is utilized. In addition to the gross profit components previously mentioned, the impact of the embedded derivatives associated with certain

B-11

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

optional living benefit features of the Company’s variable annuity contracts and related hedging activities are also included in actual gross profits used as the basis for calculating current period amortization and, in certain instances, in management’s estimate of total gross profits used for setting the amortization rate, regardless of which affiliated legal entity this activity occurs. In calculating gross profits, profits and losses related to contracts issued by the Company that are reported in affiliated legal entities other than the Company as a result of, for example, reinsurance agreements with those affiliated entities are also included. The Company is an indirect subsidiary of Prudential Financial (an SEC registrant) and has extensive transactions and relationships with other subsidiaries of Prudential Financial, including reinsurance agreements, as described in Note 13. Incorporating all product-related profits and losses in gross profits, including those that are reported in affiliated legal entities, produces a DAC amortization pattern representative of the total economics of the products. The effect of changes to total gross profits on unamortized DAC is reflected in “Amortization of deferred policy acquisition costs” in the period such total gross profits are revised. DAC related to non-participating traditional individual life insurance is amortized in proportion to gross premiums.

For some products, policyholders can elect to modify product benefits, features, rights or coverages by exchanging a contract for a new contract or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. These transactions are known as internal replacements. If policyholders surrender traditional life insurance policies in exchange for life insurance policies that do not have fixed and guaranteed terms, the Company immediately charges to expense the remaining unamortized DAC on the surrendered policies. For other internal replacement transactions, except those that involve the addition of a non-integrated contract feature that does not change the existing base contract, the unamortized DAC is immediately charged to expense if the terms of the new policies are not substantially similar to those of the former policies. If the new terms are substantially similar to those of the earlier policies, the DAC is retained with respect to the new policies and amortized over the expected life of the new policies.

Deferred sales inducements

The Company offered various types of sales inducements to contractholders related to fixed and variable deferred annuity contracts. The Company defers sales inducements and amortizes them over the anticipated life of the policy using the same methodology and assumptions used to amortize DAC. Sales inducements balances are subject to periodic recoverability testing. The Company records amortization of deferred sales inducements in “Interest credited to policyholders’ account balances.” Deferred sales inducements, for applicable products, is adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. See Note 7 for additional information regarding sales inducements.

Reinsurance recoverables

Reinsurance recoverables include corresponding receivables associated with reinsurance arrangements with affiliates. For additional information about these arrangements see Note 13.

Separate Account Assets and Liabilities

Separate account assets are reported at fair value and represent segregated funds that are invested for certain contractholders and other customers. The assets consist primarily of equity securities, fixed maturities, real estate related investments, real estate mortgage loans and short term investments and derivative instruments. The assets of each account are legally segregated and are generally not subject to claims that arise out of any other business of the Company. Investment risks associated with market value changes are borne by the contractholders, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities primarily represent the contractholders’ account balance in separate account assets and to a lesser extent borrowings of the separate account, and will be equal and offsetting to total separate account assets. See Note 7 to the Financial Statements for additional information regarding separate account arrangements with contractual guarantees. The investment income and realized investment gains or losses from separate accounts generally accrue to the contractholders and are not included in the Company’s results of operations. Mortality, policy administration and surrender charges assessed against the accounts are included in “Policy charges and fee income.” Asset administration fees charged to the accounts are included in “Asset administration fees.”

Other Assets and Other Liabilities

Other assets consist primarily of premiums due, certain restricted assets, and receivables resulting from sales of securities that had not yet settled at the balance sheet date. Other liabilities consist primarily of accrued expenses, reinsurance payables, technical overdrafts, derivatives, and payables resulting from purchases of securities that had not yet been settled at the balance sheet date.

Future Policy Benefits

The Company’s liability for future policy benefits is comprised of liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 7. These reserves represent reserves for the guaranteed minimum death and optional living benefit features on our variable annuity products and no lapse guarantees for our variable and universal life products. The optional living

B-12

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

benefits are primarily accounted for as embedded derivatives, with fair values calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. For additional information regarding the valuation of these optional living benefit features, see Note 10.

The Company’s liability for future policy benefits also includes reserves based on the present value of estimated future payments to or on behalf of policyholders related to contracts that have fixed and guaranteed terms, where the timing and amount of payment depends on policyholder mortality, and maintenance expenses less the present value of future net premiums. Expected mortality is generally based on Company experience, industry data and/or other factors. Interest rate assumptions are based on factors such as market conditions and expected investment returns. Although mortality and interest rate assumptions are “locked-in” upon the issuance of new insurance or annuity business with fixed and guaranteed terms, significant changes in experience or assumptions may require the Company to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses. Premium deficiency reserves do not include a provision for the risk of adverse deviation. Any adjustments to future policy benefit reserves related to net unrealized gains on securities classified as available-for-sale are included in AOCI. See Note 7 for additional information regarding future policy benefits.

Policyholders’ Account Balances

The Company’s liability for policyholders’ account balances primarily represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is primarily associated with the accumulated general account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the general account balance. These policyholders’ account balances also include provision for benefits under non-life contingent payout annuities and certain unearned revenues.

Contingent Liabilities

Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with the ultimate resolution of the matter that are reasonably estimable and, if so, they are included in the accrual.

Insurance Revenue and Expense Recognition

Premiums from individual life products, other than interest-sensitive and variable life contracts, are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is generally deferred and recognized into revenue in a constant relationship to insurance inforce. Benefits are recorded as an expense when they are incurred. Benefits and expenses for these products also include amortization of DAC. A liability for future policy benefits is recorded when premiums are recognized using the net premium method.

Revenues for variable deferred annuity contracts consist of charges against contractholder account values for mortality and expense risks, administration fees, surrender charges and an annual maintenance fee per contract. Revenues for mortality and expense risk charges and administration fees are recognized as assessed against the contractholder. Surrender charge revenue is recognized when the surrender charge is assessed against the contractholder at the time of surrender. Benefits and expenses for these products also include amortization of DAC and DSI. Benefit reserves for the variable investment options on annuity contracts represent the account value of the contracts and are included in “Separate account liabilities.”

Revenues for variable immediate annuity and supplementary contracts with life contingencies consist of certain charges against contractholder account values including mortality and expense risks and administration fees. These charges and fees are recognized as revenue when assessed against the contractholder. Benefit reserves for variable immediate annuity contracts represent the account value of the contracts and are included in “Separate account liabilities.”

Revenues for fixed immediate annuity and fixed supplementary contracts with and without life contingencies consist of net investment income. In addition, revenues for fixed immediate annuity contracts with life contingencies also consist of single premium payments recognized as annuity considerations when received. Benefit reserves for these contracts are based on applicable actuarial standards with assumed interest rates that vary by contract year. Reserves for contracts without life contingencies are included in “Policyholders’ account balances” while reserves for contracts with life contingencies are included in “future policy benefits and other policyholder liabilities.” Assumed interest rates ranged from 0.00% to 7.25% at December 31, 2013, and from 1.00% to 7.25% at December 31, 2012.

Revenues for variable life insurance contracts consist of charges against contractholder account values or separate accounts for expense charges, administration fees, cost of insurance charges, taxes and surrender charges. Certain contracts also include charges against premium to pay state premium taxes. All of these charges are recognized as revenue when assessed against the contractholder. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are generally deferred and amortized into revenue over the life of the related contracts in proportion to estimated gross profits. Benefits and expenses for these products also include amortization of DAC. Benefit reserves for variable life insurance contracts represent the account value of the contracts and are included in “Separate account liabilities.”

B-13

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Certain individual annuity contracts provide the holder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount, and certain individual life contracts provide no lapse guarantees. These benefits are accounted for as insurance contracts and are discussed in further detail in Note 7. The Company also provides contracts with certain living benefits which are considered embedded derivatives. These contracts are discussed in further detail in Note 7.

Amounts received as payment for interest-sensitive or variable contracts are reported as deposits to “Policyholders’ account balances” and “Separate account liabilities.” Revenues from these contracts are reflected in “Policy charges and fee income” consisting primarily of fees assessed during the period against the policyholders’ account balances for mortality and other benefit charges, policy administration charges and surrender charges. In addition to fees, the Company earns investment income from the investment of deposits in the Company’s general account portfolio. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are generally deferred and amortized into revenue over the life of the related contracts in proportion to estimated gross profits. Benefits and expenses for these products include claims in excess of related account balances, expenses of contract administration, interest credited to policyholders’ account balances and amortization of DAC and DSI.

Premiums, benefits and expenses are stated net of reinsurance ceded to other companies.

Asset Administration Fees

The Company receives asset administration fee income from contractholders’ account balances invested in The Prudential Series Funds or, “PSF,” which are a portfolio of mutual fund investments related to the Company’s separate account products. Also, the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust Funds (see Note 13). In addition, the Company receives fees from contractholders’ account balances invested in funds managed by companies other than affiliates of Prudential Insurance. Asset administration fees are recognized as income when earned.

Derivative Financial Instruments

Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, values of securities or commodities, credit spreads, market volatility, expected returns, and liquidity. Values can also be affected by changes in estimates and assumptions, including those related to counterparty behavior and non-performance risk used in valuation models. Derivative financial instruments generally used by the Company include swaps, futures, forwards and options and may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Derivative positions are carried at fair value, generally by obtaining quoted market prices or through the use of valuation models.

Derivatives are used to manage the interest rate and currency characteristics of assets or liabilities. Additionally, derivatives may be used to seek to reduce exposure to interest rate, credit, foreign currency and equity risks associated with assets held or expected to be purchased or sold, and liabilities incurred or expected to be incurred. As discussed in detail below and in Note 11, all realized and unrealized changes in fair value of derivatives are recorded in current earnings, with the exception of the effective portion of cash flow hedges. Cash flows from derivatives are reported in the operating, investing, or financing activities sections in the Statements of Cash Flows based on the nature and purpose of the derivative.

Derivatives are recorded either as assets, within “Other trading account assets, at fair value” or “Other long-term investments,” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The Company nets the fair value of all derivative financial instruments with counterparties for which a master netting arrangement has been executed.

The Company designates derivatives as either (1) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge); or (2) a derivative that does not qualify for hedge accounting.

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. Under such circumstances, the ineffective portion is recorded in “Realized investment gains (losses), net.”

The Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions.

When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded in AOCI until earnings are affected by the variability of cash flows being hedged (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). At that time, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in the income statement line item associated with the hedged item.

If it is determined that a derivative no longer qualifies as an effective cash flow hedge or management removes the hedge designation, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net.” The component of AOCI related to discontinued cash flow hedges is reclassified to the income statement line associated with the hedged cash flows consistent with the earnings impact of the original hedged cash flows.

B-14

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, or because it is probable that the forecasted transaction will not occur by the end of the specified time period, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net.” Any asset or liability that was recorded pursuant to recognition of the firm commitment is removed from the balance sheet and recognized currently in “Realized investment gains (losses), net.” Gains and losses that were in AOCI pursuant to the hedge of a forecasted transaction are recognized immediately in “Realized investment gains (losses), net.”

If a derivative does not qualify for hedge accounting, all changes in its fair value, including net receipts and payments, are included in “Realized investment gains (losses), net” without considering changes in the fair value of the economically associated assets or liabilities.

The Company is a party to financial instruments that contain derivative instruments that are “embedded” in the financial instruments. At inception, the Company assesses whether the economic characteristics of the embedded instrument are clearly and closely related to the economic characteristics of the remaining component of the financial instrument (i.e., the host contract) and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When it is determined that (1) the embedded instrument possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded instrument qualifies as an embedded derivative that is separated from the host contract, carried at fair value, and changes in its fair value are included in “Realized investment gains (losses), net.” For certain financial instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value, the Company may elect to classify the entire instrument as a trading account asset and report it within “Trading account assets, at fair value.”

The Company sells variable annuity contracts that include optional living benefit features that may be treated from an accounting perspective as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these benefit features to an affiliate, Pruco Reinsurance Ltd. (“Pruco Re”). The embedded derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value and included in “Future policy benefits and other policyholder liabilities” and “Reinsurance recoverables” or “Other liabilities,” respectively. Changes in the fair value are determined using valuation models as described in Note 10, and are recorded in “Realized investment gains (losses), net.”

The Company entered into a new coinsurance agreement with an affiliate, PAR U, effective July 1, 2012. The settlement of the initial coinsurance premium occurred subsequent to the effective date of the coinsurance agreement. As a result, the settlement was treated as if settled on the effective date and adjusted for the time elapsed between the effective date and the settlement date. This adjustment to the initial coinsurance premium was equal to the earned interest and changes in market values from the effective date through the settlement date related to fixed maturity and commercial mortgage securities from an asset portfolio within the Company. The settlement feature of this agreement was accounted for as a derivative (See Note 13 for additional information about this agreement).

Short-Term and Long-Term Debt

Liabilities for short-term and long-term debt are primarily carried at an amount equal to unpaid principal balance, net of unamortized discount or premium. Original-issue discount or premium and debt-issue costs are recognized as a component of interest expense over the period the debt is expected to be outstanding, using the interest method of amortization. Short-term debt is debt coming due in the next twelve months, including that portion of debt otherwise classified as long-term. The short-term debt caption may exclude short-term debt items the Company intends to refinance on a long-term basis in the near term. See Note 13 for additional information regarding short-term and long-term debt.

Income Taxes

The Company is a member of the federal income tax return of Prudential Financial and primarily files separate company state and local tax returns. Pursuant to the tax allocation arrangement with Prudential Financial, total federal income tax expense is determined on a separate company basis. Members with losses record tax benefits to the extent such losses are recognized in the consolidated federal tax provision.

Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to reduce a deferred tax asset to the amount expected to be realized.

Items required by tax regulations to be included in the tax return may differ from the items reflected in the financial statements. As a result, the effective tax rate reflected in the financial statements may be different than the actual rate applied on the tax return. Some of these differences are permanent such as expenses that are not deductible in the Company’s tax return, and some differences are temporary, reversing over time, such as valuation of insurance reserves. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in future years for which the Company has already recorded the tax benefit in the Company’s income statement. Deferred tax liabilities generally represent tax expense recognized in the Company’s financial statements for which payment has been deferred, or expenditures for which the Company has already taken a deduction in the Company’s tax return but have not yet been recognized in the Company’s financial statements.

The application of U.S. GAAP requires the Company to evaluate the recoverability of the Company’s deferred tax assets and establish a valuation allowance if necessary to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized. Considerable judgment is

B-15

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company may consider many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized.

U.S. GAAP prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on tax returns. The application of this guidance is a two-step process, the first step being recognition. The Company determines whether it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step is measurement. The Company measures the tax position as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate resolution with a taxing authority that has full knowledge of all relevant information. This measurement considers the amounts and probabilities of the outcomes that could be realized upon ultimate settlement using the facts, circumstances, and information available at the reporting date.

The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing jurisdictions. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards (“tax attributes”), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense.

See Note 9 for additional information regarding income taxes.

Adoption of New Accounting Pronouncements

In December 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance establishing a single definition of a public entity for use in financial accounting and reporting guidance. This new guidance is effective for all current and future reporting periods and did not have a significant effect on the Company’s financial position, results of operations, or financial statement disclosures.

In July 2013, the FASB issued new guidance regarding derivatives. The guidance permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting, in addition to the United States Treasury rate and London Inter-Bank Offered Rate (“LIBOR”). The guidance also removes the restriction on using different benchmark rates for similar hedges. The guidance is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013 and should be applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s financial position, results of operations, and financial statement disclosures.

In February 2013, the FASB issued updated guidance regarding the presentation of comprehensive income. Under the guidance, an entity is required to separately present information about significant items reclassified out of accumulated other comprehensive income by component as well as changes in accumulated other comprehensive income balances by component in either the financial statements or the notes to the financial statements. The guidance does not change the items that are reported in other comprehensive income, does not change when an item of other comprehensive income must be reclassified to net income, and does not amend any existing requirements for reporting net income or other comprehensive income. The guidance is effective for the first interim or annual reporting period beginning after December 15, 2012 and should be applied prospectively. The disclosures required by this guidance are included in Note 3.

In December 2011 and January 2013, the FASB issued updated guidance regarding the disclosure of recognized derivative instruments (including bifurcated embedded derivatives), repurchase agreements and securities borrowing/lending transactions that are offset in the statement of financial position or are subject to an enforceable master netting arrangement or similar agreement (irrespective of whether they are offset in the statement of financial position). This new guidance requires an entity to disclose information on both a gross and net basis about instruments and transactions within the scope of this guidance. This new guidance is effective for interim or annual reporting periods beginning on or after January 1, 2013, and should be applied retrospectively for all comparative periods presented. The disclosures required by this guidance are included in Note 11.

Effective January 1, 2012, the Company adopted retrospectively new authoritative guidance to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. Under the amended guidance acquisition costs are to include only those costs that are directly related to the acquisition or renewal of insurance contracts by applying a model similar to the accounting for loan origination costs. An entity may defer incremental direct costs of contract acquisition with independent third parties or employees that are essential to the contract transaction, as well as the portion of employee compensation, including payroll fringe benefits, and other costs directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for successfully negotiated contracts. Prior period financial information presented in these financial statements has been adjusted to reflect the retrospective adoption of the amended guidance. The impact of the retrospective adoption of this guidance on previously reported December 31, 2011 and December 31, 2010 balances was a reduction in “Deferred policy acquisition costs” of $91 million and $95 million, an increase in “Policyholders’ Account Balances” of

B-16

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

less than $1 million for both periods, and a reduction in “Total equity” of $59 million and $62 million, respectively. The impact of the retrospective adoption of this guidance on previously reported income from continuing operations before income taxes for the years ended December 31, 2011, 2010 and 2009 was an increase of $1 million and decreases of $11 million and $6 million, respectively. The lower level of costs now qualifying for deferral will be only partially offset by a lower level of amortization of “Deferred policy acquisition costs,” and, as such, will initially result in lower earnings in future periods primarily reflecting lower deferrals of wholesaler costs. While the adoption of this amended guidance changes the timing of when certain costs are reflected in the Company’s results of operations, it has no effect on the total acquisition costs to be recognized over time and has no impact on the Company’s cash flows.

In June 2011, the FASB issued updated guidance regarding the presentation of comprehensive income. The updated guidance eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. Under the updated guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The updated guidance does not change the items that are reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The Company opted to present the total of comprehensive income, the components of net income, and the components of other comprehensive income in two separate but consecutive statements. The Financial Statements included herein reflect the adoption of this updated guidance.

In May 2011, the FASB issued updated guidance regarding the fair value measurements and disclosure requirements. The updated guidance clarifies existing guidance related to the application of fair value measurement methods and requires expanded disclosures. This new guidance is effective for the first interim or annual reporting period beginning after December 15, 2011, and should be applied prospectively. The expanded disclosures required by this guidance are included in Note 10. Adoption of this guidance did not have a significant effect on the Company’s financial position or results of operations.

In April 2011, the FASB issued updated guidance regarding the assessment of effective control for repurchase agreements. This new guidance is effective for the first interim or annual reporting period beginning on or after December 15, 2011, and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. The Company’s adoption of this guidance did not have a significant effect on the Company’s financial position, results of operations, and financial statement disclosures.

In April 2011, the FASB issued updated guidance clarifying which restructurings constitute troubled debt restructurings. It is intended to assist creditors in their evaluation of whether conditions exist that constitute a troubled debt restructuring. This new guidance is effective for the first interim or annual reporting period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual reporting period of adoption. The Company’s adoption of this guidance in the third quarter of 2011 did not have a significant effect on the Company’s financial position, results of operations, or financial statement disclosures.

Future Adoption of New Accounting Pronouncements

In July 2013, the FASB issued updated guidance regarding the presentation of unrecognized tax benefits when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This new guidance is effective for interim or annual reporting periods that begin after December 15, 2013, and should be applied prospectively, with early application permitted. This guidance is not expected to have a significant effect on the Company’s financial position, results of operations, and financial statement disclosures.

In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014. This guidance can be elected for prospective adoption or by using a modified retrospective transition method. This guidance is not expected to have a significant effect on the Company’s financial position, results of operations, or financial statement disclosures.

B-17

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

3.    INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:

	December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI (3)
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	24,842	$	2,939	$	-	$	27,781	$	-
Obligations of U.S. states and their political subdivisions		4,781		53		153		4,681		-
Foreign government bonds		11,457		901		-		12,358		-
Public utilities		105,717		3,898		2,371		107,244		-
All other corporate securities		600,938		34,010		7,582		627,366		(45	)
Asset-backed securities (1)		51,651		611		1,084		51,178		(102	)
Commercial mortgage-backed securities		63,090		3,763		14		66,839		-
Residential mortgage-backed securities (2)		27,072		2,827		5		29,894		(281	)
Total fixed maturities, available-for-sale	$	889,548	$	49,002	$	11,209	$	927,341	$	(428	)
Equity securities, available-for-sale
Common Stocks:
Industrial, miscellaneous & other	$	-	$	-	$	-	$	-
Mutual funds		38		-		1		37
Non-redeemable preferred stocks		53		26		-		79
Total equity securities, available-for-sale	$	91	$	26	$	1	$	116

(1) Includes credit-tranched securities collateralized by sub-prime mortgages, credit cards, education loans, and other asset types.

(2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(3) Represents the amount of other-than-temporary impairment losses in AOCI, which were not included in earnings. Amount excludes $0.7 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI (3)
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	25,681	$	5,627	$	-	$	31,308	$	-
Obligations of U.S. states and their political subdivisions		2,787		162		-		2,949		-
Foreign government bonds		11,523		1,627		-		13,150		-
Public utilities		96,733		9,761		-		106,494		-
All other corporate securities		646,447		58,447		362		704,532		(45	)
Asset-backed securities (1)		61,578		1,944		95		63,427		(2,278	)
Commercial mortgage-backed securities		70,799		7,433		9		78,223		-
Residential mortgage-backed securities (2)		61,117		4,871		-		65,988		(331	)
Total fixed maturities, available-for-sale	$	976,665	$	89,872	$	466	$	1,066,071	$	(2,654)
Equity securities, available-for-sale
Common Stocks (4):
Industrial, miscellaneous & other	$	183	$	67	$	-	$	250
Mutual funds		67		2		5		64
Non-redeemable preferred stocks		1,053		14		-		1,067
Total equity securities available-for-sale	$	1,303	$	83	$	5	$	1,381

(1) Includes credit-tranched securities collateralized by sub-prime mortgages, credit cards, education loans, and other asset types.

(2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(3) Represents the amount of other-than-temporary impairment losses in AOCI, which were not included in earnings. Amount excludes $3.0 million of net unrealized gains or losses on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(4) Prior period has been reclassified to conform to the current period presentation.

B-18

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2013, are as follows:

	Available-for-Sale
	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	34,061	$	34,916
Due after one year through five years		245,432		264,010
Due after five years through ten years		212,412		226,263
Due after ten years		255,830		254,241
Asset-backed securities		51,651		51,178
Commercial mortgage-backed securities		63,090		66,839
Residential mortgage-backed securities		27,072		29,894
Total	$	889,548	$	927,341

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed, and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

	2013		2012		2011
	(in thousands)
Fixed maturities, available-for-sale
Proceeds from sales	$	108,332	$	11,599	$	36,118
Proceeds from maturities/repayments		131,032		144,385		135,127
Gross investment gains from sales, prepayments, and maturities		5,704		13,712		2,614
Gross investment losses from sales and maturities		(1,379)		(1)		(88)
Equity securities, available-for-sale
Proceeds from sales	$	6,650	$	2,660	$	2
Proceeds from maturities/repayments		-		-		472
Gross investment gains from sales		587		146		368
Gross investment losses from sales		(395)		-		-
Fixed maturity and equity security impairments
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings (1)	$	-	$	(1,469)	$	(268)
Writedowns for impairments on equity securities		(6)		(211)		(326)

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of the impairment.

As discussed in Note 2, a portion of certain other-than-temporary impairment (“OTTI”) losses on fixed maturity securities are recognized in “Other comprehensive income (loss)” (“OCI”). For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts.

Credit losses recognized in earnings on fixed maturity securities held by the Company for which a portion of the OTTI loss was recognized in OCI

	Year Ended December 31, 2013		Year Ended December 31, 2012
	(in thousands)
Balance, beginning of period	$	2,411	$	3,438
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period		(1,674)		(1,039)
Additional credit loss impairments recognized in the current period on securities previously impaired		-		70
Increases due to the passage of time on previously recorded credit losses		48		165
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected		(69)		(223)
Balance, end of period	$	716	$	2,411

B-19

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Trading Account Assets

The following table sets forth the composition of “Trading account assets” as of the dates indicated:

	December 31, 2013				December 31, 2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Trading account assets	(in thousands)
Equity securities (1)	$	-	$	-	$	1,695	$	1,390

(1) Included in equity securities are perpetual preferred stock securities that have characteristics of both debt and equity securities.

The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within “Other income” was $0.3 million, ($0.2) million and ($0.1) million during the years ended December 31, 2013, 2012 and 2011, respectively.

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated:

	December 31, 2013					December 31, 2012
	Amount (in thousands)		% of Total			Amount (in thousands)		% of Total
Commercial mortgage and other loans by property type:
Apartments/Multi-Family	$	81,484		28.5	%	$	60,663		27.2	%
Retail		65,353		22.9			64,591		29.0
Industrial		40,281		14.1			36,691		16.5
Office		30,635		10.7			18,534		8.3
Other		25,277		8.8			12,211		5.5
Hospitality		24,186		8.5			9,742		4.4
Total commercial mortgage loans		267,216		93.5			202,432		90.9
Agricultural property loans		18,691		6.5			20,458		9.1
Total commercial and agricultural mortgage loans by property type		285,907		100.0	%		222,890		100.0	%
Valuation allowance		(1,785)					(1,162)
Total net commercial and agricultural mortgage loans by property type		284,122					221,728
Other Loans
Uncollateralized loans		8,410					-
Total other loans		8,410					-
Total commercial mortgage and other loans	$	292,532				$	221,728

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States and other countries with the largest concentrations in Illinois (15%), Texas (14%), and Florida (11%) at December 31, 2013.

Activity in the allowance for losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:

	December 31, 2013		December 31, 2012		December 31, 2011
	(in thousands)
Allowance for losses, beginning of year	$	1,162	$	1,410	$	1,409
Addition to / (release of) allowance of losses		623		(248)		1
Allowance for losses, end of year (1)	$	1,785	$	1,162	$	1,410

(1) Agricultural loans represent less than $0.1 million of the ending allowance at December 31, 2013, 2012 and 2011, respectively.

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:

	December 31, 2013		December 31, 2012
	(in thousands)
Allowance for Credit Losses:
Ending balance: individually evaluated for impairment (1)	$	-	$	-
Ending balance: collectively evaluated for impairment (2)		1,785		1,162
Total ending balance	$	1,785	$	1,162

B-20

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	December 31, 2013		December 31, 2012
	(in thousands)
Recorded Investment: (3)
Ending balance gross of reserves: individually evaluated for impairment (1)	$	-	$	-
Ending balance gross of reserves: collectively evaluated for impairment (2)		294,317		222,890
Total ending balance, gross of reserves	$	294,317	$	222,890

(1) There were no loans individually evaluated for impairments at December 31, 2013 and 2012.

(2) Agricultural loans collectively evaluated for impairment had a recorded investment of $18.7 million and $20.0 million at December 31, 2013 and 2012, respectively, and no related allowance for both periods. Uncollateralized loans collectively evaluated for impairment had a recorded investment of $8.4 million and $0 million at December 31, 2013 and 2012, respectively, and no related allowance for both periods.

(3) Recorded investment reflects the balance sheet carrying value gross of related allowance.

Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. There were no impaired commercial mortgage and other loans identified in management’s specific review of probable loan losses and related allowance at December 31, 2013 and 2012. There were no recorded investments in impaired loans with an allowance recorded, before the allowances for losses at both December 31, 2013 and 2012.

There was no net investment income recognized on these loans for both the years ended December 31, 2013 and 2012. See Note 2 for information regarding the Company’s accounting policies for non-performing loans.

Impaired commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans’ expected future cash flows equals or exceeds the recorded investment. The company had no such loans at December 31, 2013 and 2012. See Note 2 for information regarding the Company’s accounting policies for non-performing loans.

As described in Note 2, loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage and other loans. As of December 31, 2013 and 2012, 99% of the $286 million recorded investment and 98% of the $223 million recorded investment, respectively, had a loan-to-value ratio of less than 80%. As of both December 31, 2013 and 2012, 98% of the recorded investment had a debt service coverage ratio of 1.0X or greater. As of December 31, 2013, approximately 2% or $7 million of the recorded investment had a loan-to-value ratio greater than 100% or debt service coverage ratio less than 1.0X, reflecting loans where the mortgage amount exceeds the collateral value or where current debt payments are greater than income from property operations; none of which related to agricultural or uncollateralized loans. As of December 31, 2012, approximately 2% or $4 million of the recorded investment had a loan-to-value ratio greater than 100% or debt service coverage ratio less than 1.0X; none of which related to agricultural or uncollateralized loans.

As of December 31, 2013 and 2012, all commercial mortgage and other loans were in current status. The Company defines current in its aging of past due commercial mortgage and agricultural loans as less than 30 days past due.

There were no commercial mortgage and other loans in nonaccrual status as of December 31, 2013 and 2012. Nonaccrual loans are those on which the accrual of interest has been suspended after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability and loans for which a loan specific reserve has been established. See Note 2 for further discussion regarding nonaccrual status loans.

For the years ended December 31, 2013 and 2012, there were no commercial mortgage and other loans sold or acquired.

The Company’s commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of both December 31, 2013 and 2012, the Company had no significant commitments to fund to borrowers that have been involved in troubled debt restructuring. For the years ended December 31, 2013 and 2012, there were no adjusted pre-modification outstanding recorded investments or post-modification outstanding recorded investments. No payment defaults on commercial mortgage and other loans were modified as a troubled debt restructuring within the 12 months preceding the respective period. See Note 2 for additional information related to the accounting for troubled debt restructurings.

Other Long-Term Investments

The following table sets forth the composition of “Other long-term investments” at December 31 for the years indicated:

	2013		2012
	(in thousands)
Company's investment in Separate accounts	$	1,619	$	1,765
Joint ventures and limited partnerships		35,886		27,309
Derivatives		-		12,238
Total other long-term investments	$	37,505	$	41,312

B-21

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Net Investment Income

Net investment income for the years ended December 31, was from the following sources:

	2013			2012			2011
	(in thousands)
Fixed maturities, available-for-sale	$	46,071		$	56,024		$	57,285
Equity securities, available-for-sale		-			11			12
Trading account assets		11			15			11
Commercial mortgage and other loans		13,831			13,503			12,187
Policy loans		9,901			9,626			9,503
Short-term investments and cash equivalents		63			80			85
Other long-term investments		2,105			4,012			1,718
Gross investment income		71,982			83,271			80,801
Less: investment expenses		(3,329	)		(3,616	)		(3,245	)
Net investment income	$	68,653		$	79,655		$	77,556

There were no non-income producing assets included in fixed maturities as of December 31, 2013. Non-income producing assets represent investments that have not produced income for the preceding twelve months.

Realized Investment Gains (Losses), Net

Realized investment gains (losses), net, for the years ended December 31, were from the following sources:

	2013			2012			2011
	(in thousands)
Fixed maturities	$	4,325		$	12,242		$	2,257
Equity securities		186			(66	)		42
Commercial mortgage and other loans		(623	)		3,926			(1	)
Short-term investments and cash equivalents		2			-			-
Joint ventures and limited partnerships		(13	)		-			(44	)
Derivatives		18,704			(5,625	)		(112,310	)
Realized investment gains (losses), net	$	22,581		$	10,477		$	(110,056	)

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the years ended December 31, are as follows:

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses) (1)			Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2010	$	43		$	29,087		$	29,130
Change in component during period (2)		(21	)		18,014			17,993
Balance, December 31, 2011	$	22		$	47,101		$	47,123
Change in component during period (2)		21			305			326
Balance, December 31, 2012	$	43		$	47,406		$	47,449
Change in other comprehensive income before reclassifications		38			(42,217	)		(42,179	)
Amounts reclassified from AOCI		-			(4,511	)		(4,511	)
Income tax benefit (expense)		(13	)		16,355			16,342
Balance, December 31, 2013	$	68		$	17,033		$	17,101

(1) Includes cash flow hedges of ($3.1) million, ($1.3) million and ($1.0) million as of December 31, 2013, 2012 and 2011, respectively.

(2) Net of taxes.

B-22

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
	(in thousands)
Amounts reclassified from AOCI (1)(2):
Net unrealized investment gains (losses):
Cash flow hedges - Currency/Interest rate (3)	$	(237	)	$	(31	)	$	7,622
Net unrealized investment gains (losses) on available-for-sale securities (4)		4,748			(12,145	)		(1,225	)
Total net unrealized investment gains (losses)		4,511			(12,176	)		6,397
Total reclassifications for the period	$	4,511		$	(12,176	)	$	6,397

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 11 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ account balances.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as “available-for-sale” and certain other long-term investments and other assets are included in the Company’s Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) on Investments			Deferred Policy Acquisition Costs and Other Costs			Future Policy Benefits and Policy Holder Account Balances(2)			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2010	$	(4,309	)	$	1,848		$	(784	)	$	1,136		$	(2,109	)
Net investment gains (losses) on investments arising during the period		843			-			-			(295	)		548
Reclassification adjustment for (gains) losses included in net income		2,049			-			-			(717	)		1,332
Reclassification adjustment for OTTI losses excluded from net income(1)		-			-			-			-			-
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs		-			(1,109	)		-			388			(721	)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders' account balances		-			-			642			(225	)		417
Balance, December 31, 2011	$	(1,417	)	$	739		$	(142	)	$	287		$	(533	)
Net investment gains (losses) on investments arising during the period		873			-			-			(306	)		567
Reclassification adjustment for (gains) losses included in net income		880			-			-			(308	)		572
Reclassification adjustment for OTTI losses excluded from net income(1)		(106	)		-			-			37			(69	)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs		-			(644	)		-			225			(419	)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders' account balances		-			-			306			(107	)		199
Balance, December 31, 2012	$	230		$	95		$	164		$	(172	)	$	317
Net investment gains (losses) on investments arising during the period		126			-			-			(44	)		82
Reclassification adjustment for (gains) losses included in net income		(132	)		-			-			46			(86	)
Reclassification adjustment for OTTI losses excluded from net income(1)		-			-			-			-			-

B-23

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	Net Unrealized Gains (Losses) on Investments		Deferred Policy Acquisition Costs and Other Costs			Future Policy Benefits and Policy Holder Account Balances(2)			Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in thousands)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs	$	-	$	(723	)	$	-		$	253	$	(470	)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders' account balances		-		-			(12	)		4		(8	)
Balance, December 31, 2013	$	224	$	(628	)	$	152		$	87	$	(165	)

(1) Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

(2) Balances are net of reinsurance.

All Other Net Unrealized Investment Gains and Losses in AOCI

	Net Unrealized Gains (Losses) on Investments(1)			Deferred Policy Acquisition Costs and Other Costs			Future Policy Benefits and Policy Holder Account Balances(3)			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2010	$	61,324		$	(24,292	)	$	10,961		$	(16,798	)	$	31,195
Net investment gains (losses) on investments arising during the period		23,930			-			-			(8,375	)		15,555
Reclassification adjustment for (gains) losses included in net income		4,348			-			-			(1,522	)		2,826
Reclassification adjustment for OTTI losses excluded from net income(2)		-			-			-			-			-
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs		-			(7,406	)		-			2,592			(4,814	)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders' account balances		-			-			4,418			(1,546	)		2,872
Balance, December 31, 2011	$	89,602		$	(31,698	)	$	15,379		$	(25,649	)	$	47,634
Net investment gains (losses) on investments arising during the period		13,098			-			-			(4,584	)		8,514
Reclassification adjustment for (gains) losses included in net income		(13,056	)		-			-			4,570			(8,486	)
Reclassification adjustment for OTTI losses excluded from net income(2)		106			-			-			(37	)		69
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs		-			5,389			-			(1,886	)		3,503
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders' account balances		-			-			(6,378	)		2,232			(4,146	)
Balance, December 31, 2012	$	89,750		$	(26,309	)	$	9,001		$	(25,354	)	$	47,088
Net investment gains (losses) on investments arising during the period		(49,387	)		-			-			17,285			(32,102	)
Reclassification adjustment for (gains) losses included in net income		(4,379	)		-			-			1,534			(2,845	)
Reclassification adjustment for OTTI losses excluded from net income(2)		-			-			-			-			-
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs		-			14,655			-			(5,129	)		9,526
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders' account balances		-			-			(6,875	)		2,406			(4,469	)
Balance, December 31, 2013	$	35,984		$	(11,654	)	$	2,126		$	(9,258	)	$	17,198

(1) Includes cash flow hedges. See Note 11 for information on cash flow hedges.

(2) Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

(3) Balances are net of reinsurance.

B-24

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

The table below presents net unrealized gains (losses) on investments by asset class at December 31:

	2013			2012			2011
	(in thousands)
Fixed maturity securities on which an OTTI loss has been recognized	$	224		$	230		$	(1,417	)
Fixed maturity securities, available-for-sale—all other		37,569			89,176			88,414
Equity securities, available-for-sale		25			78			(100	)
Derivatives designated as cash flow hedges (1)		(3,057	)		(1,327	)		(630	)
Other investments		1,447			1,823			1,918
Net unrealized gains (losses) on investments	$	36,208		$	89,980		$	88,185

(1) See Note 11 for more information on cash flow hedges.

Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:

	December 31, 2013
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses
	(in thousands)
Fixed maturities, available-for-sale
Obligations of U.S. states and their political subdivisions	$	2,628	$	153	$	-	$	-	$	2,628	$	153
Corporate securities		185,613		9,740		2,612		213		188,225		9,953
Asset-backed securities		31,499		1,068		642		16		32,141		1,084
Commercial mortgage-backed securities		397		10		268		4		665		14
Residential mortgage-backed securities		936		5		-		-		936		5
Total	$	221,073	$	10,976	$	3,522	$	233	$	224,595	$	11,209
Equity securities, available-for-sale	$	22	$	1	$	-	$	-	$	22	$	1
	December 31, 2012
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses
	(in thousands)
Fixed maturities, available-for-sale
Obligations of U.S. states and their political subdivisions	$	-	$	-	$	-	$	-	$	-	$	-
Corporate securities		20,938		241		1,014		121		21,952		362
Asset-backed securities		2,500		8		569		87		3,069		95
Commercial mortgage-backed securities		-		-		484		9		484		9
Residential mortgage-backed securities		-		-		-		-		-		-
Total	$	23,438	$	249	$	2,067	$	217	$	25,505	$	466
Equity securities, available-for-sale	$	25	$	5	$	-	$	-	$	25	$	5

The gross unrealized losses, related to fixed maturities at December 31, 2013 and 2012, are composed of $11.1 million and $0.2 million, respectively, related to high or highest quality securities based on NAIC or equivalent rating and $0.1 million and $0.3 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. At both December 31, 2013 and 2012, the $0.2 million of gross unrealized losses of twelve months or more were concentrated in asset-backed securities and the consumer non-cyclical, communications, and basic industry sectors of the Company’s corporate securities. In accordance with its policy described in Note 2, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at December 31, 2013 or 2012. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to credit spread widening and increased liquidity discounts. At December 31, 2013, the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before the anticipated recovery of its remaining amortized cost basis.

B-25

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

At both December 31, 2013 and 2012, none of the gross unrealized losses related to equity securities represented declines in value of greater than 20%, all of which have been in that position for less than six months. In accordance with its policy described in Note 2, the Company concluded that an adjustment for other-than-temporary impairments for these equity securities was not warranted at December 31, 2013 or 2012.

Securities Pledged and Special Deposits

The Company pledges as collateral investment securities it owns to unaffiliated parties through certain transactions, including securities lending, securities sold under agreements to repurchase, collateralized borrowings and postings of collateral with derivative counterparties. At December 31, the carrying value of investments pledged to third parties as reported in the Statements of Financial Position included the following:

	2013		2012
	(in thousands)
Fixed maturity securities, available-for-sale	$	3,936	$	2,075
Total securities pledged	$	3,936	$	2,075

As of December 31, 2013 and 2012, the carrying amount of the associated liabilities supported by the pledged collateral was $4.1 million and $2.1 million, respectively, which was “Cash collateral for loaned securities”.

Fixed maturities of $0.6 million and $3.9 million at December 31, 2013 and 2012, respectively, were on deposit with governmental authorities or trustees as required by certain insurance laws.

4.    DEFERRED POLICY ACQUISITION COSTS

The balances of and changes in deferred policy acquisition costs for the years ended December 31, are as follows:

	2013		2012		2011
	(in thousands)
Balance, beginning of year	$	327,832	$	262,895	$	271,179
Capitalization of commissions, sales and issue expenses		53,901		90,828		90,072
Amortization- Impact of assumption and experience unlocking and true-ups		(15,114)		1,044		(983)
Amortization- All other		59,295		(8,189)		(89,063)
Change in unrealized investment gains and losses		13,402		4,870		(8,310)
Ceded DAC upon Coinsurance Treaty with PAR U (See Note 13)		-		(23,616)		-
Balance, end of year	$	439,315	$	327,832	$	262,895

Deferred acquisition costs include reductions in capitalization and amortization related to reinsurance expense allowances resulting from the coinsurance treaties with PARCC, PAR TERM and PAR U, as well as reductions for the initial balance transferred to PAR U at inception of the coinsurance agreement (see Note 13).

Ceded capitalization was $48 million, $33 million and $19 million in 2013, 2012, and 2011, respectively. Ceded amortization amounted to $10 million, $11 million, and $7 million in 2013, 2012 and 2011, respectively. The ceded portion of the impact of changes in unrealized gains (losses) decreased the deferred acquisition cost asset $20 million in 2013 and increased the deferred acquisition cost asset $24 million in 2012.

5.    POLICYHOLDERS’ LIABILITIES

Future Policy Benefits

Future policy benefits at December 31 are as follows:

	2013			2012
	(in thousands)
Life insurance	$	793,841		$	694,076
Individual annuities		13,642			11,958
Policy claims and other liabilities		(34,946	)		119,835
Total future policy benefits	$	772,537		$	825,869

Life insurance liabilities include reserves for death benefits and other policy benefits. Individual annuity liabilities include reserves for annuities that are in payout status.

B-26

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Future policy benefits for life insurance are generally equal to the aggregate of (1) the present value of future benefit payments and related expenses, less the present value of future net premiums, and (2) any premium deficiency reserves. Assumptions as to mortality and persistency are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established. Interest rates range from 2.50% to 7.00%.

Future policy benefits for individual and group annuities and supplementary contracts are generally equal to the aggregate of (1) the present value of expected future payments, and (2) any premium deficiency reserves. Assumptions as to mortality are based on the Company’s experience, industry data, and/or other factors when the basis of the reserve is established. The interest rates used in the determination of the present value range from 0.00% to 7.25%, with none of the reserves based on an interest rate in excess of 8%.

Future policy benefits for other contract liabilities are generally equal to the present value of expected future payments based on the Company’s experience. The interest rates used in the determination of the present values range from 0.39% to 5.01%.

The Company’s liability for future policy benefits is also inclusive of liabilities for guaranteed benefits related to certain nontraditional long-duration life and annuity contracts. Liabilities for guaranteed benefits accounted for as embedded derivatives are primarily in other contract liabilities. The remaining liabilities for guaranteed benefits are primarily reflected with the underlying contract. See Note 7 for additional information regarding liabilities for guaranteed benefits related to certain nontraditional long-duration contracts.

Policyholders’ Account Balances

Policyholders’ account balances at December 31 are as follows:

	2013		2012
	(in thousands)
Interest-sensitive life contracts	$	1,021,733	$	876,585
Individual annuities		184,067		196,432
Guaranteed interest accounts		33,691		36,109
Other		121,173		112,806
Total policyholders' account balances	$	1,360,664	$	1,221,932

Policyholders’ account balances represent an accumulation of account deposits plus credited interest less withdrawals, expenses and mortality charges, if applicable. These policyholders’ account balances also include provisions for benefits under non-life contingent payout annuities. Interest crediting rates for interest-sensitive contracts range from 0.42% to 4.60%. Interest crediting rates for individual annuities range from 0.00% to 4.93%. Interest crediting rates for guaranteed interest accounts range from 1.00% to 5.25%. Interest crediting rates range from 0.50% to 3.50% for other.

6.    REINSURANCE

The Company participates in reinsurance with its affiliates PARCC, Pruco Re, PAR U, and PAR TERM, and its parent companies, Pruco Life and Prudential Insurance, in order to provide risk diversification, additional capacity for future growth and limit the maximum net loss potential. Life reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term and coinsurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely. The affiliated reinsurance agreements are described further in Note 13.

The Company has entered into various reinsurance agreements with an affiliate, Pruco Re, to reinsure its living benefit features sold on certain of its annuities as part of its risk management and capital management strategies. For additional details on these agreements, see Note 13.

Effective April 1, 2008, the Company entered into an agreement to reinsure certain variable Corporate Owned Life Insurance “COLI” policies with Pruco Life. For additional details on this agreement, see Note 13.

Reinsurance premiums, commissions, expense reimbursements, benefits and reserves related to reinsured long-duration contracts are accounted for using assumptions consistent with those used to account for the underlying contracts. Amounts recoverable from reinsurers, for long duration reinsurance arrangements, are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. The affiliated reinsurance agreements are described further in Note 13.

B-27

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Reinsurance amounts included in the Company’s Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2013, 2012 and 2011 are as follows:

	2013		2012		2011
	(in thousands)
Direct premiums	$	186,778	$	174,418	$	167,113
Premiums ceded		(171,885)		(160,287)		(151,808)
Premiums	$	14,893	$	14,133	$	15,305
Direct policy charges and fees	$	239,758	$	206,296	$	161,829
Policy charges and fees ceded		(82,947)		(59,836)		(48,357)
Policy charges and fees	$	156,811	$	146,460	$	113,472
Direct policyholders' benefits	$	228,175	$	205,982	$	191,532
Policyholders’ benefits ceded		(205,283)		(170,293)		(164,306)
Policyholders’ benefits	$	22,893	$	35,689	$	27,226
Realized capital gains (losses) net, associated with derivatives	$	(176,902)	$	(1,620)	$	(26,567)

Reinsurance premiums ceded for interest-sensitive products is accounted for as a reduction of policy charges and fee income. Reinsurance ceded for term insurance products is accounted for as a reduction of premiums.

Realized investment gains and losses include the impact of reinsurance agreements that are accounted for as embedded derivatives. Changes in the fair value of the embedded derivatives are recognized through “Realized investment gains (losses).” The Company has entered into reinsurance agreements to transfer the risk related to certain living benefit options on variable annuities to Pruco Re and to Pruco Life. See Note 13 for additional information on reinsurance agreements with affiliates. The reinsurance agreements are derivatives and have been accounted for in the same manner as an embedded derivative. See Note 11 for additional information related to the accounting for embedded derivatives.

Reinsurance recoverables included in the Company’s Statements of Financial Position as of December 31, were as follows:

	December 31, 2013		December 31, 2012
	(in thousands)
Domestic life insurance-affiliated	$	997,197	$	783,374
Domestic individual annuities-affiliated (1)		50		85,203
Domestic life insurance-unaffiliated		1,993		1,545
	$	999,240	$	870,122

(1) December 31, 2013 excludes $43 million reclassed to other liabilities due to mark-to-market impact discussed above.

Substantially all reinsurance contracts are with affiliates as of December 31, 2013, 2012 and 2011. These contracts are described further in Note 13.

The gross and net amounts of life insurance face amount in force as of December 31, were as follows:

	2013		2012		2011
	(in thousands)
Gross life insurance face amount in force	$	107,125,219	$	101,793,986	$	97,879,303
Reinsurance ceded		(97,197,953)		(92,025,256)		(88,113,164)
Net life insurance face amount in force	$	9,927,266	$	9,768,730	$	9,766,139

7.    CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS

The Company issues traditional variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company also issues variable annuity contracts with general and separate account options where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract less any partial withdrawals (“return of net deposits”). In certain of these variable annuity contracts, the Company also contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract less any partial withdrawals plus a minimum return (“minimum return”), and/or (2) the highest contract value on a specified date adjusted for any withdrawals (“contract value”). These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods. The Company also issues annuity contracts with market value adjusted investment options (“MVAs”), which provide for a return of principal plus a fixed rate of return if held to maturity, or, alternatively, a “market adjusted value” if surrendered prior to maturity or if funds are allocated to other investment options. The market value adjustment may result in a gain or loss to the Company, depending on crediting rates or an indexed rate at surrender, as applicable. The Company also issues fixed deferred annuity contracts without MVA that have a guaranteed credited rate and annuity benefit.

B-28

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

In addition, the Company issues certain variable life, variable universal life and universal life contracts where the Company contractually guarantees to the contractholder a death benefit even when there is insufficient value to cover monthly mortality and expense charges, whereas otherwise the contract would typically lapse (“no lapse guarantee”). Variable life and variable universal life contracts are offered with general and separate account options similar to variable annuities.

The assets supporting the variable portion of both traditional variable annuities and certain variable contracts with guarantees are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities.” Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits.”

For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, benefit utilization timing of annuitization, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility or contractholder behavior used in the original pricing of these products.

The Company’s contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed may not be mutually exclusive. The liabilities related to the net amount at risk are reflected within “Future policy benefits.” As of December 31, 2013 and 2012, the Company had the following guarantees associated with these contracts, by product and guarantee type:

	December 31, 2013				December 31, 2012
	In the Event of Death		At Annuitization / Accumulation (1)		In the Event of Death		At Annuitization / Accumulation (1)
	(in thousands)
Variable Annuity Contracts
Return of Net Deposits
Account value	$	5,734,942	$	N/A	$	4,511,432	$	N/A
Net amount at risk	$	3,592	$	N/A	$	10,272	$	N/A
Average attained age of contractholders		61		N/A		60		N/A
Minimum return or contract value
Account value	$	1,933,573	$	6,958,377	$	1,653,925	$	5,523,025
Net amount at risk	$	6,983	$	84,150	$	25,195	$	171,890
Average attained age of contractholders		64		61		64		60
Average period remaining until earliest expected annuitization		N/A		0.07 years		N/A		0.15 years

(1) Includes income and withdrawal benefits as described herein

	December 31, 2013		December 31, 2012
	In the Event of Death
	(in thousands)
Variable Life, Variable Universal Life and Universal Life Contracts
No Lapse Guarantees
Separate account value	$	710,080	$	643,930
General account value	$	383,074	$	298,222
Net amount at risk	$	8,551,482	$	6,992,592
Average attained age of contractholders		52 years		51 years

Account balances of variable annuity contracts with guarantees were invested in separate account investment options as follows:

	December 31, 2013		December 31, 2012
	(in thousands)
Equity funds	$	4,604,397	$	3,590,658
Bond funds		2,630,424		2,094,693
Money market funds		263,476		296,038
Total	$	7,498,297	$	5,981,389

B-29

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

In addition to the above mentioned amounts invested in separate account investment options, $170.2 million and $184.0 million of account balances of variable annuity contracts with guarantees, inclusive of contracts with MVA feature were invested in general account investment options in 2013 and 2012, respectively. For the years ended December 31, 2013, 2012 and 2011 there were no transfers of assets, other than cash, from the general account to any separate account, and accordingly no gains or losses recorded.

Liabilities for Guaranteed Benefits

The table below summarizes the changes in general account liabilities for guarantees on variable contracts. The liabilities for guaranteed minimum death benefits (“GMDB”), and guaranteed minimum income benefits (“GMIB”) are included in “Future policy benefits” and the related changes in the liabilities are included in “Policyholders’ benefits.” Guaranteed minimum income and withdrawal benefits (“GMIWB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum accumulation benefits (“GMAB”) features are accounted for as bifurcated embedded derivatives and are recorded at fair value within “Future policy benefits”. Changes in the fair value of these derivatives, including changes in the Company’s own risk of non-performance, along with any fees attributed or payments made relating to the derivative, are recorded in “Realized investment gains (losses), net.” See Note 10 for additional information regarding the methodology used in determining the fair value of these embedded derivatives.

	GMDB				GMIB		GMWB/GMIWB/G MAB		Total
	Variable Annuity		Variable Life, Variable Universal Life & Universal Life		Variable Annuity
	(in thousands)
Balance as of December 31, 2010	$	840	$	18,386	$	1,236	$	(41,316)	$	(20,854)
Incurred guarantee benefits (1)		1,248		6,053		318		118,312		125,931
Paid guarantee benefits		(683)		-		-		-		(683)
Balance as of December 31, 2011	$	1,405	$	24,439	$	1,554	$	76,996	$	104,394
Incurred guarantee benefits (1)		1,566		8,864		736		39,676		50,842
Paid guarantee benefits		(360)		(224)		-		-		(584)
Balance as of December 31, 2012	$	2,611	$	33,079	$	2,290	$	116,672	$	154,652
Incurred guarantee benefits (1)		116		6,802		(1,277)		(154,862)		(149,221)
Paid guarantee benefits		(147)		-		(52)		-		(199)
Other		109		2,574		12		-		2,695
Balance as of December 31, 2013	$	2,689	$	42,455	$	973	$	(38,190)	$	7,927

(1) Incurred guarantee benefits include the portion of assessments established as additions to reserves as well as changes in estimates affecting the reserves. Also includes changes in the fair value of features accounted for as embedded derivatives.

The GMDB liability is determined each period end by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the excess death benefits. The GMIB liability associated with variable annuities is determined each period by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the excess income benefits. The portion of assessments used is calculated at each valuation date such that, the present value of excess benefits and the portion of the present value of total expected assessments over the lifetime of the contracts are equal. The Company regularly evaluates the estimates used and adjusts the GMDB and GMIB liability balances, with an associated charge or credit to earnings.

The GMAB features provide the contractholder with a guaranteed return of initial account value or an enhanced value if applicable. The most significant of the Company’s GMAB features are the guaranteed return option (“GRO”) features, which includes an asset transfer feature that reduces the Company’s exposure to these guarantees. The GMAB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

The GMWB features provide the contractholder with access to a guaranteed remaining balance if the account value is reduced to zero through a combination of market declines and withdrawals. The guaranteed remaining balance is generally equal to the protected value under the contract, which is initially established as the greater of the account value or cumulative deposits when withdrawals commence, adjusted for cumulative withdrawals. The contractholder also has the option, after a specified time period, to reset the guaranteed remaining balance to the then-current account value, if greater. The contractholder accesses the guaranteed remaining balance through payments over time, subject to maximum annual limits. The GMWB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

B-30

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

The GMIWB features, taken collectively, provide a contractholder two optional methods to receive guaranteed minimum payments over time, a “withdrawal” option or an “income” option. The withdrawal option (which was available under only one of the GMIWBs the Company no longer offers) guarantees that a contractholder can withdraw an amount each year until the cumulative withdrawals reach a total guaranteed balance. The income option (which varies among the Company’s GMIWBs) in general guarantees the contractholder the ability to withdraw an amount each year for life (or for joint lives, in the case of any spousal version of the benefit) where such amount is equal to a percentage of a protected value under the benefit. The contractholder also has the potential to increase this annual amount, based on certain subsequent increases in account value that may occur. The GMIWB can be elected by the contractholder upon issuance of an appropriate deferred variable annuity contract or at any time following contract issue prior to annuitization. Certain GMIWB features include an asset transfer feature that reduces the Company’s exposure to these guarantees. The GMIWB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

Sales Inducements

The Company generally defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize deferred policy acquisition costs. These deferred sales inducements are included in “Deferred Sales Inducements” in the Company’s Statements of Financial Position. The Company offered various types of sales inducements, including: (1) a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage of the customer’s initial deposit and (2) additional credits after a certain number of years a contract is held. Changes in deferred sales inducements, reported as “Interest credited to policyholders’ account balances,” are as follows:

	2013		2012		2011
	(in thousands)
Balance, beginning of year	$	70,728	$	48,101	$	51,106
Capitalization		1,793		19,219		22,596
Amortization- Impact of assumption and experience unlocking and true-ups		1,799		4,488		(2,290)
Amortization- All other		13,501		(956)		(23,105)
Change in unrealized investment gains (losses)		529		(124)		(206)
Balance, end of year	$	88,350	$	70,728	$	48,101

8.    STATUTORY NET INCOME AND SURPLUS AND DIVIDEND RESTRICTIONS

The Company is required to prepare statutory financial statements in accordance with accounting practices prescribed or permitted by the New Jersey Department of Banking and Insurance. Statutory accounting practices primarily differ from GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions and valuing investments, deferred taxes, and certain assets on a different basis.

Statutory net income (loss) of the Company amounted to $81 million, $66 million, and $13 million for the years ended December 31, 2013, 2012 and 2011, respectively. Statutory surplus of the Company amounted to $380 million and $465 million at December 31, 2013 and 2012, respectively.

The Company prepares its statutory financial statements in accordance with accounting practices prescribed or permitted by the New Jersey Department of Banking and Insurance. Prescribed statutory accounting practices include publications of the NAIC, state laws, regulations, and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed.

The Company is subject to New Jersey law, which limits the amount of dividends that insurance companies can pay to stockholders without approval of the New Jersey Department of Banking and Insurance. The maximum dividend, which may be paid in any twelve-month period without notification or approval, is limited to the greater of 10% of statutory surplus as of December 31 of the preceding year or the net gain from operations of the preceding calendar year. Cash dividends may only be paid out of surplus derived from realized net profits. Based on these limitations, there is $81 million capacity to pay a dividend in 2014 without prior approval. The Company paid a dividend of $155 million in 2013. The Company did not pay any dividends in 2012.

B-31

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

9.    INCOME TAXES

The components of income tax expense (benefit) for the years ended December 31, were as follows:

	2013		2012		2011
	(in thousands)
Current tax expense (benefit):
U.S.	$	33,370	$	64,255	$	(715)
Total		33,370		64,255		(715)
Deferred tax expense (benefit):
U.S.		31,996		(25,049)		(47,893)
Total		31,996		(25,049)		(47,893)
Total income tax expense on continuing operations		65,366		39,206		(48,608)
Income tax expense (benefit) reported in equity related to:
Other comprehensive income (loss)		(16,342)		177		9,689
Additional paid-in capital		53		1,680		100
Total income tax expense (benefit) on continuing operations	$	49,077	$	41,063	$	(38,819)

The Company’s actual income tax expense for the years ended December 31, differs from the expected amount computed by applying the statutory federal income tax rate of 35% to income from continuing operations before income taxes and cumulative effect of accounting change for the following reasons:

	2013		2012		2011
	(in thousands)
Expected federal income tax expense (benefit)	$	80,923	$	50,144	$	(37,938)
Non-taxable investment income		(13,840)		(9,794)		(7,885)
Tax credits		(1,789)		(1,249)		(1,368)
Other		72		105		(1,417)
Total income tax expense (benefit) on income from continuing operations	$	65,366	$	39,206	$	(48,608)

The dividends received deduction (“DRD”) reduces the amount of dividend income subject to U.S. tax and is the primary component of the non-taxable investment income shown in the table above, and, as such, is a significant component of the difference between the Company’s effective tax rate and the federal statutory tax rate of 35%. The DRD for the current period was estimated using information from 2012 and current year results, and was adjusted to take into account the current year’s equity market performance. The actual current year DRD can vary from the estimate based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from mutual fund investments, changes in the account balances of variable life and annuity contracts, and the Company’s taxable income before the DRD.

In August 2007, the Internal Revenue Service (“IRS”) released Revenue Ruling 2007-54, which included, among other items, guidance on the methodology to be followed in calculating the DRD related to variable life insurance and annuity contracts. In September 2007, the IRS released Revenue Ruling 2007-61. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 and informed taxpayers that the U.S. Treasury Department and the IRS intend to address through new guidance the issues considered in Revenue Ruling 2007-54, including the methodology to be followed in determining the DRD related to variable life insurance and annuity contracts. In May 2010, the IRS issued an Industry Director Directive (“IDD”) confirming that the methodology for calculating the DRD set forth in Revenue Ruling 2007-54 should not be followed. The IDD also confirmed that the IRS guidance issued before Revenue Ruling 2007-54, which guidance the Company relied upon in calculating its DRD, should be used to determine the DRD. In February 2014, the IRS released Revenue Ruling 2014-7, which modified and superseded Revenue Ruling 2007-54, by removing the provisions of Revenue Ruling 2007-54 related to the methodology to be followed in calculating the DRD and obsoleting Revenue Ruling 2007-61. However, there remains the possibility that the IRS and the U.S. Treasury will address, through subsequent guidance, the issues related to the calculation of the DRD. For the last several years, the revenue proposals included in the Obama Administration's budgets included a proposal that would change the method used to determine the amount of the DRD. A change in the DRD, including the possible retroactive or prospective elimination of this deduction through guidance or legislation, could increase actual tax expense and reduce the Company’s consolidated net income. These activities had no impact on the Company’s 2011, 2012 or 2013 results.

B-32

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Deferred tax assets and liabilities at December 31, resulted from the items listed in the following table:

	2013			2012
	(in thousands)
Deferred tax assets
Insurance reserves	$	120,815		$	113,710
Other		-			766
Deferred tax assets	$	120,815		$	114,476
Deferred tax liabilities
Deferred policy acquisition costs	$	106,577		$	72,040
Deferred sales inducements		30,923			24,755
Net unrealized gains on securities		13,743			31,957
Investments		3,382			3,676
Other		531			-
Deferred tax liabilities	$	155,156		$	132,428
Net deferred tax asset (liability)	$	(34,341	)	$	(17,952	)

The application of U.S. GAAP requires the Company to evaluate the recoverability of deferred tax assets and establish a valuation allowance if necessary to reduce the deferred tax asset to an amount that is more likely than not expected to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company considers many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized. The company had no valuation allowance as of December 31, 2013, and 2012.

Management believes that based on its historical pattern of taxable income, the Company will produce sufficient income in the future to realize its deferred tax assets. Adjustments to the valuation allowance will be made if there is a change in management’s assessment of the amount of deferred tax asset that is realizable.

The Company’s income (loss) from continuing operations before income taxes includes income (loss) from domestic operations of $231.2 million, $143.3 million and ($108.4) million, and no income from foreign operations for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company's liability for income taxes includes the liability for unrecognized tax benefits and interest that relate to tax years still subject to review by the IRS or other taxing authorities. The completion of review or the expiration of the Federal statute of limitations for a given audit period could result in an adjustment to the liability for income taxes.

The Company’s unrecognized tax benefits for the years ended December 31 are as follows:

	2013		2012		2011
	(in thousands)
Balance at January 1,	$	-	$	113	$	1,619
Increases in unrecognized tax benefits - prior years		-		-		-
(Decreases) in unrecognized tax benefits- prior years		-		-		(1,506)
Increases in unrecognized tax benefits - current year		-		-		-
(Decreases) in unrecognized tax benefits- current year		-		-		-
Settlement with taxing authorities		-		(113)		-
Balance at December 31,	$	-	$	-	$	113
Unrecognized tax benefits that, if recognized, would favorably impact the effective rate		-		-		-

The Company does not anticipate any significant changes within the next 12 months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired.

The Company classifies all interest and penalties related to tax uncertainties as income tax expense (benefit). In December 31, 2013 and 2012, the Company recognized nothing in the statement of operations and recognized no liabilities in the statement of financial position for tax-related interest and penalties.

B-33

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Listed below are the tax years that remain subject to examination by major tax jurisdiction, at December 31, 2013:

Major Tax Jurisdiction	Open Tax Years
United States		2004 - 2013

During 2004 through 2006, the Company’s parent, Prudential Financial, Inc., entered into two transactions that involved, among other things, the payment of foreign income taxes that were credited against the Company’s U.S. tax liability. On May 23, 2011, the IRS issued notices of proposed adjustments disallowing the foreign tax credits claimed and related transaction expenses. The total amount of the proposed adjustments for the transactions was approximately $200 million of tax and penalties. During the fourth quarter of 2011, the Company reached agreement with the IRS on the resolution of the proposed foreign tax credits disallowance. The impact to the 2011 results attributable to the settlement was an increase to tax expense of approximately $93 million. The settlement of the foreign tax credit transactions for 2004 through 2006 marked the conclusion of the IRS audits for those years. As a result, all unrecognized tax positions plus interest relating to tax years prior to 2007 were recognized in 2011. As such, 2011 benefited from a reduction to the liability for unrecognized tax benefits of $70 million, including the impact from the foreign tax credit disallowance.

For tax years 2007 through 2013, the Company is participating in the IRS’s Compliance Assurance Program (“CAP”). Under CAP, the IRS assigns an examination team to review completed transactions contemporaneously during these tax years in order to reach agreement with the Company on how they should be reported in the tax returns. If disagreements arise, accelerated resolutions programs are available to resolve the disagreements in a timely manner before the tax returns are filed. It is management’s expectation this program will shorten the time period between the filing of the Company’s federal income tax returns and the IRS’s completion of its examination of the returns.

10.    FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement – Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Company’s Level 1 assets and liabilities primarily include certain cash equivalents, short term investments and equity securities that trade on an active exchange market.

Level 2 - Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company’s Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a net asset value), certain short-term investments and certain cash equivalents (primarily commercial paper), and certain over-the-counter derivatives.

Level 3 - Fair value is based on at least one or more significant unobservable inputs for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. The Company’s Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured over-the-counter derivative contracts, certain real estate funds for which the Company is the general partner, and embedded derivatives resulting from certain products with guaranteed benefits.

B-34

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities measured at fair value on a recurring basis, as of the dates indicated.

	As of December 31, 2013
	Level 1		Level 2		Level 3			Netting (1)			Total
	(in thousands)
Fixed maturities, available for sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	27,781	$	-		$	-		$	27,781
Obligations of U.S. states and their political subdivisions		-		4,681		-			-			4,681
Foreign government bonds		-		12,358		-			-			12,358
Corporate securities		-		730,248		4,362			-			734,610
Asset-backed securities		-		35,155		16,023			-			51,178
Commercial mortgage-backed securities		-		66,839		-			-			66,839
Residential mortgage-backed securities		-		29,894		-			-			29,894
Sub-total		-		906,956		20,385			-			927,341
Trading account assets:
Equity securities		-		`-		-			-			-
Sub-total		-		-		-			-			-
Equity securities, available for sale:		-		37		79			-			116
Short-term investments		182		4,998		-			-			5,180
Cash equivalents		-		13,999		-			-			13,999
Other long-term investments		-		5,124		-			(5,124	)		-
Reinsurance recoverables		-		-		-			-			-
Receivables from parents and affiliates		-		30,581		3,138			-			33,719
Sub-total excluding separate account assets		182		961,695		23,602			(5,124	)		980,355
Separate account assets (2)		60,601		10,168,133		6,692			-			10,235,426
Total assets	$	60,783	$	11,129,828	$	30,294		$	(5,124	)	$	11,215,781
Future policy benefits (4)		-		-		(38,190	)		-			(38,190	)
Other liabilities (3)		-		5,125		43,340			(5,124	)		43,341
Total liabilities	$	-	$	5,125	$	5,150		$	(5,124	)	$	5,151
	As of December 31, 2012
	Level 1		Level 2		Level 3			Netting (1)			Total
	(in thousands)
Fixed maturities, available for sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	31,308	$	-		$	-		$	31,308
Obligations of U.S. states and their political subdivisions		-		2,949		-			-			2,949
Foreign government bonds		-		13,150		-			-			13,150
Corporate securities		-		804,953		6,073			-			811,026
Asset-backed securities		-		45,126		18,301			-			63,427
Commercial mortgage-backed securities		-		78,223		-			-			78,223
Residential mortgage-backed securities		-		65,988		-			-			65,988
Sub-total		-		1,041,697		24,374			-			1,066,071
Trading account assets:
Equity securities		-		-		1,390			-			1,390
Sub-total		-		-		1,390			-			1,390
Equity securities, available for sale:		250		64		1,067			-			1,381
Short-term investments		2,226		-		-			-			2,226
Cash equivalents		-		49,774		-			-			49,774
Other long-term investments		-		24,328		-			(12,090	)		12,238
Reinsurance recoverables		-		-		85,166			-			85,166
Receivables from parents and affiliates		-		7,940		998			-			8,938
Sub-total excluding separate account assets		2,476		1,123,803		112,995			(12,090	)		1,227,184
Separate account assets (2)		21,876		8,345,703		6,201			-			8,373,780
Total assets	$	24,352	$	9,469,506	$	119,196		$	(12,090	)	$	9,600,964
Future policy benefits (4)		-		-		116,673			-			116,673
Other liabilities		-		12,090		-			(12,090	)		-
Total liabilities	$	-	$	12,090	$	116,673		$	(12,090	)	$	116,673

B-35

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

(1) “Netting” amounts represent the impact of offsetting asset and liability positions held within the same counterparty, subject to master netting arrangements.

(2) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account assets classified as Level 3 consist primarily of real estate and real estate investment funds. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Statements of Financial Position.

(3) Reinsurance of variable annuity living benefit features classified as “Reinsurance Recoverables” at December 31, 2012 were reclassified to “Other Liabilities” – at December 31, 2013 as they were in a net liability position.

(4) For the year ended December 31, 2013, the net embedded derivative asset position of $38 million includes $109 million of embedded derivatives in an asset position and $71 million of embedded derivatives in a liability position. For the year ended December 31, 2012, the net embedded derivative liability position of $117 million includes $37 million of embedded derivatives in an asset position and $154 million of embedded derivatives in a liability position.

The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below.

Fixed Maturity Securities – The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. The pricing hierarchy is updated for new financial products and recent pricing experience. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. If the pricing information received from third party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service. If the pricing service updates the price to be more consistent with the presented market observations, the security remains within Level 2.

Internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances where vendor pricing is not available, or where the Company ultimately concludes that pricing information received from the independent pricing service is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may over-ride the information with an internally-developed valuation. As of December 31, 2013 and December 31, 2012, over-rides on a net basis were not material. Pricing service over-rides, internally-developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy.

The fair value of private fixed maturities, which are comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using a discounted cash flow model. If the fair value is determined using pricing inputs that are observable in the market, the securities have been reflected within Level 2; otherwise a Level 3 classification is used.

Trading Account Assets – Trading account assets are comprised of perpetual preferred stock whose fair values are determined consistent with similar instruments described below under “Equity Securities.”

Equity Securities – Equity securities consist principally of investments in common and preferred stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well as mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using discounted cash flow, earnings multiple and other valuation - models that require a substantial level of judgment around inputs and therefore are classified within Level 3. The fair values of mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of perpetual preferred stock are based on inputs obtained from independent pricing services that are primarily based on indicative broker quotes. As a result, the fair values of perpetual preferred stock are classified as Level 3.

Derivative Instruments – Derivatives are recorded at fair value either as assets, within “Other long-term investments,” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, credit spreads, market volatility, expected returns, non-performance risk (“NPR”), liquidity and other factors. Liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity, and other specific attributes of the underlying derivative position.

The majority of the Company’s derivative positions are traded in the over-the-counter OTC derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate, cross currency swaps, currency forward contracts and single name credit default swaps are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, non-performance risk, volatility and other factors.

The Company’s cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including overnight indexed swap discount rates, obtained from external market data providers, third-party pricing vendors and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy.

B-36

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

To reflect the market’s perception of its own and the counterparty’s non-performance risk, the Company incorporates additional spreads over LIBOR into the discount rate used in determining the fair value of OTC derivative assets and liabilities that are not otherwise collateralized.

Derivatives classified as Level 3 include structured products. These derivatives are valued based upon models, such as Monte Carlo simulation models and other techniques that utilize significant unobservable inputs. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to external broker-dealer values. As of December 31, 2013 and December 31, 2012, all derivatives were classified within Level 2. See Note 11 for more details on the fair value of derivative instruments by primary underlying.

Cash Equivalents and Short-Term Investments – Cash equivalents and short-term investments include money market instruments, commercial paper and other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in this category are generally fair valued based on market observable inputs and, these investments have primarily been classified within Level 2.

Separate Account Assets – Separate Account Assets include fixed maturity securities, treasuries, equity securities and real estate investments for which values are determined consistent with similar instruments described above under “Fixed Maturity Securities,” “Equity Securities" and “Other Long-Term Investments.”

Receivables from Parent and Affiliates – Receivables from parent and affiliates carried at fair value include affiliated bonds within our legal entity whose fair value are determined consistent with similar securities described above under “Fixed Maturity Securities” managed by affiliated asset managers.

Reinsurance Recoverables – Reinsurance recoverables carried at fair value include the reinsurance of our living benefit guarantees on certain of our variable annuities. These guarantees are accounted for as embedded derivatives and are recorded in “Reinsurance Recoverables” or “Other Liabilities” when fair value is in an asset or liability position, respectively. The methods and assumption used to estimate the fair value are consistent with those described below in “Future Policy Benefits.” The reinsurance agreements covering these guarantees are derivatives with fair value determined in the same manner as the living benefit guarantee.

Future Policy Benefits – The liability for future policy benefits primarily includes general account liabilities for the optional living benefit features of the Company’s variable annuity contracts, including guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”), accounted for as embedded derivatives. The fair values of the GMAB, GMWB, and GMIWB liabilities are calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the optional living benefit feature. This methodology could result in either a liability or contra-liability balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management judgment.

The significant inputs to the valuation models for these embedded derivatives include capital market assumptions, such as interest rate levels and volatility assumptions, the Company’s market-perceived risk of its own non-performance, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy.

Capital market inputs and actual policyholders’ account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets, and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders’ account values. The Company’s discount rate assumption is based on the LIBOR swap curve adjusted for an additional spread relative to LIBOR to reflect NPR.

Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data, such as available industry studies or market transactions such as acquisitions and reinsurance transactions. These assumptions are generally updated in the third quarter of each year unless a material change that the Company feels is indicative of a long term trend is observed in an interim period.

Transfers between Levels 1 and 2 – Periodically there are transfers between Level 1 and Level 2 for assets held in the Company’s Separate Account. The classification of Separate Account funds may vary dependent on the availability of information to the public. Should a fund’s net asset value become publicly observable, the fund would be transferred from Level 2 to Level 1. During the year ended December 31, 2013, $32 million was transferred from Level 1 to Level 2. Transfers between levels are generally reported at the values as of the beginning of the period in which the transfers occur. There were no transfers between Levels 1 and 2 for the years ended December 31, 2012 and 2011.

B-37

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Level 3 Assets and Liabilities by Price Source – The table below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources.

	As of December 31, 2013
	Internal (1)			External (2)		Total
	(in thousands)
Corporate securities	$	4,362		$	-	$	4,362
Asset-backed securities		50			15,973		16,023
Equity securities		79			-		79
Receivables from parents and affiliates		-			3,138		3,138
Subtotal excluding separate account assets		4,491			19,111		23,602
Separate account assets		6,692			-		6,692
Total assets	$	11,183		$	19,111	$	30,294
Future policy benefits	$	(38,190	)	$	-	$	(38,190	)
Other liabilities		43,340			-		43,340
Total liabilities	$	5,150		$	-	$	5,150
	As of December 31, 2012
	Internal (1)			External (2)		Total
	(in thousands)
Corporate securities	$	5,157		$	916	$	6,073
Asset-backed securities		56			18,245		18,301
Equity securities		1,067			1,390		2,457
Reinsurance recoverables		85,166			-		85,166
Receivables from parents and affiliates		-			998		998
Subtotal excluding separate account assets		91,446			21,549		112,995
Separate account assets		6,201			-		6,201
Total assets	$	97,647		$	21,549	$	119,196
Future policy benefits	$	116,673		$	-	$	116,673
Total liabilities	$	116,673		$	-	$	116,673

(1) Represents valuations which could incorporate both internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table.

(2) Represents unadjusted prices from independent pricing services and independent non-binding broker quotes where pricing inputs are not readily available.

Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The table below presents quantitative information on significant internally-priced Level 3 assets and liabilities.

	As of December 31, 2013
	Fair Value			Valuation Techniques	Unobservable Inputs	Minimum			Maximum			Weighted Average			Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	4,362		Discounted cash flow	Discount rate		11.0	%		11.0	%		11.00	%	Decrease
				Market comparables	EBITDA multiples (2)		6.0X			7.0X			6.09X		Increase
Liabilities:
Future policy benefits (3)	$	(38,190	)	Discounted cash flow	Lapse rate (4)		0	%		11	%				Decrease
					NPR spread (5)		0.08	%		1.09	%				Decrease
					Utilization rate (6)		70	%		94	%				Increase
					Withdrawal rate (7)		86	%		100	%				Increase
					Mortality rate (8)		0	%		13	%				Decrease
					Equity Volatility curve		15	%		28	%				Increase
Other Liabilities		43,340		Represents reinsurance of variable annuity living benefits in a liability position. Fair values are determined in the same manner as future policy benefits

B-38

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	As of December 31, 2012
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum		Weighted Average		Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	5,157	Discounted cash flow	Discount rate		11.50%		17.50%		13.39%	Decrease
Reinsurance recoverables	$	85,166	Fair values are determined in the same manner as future policy benefits
Liabilities:
Future policy benefits (3)	$	116,673	Discounted cash flow	Lapse rate (4)		0%		14%			Decrease
				NPR spread (5)		0.20%		1.60%			Decrease
				Utilization rate (6)		70%		94%			Increase
				Withdrawal rate (7)		85%		100%			Increase
				Mortality rate (8)		0%		13%			Decrease
				Equity Volatility curve		19%		34%			Increase

(1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.

(2) EBITDA multiples represent multiples of earnings before interest, taxes, depreciation and amortization, and are amounts used when the reporting entity has determined that market participants would use such multiples when pricing the investments.

(3) Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(4) Base lapse rates are adjusted at the contract level based on a comparison of the benefit amount and the policyholder account value and reflect other factors, such as the applicability of any surrender charges. A dynamic lapse adjustment reduces the base lapse rate when the benefit amount is greater than the account value, as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(5) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. In determining the NPR spread, the Company reflects the financial strength ratings of the Company and its affiliates as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium.

(6) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. These assumptions vary based on the product type, the age of the contractholder and the age of the contract. The impact of changes in these assumptions is highly dependent on the contract type and age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal.

(7) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.

(8) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities – The rate used to discount future cash flows reflects current risk free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term, and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors.

Future Policy Benefits – The unobservable contractholder behavior inputs related to the liability for the optional living benefit features of the Company’s variable annuity contracts included in future policy benefits are generally based on emerging experience, future expectations and other data. While experience for these products is still emerging, the Company expects benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. The dynamic lapse adjustment assumes lower lapses when the benefit amount is greater than the account value, as in-the-money contracts are less likely to lapse. Therefore, to the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, the dynamic lapse function will reduce lapse rates for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, the dynamic lapse function will lower overall lapse rates as contracts become more in-the-money.

Separate Account Assets – In addition to the significant internally-priced Level 3 assets and liabilities presented and described above, the Company also has internally-priced separate account assets reported within Level 3. Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Statement of Financial Position. As a result, changes in value associated with these investments do not impact the Company’s Statement of Operations. In addition, fees earned by the Company related to the

B-39

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

management of most separate account assets classified as Level 3 do not change due to changes in the fair value of these investments. Quantitative information about significant internally-priced Level 3 separate account assets is as follows:

Real Estate and Other Invested Assets – Separate account assets include $6.7 million and $6.2 million of investments in real estate as of December 31, 2013 and December 31, 2012, respectively, that are classified as Level 3 and reported at fair value which is determined by the Company's equity in net assets of the entities. Fair value estimates of real estate are based on property appraisal reports prepared by independent real estate appraisers. Key inputs and assumptions to the appraisal process include rental income and expense amounts, related growth rates, discount rates and capitalization rates. Because of the subjective nature of inputs and the judgment involved in the appraisal process, real estate investments are typically included in the Level 3 Classification. Key unobservable inputs to real estate valuation include capitalization rates, which ranged from 5.00% to 10.00% (6.82% weighted average) as of December 31, 2013 and 5.50% to 9.50% (7.30% weighted average) as of December 31, 2012 and discount rates which ranged from 6.75% to 11.00% (7.90% weighted average) as of December 31, 2013 and 7.00% to 11.50% (8.30% weighted average) as of December 31, 2012.

Valuation Process for Fair Value Measurements Categorized within Level 3 – The Company has established an internal control infrastructure over the valuation of financial instruments that requires ongoing oversight by its various Business Groups. These management control functions are segregated from the trading and investing functions. For invested assets, the Company has established oversight teams, often in the form of Pricing Committees within each asset management group. The teams, which typically include representation from investment, accounting, operations, legal and other disciplines are responsible for overseeing and monitoring the pricing of the Company’s investments and performing periodic due diligence reviews of independent pricing services. An actuarial valuation team oversees the valuation of optional living benefit features of the Company’s variable annuity contracts.

The Company has also established policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of investment prices against market activity or indicators of reasonableness, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. For optional living benefit features of the Company’s variable annuity products, the actuarial valuation unit periodically performs baseline testing of contract input data and actuarial assumptions are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data, such as available industry studies. The valuation policies and guidelines are reviewed and updated as appropriate.

Within the trading and investing functions, the Company has established policies and procedures that relate to the approval of all new transaction types, transaction pricing sources and fair value hierarchy coding within the financial reporting system. For variable annuity product changes or new launches of optional living benefit features, the actuarial valuation unit validates input logic and new product features and agrees new input data directly to source documents.

Changes in Level 3 assets and liabilities – The following tables provide summaries of the changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Year Ended December 31, 2013
	Fixed Maturities - Available For  Sale
	Corporate Securities			Asset-Backed Securities			Trading Account Assets - Equity Securities		Equity Securities, Available for Sale
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	6,073		$	18,301		$	1,390	$	1,067
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(87	)		-			-		483
Asset management fees and other income		-			-			109		-
Interest credited to policyholders’ account balances		-			-			-		-
Included in other comprehensive income (loss)		(95	)		86			-		11
Net investment income		36			244			-		-
Purchases		352			12,016			-		-
Sales		(1	)		-			(1,499)		(1,482	)
Issuances		-			-			-		-
Settlements		(975	)		(5,109	)		-		-
Transfers into Level 3 (2)		-			-			-		-
Transfers out of Level 3 (2)		(941	)		(7,518	)		-		-
Other (4)		-			(1,997	)		-		-
Fair Value, end of period assets/(liabilities)	$	4,362		$	16,023		$	-	$	79

B-40

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	Year Ended December 31, 2013
	Fixed Maturities - Available For  Sale
	Corporate Securities			Asset-Backed Securities		Trading Account Assets - Equity Securities			Equity Securities, Available for Sale
	(in thousands)
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (3):
Included in earnings:
Realized investment gains (losses), net	$	-		$	-	$	-		$	-
Asset management fees and other income	$	-		$	-	$	25		$	-
	Year Ended December 31, 2013
	Receivables from Parents and Affiliates			Separate Account Assets (1)		Future Policy Benefits			Other Liabilities (5)
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	998		$	6,201	$	(116,673	)	$	85,164
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-			-		204,349			(169,386	)
Asset management fees and other income		-			-		-			-
Interest credited to policyholders’ account balances		-			491		-			-
Included in other comprehensive income (loss)		(9	)		-		-			-
Net investment income		-			-		-			-
Purchases		3,648			-		-			40,882
Sales		(2,497	)		-		-			-
Issuances		-			-		(49,486	)		-
Settlements		-			-		-			-
Transfers into Level 3 (2)		-			-		-			-
Transfers out of Level 3 (2)		(999	)		-		-			-
Other (4)		1,997			-		-			-
Fair Value, end of period assets/(liabilities)	$	3,138		$	6,692	$	38,190		$	(43,340	)
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (3):
Included in earnings:
Realized investment gains (losses), net	$	-		$	-	$	202,622		$	(168,474	)
Asset management fees and other income	$	-		$	-	$	-		$	-
Interest credited to policyholders’ account balances	$	-		$	491	$	-		$	-

	Year Ended December 31, 2012
	Fixed Maturities Available For Sale
	Corporate Securities			Asset-Backed Securities			Commercial mortgage- backed securities			Trading Account Assets - Equity Securities			Equity Securities, Available for Sale
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	1,755		$	18,627		$	-		$	1,569		$	1,144
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(468	)		76			-			-			(122	)
Asset management fees and other income		-			-			-			(179	)		-
Included in other comprehensive income (loss)		116			355			(128	)		-			45
Net investment income		8			337			1			-			-
Purchases		4,704			5,302			-			-			-
Sales		(30	)		-			-			-			-
Issuances		-			-			-			-			-
Settlements		(1,814	)		(6,142	)		(2,496	)		-			-
Transfers into Level 3 (2)		4,826			200			2,623			-			-
Transfers out of Level 3 (2)		(3,024	)		(454	)		-			-			-
Fair Value, end of period assets/(liabilities)	$	6,073		$	18,301		$	-		$	1,390		$	1,067
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (3):
Included in earnings:
Realized investment gains (losses), net	$	-		$	-		$	-		$	-		$	-
Asset management fees and other income	$	-		$	-		$	-		$	(179	)	$	-
Interest credited to policyholders’ account balances	$	-		$	-		$	-		$	-		$	-

B-41

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	Year Ended December 31, 2012
	Other Long- Term Investments			Reinsurance Recoverables		Receivables from Parents and Affiliates			Separate Account Assets (1)		Future Policy Benefits
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	18		$	53,677	$	-		$	5,995	$	(76,996	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(18	)		1,491		-			-		(1,562	)
Asset management fees and other income		-			-		-			-		-
Interest credited to policyholders’ account balances		-			-		-			206		-
Included in other comprehensive income (loss)		-			-		(2	)		-		-
Net investment income		-			-		-			-		-
Purchases		-			29,997		1,000			-		-
Sales		-			-		-			-		-
Issuances		-			-		-			-		(38,115	)
Settlements		-			-		-			-		-
Transfers into Level 3 (2)		-			-		-			-		-
Transfers out of Level 3 (2)		-			-		-			-		-
Fair Value, end of period assets/(liabilities)	$	-		$	85,165	$	998		$	6,201	$	(116,673	)
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (3):
Included in earnings:
Realized investment gains (losses), net	$	-		$	2,126	$	-		$	-	$	(2,670	)
Asset management fees and other income	$	-		$	-	$	-		$	-	$	-
Interest credited to policyholders’ account balances	$	-		$	-	$	-		$	206	$	-

	Year Ended December 31, 2011
	Fixed Maturities Available For Sale
	Corporate Securities			Asset-Backed Securities			Commercial Mortgage- Backed Securities			Equity Securities, Available for Sale			Other Long- Term Investments
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	3,636		$	16,619		$	-		$	255		$	-
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		2			-			-			(516	)		18
Asset management fees and other income		-			-			-			-			-
Included in other comprehensive income (loss)		(96	)		(121	)		-			398			-
Net investment income		59			256			-			-			-
Purchases		1,300			11,089			5,019			1,000			-
Sales		(99	)		-			-			-			-
Issuances		73			-			-			-			-
Settlements		(148	)		(5,251	)		-			-			-
Transfers into Level 3 (2)		900			-			-			1,536			-
Transfers out of Level 3 (2)		(3,872	)		(3,965	)		(5,019	)		-			-
Other (4)		-			-			-			(1,529	)		-
Fair Value, end of period assets/(liabilities)	$	1,755		$	18,627		$	-		$	1,144		$	18
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (3):
Included in earnings:
Realized investment gains (losses), net	$	-		$	-		$	-		$	(454	)	$	-
Asset management fees and other income	$	-		$	-		$	-		$	-		$	-
Interest credited to policyholders’ account balances	$	-		$	-		$	-		$	-		$	-

B-42

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	Year Ended December 31, 2011
	Reinsurance Recoverables			Receivables from Parents and Affiliates			Separate Account Assets (1)		Future Policy Benefits			Other Trading Account Assets - Equity Securities
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	11,108		$	5,888			5,393	$	41,316		$	-
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(25,919	)		-			-		(94,684	)		-
Asset management fees and other income		-			-			-		-			40
Interest credited to policyholders’ account balances		-						602		-			-
Included in other comprehensive income (loss)		-			(13	)		-		-			-
Net investment income		-			-			-		-			-
Purchases		68,488			104			-		(23,628	)		-
Sales		-			-			-		-			-
Issuances		-			-			-		-			-
Settlements		-			-			-		-			-
Transfers into Level 3 (2)		-			-			-		-			-
Transfers out of Level 3 (2)		-			(5,979	)		-		-			-
Other (4)		-			-			-		-			1,529
Fair Value, end of period assets/(liabilities)	$	53,677		$	-		$	5,995	$	(76,996	)	$	1,569
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (3):
Included in earnings:
Realized investment gains (losses), net	$	18,797		$	-		$	-	$	(94,098	)	$	-
Asset management fees and other income	$	-		$	-		$	-	$	-		$	-
Interest credited to policyholders’ account balances	$	-		$	-		$	602	$	-		$	-

(1) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Statements of Financial Position.

(2) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

(3) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(4) Other primarily represents reclasses of certain assets between reporting categories.

(5) Reinsurance of variable annuity living benefit features classified as “Reinsurance Recoverables” at December 31, 2012, were reclassified to “Other Liabilities” – at December 31, 2013 as they were in a net liability position.

Transfers – Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

For the year ended December 31, 2011 the majority of the Equity Securities Available for Sale transfers into Level 3 were due to the determination that the pricing inputs for perpetual preferred stocks provided by third party pricing services were primarily based on indicative broker quotes which could not always be verified against directly observable market information. Perpetual preferred stocks were included in Equity Securities Available for Sale and subsequently transferred to Trading Account Assets.

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. However, in some cases, as described below, the carrying amount equals or approximates fair value.

	December 31, 2013										December 31, 2012
	Fair Value								Carrying Amount (1)		Fair Value		Carrying Amount
	Level 1		Level 2		Level 3		Total		Total		Total		Total
	(in thousands)
Assets:
Commercial mortgage and other loans	$	-	$	-	$	297,317	$	297,317	$	292,532	$	237,932	$	221,728
Policy loans		-		-		176,885		176,885		176,885		254,824		173,622
Other long term investments		-		-		744		744		658		430		388
Cash and cash equivalents		1,091		25,551		-		26,642		26,642		822		822
Accrued investment income		-		15,024		-		15,024		15,024		15,782		15,782
Receivables from parents and affiliates		-		23,198		-		23,198		23,090		20,462		20,284
Other assets		-		3,941		-		3,941		3,941		4,886		4,887
Total assets	$	1,091	$	67,714	$	474,946	$	543,751	$	538,772	$	535,138	$	437,513

B-43

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	December 31, 2013										December 31, 2012
	Fair Value								Carrying Amount (1)		Fair Value		Carrying Amount
	Level 1		Level 2		Level 3		Total		Total		Total		Total
	(in thousands)
Liabilities:
Policyholders’ Account Balances - Investment Contracts	$	-	$	130,026	$	10,956	$	140,982	$	143,294	$	133,268	$	134,119
Cash collateral for loaned securities		-		4,081		-		4,081		4,081		2,134		2,134
Short-term debt		-		24,569		-		24,569		24,000		24,377		24,000
Long-term debt		-		100,677		-		100,677		93,000		86,785		85,000
Payables to parent and affiliates		-		4,607		-		4,607		4,607		2,470		2,470
Other liabilities		-		48,662		-		48,662		48,662		35,792		35,792
Total liabilities	$	-	$	312,622	$	10,956	$	323,578	$	317,644	$	284,826	$	283,515

(1) Carrying values presented herein differ from those in the Company’s Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

The fair values presented above have been determined by using available market information and by applying market valuation methodologies, as described in more detail below.

Commercial Mortgage and Other Loans

The fair value of most commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate plus an appropriate credit spread for similar quality loans. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology.

Policy Loans

During the fourth quarter of 2013, the Company changed the valuation technique used to fair value policy loans. For the period ended December 31, 2013, the fair value of policy loans was determined by discounting expected cash flows at the current loan coupon rate. As a result the carrying value of the policy loans approximates the fair value for the year ended December 31, 2013. Prior to this change, the fair value of U.S. insurance policy loans was calculated by discounting expected cash flows based upon current U.S. Treasury rates and historical loan repayment patterns.

Other Long-term Investments

Other long-term investments include investments in joint ventures and limited partnerships. The estimated fair values of these cost method investments are generally based on the Company’s share of the net asset value (“NAV”) as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. For the year end December 31, 2013 and 2012, no such adjustments were made.

Cash, Accrued Investment Income, Receivables from Parent and Affiliates and Other Assets

The Company believes that due to the short-term nature of certain assets, the carrying value approximates fair value. These assets include: cash, accrued investment income, and other assets that meet the definition of financial instruments, including receivables, such as unsettled trades and accounts receivable. Also included in receivables from parents and affiliates is an affiliated note whose fair value is determined in the same manner as the underlying debt described below under “Short-Term and Long-Term Debt”.

Policyholders’ Account Balances - Investment Contracts

Only the portion of policyholders’ account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities, payout annuities and other similar contracts without life contingencies, fair values are derived using discounted projected cash flows based on interest rates that are representative of the Company’s financial strength ratings, and hence reflect the Company’s own non-performance risk. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value.

Cash Collateral for Loaned Securities

This represents the collateral received or paid in connection with loaning or borrowing securities, similar to the securities sold under agreement to repurchase below. For these transactions, the carrying value of the related asset/liability approximates fair value as they equal the amount of cash collateral received/paid.

B-44

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Short-Term and Long-Term Debt

The fair value of short-term and long-term debt is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. These fair values consider the Company’s own non-performance risk. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities. For commercial paper issuances and other debt with a maturity of less than 90 days, the carrying value approximates fair value.

Other Liabilities and Payables to Parent and Affiliates

Other liabilities and payables to parent and affiliates are primarily payables, such as unsettled trades, drafts, escrow deposits and accrued expense payables. Due to the short term until settlement of most of these liabilities, the Company believes that carrying value approximates fair value.

11.    DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

Interest Rate Contracts

Interest rate swaps are used by the Company to reduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it owns or anticipates acquiring or selling. Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty at each due date.

Equity Contracts

Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range.

Foreign Exchange Contracts

Currency derivatives, including currency swaps, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell.

Under currency swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date.

Credit Contracts

Credit derivatives are used by the Company to enhance the return on the Company’s investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With credit derivatives the Company can sell credit protection on an identified name, and in return receive a quarterly premium. With credit default derivatives, this premium or credit spread generally corresponds to the difference between the yield on the referenced name’s public fixed maturity cash instruments and swap rates, at the time the agreement is executed. If there is an event of default by the referenced name, as defined by the agreement, then the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced defaulted security or similar security or pay the referenced amount less the auction recovery rate. See credit derivatives written section for discussion of guarantees related to credit derivatives written. In addition to selling credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio.

Embedded Derivatives

The Company sells variable annuity products, which may include guaranteed benefit features that are accounted for as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these benefit features to an affiliate, Pruco Re. The embedded

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value. These embedded derivatives are marked to market through “Realized investment gains (losses), net” based on the change in value of the underlying contractual guarantees, which are determined using valuation models, as described in Note 10.

The fair value of the living benefit feature embedded derivatives included in “Future policy benefits” was an asset of $38 million and a liability of $117 million as of December 31, 2013 and December 31, 2012, respectively. The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re included in “Reinsurance recoverables” was a liability of $43 million and an asset of $85 million as of December 31, 2013 and December 31, 2012, respectively.

The Company has invested in fixed maturities in the past that, in addition to a stated coupon, provided a return based upon the results of an underlying portfolio of fixed income investments and related investment activity. The Company accounted for these investments as available-for-sale fixed maturities containing embedded derivatives. Such embedded derivatives are marked to market through “Realized investment gains (losses), net,” based upon the change in value of the underlying portfolio.

The table below provides a summary of the gross notional amount and fair value of derivatives contracts used in a non-broker-dealer capacity, excluding embedded derivatives which are recorded with the associated host, by the primary underlying. Many derivative instruments contain multiple underlyings.

	December 31, 2013						December 31, 2012
	Notional		Gross Fair Value					Notional		Gross Fair Value
Primary Underlying	Amount		Assets		Liabilities			Amount		Assets		Liabilities
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate
Currency Swaps	$	41,256	$	-	$	(3,328)		$	22,332	$	7	$	(1,330)
Total Qualifying Hedges	$	41,256	$	-	$	(3,328)		$	22,332	$	7	$	(1,330)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest
Interest Rate Swaps	$	57,200	$	3,443	$	-		$	57,200	$	9,353	$	-
Credit
Credit Default Swaps		9,275		15		(499)			9,275		614		(369)
Currency/Interest Rate
Currency Swaps		10,370		-		(556)			9,115		-		(836)
Equity
Equity Options		1,870,001		1,666		(742)			1,870,001		14,354		(9,555)
Total Non-Qualifying Hedges		1,946,846		5,124		(1,797)			1,945,591		24,321		(10,760)
Total Derivatives (1)	$	1,988,102	$	5,124	$	(5,125)		$	1,967,923	$	24,328	$	(12,090)

(1) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was an asset of $38 million and a liability of $119 million as of December 31, 2013 and December 31, 2012, respectively, included in “Future policy benefits” and “Fixed maturities, available-for-sale.”

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (including bifurcated embedded derivatives), and repurchase and reverse repurchase agreements, that are offset in the balance sheet, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the balance sheet.

	December 31, 2013
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral			Net Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	5,124	$	(5,124	)	$	-	$	-		$	-
Securities purchased under agreement to resell		25,551		-			25,551		(25,551	)		-
Total Assets	$	30,675	$	(5,124	)	$	25,551	$	(25,551	)	$	-
Offsetting of Financial Liabilities:
Derivatives	$	5,125	$	(5,124	)	$	1	$	-		$	1
Securities sold under agreement to repurchase		-		-			-		-			-
Total Liabilities	$	5,125	$	(5,124	)	$	1	$	-		$	1

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	December 31, 2012
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral			Net Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	24,193	$	(12,090	)	$	12,103	$	-		$	12,103
Securities purchased under agreement to resell		49,774		-			49,774		(49,774	)		0
Total Assets	$	73,967	$	(12,090	)	$	61,877	$	(49,774)		$	12,103
Offsetting of Financial Liabilities:
Derivatives	$	12,090	$	(12,090	)	$	-	$	-		$	-
Securities sold under agreement to repurchase		-		-			-		-			-
Total Liabilities	$	12,090	$	(12,090)		$	-	$	-		$	-

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Company’s Financial Statements.

Cash Flow Hedges

The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its cash flow hedge accounting relationships.

The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship:

		Year Ended December 31, 2013
		Realized Investment Gains/(Losses)				Net Investment Income			Other Income				Accumulated Other Comprehensive Income(1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
Currency/Interest Rate	$		-		$		64	$		(301	)	$		(1,730	)
Total cash flow hedges			-				64			(301	)			(1,730	)
Derivatives Not Qualifying as Hedging Instruments:
Interest Rate			(4,050	)			-			-				-
Currency			-				-			-				-
Currency/Interest Rate			(110	)			-			12				-
Credit			(1,016	)			-			-				-
Equity			(3,875	)			-			-				-
Embedded Derivatives			27,755				-			-				-
Total non-qualifying hedges			18,704				-			12				-
Total	$		18,704		$		64	$		(289	)	$		(1,730	)

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

		Year Ended December 31, 2012
		Realized Investment Gains/(Losses)				Net Investment Income				Other Income				Accumulated Other Comprehensive Income(1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
Currency/Interest Rate	$		-		$		23		$		8		$		(697	)
Total cash flow hedges			-				23				8				(697	)
Derivatives Not Qualifying as Hedging Instruments:
Interest Rate			2,648				-				-				-
Currency			2				-				-				-
Currency/Interest Rate			(147	)			-				(6	)			-
Credit			(285	)			-				-				-
Equity			(211	)			-				-				-
Embedded Derivatives			(7,631	)			-				-				-
Total non-qualifying hedges			(5,624	)			-				(6	)			-
Total	$		(5,624	)	$		23		$		2		$		(697	)
		Year Ended December 31, 2011
		Realized Investment Gains/(Losses)				Net Investment Income				Other Income				Accumulated Other Comprehensive Income(1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
Currency/Interest Rate	$		-		$		(41	)	$		2		$		471
Total cash flow hedges			-				(41	)			2				471
Derivatives Not Qualifying as Hedging Instruments:
Interest Rate			9,402				-				-				-
Currency			-				-				-				-
Currency/Interest Rate			(181	)			-				-				-
Credit			68				-				-				-
Equity			-				-				-				-
Embedded Derivatives			(121,599	)			-				-				-
Total non-qualifying hedges			(112,310	)			-				-				-
Total	$		(112,310	)	$		(41	)	$		2		$		471

(1) Amounts deferred in “Accumulated other comprehensive income (loss).”

For the years ended December 31, 2013, 2012 and 2011, the ineffective portion of derivatives accounted for using hedge accounting was not material to the Company’s results of operations and there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

Presented below is a roll forward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes:

	(in thousands)
Balance, December 31, 2010	$	(1,100	)
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2011		(7,152	)
Amount reclassified into current period earnings		7,622
Balance, December 31, 2011		(630	)
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2012		(666	)
Amount reclassified into current period earnings		(31	)

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

	(in thousands)
Balance, December 31, 2012	$	(1,327	)
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2013		(1,493	)
Amount reclassified into current period earnings		(237	)
Balance, December 31, 2013	$	(3,057	)

As of December 31, 2013 and 2012, the Company did not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 14 years. Income amounts deferred in “Accumulated other comprehensive income (loss)” as a result of cash flow hedges are included in “Net unrealized investment gains (losses)” in the Statements of Equity.

Credit Derivatives

The Company has no exposure from credit derivatives where it has written credit protection as of December 31, 2013 and December 31, 2012.

The Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of December 31, 2013 and December 31, 2012, the Company had $9 million of outstanding notional amounts, reported at fair value as a liability of less than $1 million for both periods.

Prior to disposal in the fourth quarter of 2013, the Company held certain externally-managed investments in the European market which contained embedded derivatives. Their fair values were primarily driven by changes in credit spreads. These investments were medium-term notes that were collateralized by investment portfolios primarily consisting of investment grade European fixed income securities, including corporate bonds and asset-backed securities, and derivatives, as well as varying degrees of leverage. The notes had a stated coupon and provided a return based on the performance of the underlying portfolios and the level of leverage. The Company invested in these notes to earn a coupon through maturity, consistent with its investment purpose for other debt securities. The notes were accounted for under U.S. GAAP as available-for-sale fixed maturity securities with bifurcated embedded derivatives (total return swaps). Changes in the value of the fixed maturity securities were reported in Equity under the heading “Accumulated Other Comprehensive Income (Loss)” and changes in the market value of the embedded total return swaps are included in current period earnings in “Realized investment gains (losses), net.” The Company’s maximum exposure to loss from these investments was $7 million on December 31, 2012. The fair value of the embedded derivatives included in “Fixed maturities, available-for-sale” was a liability of $2 million on December 31, 2012.

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by our counterparty to financial derivative transactions.

The Company has credit risk exposure to an affiliate, Prudential Global Funding, LLC (“PGF”), related to its OTC derivative transactions. PGF manages credit risk with external counterparties by entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties, and by obtaining collateral where appropriate, see Note 13. Additionally, limits are set on single party credit exposures which are subject to periodic management review.

Under fair value measurements, the Company incorporates the market’s perception of its own and the counterparty’s non-performance risk in determining the fair value of the portion of its OTC derivative assets and liabilities that are uncollateralized. Credit spreads are applied to the derivative fair values on a net basis by counterparty. To reflect the Company’s own credit spread a proxy based on relevant debt spreads is applied to OTC derivative net liability positions. Similarly, the Company’s counterparty’s credit spread is applied to OTC derivative net asset positions.

12.    COMMITMENTS, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS

Commitments

The Company has made commitments to fund $3 million of commercial loans as of December 31, 2013. The Company also made commitments to purchase or fund investments, mostly private fixed maturities, of $757 thousand as of December 31, 2013.

Contingent Liabilities

On an ongoing basis, the Company’s internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements. From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the costs of such remediation, administrative costs and regulatory fines.

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In some of the pending legal and regulatory actions, plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain. The following is a summary of certain pending proceedings.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed, including matters discussed below. As of December 31, 2013, the aggregate range of reasonably possible losses in excess of accruals established is not currently estimable. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

In January 2013, a qui tam action on behalf of the State of Florida, Total Asset Recovery Services v. Met Life Inc., et al., Manulife Financial Corporation, et. al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Insurance Agency, LLC., filed in the Circuit Court of Leon County, Florida, was served on Prudential Insurance. The complaint alleges that Prudential Insurance failed to escheat life insurance proceeds to the State of Florida in violation of the Florida False Claims Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys’ fees and costs. In March 2013, the Company filed a motion to dismiss the complaint. In August 2013, the court dismissed the complaint with prejudice. In September 2013, plaintiff filed an appeal with Florida’s Circuit Court of the Second Judicial Circuit in Leon County.

In January 2012, a Global Resolution Agreement entered into by the Company and a third party auditor became effective upon its acceptance by the unclaimed property departments of 20 states and jurisdictions. Under the terms of the Global Resolution Agreement, the third party auditor acting on behalf of the signatory states will compare expanded matching criteria to the Social Security Master Death File (“SSMDF”) to identify deceased insureds and contractholders where a valid claim has not been made. In February 2012, a Regulatory Settlement Agreement entered into by the Company to resolve a multi-state market conduct examination regarding its adherence to state claim settlement practices became effective upon its acceptance by the insurance departments of 20 states and jurisdictions. The Regulatory Settlement Agreement applies prospectively and requires the Company to adopt and implement additional procedures comparing its records to the SSMDF to identify unclaimed death benefits and prescribes procedures for identifying and locating beneficiaries once deaths are identified. Substantially all other jurisdictions that are not signatories to the Global Resolution Agreement or the Regulatory Settlement Agreement have entered into similar agreements with the Company.

The Company is one of several companies subpoenaed by the New York Attorney General regarding its unclaimed property procedures. Additionally, the New York State Department of Financial Services (“NYDFS”) has requested that 172 life insurers (including the Company) provide data to the NYDFS regarding use of the SSMDF. The New York Office of Unclaimed Funds is conducting an audit of the Company’s compliance with New York’s unclaimed property laws. In February 2012, the Massachusetts Office of the Attorney General requested information regarding the Company’s unclaimed property procedures. In December 2013, this matter was closed without prejudice. In May 2013, the Company entered into a settlement agreement with the Minnesota Department of Commerce, Insurance Division, which requires the Company to take additional steps to identify deceased insureds and contract holders where a valid claim has not been made.

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

13.    RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties.

Expense Charges and Allocations

Many of the Company’s expenses are allocations or charges from Prudential Insurance or other affiliates. These expenses can be grouped into general and administrative expenses and agency distribution expenses.

The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses include allocations of stock compensation expenses related to a stock option program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock option program was less than $1 million for each of the years ended December 31, 2013, 2012 and 2011. The expense charged to the Company for the deferred compensation program was $1 million for each of the years ended December 31, 2013, 2012 and 2011.

The Company is charged for its share of employee benefits expenses. These expenses include costs for funded and non-funded contributory and non-contributory defined benefit pension plans. Some of these benefits are based on final group earnings and length of service while others are based on an account balance, which takes into consideration age, service and earnings during career. The Company’s share of net expense for the pension plans was $2 million for each of the years ended December 31, 2013, 2012 and 2011.

Prudential Insurance sponsors voluntary savings plans for its employee’s 401(k) plans. The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The Company's expense for its share of the voluntary savings plan was $1 million for each of the years ended December 31, 2013, 2012 and 2011.

The Company is charged distribution expenses from Prudential Insurance’s agency network for both its domestic life and annuity products through a transfer pricing agreement, which is intended to reflect a market based pricing arrangement.

The Company pays commissions and certain other fees to Prudential Annuities Distributors, Incorporated (“PAD”) in consideration for PAD’s marketing and underwriting of the Company’s products. Commissions and fees are paid by PAD to broker-dealers who sell the Company’s products. Commissions and fees paid by the Company to PAD were $75 million, $106 million and $95 million during the years ended December 31, 2013, 2012 and 2011, respectively.

Corporate Owned Life Insurance

The Company has sold two Corporate Owned Life Insurance, or “COLI”, policies to Prudential Insurance and one to Prudential Financial. The cash surrender value included in separate accounts for these COLI contracts was $1,344 million at December 31, 2013 and $1,195 million at December 31, 2012. Fees related to these COLI policies were $22 million, $16 million and $16 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Derivative Trades

In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF.

Reinsurance with Affiliates

The Company participates in reinsurance with its affiliates PARCC, Pruco Re, PAR TERM and PAR U, and its parent companies, Pruco Life and Prudential Insurance, in order to provide risk diversification, additional capacity for future growth and limit the maximum net loss potential. The Company is not relieved of its primary obligation to the policyholder as a result of these agreements.

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

Reinsurance amounts included in the Company’s Statements of Financial Position at December 31, were as follows:

	December 31, 2013		December 31, 2012
	(in thousands)
Reinsurance recoverables	$	999,240	$	870,122
Policy loans		(12,340)		(13,368)
Deferred policy acquisition costs		(207,517)		(150,019)
Other liabilities (reinsurance payables)		76,499		36,704

The reinsurance recoverables by counterparty is broken out below.

	Reinsurance Recoverables
	December 31, 2013		December 31, 2012
	(in thousands)
PARCC	$	482,633	$	442,720
PAR TERM		82,322		50,283
Prudential Insurance		28,457		23,766
PAR U		397,776		261,318
Pruco Life		6,008		5,287
Pruco Re (1)		50		85,203
Unaffiliated		1,994		1,545
Total reinsurance recoverables	$	999,240	$	870,122

(1) December 31, 2013 excludes $43 million reclassed to other liabilities due to mark-to-market impact discussed above.

Reinsurance amounts, excluding investment gains (losses) on affiliated asset transfers, included in the Company’s Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, were as follows:

	2013		2012		2011
	(in thousands)
Premiums	$	(171,885)	$	(160,286)	$	(151,808)
Policy charges and fee income		(82,947)		(59,836)		(48,357)
Net investment income		(504)		(152)		-
Other income		-		1,807		-
Interest credited to policyholders’ account balance		(10,443)		(4,000)		-
Policyholders’ benefits		(205,283)		(170,293)		(164,306)
Reinsurance expense allowances, net of capitalization and amortization		(28,840)		(26,693)		(20,469)
Realized investment gains (losses) net		(176,902)		(1,620)		(26,567)

Pruco Life

The company reinsures certain variable COLI and PDI policies with Pruco Life.

PARCC

The Company reinsures 90% of the risks under its term life insurance policies, with effective dates prior to January 1, 2010, through an automatic coinsurance agreement with PARCC.

PAR TERM

The Company reinsures 95% of the risks under its term life insurance policies with effective dates January 1, 2010 through December 31, 2013, through an automatic coinsurance agreement with PAR TERM.

Prudential Insurance

The Company has a yearly renewable term reinsurance agreement with Prudential Insurance and reinsures the majority of all mortality risks not otherwise reinsured. Effective July 1, 2012 the Company recaptured a portion of this agreement related to its universal life policies and now reinsures these risks with PAR U as discussed below.

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PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

PAR U

Effective July 1, 2012, the Company, entered into an automatic coinsurance agreement with PAR U, an affiliated company, to reinsure an amount equal to 95% of all the risks associated with its universal life policies. During the fourth quarter of 2012, the agreement between the Company and PAR U was amended to revise language relating to the consideration due to PAR U.

Pruco Re

The Company uses reinsurance as part of its risk management and capital management strategies for certain of its optional living benefit features. Starting from 2005, the Company has entered into various automatic coinsurance agreements with Pruco Re, an affiliated company, to reinsure its living benefit features sold on certain of its annuities.

Affiliated Asset Administration Fee Income

The Company participates in a revenue sharing agreement with AST Investment Services, Inc, formerly known as American Skandia Investment Services, Inc, whereby the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust, formerly known as American Skandia Trust. Income received from AST Investment Services, Inc. related to this agreement was $26.4 million, $19.3 million and $12.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. These revenues are recorded as “Asset administration fees” in the Statements of Operations and Comprehensive Income (Loss).

The Company participates in a revenue sharing agreement with Prudential Investments LLC, whereby the Company receives fee income from policyholders’ account balances invested in The Prudential Series Fund (“PSF”). Income received from Prudential Investments LLC, related to this agreement was $6.6 million, $6.1 million and $6.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. These revenues are recorded as “Asset administration fees” in the Company’s Statements of Operations and Comprehensive Income (Loss).

Affiliated Investment Management Expenses

In accordance with an agreement with Prudential Investment Management, Inc. (“PIMI”), the Company pays investment management expenses to PIMI who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PIMI related to this agreement was $2.3 million, $2.6 million, and $2.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. These expenses are recorded as “Net Investment Income” in the Statements of Operations and Comprehensive Income (Loss).

Affiliated Asset Transfers

From time to time, the Company participates in affiliated asset trades with parent and sister companies. Book and market value differences for trades with a parent and sister are recognized within Additional paid-in-capital ("APIC") and Realized investment gain(loss), respectively.

Affiliate	Date	Transaction	Security Type	FV		BV		Additional Paid-in Capital, Net of Tax Increase/ (Decrease)			Realized Investment Gain/ (Loss)		Derivative Gain/ (Loss)
								(in millions)
Pruco Life	Dec-11	Purchase	Commercial Mortgages	$	11	$	10	$	(1	)	$	-	$	-
Pruco Life	Dec-11	Sale	Fixed Maturities		14		13		1			-		-
PAR U	Sep-12	Sale	Fixed Maturities and Commercial Mortgages		156		142		-			14		(5	)
Prudential Financial	Sep-12	Transfer Out	Fixed Maturities		46		41		3			-		-
Prudential Insurance	Sep-13	Sale	Commercial Mortgages		2		2		1			-		-

Debt Agreements

The Company is authorized to borrow funds up to $200 million from affiliates to meet its capital and other funding needs.

B-53

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Notes to Financial Statements—(Continued)

The following table provides the breakout of the Company’s short-term and long-term debt with affiliates:

Affiliate	Date Issued		Amount of Notes -     December 31, 2013		Amount of Notes -     December 31, 2012		Interest Rate		Date of Maturity
(in thousands)
PFI		12/16/2011	$	33,000	$	44,000		2.65% - 3.61%		12/2013 - 12/2016
Washington Street Investment		12/17/2012		52,000		65,000		0.95% - 1.87%		12/2013 - 12/2017
PFI		11/15/2013		9,000		-		2.24%		12/15/2018
PFI		11/15/2013		23,000		-		3.19%		12/15/2020
Total Loans Payable to Affiliate			$	117,000	$	109,000

The total interest expense to the Company related to loans payable to affiliates was $2.3 million, $1.7 million, and $0.1 million for the years ended December 31, 2013, 2012, and 2011, respectively.

Contributed Capital and Dividends

In June 2013, the Company paid a dividend in the amount of $155 million to Pruco Life.

14.    QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The unaudited quarterly results of operations for the years ended December 31, 2013 and 2012 are summarized in the table below:

	March 31		June 30			September 30			December 31,
	(in thousands)
2013
Total revenues	$	80,971	$	85,711		$	43,895		$	89,523
Total benefits and expenses		21,433		25,360			(15,688	)		37,786
Income (loss) from operations before income taxes		59,538		60,351			59,583			51,737
Net income (loss)	$	43,332	$	41,997		$	39,540		$	40,974
2012
Total revenues	$	79,015	$	60,048		$	69,626		$	75,916
Total benefits and expenses		305		102,086			15,142			23,805
Income (loss) from operations before income taxes		78,710		(42,038	)		54,484			52,111
Net income (loss)	$	53,391	$	(27,449	)	$	40,294		$	37,825

B-54

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of

Pruco Life Insurance Company of New Jersey:

In our opinion, the accompanying statements of financial position and the related statements of operations and comprehensive income, of equity and of cash flows present fairly, in all material respects, the financial position of Pruco Life Insurance Company of New Jersey (an indirect, wholly owned subsidiary of The Prudential Insurance Company of America) at December 31, 2013 and December 31, 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 13 of the financial statements, the Company has entered into extensive transactions with affiliated entities.

/s/ PRICEWATERHOUSECOOPERS LLP

New York, New York

March 10, 2014

B-55

PART C:

OTHER INFORMATION

Item 26.   EXHIBITS

Exhibit number                                                                     Description of Exhibit

(a)	Board of Directors Resolution:
(i)		Resolution of Board of Directors of Pruco Life Insurance Company of New Jersey establishing the Pruco Life of New Jersey Variable Appreciable Account. (Note 4)
(b)	Not Applicable.
(c)	Underwriting Contracts:
(i)		Distribution Agreement between Pruco Securities, LLC and Pruco Life Insurance Company of New Jersey. (Note 4)
(ii)		Selling Agreement used from 11-2008 to current. (Note 5)
(iii)		Selling Agreement used from 1-2008 to 11-2008. (Note 5)
(iv)		Selling Agreement used from 11-2007 to 1-2008. (Note 5)
(v)		Selling Agreement used from 12-2006 to 11-2007. (Note 5)
(vi)		Selling Agreement used from 11-2005 to 12-2006. (Note 5)
(vii)		Selling Agreement used from 9-2003 to 11-2005. (Note 5)
(viii)		Selling Agreement used from 3-1999 to 9-2003. (Note 5)
(d)	Contracts:
(i)		Variable Universal Life Insurance Contract (VULNT-2009 NY). (Note 5)
(ii)		Rider for Insured's Accidental Death Benefit - VL 110B-2000. (Note 4)
(iii)		Rider for Insured's Total Disability Benefit - VL 100 B3-2005NY. (Note 4)
(iv)		Rider for Level Term Insurance Benefit on Dependent Children - VL 182B-2005 NY. (Note 4)
(v)		Rider for Level Term Insurance Benefit on Dependent Children - From Conversions - VL 184B-2005 NY. (Note 4)
(vi)		Rider for Overloan Protection - PLY 123-2009. (Note 4)
(vii)		Rider for Settlement Options to Provide Acceleration of Death Benefits - ORD 87241-91-NY.     (Note 4)
(e)	Application:
(i)		Application for Variable Universal Life Insurance Contract. (Note 10)
(ii)		Supplement to the Application for Variable Universal Life Insurance Contract. (Note 4)
(f)	Depositor’s Certificate of Incorporation and By-Laws:
(i)		Articles of Incorporation of Pruco Life Insurance Company of New Jersey, as amended March 11, 1983. (Note 4)
(ii)		Certificate of Amendment of the Articles of Incorporation of Pruco Life Insurance Company of New Jersey, February 12, 1998. (Note 4)
(iii)		By-laws of Pruco Life Insurance Company of New Jersey, as amended August 4, 1999. (Note 4)
(g)	Reinsurance Agreements:.
(i)		Agreement between Pruco Life of New Jersey and Prudential. (Note 3)
(ii)		Amendments (1-15) to the Agreement between Pruco Life of New Jersey and Prudential. (Note 12)
(iii)		Agreement between Pruco Life of New Jersey and Munich American Reassurance. (Note 6)
(iv)		Amendment (2) to the Agreement between Pruco Life of New Jersey and Munich American Reassurance. (Note 10)
(v)		Amendments (3-4) to the Agreement between Pruco Life of New Jersey and Munich American Reinsurance.    (Note 1)
(vi)		Agreement between Pruco Life of New Jersey and RGA Reinsurance Company. (Note 7)
(vii)		Amendment (2) to the Agreement between Pruco Life of New Jersey and RGA Reinsurance Company. (Note 10)
(viii)		Amendment (3) to the Agreement between Pruco Life of New Jersey and RGA Reinsurance Company. (Note 12)
(ix)		Agreement between Pruco Life of New Jersey and SCOR Global Life US Re Insurance Company. (Note 8)
(x)		Amendment (2) to the Agreement between Pruco Life of New Jersey and SCOR Global Life US Re Insurance Company. (Note 10)
(xi)		Amendments (3-4) to the Agreement between Pruco Life of New Jersey and SCOR Global Life US Re Insurance Company. (Note 1)
(xii)		Agreement between Pruco Life of New Jersey and ACE Tempest Life Re. (Note 9)
(xiii)		Amendment (2) to the Agreement between Pruco Life of New Jersey and ACE Tempest Life Re. (Note 10)
(xiv)		Agreement between Pruco Life of New Jersey and Scor Global Life Re Insurance Company of Texas. (Note 12)
(xv)		Amendment (1) to the Agreement between Pruco Life of New Jersey and Scor Global Life Re Insurance Company of Texas. (Note 12)
(xvi)		Amendment (2) to the Agreement between Pruco Life of New Jersey and Scor Global Life Re Insurance Company of Texas. (Note 12)
(xvii)		Amendments (3-4) to the Agreement between Pruco Life of New Jersey and Scor Global Life Re Insurance Company of Texas. (Note 1)
(xviii)		Agreement between Pruco Life of New Jersey and ACE Tempest Life Reinsurance Ltd. (Note 12)
(xix)		Amendment (2) to the Agreement between Pruco Life of New Jersey and ACE Tempest Life Reinsurance Ltd. (Note 1)
(h)	Participation Agreements:
(i)		American Skandia Trust Participation Agreement, as amended June 8, 2005. (Note 2)
(ii)		Amendment (1) to the Participation Agreement between Pruco Life of New Jersey and Advanced Series Trust (formerly American Skandia Trust), as amended June 8, 2005 (Note 13)
(iii)		Participation Agreement between Pruco Life of New Jersey and Northern Lights (Note 11)
(iv)		Amendment (1) to the Participation Agreement between Pruco Life of New Jersey and Northern Lights (Note 12)
(v)		Amendment (2) to the Participation Agreement between Pruco Life of New Jersey and Northern Lights (Note 13)
(i)	Administrative Contracts:
(i)		Service Agreement between Prudential and the Regulus Group, LLC. (Note 10)
(ii)		Revised Service Agreement between Prudential and the Regulus Group LLC, a TransCentra company. (Note 13)
(j)	Not Applicable.
(k)	Opinion and Consent of Sun-Jin Moon, Esq., as to the legality of the securities being registered. (Note 1)
(l)	Not Applicable.
(m)	Not Applicable.
(n)	Other Opinions:
(i)		Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm. (Note 1)
(ii)		Powers of Attorney:  John Chieffo, Yanela C. Frias, Bernard J. Jacob, Richard F. Lambert, Stephen Pelletier, Kent D. Sluyter, Kenneth Y. Tanji. (Note 1)
(o)	None.
(p)	Not Applicable.
(q)	Redeemability Exemption:
(i)		Memorandum describing Pruco Life Insurance Company of New Jersey's issuance, transfer, and redemption procedures for the Contracts pursuant to Rule 6e-3(T)(b)(12)(iii). (Note 13)

---------------------------------------------------------

(Note 1)	Filed herewith.
(Note 2)	Incorporated by reference to Post-Effective Amendment No. 2 to Form N-6, Registration No. 333-112809, filed August 15, 2005 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 3)	Incorporated by reference to Post-Effective Amendment No. 4 to Form N-6, Registration No. 333-117796, filed April 17, 2007 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 4)	Incorporated by reference to Form N-6 to this Registration Statement, filed April 17, 2009 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 5)	Incorporated by reference to Pre-Effective Amendment No. 1 to this Registration Statement, filed December 3, 2009 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 6)	Incorporated by reference to Post-Effective Amendment No. 1 to Form N-6, Registration No. 333-112809, filed April 19, 2005 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 7)	Incorporated by reference to Post-Effective Amendment No. 6 to Form N-6, Registration No. 333-112809, filed April 12, 2007 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 8)	Incorporated by reference to Post-Effective Amendment No. 8 to Form N-6, Registration No. 333-112809, filed April 21, 2009 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 9)	Incorporated by reference to Post-Effective Amendment No. 9 to Form N-6, Registration No. 333-112809, filed April 14, 2010 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 10)	Incorporated by reference to Post-Effective Amendment No. 2 to this Registration Statement, filed April 15, 2011 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 11)	Incorporated by reference to Post-Effective Amendment No. 3 to this Registration Statement, filed April 23, 2012 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 12)	Incorporated by reference to Post-Effective Amendment No. 5 to this Registration Statement, filed April 12, 2013 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
(Note 13)	Incorporated by reference to Post-Effective Amendment No. 5 to this Registration Statement, filed February 6, 2014 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.

Item 27.   Directors and Major Officers of Pruco Life of New Jersey

The directors and major officers of Pruco Life of New Jersey, listed with their principal occupations, are shown below. The Principal business address of the directors and officers listed below is 213 Washington Street, Newark, New Jersey 07102.

DIRECTORS OF PRUCO LIFE OF NEW JERSEY

JOHN CHIEFFO – Director

YANELA C. FRIAS - Vice President, Chief Financial Officer, Chief Accounting Officer, and Director

BERNARD J. JACOB - Director

RICHARD F. LAMBERT - Director

ROBERT F. O'DONNELL - Chief Executive Officer, President, and Director

KENT D. SLUYTER – Senior Vice President and Director

KENNETH Y. TANJI -Treasurer and Director

OFFICERS WHO ARE NOT DIRECTORS

ERIN C. SCHWERZMANN – Vice President and Corporate Counsel

JORDAN K. THOMSEN – Vice President and Corporate Counsel

JOSEPH D. EMANUEL - Vice President, Chief Legal Officer, and Secretary

SUN-JIN MOON - Vice President and Assistant Secretary

SARAH J. HAMID - Senior Vice President, Chief Actuary and Appointed Actuary

JAMES M. O’CONNOR - Senior Vice President and Actuary

Item 28.   Persons Controlled by or Under Common Control with the Depositor or the Registrant

Pruco Life of New Jersey, a life insurance company organized under the laws of New Jersey, is a direct wholly-owned subsidiary of Pruco Life.  Pruco Life, a life insurance company organized under the laws of Arizona, is a direct wholly-owned subsidiary of The Prudential Insurance Company of America and an indirect wholly-owned subsidiary of Prudential Financial, Inc.

The subsidiaries of Prudential Financial, Inc. are listed under Exhibit 21.1 of the Annual Report on Form 10-K of Prudential Financial, Inc., Registration No. 001-16707, the text of which is hereby incorporated by reference.

Item 29.   Indemnification

The Registrant, in connection with certain affiliates, maintains various insurance coverages under which the underwriter and certain affiliated persons may be insured against liability, which may be incurred in such capacity, subject to the terms, conditions, and exclusions of the insurance policies.

New Jersey, being the state of organization of Pruco Life of New Jersey, permits entities organized under its jurisdiction to indemnify directors and officers with certain limitations.  The relevant provisions of New Jersey law permitting indemnification can be found in Section 14A:3-5 of the New Jersey Statutes Annotated.  The text of Pruco Life of New Jersey’s By-law, Article V, which relates to indemnification of officers and directors, was filed on April 17, 2009 as exhibit Item 26. (f)(iii) to Form N-6 of this Registration Statement on behalf of the Pruco Life of New Jersey Variable Appreciable Account.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) 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 public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by 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 30.   Principal Underwriters

(a) Pruco Securities, LLC ("Prusec"), an indirect wholly-owned subsidiary of Prudential Financial, acts as the Registrant's principal underwriter of the Contract.  Prusec, organized on September 22, 2003 under New Jersey law, is registered as a broker and dealer under the Securities Exchange Act of 1934 and is a registered member of the Financial Industry Regulatory Authority, Inc. (“FINRA”).  (Prusec is a successor company to Pruco Securities Corporation, established on February 22, 1971.)  Prusec's principal business address is 751 Broad Street, Newark, New Jersey 07102.

Prusec acts as principal underwriter and general distributor for the following separate investment accounts and their affiliates:

Pruco Life Variable Universal Account

Pruco Life Variable Appreciable Account

Pruco Life of New Jersey Variable Appreciable Account

The Prudential Variable Appreciable Account

Pruco Life PRUvider Variable Appreciable Account

Pruco Life Variable Insurance Account

Pruco Life of New Jersey Variable Insurance Account

Union Security Insurance Company - Variable Account C

The Contract is sold by registered representatives of Prusec who are also authorized by state insurance departments to do so.  The Contract may also be sold through other broker-dealers authorized by Prusec and applicable law to do so.

(b)
MANAGERS AND OFFICERS OF PRUCO SECURITIES, LLC (“Prusec”)
Name and Principal Business Address --------------------------------------------------	Position and Office With Prusec ---------------------------------------------
Caroline Feeney  (Note 1)	Chairman of the Board, Manager
John G. Gordon  (Note 1)	President, Manager, Chief Operating Officer
Steven Weinreb (Note 3)	Vice President, Controller, Chief Financial Officer
Jeffrey Sheftic (Note 5)	Vice President
John D. McGovern (Note 1)	Vice President, Chief Compliance Officer
Ronald P. Herrmann (Note 1)	Vice President
Richard W. Kinville (Note 2)	Vice President, Anti-Money Laundering Officer
William D. Wilcox (Note 9)	Chief Legal Officer
John D. Rosero (Note 1)	Secretary
Charles E. Anderson (Note 8)	Vice President
Adam Scaramella (Note 10)	Vice President and Assistant Secretary
Margaret M. Foran (Note 2)	Vice President, Assistant Secretary
Mark A. Hug  (Note 1)	Vice President, Manager
Patrick L. Hynes  (Note 5)	Vice President
Charles M. O'Donnell (Note 1)	Vice President
Michele Talafha  (Note 4)	Assistant Vice President
Kent D. Sluyter (Note 1)	Manager
Robert F. O'Donnell (Note 7)	Manager
Stuart S. Parker (Note 3)	Manager
Matthew J. Voelker (Note 6)	Manager
David Campen  (Note 1)	Assistant Controller
Robert Szuhany  (Note 1)	Assistant Controller
Daniel D. Rappoccio  (Note 3)	Assistant Controller
Mary E. Yourth (Note 1)	Assistant Controller
Cathleen M. Paugh (Note 2)	Treasurer
Kathleen C. Hoffman  (Note 2)	Assistant Treasurer
Laura J. Delaney (Note 2)	Assistant Treasurer
John M. Cafiero (Note 2)	Assistant Secretary
Sun-Jin Moon  (Note 1)	Assistant Secretary
Patricia Christian  (Note 1)	Assistant Secretary
Mary Jo Reich  (Note 1)	Assistant Secretary
(Note 1) 213 Washington Street, Newark, NJ 07102
(Note 2) 751 Broad Street, Newark, NJ 07102
(Note 3) Three Gateway Center, Newark, NJ  07102
(Note 4) One New York Plaza, New York, NY 10292
(Note 5) 200 Wood Avenue South, Iselin, NJ  08830
(Note 6) 2998 Douglas Boulevard, Suite 220, Roseville, CA  95661
(Note 7) One Corporate Drive, Shelton, CT 06484
(Note 8) 13001 Bass Lake Road, Plymouth, MN 55442
(Note 9) 280 Trumball Street, 1 Commercial Plaza, Hartford, CT 06103-3509
(Note 10) 2101 Welsh Rd, Dresher, PA, 19025-5000

(c) Prusec passes through the gross distribution revenue it receives to broker-dealers for their sales and does not retain any portion of it in return for its services as distributor for the Contracts.  However, Prusec does retain a portion of compensation it receives with respect to sales by its representatives.  Prusec retained compensation of $2,192,800 in 2013, $2,168,552 in 2012, and $2,477,021 in 2011.  Prusec offers the Contract on a continuous basis.

The sum of the chart below is $58,142,132, which represents Prusec's total 2013 Variable Life Distribution Revenue.  The amount includes both agency distribution and broker-dealer distribution.

Compensation received by Prusec during the last fiscal year with respect to variable life insurance products.
Principal Underwriter	Gross Distribution Revenue*	Compensation on Events Occasioning the Deduction of a Deferred Sales Load	Brokerage Commissions**	Other Compensation
Prusec	$43,855,992	$-0-	$14,286,140	$-0-

* Represents Variable Life Distribution Revenue for the agency channel.

** Represents Variable Life Distribution Revenue for the broker-dealer channel.

Because Prusec registered representatives who sell the Contracts are also our life insurance agents, they may be eligible for various cash bonuses and insurance benefits and non-cash compensation programs that we or our affiliates offer, such as conferences, trips, prizes, and awards, subject to applicable regulatory requirements.  In some circumstances and to the extent permitted by applicable regulatory requirements, we may also reimburse certain sales and marketing expenses.

Item 31.   Location of Accounts and Records

The Depositor, Pruco Life Insurance Company of New Jersey, is located at 213 Washington Street, Newark, New Jersey 07102.

The Principal Underwriter, Pruco Securities, LLC, is located at 751 Broad Street, Newark, New Jersey 07102.

Each company maintains those accounts and records required to be maintained pursuant to Section 31(a) of the Investment Company Act and the rules promulgated thereunder.

Item 32.   Management Services

Not Applicable.

Item 33.   Representation of Reasonableness of Fees

Pruco Life Insurance Company of New Jersey (“Pruco Life of New Jersey”) represents that the fees and charges deducted under the Variable Universal Life Insurance Contracts registered by this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Pruco Life of New Jersey.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under Rule 485(b) under the Securities Act of 1933 and has duly caused this post-effective amendment to be signed on its behalf by the undersigned, duly authorized, in the City of Newark, and State of New Jersey on this 11th day of April, 2014.

(Seal)

Pruco Life of New Jersey Variable Appreciable Account

(Registrant)

By: Pruco Life Insurance Company of New Jersey

(Depositor)

By:        /s/ Erin C. Schwerzmann

               Erin C. Schwerzmann 

               Vice President and Corporate Counsel

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 8 to the Registration Statement has been signed below by the following persons in the capacities indicated on this 11th day of April, 2014.

Signature and Title     /s/ *                                                 John Chieffo Director   /s/ *                                                 Yanela C. Frias Vice President, Chief Financial Officer, Chief Accounting Officer, and Director   /s/ *                                                 Bernard J. Jacob Director   /s/ *                                                 Richard F. Lambert Director   /s/ *                                                 Stephen Pelletier Second Vice President, performing the functions of the principal executive officer as of the date of this registration statement /s/ *                                                 Kent D. Sluyter Director   /s/ *                                                 Kenneth Y. Tanji Treasurer and Director                         *By:         /s/ Erin C. Schwerzmann               Erin C. Schwerzmann  (Attorney-in-Fact)

EXHIBIT INDEX

Item 26.
(g) Reinsurance Agreements:	(v)	Amendments (3-4) to the Agreement between Pruco Life of New Jersey and Munich American Reinsurance.	C-
	(xi)	Amendments (3-4) to the Agreement between Pruco Life of New Jersey and SCOR Global Life US Re Insurance Company.	C-
	(xvii)	Amendments (3-4) to the Agreement between Pruco Life of New Jersey and Scor Global Life Re Insurance Company of Texas.	C-
	(xix)	Amendment (2) to the Agreement between Pruco Life of New Jersey and ACE Tempest Life Reinsurance Ltd.	C-
(k) Legal Opinion and Consent		Opinion and Consent of Sun-Jin Moon, Esq., as to the legality of the securities being registered.	C-
(n) Other Options:	(i)	Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.	C-
	(ii)	Powers of Attorney:  John Chieffo, Yanela C. Frias, Bernard J. Jacob, Richard F. Lambert, Stephen Pelletier, Kent D. Sluyter, Kenneth Y. Tanji.	C-