497 1 sai.htm

STATEMENT OF ADDITIONAL INFORMATION

May 1, 2009

WRL ASSOCIATE FREEDOM ELITE BUILDER®
issued through
WRL Series Life Account
by
Western Reserve Life Assurance Co. of Ohio

Administrative Office:
570 Carillon Parkway
St. Petersburg, Florida 33716
1-800-851-9777
(727) 299-1800

Direct all payments by check and all correspondence and
notices to the Mailing Address:
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499

This Statement of Additional Information (“SAI”) expands upon subjects discussed in the current prospectus for the WRL Associate Freedom Elite Builder® flexible premium variable life insurance policy offered by Western Reserve Life Assurance Co. of Ohio. You may obtain a copy of the prospectus dated May 1, 2009, by calling our administrative office at 1-800-851-9777 (Monday – Friday from 8:30 a.m. – 7:00 p.m. Eastern time), or by writing to the mailing address at, Western Reserve Life, 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499. The prospectus sets forth information that a prospective investor should know before investing in a Policy. Terms used in this SAI have the same meanings as in the prospectus for the Policy.

This SAI is not a prospectus and should be read only in conjunction with the prospectuses for the Policy and the
AEGON/Transamerica Series Trust – Initial Class, Fidelity Variable Insurance Products
Funds – Service Class 2 Shares, the ProFunds, the Access One Trust, the AllianceBernstein Variable Products Series Fund, and the Franklyn Templeton Variable Insurance Trust.
 

WRL00193/A-05/2009

Table of Contents     

The Policy - General Provisions     2

Ownership Rights     2

Our Right to Contest the Policy     2

Suicide Exclusion     3

Misstatement of Age or Gender     3

Mixed and Shared Funding     3

Addition, Deletion, or Substitution of Portfolios     3

Additional Information     4

Additional Information about Western Reserve and the Separate Account     4

Legal Matters     4

Variations in Policy Provisions     4

 Personalized Illustrations of Policy Benefits     5

 Sale of the Policies     5

 Reports to Owners     5

 Records     5

 Independent Registered Public Accounting Firm     6

 Experts     6

 Financial Statements     6

Underwriters     6

Underwriting Standards     6

IMSA     6

Performance Data     7

Other Performance Data in Advertising Sales Literature     7

 Western Reserve's Published Ratings     7

Index to Financial Statements     7

WRL Series Life Account:     S-1

Western Reserve Life Assurance Co. of Ohio      G-1

In order to supplement the description in the prospectus, the following provides additional information about Western Reserve and the Policy, which may be of interest to a prospective purchaser.

The Policy – General Provisions

 

Ownership Rights

     The Policy belongs to the owner named in the application. The owner may exercise all of the rights and options described in the Policy. The owner is the insured unless the application specifies a different person as the insured. If the owner dies before the insured and no contingent owner is named, then ownership of the Policy will pass to the owner's estate. The owner may exercise certain rights described below.
 

Changing the Owner

·

Change the owner by providing written notice to us at our mailing address at any time while the insured is alive and the Policy is in force.
 

·

Change is effective as of the date that the written notice is accepted by us at our mailing address.
 

·

Changing the owner does not automatically change the beneficiary.
 

·

Changing the owner may have tax consequences. You should consult a tax advisor before changing the owner.
 

·

We are not liable for payments we made before we received the written notice at our mailing address.


Choosing the Beneficiary

·

The owner designates the beneficiary (the person to receive the death benefit when the insured dies) in the application.
 

·

If the owner designates more than one beneficiary, then each beneficiary shares equally in any death benefit proceeds unless the beneficiary designation states otherwise.
 

·

If the beneficiary dies before the insured, then any contingent beneficiary becomes the beneficiary.
 

·

If both the beneficiary and contingent beneficiary die before the insured, then the death benefit will be paid to the owner or the owner's estate upon the insured's death.


Changing the Beneficiary

·

The owner changes the beneficiary by providing written notice to us at our mailing address.
 

·

Change is effective as of the date the owner signs the written notice.
 

·

We are not liable for any payments we made before we received the written notice at our mailing address.

 

 

Assigning the Policy

·

The owner may assign Policy rights while the insured is alive.
 

·

The owner retains any ownership rights that are not assigned.
 

·

Assignee may not change the owner or the beneficiary, and may not elect or change an optional method of payment. Any amount payable to the assignee will be paid in a lump sum.
 

·

Claims under any assignment are subject to proof of interest and the extent of the assignment.
 

·

We are not:
   

 > bound by any assignment unless we  receive a written notice of the assignment at our mailing address;
   

> responsible for the validity of any assignment;
   

> liable for any payment we made before we received written notice of the assignment at our mailing address; or

 

> bound by any assignment which results in adverse tax consequences to the owner, insured(s) or beneficiary(ies).
 

·

Assigning the Policy may have tax consequences. You should consult a tax advisor before assigning the Policy.


Our Right to Contest the Policy

     In issuing this Policy, we rely on all statements made by or for the insured in the application or in a supplemental application. Therefore, if you make any material misrepresentation of a fact in the application (or any supplemental application), then we may contest the Policy's validity or may resist a claim under the Policy for two years from the Policy date. For any portion of the specified amount that is issued as a result of a conversion, the contestability period is measured from the later of the policy date of the policy that was converted or the latest effective date of reinstatement of the converted policy.

     A new two year contestability period shall apply to each increase in specified amount beginning on the effective date of each increase and will apply only to statements made in the application for the increase.
 

     In the absence of fraud, we cannot bring any legal action to contest the validity of the Policy after the Policy (or requested increase in specified amount) has been in force during the insured's lifetime for two years from the Policy date, or if reinstated, for two years from the date of reinstatement. For any portion of the specified amount that is issued as a result of a conversion, the suicide period is measured from the later of the policy date of the policy that was converted or the latest effective date of reinstatement of the converted policy.

Suicide Exclusion

     If the insured commits suicide, while sane or insane, within two years of the Policy date (or two years from the reinstatement date, if the Policy lapses and is reinstated), the Policy will terminate and our liability is limited to an amount equal to the premiums paid, less any outstanding loan amount, and less any cash withdrawals. We will pay this amount to the beneficiary in one sum.
 
     If the insured commits suicide, while sane or insane, within two years from the effective date of any increase in specified amount, our liability with respect to such increase will be limited to its cost of insurance.
 

Misstatement of Age or Gender

     If the age or gender of the insured was stated incorrectly in the application or any supplemental application, then the death benefit will be adjusted based on what the cost of insurance charge for the most recent monthly deduction would have purchased based on the insured's correct age and gender.
 

Modifying the Policy
 
     Only our President or Secretary may modify the Policy or waive any of our rights or requirements under the Policy. Any modification or waiver must be in writing. No registered representative may bind us by making any promise not contained in the Policy.
 
     If we modify the Policy, we will provide you notice and we will make appropriate endorsements to the Policy.
 

Mixed and Shared Funding

     In addition to the separate account, shares of the portfolios are also sold to other separate accounts that we (or our affiliates) establish to support variable annuity contracts and variable life insurance policies. It is possible that, in the future, it may become disadvantageous for variable life insurance separate accounts and variable annuity separate accounts to invest in the portfolios simultaneously. Neither the funds nor we currently foresee any such disadvantages, either to variable life insurance policyowners or to variable annuity contract owners. However, the funds’ Board of Directors/Trustees will monitor events in order to identify any material conflicts between the interests of such variable life insurance policyowners and variable annuity contract owners, and will determine what action, if any, it should take. Such action could include the sale of portfolio shares by one or more of the separate accounts, which could have adverse consequences. Material conflicts could result from, for example, (1) changes in state insurance laws, (2) changes in federal income tax laws, or (3) differences in voting instructions between those given by variable life insurance policyowners and those given by variable annuity contract owners.
 
     If a fund's Board of Directors/Trustees were to conclude that separate funds should be established for variable life insurance and variable annuity separate accounts, Western Reserve will bear the attendant expenses, but variable life insurance policyowners and variable annuity contract owners would no longer have the economies of scale resulting from a larger combined fund.
   

Addition, Deletion, or Substitution of Portfolios

     We do not guarantee that each portfolio will always be available for investment through the Policy. We reserve the right, subject to compliance with applicable law, to add new portfolios, close existing portfolios, or substitute portfolio shares that are held by any subaccount for shares of a different portfolio. New or substitute portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will only add, delete or substitute shares of another portfolio of a fund (or of another open-end, registered investment company) if the shares of a portfolio are no longer available for investment, or if in our judgment further investment in any portfolio would become inappropriate in view of the purposes of the separate account. We will not add, delete or substitute any shares attributable to your interest in a subaccount without notice to you and prior approval of the SEC, to the extent required by the 1940 Act or other applicable law. We may also decide to purchase securities from other portfolios for the separate account. We reserve the right to transfer separate account assets to another separate account that we determine to be associated with the class of contracts to which the Policy belongs.
 
     We also reserve the right to establish additional subaccounts of the separate account, each of which would invest in a new portfolio of a fund, or in shares of another investment company, with specified investment objectives. We may establish new subaccounts when, in our sole discretion, marketing, tax or investment conditions warrant. We will make any new subaccounts available to existing owners on a basis we determine. We may also eliminate one or more subaccounts for the same reasons as stated above.
 
     In the event of any such substitution or change, we may make such changes in this and other policies as may be necessary or appropriate to reflect such substitution or change. If we deem it to be in the best interests of persons having voting rights under the Policies, and when permitted by law, the separate account may be (1) operated as a management company under the 1940 Act, (2) deregistered under the 1940 Act in the event such registration is no longer required, (3) managed under the direction of a committee, or (4) combined with one or more other separate accounts, or subaccounts.
 

Additional Information

 

Additional Information about Western Reserve and the Separate Account

     Western Reserve is a stock life insurance company is a wholly-owned indirect subsidiary of Transamerica Corporation, which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. All of the stock of Transamerica Corporation is indirectly owned by AEGON N.V. of the Netherlands, a public company under Dutch law. Western Reserve's administrative office is located at 570 Carillon Parkway, St. Petersburg, Florida 33716-1202 and the mailing address is 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.
 
     Western Reserve was initially incorporated in 1957 under the laws of Ohio and is subject to regulation by the Insurance Department of the State of Ohio, as well as by the insurance departments of all other states and jurisdictions in which it does business. Western Reserve is licensed to sell insurance in all states (except New York), Puerto Rico, Guam, and in the District of Columbia. Western Reserve submits annual statements on its operations and finances to insurance officials in all states and jurisdictions in which it does business. The Policy described in the prospectus has been filed with, and where required, approved by, insurance officials in those jurisdictions in which it is sold.
 
     Western Reserve established the separate account as a separate investment account under Ohio law in 1985. We own the assets in the separate account and are obligated to pay all benefits under the Policies. The separate account is used to support other life insurance policies of Western Reserve, as well as for other purposes permitted by law. The separate account is registered with the SEC as a unit investment trust under the 1940 Act and qualifies as a "separate account" within the meaning of the federal securities laws.
 
     Western Reserve holds the assets of the separate account physically segregated and apart from the general account. Western Reserve maintains records of all purchases and sales of portfolio shares by each of the subaccounts. A blanket bond was issued to AEGON USA, Inc. ("AEGON USA") in the aggregate amount of $12 million, covering all of the employees of AEGON USA and its affiliates, including Western Reserve. A Stockbrokers Blanket Bond, issued to AEGON U.S.A. Securities, Inc. providing fidelity coverage, covers the activities of registered representatives of TCI to a limit of $10 million.

Legal Matters

      Sutherland Asbill & Brennan LLP, of Washington, D.C., has provided legal advice to Western Reserve regarding certain matters under the federal securities laws that relate to the Policy. Arthur D. Woods, Vice President and Senior Counsel of Western Reserve, has provided legal advice on certain matters in connection with the issuance of the Policy.

Variations in Policy Provisions

     Certain provisions of the Policy may vary from the descriptions in the prospectus, depending on when and where the Policy was issued, in order to comply with different state laws. These variations may include differences in charges, or Policy features may be unavailable or known by a different name. Please refer to your Policy, since any variations will be included in your Policy or in riders or endorsements attached to your Policy.
 

Personalized Illustrations of Policy Benefits

     In order to help you understand how your Policy values would vary over time under different sets of assumptions, we will provide you with certain personalized illustrations upon request. These will be based on the age and insurance risk characteristics of the insured persons under your Policy and such factors as the specified amount, death benefit option, premium payment amounts, and rates of return (within limits) that you request.
 
     The illustrations are not a representation or guarantee of investment returns or cash value. You may request illustrations that reflect the expenses of the portfolios in which you intend to invest.
 

Sale of the Policies

     We currently offer the Policies on a continuous basis. We anticipate continuing to offer the Policies, but reserve the right to discontinue the offering.

Our affiliate, TCI serves as principal underwriter for the Policies. TCI’s home office is located at 4600 S. Syracuse Street, Suite 1100, Denver, Colorado 80237. TCI is an affiliate of Western Reserve and, like Western Reserve, is an indirect, wholly owned subsidiary of AEGON USA. TCI is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of NASD, Inc. TCI is not a member of the Securities Investor Protection Corporation.

The Policies are offered to the public through sales representatives of broker-dealers ("selling firms") that have entered into selling agreements with us and with TCI. Sales representatives are appointed as our insurance agents.

During fiscal year 2007and 2006, before TCI replaced our affiliate, AFSG Securities Corporation (“AFSG”) as principal underwriter for the Policies, the amounts paid to AFSG were $21,215,096 and $70,977,287, respectively. The amount paid to TCI for the period May 1, 2007 through December 31, 2007, in connection with all Policies sold through the separate account, was $44,112,185. During fiscal year 2008, the amount paid to TCI in connection with all Policies sold through the separate account was $47,040,038. AFSG and TCI passed through to selling firms, and did not retain, any portion of any commissions they received. Our parent company provides capital distributions to TCI (and provided capital distributions to AFSG), and pays for TCI’s (and paid for AFSG’s) operating and other expenses, including overhead, legal and accounting fees.

We and/or TCI or ISI may pay certain selling firms additional cash amounts for: (1) “preferred product” treatment of the Policies in their marketing programs, which may include marketing services and increased access to their sales representatives; (2) sales promotions relating to the Policies; (3) costs associated with sales conferences and educational seminars for their sales representatives; and (4) other sales expenses incurred by them. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms.

Reports to Owners

     At least once each year, or more often as required by law, we will mail to policyowners at their last known address a report showing the following information as of the end of the report period:
 

>

the current cash value

>

any activity since the last report

>

the current net surrender value

>

projected values

>

the current death benefit

>

investment experience of each subaccount

>

outstanding loans

>

any other information required by law


     You may request additional copies of reports, but we may charge a fee for such additional copies. In addition, we will send written confirmations of any premium payments and other financial transactions you request including: changes in specified amount, changes in death benefit option, transfers, partial withdrawals, increases in loan amount, loan interest payments, loan repayments, lapses and reinstatements. We also will send copies of the annual and semi-annual report to shareholders for each portfolio in which you are indirectly invested.
 

Records

     We will maintain all records relating to the separate account and the fixed account.

Independent Registered Public Accounting Firm

The financial statements of the separate account at December 31, 2008 and for the periods disclosed in the financial statements, and the statutory-basis financial statements and schedules of Western Reserve at December 31, 2008 and 2007, and for each of the three years in the period ended December 31, 2008, appearing herein, have been audited by Ernst & Young LLP, 801 Grand Avenue, Suite 3000, Des Moines, Iowa 50309, independent registered public accounting firm, as set forth in their respective reports thereon appearing elsewhere herein, and are included in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.

Experts

     Actuarial matters included in this SAI have been examined by Lorne Schinbein, Vice President and Managing Actuary of Western Reserve, located at 570 Carillon Parkway, St. Petersburg, Florida 33716, as stated in the opinion filed as an exhibit to the registration statement.

Financial Statements

     Western Reserve's statutory-basis financial statements and schedules, which include the Report of Independent Registered Public Accounting Firm, appear on the following pages. These statutory-basis financial statements and schedules should be distinguished from the separate account's financial statements and you should consider these statutory-basis financial statements and schedules only as bearing upon Western Reserve's ability to meet our obligations under the Policies. You should not consider our statutory-basis financial statements and schedules as bearing upon the investment performance of the assets held in the separate account.
 
     Western Reserve's statutory-basis financial statements and schedules at December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008, have been prepared on the basis of statutory accounting principles rather than U.S. generally accepted accounting principles.
 
     The separate account’s financial statements, which include the Report of Independent Registered Public Accounting Firm, also appear on the following pages.

Underwriters

     

Underwriting Standards

     The Policy uses mortality tables that distinguish between men and women. As a result, the Policy pays different benefits to men and women of the same age. Montana prohibits our use of actuarial tables that distinguish between males and females to determine premiums and policy benefits for policies issued on the lives of its residents. Therefore, we will base the premiums and benefits in Policies that we issue in Montana, to insure residents of that state, on actuarial tables that do not differentiate on the basis of gender.
 
     Your cost of insurance charge will vary by the insured's gender, issue age on the Policy date, issue age at the time of any increase in specified amount, rate band, length of time from the Policy date or from the date of any increase in specified amount, and rate class. We currently place insureds into the following rate classes:
 

·

ultimate select (preferred) non-tobacco use;

·

select (non-preferred) non-tobacco use;

·

ultimate standard (preferred) tobacco use;

·

standard (non-preferred) tobacco use; and

·

juvenile-under 18.


     We also place insureds in various sub-standard rate classes, which involve a higher mortality risk and higher charges. We generally charge higher rates for insureds who use tobacco. We currently charge lower cost of insurance rates for insureds who are in an "ultimate class." An ultimate class is only available if our underwriting guidelines require you to take a blood test because of the specified amount you have chosen.

IMSA

 

     We are a member of the Insurance Marketplace Standards Association ("IMSA"). IMSA is an independent, voluntary organization of life insurance companies. It promotes high ethical standards in the sales and advertising of individual life insurance, long-term care insurance and annuity products. Through its Principles and Code of Ethical Market Conduct, IMSA encourages its member companies to develop and implement policies and procedures to promote sound market practices. Companies must undergo a rigorous self and independent assessment of their practices to become a member of IMSA. The IMSA logo in our sales literature shows our ongoing commitment to these standards. You may find more information about IMSA and its ethical standards at www.imsaethics.org in the "Consumer" section or by contacting IMSA at 240-497-2900.
 

Performance Data

 

Other Performance Data in Advertising Sales Literature

We may compare each subaccount's performance to the performance of:

·

other variable life issuers in general;

·

variable life insurance policies which invest in mutual funds with similar investment objectives and policies, as reported by Lipper Analytical Services, Inc. ("Lipper") and Morningstar, Inc. ("Morningstar"); and other services, companies, individuals, or industry or financial publications (e.g., Forbes, Money, The Wall Street Journal, Business Week, Barron's, Kiplinger's Personal Finance, and Fortune) ;
 

>

Lipper and Morningstar rank variable annuity contracts and variable life policies. Their performance analysis ranks such policies and contracts on the basis of total return, and assumes reinvestment of distributions; but it does not show sales charges, redemption fees or certain expense deductions at the separate account level.

·

the Standard & Poor's Index of 500 Common Stocks, or other widely recognized indices;
 

>

unmanaged indices may assume the reinvestment of dividends, but usually do not reflect deductions for the expenses of operating or managing an investment portfolio; or

·

  other types of investments, such as:
 

>

certificates of deposit;
 

>

savings accounts and U.S. Treasuries;
 

>

certain interest rate and inflation indices (e.g., the Consumer Price Index); or
 

>

indices measuring the performance of a defined group of securities recognized by investors as representing a particular segment of the securities markets (e.g., Donoghue Money Market Institutional Average, Lehman Brothers Corporate Bond Index, or Lehman Brothers Government Bond Index).


     

Western Reserve's Published Ratings

     We may publish in advertisements, sales literature, or reports we send to you the ratings and other information that an independent ratings organization assigns to us. These organizations include: A.M. Best Company, Moody's Investors Service, Inc., Standard & Poor's Insurance Rating Services, and Fitch Ratings. These ratings are opinions regarding an operating insurance company's financial capacity to meet the obligations of its insurance policies in accordance with their terms. These ratings do not apply to the separate account, the subaccounts, the funds or their portfolios, or to their performance.

Index to Financial Statements (Note: Financial Statements will be filed by amendment when completed)

 

WRL Series Life Account:

Report of Independent Registered Public Accounting Firm, dated March 25, 2009
Statements of Assets and Liabilities at December 31, 2008
Statements of Operations for the year ended December 31, 2008
Statements of Changes in Net Assets for the years ended December 31, 2008 and 2007
Notes to the Financial Statements

Western Reserve Life Assurance Co. of Ohio

Report of Independent Registered Public Accounting Firm, dated March 27, 2009

Balance Sheets Statutory-Basis at December 31, 2008 and 2007
Statements of Operations Statutory-Basis for the years ended December 31, 2008, 2007 and 2006
Statements of Changes in Capital and Surplus Statutory-Basis for the years ended December 31, 2008, 2007 and 2006
Statements of Cash Flow Statutory-Basis for the years ended December 31, 2008, 2007 and 2006
Notes to Financial Statements--Statutory-Basis
Statutory-Basis Financial Statement Schedules


 

Report of Independent Registered Public Accounting Firm
 

The Board of Directors and Contract Owners

of the WRL Series Life Account

Western Reserve Life Assurance Co. of Ohio
 

We have audited the accompanying statements of assets and liabilities of each of the subaccounts constituting the WRL Series Life Account (comprised of the Transamerica JPMorgan Core Bond VP, Transamerica Asset Allocation – Conservative VP, Transamerica Asset Allocation – Growth VP, Transamerica Asset Allocation – Moderate Growth VP, Transamerica Asset Allocation – Moderate VP, Transamerica International Moderate Growth VP, Transamerica MFS International Equity VP, Transamerica Capital Guardian U.S. Equity VP, Transamerica Capital Guardian Value VP, Transamerica Clarion Global Real Estate Securities VP, Transamerica Federated Market Opportunity VP, Transamerica Science & Technology VP, Transamerica JPMorgan Mid Cap Value VP, Transamerica JPMorgan Enhanced Index VP, Transamerica Marsico Growth VP, Transamerica BlackRock Large Cap Value VP, Transamerica MFS High Yield VP, Transamerica Munder Net50 VP, Transamerica PIMCO Total Return VP, Transamerica Legg Mason Partners All Cap VP, Transamerica T. Rowe Price Equity Income VP, Transamerica T. Rowe Price Small Cap VP, Transamerica Templeton Global VP, Transamerica Third Avenue Value VP, Transamerica Balanced VP, Transamerica Convertible Securities VP, Transamerica Equity VP, Transamerica Growth Opportunities VP, Transamerica Money Market VP, Transamerica Small/MidCap Value VP, Transamerica U.S. Government Securities VP, Transamerica Value Balanced VP, Transamerica Van Kampen Mid-Cap Growth VP, Transamerica Index 50 VP, Transamerica Index 75 VP, ProFund VP Bull, ProFund VP Money Market, ProFund VP NASDAQ-100, ProFund VP Short Small-Cap, ProFund VP Small-Cap, Access VP High Yield, ProFund VP Europe 30, ProFund VP Oil & Gas, ProFund VP Ultra Small-Cap, ProFund VP Utilities, ProFund VP Consumer Services, ProFund VP Pharmaceuticals, ProFund VP Small-Cap Value, ProFund VP Falling U.S. Dollar, ProFund VP Emerging Markets, ProFund VP International, ProFund VP Asia 30, ProFund VP Japan, ProFund VP Short NASDAQ-100, ProFund VP U.S. Government Plus, ProFund VP Basic Materials, ProFund VP Financials, ProFund VP Precious Metals, ProFund VP Telecommunications, ProFund VP Mid-Cap, ProFund VP Short Emerging Markets, ProFund VP Short International, Fidelity VIP Contrafund®, Fidelity VIP Equity-Income, Fidelity VIP Growth Opportunities and Fidelity VIP Index 500 subaccounts) as of December 31, 2008, and the related statements of operations and changes in net assets for the periods indicated thereon. These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Separate Account’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008 by correspondence with the mutual funds’ transfer agents. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts constituting the WRL Series Life Account at December 31, 2008, and the results of their operations and changes in net assets for the periods indicated thereon, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Des Moines, Iowa
March 25, 2009

Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Transamerica JPMorgan Core Bond VP

Transamerica Asset Allocation - Conservative VP

Transamerica Asset Allocation - Growth VP

Transamerica Asset Allocation - Moderate Growth VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

4,249,903.498

4,499,839.771

29,583,534.267

28,177,581.283

Cost

  

$ 50,663,035

$ 47,245,445

$ 338,173,322

$ 331,671,164
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 50,786,347

$ 37,303,672

$ 194,363,820

$ 229,929,063

Receivable for units sold

5

-

-

2,107

Total assets

  

50,786,352

37,303,672

194,363,820

229,931,170
           

Liabilities

          

Payable for units redeemed

  

-

4,337

256

-
   

$ 50,786,352

$ 37,299,335

$ 94,363,564

$ 229,931,170
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 50,786,352

$ 37,299,335

$ 94,363,564

$ 229,931,170

Total net assets

  

$ 50,786,352

$ 37,299,335

$ 194,363,564

$ 229,931,170
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

1,385,002

3,017,230

14,678,104

16,417,443

M&E - 0.75%

  

186,672

341,301

5,252,151

5,456,318

M&E - 0.00%

  

286

6,118

51,301

69,781

M&E - 1.50%

  

47

294

1,822

3,977
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 35.020967

$ 1.145331

$ 9.701650

$ 0.509528

M&E - 0.75%

  

$ 12.205998

$ 10.596197

$ 9.824725

$ 10.416946

M&E - 0.00%

  

$ 11.369629

$ 8.563181

$ 6.788673

$ 7.506094

M&E - 1.50%

  

$ 10.272113

$ 8.224675

$ 6.881551

$ 7.452775
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Transamerica Asset Allocation - Moderate VP

Transamerica International Moderate Growth VP

Transamerica MFS International Equity VP

Transamerica Capital Guardian US Equity VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

8,875,670.841

1,111,929.560

7,485,981.067

272,125.728

Cost

  

$ 100,864,852

$ 11,427,830

$ 63,121,640

$ 2,438,426
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 74,200,608

$ 7,472,167

$ 37,280,186

$ 1,281,712

Receivable for units sold

652

3

-

1

Total assets

  

74,201,260

7,472,170

37,280,186

1,281,713
           

Liabilities

          

Payable for units redeemed

  

-

-

99

-
   

$ 74,201,260

$ 7,472,170

$ 37,280,087

$ 1,281,713
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 74,201,260

$ 7,472,170

$ 37,280,087

$ 1,281,713

Total net assets

  

$ 74,201,260

$ 7,472,170

$ 37,280,087

$ 1,281,713
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

5,476,925

646,035

3,794,182

159,767

M&E - 0.75%

  

1,266,848

395,961

6,509

919

M&E - 0.00%

  

12,266

12,498

6

888

M&E - 1.50%

  

459

463

373

-
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 11.049930

$ 7.069717

$ 9.813748

$ 7.952786

M&E - 0.75%

  

$ 10.717144

$ 7.097876

$ 6.489796

$ 6.139467

M&E - 0.00%

  

$ 8.233158

$ 7.292654

$ 6.522370

$ 6.170355

M&E - 1.50%

  

$ 7.933200

$ 7.036737

$ 7.129773

$ 6.978347
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Transamerica Capital Guardian Value VP

Transamerica Clarion Global Real Estate Securities VP

Transamerica Federated Market Opportunity VP

Transamerica Science & Technology VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

222,965.969

4,566,630.929

5,730,947.167

3,620,914.049

Cost

  

$ 4,037,757

$ 79,081,488

$ 86,405,073

$ 17,088,055
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 2,109,258

$ 35,802,386

$ 76,622,764

$ 9,450,586

Receivable for units sold

2

-

-

31

Total assets

  

2,109,260

35,802,386

76,622,764

9,450,617
           

Liabilities

          

Payable for units redeemed

  

-

265

2,328

-
   

$ 2,109,260

$ 35,802,121

$ 76,620,436

$ 9,450,617
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 2,109,260

$ 35,802,121

$ 76,620,436

$ 9,450,617

Total net assets

  

$ 2,109,260

$ 35,802,121

$ 76,620,436

$ 9,450,617
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

208,672

1,933,639

2,318,674

3,185,850

M&E - 0.75%

  

39,660

181,607

455,851

70,676

M&E - 0.00%

  

3,324

4,078

2,171

2,764

M&E - 1.50%

  

3

1,068

14

31
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 8.373031

$ 17.361890

$ 30.755078

$ 2.792099

M&E - 0.75%

  

$ 8.639412

$ 12.112581

$ 11.601175

$ 7.580627

M&E - 0.00%

  

$ 5.830206

$ 5.803895

$ 9.633044

$ 7.033994

M&E - 1.50%

  

$ 7.485218

$ 6.638974

$ 8.980597

$ 6.393279
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Transamerica JPMorgan Mid Cap Value VP

Transamerica JPMorgan Enhanced Index VP

Transamerica Marsico Growth VP

Transamerica BlackRock Large Cap Value VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

843,540.260

152,637.861

1,403,224.969

3,499,562.195

Cost

  

$ 11,371,916

$ 2,121,714

$ 14,408,559

$ 56,603,019
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 7,802,747

$ 1,243,999

$ 10,355,800

$ 38,810,145

Receivable for units sold

-

2

111

-

Total assets

  

7,802,747

1,244,001

10,355,911

38,810,145
           

Liabilities

          

Payable for units redeemed

  

1,014

-

-

615
   

$ 7,801,733

$ 1,244,001

$ 10,355,911

$ 38,809,530
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 7,801,733

$ 1,244,001

$ 10,355,911

$ 38,809,530

Total net assets

  

$ 7,801,733

$ 1,244,001

$ 10,355,911

$ 38,809,530
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

659,236

122,365

1,380,025

2,068,927

M&E - 0.75%

  

3,394

21,462

72,655

103,092

M&E - 0.00%

  

-

26

1,778

7,692

M&E - 1.50%

  

-

-

22

356
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 11.783686

$ 8.600666

$ 7.027104

$ 18.149115

M&E - 0.75%

  

$ 9.872983

$ 8.918190

$ 8.878294

$ 11.665426

M&E - 0.00%

  

$ -

$ 6.777392

$ 7.388869

$ 7.158778

M&E - 1.50%

  

$ -

$ 7.236194

$ 6.900056

$ 7.470872
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Transamerica MFS High Yield VP

Transamerica Munder Net50 VP

Transamerica PIMCO Total Return VP

Transamerica Legg Mason Partners All Cap VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

156,527.674

1,393,390.885

1,733,163.544

3,241,904.056

Cost

  

$ 1,258,308

$ 13,089,042

$ 19,863,434

$ 40,609,110
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 918,817

$ 6,966,954

$ 18,475,523

$ 24,087,347

Receivable for units sold

-

-

-

-

Total assets

  

918,817

6,966,954

18,475,523

24,087,347
           

Liabilities

          

Payable for units redeemed

  

-

1,051

2

590
   

$ 918,817

$ 6,965,903

$ 18,475,521

$ 24,086,757
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 918,817

$ 6,965,903

$ 18,475,521

$ 24,086,757

Total net assets

  

$ 918,817

$ 6,965,903

$ 18,475,521

$ 24,086,757
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

69,559

1,016,221

1,366,059

2,247,438

M&E - 0.75%

  

23,451

65,157

128,870

48,915

M&E - 0.00%

  

1,680

687

6,883

6,897

M&E - 1.50%

  

-

39

-

-
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 9.847976

$ 6.334182

$ 12.384243

$ 10.503779

M&E - 0.75%

  

$ 9.408055

$ 8.040709

$ 11.520877

$ 8.865693

M&E - 0.00%

  

$ 7.842151

$ 6.988209

$ 10.639140

$ 6.740679

M&E - 1.50%

  

$ 7.581136

$ 6.596048

$ 9.724432

$ 7.192237
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008


 

   

Transamerica T. Rowe Price Equity Income VP

Transamerica T. Rowe Price Small Cap VP

Transamerica Templeton Global VP

Transamerica Third Avenue Value VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

1,981,395.187

2,645,977.683

11,128,702.534

7,265,446.788

Cost

  

$ 32,804,437

$ 26,174,574

$ 261,913,764

$ 123,609,302
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 16,505,022

$ 13,944,302

$ 153,798,669

$ 61,756,298

Receivable for units sold

212

117

-

2,442

Total assets

  

16,505,234

13,944,419

153,798,669

61,758,740
           

Liabilities

          

Payable for units redeemed

  

-

-

318

-
   

$ 16,505,234

$ 13,944,419

$ 153,798,351

$ 61,758,740
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 16,505,234

$ 13,944,419

$ 153,798,351

$ 61,758,740

Total net assets

  

$ 16,505,234

$ 13,944,419

$ 153,798,351

$ 61,758,740
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

1,794,859

1,507,084

8,082,863

3,357,862

M&E - 0.75%

  

103,187

136,002

177,577

306,602

M&E - 0.00%

  

3,838

83

10,866

13,193

M&E - 1.50%

  

5

-

43

1,124
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 8.621935

$ 8.458890

$ 18.814607

$ 17.419557

M&E - 0.75%

  

$ 9.726436

$ 8.790842

$ 9.284293

$ 10.362239

M&E - 0.00%

  

$ 6.879917

$ 7.104083

$ 6.764536

$ 6.193222

M&E - 1.50%

  

$ 7.462544

$ 6.819095

$ 6.630354

$ 6.648425
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Transamerica Balanced VP

Transamerica Convertible Securities VP

Transamerica Equity VP

Transamerica Growth Opportunities VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

442,314.994

449,881.038

32,492,405.920

4,633,364.564

Cost

  

$ 5,222,607

$ 4,904,408

$ 822,319,274

$ 71,826,715
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 3,706,600

$ 2,793,761

$ 486,736,241

$ 35,862,242

Receivable for units sold

1,706

66

296

-

Total assets

  

3,708,306

2,793,827

486,736,537

35,862,242
           

Liabilities

          

Payable for units redeemed

  

-

-

-

1,547
   

$ 3,708,306

$ 2,793,827

$ 486,736,537

$ 35,860,695
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 3,708,306

$ 2,793,827

$ 486,736,537

$ 35,860,695

Total net assets

  

$ 3,708,306

$ 2,793,827

$ 486,736,537

$ 35,860,695
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

333,440

237,304

49,362,224

3,380,011

M&E - 0.75%

  

29,268

28,573

463,948

131,924

M&E - 0.00%

  

6

258

8,202

884

M&E - 1.50%

  

5

29

941

144
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 10.239191

$ 10.600586

$ 9.771856

$ 10.198795

M&E - 0.75%

  

$ 10.047303

$ 9.662401

$ 9.305877

$ 10.468514

M&E - 0.00%

  

$ 7.807174

$ 7.693978

$ 6.394678

$ 7.455580

M&E - 1.50%

  

$ 7.535072

$ 6.902165

$ 6.472692

$ 7.038976
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Transamerica Money Market VP

Transamerica Small/MidCap Value VP

Transamerica U.S. Government Securities VP

Transamerica Value Balanced VP
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

106,465,003.160

1,318,683.304

1,684,090.699

10,648,193.807

Cost

  

$ 106,465,003

$ 26,758,374

$ 20,545,934

$ 134,726,487
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 106,465,003

$ 15,296,726

$ 21,286,906

$ 91,467,985

Receivable for units sold

302

10

-

-

Total assets

  

106,465,305

15,296,736

21,286,906

91,467,985
           

Liabilities

          

Payable for units redeemed

  

-

-

-

48
   

$ 106,465,305

$ 15,296,736

$ 21,286,906

$ 91,467,937
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 106,465,305

$ 15,296,736

$ 21,286,906

$ 91,467,937

Total net assets

  

$ 106,465,305

$ 15,296,736

$ 21,286,906

$ 91,467,937
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

4,421,474

1,127,666

1,261,807

5,062,183

M&E - 0.75%

  

1,088,263

265,697

429,359

39,235

M&E - 0.00%

  

1,260

5,876

4,149

1,364

M&E - 1.50%

  

165

2,348

221

6
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 21.301316

$ 10.921429

$ 12.711691

$ 17.989320

M&E - 0.75%

  

$ 11.271892

$ 10.996790

$ 12.104896

$ 9.996962

M&E - 0.00%

  

$ 10.837603

$ 7.686599

$ 11.455941

$ 7.649702

M&E - 1.50%

  

$ 10.021718

$ 5.975130

$ 10.468880

$ 7.520268
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008


 

   

Transamerica Van Kampen Mid-Cap Growth VP

Transamerica Index 50 VP

Transamerica Index 75 VP

ProFund VP Bull
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

12,654,100.668

13,000.045

19,149.358

45,648.370

Cost

  

$ 303,364,244

$ 102,138

$ 167,603

$ 825,539
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 171,969,228

$ 107,640

$ 139,982

$ 864,124

Receivable for units sold

-

-

2

-

Total assets

  

171,969,228

107,640

139,984

864,124
           

Liabilities

          

Payable for units redeemed

  

750

-

-

227
   

$ 171,968,478

$ 107,640

$ 139,984

$ 863,897
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 171,968,478

$ 107,640

$ 139,984

$ 863,897

Total net assets

  

$ 171,968,478

$ 107,640

$ 139,984

$ 863,897
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

6,783,097

12,925

18,948

102,911

M&E - 0.75%

  

115,678

150

312

16,024

M&E - 0.00%

  

2,732

3

3

-

M&E - 1.50%

  

76

-

2

3
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 25.211522

$ 8.230487

$ 7.266233

$ 7.259718

M&E - 0.75%

  

$ 8.100949

$ 8.238683

$ 7.273482

$ 7.287342

M&E - 0.00%

  

$ 6.851235

$ 8.280000

$ 7.310000

$ 6.653757

M&E - 1.50%

  

$ 6.139565

$ 8.706569

$ 7.852876

$ 7.163132
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

ProFund VP Money Market

ProFund VP NASDAQ-100

ProFund VP Short Small-Cap

ProFund VP Small-Cap
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

34,728,852.930

143,788.991

260,693.074

78,446.066

Cost

  

$ 34,728,853

$ 1,614,770

$ 4,669,880

$ 1,394,351
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 34,728,853

$ 1,539,980

$ 4,619,481

$ 1,393,202

Receivable for units sold

1,592

3,485

776

3,010

Total assets

  

34,730,445

1,543,465

4,620,257

1,396,212
           

Liabilities

          

Payable for units redeemed

  

-

-

-

-
   

$ 34,730,445

$ 1,543,465

$ 4,620,257

$ 1,396,212
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 34,730,445

$ 1,543,465

$ 4,620,257

$ 1,396,212

Total net assets

  

$ 34,730,445

$ 1,543,465

$ 4,620,257

$ 1,396,212
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

2,504,147

178,990

377,905

156,138

M&E - 0.75%

  

811,998

24,113

28,827

43,643

M&E - 0.00%

  

1

-

4,260

196

M&E - 1.50%

  

-

-

-

-
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 10.463441

$ 7.595978

$ 11.223047

$ 6.976554

M&E - 0.75%

  

$ 10.503028

$ 7.624865

$ 11.265684

$ 7.003096

M&E - 0.00%

  

$ 10.534986

$ 6.856594

$ 12.734344

$ 6.467984

M&E - 1.50%

  

$ 9.943386

$ 6.586579

$ 10.991984

$ 7.304007
           

See accompanying notes.

        




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008


 

   

Access VP High Yield

ProFund VP Europe 30

ProFund VP Oil & Gas

ProFund VP UltraSmall-Cap
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

408,451.489

13,458.857

47,034.319

55,636.666

Cost

  

$ 10,117,669

$ 229,711

$ 2,820,069

$ 371,518
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 10,141,850

$ 219,649

$ 1,826,813

$ 432,297

Receivable for units sold

117

7

59

-

Total assets

  

10,141,967

219,656

1,826,872

432,297
           

Liabilities

          

Payable for units redeemed

  

-

-

-

34
   

$ 10,141,967

$ 219,656

$ 1,826,872

$ 432,263
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 10,141,967

$ 219,656

$ 1,826,872

$ 432,263

Total net assets

  

$ 10,141,967

$ 219,656

$ 1,826,872

$ 432,263
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

923,134

34,639

216,766

58,430

M&E - 0.75%

  

100,983

1,287

70,652

49,186

M&E - 0.00%

  

2

633

11

-

M&E - 1.50%

  

-

-

145

-
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 9.901889

$ 6.007191

$ 6.350986

$ 4.014395

M&E - 0.75%

  

$ 9.914286

$ 6.014748

$ 6.358969

$ 4.019470

M&E - 0.00%

  

$ 9.976772

$ 6.052780

$ 6.399188

$ 4.045041

M&E - 1.50%

  

$ 9.752608

$ 6.237657

$ 5.876056

$ 4.624466
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

ProFund VP Utilities

ProFund VP Consumer Services

ProFund VP Pharmaceuticals

ProFund VP Small-Cap Value
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

17,708.486

6,947.357

22,065.697

8,319.458

Cost

  

$ 539,649

$ 136,467

$ 465,057

$ 155,745
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 456,525

$ 140,059

$ 445,065

$ 154,992

Receivable for units sold

7

1

5

4

Total assets

  

456,532

140,060

445,070

154,996
           

Liabilities

          

Payable for units redeemed

  

-

-

-

-
   

$ 456,532

$ 140,060

$ 445,070

$ 154,996
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 456,532

$ 140,060

$ 445,070

$ 154,996

Total net assets

  

$ 456,532

$ 140,060

$ 445,070

$ 154,996
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

46,874

19,360

42,667

17,092

M&E - 0.75%

  

14,108

469

8,435

4,126

M&E - 0.00%

  

17

-

505

242

M&E - 1.50%

  

8

7

-

-
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 7.481180

$ 7.060069

$ 8.621734

$ 7.220372

M&E - 0.75%

  

$ 7.490558

$ 7.068930

$ 8.632556

$ 7.229439

M&E - 0.00%

  

$ 7.537860

$ 7.113620

$ 8.687044

$ 7.275181

M&E - 1.50%

  

$ 7.186101

$ 7.878391

$ 9.195826

$ 7.875522
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

ProFund VP Falling US Dollar

ProFund VP Emerging Markets

ProFund VP International

ProFund VP Asia 30
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

25,244.533

41,958.540

22,998.460

15,716.857

Cost

  

$ 805,997

$ 743,064

$ 507,309

$ 879,271
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 759,860

$ 727,561

$ 388,444

$ 618,458

Receivable for units sold

242

61

32

53

Total assets

  

760,102

727,622

388,476

618,511
           

Liabilities

          

Payable for units redeemed

  

-

-

-

-
   

$ 760,102

$ 727,622

$ 388,476

$ 618,511
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 760,102

$ 727,622

$ 388,476

$ 618,511

Total net assets

  

$ 760,102

$ 727,622

$ 388,476

$ 618,511
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

46,636

115,525

53,905

96,112

M&E - 0.75%

  

36,995

29,124

10,860

15,900

M&E - 0.00%

  

26

30

-

-

M&E - 1.50%

  

-

9

1

103
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 9.080781

$ 5.027614

$ 5.996874

$ 5.514951

M&E - 0.75%

  

$ 9.092165

$ 5.033930

$ 6.004411

$ 5.521895

M&E - 0.00%

  

$ 9.149490

$ 5.065815

$ 6.042382

$ 5.556857

M&E - 1.50%

  

$ 8.912185

$ 5.635835

$ 6.472289

$ 6.456407
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008


 

   

ProFund VP Japan

ProFund VP Short NASDAQ-100

ProFund VP U.S. Government Plus

ProFund VP Basic Materials
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

4,722.901

61,439.242

90,006.041

24,281.119

Cost

 

$ 56,861

$ 1,265,682

$ 3,331,495

$ 1,136,336

 

 

 

 

 

 

 

 

 

 

 

 

Investments in mutual funds,

 

 

 

 

Level 1 quoted prices

 

 

 

 

 

at net asset value

 

$ 58,611

$ 1,245,988

$ 4,253,685

$ 607,514

Receivable for units sold

3

82

243

97

Total assets

 

58,614

1,246,070

4,253,928

607,611

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Payable for units redeemed

-

-

-

-

 

 

$ 58,614

$ 1,246,070

$ 4,253,928

$ 607,611

 

 

 

 

 

 

Net Assets:

 

 

 

 

 

Deferred annuity contracts

 

 

 

 

terminable by owners

 

$ 58,614

$ 1,246,070

$ 4,253,928

$ 607,611

Total net assets

 

$ 58,614

$ 1,246,070

$ 4,253,928

$ 607,611

 

 

 

 

 

 

 

 

 

 

 

 

Accumulation units outstanding:

 

 

 

 

M&E - 0.90%

 

6,656

86,659

244,680

98,070

M&E - 0.75%

 

2,355

8,529

38,855

31,439

M&E - 0.00%

 

12

3,081

2

20

M&E - 1.50%

 

-

-

1

24

 

 

 

 

 

 

 

 

 

 

 

 

Accumulation unit value:

 

 

 

 

M&E - 0.90%

 

$ 6.494548

$ 12.675777

$ 15.000450

$ 4.688636

M&E - 0.75%

 

$ 6.502701

$ 12.691626

$ 15.019193

$ 4.694538

M&E - 0.00%

 

$ 6.543783

$ 12.771516

$ 15.113639

$ 4.724287

M&E - 1.50%

 

$ 6.707273

$ 13.026291

$ 14.861985

$ 4.761801
           
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

ProFund VP Financials

ProFund VP Precious Metals

ProFund VP Telecommunications

ProFund VP Mid-Cap
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

35,120.174

69,252.121

66,336.249

42,941.978

Cost

 

$ 719,680

$ 2,142,279

$ 441,199

$ 855,522

 

 

 

 

 

 

 

 

 

 

 

 

Investments in mutual funds,

 

 

 

 

Level 1 quoted prices

 

 

 

 

 

at net asset value

 

$ 555,601

$ 2,165,514

$ 448,433

$ 783,691

Receivable for units sold

15

189

72

10

Total assets

 

555,616

2,165,703

448,505

783,701

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Payable for units redeemed

-

-

-

-

 

 

$ 555,616

$ 2,165,703

$ 448,505

$ 783,701

 

 

 

 

 

 

Net Assets:

 

 

 

 

 

Deferred annuity contracts

 

 

 

 

terminable by owners

 

$ 555,616

$ 2,165,703

$ 448,505

$ 783,701

Total net assets

 

$ 555,616

$ 2,165,703

$ 448,505

$ 783,701

 

 

 

 

 

 

 

 

 

 

 

 

Accumulation units outstanding:

 

 

 

 

M&E - 0.90%

 

77,521

302,962

54,203

81,347

M&E - 0.75%

 

26,913

60,339

3,850

39,405

M&E - 0.00%

 

-

1,379

-

539

M&E - 1.50%

 

152

351

2

5

 

 

 

 

 

 

 

 

 

 

 

 

Accumulation unit value:

 

 

 

 

M&E - 0.90%

 

$ 5.308638

$ 5.931092

$ 7.724867

$ 6.458127

M&E - 0.75%

 

$ 5.315336

$ 5.938541

$ 7.734543

$ 6.466250

M&E - 0.00%

 

$ 5.349115

$ 5.976149

$ 7.783335

$ 6.507160

M&E - 1.50%

 

$ 6.810715

$ 6.379222

$ 8.221187

$ 6.751723
           
           

See accompanying notes.

        




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

ProFund VP Short Emerging Markets

ProFund VP Short International

Fidelity VIP Contrafund®

Fidelity VIP Equity-Income
   

Subaccount

Subaccount

Subaccount

Subaccount

Assets

          

Investment in securities:

        

Number of shares

  

52,234.770

45,262.182

876,382.674

509,024.685

Cost

 

$ 2,028,380

$ 2,027,829

$ 22,571,142

$ 11,955,325

 

 

 

 

 

 

 

 

 

 

 

 

Investments in mutual funds,

 

 

 

 

Level 1 quoted prices

 

 

 

 

 

at net asset value

 

$ 1,686,661

$ 1,837,645

$ 13,268,434

$ 6,617,321

Receivable for units sold

126

38

9,784

203

Total assets

 

1,686,787

1,837,683

13,278,218

6,617,524

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Payable for units redeemed

-

-

-

-

 

 

$ 1,686,787

$ 1,837,683

$ 13,278,218

$ 6,617,524

 

 

 

 

 

 

Net Assets:

 

 

 

 

 

Deferred annuity contracts

 

 

 

 

terminable by owners

 

$ 1,686,787

$ 1,837,683

$ 13,278,218

$ 6,617,524

Total net assets

 

$ 1,686,787

$ 1,837,683

$ 13,278,218

$ 6,617,524

 

 

 

 

 

 

 

 

 

 

 

 

Accumulation units outstanding:

 

 

 

 

M&E - 0.90%

 

112,995

118,118

1,489,388

776,801

M&E - 0.75%

 

15,336

25,553

-

-

M&E - 0.00%

 

-

-

-

-

M&E - 1.50%

 

81

1

-

-

 

 

 

 

 

 

 

 

 

 

 

 

Accumulation unit value:

 

 

 

 

M&E - 0.90%

 

$ 13.134333

$ 12.787938

$ 8.915216

$ 8.518943

M&E - 0.75%

 

$ 13.150772

$ 12.803946

$ -

$ -

M&E - 0.00%

 

$ 13.233629

$ 12.884637

$ -

$ -

M&E - 1.50%

 

$ 12.206635

$ 11.973479

$ -

$ -
           
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Assets and Liabilities

December 31, 2008



   

Fidelity VIP Growth Opportunities

Fidelity VIP Index 500

    
   

Subaccount

Subaccount

    

Assets

          

Investment in securities:

        

Number of shares

  

230,050.095

56,124.882

 

 

Cost

  

$ 4,613,355

$ 7,952,024

 

 
           
           

Investments in mutual funds,

        

Level 1 quoted prices

          

at net asset value

  

$ 2,282,097

$ 5,528,301

    

Receivable for units sold

-

2

    

Total assets

  

2,282,097

5,528,303

 

 
           

Liabilities

          

Payable for units redeemed

8,516

-

 

 

 

 

$ 2,273,581

$ 5,528,303

 

 
           

Net Assets:

          

Deferred annuity contracts

        

terminable by owners

  

$ 2,273,581

$ 5,528,303

    

Total net assets

  

$ 2,273,581

$ 5,528,303

 

 
           
           

Accumulation units outstanding:

        

M&E - 0.90%

  

491,716

258,210

 

 

M&E - 0.75%

 

-

368,701

 

 

M&E - 0.00%

 

-

5,086

 

 

M&E - 1.50%

 

-

-

 

 
           
           

Accumulation unit value:

        

M&E - 0.90%

  

$ 4.623767

$ 8.447176

 

 

M&E - 0.75%

 

$ -

$ 8.984076

 

 

M&E - 0.00%

 

$ -

$ 6.826290

 

 

M&E - 1.50%

 

$ -

$ 7.186751

 

 
           
           

See accompanying notes.

        



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


       

Transamerica JPMorgan Core Bond VP

Transamerica Asset Allocation - Conservative VP

Transamerica Asset Allocation - Growth VP

Transamerica Asset Allocation - Moderate Growth VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 2,307,636

$ 1,219,138

$ 8,074,332

$ 9,380,193

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

463,043

340,867

2,359,351

2,661,857

Net investment income (loss)

  

1,844,593

878,271

5,714,981

6,718,336
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

2,217,229

49,556,796

33,549,320

Proceeds from sales

    

15,053,994

7,832,432

36,692,967

39,080,660

Cost of investments sold

    

15,454,391

9,358,504

43,013,389

42,604,550

Net realized capital gains (losses) on investments

(400,397)

691,157

43,236,374

30,025,430
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

(537,969)

704,879

39,426,274

55,636,643

End of period

    

123,312

(9,941,773)

(143,809,502)

(101,742,101)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

661,281

(10,646,652)

(183,235,776)

(157,378,744)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

260,884

(9,955,495)

(139,999,402)

(127,353,314)
               

Increase (decrease) in net assets from operations

$ 2,105,477

$ (9,077,224)

$(134,284,421)

$ 120,634,978)
               
               
               

See accompanying notes.

            





Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

Transamerica Asset Allocation - Moderate VP

Transamerica International Moderate Growth VP

Transamerica MFS International Equity VP

Transamerica Capital Guardian US Equity VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 3,322,337

$ 213,379

$ 2,834,266

$ 42,975

             

Administrative, mortality and

          
 

expense risk charge

  

834,530

75,179

486,659

14,129

Net investment income (loss)

  

2,487,807

138,200

2,347,607

28,846
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

9,132,508

315,244

4,326,708

343,122

Proceeds from sales

    

16,414,335

2,278,281

10,682,207

193,965

Cost of investments sold

    

18,656,054

2,563,537

12,709,566

248,857

Net realized capital gains (losses) on investments

6,890,789

29,988

2,299,349

288,230
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

12,068,323

280,505

1,824,005

(17,271)

End of period

    

(26,664,244)

(3,955,663)

(25,841,454)

(1,156,714)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(38,732,567)

(4,236,168)

(27,665,459)

(1,139,443)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(31,841,778)

(4,206,180)

(25,366,110)

(851,213)
               

Increase (decrease) in net assets from operations

$ (29,353,971)

$ (4,067,980)

$ (23,018,503)

$ (822,367)
               
               
               

See accompanying notes.

          



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted



       

Transamerica Capital Guardian Value VP

Transamerica Clarion Global Real Estate Securities VP

Transamerica Federated Market Opportunity VP

Transamerica Science & Technology VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 210,806

$ 3,841,977

$ 4,115,714

$ -

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

26,032

518,435

785,608

141,967

Net investment income (loss)

  

184,774

3,323,542

3,330,106

(141,967)
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

225,148

13,820,027

-

859,522

Proceeds from sales

    

705,942

16,494,924

17,054,737

6,843,534

Cost of investments sold

    

986,439

19,780,556

18,860,412

6,443,805

Net realized capital gains (losses) on investments

(55,349)

10,534,395

(1,805,675)

1,259,251
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

(327,636)

75,687

(3,043,841)

4,164,856

End of period

    

(1,928,499)

(43,279,102)

(9,782,309)

(7,637,469)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(1,600,863)

(43,354,789)

(6,738,468)

(11,802,325)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(1,656,212)

(32,820,394)

(8,544,143)

(10,543,074)
               

Increase (decrease) in net assets from operations

$ (1,471,438)

$ (29,496,852)

$ (5,214,037)

$ (10,685,041)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

Transamerica JPMorgan Mid Cap Value VP

Transamerica JPMorgan Enhanced Index VP

Transamerica Marsico Growth VP

Transamerica BlackRock Large Cap Value VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 162,811

$ 96,377

$ 126,070

$ 504,659

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

103,712

15,042

139,959

479,696

Net investment income (loss)

  

59,099

81,335

(13,889)

24,963
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

1,329,777

259,553

442,185

6,369,655

Proceeds from sales

    

2,972,896

670,168

5,194,429

10,477,487

Cost of investments sold

    

3,103,384

685,290

4,217,639

10,718,654

Net realized capital gains (losses) on investments

1,199,289

244,431

1,418,975

6,128,488
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

2,145,053

202,658

5,392,816

10,467,715

End of period

    

(3,569,169)

(877,715)

(4,052,759)

(17,792,874)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(5,714,222)

(1,080,373)

(9,445,575)

(28,260,589)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(4,514,933)

(835,942)

(8,026,600)

(22,132,101)
               

Increase (decrease) in net assets from operations

$ (4,455,834)

$ (754,607)

$ (8,040,489)

$ (22,107,138)
               
               
               

See accompanying notes.

            



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted



       

Transamerica MFS High Yield VP

Transamerica Munder Net50 VP

Transamerica PIMCO Total Return VP

Transamerica Legg Mason Partners All Cap VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 124,180

$ 462,792

$ 1,146,972

$ 733,800

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

10,175

99,477

169,818

313,018

Net investment income (loss)

  

114,005

363,315

977,154

420,782
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

10,870

2,389,433

8,664

4,931,942

Proceeds from sales

    

866,755

5,155,258

7,967,551

6,195,433

Cost of investments sold

    

980,099

5,147,072

7,926,899

7,356,081

Net realized capital gains (losses) on investments

(102,474)

2,397,619

49,316

3,771,294
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

2,808

2,869,614

565,272

2,758,396

End of period

    

(339,491)

(6,122,088)

(1,387,911)

(16,521,763)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(342,299)

(8,991,702)

(1,953,183)

(19,280,159)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(444,773)

(6,594,083)

(1,903,867)

(15,508,865)
               

Increase (decrease) in net assets from operations

$ (330,768)

$ (6,230,768)

$ (926,713)

$ (15,088,083)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted



       

Transamerica T. Rowe Price Equity Income VP

Transamerica T. Rowe Price Small Cap VP

Transamerica Templeton Global VP

Transamerica Third Avenue Value VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 850,765

$ 333,024

$ 4,515,376

$ 4,849,949

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

210,397

170,073

2,097,395

854,307

Net investment income (loss)

  

640,368

162,951

2,417,981

3,995,642
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

6,840,514

3,997,793

-

27,640,823

Proceeds from sales

    

5,166,546

4,020,362

27,950,543

19,897,720

Cost of investments sold

    

7,472,510

5,512,221

34,236,152

23,051,754

Net realized capital gains (losses) on investments

4,534,550

2,505,934

(6,285,609)

24,486,789
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

(962,206)

(1,188,056)

16,939,061

13,821,418

End of period

    

(16,299,415)

(12,230,272)

(108,115,095)

(61,853,004)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(15,337,209)

(11,042,216)

(125,054,156)

(75,674,422)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(10,802,659)

(8,536,282)

(131,339,765)

(51,187,633)
               

Increase (decrease) in net assets from operations

$ (10,162,291)

$ (8,373,331)

$(128,921,784)

$ (47,191,991)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted



       

Transamerica Balanced VP

Transamerica Convertible Securities VP

Transamerica Equity VP

Transamerica Growth Opportunities VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 95,928

$ 261,904

$ 1,779,834

$ 1,960,554

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

47,128

39,864

6,812,836

475,286

Net investment income (loss)

  

48,800

222,040

(5,033,002)

1,485,268
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

421,131

760,369

30,090,216

13,749,019

Proceeds from sales

    

2,126,451

3,014,777

85,567,265

10,105,206

Cost of investments sold

    

2,032,823

3,735,141

97,037,441

14,347,251

Net realized capital gains (losses) on investments

514,759

40,005

18,620,040

9,506,974
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

1,082,820

158,479

122,818,225

2,485,853

End of period

    

(1,516,007)

(2,110,647)

(335,583,033)

(35,964,473)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(2,598,827)

(2,269,126)

(458,401,258)

(38,450,326)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(2,084,068)

(2,229,121)

(439,781,218)

(28,943,352)
               

Increase (decrease) in net assets from operations

$ (2,035,268)

$ (2,007,081)

$(444,814,220)

$ (27,458,084)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted



       

Transamerica Money Market VP

Transamerica Small/MidCap Value VP

Transamerica U.S. Government Securities VP

Transamerica Value Balanced VP
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 1,847,490

$ 422,048

$ 241,455

$ 5,836,402

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

715,009

187,332

72,006

1,111,860

Net investment income (loss)

  

1,132,481

234,716

169,449

4,724,542
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

(838)

2,384,338

-

10,365,722

Proceeds from sales

    

27,780,301

4,760,107

3,431,195

18,318,996

Cost of investments sold

    

27,780,301

5,181,618

3,367,050

20,173,297

Net realized capital gains (losses) on investments

(838)

1,962,827

64,145

8,511,421
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

1,815,348

14,944

14,115,745

End of period

    

-

(11,461,648)

740,972

(43,258,502)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

-

(13,276,996)

726,028

(57,374,247)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(838)

(11,314,169)

790,173

(48,862,826)
               

Increase (decrease) in net assets from operations

$ 1,131,643

$ (11,079,453)

$ 959,622

$ (44,138,284)
               
               
               

See accompanying notes.

            



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

Transamerica Van Kampen Mid-Cap Growth VP

Transamerica Index 50 VP

Transamerica Index 75 VP

ProFund VP Bull
       

Subaccount

Subaccount(1)

Subaccount(1)

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 5,793,577

$ -

$ -

$ -

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

2,477,528

197

588

11,304

Net investment income (loss)

  

3,316,049

(197)

(588)

(11,304)
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

-

-

7,681

Proceeds from sales

    

32,802,586

44,475

14,391

15,509,697

Cost of investments sold

    

39,572,052

48,126

18,233

16,009,381

Net realized capital gains (losses) on investments

(6,769,466)

(3,651)

(3,842)

(492,003)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

24,536,756

-

-

(14,022)

End of period

    

(131,395,016)

5,502

(27,621)

38,585

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(155,931,772)

5,502

(27,621)

52,607
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(162,701,238)

1,851

(31,463)

(439,396)
               

Increase (decrease) in net assets from operations

$ 159,385,189)

$ 1,654

$ (32,051)

$ (450,700)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

ProFund VP Money Market

ProFund VP NASDAQ-100

ProFund VP Short Small-Cap

ProFund VP Small-Cap
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 274,976

$ -

$ 78,184

$ 3,259

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

298,527

20,504

24,254

15,797

Net investment income (loss)

  

(23,551)

(20,504)

53,930

(12,538)
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

-

-

118,672

Proceeds from sales

    

134,329,909

20,947,987

64,144,721

26,243,313

Cost of investments sold

    

134,329,909

22,706,331

63,802,031

26,626,018

Net realized capital gains (losses) on investments

-

(1,758,344)

342,690

(264,033)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

(107,124)

(14,326)

(12,313)

End of period

    

-

(74,790)

(50,399)

(1,149)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

-

32,334

(36,073)

11,164
               

Net realized and unrealized capital gains (losses)

        

on investments

    

-

(1,726,010)

306,617

(252,869)
               

Increase (decrease) in net assets from operations

$ (23,551)

$ (1,746,514)

$ 360,547

$ (265,407)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted



       

Access VP High Yield

ProFund VP Europe 30

ProFund VP Oil & Gas

ProFund VP UltraSmall-Cap
       

Subaccount(1)

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 218,013

$ 4,054

$ -

$ 3,606

Expenses

              

Administrative, mortality and

          
 

expense risk charge

  

17,193

1,145

24,655

6,209

Net investment income (loss)

  

200,820

2,909

(24,655)

(2,603)
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

28,395

194,349

-

Proceeds from sales

    

20,509,044

648,352

10,384,514

52,456,235

Cost of investments sold

    

21,132,577

776,092

11,452,753

52,524,598

Net realized capital gains (losses) on investments

(623,533)

(99,345)

(873,890)

(68,363)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

-

-

-

End of period

    

24,181

(10,062)

(993,256)

60,779

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

24,181

(10,062)

(993,256)

60,779
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(599,352)

(109,407)

(1,867,146)

(7,584)
               

Increase (decrease) in net assets from operations

$ (398,532)

$ (106,498)

$ (1,891,801)

$ (10,187)
               
               
               

See accompanying notes.

            


 

 

Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

ProFund VP Utilities

ProFund VP Consumer Services

ProFund VP Pharmaceuticals

ProFund VP Small-Cap Value
       

Subaccount

Subaccount

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 14,934

$ -

$ 6,122

$ -

Expenses:

              

Administrative, mortality and

          
 

expense risk charge

  

7,370

247

1,688

715

Net investment income (loss)

  

7,564

(247)

4,434

(715)
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

14,871

-

-

12,162

Proceeds from sales

    

4,228,062

128,003

469,446

443,509

Cost of investments sold

    

4,293,600

144,482

512,439

539,412

Net realized capital gains (losses) on investments

(50,667)

(16,479)

(42,993)

(83,741)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

-

-

-

End of period

    

(83,124)

3,592

(19,992)

(753)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(83,124)

3,592

(19,992)

(753)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(133,791)

(12,887)

(62,985)

(84,494)
               

Increase (decrease) in net assets from operations

$ (126,227)

$ (13,134)

$ (58,551)

$ (85,209)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

ProFund VP Falling US Dollar

ProFund VP Emerging Markets

ProFund VP International

ProFund VP Asia 30
       

Subaccount

Subaccount

Subaccount(1)

Subaccount(1)

Net investment income (loss)

          

Income:

              

Dividends

      

$ 2,438

$ 9,902

$ 4,472

$ 7,813

Expenses:

              

Administrative, mortality and

          
 

expense risk charge

  

41,226

9,589

2,660

4,902

Net investment income (loss)

  

(38,788)

313

1,812

2,911
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

1,334

530

-

96,686

Proceeds from sales

    

24,152,958

7,568,475

873,765

1,235,839

Cost of investments sold

    

24,965,249

8,488,325

1,002,815

1,558,027

Net realized capital gains (losses) on investments

(810,957)

(919,320)

(129,050)

(225,502)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

-

-

-

End of period

    

(46,137)

(15,503)

(118,865)

(260,813)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(46,137)

(15,503)

(118,865)

(260,813)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(857,094)

(934,823)

(247,915)

(486,315)
               

Increase (decrease) in net assets from operations

$ (895,882)

$ (934,510)

$ (246,103)

$ (483,404)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

ProFund VP Japan

ProFund VP Short NASDAQ-100

ProFund VP U.S. Government Plus

ProFund VP Basic Materials
       

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Net investment income (loss)

          

Income:

              

Dividends

      

$ 10,598

$ 11,433

$ 11,250

$ 4,907

Expenses:

              

Administrative, mortality and

          
 

expense risk charge

  

441

3,455

7,224

17,714

Net investment income (loss)

  

10,157

7,978

4,026

(12,807)
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

-

-

-

Proceeds from sales

    

876,036

3,344,142

803,074

10,234,101

Cost of investments sold

    

916,749

3,240,834

787,860

11,164,964

Net realized capital gains (losses) on investments

(40,713)

103,308

15,214

(930,863)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

-

-

-

End of period

    

1,750

(19,694)

922,190

(528,822)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

1,750

(19,694)

922,190

(528,822)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(38,963)

83,614

937,404

(1,459,685)
               

Increase (decrease) in net assets from operations

$ (28,806)

$ 91,592

$ 941,430

$ (1,472,492)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

ProFund VP Financials

ProFund VP Precious Metals

ProFund VP Telecommunications

ProFund VP Mid-Cap
       

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Net investment income (loss)

          

Income:

              

Dividends

      

$ 6,852

$ 65,642

$ 6,342

$ 2,191

Expenses:

              

Administrative, mortality and

          
 

expense risk charge

  

3,294

12,700

2,835

2,186

Net investment income (loss)

  

3,558

52,942

3,507

5
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

145,229

35,041

-

Proceeds from sales

    

1,460,422

8,326,888

3,442,112

879,717

Cost of investments sold

    

1,720,071

9,955,886

3,919,681

1,060,511

Net realized capital gains (losses) on investments

(259,649)

(1,483,769)

(442,528)

(180,794)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

-

-

-

End of period

    

(164,079)

23,235

7,234

(71,831)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(164,079)

23,235

7,234

(71,831)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(423,728)

(1,460,534)

(435,294)

(252,625)
               

Increase (decrease) in net assets from operations

$ (420,170)

$ (1,407,592)

$ (431,787)

$ (252,620)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

ProFund VP Short Emerging Markets

ProFund VP Short International

Fidelity VIP Contrafund®

Fidelity VIP Equity-Income
       

Subaccount(1)

Subaccount(1)

Subaccount

Subaccount

Net investment income (loss)

          

Income:

              

Dividends

      

$ 604

$ 387

$ 154,243

$ 226,023

Expenses:

              

Administrative, mortality and

          
 

expense risk charge

  

5,717

5,422

179,420

92,031

Net investment income (loss)

  

(5,113)

(5,035)

(25,177)

133,992
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

-

609,737

11,113

Proceeds from sales

    

4,366,414

1,387,357

4,240,094

1,751,215

Cost of investments sold

    

4,189,833

1,227,084

4,749,145

2,042,386

Net realized capital gains (losses) on investments

176,581

160,273

100,686

(280,058)
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

-

-

1,504,156

(72,559)

End of period

    

(341,719)

(190,184)

(9,302,708)

(5,338,004)

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(341,719)

(190,184)

(10,806,864)

(5,265,445)
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(165,138)

(29,911)

(10,706,178)

(5,545,503)
               

Increase (decrease) in net assets from operations

$ (170,251)

$ (34,946)

$ (10,731,355)

$ (5,411,511)
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Operations

Year Ended December 31, 2008, Except as noted


 

       

Fidelity VIP Growth Opportunities

Fidelity VIP Index 500

    
       

Subaccount

Subaccount

    

Net investment income (loss)

          

Income:

              

Dividends

      

$ 5,106

$ 144,943

    

Expenses:

              

Administrative, mortality and

          
 

expense risk charge

  

39,590

47,534

    

Net investment income (loss)

  

(34,484)

97,409

 

 
               

Net realized and unrealized capital gains (losses)

      
 

on investments

          

Net realized capital gains (losses) on investments:

        

Realized gain distributions

    

-

59,627

    

Proceeds from sales

    

2,174,301

1,265,931

    

Cost of investments sold

    

1,900,118

1,310,235

    

Net realized capital gains (losses) on investments

274,183

15,323

 

 
               

Net change in unrealized appreciation/depreciation

        

of investments:

            

Beginning of period

    

1,213,455

348,614

    

End of period

    

(2,331,258)

(2,423,723)

    

Net change in unrealized appreciation/depreciation

 

 

 

 

of investments

    

(3,544,713)

(2,772,337)

 

 
               

Net realized and unrealized capital gains (losses)

        

on investments

    

(3,270,530)

(2,757,014)

 

 
               

Increase (decrease) in net assets from operations

$ (3,305,014)

$ (2,659,605)

 

 
               
               
               

See accompanying notes.

            


Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


       

Transamerica JPMorgan Core Bond VP

Transamerica Asset Allocation - Conservative VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 1,844,593

$ 1,960,923

$ 878,271

$ 632,029

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

(400,397)

(146,629)

691,157

1,598,086

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

661,281

847,582

(10,646,652)

(664,089)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

2,105,477

2,661,876

(9,077,224)

1,566,026

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

13,128,489

4,992,947

22,585,791

5,262,014

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(3,681,745)

550,625

(40,978)

1,032,552

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(3,330,951)

(2,305,909)

(1,871,996)

(2,175,865)

Contract maintenance charges

 

(4,562,667)

(4,072,761)

(3,038,137)

(2,035,298)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

1,553,126

(835,098)

17,634,680

2,083,403

Net increase (decrease) in net assets

 

3,658,603

1,826,778

8,557,456

3,649,429

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

47,127,749

45,300,971

28,741,879

25,092,450

End of the period

 

 

$ 50,786,352

$ 47,127,749

$ 37,299,335

$ 28,741,879
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


       

Transamerica Asset Allocation - Growth VP

Transamerica Asset Allocation - Moderate Growth VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 5,714,981

$ 4,496,955

$ 6,718,336

$ 5,233,829

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

43,236,374

15,732,905

30,025,430

11,869,072

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(183,235,776)

(1,274,526)

(157,378,744)

4,896,598

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(134,284,421)

18,955,334

(120,634,978)

21,999,499

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

45,175,320

83,125,984

49,335,315

79,242,009

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(5,449,608)

5,619,308

(7,637,959)

4,353,215

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(19,118,991)

(13,520,685)

(20,447,280)

(17,556,207)

Contract maintenance charges

 

(29,832,085)

(28,724,820)

(34,021,939)

(33,593,712)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(9,225,364)

46,499,787

(12,771,863)

32,445,305

Net increase (decrease) in net assets

 

(143,509,785)

65,455,121

(133,406,841)

54,444,804

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

337,873,349

272,418,228

363,338,011

308,893,207

End of the period

 

 

$ 194,363,564

$ 337,873,349

$ 229,931,170

$ 363,338,011
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


       

Transamerica Asset Allocation - Moderate VP

Transamerica International Moderate Growth VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 2,487,807

$ 2,080,384

$ 138,200

$ 21,566

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

6,890,789

3,984,293

29,988

146,575

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(38,732,567)

486,176

(4,236,168)

143,709

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(29,353,971)

6,550,853

(4,067,980)

311,850

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

18,655,902

20,734,184

4,234,840

4,841,314

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(293,991)

534,209

206,334

2,251,574

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(7,240,255)

(4,804,700)

(379,110)

(185,957)

Contract maintenance charges

 

(10,913,718)

(10,173,042)

(1,231,791)

(574,665)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

207,938

6,290,651

2,830,273

6,332,266

Net increase (decrease) in net assets

 

(29,146,033)

12,841,504

(1,237,707)

6,644,116

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

103,347,293

90,505,789

8,709,877

2,065,761

End of the period

 

 

$ 74,201,260

$ 103,347,293

$ 7,472,170

$ 8,709,877
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


       

Transamerica MFS International Equity VP

Transamerica Capital Guardian US Equity VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 2,347,607

$ 40,985

$ 28,846

$ (3,250)

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

2,299,349

15,406,353

288,230

177,887

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(27,665,459)

(9,823,015)

(1,139,443)

(189,664)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(23,018,503)

5,624,323

(822,367)

(15,027)

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

289,726

6,047,099

564,800

131,558

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(2,151,679)

562,941

44,529

(30,493)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(3,272,719)

(3,180,309)

(38,532)

(23,038)

Contract maintenance charges

 

(3,741,320)

(4,177,806)

(118,771)

(115,426)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(8,875,992)

(748,075)

452,026

(37,399)

Net increase (decrease) in net assets

 

(31,894,495)

4,876,248

(370,341)

(52,426)

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

69,174,582

64,298,334

1,652,054

1,704,480

End of the period

 

 

$ 37,280,087

$ 69,174,582

$ 1,281,713

$ 1,652,054
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


       

Transamerica Capital Guardian Value VP

Transamerica Clarion Global Real Estate Securities VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 184,774

$ 8,005

$ 3,323,542

$ 5,659,889

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

(55,349)

446,803

10,534,395

16,147,624

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(1,600,863)

(753,445)

(43,354,789)

(29,421,649)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(1,471,438)

(298,637)

(29,496,852)

(7,614,136)

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

169,388

-

-

5,194,008

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

4,478

(508,454)

(4,003,879)

(7,348,499)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(171,751)

(56,410)

(3,958,550)

(5,180,898)

Contract maintenance charges

 

(254,657)

(288,722)

(4,891,318)

(6,457,096)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(252,542)

(853,586)

(12,853,747)

(13,792,485)

Net increase (decrease) in net assets

 

(1,723,980)

(1,152,223)

(42,350,599)

(21,406,621)

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

3,833,240

4,985,463

78,152,720

99,559,341

End of the period

 

 

$ 2,109,260

$ 3,833,240

$ 35,802,121

$ 78,152,720
               
               
               

See accompanying notes.

            



 

Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


 

       

Transamerica Federated Market Opportunity VP

Transamerica Science & Technology VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 3,330,106

$ 2,727,191

$ (141,967)

$ (127,755)

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

(1,805,675)

25,902

1,259,251

613,446

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(6,738,468)

(4,311,830)

(11,802,325)

3,218,392

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(5,214,037)

(1,558,737)

(10,685,041)

3,704,083

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

6,985,060

6,295,470

-

7,722,350

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(1,639,945)

(9,425,500)

(1,561,032)

3,756,288

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(6,110,491)

(4,631,888)

(814,162)

(792,247)

Contract maintenance charges

 

(7,640,043)

(7,617,160)

(1,454,758)

(1,040,531)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(8,405,419)

(15,379,078)

(3,829,952)

9,645,860

Net increase (decrease) in net assets

 

(13,619,456)

(16,937,815)

(14,514,993)

13,349,943

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

90,239,892

107,177,707

23,965,610

10,615,667

End of the period

 

 

$ 76,620,436

$ 90,239,892

$ 9,450,617

$ 23,965,610
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Transamerica JPMorgan Mid Cap Value VP

Transamerica JPMorgan Enhanced Index VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 59,099

$ 11,999

$ 81,335

$ 8,532

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

1,199,289

1,981,355

244,431

189,802

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(5,714,222)

(1,546,531)

(1,080,373)

(132,218)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(4,455,834)

446,823

(754,607)

66,116

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

-

-

-

757,139

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(1,755,598)

(2,549,349)

15,995

(65,107)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(729,050)

(975,507)

(182,855)

(55,377)

Contract maintenance charges

 

(355,996)

(440,180)

(100,024)

(106,072)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(2,840,644)

(3,965,036)

(266,884)

530,583

Net increase (decrease) in net assets

 

(7,296,478)

(3,518,213)

(1,021,491)

596,699

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

15,098,211

18,616,424

2,265,492

1,668,793

End of the period

 

 

$ 7,801,733

$ 15,098,211

$ 1,244,001

$ 2,265,492
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Transamerica Marsico Growth VP

Transamerica BlackRock Large Cap Value VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ (13,889)

$ (138,572)

$ 24,963

$ 33,279

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

1,418,975

736,873

6,128,488

10,691,529

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(9,445,575)

2,143,246

(28,260,589)

(8,122,488)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(8,040,489)

2,741,547

(22,107,138)

2,602,320

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

132,564

4,160,777

967,761

3,868,402

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

97,158

591,244

(1,407,110)

(1,444,569)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(946,897)

(637,368)

(3,445,022)

(3,402,298)

Contract maintenance charges

 

(1,172,247)

(1,008,825)

(4,140,813)

(4,394,505)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(1,889,422)

3,105,828

(8,025,184)

(5,372,970)

Net increase (decrease) in net assets

 

(9,929,911)

5,847,375

(30,132,322)

(2,770,650)

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

20,285,822

14,438,447

68,941,852

71,712,502

End of the period

 

 

$ 10,355,911

$ 20,285,822

$ 38,809,530

$ 68,941,852
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Transamerica MFS High Yield VP

Transamerica Munder Net50 VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 114,005

$ 117,391

$ 363,315

$ (123,899)

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

(102,474)

(100,206)

2,397,619

1,705,922

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(342,299)

40,744

(8,991,702)

295,679

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(330,768)

57,929

(6,230,768)

1,877,702

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

-

2,073,293

584,711

1,821,748

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

47,871

(2,829,517)

(1,239,409)

1,406,981

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(31,003)

(91,921)

(704,745)

(599,661)

Contract maintenance charges

 

(103,486)

(170,881)

(1,038,586)

(1,084,255)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(86,618)

(1,019,026)

(2,398,029)

1,544,813

Net increase (decrease) in net assets

 

(417,386)

(961,097)

(8,628,797)

3,422,515

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

1,336,203

2,297,300

15,594,700

12,172,185

End of the period

 

 

$ 918,817

$ 1,336,203

$ 6,965,903

$ 15,594,700
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


 

       

Transamerica PIMCO Total Return VP

Transamerica Legg Mason Partners All Cap VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 977,154

$ 199,356

$ 420,782

$ 199,069

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

49,316

359,931

3,771,294

3,310,168

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(1,953,183)

449,229

(19,280,159)

(3,348,299)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(926,713)

1,008,516

(15,088,083)

160,938

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

7,612,348

3,328,951

1,717,760

4,030,008

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

630,934

2,435

(1,058,966)

(2,036,228)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(935,201)

(730,457)

(2,523,799)

(2,314,616)

Contract maintenance charges

 

(1,477,812)

(886,629)

(3,057,845)

(3,359,021)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

5,830,269

1,714,300

(4,922,850)

(3,679,857)

Net increase (decrease) in net assets

 

4,903,556

2,722,816

(20,010,933)

(3,518,919)

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

13,571,965

10,849,149

44,097,690

47,616,609

End of the period

 

 

$ 18,475,521

$ 13,571,965

$ 24,086,757

$ 44,097,690
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


 

       

Transamerica T. Rowe Price Equity Income VP

Transamerica T. Rowe Price Small Cap VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 640,368

$ 393,100

$ 162,951

$ (206,182)

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

4,534,550

3,308,308

2,505,934

2,155,920

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(15,337,209)

(3,031,427)

(11,042,216)

(236,164)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(10,162,291)

669,981

(8,373,331)

1,713,574

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

285,905

2,946,962

2,114,024

2,563,431

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(440,792)

521,931

(373,836)

(85,936)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(1,272,881)

(1,540,150)

(1,066,713)

(1,388,265)

Contract maintenance charges

 

(1,708,700)

(1,758,033)

(1,535,904)

(1,544,166)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(3,136,468)

170,710

(862,429)

(454,936)

Net increase (decrease) in net assets

 

(13,298,759)

840,691

(9,235,760)

1,258,638

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

29,803,993

28,963,302

23,180,179

21,921,541

End of the period

 

 

$ 16,505,234

$ 29,803,993

$ 13,944,419

$ 23,180,179
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Transamerica Templeton Global VP

Transamerica Third Avenue Value VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 2,417,981

$ 1,897,216

$ 3,995,642

$ 4,159,367

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

(6,285,609)

353,804

24,486,789

25,329,779

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(125,054,156)

37,063,596

(75,674,422)

(28,785,637)

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(128,921,784)

39,314,616

(47,191,991)

703,509

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

14,754,535

28,796,215

910,266

8,947,313

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(4,409,694)

(7,117,588)

(3,460,705)

(5,708,582)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(14,053,037)

(15,915,952)

(5,480,877)

(6,651,083)

Contract maintenance charges

 

(20,249,251)

(20,591,918)

(6,964,709)

(7,894,808)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(23,957,447)

(14,829,243)

(14,996,025)

(11,307,160)

Net increase (decrease) in net assets

 

(152,879,231)

24,485,373

(62,188,016)

(10,603,651)

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

306,677,582

282,192,209

123,946,756

134,550,407

End of the period

 

 

$ 153,798,351

$ 306,677,582

$ 61,758,740

$ 123,946,756
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


 

       

Transamerica Balanced VP

Transamerica Convertible Securities VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 48,800

$ 13,441

$ 222,040

$ 32,313

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

514,759

162,158

40,005

434,581

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(2,598,827)

507,547

(2,269,126)

13,115

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(2,035,268)

683,146

(2,007,081)

480,009

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

170,103

1,073,586

364,034

1,390,813

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(352,217)

514,637

265,054

235,493

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(332,922)

(273,544)

(207,186)

(94,353)

Contract maintenance charges

 

(458,613)

(422,655)

(326,335)

(216,649)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(973,649)

892,024

95,567

1,315,304

Net increase (decrease) in net assets

 

(3,008,917)

1,575,170

(1,911,514)

1,795,313

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

6,717,223

5,142,053

4,705,341

2,910,028

End of the period

 

 

$ 3,708,306

$ 6,717,223

$ 2,793,827

$ 4,705,341
               
               
               

See accompanying notes.

            



Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


 

       

Transamerica Equity VP

Transamerica Growth Opportunities VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ (5,033,002)

$ (8,533,841)

$ 1,485,268

$ (525,370)

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

18,620,040

49,307,298

9,506,974

4,343,036

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

(458,401,258)

97,518,672

(38,450,326)

8,015,033

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

(444,814,220)

138,292,129

(27,458,084)

11,832,699

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

58,486,824

81,314,312

2,846,901

10,230,614

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

(11,991,221)

(41,804,393)

(2,251,994)

(2,359,509)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(46,823,205)

(54,642,782)

(3,201,616)

(2,989,052)

Contract maintenance charges

 

(71,786,987)

(74,045,073)

(4,448,119)

(4,308,179)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

(72,114,589)

(89,177,936)

(7,054,828)

573,874

Net increase (decrease) in net assets

 

(516,928,809)

49,114,193

(34,512,912)

12,406,573

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

1,003,665,346

954,551,153

70,373,607

57,967,034

End of the period

 

 

$ 486,736,537

$ 1,003,665,346

$ 35,860,695

$ 70,373,607
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Transamerica Money Market VP

Transamerica Small/MidCap Value VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 1,132,481

$ 2,199,996

$ 234,716

$ 24,025

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

(838)

(17)

1,962,827

1,847,801

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

-

-

(13,276,996)

1,230,226

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

1,131,643

2,199,979

(11,079,453)

3,102,052

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

59,611,176

16,175,478

4,441,374

8,579,930

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

6,494,412

4,991,135

915,693

2,714,815

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(13,739,832)

(7,811,003)

(742,456)

(369,629)

Contract maintenance charges

 

(7,314,018)

(5,713,871)

(2,049,174)

(1,410,431)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

45,051,738

7,641,739

2,565,437

9,514,685

Net increase (decrease) in net assets

 

46,183,381

9,841,718

(8,514,016)

12,616,737

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

60,281,924

50,440,206

23,810,752

11,194,015

End of the period

 

 

$ 106,465,305

$ 60,281,924

$ 15,296,736

$ 23,810,752
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Transamerica U.S. Government Securities VP

Transamerica Value Balanced VP
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

  

$ 169,449

$ 31,585

$ 4,724,542

$ 2,558,198

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

64,145

(10,718)

8,511,421

3,956,229

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

726,028

29,595

(57,374,247)

2,273,248

Increase (decrease) in net assets

 

 

 

 

 

 

from operations

 

959,622

50,462

(44,138,284)

8,787,675

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

19,363,175

636,871

5,035,269

10,442,659

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

1,477,925

235,240

(2,837,860)

(3,805,461)

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(1,205,545)

(124,111)

(7,894,276)

(7,962,858)

Contract maintenance charges

 

(684,791)

(84,082)

(10,942,961)

(11,188,844)

Increase (decrease) in net assets

 

 

 

 

 

 

from contract transactions

18,950,764

663,918

(16,639,828)

(12,514,504)

Net increase (decrease) in net assets

 

19,910,386

714,380

(60,778,112)

(3,726,829)

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

1,376,520

662,140

152,246,049

155,972,878

End of the period

 

 

$ 21,286,906

$ 1,376,520

$ 91,467,937

$ 152,246,049
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Transamerica Van Kampen Mid-Cap Growth VP

Transamerica Index 50 VP

Transamerica Index 75 VP
       

Subaccount

Subaccount

Subaccount
       

2008

2007

2008(1)

2007

2008(1)

2007

Operations

                  

Net investment income (loss)

$ 3,316,049

$(3,051,748)

$ (197)

$ -

$ (588)

$ -

Net realized capital gains (losses)

          
 

on investments

(6,769,466)

(722,021)

(3,651)

-

(3,842)

-

Net change in unrealized appreciation/

          
 

depreciation of investments

(155,931,772)

68,424,772

5,502

-

(27,621)

-

Increase (decrease) in net assets

 

 

 

 

 

 
 

from operations

(159,385,189)

64,651,003

1,654

-

(32,051)

-
                   

Contract transactions

              

Net contract purchase payments

18,780,621

33,158,062

23,673

-

151,209

-

Transfer payments from (to) other

          
 

subaccounts or general account

(5,452,634)

(7,217,725)

83,335

-

24,779

-

Contract terminations, withdrawals,

          

and other deductions

  

(16,433,906)

(18,279,999)

-

-

(210)

-

Contract maintenance charges

(24,097,370)

(24,309,549)

(1,022)

-

(3,743)

-

Increase (decrease) in net assets

 

 

 

 

 

 
 

from contract transactions

(27,203,289)

(16,649,211)

105,986

-

172,035

-

Net increase (decrease) in net assets

(186,588,478)

48,001,792

107,640

-

139,984

-
                   

Net assets:

                  

Beginning of the period

  

358,556,956

310,555,164

-

-

-

-

End of the period

    

$ 71,968,478

$358,556,956

$ 107,640

$ -

$ 139,984

$ -
                   
                   
                   

See accompanying notes.

              




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

ProFund VP Bull

ProFund VP Money Market
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

    

$ (11,304)

$ (29,310)

$ (23,551)

$ 140,465

Net realized capital gains (losses)

 

 

 

 

 

 

 

on investments

 

 

(492,003)

(257,888)

-

-

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

 

52,607

28,489

-

-

Increase (decrease) in net assets

 

 

 

 

 

 

 

from operations

 

 

(450,700)

(258,709)

(23,551)

140,465

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

 

-

4,220,565

-

4,564,705

Transfer payments from (to) other

 

 

 

 

 

 

 

subaccounts or general account

258,771

(10,852,649)

12,349,978

21,203,542

Contract terminations, withdrawals,

 

 

 

 

 

 

and other deductions

 

 

(43,110)

(145,578)

(2,129,563)

(550,441)

Contract maintenance charges

 

 

(73,628)

(228,764)

(1,980,578)

(312,098)

Increase (decrease) in net assets

 

 

 

 

 

 

 

from contract transactions

 

142,033

(7,006,426)

8,239,837

24,905,708

Net increase (decrease) in net assets

 

 

(308,667)

(7,265,135)

8,216,286

25,046,173

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

1,172,564

8,437,699

26,514,159

1,467,986

End of the period

 

 

$ 863,897

$ 1,172,564

$ 34,730,445

$ 26,514,159
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

ProFund VP NASDAQ-100

ProFund VP Short Small-Cap
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

              

Net investment income (loss)

    

$ (20,504)

$ (54,442)

$ 53,930

$ 244,235

Net realized capital gains (losses)

 

 

 

 

 

 

 

on investments

 

 

(1,758,344)

63,974

342,690

(1,074,677)

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

 

32,334

(91,622)

(36,073)

(15,888)

Increase (decrease) in net assets

 

 

 

 

 

 

 

from operations

 

 

(1,746,514)

(82,090)

360,547

(846,330)

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

 

-

8,451,277

4,035,306

1,656,055

Transfer payments from (to) other

 

 

 

 

 

 

 

subaccounts or general account

(9,218,351)

3,976,956

(943,792)

868,713

Contract terminations, withdrawals,

 

 

 

 

 

 

and other deductions

 

 

(88,784)

(191,707)

(61,880)

(220,931)

Contract maintenance charges

 

 

(152,209)

(329,586)

(181,097)

(208,877)

Increase (decrease) in net assets

 

 

 

 

 

 

 

from contract transactions

 

(9,459,344)

11,906,940

2,848,537

2,094,960

Net increase (decrease) in net assets

 

 

(11,205,858)

11,824,850

3,209,084

1,248,630

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

 

Beginning of the period

 

 

12,749,323

924,473

1,411,173

162,543

End of the period

 

 

$ 1,543,465

$ 12,749,323

$ 4,620,257

$ 1,411,173
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

ProFund VP Small-Cap

Access VP High Yield

ProFund VP Europe 30
       

Subaccount

Subaccount

Subaccount
       

2008

2007

2008(1)

2007

2008(1)

2008(1)

Operations

                  

Net investment income (loss)

    

$ (12,538)

$ (24,133)

$ 200,820

$ -

$ 2,909

$ -

Net realized capital gains (losses)

                
 

on investments

    

(264,033)

(891,222)

(623,533)

-

(99,345)

-

Net change in unrealized appreciation/

              
 

depreciation of investments

11,164

(20,283)

24,181

-

(10,062)

-

Increase (decrease) in net assets

    

 

 

 

 

 

 
 

from operations

    

(265,407)

(935,638)

(398,532)

-

(106,498)

-
                   

Contract transactions

                

Net contract purchase payments

    

-

1,133,702

8,558,653

-

177,689

-

Transfer payments from (to) other

                
 

subaccounts or general account

50,383

(1,514,608)

2,177,410

-

158,997

-

Contract terminations, withdrawals,

                

and other deductions

    

(34,155)

(162,214)

(82,253)

-

(807)

-

Contract maintenance charges

    

(102,621)

(183,528)

(113,311)

-

(9,725)

-

Increase (decrease) in net assets

    

 

 

 

 

 

 
 

from contract transactions

  

(86,393)

(726,648)

10,540,499

-

326,154

-

Net increase (decrease) in net assets

    

(351,800)

(1,662,286)

10,141,967

-

219,656

-
                   

Net assets:

                  

Beginning of the period

    

1,748,012

3,410,298

-

-

-

-

End of the period

    

$ 1,396,212

$ 1,748,012

$10,141,967

$ -

$ 219,656

$ -
                   
                   
                   

See accompanying notes.

                




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


 

       

ProFund VP Oil & Gas

ProFund VP UltraSmall-Cap

ProFund VP Utilities

ProFund VP Consumer Services
       

Subaccount

Subaccount

Subaccount

Subaccount
       

2008(1)

2008(1)

2008(1)

2008(1)

Operations

            

Net investment income (loss)

    

$ (24,655)

$ (2,603)

$ 7,564

$ (247)

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

 

(873,890)

(68,363)

(50,667)

(16,479)

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

 

(993,256)

60,779

(83,124)

3,592

Increase (decrease) in net assets

 

 

 

 

 

 

 

from operations

 

 

(1,891,801)

(10,187)

(126,227)

(13,134)

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

 

2,832,166

1,813,225

649,865

136,028

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

 

1,274,012

(1,340,799)

24,763

20,421

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(152,703)

(367)

(35,299)

-

Contract maintenance charges

 

 

(234,802)

(29,609)

(56,570)

(3,255)

Increase (decrease) in net assets

 

 

 

 

 

 

 

from contract transactions

 

3,718,673

442,450

582,759

153,194

Net increase (decrease) in net assets

 

1,826,872

432,263

456,532

140,060

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

Beginning of the period

 

 

-

-

-

-

End of the period

 

 

$ 1,826,872

$ 432,263

$ 456,532

$ 140,060
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

ProFund VP Pharmaceuticals

ProFund VP Small-Cap Value

ProFund VP Falling US Dollar

ProFund VP Emerging Markets
       

Subaccount

Subaccount

Subaccount

Subaccount
       

2008(1)

2008(1)

2008(1)

2008(1)

Operations

            

Net investment income (loss)

    

$ 4,434

$ (715)

$ (38,788)

$ 313

Net realized capital gains (losses)

          
 

on investments

    

(42,993)

(83,741)

(810,957)

(919,320)

Net change in unrealized appreciation/

          
 

depreciation of investments

  

(19,992)

(753)

(46,137)

(15,503)

Increase (decrease) in net assets

    

 

 

 

 
 

from operations

    

(58,551)

(85,209)

(895,882)

(934,510)
               

Contract transactions

            

Net contract purchase payments

    

220,330

111,243

15,981,213

1,220,353

Transfer payments from (to) other

          
 

subaccounts or general account

  

307,698

139,878

(13,778,067)

542,646

Contract terminations, withdrawals,

          

and other deductions

    

(8,352)

(3,753)

(251,474)

(33,413)

Contract maintenance charges

    

(16,055)

(7,163)

(295,688)

(67,454)

Increase (decrease) in net assets

    

 

 

 

 
 

from contract transactions

  

503,621

240,205

1,655,984

1,662,132

Net increase (decrease) in net assets

  

445,070

154,996

760,102

727,622
               

Net assets:

            

Beginning of the period

    

-

-

-

-

End of the period

    

$ 445,070

$ 154,996

$ 760,102

$ 727,622
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

ProFund VP International

ProFund VP Asia 30

ProFund VP Japan

ProFund VP Short NASDAQ-100
       

Subaccount

Subaccount

Subaccount

Subaccount
       

2008(1)

2008(1)

2008(1)

2008(1)

Operations

            

Net investment income (loss)

    

$ 1,812

$ 2,911

$ 10,157

$ 7,978

Net realized capital gains (losses)

 

 

 

 

 

 

on investments

 

 

(129,050)

(225,502)

(40,713)

103,308

Net change in unrealized appreciation/

 

 

 

 

 

 

depreciation of investments

 

(118,865)

(260,813)

1,750

(19,694)

Increase (decrease) in net assets

 

 

 

 

 

 

 

from operations

 

 

(246,103)

(483,404)

(28,806)

91,592

 

 

 

 

 

 

 

 

Contract transactions

 

 

 

 

 

 

Net contract purchase payments

 

 

261,135

713,558

80,826

893,391

Transfer payments from (to) other

 

 

 

 

 

 

subaccounts or general account

 

409,510

448,911

11,950

309,482

Contract terminations, withdrawals,

 

 

 

 

 

and other deductions

 

 

(15,431)

(12,907)

(2,834)

(18,310)

Contract maintenance charges

 

 

(20,635)

(47,647)

(2,522)

(30,085)

Increase (decrease) in net assets

 

 

 

 

 

 

 

from contract transactions

 

634,579

1,101,915

87,420

1,154,478

Net increase (decrease) in net assets

 

388,476

618,511

58,614

1,246,070

 

 

 

 

 

 

 

 

Net assets:

 

 

 

 

 

 

Beginning of the period

 

 

-

-

-

-

End of the period

    

$ 388,476

$ 618,511

$ 58,614

$ 1,246,070
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


 

       

ProFund VP U.S. Government Plus

ProFund VP Basic Materials

ProFund VP Financials

ProFund VP Precious Metals
       

Subaccount

Subaccount

Subaccount

Subaccount
       

2008(1)

2008(1)

2008(1)

2008(1)

Operations

            

Net investment income (loss)

    

$ 4,026

$ (12,807)

$ 3,558

$ 52,942

Net realized capital gains (losses)

          
 

on investments

    

15,214

(930,863)

(259,649)

(1,483,769)

Net change in unrealized appreciation/

          
 

depreciation of investments

  

922,190

(528,822)

(164,079)

23,235

Increase (decrease) in net assets

    

 

 

 

 
 

from operations

    

941,430

(1,472,492)

(420,170)

(1,407,592)
               

Contract transactions

            

Net contract purchase payments

    

2,390,331

1,772,463

362,764

2,556,451

Transfer payments from (to) other

          
 

subaccounts or general account

  

1,024,157

557,061

669,688

1,260,436

Contract terminations, withdrawals,

          

and other deductions

    

(33,757)

(97,287)

(27,651)

(94,633)

Contract maintenance charges

    

(68,233)

(152,134)

(29,015)

(148,959)

Increase (decrease) in net assets

    

 

 

 

 
 

from contract transactions

  

3,312,498

2,080,103

975,786

3,573,295

Net increase (decrease) in net assets

  

4,253,928

607,611

555,616

2,165,703
               

Net assets:

            

Beginning of the period

    

-

-

-

-

End of the period

    

$ 4,253,928

$ 607,611

$ 555,616

$ 2,165,703
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

ProFund VP Telecommunications

ProFund VP Mid-Cap

ProFund VP Short Emerging Markets

ProFund VP Short International
       

Subaccount

Subaccount

Subaccount

Subaccount
       

2008(1)

2008(1)

2008(1)

2008(1)

Operations

            

Net investment income (loss)

    

$ 3,507

$ 5

$ (5,113)

$ (5,035)

Net realized capital gains (losses)

          
 

on investments

    

(442,528)

(180,794)

176,581

160,273

Net change in unrealized appreciation/

          
 

depreciation of investments

  

7,234

(71,831)

(341,719)

(190,184)

Increase (decrease) in net assets

    

 

 

 

 
 

from operations

    

(431,787)

(252,620)

(170,251)

(34,946)
               

Contract transactions

            

Net contract purchase payments

    

1,047,254

553,298

1,695,128

1,894,065

Transfer payments from (to) other

          
 

subaccounts or general account

  

(123,103)

512,731

237,574

66,744

Contract terminations, withdrawals,

          

and other deductions

    

(23,722)

(9,381)

(18,993)

(24,509)

Contract maintenance charges

    

(20,137)

(20,327)

(56,671)

(63,671)

Increase (decrease) in net assets

    

 

 

 

 
 

from contract transactions

  

880,292

1,036,321

1,857,038

1,872,629

Net increase (decrease) in net assets

  

448,505

783,701

1,686,787

1,837,683
               

Net assets:

            

Beginning of the period

    

-

-

-

-

End of the period

    

$ 448,505

$ 783,701

$ 1,686,787

$ 1,837,683
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted



       

Fidelity VIP Contrafund®

Fidelity VIP Equity-Income
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

            

Net investment income (loss)

    

$ (25,177)

$ (39,462)

$ 133,992

$ 91,384

Net realized capital gains (losses)

          
 

on investments

    

100,686

7,340,283

(280,058)

1,858,082

Net change in unrealized appreciation/

          
 

depreciation of investments

  

(10,806,864)

(3,538,425)

(5,265,445)

(1,827,880)

Increase (decrease) in net assets

    

 

 

 

 
 

from operations

    

(10,731,355)

3,762,396

(5,411,511)

121,586
               

Contract transactions

            

Net contract purchase payments

    

627,111

1,527,899

180,539

241,396

Transfer payments from (to) other

          
 

subaccounts or general account

  

(169,369)

(838,156)

(200,504)

(544,832)

Contract terminations, withdrawals,

          

and other deductions

    

(1,218,067)

(1,196,685)

(602,552)

(743,061)

Contract maintenance charges

    

(1,321,952)

(1,359,119)

(762,656)

(863,987)

Increase (decrease) in net assets

    

 

 

 

 
 

from contract transactions

  

(2,082,277)

(1,866,061)

(1,385,173)

(1,910,484)

Net increase (decrease) in net assets

  

(12,813,632)

1,896,335

(6,796,684)

(1,788,898)
               

Net assets:

            

Beginning of the period

    

26,091,850

24,195,515

13,414,208

15,203,106

End of the period

    

$ 13,278,218

$ 26,091,850

$ 6,617,524

$ 13,414,208
               
               
               

See accompanying notes.

            




Western Reserve Life Assurance Co.

WRL Series Life Account

Statements of Changes in Net Assets

Years Ended December 31, 2008 and 2007, Except as Noted


       

Fidelity VIP Growth Opportunities

Fidelity VIP Index 500
       

Subaccount

Subaccount
       

2008

2007

2008

2007

Operations

            

Net investment income (loss)

    

$ (34,484)

$ (44,754)

$ 97,409

$ 143,359

Net realized capital gains (losses)

          
 

on investments

    

274,183

390,535

15,323

210,055

Net change in unrealized appreciation/

          
 

depreciation of investments

  

(3,544,713)

535,763

(2,772,337)

(143,848)

Increase (decrease) in net assets

    

 

 

 

 
 

from operations

    

(3,305,014)

881,544

(2,659,605)

209,566
               

Contract transactions

            

Net contract purchase payments

    

-

1,318,595

1,752,153

1,978,623

Transfer payments from (to) other

          
 

subaccounts or general account

  

(631,938)

1,456,240

743,056

489,254

Contract terminations, withdrawals,

          

and other deductions

    

(280,053)

(239,908)

(143,275)

(311,258)

Contract maintenance charges

    

(384,366)

(352,921)

(635,184)

(577,399)

Increase (decrease) in net assets

    

 

 

 

 
 

from contract transactions

  

(1,296,357)

2,182,006

1,716,750

1,579,220

Net increase (decrease) in net assets

  

(4,601,371)

3,063,550

(942,855)

1,788,786
               

Net assets:

            

Beginning of the period

    

6,874,952

3,811,402

6,471,158

4,682,372

End of the period

    

$ 2,273,581

$ 6,874,952

$ 5,528,303

$ 6,471,158
               
               
               

See accompanying notes.

            



 

 

Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008




1.

Organization and Summary of Significant Accounting Policies

    

Organization
 
The WRL Series Life Account (the "Life Account") was established as a variable life insurance separate account of Western Reserve Life Assurance Co. of Ohio ("WRL" or the "depositor") and is registered as a unit investment trust under the Investment Company Act of 1940, as ameneded. The Life Account encompasses the following tax-deferred variable life Contracts (the "Contracts") issued by WRL:
 
Class A:
WRL Freedom Builder
WRL Freedom Elite
WRL Freedom Equity Protector
WRL Freedom Wealth Protector
WRL Freedom Elite Builder
WRL Freedom Elite Advisor
Class B:
WRL Freedom Xcelerator
Class C:
WRL For Life
Class E:
WRL Freedom Elite Builder
 
The Life Account contains multiple investment options referred to as subaccounts. Each subaccount invests exclusively in the corresponding Portfolio (the "Portfolio") of a fund. The Life Account contains sixty-six funds (collectively referred to as the "Series Funds"). Each is registered as an open-ended managment investment company under the Investment Company Act of 1940, as amended.

Subaccount Investment by Fund:

  
       
   

Transamerica JPMorgan Core Bond VP

Transamerica T. Rowe Price Equity Income VP
   

Transamerica Asset Allocation - Conservative VP

Transamerica T. Rowe Price Small Cap VP
   

Transamerica Asset Allocation - Growth VP

Transamerica Templeton Global VP
   

Transamerica Asset Allocation - Moderate Growth VP

Transamerica Third Avenue Value VP
   

Transamerica Asset Allocation - Moderate VP

Transamerica Balanced VP
   

Transamerica International Moderate Growth VP

Transamerica Convertible Securities VP
   

Transamerica MFS International Equity VP

Transamerica Equity VP
   

Transamerica Capital Guardian US Equity VP

Transamerica Growth Opportunities VP
   

Transamerica Capital Guardian Value VP

Transamerica Money Market VP
   

Transamerica Clarion Global Real Estate Securities VP

Transamerica Small/MidCap Value VP
   

Transamerica Federated Market Opportunity VP

Transamerica U.S. Government Securities VP
   

Transamerica Science & Technology VP

Transamerica Value Balanced VP
   

Transamerica JPMorgan Mid Cap Value VP

Transamerica Van Kampen Mid-Cap Growth VP
   

Transamerica JPMorgan Enhanced Index VP

Transamerica Index 50 VP
   

Transamerica Marsico Growth VP

Transamerica Index 75 VP
   

Transamerica BlackRock Large Cap Value VP

  
   

Transamerica MFS High Yield VP

  
   

Transamerica Munder Net50 VP

  
   

Transamerica PIMCO Total Return VP

  
   

Transamerica Legg Mason Partners All Cap VP

  




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

1.

Organization and Summary of Significant Accounting Policies (continued)

    




Life Account classes A, B, C and E invest in AEGON Transamerica Series Trust initial class shares.
 

Variable Insurance Products Fund-Service Class 2:

      
   

Fidelity VIP Contrafund®

        
   

Fidelity VIP Equity-Income

        
   

Fidelity VIP Growth Opportunities

      
   

Fidelity VIP Index 500

        
 

Profunds

              
   

ProFund VP Bull

          
   

ProFund VP Money Market

        
   

ProFund VP NASDAQ-100

        
   

ProFund VP Short Small-Cap

        
   

ProFund VP Small-Cap

        
   

Access VP High Yield

          
   

ProFund VP Europe 30

        
   

ProFund VP Oil & Gas

        
   

ProFund VP UltraSmall-Cap

        
   

ProFund VP Utilities

          
   

ProFund VP Consumer Services

        
   

ProFund VP Pharmaceuticals

        
   

ProFund VP Small-Cap Value

        
   

ProFund VP Falling US Dollar

        
   

ProFund VP Emerging Markets

        
   

ProFund VP International

        
   

ProFund VP Asia 30

          
   

ProFund VP Japan

          
   

ProFund VP Short NASDAQ-100

        
   

ProFund VP U.S. Government Plus

      
   

ProFund VP Basic Materials

        
   

ProFund VP Financials

        
   

ProFund VP Precious Metals

        
   

ProFund VP Telecommunications

        
   

ProFund VP Mid-Cap

          
   

ProFund VP Short Emerging Markets

      
   

ProFund VP Short International

        
                 

Each period reported on reflects a full twelve month period except as follows:

    
     

Subaccount

    

Inception Date

  
     

Transamerica Small/Mid Cap Value VP

May 1, 2004

  
     

Fidelity VIP Index 500 Portfolio

  

May 1, 2004

  
     

Transamerica International Moderate Growth VP

May 1, 2006

  
     

ProFund VP Bull

    

June 12, 2006

  
     

ProFund VP Money Market

  

June 12, 2006

  
     

ProFund VP NASDAQ-100

  

June 12, 2006

  




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

1.

Organization and Summary of Significant Accounting Policies (continued)

    




Subaccount

      

Inception Date

      

ProFund VP Short Small-Cap

    

June 12, 2006

      

ProFund VP Small-Cap

    

June 12, 2006

      

Access VP High Yield

      

February 28, 2008

      

ProFund VP Europe 30

    

February 28, 2008

      

ProFund VP Oil & Gas

    

February 28, 2008

      

ProFund VP Ultra Small-Cap

    

February 28, 2008

      

ProFund VP Utilities

      

February 28, 2008

      

ProFund VP Consumer Services

    

February 28, 2008

      

ProFund VP Pharmaceuticals

    

February 28, 2008

      

ProFund VP Small-Cap Value

    

February 28, 2008

      

ProFund VP Falling US Dollar

    

February 28, 2008

      

ProFund VP Emerging Markets

    

February 28, 2008

      

ProFund VP International

    

February 28, 2008

      

ProFund VP Asia 30

      

February 28, 2008

      

ProFund VP Japan

      

February 28, 2008

      

ProFund VP Short NASDAQ-100

    

February 28, 2008

      

ProFund VP U.S. Government Plus

  

February 28, 2008

      

ProFund VP Basic Materials

    

February 28, 2008

      

ProFund VP Financials

    

February 28, 2008

      

ProFund VP Precious Metals

    

February 28, 2008

      

ProFund VP Telecommunications

    

February 28, 2008

      

ProFund VP Mid-Cap

      

February 28, 2008

      

ProFund VP Short Emerging Markets

  

February 28, 2008

      

ProFund VP Short International

    

February 28, 2008

      

Transamerica Index 50 VP

    

May 1, 2008

      

Transamerica Index 75 VP

    

May 1, 2008

      
                 

The following Portfolio name changes were made effective during the fiscal year ended December 31, 2008:

Portfolio

        

Formerly

      

Transamerica JPMorgan Core Bond VP

  

JPMorgan Core Bond

  

Transamerica Asset Allocation - Conservative VP

Asset Allocation - Conservative

  

Transamerica Asset Allocation - Growth VP

  

Asset Allocation - Growth

  

Transamerica Asset Allocation - Moderate Growth VP

Asset Allocation - Moderate Growth

  

Transamerica Asset Allocation - Moderate VP

  

Asset Allocation - Moderate

  

Transamerica International Moderate Growth VP

  

International Moderate Growth

Transamerica MFS International Equity VP

  

MFS International Equity

      

Transamerica Capital Guardian US Equity VP

  

Capital Guardian US Equity

Transamerica Capital Guardian Value VP

  

Capital Guardian Value

  

Transamerica Clarion Global Real Estate Securities VP

  

Clarion Global Real Estate Securities

Transamerica Federated Market Opportunity VP

  

Federated Market Opportunity

Transamerica Science & Technology VP

  

Transamerica Science & Technology

  

ProFund VP NASDAQ-100

    

June 12, 2006

      




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



1.

Organization and Summary of Significant Accounting Policies (continued)
 
     

 

 

 

 

 
 

Portfolio

 

 

 

Formerly

    
 

Transamerica JPMorgan Mid Cap Value VP

JPMorgan Mid Cap Value

    
 

Transamerica JPMorgan Enhanced Index VP

JPMorgan Enhanced Index

    
 

Transamerica Marsico Growth VP

 

Marsico Growth

    
 

Transamerica BlackRock Large Cap Value VP

BlackRock Large Cap Value

    
 

Transamerica MFS High Yield VP

 

MFS High Yield

    
 

Transamerica Munder Net50 VP

 

Munder Net50

    
 

Transamerica PIMCO Total Return VP

 

PIMCO Total Return

    
 

Transamerica Legg Mason Partners All Cap VP

Legg Mason Partners All Cap

    
 

Transamerica T. Rowe Price Equity Income VP

T. Rowe Price Equity Income

    
 

Transamerica T. Rowe Price Small Cap VP

T. Rowe Price Small Cap

    
 

Transamerica Templeton Global VP

 

Templeton Transamerica Global

    
 

Transamerica Third Avenue Value VP

 

Third Avenue Value

    
 

Transamerica Balanced VP

 

Transamerica Balanced

    
 

Transamerica Convertible Securities VP

 

Transamerica Convertible Securities

    
 

Transamerica Equity VP

 

 

Transamerica Equity

    
 

Transamerica Growth Opportunities VP

 

Transamerica Growth Opportunities

    
 

Transamerica Money Market VP

 

Transamerica Money Market

    
 

Transamerica Small/MidCap Value VP

 

Transamerica Small/MidCap Value

    
 

Transamerica U.S. Government Securities VP

Transamerica U.S. Government Securities

    
 

Transamerica Value Balanced VP

 

Transamerica Value Balanced

    
 

Transamerica Van Kampen Mid-Cap Growth VP

Van Kampen Mid-Cap Growth

    



Investments

Net purchase payments received by the Life Account are invested in the portfolios of the Series Funds, as selected by the contract owner. Investments are stated at the closing net asset values per share on December 31, 2008.
 
Realized capital gains and losses from the sales of shares in the Series Funds are determined on the first-in, first-out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. Unrealized gains or losses from investments in the life account are included in the Statements of Operations.
 

Dividend Income

Dividends received from the Series Funds investments are reinvested to purchase additional mutual fund shares.
 

Accounting Policy

Effective January 1, 2008 the Life Account adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. The adoption did not have a material impact on the Life Account's Financial Statements. See Note 8 to the Financial Statements for additional disclosure.

 

Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



2.

Investments

        
   
 

The aggregate cost of purchases and proceeds from sales of investments for the period ended December 31, 2008 were as follows:
             
         

Purchases

Sales
 

AEGON/Transamerica Series Fund, Inc.:

        
   

Transamerica JPMorgan Core Bond VP

    

$ 18,451,701

$ 15,053,994

 

 

Transamerica Asset Allocation - Conservative VP

 

 

28,561,368

7,832,432

 

 

Transamerica Asset Allocation - Growth VP

 

 

82,739,115

36,692,967

 

 

Transamerica Asset Allocation - Moderate Growth VP

 

66,577,461

39,080,660

 

 

Transamerica Asset Allocation - Moderate VP

 

 

28,164,835

16,414,335

 

 

Transamerica International Moderate Growth VP

 

 

5,562,000

2,278,281

 

 

Transamerica MFS International Equity VP

 

 

8,492,810

10,682,207

 

 

Transamerica Capital Guardian US Equity VP

 

 

1,017,959

193,965

 

 

Transamerica Capital Guardian Value VP

 

 

863,322

705,942

 

 

Transamerica Clarion Global Real Estate Securities VP

 

 

20,799,791

16,494,924

 

 

Transamerica Federated Market Opportunity VP

 

 

11,977,813

17,054,737

 

 

Transamerica Science & Technology VP

 

 

3,731,164

6,843,534

 

 

Transamerica JPMorgan Mid Cap Value VP

 

 

1,520,635

2,972,896

 

 

Transamerica JPMorgan Enhanced Index VP

 

 

744,173

670,168

 

 

Transamerica Marsico Growth VP

 

 

3,733,347

5,194,429

 

 

Transamerica BlackRock Large Cap Value VP

 

 

8,876,939

10,477,487

 

 

Transamerica MFS High Yield VP

 

 

905,012

866,755

 

 

Transamerica Munder Net50 VP

 

 

5,509,172

5,155,258

 

 

Transamerica PIMCO Total Return VP

 

 

14,783,631

7,967,551

 

 

Transamerica Legg Mason Partners All Cap VP

 

 

6,624,956

6,195,433

 

 

Transamerica T. Rowe Price Equity Income VP

 

 

9,511,050

5,166,546

 

 

Transamerica T. Rowe Price Small Cap VP

 

 

7,318,761

4,020,362

 

 

Transamerica Templeton Global VP

 

 

6,410,047

27,950,543

 

 

Transamerica Third Avenue Value VP

 

 

36,539,858

19,897,720

 

 

Transamerica Balanced VP

 

 

1,623,549

2,126,451

 

 

Transamerica Convertible Securities VP

 

 

4,092,779

3,014,777

 

 

Transamerica Equity VP

 

 

38,490,247

85,567,265

 

 

Transamerica Growth Opportunities VP

 

 

18,283,546

10,105,206

 

 

Transamerica Money Market VP

 

 

73,970,157

27,780,301

 

 

Transamerica Small/MidCap Value VP

 

 

9,944,591

4,760,107

 

 

Transamerica U.S. Government Securities VP

 

 

22,551,407

3,431,195




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



2.

Investments (continued)

        
         

Purchases

Sales
   

Transamerica Value Balanced VP

  

$ 16,769,348

$ 18,318,996

 

 

Transamerica Van Kampen Mid-Cap Growth VP

 

8,950,751

32,802,586

 

 

Transamerica Index 50 VP

 

 

150,264

44,475

 

 

Transamerica Index 75 VP

 

 

185,836

14,391

 

Profunds

 

 

 

 

 

 

ProFund VP Bull

 

 

15,647,971

15,509,697

 

 

ProFund VP Money Market

 

 

142,547,394

134,329,909

 

 

ProFund VP NASDAQ-100

 

 

11,470,713

20,947,987

 

 

ProFund VP Short Small-Cap

 

 

67,046,842

64,144,721

 

 

ProFund VP Small-Cap

 

 

26,264,708

26,243,313

 

 

Access VP High Yield

 

 

31,250,246

20,509,044

 

 

ProFund VP Europe 30

 

 

1,005,803

648,352

 

 

ProFund VP Oil & Gas

 

 

14,272,822

10,384,514

 

 

ProFund VP UltraSmall-Cap

 

 

52,896,116

52,456,235

 

 

ProFund VP Utilities

 

 

4,833,249

4,228,062

 

 

ProFund VP Consumer Services

 

280,949

128,003

 

 

ProFund VP Pharmaceuticals

 

 

977,496

469,446

 

 

ProFund VP Small-Cap Value

 

 

695,157

443,509

 

 

ProFund VP Falling US Dollar

 

 

25,771,246

24,152,958

 

 

ProFund VP Emerging Markets

 

9,231,389

7,568,475

 

 

ProFund VP International

 

 

1,510,124

873,765

 

 

ProFund VP Asia 30

 

 

2,437,298

1,235,839

 

 

ProFund VP Japan

 

 

973,610

876,036

 

 

ProFund VP Short NASDAQ-100

 

4,506,516

3,344,142

 

 

ProFund VP U.S. Government Plus

 

4,119,355

803,074

 

 

ProFund VP Basic Materials

 

 

12,301,300

10,234,101

 

 

ProFund VP Financials

 

 

2,439,751

1,460,422

 

 

ProFund VP Precious Metals

 

 

12,098,165

8,326,888

 

 

ProFund VP Telecommunications

 

4,360,880

3,442,112

 

 

ProFund VP Mid-Cap

 

 

1,916,033

879,717

 

 

ProFund VP Short Emerging Markets

 

6,218,213

4,366,414

 

 

ProFund VP Short International

 

3,254,913

1,387,357

 

Variable Insurance Products Fund (VIP) - Service Class 2:

 

 

 

 

 

Fidelity VIP Contrafund®

 

 

2,749,667

4,240,094

 

 

Fidelity VIP Equity-Income

 

 

511,243

1,751,215

 

 

Fidelity VIP Growth Opportunities

 

832,987

2,174,301

 

 

Fidelity VIP Index 500

 

 

3,139,716

1,265,931




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding

HB

IF

II

IH

IG
 

652

680

683

682

681

A summary of changes in equivalent accumulation units outstanding follows:

TB

UF

UI

UH

UG
 

FB

FU

FX

FW

FV
 

B7

R7

U7

T7

S7
 

Transamerica JPMorgan Core Bond VP

Transamerica Asset Allocation - Conservative VP

Transamerica Asset Allocation - Growth VP

Transamerica Asset Allocation - Moderate Growth VP

Transamerica Asset Allocation - Moderate VP
 

Subaccount

Subaccount

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

1,495,262

1,859,642

17,905,414

20,972,352

6,462,891

Units purchased

1,581,519

1,997,160

16,000,668

16,353,405

5,135,777

Units redeemed and

 

 

 

 

 

transferred

(1,574,246)

(1,834,556)

(13,110,457)

(14,231,998)

(4,694,883)

Units outstanding at

 

 

 

 

 

December 31, 2007

1,502,535

2,022,246

20,795,625

23,093,759

6,903,785

Units purchased

1,080,006

2,954,569

7,473,574

7,427,728

3,036,142

Units redeemed and

 

 

 

 

 

transferred

(1,010,534)

(1,611,871)

(8,285,822)

(8,573,968)

(3,183,429)

Units outstanding at

 

 

 

 

 

December 31, 2008

1,572,007

3,364,944

19,983,377

21,947,519

6,756,498




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



3. Accumulation Units Outstanding (continued)

JT

HM

JC

IS

HP
 

752

631

0

0

628

A summary of changes in equivalent accumulation units outstanding follows:

VT

X0

V8

US

TP
 

GT

V0

V9

GD

FM
 

X4

H7

X3

X2

J7
 

Transamerica International Moderate Growth VP

Transamerica MFS International Equity VP

Transamerica Capital Guardian US Equity VP

Transamerica Capital Guardian Value VP

Transamerica Clarion Global Real Estate Securities VP
 

Subaccount

Subaccount

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

199,220

4,545,134

125,341

329,825

3,092,917

Units purchased

1,039,286

5,493,346

19,152

113,866

3,418,883

Units redeemed and

 

 

 

 

 

transferred

(459,277)

(5,518,137)

(21,720)

(170,503)

(3,870,973)

Units outstanding at

 

 

 

 

 

December 31, 2007

779,229

4,520,343

122,773

273,188

2,640,827

Units purchased

907,217

956,094

66,189

72,844

691,468

Units redeemed and

 

 

 

 

 

transferred

(631,489)

(1,675,367)

(27,388)

(94,373)

(1,211,903)

Units outstanding at

 

 

 

 

 

December 31, 2008

1,054,957

3,801,070

161,574

251,659

2,120,392




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



3. Accumulation Units Outstanding (continued)

HI

HZ

HW

IY

HQ
 

643

622

616

0

610

A summary of changes in equivalent accumulation units outstanding follows:

TI

TZ

TW

UY

TQ
 

FI

FT

0

GG

FN
 

E7

Q7

0

X5

K7
 

Transamerica Federated Market Opportunity VP

Transamerica Science & Technology VP

Transamerica JPMorgan Mid Cap Value VP

Transamerica JPMorgan Enhanced Index VP

Transamerica Marsico Growth VP
 

Subaccount

Subaccount

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

3,472,419

2,515,412

1,072,445

124,431

1,422,393

Units purchased

2,919,178

707,767

715,248

92,694

1,529,607

Units redeemed and

 

 

 

 

 

transferred

(3,366,281)

994,358

(934,513)

(54,466)

(1,284,441)

Units outstanding at

 

 

 

 

 

December 31, 2007

3,025,316

4,217,537

853,180

162,659

1,667,559

Units purchased

1,236,394

1,904,366

17,068

52,678

650,810

Units redeemed and

 

 

 

 

 

transferred

(1,485,000)

(2,862,582)

(207,619)

(71,484)

(863,890)

Units outstanding at

 

 

 

 

 

December 31, 2008

2,776,710

3,259,321

662,629

143,853

1,454,479




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding (continued)

HL

JA

HR

IJ

HU
 

635

0

611

684

614

A summary of changes in equivalent accumulation units outstanding follows:

TL

VA

TR

UJ

TU
 

FK

GH

FO

FY

FR
 

G7

X1

L7

V7

O7
 

Transamerica BlackRock Large Cap Value VP

Transamerica MFS High Yield VP

Transamerica Munder Net50 VP

Transamerica PIMCO Total Return VP

Transamerica Legg Mason Partners All Cap VP
 

Subaccount

Subaccount

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

2,711,207

176,750

1,235,153

912,999

2,868,843

Units purchased

2,743,268

414,513

1,755,350

2,083,958

2,280,925

Units redeemed and

 

 

 

 

 

transferred

(2,923,739)

(489,155)

(1,629,742)

(1,936,591)

(2,492,784)

Units outstanding at

 

 

 

 

 

December 31, 2007

2,530,736

102,108

1,360,761

1,060,366

2,656,984

Units purchased

517,030

81,001

658,664

1,760,367

521,193

Units redeemed and

 

 

 

 

 

transferred

(867,699)

(88,419)

(937,320)

(1,318,922)

(874,926)

Units outstanding at

 

 

 

 

 

December 31, 2008

2,180,067

94,690

1,082,105

1,501,811

2,303,251




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding (continued)

HS

HT

HD

HO

IK
 

612

613

648

629

685

A summary of changes in equivalent accumulation units outstanding follows:

TS

TT

TD

TO

UK
 

FP

FQ

GJ

FL

FZ
 

M7

N7

C7

I7

W7
 

Transamerica T. Rowe Price Equity Income VP

Transamerica T. Rowe Price Small Cap VP

Transamerica Templeton Global VP

Transamerica Third Avenue Value VP

Transamerica Balanced VP
 

Subaccount

Subaccount

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

2,174,963

1,776,439

9,611,118

4,620,302

379,220

Units purchased

2,503,795

1,722,378

10,411,900

4,357,428

450,269

Units redeemed and

 

 

 

 

 

transferred

(2,496,356)

(1,771,218)

(10,828,543)

(4,695,968)

(389,374)

Units outstanding at

 

 

 

 

 

December 31, 2007

2,182,402

1,727,599

9,194,475

4,281,762

440,115

Units purchased

537,474

631,660

1,520,193

1,007,585

175,355

Units redeemed and

 

 

 

 

 

transferred

(817,988)

(716,090)

(2,443,319)

(1,610,565)

(252,751)

Units outstanding at

 

 

 

 

 

December 31, 2008

1,901,888

1,643,169

8,271,349

3,678,782

362,719




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding (continued)

IL

IM

IO

HA

IT
 

686

687

688

651

0

A summary of changes in equivalent accumulation units outstanding follows:

UL

UM

UO

TA

UT
 

GA

GB

GC

FA

GE
 

X7

Y7

Z7

A7

Y1
 

Transamerica Convertible Securities VP

Transamerica Equity VP

Transamerica Growth Opportunities VP

Transamerica Money Market VP

Transamerica Small/MidCap Value VP
 

Subaccount

Subaccount

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

203,694

60,255,025

4,058,333

2,564,345

741,989

Units purchased

336,239

58,374,762

4,086,336

6,468,906

940,173

Units redeemed and

 

 

 

 

 

transferred

(260,256)

(63,646,865)

(4,107,033)

(5,999,335)

(405,274)

Units outstanding at

 

 

 

 

 

December 31, 2007

279,677

54,982,922

4,037,636

3,033,916

1,276,888

Units purchased

287,731

8,468,270

1,009,736

6,147,354

919,671

Units redeemed and

 

 

 

 

 

transferred

(301,244)

(13,615,876)

(1,534,409)

(3,670,108)

(794,972)

Units outstanding at

 

 

 

 

 

December 31, 2008

266,164

49,835,316

3,512,963

5,511,162

1,401,587




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008

3. Accumulation Units Outstanding (continued)

IU

HJ

HF

Y3

Z1
 

0

642

646

0

0

A summary of changes in equivalent accumulation units outstanding follows:

UU

TJ

TF

Y4

Z2
 

GF

FJ

GK

Y9

Z5
 

Y2

F7

D7

U8

U9
 

Transamerica U.S. Government Securities VP

Transamerica Value Balanced VP

Transamerica Van Kampen Mid-Cap Growth VP

Transamerica Index 50 VP

Transamerica Index 75 VP
 

Subaccount

Subaccount

Subaccount

Subaccount(1)

Subaccount(1)

Units outstanding at

          

January 1, 2007

58,559

6,324,588

7,997,423

-

-

Units purchased

136,808

5,859,252

8,281,549

-

-

Units redeemed and

 

 

 

 

 

transferred

(78,039)

(6,339,822)

(8,630,693)

-

-

Units outstanding at

 

 

 

 

 

December 31, 2007

117,328

5,844,018

7,648,279

-

-

Units purchased

2,096,907

746,715

1,321,795

20,884

21,215

Units redeemed and

 

 

 

 

 

transferred

(518,698)

(1,487,945)

(2,068,491)

(7,806)

(1,950)

Units outstanding at

 

 

 

 

 

December 31, 2008

1,695,537

5,102,788

6,901,583

13,078

19,265





 

Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



3. Accumulation Units Outstanding (continued)

JU

JY

JV

JX

JW
 

773

777

774

776

775

A summary of changes in equivalent accumulation units outstanding follows:

VU

VY

VV

VX

VW
 

GU

GY

GL

GX

GW
 

V6

Z6

W6

Y6

X6
 

ProFund VP Bull

ProFund VP Money Market

ProFund VP NASDAQ-100

ProFund VP Short Small-Cap

ProFund VP Small-Cap
 

Subaccount

Subaccount

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

736,714

144,185

80,871

18,450

303,258

Units purchased

3,735,673

10,320,616

3,444,853

10,462,230

7,653,547

Units redeemed and

 

 

 

 

 

transferred

(4,372,638)

(7,933,653)

(2,569,679)

(10,326,065)

(7,796,442)

Units outstanding at

 

 

 

 

 

December 31, 2007

99,749

2,531,148

956,045

154,615

160,363

Units purchased

1,680,604

17,657,831

1,435,455

8,068,591

4,124,862

Units redeemed and

 

 

 

 

 

transferred

(1,661,415)

(16,872,833)

(2,188,397)

(7,812,213)

(4,085,247)

Units outstanding at

 

 

 

 

 

December 31, 2008

118,938

3,316,146

203,103

410,993

199,978




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding (continued)

A1

B1

C1

D1

E1
 

0

0

0

0

0

A summary of changes in equivalent accumulation units outstanding follows:

A2

B2

C2

D2

E2
 

A5

B5

C5

D5

E5
 

W1

A6

B6

C6

D6
 

Access VP High Yield

ProFund VP Europe 30

ProFund VP Oil & Gas

ProFund VP UltraSmall-Cap

ProFund VP Utilities
 

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Units outstanding at

          

January 1, 2007

-

-

-

-

-

Units purchased

-

-

-

-

-

Units redeemed and

 

 

 

 

 

transferred

-

-

-

-

-

Units outstanding at

 

 

 

 

 

December 31, 2007

-

-

-

-

-

Units purchased

3,336,212

124,323

1,687,256

7,335,651

517,263

Units redeemed and

 

 

 

 

 

transferred

(2,312,093)

(87,764)

(1,399,682)

(7,228,035)

(456,256)

Units outstanding at

 

 

 

 

 

December 31, 2008

1,024,119

36,559

287,574

107,616

61,007




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



3. Accumulation Units Outstanding (continued)

F1

G1

H1

I1

J1
 

0

0

0

0

0

A summary of changes in equivalent accumulation units outstanding follows:

F2

G2

H2

I2

J2
 

F5

G5

H5

I5

J5
 

E6

F6

G6

H6

I6
 

ProFund VP Consumer Services

ProFund VP Pharmaceuticals

ProFund VP Small-Cap Value

ProFund VP Falling US Dollar

ProFund VP Emerging Markets
 

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Units outstanding at

          

January 1, 2007

-

-

-

-

-

Units purchased

-

-

-

-

-

Units redeemed and

 

 

 

 

 

transferred

-

-

-

-

-

Units outstanding at

 

 

 

 

 

December 31, 2007

-

-

-

-

-

Units purchased

38,037

121,806

89,030

2,755,007

1,210,714

Units redeemed and

 

 

 

 

 

transferred

(18,200)

(70,199)

(67,570)

(2,671,349)

(1,066,027)

Units outstanding at

 

 

 

 

 

December 31, 2008

19,837

51,607

21,460

83,658

144,687




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding (continued)

K1

L1

M1

N1

O1
 

0

0

0

0

0

A summary of changes in equivalent accumulation units outstanding follows:

K2

L2

M2

N2

O2
 

K5

L5

M5

N5

O5
 

J6

K6

L6

M6

N6
 

ProFund VP International

ProFund VP Asia 30

ProFund VP Japan

ProFund VP Short NASDAQ-100

ProFund VP U.S. Government Plus
 

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Units outstanding at

          

January 1, 2007

-

-

-

-

-

Units purchased

-

-

-

-

-

Units redeemed and

 

 

 

 

 

transferred

-

-

-

-

-

Units outstanding at

 

 

 

 

 

December 31, 2007

-

-

-

-

-

Units purchased

191,549

376,084

111,246

537,935

459,410

Units redeemed and

 

 

 

 

 

transferred

(126,783)

(263,970)

(102,224)

(439,666)

(175,872)

Units outstanding at

 

 

 

 

 

December 31, 2008

64,766

112,114

9,022

98,269

283,538




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding (continued)

P1

Q1

R1

S1

T1
 

0

0

0

0

0

A summary of changes in equivalent accumulation units outstanding follows:

P2

Q2

R2

S2

T2
 

P5

Q5

R5

S5

T5
 

O6

P6

Q6

R6

S6
 

ProFund VP Basic Materials

ProFund VP Financials

ProFund VP Precious Metals

ProFund VP Telecommunications

ProFund VP Mid-Cap
 

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Subaccount(1)

Units outstanding at

          

January 1, 2007

-

-

-

-

-

Units purchased

-

-

-

-

-

Units redeemed and

 

 

 

 

 

transferred

-

-

-

-

-

Units outstanding at

 

 

 

 

 

December 31, 2007

-

-

-

-

-

Units purchased

1,426,984

375,194

1,737,640

440,032

264,057

Units redeemed and

 

 

 

 

 

transferred

(1,297,432)

(270,608)

(1,372,609)

(381,977)

(142,760)

Units outstanding at

 

 

 

 

 

December 31, 2008

129,552

104,586

365,031

58,055

121,297




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

3. Accumulation Units Outstanding (continued)

U1

V1

XB

XC

XA
 

0

0

624

625

623

A summary of changes in equivalent accumulation units outstanding follows:

U2

V2

0

0

0
 

U5

V5

0

0

0
 

T6

U6

0

0

0
 

ProFund VP Short Emerging Markets

ProFund VP Short International

Fidelity VIP Contrafund®

Fidelity VIP Equity-Income

Fidelity VIP Growth Opportunities
 

Subaccount(1)

Subaccount(1)

Subaccount

Subaccount

Subaccount

Units outstanding at

          

January 1, 2007

-

-

1,791,909

1,015,129

446,408

Units purchased

-

-

1,550,611

940,672

819,592

Units redeemed and

 

 

 

 

 

transferred

-

-

(1,680,296)

(1,063,370)

(604,918)

Units outstanding at

 

 

 

 

 

December 31, 2007

-

-

1,662,224

892,431

661,082

Units purchased

618,850

347,501

448,312

147,356

242,767

Units redeemed and

 

 

 

 

 

transferred

(490,438)

(203,829)

(621,148)

(262,986)

(412,133)

Units outstanding at

 

 

 

 

 

December 31, 2008

128,412

143,672

1,489,388

776,801

491,716




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



3. Accumulation Units Outstanding (continued)

JP

          
 

0

          

A summary of changes in equivalent accumulation units outstanding follows:

VP

          
 

GI

          
 

W2

          
 

Fidelity VIP Index 500

          
 

Subaccount

          

Units outstanding at

            

January 1, 2007

344,135

          

Units purchased

277,005

          

Units redeemed and

            

transferred

(163,383)

          

Units outstanding at

 

          

December 31, 2007

457,757

          

Units purchased

395,902

          

Units redeemed and

            

transferred

(221,662)

          

Units outstanding at

            

December 31, 2008

631,997

          




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


4.

Financial Highlights

  




The Mutual Fund Account offers various death benefit options, which have differing fees that are charged against the contract owner’s account balance. These charges are discussed in more detail in the individual's policy. Differences in the fee structures for these units result in different unit values, expense ratios, and total returns.
 

       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Transamerica JPMorgan Core Bond VP

                      
   

12/31/2008

1,572,007

$11.37

to

$10.27

$ 50,786,352

  

4.47%

0.00%

to

1.50%

5.58%

to

2.72%
   

12/31/2007

1,502,535

10.77

to

33.47

47,127,749

  

5.18

0.00

to

0.90

6.94

to

5.98
   

12/31/2006

1,495,262

10.07

to

31.58

45,300,971

  

5.23

0.00

to

0.90

0.69

to

2.99
   

12/31/2005

1,616,926

10.64

to

30.66

48,334,703

  

5.24

0.75

to

0.90

1.53

to

1.39
   

12/31/2004

1,703,657

10.48

to

30.24

51,050,290

  

6.75

0.75

to

0.90

3.75

to

3.59

Transamerica Asset Allocation - Conservative VP

                  
   

12/31/2008

3,364,944

8.56

to

8.22

37,299,335

  

3.14

0.00

to

1.50

(21.18)

to

(17.75)
   

12/31/2007

2,022,246

10.86

to

14.27

28,741,879

  

3.22

0.00

to

0.90

6.38

to

5.43
   

12/31/2006

1,859,642

10.21

to

13.53

25,092,450

  

3.28

0.00

to

0.90

2.12

to

8.47
   

12/31/2005

1,894,040

11.81

to

12.48

23,572,436

  

2.78

0.75

to

0.90

4.40

to

4.25
   

12/31/2004

1,545,736

11.31

to

11.97

18,488,088

  

0.34

0.75

to

0.90

8.89

to

8.73

Transamerica Asset Allocation - Growth VP

                    
   

12/31/2008

19,983,377

6.79

to

6.88

194,363,564

  

2.92

0.00

to

1.50

(39.63)

to

(31.18)
   

12/31/2007

20,795,625

11.25

to

16.22

337,873,349

  

2.30

0.00

to

0.90

7.76

to

6.79
   

12/31/2006

17,905,414

10.44

to

15.19

272,418,228

  

0.96

0.00

to

0.90

4.36

to

14.59
   

12/31/2005

13,233,464

13.36

to

13.25

175,590,028

  

0.49

0.75

to

0.90

11.40

to

11.24
   

12/31/2004

9,183,811

11.99

to

11.91

109,457,913

  

0.09

0.75

to

0.90

13.33

to

13.16

Transamerica Asset Allocation - Moderate Growth VP

                  
   

12/31/2008

21,947,519

7.51

to

7.45

229,931,170

  

3.02

0.00

to

1.50

(32.76)

to

(25.47)
   

12/31/2007

23,093,759

11.16

to

15.77

363,338,011

  

2.40

0.00

to

0.90

7.81

to

6.84
   

12/31/2006

20,972,352

10.35

to

14.76

308,893,207

  

1.64

0.00

to

0.90

3.55

to

12.82
   

12/31/2005

16,902,523

12.91

to

13.08

220,729,099

  

1.18

0.75

to

0.90

9.09

to

8.93
   

12/31/2004

11,678,509

11.84

to

12.01

140,127,540

  

0.20

0.75

to

0.90

12.69

to

12.53




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Transamerica Asset Allocation - Moderate VP

                  
   

12/31/2008

6,756,498

8.23

to

7.93

74,201,260

  

3.46

0.00

to

1.50

(25.96)

to

(20.67)
   

12/31/2007

6,903,785

11.12

to

15.06

103,347,293

  

3.01

0.00

to

0.90

7.96

to

6.99
   

12/31/2006

6,462,891

10.30

to

14.08

90,505,789

  

2.68

0.00

to

0.90

3.01

to

10.49
   

12/31/2005

5,643,157

12.30

to

12.74

71,608,709

  

1.89

0.75

to

0.90

6.64

to

6.49
   

12/31/2004

4,444,247

11.54

to

11.96

53,053,473

  

0.27

0.75

to

0.90

10.56

to

10.40

Transamerica International Moderate Growth VP

                  
   

12/31/2008

1,054,957

7.29

to

7.04

7,472,170

  

2.39

0.00

to

1.50

(36.12)

to

(29.63)
   

12/31/2007

779,229

11.42

to

11.17

8,709,877

  

1.27

0.00

to

0.90

8.69

to

7.72
   

12/31/2006 (1)

199,220

10.50

to

10.37

2,065,761

  

-

0.00

to

0.90

5.04

to

3.67

Transamerica MFS International Equity VP

                    
   

12/31/2008

3,801,070

6.52

to

7.13

37,280,087

  

5.17

0.00

to

1.50

(34.78)

to

(28.70)
   

12/31/2007

4,520,343

15.30

to

15.30

69,174,582

  

0.96

0.90

to

0.90

8.17

to

8.17
   

12/31/2006

4,545,134

14.15

to

14.15

64,298,334

  

1.45

0.90

to

0.90

21.97

to

21.97
   

12/31/2005

3,355,533

11.60

to

11.60

38,917,877

  

0.78

0.90

to

0.90

11.86

to

11.86
   

12/31/2004

3,118,682

10.37

to

10.37

32,335,564

  

-

0.90

to

0.90

13.32

to

13.32

Transamerica Capital Guardian US Equity VP

                    
   

12/31/2008

161,574

6.17

to

6.98

1,281,713

  

2.72

0.00

to

1.50

(38.30)

to

(30.22)
   

12/31/2007

122,773

13.46

to

13.46

1,652,054

  

0.72

0.90

to

0.90

(1.05)

to

(1.05)
   

12/31/2006

125,341

13.60

to

13.60

1,704,480

  

0.54

0.90

to

0.90

9.13

to

9.13
   

12/31/2005

123,344

12.46

to

12.46

1,537,037

  

0.56

0.90

to

0.90

5.36

to

5.36
   

12/31/2004

117,501

11.83

to

11.83

1,389,717

  

0.29

0.90

to

0.90

8.79

to

8.79

Transamerica Capital Guardian Value VP

                      
   

12/31/2008

251,659

$5.83

to

$7.49

$ 2,109,260

  

6.94%

0.00%

to

1.50%

(39.52)%

to

(25.15)%
   

12/31/2007

273,188

9.64

to

13.97

3,833,240

  

1.05

0.00

to

0.90

(6.28)

to

(7.12)
   

12/31/2006

329,825

10.29

to

15.04

4,985,463

  

1.36

0.00

to

0.90

2.86

to

15.46
   

12/31/2005

221,066

13.38

to

13.03

2,885,186

  

0.99

0.75

to

0.90

6.91

to

6.75
   

12/31/2004

185,493

12.52

to

12.20

2,265,839

  

1.07

0.75

to

0.90

15.83

to

15.66




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Transamerica Clarion Global Real Estate Securities VP

                  
   

12/31/2008

2,120,392

5.80

to

6.64

35,802,121

  

6.51

0.00

to

1.50

(42.38)

to

(33.61)
   

12/31/2007

2,640,827

10.07

to

30.40

78,152,720

  

6.51

0.00

to

0.90

(6.70)

to

(7.54)
   

12/31/2006

3,092,917

10.80

to

32.88

99,559,341

  

1.41

0.00

to

0.90

7.96

to

41.01
   

12/31/2005

2,346,482

16.20

to

23.32

54,171,885

  

1.67

0.75

to

0.90

12.63

to

12.46
   

12/31/2004

2,253,014

14.38

to

20.74

46,575,701

  

2.15

0.75

to

0.90

31.87

to

31.67

Transamerica Federated Market Opportunity VP

                  
   

12/31/2008

2,776,710

9.63

to

8.98

76,620,436

  

4.63

0.00

to

1.50

(4.53)

to

(10.19)
   

12/31/2007

3,025,316

10.09

to

32.50

90,239,892

  

3.71

0.00

to

0.90

(0.48)

to

(1.37)
   

12/31/2006

3,472,419

10.14

to

32.96

107,177,707

  

1.66

0.00

to

0.90

1.38

to

1.84
   

12/31/2005

3,758,586

12.15

to

32.36

116,589,152

  

2.27

0.75

to

0.90

4.18

to

4.03
   

12/31/2004

3,738,868

11.67

to

31.11

115,142,865

  

2.74

0.75

to

0.90

8.39

to

8.23

Transamerica Science & Technology VP

                      
   

12/31/2008

3,259,321

7.03

to

6.39

9,450,617

  

-

0.00

to

1.50

(48.59)

to

(36.07)
   

12/31/2007

4,217,537

13.68

to

5.48

23,965,610

  

-

0.00

to

0.90

32.75

to

31.56
   

12/31/2006

2,515,412

10.31

to

4.17

10,615,667

  

-

0.00

to

0.90

3.07

to

0.11
   

12/31/2005

2,830,782

11.25

to

4.16

11,885,836

  

0.42

0.75

to

0.90

1.30

to

1.15
   

12/31/2004

3,284,550

11.10

to

4.11

13,578,433

  

-

0.75

to

0.90

7.25

to

7.10

Transamerica JPMorgan Mid Cap Value VP

                    
   

12/31/2008

662,629

9.87

to

11.78

7,801,733

  

1.39

0.75

to

0.90

(33.38)

to

(33.48)
   

12/31/2007

853,180

14.82

to

17.71

15,098,211

  

0.97

0.75

to

0.90

2.06

to

1.91
   

12/31/2006

1,072,445

14.52

to

17.38

18,616,424

  

0.80

0.75

to

0.90

16.37

to

16.20
   

12/31/2005

1,489,231

12.48

to

14.96

22,237,578

  

0.22

0.75

to

0.90

8.34

to

8.18
   

12/31/2004

1,335,977

11.52

to

13.83

18,459,737

  

0.04

0.75

to

0.90

0.00

to

13.56

Transamerica JPMorgan Enhanced Index VP

                    
   

12/31/2008

143,853

6.78

to

7.24

1,244,001

  

5.56

0.00

to

1.50

(37.35)

to

(27.64)
   

12/31/2007

162,659

10.82

to

13.85

2,265,492

  

1.28

0.00

to

0.90

4.54

to

3.60
   

12/31/2006

124,431

10.35

to

13.37

1,668,793

  

1.10

0.00

to

0.90

3.48

to

14.29
   

12/31/2005

109,037

12.08

to

11.70

1,278,225

  

1.31

0.75

to

0.90

2.69

to

2.54
   

12/31/2004

102,732

11.76

to

11.41

1,174,754

  

0.79

0.75

to

0.90

10.19

to

10.03




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Transamerica Marsico Growth VP

                      
   

12/31/2008

1,454,479

7.39

to

6.90

10,355,911

  

0.79

0.00

to

1.50

(40.95)

to

(31.00)
   

12/31/2007

1,667,559

12.51

to

12.01

20,285,822

  

0.03

0.00

to

0.90

20.40

to

19.32
   

12/31/2006

1,422,393

10.39

to

10.06

14,438,447

  

0.13

0.00

to

0.90

3.92

to

4.42
   

12/31/2005

1,584,536

12.12

to

9.64

15,338,318

  

0.08

0.75

to

0.90

7.77

to

7.62
   

12/31/2004

1,568,428

11.25

to

8.95

14,072,469

  

-

0.75

to

0.90

11.41

to

11.25

Transamerica BlackRock Large Cap Value VP

                    
   

12/31/2008

2,180,067

7.16

to

7.47

38,809,530

  

0.93

0.00

to

1.50

(33.89)

to

(25.29)
   

12/31/2007

2,530,736

10.83

to

27.70

68,941,852

  

0.95

0.00

to

0.90

4.64

to

3.70
   

12/31/2006

2,711,207

10.35

to

26.71

71,712,502

  

0.50

0.00

to

0.90

3.48

to

15.88
   

12/31/2005

2,618,758

14.75

to

23.05

60,038,994

  

0.68

0.75

to

0.90

15.08

to

14.91
   

12/31/2004

2,164,254

12.82

to

20.06

43,388,925

  

1.03

0.75

to

0.90

17.45

to

17.28

Transamerica MFS High Yield VP

                      
   

12/31/2008

94,690

$7.84

to

$7.58

$ 918,817

  

10.45%

0.00%

to

1.50%

(25.20)%

to

(24.19)%
   

12/31/2007

102,108

10.48

to

13.28

1,336,203

  

5.62

0.00

to

0.90

1.85

to

0.94
   

12/31/2006

176,750

10.29

to

13.16

2,297,300

  

11.44

0.00

to

0.90

2.93

to

9.96
   

12/31/2005

120,203

11.38

to

11.97

1,430,539

  

6.75

0.75

to

0.90

1.05

to

0.91
   

12/31/2004

30,333

11.26

to

11.86

357,424

  

4.56

0.75

to

0.90

8.95

to

8.81

Transamerica Munder Net50 VP

                      
   

12/31/2008

1,082,105

6.99

to

6.60

6,965,903

  

4.10

0.00

to

1.50

(43.53)

to

(34.04)
   

12/31/2007

1,360,761

12.38

to

11.32

15,594,700

  

-

0.00

to

0.90

17.04

to

15.99
   

12/31/2006

1,235,153

10.57

to

9.76

12,172,185

  

-

0.00

to

0.90

5.74

to

(0.89)
   

12/31/2005

1,441,506

12.44

to

9.85

14,266,078

  

-

0.75

to

0.90

7.26

to

7.10
   

12/31/2004

1,655,749

11.60

to

9.19

15,258,930

  

-

0.75

to

0.90

14.47

to

14.31

Transamerica PIMCO Total Return VP

                      
   

12/31/2008

1,501,811

10.64

to

9.72

18,475,521

  

6.05

0.00

to

1.50

(2.79)

to

(2.76)
   

12/31/2007

1,060,366

10.94

to

12.85

13,571,965

  

2.52

0.00

to

0.90

8.95

to

7.97
   

12/31/2006

912,999

10.05

to

11.91

10,849,149

  

3.78

0.00

to

0.90

0.46

to

3.28
   

12/31/2005

1,100,536

10.68

to

11.53

12,666,656

  

1.95

0.75

to

0.90

1.57

to

1.42
   

12/31/2004

905,243

10.51

to

11.37

10,272,817

  

1.54

0.75

to

0.90

3.71

to

3.56




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Transamerica Legg Mason Partners All Cap VP

                  
   

12/31/2008

2,303,251

6.74

to

7.19

24,086,757

  

2.08

0.00

to

1.50

(36.36)

to

(28.08)
   

12/31/2007

2,656,984

10.59

to

16.66

44,097,690

  

1.32

0.00

to

0.90

1.04

to

0.13
   

12/31/2006

2,868,843

10.48

to

16.63

47,616,609

  

1.00

0.00

to

0.90

4.84

to

17.50
   

12/31/2005

3,199,406

11.90

to

14.16

45,229,482

  

0.60

0.75

to

0.90

3.30

to

3.15
   

12/31/2004

3,632,195

11.52

to

13.72

49,799,331

  

0.23

0.75

to

0.90

8.32

to

8.16

Transamerica T. Rowe Price Equity Income VP

                  
   

12/31/2008

1,901,888

6.88

to

7.46

16,505,234

  

3.56

0.00

to

1.50

(35.97)

to

(25.37)
   

12/31/2007

2,182,402

10.74

to

13.59

29,803,993

  

2.18

0.00

to

0.90

3.32

to

2.39
   

12/31/2006

2,174,963

10.40

to

13.27

28,963,302

  

1.62

0.00

to

0.90

4.00

to

17.90
   

12/31/2005

1,821,470

12.64

to

11.25

20,551,891

  

1.44

0.75

to

0.90

3.33

to

3.18
   

12/31/2004

1,494,674

12.23

to

10.91

16,318,345

  

0.85

0.75

to

0.90

13.95

to

13.79

Transamerica T. Rowe Price Small Cap VP

                    
   

12/31/2008

1,643,169

7.10

to

6.82

13,944,419

  

1.72

0.00

to

1.50

(36.25)

to

(31.81)
   

12/31/2007

1,727,599

11.14

to

13.39

23,180,179

  

-

0.00

to

0.90

9.61

to

8.63
   

12/31/2006

1,776,439

10.17

to

12.33

21,921,541

  

-

0.00

to

0.90

1.67

to

2.67
   

12/31/2005

2,719,220

12.42

to

12.01

32,674,271

  

-

0.75

to

0.90

9.79

to

9.63
   

12/31/2004

2,141,030

11.31

to

10.95

23,455,627

  

-

0.75

to

0.90

9.54

to

9.38

Transamerica Templeton Global VP

                      
   

12/31/2008

8,271,349

6.76

to

6.63

153,798,351

  

1.91

0.00

to

1.50

(43.67)

to

(33.70)
   

12/31/2007

9,194,475

12.01

to

33.70

306,677,582

  

1.54

0.00

to

0.90

15.25

to

14.21
   

12/31/2006

9,611,118

10.42

to

29.51

282,192,209

  

1.27

0.00

to

0.90

4.21

to

17.73
   

12/31/2005

10,257,628

12.31

to

25.07

256,622,724

  

1.05

0.75

to

0.90

6.67

to

6.51
   

12/31/2004

11,153,731

11.54

to

23.53

262,308,294

  

-

0.75

to

0.90

8.25

to

8.09

Transamerica Third Avenue Value VP

                      
   

12/31/2008

3,678,782

6.19

to

6.65

61,758,740

  

5.00

0.00

to

1.50

(41.15)

to

(33.52)
   

12/31/2007

4,281,762

10.52

to

29.87

123,946,756

  

3.90

0.00

to

0.90

1.20

to

0.29
   

12/31/2006

4,620,302

10.40

to

29.78

134,550,407

  

0.80

0.00

to

0.90

3.99

to

15.04
   

12/31/2005

4,469,405

15.33

to

25.89

114,190,150

  

0.55

0.75

to

0.90

17.92

to

17.75
   

12/31/2004

3,748,044

13.00

to

21.99

82,119,637

  

0.66

0.75

to

0.90

23.87

to

23.69




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



4.

Financial Highlights (continued)

                      
       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Transamerica Balanced VP

                        
   

12/31/2008

362,719

$7.81

to

$7.54

$ 3,708,306

  

1.79%

0.00%

to

1.50%

(32.40)%

to

(24.65)%
   

12/31/2007

440,115

11.55

to

15.28

6,717,223

  

1.12

0.00

to

0.90

13.61

to

12.59
   

12/31/2006

379,220

10.17

to

13.58

5,142,053

  

1.00

0.00

to

0.90

1.66

to

8.15
   

12/31/2005

328,735

12.26

to

12.55

4,123,912

  

1.37

0.75

to

0.90

7.16

to

7.00
   

12/31/2004

320,575

11.44

to

11.73

3,758,867

  

1.23

0.75

to

0.90

10.32

to

10.16

Transamerica Convertible Securities VP

                      
   

12/31/2008

266,164

7.69

to

6.90

2,793,827

  

5.78

0.00

to

1.50

(36.87)

to

(30.98)
   

12/31/2007

279,677

12.19

to

16.94

4,705,341

  

1.85

0.00

to

0.90

18.63

to

17.57
   

12/31/2006

203,694

10.27

to

14.41

2,910,028

  

1.55

0.00

to

0.90

2.74

to

9.91
   

12/31/2005

194,922

11.90

to

13.11

2,542,542

  

2.24

0.75

to

0.90

3.11

to

2.96
   

12/31/2004

211,280

11.54

to

12.74

2,668,990

  

1.92

0.75

to

0.90

12.33

to

12.17

Transamerica Equity VP

                        
   

12/31/2008

49,835,316

6.39

to

6.47

486,736,537

  

0.23

0.00

to

1.50

(46.00)

to

(35.27)
   

12/31/2007

54,982,922

11.84

to

18.26

1,003,665,346

  

0.02

0.00

to

0.90

16.29

to

15.24
   

12/31/2006

60,255,025

10.18

to

15.85

954,551,153

  

-

0.00

to

0.90

1.84

to

7.75
   

12/31/2005

19,781,930

13.94

to

14.71

290,823,547

  

0.36

0.75

to

0.90

15.67

to

15.50
   

12/31/2004

20,350,784

12.05

to

12.73

259,098,023

  

-

0.75

to

0.90

14.94

to

14.77

Transamerica Growth Opportunities VP

                      
   

12/31/2008

3,512,963

7.46

to

7.04

35,860,695

  

3.63

0.00

to

1.50

(40.90)

to

(29.61)
   

12/31/2007

4,037,636

12.62

to

17.41

70,373,607

  

0.05

0.00

to

0.90

23.09

to

21.98
   

12/31/2006

4,058,333

10.25

to

14.28

57,967,034

  

0.23

0.00

to

0.90

2.50

to

4.16
   

12/31/2005

4,146,742

14.01

to

13.71

56,848,783

  

-

0.75

to

0.90

15.36

to

15.19
   

12/31/2004

4,139,106

12.14

to

11.90

49,251,986

  

-

0.75

to

0.90

15.75

to

15.58

Transamerica Money Market VP

                      
   

12/31/2008

5,511,162

10.84

to

10.02

106,465,305

  

2.29

0.00

to

1.50

2.39

to

0.22
   

12/31/2007

3,033,916

10.58

to

20.99

60,281,924

  

4.86

0.00

to

0.90

5.03

to

4.09
   

12/31/2006

2,564,345

10.08

to

20.17

50,440,206

  

4.68

0.00

to

0.90

0.78

to

3.80
   

12/31/2005

2,433,155

10.24

to

19.43

46,226,920

  

2.88

0.75

to

0.90

2.11

to

1.96
   

12/31/2004

2,386,257

10.02

to

19.05

44,846,711

  

0.98

0.75

to

0.90

0.25

to

0.10




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008




4.

Financial Highlights (continued)

                      
       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Transamerica Small/MidCap Value VP

                      
   

12/31/2008

1,401,587

7.69

to

5.98

15,296,736

  

1.93

0.00

to

1.50

(40.87)

to

(40.25)
   

12/31/2007

1,276,888

13.00

to

18.64

23,810,752

  

1.00

0.00

to

0.90

24.74

to

23.62
   

12/31/2006

741,989

10.42

to

15.07

11,194,015

  

0.97

0.00

to

0.90

4.20

to

17.00
   

12/31/2005

365,422

12.92

to

12.88

4,710,189

  

0.48

0.75

to

0.90

12.71

to

12.55
   

12/31/2004 (1)

62,180

11.46

to

11.45

711,890

  

-

0.75

to

0.90

21.73

to

21.56

Transamerica U.S. Government Securities VP

                    
   

12/31/2008

1,695,537

11.46

to

10.47

21,286,906

  

2.86

0.00

to

1.50

7.66

to

4.69
   

12/31/2007

117,328

10.64

to

11.91

1,376,520

  

4.45

0.00

to

0.90

6.05

to

5.10
   

12/31/2006

58,559

10.03

to

11.34

662,140

  

3.52

0.00

to

0.90

0.34

to

2.35
   

12/31/2005

78,026

10.50

to

11.08

862,890

  

3.81

0.75

to

0.90

1.47

to

1.32
   

12/31/2004

51,200

10.35

to

10.93

553,600

  

3.64

0.75

to

0.90

2.52

to

2.37

Transamerica Value Balanced VP

                      
   

12/31/2008

5,102,788

7.65

to

7.52

91,467,937

  

4.68

0.00

to

1.50

(30.54)

to

(24.80)
   

12/31/2007

5,844,018

11.01

to

26.13

152,246,049

  

2.54

0.00

to

0.90

6.72

to

5.76
   

12/31/2006

6,324,588

10.32

to

24.71

155,972,878

  

2.55

0.00

to

0.90

3.20

to

14.24
   

12/31/2005

6,898,186

11.97

to

21.63

149,052,652

  

2.60

0.75

to

0.90

5.80

to

5.64
   

12/31/2004

7,584,776

11.31

to

20.47

155,232,534

  

1.44

0.75

to

0.90

9.14

to

8.98

Transamerica Van Kampen Mid-Cap Growth VP

                  
   

12/31/2008

6,901,583

$6.85

to

$6.14

$171,968,478

  

2.07%

0.00%

to

1.50%

(46.29)%

to

(38.60)%
   

12/31/2007

7,648,279

12.76

to

47.36

358,556,956

  

-

0.00

to

0.90

22.53

to

21.43
   

12/31/2006

7,997,423

10.41

to

39.00

310,555,164

  

-

0.00

to

0.90

4.10

to

8.93
   

12/31/2005

8,766,841

11.45

to

35.81

313,235,641

  

0.09

0.75

to

0.90

6.75

to

6.59
   

12/31/2004

9,381,782

10.73

to

33.59

314,876,463

  

-

0.75

to

0.90

6.34

to

6.18

Transamerica Index 50 VP

                        
   

12/31/2008 (1)

13,078

8.28

to

8.71

107,640

  

-

0.00

to

1.50

(17.20)

to

(12.93)

Transamerica Index 75 VP

                        
   

12/31/2008 (1)

19,265

7.31

to

7.85

139,984

  

-

0.00

to

1.50

(26.90)

to

(21.47)

ProFund VP Bull

                          
   

12/31/2008

118,938

6.65

to

7.16

863,897

  

-

0.00

to

1.50

(37.67)

to

(28.37)
   

12/31/2007

99,749

10.67

to

11.75

1,172,564

  

0.21

0.00

to

0.90

3.55

to

2.62
   

12/31/2006 (1)

736,714

10.31

to

11.45

8,437,699

  

0.07

0.00

to

0.90

3.09

to

14.52




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



4.

Financial Highlights (continued)

                      
       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

ProFund VP Money Market

                        
   

12/31/2008

3,316,146

10.53

to

9.94

34,730,445

  

0.80

0.00

to

1.50

0.84

to

(0.57)
   

12/31/2007

2,531,148

10.45

to

10.47

26,514,159

  

3.20

0.00

to

0.90

3.77

to

2.84
   

12/31/2006 (1)

144,185

10.07

to

10.18

1,467,986

  

2.09

0.00

to

0.90

0.68

to

1.81

ProFund VP NASDAQ-100

                        
   

12/31/2008

203,103

6.86

to

6.59

1,543,465

  

-

0.00

to

1.50

(42.48)

to

(34.13)
   

12/31/2007

956,045

11.92

to

13.33

12,749,323

  

-

0.00

to

0.90

17.62

to

16.57
   

12/31/2006 (1)

80,871

10.13

to

11.43

924,473

  

-

0.00

to

0.90

1.34

to

14.31

ProFund VP Short Small-Cap

                        
   

12/31/2008

410,993

12.73

to

10.99

4,620,257

  

2.41

0.00

to

1.50

24.08

to

9.92
   

12/31/2007

154,615

10.26

to

9.13

1,411,173

  

6.97

0.00

to

0.90

4.53

to

3.59
   

12/31/2006 (1)

18,450

9.82

to

8.81

162,543

  

0.15

0.00

to

0.90

(1.82)

to

(11.90)

ProFund VP Small-Cap

                        
   

12/31/2008

199,978

6.47

to

7.30

1,396,212

  

0.20

0.00

to

1.50

(35.40)

to

(26.96)
   

12/31/2007

160,363

10.01

to

10.90

1,748,012

  

0.23

0.00

to

0.90

(2.21)

to

(3.09)
   

12/31/2006 (1)

303,258

10.24

to

11.25

3,410,298

  

-

0.00

to

0.90

2.39

to

12.45

Access VP High Yield

                        
   

12/31/2008 (1)

1,024,119

9.98

to

9.75

10,141,967

  

7.35

0.00

to

1.50

(0.23)

to

(2.47)

ProFund VP Europe 30

                        
   

12/31/2008 (1)

36,559

6.05

to

6.24

219,656

  

2.60

0.00

to

1.50

(39.47)

to

(37.62)

ProFund VP Oil & Gas

                        
   

12/31/2008 (1)

287,574

6.40

to

5.88

1,826,872

  

-

0.00

to

1.50

(36.01)

to

(41.24)

ProFund VP UltraSmall-Cap

                        
   

12/31/2008 (1)

107,616

4.05

to

4.62

432,263

  

0.70

0.00

to

1.50

(59.55)

to

(53.76)

ProFund VP Utilities

                        
   

12/31/2008 (1)

61,007

7.54

to

7.19

456,532

  

1.49

0.00

to

1.50

(24.62)

to

(28.14)

ProFund VP Consumer Services

                      
   

12/31/2008 (1)

19,837

7.11

to

7.88

140,060

  

-

0.00

to

1.50

(28.86)

to

(21.22)

ProFund VP Pharmaceuticals

                        
   

12/31/2008 (1)

51,607

8.69

to

9.20

445,070

  

2.58

0.00

to

1.50

(13.13)

to

(8.04)

ProFund VP Small-Cap Value

                        
   

12/31/2008 (1)

21,460

7.28

to

7.88

154,996

  

-

0.00

to

1.50

(27.25)

to

(21.24)




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



4.

Financial Highlights (continued)

                      
       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

ProFund VP Falling US Dollar

                        
   

12/31/2008 (1)

83,658

$9.15

to

$8.91

$ 760,102

  

0.05%

0.00%

to

1.50%

(8.51)%

to

(10.88)%

ProFund VP Emerging Markets

                      
   

12/31/2008 (1)

144,687

5.07

to

5.64

727,622

  

0.75

0.00

to

1.50

(49.34)

to

(43.64)

ProFund VP International

                        
   

12/31/2008 (1)

64,766

6.04

to

6.47

388,476

  

1.25

0.00

to

1.50

(39.58)

to

(35.28)

ProFund VP Asia 30

                        
   

12/31/2008 (1)

112,114

5.56

to

6.46

618,511

  

1.21

0.00

to

1.50

(44.43)

to

(35.44)

ProFund VP Japan

                        
   

12/31/2008 (1)

9,022

6.54

to

6.71

58,614

  

18.13

0.00

to

1.50

(34.56)

to

(32.93)

ProFund VP Short NASDAQ-100

                      
   

12/31/2008 (1)

98,269

12.77

to

13.03

1,246,070

  

2.44

0.00

to

1.50

27.72

to

30.26

ProFund VP U.S. Government Plus

                      
   

12/31/2008 (1)

283,538

15.11

to

14.86

4,253,928

  

1.06

0.00

to

1.50

51.14

to

48.62

ProFund VP Basic Materials

                        
   

12/31/2008 (1)

129,552

4.72

to

4.76

607,611

  

0.21

0.00

to

1.50

(52.76)

to

(52.38)

ProFund VP Financials

                        
   

12/31/2008 (1)

104,586

5.35

to

6.81

555,616

  

1.56

0.00

to

1.50

(46.51)

to

(31.89)

ProFund VP Precious Metals

                        
   

12/31/2008 (1)

365,031

5.98

to

6.38

2,165,703

  

3.70

0.00

to

1.50

(40.24)

to

(36.21)

ProFund VP Telecommunications

                      
   

12/31/2008 (1)

58,055

7.78

to

8.22

448,505

  

1.66

0.00

to

1.50

(22.17)

to

(17.79)

ProFund VP Mid-Cap

                        
   

12/31/2008 (1)

121,297

6.51

to

6.75

783,701

  

0.70

0.00

to

1.50

(34.93)

to

(32.48)

ProFund VP Short Emerging Markets

                      
   

12/31/2008 (1)

128,412

13.23

to

12.21

1,686,787

  

0.08

0.00

to

1.50

32.34

to

22.07

ProFund VP Short International

                      
   

12/31/2008 (1)

143,672

12.88

to

11.97

1,837,683

  

0.05

0.00

to

1.50

28.85

to

19.73




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008


 

4.

Financial Highlights (continued)

                      
       

Unit FairValue

      

Expense

Total Return
       

Corresponding to

    

Investment

Ratio

Corresponding to
   

Year

  

Lowest to Highest

Net

  

Income

Lowest to

Lowest to Highest

Subaccount

Ended

Units

Expense Ratio

Assets

 

Ratio*

Highest**

Expense Ratio***

Fidelity VIP Contrafund®

                        
   

12/31/2008

1,489,388

8.92

to

8.92

13,278,218

  

0.76

0.90

to

0.90

(43.20)

to

(43.20)
   

12/31/2007

1,662,224

15.70

to

15.70

26,091,850

  

0.74

0.90

to

0.90

16.25

to

16.25
   

12/31/2006

1,791,909

13.50

to

13.50

24,195,515

  

0.98

0.90

to

0.90

10.44

to

10.44
   

12/31/2005

1,835,666

12.23

to

12.23

22,443,195

  

0.11

0.90

to

0.90

15.61

to

15.61
   

12/31/2004

1,426,128

10.58

to

10.58

15,081,938

  

0.19

0.90

to

0.90

14.13

to

14.13

Fidelity VIP Equity-Income

                        
   

12/31/2008

776,801

8.52

to

8.52

6,617,524

  

2.18

0.90

to

0.90

(43.32)

to

(43.32)
   

12/31/2007

892,431

15.03

to

15.03

13,414,208

  

1.52

0.90

to

0.90

0.36

to

0.36
   

12/31/2006

1,015,129

14.98

to

14.98

15,203,106

  

3.03

0.90

to

0.90

18.86

to

18.86
   

12/31/2005

905,391

12.60

to

12.60

11,407,858

  

1.54

0.90

to

0.90

4.63

to

4.63
   

12/31/2004

1,044,759

12.04

to

12.04

12,581,219

  

1.36

0.90

to

0.90

10.24

to

10.24

Fidelity VIP Growth Opportunities

                      
   

12/31/2008

491,716

4.62

to

4.62

2,273,581

  

0.11

0.90

to

0.90

(55.54)

to

(55.54)
   

12/31/2007

661,082

10.40

to

10.40

6,874,952

  

-

0.90

to

0.90

21.80

to

21.80
   

12/31/2006

446,408

8.54

to

8.54

3,811,402

  

0.47

0.90

to

0.90

4.18

to

4.18
   

12/31/2005

455,162

8.20

to

8.20

3,730,091

  

0.67

0.90

to

0.90

7.71

to

7.71
   

12/31/2004

472,044

7.61

to

7.61

3,591,536

  

0.32

0.90

to

0.90

5.93

to

5.93

Fidelity VIP Index 500

                        
   

12/31/2008

631,997

$6.83

to

$7.19

$ 5,528,303

  

2.38%

0.00%

to

1.50%

(37.16)%

to

(28.13)%
   

12/31/2007

457,757

10.86

to

13.56

6,471,158

  

3.39

0.00

to

0.90

5.18

to

4.24
   

12/31/2006

344,135

10.33

to

13.01

4,682,372

  

1.24

0.00

to

0.90

3.27

to

14.41
   

12/31/2005

187,457

12.04

to

11.37

2,223,179

  

0.96

0.75

to

0.90

3.78

to

3.63
   

12/31/2004 (1)

49,601

11.60

to

10.98

560,487

  

0.18

0.75

to

0.90

9.52

to

14.53




*These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying Series Fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios 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 Series Fund in which the subaccounts invest. These ratios are annualized for periods less than one year.
 
**These ratios represent the annualized contract expenses of the Life Account, consisting primarily of mortality and expense charges. 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 Series Fund are excluded.

Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



4.

Financial Highlights (continued)




***These amounts represent the total return for the period indicated, including changes in the value of the underlying Series 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. Total returns reflect a full twelve month period except for those subaccounts indicated in the Organization and Summary of Significant Accounting Policies footnote and new expense ratios as follows:
 
Expense Ratio Inception Date
1.50% July 2, 2008
 

There are subaccounts that have total returns outside of the range indiciated above. The following is a list of the subaccounts and their corresponding total returns.
 

Subaccount

        

2008 Total Return Range

Transamerica Asset Allocation - Conservative VP

  

(21.89)% to (17.75)%

Transamerica Asset Allocation - Growth VP

  

(40.18)% to (31.18)%

Transamerica Asset Allocation - Moderate Growth VP

  

(33.37)% to (25.47)%

Transamerica Asset Allocation - Moderate VP

  

(26.63)% to (20.67)%

Transamerica International Moderate Growth VP

  

(36.69)% to (29.63)%

Transamerica MFS International Equity VP

  

(35.87)% to (28.70)%

Transamerica Capital Guardian US Equity VP

  

(40.90)% to (30.22)%

Transamerica Capital Guardian Value VP

    

(40.06)% to (25.15)%

Transamerica Clarion Global Real Estate Securities VP

  

(42.90)% to (33.61)%

Transamerica Science & Technology VP

  

(49.05)% to (36.07)%

Transamerica JPMorgan Enhanced Index VP

  

(37.91)% to (27.64)%

Transamerica Marsico Growth VP

    

(41.47)% to (31.00)%

Transamerica BlackRock Large Cap Value VP

  

(34.48)% to (25.29)%

Transamerica MFS High Yield VP

    

(25.87)% to (24.19)%

Transamerica Munder Net50 VP

    

(44.04)% to (34.04)%

Transamerica PIMCO Total Return VP

    

(3.66)% to (2.76)%

Transamerica Legg Mason Partners All Cap VP

  

(36.93)% to (28.08)%

Transamerica T. Rowe Price Equity Income VP

  

(36.54)% to (25.37)%

Transamerica T. Rowe Price Small Cap VP

  

(36.82)% to (31.81)%

Transamerica Templeton Global VP

    

(44.18)% to (33.70)%

Transamerica Third Avenue Value VP

    

(41.68)% to (33.52)%

Transamerica Balanced VP

    

(33.01)% to (24.65)%




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



4.

Financial Highlights (continued)




Subaccount

        

2008 Total Return Range

Transamerica Convertible Securities VP

    

(37.44)% to (30.98)%

Transamerica Equity VP

      

(46.49)% to (35.27)%

Transamerica Growth Opportunities VP

    

(41.44)% to (29.61)%

Transamerica Small/MidCap Value VP

    

(41.40)% to (40.25)%

Transamerica Value Balanced VP

    

(31.16)% to (24.80)%

Transamerica Van Kampen Mid-Cap Growth VP

  

(46.77)% to (38.60)%

Transamerica Index 50 VP

    

(17.70)% to (12.93)%

Transamerica Index 75 VP

    

(27.34)% to (21.47)%

ProFund VP Bull

      

(38.23)% to (28.37)%

ProFund VP NASDAQ-100

    

(43.00)% to (34.13)%

ProFund VP Small-Cap

      

(35.98)% to (26.96)%

ProFund VP Europe 30

      

(39.93)% to (37.62)%

ProFund VP UltraSmall-Cap

    

(59.86)% to (53.76)%

ProFund VP Consumer Services

    

(29.40)% to (21.22)%

ProFund VP Pharmaceuticals

    

(13.78)% to (8.04)%

ProFund VP Small-Cap Value

    

(27.80)% to (21.24)%

ProFund VP Emerging Markets

    

(49.72)% to (43.64)%

ProFund VP International

      

(40.03)% to (35.28)%

ProFund VP Asia 30

      

(44.35)% to (35.44)%

ProFund VP Japan

      

(35.05)% to (32.93)%

ProFund VP Short NASDAQ-100

    

26.76% to 30.26%

ProFund VP Basic Materials

    

(53.11)% to (52.38)%

ProFund VP Financials

      

(46.91)% to (31.89)%

ProFund VP Precious Metals

    

(40.69)% to (36.21)%

ProFund VP Telecommunications

    

(22.75)% to (17.79)%

ProFund VP Mid-Cap

      

(35.42)% to (32.48)%

Fidelity VIP Index 500

      

(37.72)% to (28.13)%




Western Reserve Life Assurance Co.

WRL Series Life Account

Notes to Financial Statements

December 31, 2008



5.

Administrative, Mortality, and Expense Risk Charge




Under some forms of the Contracts, a sales charge and premium taxes are deducted by WRL prior to allocation of policy owner payments to the subaccounts. Contingent surrender charges may also apply.
 
Under all forms of the Contract, monthly charges against policy cash values are made to compensate WRL
for costs of insurance provided.
 
A daily charge equal to an annual rate from 0.00% and 1.50% of average daily net assets is assessed to compensate WRL for assumption of mortality and expense risks in connection with the issuance and administration of the Contracts. This charge (not assessed at the individual contract level) effectively reduces the value of a unit outstanding during the year.
 

6.

Income Taxes




Operations of the Life Account form a part of WRL, which is taxed as a life insurance company under Subchapter L of the Internal Revenue Code of 1986, as amended (the Code). The operations of the Life Account are accounted for separately from other operations of WRL for purposes of federal income taxation. The Life Account is not separately taxable as a regulated investment company under Subchapter M of the Code and is not otherwise taxable as an entity separate from WRL. Under existing federal income tax laws, the income of the Life Account is not taxable to WRL, as long as earnings are credited under the variable annuity contracts.
 

7.

Dividend Distributions




Dividends are not declared by the Life Account, since the increase in the value of the underlying investment in the Series Funds is reflected daily in the accumulation unit price used to calculate the equity value within the Life Account. Consequently, a dividend distribution by the underlying Series Funds does not change either the accumulation unit price or equity values within the Life Account.
 

8.

Fair Value Measurements and Fair Value Hierarchy




SFAS No. 157 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the nature of inputs used to measure fair value and enhances disclosure requirements for fair value measurements.
 
The Life Account has categorized its financial instruments into a three level hierarchy which is based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.
 
Financial assets and liabilities recorded at fair value on the Statement of Assets and Liabilities are categorized as follows:
 
Level 1. Unadjusted quoted prices for identical assets or liabilities in an active market.
 

Level 2. Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
 
a) Quoted prices for similar assets or liabilities in active markets
b) Quoted prices for identical or similar assets or liabilities in non-active markets

c) Inputs other than quoted market prices that are observable
d) Inputs that are derived principally from or corroborated by observable market
data through correlation or other means.
 

Level 3. Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.
 
All investments in Mutual Funds included in the Statement of Assets and Liabilities are stated at fair value and are based upon daily unadjusted quoted prices, therefore are considered Level 1.


 

Report of Independent Registered Public Accounting Firm

The Board of Directors

Western Reserve Life Assurance Co. of Ohio

We have audited the accompanying statutory-basis balance sheets of Western Reserve Life Assurance Co. of Ohio (the Company) as of December 31, 2008 and 2007, and the related statutory-basis statements of operations, changes in capital and surplus, and cash flow for each of the three years in the period ended December 31, 2008. Our audits also included the statutory-basis financial statement schedules required by Regulation S-X, Article 7. These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 1 to the financial statements, the Company presents its financial statements in conformity with accounting practices prescribed or permitted by the Ohio Department of Insurance, which practices differ from U.S. generally accepted accounting principles. The variances between such practices and U.S. generally accepted accounting principles also are described in Note 1. The effects on the financial statements of these variances are not reasonably determinable but are presumed to be material.

In our opinion, because of the effects of the matter described in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with U.S. generally accepted accounting principles, the financial position of Western Reserve Life Assurance Co. of Ohio at December 31, 2008 and 2007, or the results of its operations or its cash flow for each of the three years in the period ended December 31, 2008.

 

1
A member firm of Ernst & Young Global Limited


 

However, in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Western Reserve Life Assurance Co. of Ohio at December 31, 2008 and 2007, and the results of its operations and its cash flow for each of the three years in the period ended December 31, 2008, in conformity with accounting practices prescribed or permitted by the Ohio Department of Insurance. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic statutory-basis financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 2 to the financial statements, Western Reserve Life Assurance Co. of Ohio, with the permission of the Ohio Superintendent of Insurance, changed its policy for deferred income taxes at December 31, 2008.

/s/ Ernst & Young LLP

Des Moines, Iowa

March 27, 2009

 

2
A member firm of Ernst & Young Global Limited


Western Reserve Life Assurance Co. of Ohio

Balance Sheets - Statutory Basis

(Dollars in Thousands, Except per Share Amounts)

 

     December 31
     2008    2007

Admitted assets

      

Cash and invested assets:

      

Bonds

    $ 619,733    $ 696,849

Preferred stocks

      4,545      4,673

Common stocks of affiliated entities (cost: 2008-$21,422 and 2007-$20,659)

      26,092      24,397

Mortgage loans on real estate

      12,754      24,493

Home office properties

      37,806      38,574

Cash, cash equivalents and short-term investments

      279,506      45,633

Policy loans

      411,020      410,844

Invested asset receivable

      25,399      -  

Other invested assets

      8,351      10,358
             

Total cash and invested assets

      1,425,206      1,255,821

Net deferred income tax asset

      76,045      30,879

Premiums deferred and uncollected

      4,431      4,970

Reinsurance receivable

      3,293      8,579

Federal income tax recoverable

      75,192      -  

Receivable from parent, subsidiaries and affiliates

      81,614      16,005

Investment income due and accrued

      7,577      7,722

Cash surrender value of life insurance policies

      66,323      63,948

Due from broker

      104,605      -  

Other admitted assets

      7,954      7,386

Separate account assets

      6,275,403      10,373,595
             

Total admitted assets

    $ 8,127,643    $ 11,768,905
             


 

3


     December 31  
     2008     2007  

Liabilities and capital and surplus

     

Liabilities:

     

Aggregate reserves for policies and contracts:

     

Life

    $ 1,113,616     $ 1,055,742  

Annuity

      621,785       596,029  

Accident and health

      39       -    

Life policy and contract claim reserves

      22,480       15,373  

Liability for deposit-type contracts

      14,520       16,119  

Other policyholders- funds

      43       50  

Interest maintenance reserve

      19,586       -    

Remittances and items not allocated

      6,916       9,202  

Federal and foreign income taxes payable

      -         973  

Transfers to separate accounts due or accrued

      (719,097 )     (888,410 )

Asset valuation reserve

      4,380       7,096  

Reinsurance in unauthorized companies

      1,174       -    

Funds held under coinsurance and other reinsurance treaties

      121,095       16,541  

Payable to affiliates

      65,264       37,892  

Amounts incurred under modified coinsurance agreements

      35,317       3,607  

Unearned investment income

      10,551       10,472  

Disbursement payable-contract termination

      225,843       -    

Other liabilities

      28,636       25,921  

Separate account liabilities

      6,275,403       10,373,595  
                

Total liabilities

      7,847,551       11,280,202  

Capital and surplus:

     

Common stock, $1.00 par value, 3,000,000 shares authorized and 2,500,000 shares issued and outstanding

      2,500       2,500  

Aggregate write-ins for other than special surplus funds

      45,322       -    

Paid-in surplus

      149,634       151,259  

Unassigned surplus

      82,636       334,944  
                

Total capital and surplus

      280,092       488,703  
                

Total liabilities and capital and surplus

    $ 8,127,643     $ 11,768,905  
                


See accompanying notes.

 

4


Western Reserve Life Assurance Co. of Ohio

Statements of Operations - Statutory Basis

(Dollars in Thousands)

 

     Year Ended December 31  
     2008     2007     2006  

Revenues:

       

Premiums and other considerations, net of reinsurance:

       

Life

    $ 574,562     $ 583,890     $ 582,936  

Annuity

      213,833       429,894       584,189  

Accident and health

      447       -         -    

Net investment income

      71,623       68,832       64,109  

Amortization of interest maintenance reserve

      (443 )     (510 )     (437 )

Commissions and expense allowances on reinsurance ceded

      (11,229 )     11,826       9,385  

Reserve adjustments on reinsurance ceded

      1,982,087       10,216       8,451  

Income from fees associated with investment management, administration and contract guarantees for separate accounts

      113,994       137,410       128,081  

Income earned on company owned life insurance

      2,367       2,323       2,257  

Income from administrative service agreement with affiliate

      30,230       38,629       36,528  

Other

      6,616       6,130       5,320  
                        
     2,984,087       1,288,640       1,420,819  

Benefits and expenses:

       

Benefits paid or provided for:

       

Life

      83,678       74,138       65,610  

Surrender benefits

      1,124,340       1,206,556       1,047,578  

Annuity benefits

      46,871       49,912       47,275  

Other benefits

      1,860       1,564       2,587  

Increase (decrease) in aggregate reserves for policies and contracts:

       

Life

      57,874       69,337       34,451  

Annuity

      25,756       (40,543 )     (56,276 )

Accident and health

      39       -         -    
                        
     1,340,418       1,360,964       1,141,225  

Insurance expenses:

       

Commissions

      162,635       174,497       167,682  

General insurance expenses

      110,328       111,553       101,204  

Taxes, licenses and fees

      17,089       20,455       16,459  

Net transfers from separate accounts

      (540,274 )     (576,044 )     (186,676 )

Initial premium on Modco reinsurance transaction

      2,006,918       -         -    

Other expenses

      1,086       947       1,274  
                        
     1,757,782       (268,592 )     99,943  
                        

Total benefits and expenses

      3,098,200       1,092,372       1,241,168  
                        

Gain (loss) from operations before dividends to policyholders, federal income tax (benefit) expense and net realized capital gains (losses) on investments

      (114,113 )     196,268       179,651  

Dividends to policyholders

      27       27       29  
                        

Gain (loss) from operations before federal income tax (benefit) expense and net realized capital gains (losses) on investments

      (114,140 )     196,241       179,622  

Federal income tax (benefit) expense

      (54,644 )     61,963       67,978  
                        

Gain (loss) from operations before net realized capital gains (losses) on investments

      (59,496 )     134,278       111,644  

Net realized capital gains (losses) on investments (net of related federal income taxes and amounts tranferred to/from interest maintenance reserve)

      368       (2,623 )     345  
                        

Net (loss) income

    $ (59,128 )   $ 131,655     $ 111,989  
                        


See accompanying notes.

 

5


Western Reserve Life Assurance Co. of Ohio

Statements of Changes in Capital and Surplus - Statutory Basis

(Dollars in Thousands)

 

     Common
Stock		    Aggregate
Write-ins
for Other
than Special
Surplus Funds		    Paid-in
Surplus		     Unassigned
Surplus		     Total
Capital and
Surplus		  

Balance at January 1, 2006

    $ 2,500    $ -      $ 152,185     $ 236,764     $ 391,449  

Net income

      -        -        -         111,989       111,989  

Change in net unrealized capital gains and losses

      -        -        -         (43,656 )     (43,656 )

Change in non-admitted assets

      -        -        -         (42,577 )     (42,577 )

Change in asset valuation reserve

      -        -        -         7,027       7,027  

Change in liability for reinsurance in unauthorized companies

      -        -        -         259       259  

Change in surplus in separate accounts

      -        -        -         (141 )     (141 )

Change in net deferred income tax asset

      -        -        -         24,874       24,874  

Dividend to stockholder

      -        -        -         (2,000 )     (2,000 )

Cumulative effect of changes in accounting principles

      -        -        -         1       1  

Surplus effect of reinsurance transaction

      -        -        -         (969 )     (969 )

Contributed surplus related to stock appreciation rights plans of indirect parent

      -        -        (404 )     -         (404 )

Correction of prior year error

      -        -        -         21,246       21,246  
                                      

Balance at December 31, 2006

      2,500      -        151,781       312,817       467,098  

Net income

      -        -        -         131,655       131,655  

Change in net unrealized capital gains and losses

      -        -        -         638       638  

Change in non-admitted assets

      -        -        -         (6,561 )     (6,561 )

Change in asset valuation reserve

      -        -        -         (1,238 )     (1,238 )

Change in net deferred income tax asset

      -        -        -         8,842       8,842  

Dividend to stockholder

      -        -        -         (110,000 )     (110,000 )

Surplus effect of reinsurance transaction

      -        -        -         (1,209 )     (1,209 )

Contributed surplus related to stock appreciation rights plans of indirect parent

      -        -        (522 )     -         (522 )
                                      

Balance at December 31, 2007

    $ 2,500    $ -      $ 151,259     $ 334,944     $ 488,703  


 

6


Western Reserve Life Assurance Co. of Ohio

Statements of Changes in Capital and Surplus - Statutory Basis (continued)

(Dollars in Thousands)

 

     Common
Stock		    Aggregate
Write-ins
for Other
than Special
Surplus Funds		    Paid-in
Surplus		     Unassigned
Surplus		     Total
Capital and
Surplus		  

Balance at December 31, 2007

    $ 2,500    $ -      $ 151,259     $ 334,944     $ 488,703  

Net loss

      -        -        -         (59,128 )     (59,128 )

Change in net unrealized capital gains and losses, net of tax

      -        -        -         1,738       1,738  

Change in non-admitted assets

      -        -        -         7,856       7,856  

Change in asset valuation reserve

      -        -        -         2,716       2,716  

Change in liability for reinsurance in unauthorized companies

      -        -        -         (1,174 )     (1,174 )

Dividend to stockholder

      -        -        -         (200,000 )     (200,000 )

Change in net deferred income tax asset

      -        -        -         (7,619 )     (7,619 )

Surplus effect of reinsurance transaction

      -        -        -         3,543       3,543  

Increase in admitted deferred tax attributable to use of permitted practice

      -        45,322      -         -         45,322  

Correction of interest on taxes

      -        -        -         (240 )     (240 )

Contributed surplus related to stock appreciation rights plans of indirect parent

      -        -        (1,625 )     -         (1,625 )
                                      

Balance at December 31, 2008

    $ 2,500    $ 45,322    $ 149,634     $ 82,636     $ 280,092  
                                      


See accompanying notes.

 

7


Western Reserve Life Assurance Co. of Ohio

Statements of Cash Flow - Statutory Basis

(Dollars in Thousands)

 

     Year Ended December 31  
     2008     2007     2006  

Operating activities

       

Premiums collected, net of reinsurance

    $ 789,337     $ 1,014,138     $ 1,167,315  

Net investment income received

      76,682       73,854       71,408  

Miscellaneous income received

      152,105       204,010       187,060  

Benefit and loss related payments

      (1,243,327 )     (1,333,939 )     (1,165,987 )

Commissions, expenses paid and aggregate write-ins for deductions

      (293,143 )     (311,221 )     (282,359 )

Net transfers to separate accounts and protected cell amounts

      709,586       619,060       191,125  

Dividends paid to policyholders

      (27 )     (27 )     (29 )

Federal and foreign income taxes paid

      (33,143 )     (69,082 )     (60,364 )
                        

Net cash provided by operating activities

      158,070       196,793       108,169  

Investing activities

       

Proceeds from investments sold, matured or repaid:

       

Bonds

      331,923       393,160       513,300  

Preferred stocks

      -         -         3,020  

Common stocks

      -         -         8,144  

Mortgage loans on real estate

      11,740       1,058       988  

Other invested assets

      -         -         -    

Miscellaneous proceeds

      8,250       7       962  
                        

Total investment proceeds

      351,913       394,225       526,414  

Costs of investments acquired:

       

Bonds

      (234,428 )     (467,479 )     (465,786 )

Preferred stocks

      -         -         (2,488 )

Common stocks

      (763 )     (758 )     (4,126 )

Mortgage loans on real estate

      -         -         (8,501 )

Real estate

      (122 )     (36 )     (39 )

Other invested assets

      (669 )     (1,335 )     (484 )

Miscellaneous applications

      (38 )     (4,506 )     -    
                        

Total cost of investments acquired

      (236,020 )     (474,114 )     (481,424 )

Net increase in policy loans

      (176 )     (66,063 )     (44,319 )
                        

Net cost of investments acquired

      (236,196 )     (540,177 )     (525,743 )
                        

Net cash provided by (used in) investing activities

      115,717       (145,952 )     671  


 

8


Western Reserve Life Assurance Co. of Ohio

Statements of Cash Flow - Statutory Basis (continued)

(Dollars in Thousands)

 

     Year Ended December 31  
     2008     2007     2006  

Financing and miscellaneous activities

       

Cash provided (applied):

       

Borrowed funds received (returned)

      -         (18,791 )     12,384  

Net withdrawals on deposit-type contracts and other insurance liabilities

      (1,973 )     (835 )     (5,334 )

Dividends to stockholder

      (200,000 )     (110,000 )     (2,000 )

Funds held under reinsurance treaty with unauthorized reinsurers

      104,554       446       (1,508 )

Payable to affiliates

      27,372       (3,370 )     21,969  

Other cash provided (applied)

      30,133       15,035       (52,250 )
                        

Net cash used in financing and miscellaneous activities

      (39,914 )     (117,515 )     (26,739 )
                        

Net increase (decrease) in cash, cash equivalents and short-term investments

      233,873       (66,674 )     82,101  

Cash, cash equivalents and short-term investments:

       

Beginning of year

      45,633       112,307       30,206  
                        

End of year

    $ 279,506     $ 45,633     $ 112,307  
                        


See accompanying notes.

 

9


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis

(Dollars in Thousands)

December 31, 2008

1. Organization and Summary of Significant Accounting Policies

Organization

Western Reserve Life Assurance Co. of Ohio (the Company) is a stock life insurance company and is a wholly owned subsidiary of AEGON USA, LLC (AEGON). AEGON is an indirect, wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands.

Nature of Business

The Company operates predominantly in the variable universal life and variable annuity areas of the life insurance business. The Company is licensed in 49 states, District of Columbia, Puerto Rico and Guam. Sales of the Company's products are through financial planners, independent representatives, financial institutions and stockbrokers. The majority of the Company's new life insurance, and a portion of new annuities, are written through an affiliated marketing organization.

Basis of Presentation

The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

The accompanying financial statements of the Company have been prepared in conformity with accounting practices prescribed or permitted by the Ohio Department of Insurance, which practices differ from accounting principles generally accepted in the United States (GAAP). The more significant variances from GAAP are:

Investments: Investments in bonds and mandatory redeemable preferred stocks are reported at amortized cost or fair value based on their National Association of Insurance Commissioners (NAIC) rating; for GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in operations for those designated as trading and as a separate component of other comprehensive income for those designated as available-for-sale. Prior to 2008, fair value for statutory purposes was based on the price published by the Securities Valuation Office of the NAIC (SVO), if available, whereas fair value for GAAP was based on indexes, third party pricing services, brokers,

 

10


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

external fund managers and internal models. In 2008, the NAIC adopted a regulation allowing insurance companies to report the fair value determined by the SVO or determine the fair value by using a permitted valuation method. Therefore, effective December 31, 2008, fair value for statutory purposes was reported or determined using the following pricing sources: indexes, third party pricing services, brokers, external fund managers and internal models.

All single class and multi-class mortgage-backed/asset-backed securities (e.g., CMOs) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using either the retrospective or prospective methods. If it is determined that a decline in fair value is other than temporary, the cost basis of the security is written down to the undiscounted estimated future cash flows. For GAAP purposes, all securities, purchased or retained, that represent beneficial interests in securitized assets (e.g., CMO, CBO, CDO, CLO, MBS and ABS securities), other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If it is determined that a decline in fair value is other than temporary, the cost basis of the security is written down to fair value. If high credit quality securities are adjusted, the retrospective method is used.

Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Company's occupancy of those properties. Changes between depreciated cost and admitted amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.

Valuation allowances for mortgage loans are established, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, such allowances are based on the present value of expected future cash flows discounted at the loan-s effective interest rate or, if foreclosure is probable, on the estimated fair value of the collateral.

The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus, rather than being included as a component of earnings as would be required under GAAP.

 

11


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Valuation Reserves: Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity of the bond or mortgage loan. That net deferral is reported as the -interest maintenance reserve- (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses would be reported in the income statement on a pretax basis in the period that the assets giving rise to the gains or losses are sold.

The -asset valuation reserve- (AVR) provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.

Subsidiaries: The accounts and operations of the Company's subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP.

Policy Acquisition Costs: The costs of acquiring and renewing business are expensed when incurred. Under GAAP, acquisition costs related to traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, would be deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves; for universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.

Non-admitted Assets: Certain assets designated as -non-admitted-, principally the non-admitted portion of deferred income tax assets and agent debit balances, and other assets not specifically identified as an admitted asset within the NAIC Accounting Practices and Procedures Manual are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheet to the extent that those assets are not impaired.

 

12


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Universal Life and Annuity Policies: Revenues for universal life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received and benefits incurred represent the total of surrender and death benefits paid and the change in policy reserves. Premiums received and benefits incurred for annuity policies without mortality or morbidity risk are recorded using deposit accounting, and credited directly to an appropriate policy reserve account, without recognizing premium income or benefits paid. Under GAAP, for universal life, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability.

Benefit Reserves: Certain policy reserves are calculated based on statutorily required interest and mortality assumptions rather than on estimated expected experience or actual account balances as would be required under GAAP.

Reinsurance: Any reinsurance balance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances has been provided for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.

Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.

Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.

 

13


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Deferred Income Taxes: Deferred income tax assets are limited to 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year, plus 2) the lesser of the remaining gross deferred income tax assets expected to be realized within one year of the balance sheet date or 10% of capital and surplus excluding any net deferred income tax assets, electronic data processing equipment and operating software and any net positive goodwill, plus 3) the amount of remaining gross deferred income tax assets that can be offset against existing gross deferred income tax liabilities. The remaining deferred income tax assets are non-admitted. During 2008, the Company obtained permission from the state of Ohio to compute deferred income taxes using a permitted practice, which is discussed in detail in Note 2 - Prescribed and Permitted Statutory Accounting Practices.

Deferred income taxes do not include amounts for state taxes. Under GAAP, state taxes are included in the computation of deferred income taxes, a deferred income tax asset is recorded for the amount of gross deferred income tax assets expected to be realized in all future years, and a valuation allowance is established for deferred income tax assets not realizable.

Policyholder Dividends: Policyholder dividends are recognized when declared rather than over the term of the related policies.

Statements of Cash Flow: Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year of less. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.

Securities Lending Assets and Liabilities: If collateral is restricted and not available for the general use of the Company, an asset and related liability are not recorded on the balance sheet. However, if the collateral is not restricted and is available for general use, the Company is required to record the asset and related liability. Under GAAP, the asset and related liability must be recorded for collateral under the control of the Company, regardless of any restrictions on the collateral.

The effects of the foregoing variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material.

 

14


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Other significant accounting policies are as follows:

Investments

Investments in bonds, except those to which the SVO has ascribed a designation of an NAIC 6, are reported at amortized cost using the interest method.

Single class and multi-class mortgage-backed/asset-backed securities, categorized as bonds, are valued at amortized cost using the interest method including anticipated prepayments, except for those with an NAIC designation of 6, which are valued at the lower of amortized cost or fair value. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. The retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.

Investments in both affiliated and unaffiliated preferred stocks in good standing are reported at cost. Investments in preferred stocks not in good standing are reported at the lower of cost or fair value as determined by the SVO and the related net unrealized capital gains (losses) are reported in unassigned surplus along with any adjustment for federal income taxes.

Common stocks of noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries- equity is included in the change in net unrealized capital gains or losses.

There are no restrictions on common or preferred stock.

Home office properties are reported at cost less allowances for depreciation. Depreciation of home office properties is computed principally by the straight-line method.

Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.

Cash equivalents are short-term highly liquid investments with original maturities of three months or less and are principally stated at amortized cost.

 

15


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines that the impairment is other than temporary, the mortgage loan is written down to realizable value and a realized loss is recognized.

Policy loans are reported at unpaid principal balances. Other -admitted assets- are valued principally at cost.

Investments in Low Income Housing Tax Credit (LIHTC) Properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company.

Realized capital gains and losses are determined using specific identification and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, preferred and common stocks are credited or charged directly to unassigned surplus.

The carrying values of all investments are reviewed on an ongoing basis for credit deterioration or changes in estimated cash flows. If this review indicates a decline in fair value that is other than temporary, the carrying value of the investment is reduced to its fair value, and a specific writedown is taken. Such reductions in carrying value are recognized as realized losses on investments.

Under a formula prescribed by the NAIC, the Company defers, in the IMR, the portion of realized gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity of the security.

During 2008, 2007 and 2006 net realized capital (losses) gains of $19,356, $(177) and $(2,235), respectively, were credited to the IMR rather than being immediately recognized in the statements of operations. Amortization of these net (losses) gains aggregated $(443), $(510) and $(437), for the years ended December 31, 2008, 2007 and 2006, respectively.

Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Further, income is not accrued when collection is uncertain. Investment income due and accrued of $6, $13 and $20 has been excluded for the years ended December 31, 2008, 2007 and 2006, respectively, with respect to such practices.

 

16


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Derivative Instruments

Futures are marked to market on a daily basis and a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements.

Premiums and Annuity Considerations

Revenues for policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received and are recognized over the premium paying periods of the related policies. Premiums received for annuity policies without mortality or morbidity risk are recorded using deposit accounting, and recorded directly to an appropriate policy reserve account, without recognizing premium income.

Aggregate Reserves for Policies and Contracts

Life and annuity reserves are developed by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum required by law. The Company waives deduction of deferred fractional premiums upon death and refunds portions of premiums beyond the date of death. Surrender values on policies do not exceed the corresponding benefit reserves. Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Additional reserves are established when the results of cash flow testing under various interest rate scenarios indicate the need for such reserves or the net premiums exceed the gross premiums on any insurance in force.

Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula. Tabular interest on funds not involving life contingencies has also been determined by formula.

The aggregate policy reserves for life insurance policies are based principally upon the 1941, 1958, 1980 and 2001 Commissioners- Standard Ordinary Mortality Tables. The reserves are calculated using interest rates ranging from 2.0 to 5.5 percent and are computed principally on the Net Level Premium Valuation and the Commissioners- Reserve Valuation Methods. Reserves for universal life policies are based on account balances adjusted for the Commissioners- Reserve Valuation Method.

 

17


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Deferred annuity reserves are calculated according to the Commissioners- Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest. Reserves for immediate annuities and supplementary contracts with life contingencies are equal to the present value of future payments assuming interest rates ranging from 4.0 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.

The liabilities related to guaranteed investment contracts and policyholder funds left on deposit with the Company generally are equal to fund balances less applicable surrender charges.

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the statement date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.

Liability for Deposit-Type Contracts

Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include supplemental contracts and certain annuity contracts. Deposits and withdrawals received on these contracts are recorded as a direct increase or decrease to the liability balance, and are not reflected as premiums, benefits or changes in reserve in the statement of operations.

Reinsurance

Coinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of inforce blocks of business are included in unassigned surplus and are amortized into income over the estimated life of the policies. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively.

 

18


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Separate Accounts

Separate accounts held by the Company primarily represent funds which are administered for individual variable universal life and variable annuity contracts. Assets held in trust for purchases of variable universal life and variable annuity contracts and the Company's corresponding obligation to the contract owners are shown separately in the balance sheets. The assets consist of shares in funds, considered common stock investments, which are valued daily and carried at fair value. The separate accounts, held for individual policyholders, do not have any minimum guarantees, and the investment risks associated with the fair value changes are borne entirely by the policyholder.

The Company received variable contract premiums of $732,493, $910,067 and $1,092,584, in 2008, 2007 and 2006, respectively. All variable account contracts are subject to discretionary withdrawal by the policyholder at the market value of the underlying assets less the current surrender charge. Separate account contract holders have no claim against the assets of the general account.

Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements. In addition, the Company received $113,994, $137,410 and $128,081, in 2008, 2007 and 2006, respectively, related to fees associated with investment management, administration and contractual guarantees for separate accounts.

Stock Option Plan and Stock Appreciation Rights Plans

Prior to 2002 and in 2005 through 2008, AEGON N.V. sponsored a stock option plan for eligible employees of the company. Pursuant to the plan, the option price at the date of grant is equal to the market value of the stock. Under statutory accounting principles, the Company does not record any expense related to this plan. However, the Company is allowed to record a deduction in the consolidated tax return filed by the Company and certain affiliates. The tax benefit of this deduction has been credited directly to unassigned surplus.

 

19


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

The Company's employees participate in various stock appreciation rights (SAR) plans issued by AEGON. In accordance with Statement of Statutory Accounting Principles (SSAP) No. 13, Stock Options and Stock Purchase Plans, the expense related to these plans for the Company's employees has been charged to the Company, with an offsetting amount credited to paid-in surplus. The Company recorded a benefit of $1,628, $832 and $538 for the years ended December 31, 2008, 2007 and 2006, respectively. In addition, the Company recorded an adjustment to paid-in surplus for the income tax effect related to these plans over and above the amount reflected in the statement of operations in the amount of $3, $310 and $134 for years ended December 31, 2008, 2007 and 2006, respectively.

Recent Accounting Pronouncements

In November 2008, the NAIC issued SSAP No. 98, Treatment of Cash Flows When Quantifying Changes in Valuation and Impairments. This statement establishes statutory accounting principles for impairment analysis and subsequent valuation of loan-backed and structured securities. Prior to SSAP No. 98, loan-backed and structured securities were evaluated for impairment based upon undiscounted cash flows in accordance with SSAP No. 43, Loan-backed and Structured Securities. SSAP No. 98 requires the use of the present value of the anticipated future cash flows for this purpose. This will result in increased other-than-temporary impairments (OTTI) for certain loan-backed and structured settlement securities. The Company adopted SSAP No. 98 on January 1, 2009. The adoption of this statement shall be accounted for prospectively and therefore there was no impact to the Company's financials at December 31, 2008. As a result of the adoption, the Company expects to reduce unassigned surplus by $7,836 at January 1, 2009.

In September 2008, the NAIC issued SSAP No. 99, Accounting for Certain Securities Subsequent to an Other-Than-Temporary Impairment. This statement establishes the statutory accounting principles for the treatment of premium or discount applicable to certain securities subsequent to the recognition of an OTTI. Prior to SSAP No. 99, the Company's investments in OTTI were reported in accordance with SSAP No. 26, Bonds, excluding Loan-backed and Structured Securities, SSAP No. 32, Investments in Preferred Stock and SSAP No. 43, Loan-backed and Structured Securities. The Company adopted SSAP No. 99 on January 1, 2009. The adoption of this statement shall be accounted for prospectively and therefore there was no impact to the Company's financials at adoption.

Reclassifications

Certain reclassifications have been made to the 2007 and 2006 financial statements to conform to the 2008 presentation.

 

20


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

1. Organization and Summary of Significant Accounting Policies (continued)

 

Beginning in 2006, the manner in which the reserves on Variable Annuity and Variable Universal Life contracts are split between the separate account and general account statements was modified. This modification resulted in the contract surrender value being held as the reserve in the separate account statement, and any reserves in excess of the surrender value being held as the reserve in the general account. As a result, the total reserves held by the Company did not change, although the new reserve split resulted in an increase in the general account reserves of approximately $479,175 and an offsetting decrease in the separate account reserves by this same amount as of December 31, 2006.

2. Prescribed and Permitted Statutory Accounting Practices

The financial statements of the Company are presented on the basis of accounting practices prescribed by the Insurance Department of the State of Ohio. The Insurance Department of the State of Ohio recognizes only statutory accounting practices prescribed or permitted by the State of Ohio for determining and reporting the financial condition and results of operation of an insurance company for determining its solvency under Ohio Insurance Law. The NAIC Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed or permitted practices by the State of Ohio.

The Company, with the permission of the Ohio Superintendent of Insurance, determines the admitted amount of deferred income tax assets pursuant to Ohio Bulletin 2009-04. Bulletin 2009-04 increases the realization period for purposes of determining the admissibility of deferred tax assets in accordance with the requirements of SSAP No. 10, Income Taxes, Paragraph 10(b)(i) from one year to three years from the balance sheet date and expands the limit on net deferred tax assets for Paragraph 10(b)(ii) from 10% of adjusted capital and surplus to 15%.

A reconciliation of the Company's net income and capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Ohio is shown below :

 

     2008     2007    2006

Net Income (Loss), State of Ohio Basis

    $ (59,128 )   $ 131,655    $ 111,989

State permitted practices (Income)

      -         -        -  
                     

Net Income, NAIC SAP

    $ (59,128 )   $ 131,655    $ 111,989
                     

Statutory Surplus, State of Ohio Basis

    $ 280,092     $ 488,703    $ 467,098

State permitted practices (Surplus)

      (45,322 )     -        -  
                     

Statutory Surplus, NAIC SAP

    $ 234,770     $ 488,703    $ 467,098
                     


 

21


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

3. Accounting Changes and Corrections of Errors

Effective January 1, 2008, the Company modified the way it recorded interest on income taxes. Prior to January 1, 2008, interest on income taxes was included as a net amount (after federal tax benefit) within federal and foreign income taxes recoverable. Effective January 1, 2008, the gross amount of interest was included in taxes, licenses, and fees due and accrued, which is part of other liabilities, and the related deferred tax asset was included in net deferred income tax asset. The Company reported a decrease in unassigned surplus of $240 as of January 1, 2008 related to this change.

4. Fair Values of Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash, Cash Equivalents and Short-Term Investments: The carrying amounts reported in the statutory-basis balance sheets for these instruments approximate their fair values.

Bonds and Preferred Stocks: Prior to 2008, fair values for bonds and preferred stocks were based on the price published by the SVO, if available. In 2008, the NAIC adopted regulation allowing insurance companies to report the fair value determined by the SVO or determine the fair value by using a permitted valuation method. Therefore, effective December 31, 2008, fair value for statutory purposes was reported or determined using the following pricing sources: indexes, third party pricing services, brokers, external fund managers and internal models.

For fixed maturity securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from independent pricing services, or, in the case of private placements, are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments. For equity securities that are not actively traded, estimated fair values are based on values of issues of comparable yield and quality.

Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.

Policy Loans: Carrying value of policy loans approximates their fair value.

Separate Account Assets: The fair value of separate account assets are based on quoted market prices.

Separate Account Annuity Liabilities: Separate account annuity liabilities are based upon the fair value of the related separate account assets.

 

22


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

4. Fair Values of Financial Instruments (continued)

 

Investment Contract Liabilities: Fair values for the Company's liabilities under investment-type insurance contracts are estimated using discounted cash flow calculations, based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for the contracts being valued.

Fair values for the Company's insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk, which minimizes exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

The following sets forth a comparison of the fair values and carrying amounts of the Company's financial instruments:

 

     December 31
     2008    2007
     Carrying
Amount		    Fair Value    Carrying
Amount		    Fair Value

Admitted assets

            

Cash, cash equivalents and short-term investments

    $ 279,506    $ 279,506    $ 45,633    $ 45,633

Bonds, other than affiliates

      619,733      563,150      696,849      694,605

Preferred stocks, other than affiliates

      4,545      3,580      4,673      4,646

Mortgage loans on real estate

      12,754      11,545      24,493      24,249

Policy loans

      411,020      411,020      410,844      410,844

Separate account assets

      6,275,403      6,275,403      10,373,595      10,373,595

Liabilities

            

Investment contract liabilities

      632,369      631,698      607,967      606,177

Deposit-type contracts

      14,520      14,520      16,119      16,119

Separate account annuity liabilities

      3,654,589      3,654,589      6,137,949      6,137,949


Included in the Company's financial statements are certain investment-related financial instruments that are carried at fair value on a recurring basis. The Company also holds other financial instruments that are measured at fair value on a non-recurring basis; including impaired financial instruments, such as bonds and preferred stock that are carried at the lower of cost or market. Under Statutory Accounting practice, the Company calculates the fair value of affiliated common stock based on the equity method of accounting; as such, it is not included in the fair value disclosures.

The fair value of a financial instrument is 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.

 

23


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

4. Fair Values of Financial Instruments (continued)

 

Fair values are based on quoted market prices when available. When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality (matrix pricing). In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that management believes market participants would use to determine a current transaction price. These valuation techniques involve some level of management estimation and judgment which becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input employed.

The Company's financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset-s or a liability-s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:

 

Level 1 -   Unadjusted quoted prices for identical assets or liabilities in active markets accessible at the measurement date.
Level 2 -   Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
 

a)      Quoted prices for similar assets or liabilities in active markets
 

b)      Quoted prices for identical or similar assets or liabilities in non-active markets
 

c)      Inputs other than quoted market prices that are observable
 

d)      Inputs that are derived principally from or corroborated by observable market data through correlation or other means

Level 3 -

   Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Company's own assumptions about the assumptions a market participant would use in pricing the asset or liability.


 

24


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

4. Fair Values of Financial Instruments (continued)

 

Financial assets and liabilities measured at fair value on a recurring basis

The following table provides information as of December 31, 2008 about the Company's financial assets and liabilities measured at fair value on a recurring basis.

 

     2008
     Level 1    Level 2    Level 3    Total

Assets:

            

Short-term investments (a)

    $ -      $ 271,302    $ 790    $ 272,092

Separate Account assets (b)

      6,275,403      -        -        6,275,403
                           

Total assets

    $ 6,275,403    $ 271,302    $ 790    $ 6,547,495
                           


(a)

Short-term investments are carried at amortized cost; which approximates fair value.

(b)

Separate Accounts assets are carried at the net asset value provided by the fund managers.


Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

During 2008, the Company reported the following assets in Level 3 on a recurring basis.

 

     Short-term
Investments

Balance at January 1, 2008

    $ 2,199

Change in realized gains/losses included in net income

      1,409
      

Balance at December 31, 2008

    $ 790
      

Total gains/losses included in income attributable to instruments held at the reporting date

    $ 1,409
      


 

25


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

4. Fair Values of Financial Instruments (continued)

 

Assets measured at fair value on a non-recurring basis

During 2008, the Company reported the following assets at fair value on a non-recurring basis.

 

Description

    December 31,
2008		    Level 1    Level 2    Level 3    Total
Gains/
(Losses)

Fixed maturities

    $ 1,692    -      -      $ 1,692    -  


Level 3 Financial Assets

The Company classifies certain broker quoted or impaired securities in Level 3. Fair values for the securities classified in Level 3 are at the lower of cost or market value.

In certain circumstances, the Company will obtain non-binding broker quotes from brokers to assist in the determination of fair value. If those quotes can be corroborated by other market observable data, the investment will be classified as Level 2. If not, the investments are classified as Level 3 due to the broker-s valuation process.

Investments, which have a designation of NAIC 6, are considered to be impaired. They are reported at the lower of cost or market, with gains/ (losses) included in net income.

 

26


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments

The carrying amount and estimated fair value of investments in bonds and preferred stock are as follows:

 

     Carrying
Amount		    Gross
Unrealized
Gains		    Gross
Unrealized
Losses 12
Months or
More		    Gross
Unrealized
Losses less
Than 12
Months		    Estimated
Fair
Value

December 31, 2008

               

Unaffiliated bonds:

               

United States Government and agencies

    $ 97,307    $ 30,939    $ -      $ -      $ 128,246

State, municipal and other government

      4,477      -        661      377      3,439

Public utilities

      10,493      233      -        359      10,367

Industrial and miscellaneous

      212,419      546      7,927      11,830      193,208

Mortgage and other asset-backed securities

      295,037      1,120      46,570      21,697      227,890
                                  
   $ 619,733    $ 32,838    $ 55,158    $ 34,263    $ 563,150

Unaffiliated preferred stocks

      4,545      -        832      133      3,580
                                  
   $ 624,278    $ 32,838    $ 55,990    $ 34,396    $ 566,730
                                  
     Carrying
Amount		    Gross
Unrealized
Gains		    Gross
Unrealized
Losses 12
Months or
More		    Gross
Unrealized
Losses less
Than 12
Months		    Estimated
Fair
Value

December 31, 2007

               

Unaffiliated bonds:

               

United States Government and agencies

    $ 152,325    $ 5,531    $ -      $ 1    $ 157,855

State, municipal and other government

      4,494      115      -        58      4,551

Public utilities

      14,942      345      32      -        15,255

Industrial and miscellaneous

      193,686      2,292      1,185      1,396      193,397

Mortgage and other asset-backed securities

      331,402      1,787      3,673      5,969      323,547
                                  
   $ 696,849    $ 10,070    $ 4,890    $ 7,424    $ 694,605

Unaffiliated preferred stocks

      4,673      60      76      11      4,646
                                  
   $ 701,522    $ 10,130    $ 4,966    $ 7,435    $ 699,251
                                  


 

27


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

At December 31, 2008 and 2007, respectively, for securities in an unrealized loss position greater than or equal to twelve months, the Company held 68 and 57 securities with a carrying amount of $202,928 and $181,439 and an unrealized loss of $55,990 and $4,966, with an average price of 72.4 and 97.3 (fair value/amortized cost). Of this portfolio, 88.42% and 97.43% were investment grade with associated unrealized losses of $43,441 and $4,645, respectively.

At December 31, 2008 and 2007, respectively, for securities that have been in a continuous loss position for less than twelve months, the Company held 95 and 59 securities with a carrying amount of $219,972 and $181,236 and an unrealized loss of $34,396 and $7,435 with an average price of 84.4 and 95.9 (fair value/amortized cost). Of this portfolio, 91.71% and 93.47% were investment grade with associated unrealized losses of $30,889 and $7,145, respectively.

The Company closely monitors below investment grade holdings and those investment grade issuers where the Company has concerns. The Company also regularly monitors industry sectors. Securities in unrealized loss positions that are considered other than temporary are written down to fair value. The Company considers relevant facts and circumstances in evaluating whether the impairment is other than temporary including: (1) the probability of the Company collecting all amounts due according to the contractual terms of the security in affect at the date of acquisition; and (2) the Company's decision to sell a security prior to its maturity at an amount below its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored. For asset-backed securities, cash flow trends and underlying levels of collateral are monitored. The Company will record a charge to the statement of operations to the extent that these securities are subsequently determined to be other than temporarily impaired.

At December 31, 2008, the Company's asset-backed securities (ABS) credit card portfolio had a fair value $11,970 less than the carrying amount. The unrealized loss in the ABS credit card sector is primarily a function of decreased liquidity and increased credit spreads in the structured finance and financial institution market. While the credit card ABS portfolios with large subprime segments may be negatively impacted by the slowing domestic economy and housing market, there has been little rating migration of the bonds held by the Company. All of the ABS credit card bonds held by the Company are rated investment grade. The Company's entire credit card portfolio has been stress tested. Results of these stress tests indicate that while downgrades within the portfolio may occur, all of the securities in an unrealized loss position in this portfolio are projecting payment in full. As there has been no impact to expected future cash flows, the Company does not consider the underlying investments to be impaired as of December 31, 2008.

 

28


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

At December 31, 2008, the Company's ABS housing portfolio had a fair value $17,144 less than the carrying amount. ABS Housing securities are secured by pools of residential mortgage loans primarily those which are categorized as sub-prime.

Sub-prime mortgages are loans to homebuyers who have weak or impaired credit histories, are loans that are non-conforming or are loans that are second in priority. The Company does not sell or buy sub-prime mortgages directly. The Company's exposure to sub-prime mortgages is through ABS. These securities are pools of mortgages that have been securitized and offered to investors as asset-backed securities, where the mortgages are collateral. Most of the underlying mortgages within the pool have FICO scores below 660 at issuance. Therefore, the ABS has been classified by the Company as a sub-prime mortgage position. Also included in the Company's total sub-prime mortgage position are ABS with second lien mortgages as collateral. The second lien mortgages may not necessarily have sub-prime FICO scores; however, the Company has included these ABS in its sub-prime position as it-s the second priority in terms of repayment. The Company does not have any -direct- residential mortgages to sub-prime borrowers outside of the ABS structures.

All ABS-housing securities are monitored and reviewed on a monthly basis with detailed cash flow models using the current collateral pool and capital structure on each portfolio quarterly. Model output is generated under base and several stress-case scenarios. ABS-housing asset specialists utilize widely recognized industry modeling software to perform a loan-by-loan, bottom-up approach to modeling. The ABS-housing models incorporate external estimates on property valuations, borrower characteristics, propensity of a borrower to default or prepay and the overall security structure. Defaults were estimated by identifying the loans that are in various delinquency buckets and defaulting a certain percentage of them over the near-term and long-term. Recent payment history, a percentage of on-going delinquency rates and a constant prepayment rate are also incorporated into the model. Once the entire pool is modeled, the results are closely analyzed by the asset specialist to determine whether or not our particular tranche or holding is at risk for payment interruption. Holdings are impaired to projected cash flows where loss events have taken place (or are projected to take place on structured securities) that would affect future cash flows on our particular tranche.

Sub-prime holdings fair values have declined as the collateral pools have experienced higher than expected delinquencies and losses, further exacerbated by the impact of declining home values on borrowers using affordability products. Further impacting the unrealized losses is spread widening due to illiquidity as well as increased extension risk due to slower than expected prepayments. Despite the continued decline in the margin of safety on these securities during 2008, cash flow models indicate full recovery of principal and interest for each of the Company's particular holdings in an unrealized loss position.

 

29


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

For ABS in an unrealized loss position, the Company considers them for impairment when there has been an adverse change in estimated cash flows from the cash flows previously projected at purchase, which is in accordance with SSAP 43, Loan-backed and Structured Securities. The Company did not impair any of its sub-prime mortgage positions in 2008 or 2007.

The actual cost, carrying amount and fair value of the Company's sub-prime mortgage-backed ABS holdings at December 31, 2008 are $66,543, $66,514 and $49,487, respectively. As the remaining unrealized losses in the ABS housing portfolio relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be impaired as of December 31, 2008.

At December 31, 2008, the Company's commercial mortgage-backed securities (CMBS) portfolio had a fair value $23,321 less than the carrying amount. CMBS are securitizations of underlying pools of mortgages on commercial real estate. The underlying mortgages have varying risk characteristics and are pooled together and sold in different rated tranches. The Company's CMBS includes conduit and single borrower mortgages.

All CMBS securities are monitored and modeled under base and several stress-case scenarios by asset specialists. For conduit securities, a widely recognized industry modeling software is used to perform a loan-by-loan, bottom-up approach. For non-conduit securities a CMBS asset specialist works closely with the Company's real estate valuation group to determine underlying asset valuation and risk. Both methodologies incorporate external estimates on the property market, capital markets, property cash flows, and loan structure. Results are then closely analyzed by the asset specialist to determine whether or not a principal or interest loss is expected to occur. If cash flow models indicate a credit event will impact future cash flows, the security is impaired to undiscounted cash flows.

All of the securities in an unrealized loss position are rated investment grade. As the remaining unrealized losses in the CMBS portfolio relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be impaired as of December 31, 2008.

 

30


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

The estimated fair values of bonds and preferred stocks with gross unrealized losses at December 31, 2008 and 2007 are as follows:

 

     Losses 12
Months or
More		    Losses Less
Than 12
Months		    Total
December 31, 2008         

Unaffiliated bonds:

         

United States Government and agencies

    $ 5    $ -      $ 5

State, municipal and other government

      1,240      2,200      3,440

Public utilities

      -        8,318      8,318

Industrial and miscellaneous

      40,345      110,783      151,128

Mortgage and other asset-backed securities

      102,536      63,506      166,042
                    
     144,126      184,807      328,933

Unaffiliated preferred stocks

      2,811      769      3,580
                    
   $ 146,937    $ 185,576    $ 332,513
                    
     Losses 12
Months or
More		    Losses Less
Than 12
Months		    Total

December 31, 2007

         

Unaffiliated bonds:

         

United States Government and agencies

    $ -      $ 823    $ 823

State, municipal and other government

      -        1,851      1,851

Public utilities

      4,963      -        4,963

Industrial and miscellaneous

      61,784      48,785      110,569

Mortgage and other asset-backed securities

      106,518      121,865      228,383
                    
     173,265      173,324      346,589

Unaffiliated preferred stocks

      3,207      477      3,684
                    
   $ 176,472    $ 173,801    $ 350,273
                    


 

31


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

The carrying amount and fair value of bonds at December 31, 2008, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

 

     Carrying
Value		    Estimated
Fair
Value

Due in one year or less

    $ 24,550    $ 24,569

Due after one year through five years

      142,410      131,768

Due after five years through ten years

      50,012      43,033

Due after ten years

      107,724      135,890
             
     324,696      335,260

Mortgage and other asset-backed securities

      295,037      227,890
             
   $ 619,733    $ 563,150
             


A detail of net investment income is presented below:

 

     Year Ended December 31  
     2008     2007     2006  

Income:

       

Bonds

    $ 36,265     $ 32,953     $ 32,693  

Preferred stocks

      258       264       421  

Common stocks of affiliated entities

      8,085       6,160       10,010  

Mortgage loans on real estate

      1,705       1,501       1,183  

Real estate

      4,562       7,243       7,400  

Policy loans

      23,746       22,127       18,870  

Cash, cash equivalents and short-term investments

      4,194       9,852       -    

Other invested assets

      (2,677 )     (2,995 )     -    

Other

      2,534       492       2,279  
                        

Gross investment income

      78,672       77,597       72,856  

Less investment expenses

      (7,049 )     (8,765 )     (8,747 )
                        

Net investment income

    $ 71,623     $ 68,832     $ 64,109  
                        


Investment expenses include expenses for the occupancy of company-owned property of $3,949, $3,759 and $3,668 during 2008, 2007 and 2006, respectively, as well as depreciation expense on these properties of $890, $890 and $887, respectively.

 

32


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

Proceeds from sales of debt securities and related gross realized gains and losses were as follows:

 

     Year Ended December 31  
     2008     2007     2006  

Proceeds

    $ 308,079     $ 372,675     $ 510,357  
                        

Gross realized gains

    $ 35,518     $ 2,154     $ 1,685  

Gross realized losses

      (7,238 )     (2,426 )     (4,689 )
                        

Net realized capital gains (losses)

    $ 28,280     $ (272 )   $ (3,004 )
                        


The Company had gross realized losses of $4,739 in 2008 which relate to losses recognized on other than temporary declines in fair values of bonds. The Company did not have gross realized losses in 2007 or 2006 related to losses recognized on other than temporary declines in fair values of bonds.

At December 31, 2008, bonds with an aggregate carrying value of $3,823 were on deposit with certain state regulatory authorities or were restrictively held in bank custodial accounts for benefit of such state regulatory authorities, as required by statute.

Net realized capital gains (losses) on investments and change in unrealized capital gains and losses are summarized below:

 

     Realized  
     Year Ended December 31  
     2008     2007     2006  

Bonds

    $ 23,541     $ (272 )   $ (3,004 )

Common stocks

      -         -         (20 )

Cash, cash equivalents, and short-term investments

      (1,508 )     (1,230 )     -    

Derivatives

      9,756       (2,240 )     (858 )

Other invested assets

      1       (164 )     952  
                        
     31,790       (3,906 )     (2,930 )

Federal income tax effect

      (12,066 )     1,106       1,040  

Transfer to (from) interest maintenance reserve

      (19,356 )     177       2,235  
                        

Net realized capital gains (losses) on investments

    $ 368     $ (2,623 )   $ 345  
                        


 

33


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

     Change in Unrealized  
     Year Ended December 31  
     2008     2007    2006  

Bonds

    $ (2,070 )   $ -      $ -    

Common stocks

      932       638      (43,656 )
                       

Change in unrealized capital gains (losses)

    $ (1,138 )   $ 638    $ (43,656 )
                       


Gross unrealized gains (losses) on common stocks of affiliated entities were as follows:

 

     December 31  
     2008     2007  

Unrealized gains

    $ 7,228     $ 6,212  

Unrealized losses

      (2,559 )     (2,475 )
                

Net unrealized gains

    $ 4,669     $ 3,737  
                


During 2008 and 2007, the Company did not issue any mortgage loans.

During 2008, 2007 and 2006, no mortgage loans were foreclosed and transferred to real estate. At December 31, 2008, 2007 and 2006, the Company held a mortgage loan loss reserve in the asset valuation reserve of $61, $233 and $243, respectively.

At December 31, 2008, the Company had three LIHTC. The remaining years of unexpired tax credits ranged from three to nine and none of the properties were subject to regulatory review. The length of time remaining for holding periods ranged from seven to thirteen years. The amount of contingent equity commitments expected to be paid during the years 2009 to 2013 is $1,491. There were no impairment losses, write-downs or reclassifications during 2008 related to these credits.

At December 31, 2007, the Company had three LIHTC. The remaining years of unexpired tax credits ranged from four to ten and none of the properties were subject to regulatory review. The length of time remaining for holding periods ranged from eight to fourteen years. The amount of contingent equity commitments expected to be paid during the years 2008 to 2012 is $2,053. There were no impairment losses, write-downs, or reclassifications during 2007 related to any of these credits.

The Company issues products providing the customer a return based on the S&P 500 index. The Company uses S&P 500 index futures contracts to hedge the liability risk associated with these products.

 

34


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

5. Investments (continued)

 

Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges, consequently, when the value of the derivative changes, the value of a corresponding hedged asset or liability will move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.

Under exchange traded futures and options, the Company agrees to purchase a specified number of contracts with other parties and to post a variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The parties with whom the Company enters into exchange traded futures and options are regulated futures commissions merchants who are members of a trading exchange. The Company recognized net realized gains (losses) from futures contracts in the amount of $9,756, $(2,240) and $(858) for the years ended December 31, 2008, 2007 and 2006, respectively.

6. Reinsurance

The Company reinsures portions of certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligations under the reinsurance treaty.

Premiums earned reflect the following reinsurance ceded amounts for the year ended December 31:

 

     Year Ended December 31  
     2008     2007     2006  

Direct premiums

    $ 990,717     $ 1,084,449     $ 1,229,963  

Reinsurance assumed-affiliated

      3,730       3,853       2,382  

Reinsurance ceded-affiliated

      (170,903 )     (48,572 )     (43,611 )

Reinsurance ceded-non-affiliated

      (34,702 )     (25,946 )     (21,609 )
                        

Net premiums earned

    $ 788,842     $ 1,013,784     $ 1,167,125  
                        


 

35


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

6. Reinsurance (continued)

 

The Company received reinsurance recoveries in the amount of $40,858, $37,977 and $34,248 during 2008, 2007 and 2006, respectively. At December 31, 2008 and 2007, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $19,752 and $14,863, respectively. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2008 and 2007 of $266,137 and $112,489, respectively. As of December 31, 2008 and 2007, the amount of reserve credits for reinsurance ceded that represented unauthorized affiliated companies were $224,853 and $75,817, respectively.

The net amount of the reduction in surplus at December 31, 2008 if all reinsurance agreements were cancelled is $8,307.

The Company has entered into an indemnity reinsurance agreement effective December 31, 2008, with Transamerica International Re (Bermuda) Ltd, an affiliate of the Company, to cede on a 100% quota share basis the net liabilities associated with certain of the Company's variable annuity products on a coinsurance and modified coinsurance basis. The Company ceded reserves on a coinsurance basis of $133,875, received consideration of $12,780 and established a funds withheld liability of $121,095. The pretax gain of $12,780 ($8,307 on a net of tax basis) has been reclassified to equity in accordance with SSAP 61, Life, Deposit-Type and Accident and Health Reinsurance. The Company ceded general account and separate account reserves on a modified coinsurance basis of $303,642 and $1,703,276, respectively. An initial reinsurance premium equal to the reserves ceded was recorded, resulting in no gain or loss on the modified coinsurance portion on this transaction. At December 31, 2008, the Company holds collateral in the form of letters of credit of $95,000 from the assuming company.

Effective October 1, 2008 the Company recaptured various guaranteed minimum death benefit riders included in certain of its variable annuity contracts that were previously ceded to Transamerica International Re (Bermuda) Ltd., an affiliate, under a 2001 reinsurance agreement. The Company released a funds withheld liability of $14,716 associated with this business and paid recapture consideration of $36,703. Reserves recaptured included $71,423 of GMDB reserves and $1,927 of claim reserves. The resulting pretax loss of $95,337 was included in the Summary of Operations in accordance with SSAP 61. In addition, the unamortized pre-tax ceded gain held by the Company in unassigned surplus resulting from the original reinsurance transaction was released into income in the amount of $5,925 ($3,851 net of tax). Prior to this transaction, the Company had amortized $1,367 and $1,823 on a pre-tax basis ($889 and $1,185 on a net of tax basis) into earnings for 2008 and 2007, respectively, with a corresponding charge to unassigned surplus.

 

36


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

6. Reinsurance (continued)

 

During 2006, the Company entered into a reinsurance agreement with Transamerica International Reinsurance Ireland, Ltd. (TIRI) an affiliate, to retrocede an inforce block of term life business effective January 1, 2006. The difference between the initial commission expense allowance received of $700 and ceded reserves of $332 resulted in an initial transaction gain of $368, which was credited to unassigned surplus on a net of tax basis in the amount of $240, in accordance with SSAP No. 61. For each of the years ended December 31, 2008 and 2007, the Company amortized $24 into earnings with a corresponding charge to unassigned surplus.

During 2007, the Company recaptured the risks related to the universal life business that was previously ceded to TIRI on a funds withheld basis. The Company paid recapture consideration of $525 and received $81 for assets recaptured related to the block. Reserves recaptured included $5,453 in life reserves and $30 in other claim reserves, resulting in a net pre-tax loss of $5,927, which is included in the statement of operations.

Letters of credit held for all unauthorized reinsurers as of December 31, 2008 and 2007 were $131,155 and $79,000, respectively.

 

37


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

7. Income Taxes

The main components of deferred tax amounts are as follows:

 

     December 31
     2008    2007

Deferred income tax assets:

      

Non-admitted assets

    $ 5,587    $ 6,650

Partnerships

      945      3,029

Tax basis deferred acquisition costs

      92,162      93,168

Reserves

      123,431      135,841

Unrealized capital losses

      32      31

-807(f) assets

      163      187

Deferred intercompany losses

      2,800      744

Guaranty funds

      926      926

Credit carryforwards

      -        2,482

Miscellaneous accruals

      4,212      3,814

Other

      2,352      1,938
             

Total deferred income tax assets

      232,610      248,810

Deferred income tax assets non-admitted

      115,396      165,305
             

Admitted deferred income tax assets

      117,214      83,505

Deferred income tax liabilities:

      

Partnerships

      310      -  

Real estate

      27      27

-807(f) liabilities

      39,919      52,151

Unrealized capital gains

      213      243

Deferred intercompany gains

      32      -  

Other

      668      205
             

Total deferred income tax liabilities

      41,169      52,626
             

Net admitted deferred income tax asset

    $ 76,045    $ 30,879
             


 

38


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

7. Income Taxes (continued)

 

The change in net deferred income tax assets is as follows:

 

     December 31       
     2008    2007    Change  

Total deferred income tax assets

    $ 232,610    $ 248,810    $ (16,200 )

Total deferred income tax liabilities

      41,169      52,626      11,457  
                      

Net deferred income tax asset

    $ 191,441    $ 196,184      (4,743 )
                

Tax effect of unrealized gains (losses)

            (2,876 )
              

Change in net deferred income tax

          $ (7,619 )
              
     December 31       
     2007    2006    Change  

Total deferred income tax assets

    $ 248,810    $ 250,068    $ (1,258 )

Total deferred income tax liabilities

      52,626      62,726      10,100  
                      

Net deferred income tax asset

    $ 196,184    $ 187,342      8,842  
                

Tax effect of unrealized gains (losses)

            -    
              

Change in net deferred income tax

          $ 8,842  
              


Non-admitted deferred tax assets increased (decreased) $(49,909), $8,490 and $22,220 for 2008, 2007 and 2006, respectively.

 

39


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

7. Income Taxes (continued)

 

As discussed in Note 2 Prescribed and Permitted Statutory Accounting Practices, the Company, with the permission of the Ohio Superintendent of Insurance, determines the admitted amount of deferred income tax assets pursuant to Ohio Bulletin 2009-04. The following charts outline the effect of this permitted practice on the Company's financial statements:

 

          3 years     1 year     Change  

18 e.

   Gross DTAs at Enacted Tax Rate       $ 232,610        $ 232,610        $ -    
  Admitted Gross DTAs (paragraph 10 a.)    $ 30,723      $ 30,723      $ -     
  Admitted Gross DTAs (paragraph 10 b.)      45,322        -          45,322   
  Admitted Gross DTAs (paragraph 10 c.)      41,169        41,169        -     
                             
  Total Admitted Gross DTAs      117,214      (117,214 )     71,892      (71,892 )     45,322      (45,322 )
                                   
  Nonadmitted Gross DTAs         115,396          160,718          (45,322 )
  Admitted DTA         117,214          71,892          45,322  
  Gross DTL         (41,169 )        (41,169 )        -    
                                   
  Net Admitted DTA       $ 76,045        $ 30,723        $ 45,322  
                                   

18 f.

  

10 a.-Federal Income taxes paid in prior year that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year

  

      $ 30,723  
  10 b.i.-Gross DTAs, after application of 10a. expected to be realized within one year     $ -     
  10 b.ii.-10% of adjusted capital and surplus as shown on most recently filed statement       48,943   
  Lesser of 10 b.i. or 10 b.ii.          -    
  10 c.-Gross DTAs, after 10a. And 10b. That can be offset against gross DTLs          41 ,169  
                       
  Admitted Gross DTAs          71,892  
  Gross DTLs          (41,169 )
                       
  Net Admitted DTAs        $ 30,723  
                       
 

10 d.ii.-If the reporting entity-s financial statements and risk-based capital (RBC) calculated using a DTA as the sum of 10 a., 10 b., 10 c. results in the Company's risk-based capital level being above the maximum risk-based capital level where an action level could occur as a result of a trend test (i.e., 250% for life entities and 300% for property/casualty entities), then the reporting entity may admit a higher amount as calculated in paragraph 10 e.:

     

     
 

Total adjusted capital using a DTA in accordance with 10 a., 10 b., and 10 c.

 

      $ 239,472  
                       
 

Authorized control level

 

        44,224  
                       
 

Total adjusted capital exceeds 250% of authorized control level, therefore DTA in accordance with 10 e. may be admitted.

  

     
 

10 e.i.-Federal Income taxes paid in prior year that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year

  

        30,723  
  10 e.ii. (a)-Gross DTAs, after application of 10 e.i. expected to be realized within three years     $ 45,322   
  10 e.ii. (b)-15% of adjusted capital and surplus as shown on most recently filed statement       73,414   
  Lesser of 10 e.ii. (a) or 10 e.ii. (b)          45,322  
  10 e.iii.-Gross DTAs, after 10 e.i. and 10 e.ii. that can be offset against gross DTLs          41,169  
                       
  Admitted Gross DTAs          117,214  
  Gross DTLs          (41,169 )
                       
  Net Admitted DTAs        $ 76,045  
                       


 

40


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

7. Income Taxes (continued)

 

Federal income tax expense differs from the amount computed by applying the statutory federal income tax rate to gain (loss) from operations before federal income tax expense and net realized capital gains (losses) on investments for the following reasons:

 

     Year Ended December 31  
     2008     2007     2006  

Income tax expense (benefit) on operational gains and capital gains (losses) on investments computed at the federal statutory rate (35%)

    $ (28,823 )   $ 67,317     $ 61,842  

Deferred acquisition costs-tax basis

      (1,023 )     (314 )     327  

Dividends received deduction

      (7,490 )     (8,946 )     (11,099 )

IMR amortization

      155       179       153  

Investment income items

      2,196       97       (375 )

Limited partnership book/tax difference

      156       232       223  

Prior year under accrual

      657       192       1,647  

Reinsurance transactions

      1,240       (423 )     (339 )

Tax credits

      (5,370 )     (3,198 )     (3,167 )

Tax reserve valuation

      (2,895 )     6,380       17,750  

Miscellaneous accruals

      (629 )     1,576       43  

Non-deductible items

      917       91       100  

Depreciation

      (50 )     (56 )     (178 )

LOLI

      (831 )     (887 )     (790 )

Other

      (788 )     (1,383 )     801  
                        

Federal income tax (benefit) expense on operations and capital gains (losses) on investments

      (42,578 )     60,857       66,938  

Less tax expense (benefit) on capital gains (losses)

      12,066       (1,106 )     (1,040 )
                        

Total federal income tax (benefit) expense

    $ (54,644 )   $ 61,963     $ 67,978  
                        


The total statutory income taxes are computed as follows:

 

     Year Ended December 31
     2008     2007    2006

Federal income tax expense on operations and capital gains (losses) on investments

    $ (42,578 )   $ 60,857    $ 66,938

Change in net deferred income taxes

      (7,619 )     8,842      24,874
                     

Total statutory income tax (benefit) expense

    $ (34,959 )   $ 52,015    $ 42,064
                     


 

41


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

7. Income Taxes (continued)

 

For federal income tax purposes, the Company joins in a consolidated income tax return filing with its indirect parent company, Transamerica Corporation, and other affiliated companies. The method of allocation between the companies is subject to a written agreement. Under the terms of the agreement, allocations are based upon separate return calculations. The Company is entitled to recoup federal income taxes paid in the event of future losses and credits to the extent the losses and credits reduce the greater of the Company's separately computed tax liability or the consolidated group-s tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event of future losses and credits to the extent the losses and credits reduce the greater of the Company's separately computed tax liability or the consolidated group-s tax liability in any carryback or carryforward year when so applied. Intercompany tax balances are settled within 30 days of payment to or filing with the Internal Revenue Service.

The Company did not incur income taxes during 2008, which will be available for recoupment in the event of future net losses. The Company incurred income taxes during 2007 and 2006 of $60,165 and $65,214, respectively, which will be available for recoupment in the event of future net losses.

The amount of tax contingencies calculated for the Company as of December 31, 2008 and 2007 is not material to the Company's financial position. Therefore, the total amount of tax contingencies that, if recognized, would affect the effective income tax rate is immaterial. The Company classifies interest and penalties related to income taxes as interest expense and penalty expense, respectively. The Company's interest expense related to income taxes as of December 31, 2008 and 2007 was not material and the Company recorded no liability for penalties.

The Company's federal income tax returns have been examined by the Internal Revenue Service and closing agreements have been executed through 2000. The examination for the years 2001 through 2004 has been completed and resulted in tax return adjustments that are currently being appealed. The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions. An examination is currently underway for 2005 and 2006. The 2007 tax return has been filed but no examination has commenced.

 

42


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

8. Policy and Contract Attributes

A portion of the Company's policy reserves and other policyholders- funds relate to liabilities established on a variety of the Company's products, primarily separate accounts that are not subject to significant mortality or morbidity risk; however, there may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on these products, by withdrawal characteristics, is summarized as follows:

 

     December 31  
     2008     2007  
     Amount    Percent     Amount    Percent  

Subject to discretionary withdrawal with adjustment:

           

With market value adjustment

    $ 32,391    1 %   $ 20,695    0 %

At book value less surrender charge of 5% or more

      69,724    1       81,307    1  

At fair value

      3,696,287    83       6,164,883    91  
                          

Total with adjustment or at market value

      3,798,402    85       6,266,885    92  

At book value without adjustment (minimal or no charge or adjustment)

      428,383    10       431,030    6  

Not subject to discretionary withdrawal

      235,131    5       92,330    2  
                          

Total annuity reserves and deposit liabilities

      4,461,916    100 %     6,790,245    100 %
                  

Less reinsurance ceded

      165,616        35,260   
                  

Net annuity reserves and deposit liabilities

    $ 4,296,300      $ 6,754,985   
                  


 

43


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

8. Policy and Contract Attributes (continued)

 

Information regarding the separate accounts of the Company is as follows:

 

     Guaranteed
Indexed		    Nonindexed
Guaranteed
Less Than 4%		    Nonindexed
Guaranteed
More
Than 4%		    Nonguaranteed
Separate
Accounts		    Total

Premiums, deposits and other considerations for the year ended December 31, 2008

    $ -      $ -      $ -      $ 731,603    $ 731,603
                                  

Reserves for accounts with assets at fair value at December 31, 2008

    $ -      $ -      $ -      $ 5,556,306    $ 5,556,306
                                  

Reserves for separate accounts by withdrawal characteristics at December 31, 2008:

               

Subject to discretionary withdrawal:

               

With market value adjustment

    $ -      $ -      $ -      $ -      $ -  

At book value without market value adjustment and with current surrender charge of 5% or more

      -        -        -        -        -  

At fair value

      -        -        -        5,556,306      5,556,306

At book value without market value adjustment and with current surrender charge of less than 5%

      -        -        -        -        -  
                                  

Subtotal

      -        -        -        5,556,306      5,556,306

Not subject to discretionary withdrawal

      -        -        -        -        -  
                                  

Total separate account liabilities at December 31, 2008

    $ -      $ -      $ -      $ 5,556,306    $ 5,556,306
                                  


 

44


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

8. Policy and Contract Attributes (continued)

 

 

     Guaranteed
Indexed		    Nonindexed
Guaranteed
Less Than 4%		    Nonindexed
Guaranteed
More
Than 4%		    Nonguaranteed
Separate
Accounts		    Total

Premiums, deposits and other considerations for the year ended December 31, 2007

    $ -      $ -      $ -      $ 909,554    $ 909,554
                                  

Reserves for accounts with assets at fair value at December 31, 2007

    $ -      $ -      $ -      $ 9,485,165    $ 9,485,165
                                  

Reserves for separate accounts by withdrawal characteristics at December 31, 2007:

               

Subject to discretionary withdrawal:

               

With market value adjustment

    $ -      $ -      $ -      $ -      $ -  

At book value without market value adjustment and with current surrender charge of 5% or more

      -        -        -        -        -  

At fair value

      -        -        -        9,485,165      9,485,165

At book value without market value adjustment and with current surrender charge of less than 5%

      -        -        -        -        -  
                                  

Subtotal

      -        -        -        9,485,165      9,485,165

Not subject to discretionary withdrawal

      -        -        -        -        -  
                                  

Total separate account liabilities at December 31, 2007

    $ -      $ -      $ -      $ 9,485,165    $ 9,485,165
                                  


 

45


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

8. Policy and Contract Attributes (continued)

 

A reconciliation of the amounts transferred to and from the separate accounts is presented below:

 

     Year Ended December 31  
     2008     2007     2006  

Transfer as reported in the summary of operations of the separate accounts statement:

       

Transfers to separate accounts

    $ 732,493     $ 910,067     $ 1,092,584  

Transfers from separate accounts

      1,274,005       1,484,712       1,758,650  
                        

Net transfers from separate accounts

      (541,512 )     (574,645 )     (666,066 )

Other reconciling adjustments

      1,238       (1,399 )     215  
                        

Net transfers as reported in the summary of operations of the Company

    $ (540,274 )   $ (576,044 )   $ (665,851 )
                        


At December 31, 2008 and 2007, the Company had variable annuities with guaranteed living benefits as follows:

 

Year

   

Benefit and Type of Risk

    Subjected
Account
Value		    Amount of
Reserve Held		    Reinsurance
Reserve
Credit

2008

    Guaranteed Minimum Income Benefit    $ 990,339    $ 104,921    $ 97,859

2007

    Guaranteed Minimum Income Benefit    $ 1,633,606    $ 28,980    $ 4,250


For Variable Annuities with Guaranteed Living Benefits (VAGLB), the Company complies with Actuarial Guideline 39. This guideline defines a two step process for the determination of VAGLB reserves. The first step is to establish a reserve equal to the accumulated VAGLB charges for the policies in question. The second step requires a standalone asset adequacy analysis to determine the sufficiency of these reserves. This step has been satisfied by projecting 30 years into the future along 1000 stochastic variable return paths using a variety of assumptions as to VAGLB charges, lapse, withdrawal, annuitization and death. The results of this analysis are discounted back to the valuation date and compared to the accumulation of fees reserve to determine if an additional reserve needs to be established.

At December 31, 2008 and 2007, the Company had variable annuities with guaranteed death benefits as follows:

 

Year

   

Benefit and Type of Risk

    Subjected
Account
Value		    Amount of
Reserve Held		    Reinsurance
Reserve
Credit

2008

    Guaranteed Minimum Death Benefit    $ 3,074,498    $ 193,360    $ 157,384

2007

    Guaranteed Minimum Death Benefit    $ 6,291,420    $ 73,072    $ 35,260


 

46


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

8. Policy and Contract Attributes (continued)

 

For Variable Annuities with Minimum Guaranteed Death Benefits (MGDB), the Company complies with Actuarial Guideline 34. This guideline requires that MGDBs be projected by assuming an immediate drop in the values of the assets supporting the variable annuity contract, followed by a subsequent recovery at a net assumed return until the maturity of the contract. The immediate drop percentages and gross assumed returns vary by asset class and are defined in the guideline. Mortality is based on the 1994 Variable Annuity MGDB Mortality Table, which is also defined in the guideline.

Reserves on the Company's traditional life insurance products are computed using mean reserving methodologies. These methodologies result in the establishment of assets for the amount of the net valuation premiums that are anticipated to be received between the policy-s paid-through date to the policy-s next anniversary date. At December 31, 2008 and 2007, these assets (which are reported as premiums deferred and uncollected) and the amounts of the related gross premiums and loading, are as follows:

 

     Gross    Loading     Net

December 31, 2008

        

Ordinary direct renewal business

    $ 2,796    $ 1,625     $ 4,421

Ordinary new business

      9      1       10
                     
   $ 2,805    $ 1,626     $ 4,431
                     

December 31, 2007

        

Ordinary direct renewal business

    $ 3,046    $ 1,813     $ 4,859

Ordinary new business

      262      (151 )     111
                     
   $ 3,308    $ 1,662     $ 4,970
                     


At December 31, 2008 and 2007, the Company had insurance in force aggregating $3,644,366 and $2,170,424 respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the Ohio Department of Insurance. The Company established policy reserves of $22,357 and $15,281 to cover these deficiencies at December 31, 2008 and 2007, respectively.

The Company anticipates investment income as a factor in the premium deficiency calculation, in accordance with SSAP No. 54, Individual and Group Accident and Health Contracts.

 

47


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

9. Capital and Surplus

The Company is subject to limitations, imposed by the State of Ohio, on the payment of dividends to its parent company, AEGON. Generally, dividends during any twelve month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of statutory surplus as of the preceding December 31, or (b) net income for the preceding year. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2009, without the prior approval of insurance regulatory authorities, is $23,477.

On December 29, 2008 the Company paid a $200,000 common stock dividend to its parent company. Of this amount, $131,600 was considered an ordinary cash dividend and $68,400 was considered an extraordinary dividend. The Company received approval from the Ohio Department of Insurance to make the dividend payment. The Company paid ordinary common stock dividends of $110,000 and $2,000 to its parent on December 19, 2007 and September 8, 2006, respectively.

Life/health insurance companies are subject to certain Risk-Based Capital (RBC) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life/health insurance company is to be determined based on the various risk factors related to it. At December 31, 2008, the Company meets the RBC requirements.

10. Retirement and Compensation Plans

The Company's employees participate in a qualified benefit plan sponsored by AEGON. The Company has no legal obligation for the plan. The Company recognizes pension expense equal to its allocation from AEGON. The pension expense is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits as a percent of salaries. The benefits are based on years of service and the employee-s compensation during the highest five consecutive years of employment. Pension expense allocated to the Company aggregated $1,444, $1,829 and $1,432 for 2008, 2007 and 2006, respectively. The plan is subject to the reporting and disclosure requirements of the Employee Retirement and Income Security Act of 1974.

 

48


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

10. Retirement and Compensation Plans (continued)

 

The Company's employees also participate in a contributory defined contribution plan sponsored by AEGON which is qualified under Section 401(k) of the Internal Revenue Service Code. Employees of the Company who customarily work at least 1,000 hours during each calendar year and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to twenty-five percent of their salary to the plan. The Company will match an amount up to three percent of the participant-s salary. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement and Income Security Act of 1974. Expense related to this plan was $793, $905 and $864 for 2008, 2007 and 2006, respectively.

AEGON sponsors supplemental retirement plans to provide the Company's senior management with benefits in excess of normal pension benefits. The plans are noncontributory and benefits are based on years of service and the employee-s compensation level. The plans are unfunded and nonqualified under the Internal Revenue Code. In addition, AEGON has established incentive deferred compensation plans for certain key employees of the Company. The Company's allocation of expense for these plans for 2008, 2007 and 2006 was insignificant. AEGON also sponsors an employee stock option plan/stock appreciation rights for employees of the Company and a stock purchase plan for its producers, with the participating affiliated companies establishing their own eligibility criteria, producer contribution limits and company matching formula. These plans have been funded as deemed appropriate by management of AEGON and the Company.

In addition to pension benefits, the Company participates in plans sponsored by AEGON that provide postretirement medical, dental and life insurance benefits to employees meeting certain eligibility requirements. Portions of the medical and dental plans are contributory. The postretirement expenses are charged to affiliates in accordance with an intercompany cost sharing arrangement. The Company expensed $143, $179 and $147 for 2008, 2007 and 2006, respectively.

11. Related Party Transactions

The Company shares certain officers, employees and general expenses with affiliated companies.

 

49


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

11. Related Party Transactions (continued)

 

The Company is party to a Cost Sharing agreement between AEGON companies, providing for services needed. The Company is also party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors, Inc. whereby the Advisor serves as the administrator and advisor for the Company's mortgage loan operations by administering the day-to-day real estate and mortgage loan operations of the Company. AEGON USA Investment Management, LLC acts as a discretionary investment manager under an Investment Management Agreement with the Company. During 2008, 2007 and 2006, the Company paid $95,980, $106,392 and $94,305, respectively, for such services, which approximates their costs to the affiliates. During 2006, the Company executed an administration service agreement with Transamerica Fund Advisors, Inc. to provide administrative services to the AEGON/Transamerica Series Trust. The Company received $30,230, $38,629 and $36,528 from this agreement during 2008, 2007 and 2006, respectively. The Company provides office space, marketing and administrative services to certain affiliates. During 2008, 2007 and 2006, the Company received $95,867, $100,815 and $91,726, respectively, for such services, which approximates their cost.

Receivables from and payables to affiliates and intercompany borrowings bear interest at the thirty-day commercial paper rate. At December 31, 2008, 2007 and 2006, the Company has a net amount of $(16,350), $21,887 and $9,683, respectively, due (from) to affiliates. Terms of settlement require that these amounts are settled within 90 days. During 2008, 2007 and 2006, the Company paid net interest of $924, $1,954 and $1,599, respectively, to affiliates.

At December 31, 2008, the Company did not hold any short-term notes receivable.

In prior years, the Company purchased life insurance policies covering the lives of certain employees of the Company from an affiliate. At December 31, 2008 and 2007, the cash surrender value of these policies was $66,323 and $63,948, respectively.

12. Commitments and Contingencies

The Company is a party to legal proceedings involving a variety of issues incidental to its business. Lawsuits may be brought in nearly any federal or state court in the United States or in an arbitral forum. In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Company's legal proceedings are subject to many variables, and given its complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes include substantial demands for compensatory and punitive damages, and injunctive relief, it is management-s opinion that damages arising from such demands will not be material to the Company's financial position or results of operations.

 

50


Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

12. Commitments and Contingencies (continued)

 

The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company except where right of offset against other taxes paid is allowed by law; amounts available for future offsets are recorded as an asset on the Company's balance sheet. The future obligation has been based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Association. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for financial reporting purposes. The Company has established a reserve of $3,337 and $3,344 with no offsetting premium tax benefit at December 31, 2008 and 2007, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund expense (credit) was $36, $(22) and $36 for 2008, 2007 and 2006, respectively.

The Company participates in an agent-managed securities lending program. The Company receives collateral equal to 102% of the fair market value of the loaned government/other domestic securities, respectively, as of the transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government/other domestic securities, respectively. In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair market value of the loaned security.

At December 31, 2007, securities in the amount of $158,452 were on loan under securities lending agreements. At December 31, 2007 the collateral the Company received from securities lending was in the form of cash. At December 31, 2008, there were no securities on loan under securities lending agreements.

The Company has contingent commitments of $1,491 and $2,053 as of December 31, 2008 and 2007, respectively, for LIHTC investments.

The Company is required by the Commodity Futures Trading Commission (CFTC) to maintain assets on deposit with brokers for futures trading activity done on behalf of the Company. The broker has a secured interest with priority in the pledged assets, however, the Company has the right to recall and substitute the pledged assets. At December 31, 2008 and 2007 respectively, the Company pledged assets in the amount of $36,127 and $6,449 to satisfy the requirements of futures trading accounts.

 

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Western Reserve Life Assurance Co. of Ohio

Notes to Financial Statements - Statutory Basis (continued)

(Dollars in Thousands)

 

13. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities

During the period January 1, 2006 through June 30, 2006, the Company sold $32,428 of agent balances without recourse to ADB Corporation, LLC, an affiliated entity. The Company did not realize a gain or loss as a result of the sales. As of July 1, 2006, the Company no longer sells agent debit balances and thus has retained such balances as non-admitted receivables. Agent receivables in the amount of $15,409, $18,673 and $20,261 were non-admitted as of December 31, 2008, 2007 and 2006, respectively.

 

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Statutory-Basis Financial

Statement Schedules

Western Reserve Life Assurance Co. of Ohio

Summary of Investments - Other Than

Investments in Related Parties

(Dollars in Thousands)

December 31, 2008

Schedule I

 

Type of Investment

    Cost (1)    Fair
Value		    Amount at
Which Shown
in the
Balance Sheet

Fixed maturities

         

Bonds:

         

United States government and government agencies and authorities

    $ 97,307    $ 128,246    $ 97,307

States, municipalities and political subdivisions

      54,143      55,007      54,143

Foreign governments

      3,652      2,754      3,652

Public utilities

      10,493      10,367      10,493

All other corporate bonds

      454,138      366,776      454,138

Preferred stocks

      4,545      3,580      4,545
                    

Total fixed maturities

      624,278      566,730      624,278

Mortgage loans on real estate

      12,754         12,754

Real estate

      37,806         37,806

Policy loans

      411,020         411,020

Cash, cash equivalents and short-term investments

      279,506         279,506

Other invested assets

      8,351         8,351
                

Total investments

    $ 1,373,715       $ 1,373,715
                


(1) Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accruals of discounts.


 

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Western Reserve Life Assurance Co. of Ohio

Supplementary Insurance Information

(Dollars in Thousands)

Schedule III

 

     Future Policy
Benefits and
Expenses		    Policy and
Contract
Liabilities		    Premium
Revenue		    Net
Investment
Income*		    Benefits,
Claims,
Losses and
Settlement
Expenses		    Other
Operating
Expenses*		  

Year ended December 31, 2008

                  

Individual life

    $ 1,097,394      20,196    $ 574,634    $ 45,656    $ 370,010    $ 237,806  

Group life

      16,261      101      375      667      1,473      365  

Annuity

      621,785      2,183      213,833      25,300      968,935      1,519,611  
                                           
   $ 1,735,440    $ 22,480    $ 788,842    $ 71,623    $ 1,340,418    $ 1,757,782  
                                           
Year ended December 31, 2007                  

Individual life

    $ 1,040,192      14,956    $ 583,844    $ 42,731    $ 304,367    $ 241,395  

Group life

      15,550      100      46      646      915      53  

Annuity

      596,029      317      429,894      25,455      1,055,682      (510,040 )
                                           
   $ 1,651,771    $ 15,373    $ 1,013,784    $ 68,832    $ 1,360,964    $ (268,592 )
                                           
Year ended December 31, 2006                  

Individual life

    $ 971,044      12,448    $ 582,703    $ 33,573    $ 727,802    $ (178,400 )

Group life

      15,361      198      233      694      445      55  

Annuity

      636,572      238      584,189      29,842      892,153      (200,887 )
                                           
   $ 1,622,977    $ 12,884    $ 1,167,125    $ 64,109    $ 1,620,400    $ (379,232 )
                                           


* Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied.


 

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Western Reserve Life Assurance Co. of Ohio

Reinsurance

(Dollars in Thousands)

Schedule IV

 

     Gross
Amount		    Ceded to
Other
Companies		    Assumed
From
Other
Companies		    Net
Amount		    Percentage
of Amount
Assumed
to Net		  

Year ended December 31, 2008

               

Life insurance in force

    $ 102,486,516    $ 54,034,032    $ 16,447,344    $ 64,899,828    25 %
                                  

Premiums:

               

Individual life

    $ 648,362    $ 77,458    $ 3,730    $ 574,634    1 %

Group life

      5,033      4,658      -        375    0 %

Annuity

      337,322      123,489      -        213,833    0 %
                                  
   $ 990,717    $ 205,605    $ 3,730    $ 788,842    0 %
                                  

Year ended December 31, 2007

               

Life insurance in force

    $ 99,363,588    $ 48,566,371    $ 17,211,679    $ 68,008,896    25 %
                                  

Premiums:

               

Individual life

    $ 646,758    $ 66,766    $ 3,853    $ 583,845    1 %

Group life

      586      540      -        46    0 %

Annuity

      437,105      7,212      -        429,893    0 %
                                  
   $ 1,084,449    $ 74,518    $ 3,853    $ 1,013,784    1 %
                                  

Year ended December 31, 2006

               

Life insurance in force

    $ 90,434,049    $ 40,136,640    $ 17,246,515    $ 67,543,924    26 %
                                  

Premiums:

               

Individual life

    $ 637,660    $ 57,339    $ 2,382    $ 582,703    0 %

Group life

      725      492      -        233    0 %

Annuity

      591,578      7,389      -        584,189    0 %
                                  
   $ 1,229,963    $ 65,220    $ 2,382    $ 1,167,125    0 %
                                  


 

55