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American National Variable Annuity Separate Account, et al. – ‘485BPOS’ on 5/1/02

On:  Wednesday, 5/1/02   ·   Effective:  5/1/02   ·   Accession #:  899732-2-13   ·   File #s:  333-33856, 811-07600

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  As Of                Filer                Filing    For·On·As Docs:Size

 5/01/02  American Nat’l Var Annuity … Acct 485BPOS     5/01/02    5:446K
          American National Variable Annuity Separate Account

Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Wealthquest Iii Group Unallocated Vul                135    854K 
 2: EX-9        Counsel Consent                                        2      8K 
 4: EX-10       Andersen Auditor Consent                               1      5K 
 3: EX-10       Kpmg Auditor Consent                                   1      5K 
 5: EX-14       Actuary Consent                                        9     29K 


485BPOS   —   Wealthquest Iii Group Unallocated Vul
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
3Table of Contents
5Glossary
"Alger American Fund
"Mfs Fund
"T. Rowe Price Funds
6Introduction
"What is the Purpose of the Contract?
"What are the Investment Options?
"How Do I Purchase a Contract?
7Can I Transfer Amounts Between the Investment Alternatives?
"Can I Make Withdrawals?
"Is an Annuity Available?
"What are the Charges and Deductions Under the Contract?
8What are the Tax Consequences Associated with the Contract?
"If I Have Questions, Where Can I Go?
9Contract Owner Transaction Expenses
"Surrender Charge
"Separate Account Annual Expenses
"Portfolio Company Annual Expenses
10Examples
13Accumulation Unit Values
14Contract
"Type of Contract
"Contract Application and Purchase Payments
"Allocation of Purchase Payments
"Crediting of Accumulation Units
15Determining Accumulation Unit Values
"Transfers
16Charges and Deductions
"Other Charges
17Distributions Under the Contract
"Withdrawals
"Termination of Contract
18Annuity Payments
"Annuity Options
"Annuity Provisions
19The Separate Account
20The Funds
24Changes in Investment Options
25Federal Tax Matters
"Taxation of Annuities in General
"Qualified Contracts
27Performance
"Distributor of the Contract
28Legal Matters
"Legal Proceedings
"Experts
"Additional Information
29Financial Statements
30Table of Contents of Statement of Additional Information
33The Contract
"Assignment
"Distribution of the Contract
"Tax Matters
"Records and Reports
35Total Return
"Other Total Return
"Yields
36State Law Differences
37Separate Account
42The INVESCO Funds
93Investments
99Bonds
101Mortgage loans
123Items 24. Financial Statements and Exhibits
125Item 25. Directors and Officers of the Depositor
"Directors
129Item 26. Persons Controlled by or Under Common Control with Depositor of Registrant
"Item 27. Number of Contractowners
130Item 28. Indemnification
"Item 29. Principal Underwriters
132Item 30. Location of Accounts and Records
"Item 31. Management Services
"Item 32. Undertakings
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1933 Act Registration Number 333-33856 1940 Act Registration Number 811-07600 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Post-effective Amendment Number 2 and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment Number 28 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT (Exact Name of Registrant) AMERICAN NATIONAL INSURANCE COMPANY (Exact Name of Depositor) One Moody Plaza Galveston, Texas 77550 (Address of Depositor's Principal Executive Offices) (409) 763-4661 (Depositor's Telephone Number, including Area Code) Rex Hemme Jerry L. Adams Vice President, Actuary Greer, Herz & Adams, L.L.P. American National Insurance Company With copy to: One Moody Plaza One Moody Plaza Galveston, Texas 77550 Galveston, Texas 77550 (Name and Address of Agent for Service) Declaration Required by Rule 24f-2(a)(1): An indefinite number of securities of the Registrant has been registered under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940. Notice required by Rule 24f-2(b)(1) has been filed in the Office of the Securities and Exchange Commission on March 30, 2002 for the Registrant's fiscal year ending December 31, 2001. It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) of Rule 485 [x] on May 1, 2002 pursuant to paragraph (b) of Rule 485 [ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485 [ ] on (date) pursuant to paragraph (a)(i) of Rule 485 [ ] 75 days after filing pursuant to paragraph (a)(ii) of rule 485 [ ] on (date) pursuant to paragraph (a)(ii) of rule 485 If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment Title of Securities Being Registered: Variable Annuity Contracts
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GROUP UNALLOCATED VARIABLE ANNUITY CONTRACT ISSUED BY AMERICAN NATIONAL INSURANCE COMPANY HOME OFFICE ONE MOODY PLAZA GALVESTON TX 77550-7999 PROSPECTUS MAY 1, 2002 1-800-306-2959 This prospectus describes a group unallocated variable annuity contract being offered to corporate and non-corporate pension plans. You can allocate contract value to American National Variable Annuity Separate Account, which reflects the investment performance of the following eligible portfolios selected by you. At this time, you can allocate your contract value to the following portfolios: AMERICAN NATIONAL FUND . Growth Portfolio . Equity Income Portfolio . Balanced Portfolio . Money Market Portfolio . High Yield Bond Portfolio . International Stock Portfolio . Small-Cap/Mid-Cap Portfolio . Government Bond Portfolio FIDELITY FUNDS . Mid Cap Portfolio . Index 500 Portfolio . Contrafund Portfolio . Aggressive Growth Portfolio . Growth Opportunities Portfolio T. ROWE PRICE FUNDS . Equity Income Portfolio . Mid-Cap Growth Portfolio . International Stock Portfolio . Limited-Term Bond Portfolio MFS FUND . Capital Opportunities Portfolio . Emerging Growth Portfolio . Research Portfolio . Investors Trust Portfolio FEDERATED FUND . Utility Fund II Portfolio . Growth Strategies Portfolio . International Small Company Fund II Portfolio . High Income Bond Portfolio . Equity Income Fund II Portfolio ALGER AMERICAN FUND . Small Capitalization Portfolio . Growth Portfolio . MidCap Growth Portfolio . Leveraged AllCap Portfolio . Income & Growth Portfolio . Balanced Portfolio INVESCO VIF FUNDS . Health Sciences Fund . Small Company Growth Fund . Telecommunications Fund . Utilities Fund . Dynamics Fund . Real Estate Opportunity Fund . Financial Services Fund . Technology Fund THIS PROSPECTUS CONTAINS INFORMATION THAT YOU SHOULD KNOW BEFORE PURCHASING A CONTRACT AND SHOULD BE KEPT FOR FUTURE REFERENCE. ADDITIONAL INFORMATION ABOUT THE CONTRACT IS CONTAINED IN A STATEMENT OF ADDITIONAL INFORMATION ("SAI") FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, ("SEC") WHICH IS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. YOU MAY OBTAIN A FREE COPY OF THE SAI, WHICH IS DATED THE SAME DATE AS THIS PROSPECTUS, BY WRITING OR CALLING US AT OUR HOME OFFICE. THE TABLE OF CONTENTS OF THE SAI IS ON PAGE 46 OF THIS PROSPECTUS. THE SEC MAINTAINS AN INTERNET WEBSITE (HTTP://WWW.SEC.GOV) THAT CONTAINS MATERIAL INCORPORATED BY REFERENCE INTO THIS PROSPECTUS, SAI, AND OTHER INFORMATION REGARDING COMPANIES THAT FILE ELECTRONICALLY WITH THE SEC. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY CURRENT PROSPECTUSES OR PROSPECTUS PROFILES FOR THE AMERICAN NATIONAL FUND, THE FIDELITY FUNDS, THE T. ROWE PRICE FUNDS, THE MFS FUND, THE FEDERATED FUND, THE ALGER AMERICAN FUND AND INVESCO FUNDS. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. INTERESTS IN THE CONTRACT ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY ANY BANK, NOR IS THE CONTRACT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. THE CONTRACT INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. Please read this prospectus carefully and keep it for future reference. Form 4872 Rev 5-02 1
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TABLE OF CONTENTS PAGE Glossary........................................................ 4 Introduction.................................................... 6 What is the Purpose of the Contract?.......................... 6 What are the Investment Options?.............................. 6 How Do I Purchase a Contract?................................. 7 How Do I Allot Purchase Payments?............................. 7 Can I Transfer Amounts Between the Investment Alternatives?... 7 Can I Make Withdrawals?....................................... 8 Is an Annuity Available?...................................... 8 What are the Charges and Deductions Under the Contract?....... 8 What are the Tax Consequences Associated with the Contract?... 8 If I Have Questions, Where Can I Go?.......................... 8 Contract Owner Transaction Expenses............................. 9 Sales Load as a Percentage of Purchase Payments............... 9 Deferred Sales Load "Surrender Charge"........................ 9 Exchange Fee.................................................. 9 Annual Contract Fee........................................... 9 Separate Account Annual Expenses.............................. 9 Portfolio Company Annual Expenses............................. 9 Examples........................................................ 17 Accumulation Unit Values........................................ 20 Contract........................................................ 23 Type of Contract.............................................. 23 Contract Application and Purchase Payments.................... 23 Allocation of Purchase Payments............................... 24 Crediting of Accumulation Units............................... 24 Determining Accumulation Unit Values.......................... 24 Transfers..................................................... 24 Charges and Deductions.......................................... 26 Surrender Charge.............................................. 26 Other Charges................................................. 26 Distributions Under the Contract................................ 28 Withdrawals................................................... 28 Termination of Contract....................................... 28 Annuity Payments................................................ 30 Annuity Options............................................... 30 Annuity Provisions............................................. 31 The Company, Separate Account and Funds......................... 32 2
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PAGE American National Insurance Company 32 The Separate Account.......................................... 32 The Funds..................................................... 33 Changes in Investment Options................................. 40 Federal Tax Matters............................................. 41 Introduction.................................................. 41 Taxation of Annuities in General.............................. 41 Qualified Contracts.......................................... 41 Performance..................................................... 43 Distributor of the Contract..................................... 43 Legal Matters................................................... 44 Legal Proceedings............................................... 44 Experts......................................................... 44 Additional Information.......................................... 44 Financial Statements............................................ 45 Table of Contents of Statement of Additional Information........ 46 3
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GLOSSARY ACCUMULATION PERIOD. The time between the date Accumulation Units are first purchased by us and the date the Contract is terminated. ACCUMULATION UNIT. A unit used by us to calculate a Contract's value during the Accumulation Period. ACCUMULATION VALUE. The sum of the value of your Accumulation Units . ALGER AMERICAN FUND. The Alger American Fund. AMERICAN NATIONAL FUND. American National Investment Accounts, Inc. COMPANY ("WE", "OUR" OR "US" ). American National Insurance Company. CONTRACT The contract described in this prospectus. CONTRACT OWNER ("YOU" OR "YOUR"). Unless changed by notice to us, the Contract Owner is as stated in the application. CONTRACT ANNIVERSARY. An anniversary of the Date of Issue. CONTRACT YEAR. A one-year period, commencing on either the Date of Issue or a Contract Anniversary. DATE OF ISSUE. The date a Contract is issued. ELIGIBLE PORTFOLIO. A Portfolio which corresponds to a subaccount. FEDERATED FUNDS. Federated Insurance Series. FIDELITY FUNDS. Variable Insurance Products Fund. The Fidelity Fund's Portfolios offered through the Contract are Service Class II Portfolio. GENERAL ACCOUNT. All of our assets except those segregated in separate accounts. INVESCO VIF. INVESCO Variable Investment funds, Inc. MFS Fund. MFS Variable Insurance Trust. PLAN A document or agreement defining retirement or other benefits under section 401(a) or 457 of the Internal Revenue Code and those eligible to receive such benefits. A Plan is not a part of a Contract and we are not a party to a Plan. PLAN PARTICIPANT. An individual participating in a Plan. PORTFOLIO. A series of a mutual fund designed to meet specified investment objectives. PURCHASE PAYMENT. A payment made to us during the Accumulation Period. QUALIFIED PLAN. A Contract issued in connection with a Plan that receives favorable tax treatment under the Internal Revenue Code of 1986. T. ROWE PRICE FUNDS. T. Rowe Price Equity Series, Inc., T. Rowe Price International Series, Inc. and T. Rowe Price Fixed Income Series, Inc. VALUATION DATE. Each day the New York Stock Exchange is open for regular trading. A redemption, transfer, or purchase can be made only on days that we are open. We will be open on each day the NYSE is open except for the day after Thanksgiving and Christmas Eve day. VALUATION PERIOD. The close of business on one Valuation Date to the close of business on another. VARIABLE ANNUITY. An annuity with value that varies in dollar amount based on performance of the investments you choose. 4
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INTRODUCTION WHAT IS THE PURPOSE OF THE CONTRACT? The Contract allows the accumulation of funds, at rates that will increase or decline in value based on the performance of investments you choose. THE CONTRACT IS DESIGNED FOR PEOPLE SEEKING LONG-TERM TAX-DEFERRED ACCUMULATION OF ASSETS, GENERALLY FOR RETIREMENT OR OTHER LONG-TERM PURPOSES. THE TAX-DEFERRED FEATURE IS MOST ATTRACTIVE TO PEOPLE IN HIGH FEDERAL (AND STATE) TAX BRACKETS. YOU SHOULD NOT INVEST IN THIS CONTRACT IF YOU ARE LOOKING FOR A SHORT-TERM INVESTMENT OR IF YOU CANNOT TAKE THE RISK OF LOSING MONEY THAT YOU PUT IN. THERE ARE VARIOUS ADDITIONAL FEES AND CHARGES ASSOCIATED WITH VARIABLE ANNUITIES. THE TAX DEFERRAL FEATURE OF VARIABLE ANNUITIES IS UNNECESSARY WHEN PURCHASED TO FUND A QUALIFIED PLAN, SINCE THE PLAN WOULD ALREADY PROVIDE TAX DEFERRAL IN MOST CASES. YOU SHOULD CONSIDER WHETHER THE OTHER FEATURES AND BENEFITS, SUCH AS THE OPPORTUNITY FOR LIFETIME INCOME BENEFITS, AND THE GUARANTEED LEVEL OF CERTAIN CHARGES, MAKE THE CONTRACT APPROPRIATE FOR YOUR NEEDS. WHAT ARE THE INVESTMENT OPTIONS? You can invest Purchase Payments in one or more of the following subaccounts of the separate account, each of which invests exclusively in shares of a corresponding Eligible Portfolio: . American National Growth . American National Balanced . American National Equity Income . American National Money Market . American National High Yield Bond . American National International Stock . American National Small-Cap/Mid-Cap . American National Government Bond . Fidelity Mid Cap . Fidelity Index 500 . Fidelity Contrafund . Fidelity Aggressive Growth . Fidelity Growth Opportunities . T. Rowe Price Equity Income . T. Rowe Price Mid-Cap Growth . T. Rowe Price International Stock . T. Rowe Price Limited-Term Bond . MFS Capital Opportunities . MFS Emerging Growth . MFS Research . MFS Investors Trust . Federated Utility Fund II . Federated Growth Strategies . Federated International Small Company Fund . Federated High Income Bond . Federated Equity Income Fund II . Alger American Small Capitalization . Alger American MidCap Growth . Alger American Growth . Alger American Balanced . Alger American Leveraged AllCap . Alger American Income & Growth . INVESCO VIF-Health Sciences Fund . INVESCO VIF-Small Company Growth Fund . INVESCO VIF-Telecommunications Fund . INVESCO VIF-Utilities Fund . INVESCO VIF-Dynamics Fun . INVESCO VIF-Real Estate Opportunity Fund . INVESCO VIF-Financial Services Fund . INVESCO VIF-Technology Fund Each such subaccount and corresponding Eligible Portfolio has its own investment objective (See "The Funds" on page 33). There is no assurance that Eligible Portfolios will achieve their investment objectives. Accordingly, you could lose some or all of the Accumulation Value. HOW DO I PURCHASE A CONTRACT? You can purchase a Contract by completing an application and paying a Purchase Payment and submitting these to our home office. (See "Contract Application and Purchase Payments" on page 23.) Purchase Payments must be for the purpose of providing for Plan benefits. Without our prior approval, the maximum Purchase Payment under a Contract is $1,000,000. 5
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The contract may not be available in some states. You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with information that is different. HOW DO I ALLOCATE PURCHASE PAYMENTS? You can allocate Purchase Payments among the 40 currently available subaccounts. You cannot allocate less than 1% of a Purchase Payment to any one-investment option. CAN I TRANSFER AMOUNTS BETWEEN THE INVESTMENT ALTERNATIVES? You can make transfers between subaccounts at any time. (See "Transfers" on page 24.) All transfers among the subaccounts are free. You should periodically review allocations among the subaccounts to make sure they fit the current situation and financial goals. You can make allocation changes in writing or during our normal business hours by telephone if a telephone authorization form is on file with us. We will employ reasonable procedures to confirm that telephone instructions are genuine. These procedures may include requiring callers to identify themselves and the policy owner or others (e.g., beneficiary) by name, social security number, date of birth, or other identifying information. There are risks associated with telephone transactions that do not exist if a written request is submitted. Anyone authorizing or making telephone requests bears those risks. We will not be liable for any liability or losses resulting from unauthorized or allegedly unauthorized telephone requests that we believe are genuine. We may record telephone requests. We cannot guarantee that we will be available to accept telephone transfer instructions. The contracts are first and foremost annuity policies, designed for retirement or other long-term financial planning, and are not designed for or appropriate for market timers or other persons that use programmed, large, or frequent transfers. The use of such transfers can be disruptive to an underlying portfolio and harmful to other policy owners invested in the portfolio. We therefore reserve the right to reject any transfer request (or premium payment) from any person if, in our judgment, an underlying portfolio or other policy owners would potentially be adversely affected or if an underlying portfolio objects to or would reject our transaction order. We may impose severe restrictions on transfers or even prohibit them for particular policy owners who, in our view, have abused or appear likely to abuse the transfer privilege. CAN I MAKE WITHDRAWALS? By written request to us, you can withdraw all or part of the Accumulation Value at any time. (See "Withdrawals" on page 28.) Such withdrawal may be subject to a Surrender Charge. Such withdrawal may also be subject to Plan restrictions. Surrender charges are waived for any withdrawal to fund a distribution under a Plan. Proof of such Plan benefit must be provided. Distributions to Plan Participants may be subject to income tax and penalty tax. IS AN ANNUITY AVAILABLE? In order to fund plan distributions, you can select from a number of fixed annuity options, each of which provides a different level and number of annuity payments. The annuity options include payments: . for the life of a Plan Participant . for the life of a Plan Participant, with a guarantee that such payments will continue for at least 10 or 20 years . made jointly to a Plan Participant and spouse, with a right of survivorship. (See "Annuity Options," page 30.) WHAT ARE THE CHARGES AND DEDUCTIONS UNDER THE CONTRACT? We do not currently deduct a sales charge when you purchase a Contract. We may deduct a surrender charge up to 7% of Accumulation Value withdrawn. We also charge a daily administrative asset fee. Such expense charge equals, on an annual basis, 0.10% of the Contract's daily Accumulation Value. 6
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We charge a daily amount equal to, on an annual basis, a mortality and expense risk fee of 1.15% of the Contract's daily Accumulation Value to meet our death benefit obligations and to pay expenses. WHAT ARE THE TAX CONSEQUENCES ASSOCIATED WITH THE CONTRACT? You generally are required to pay taxes on all amounts withdrawn from a Qualified Contract. Restrictions and penalties may apply to withdrawals from a Qualified Contract. IF I HAVE QUESTIONS, WHERE CAN I GO? If you or the Plan administrator have any questions about the Contract, you or the Plan administrator can contact your registered representative or write us at P.O. Box 1893, Galveston, Texas, 77553-1893. You can call us at 1-800-306-2959. 7
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CONTRACT OWNER TRANSACTION EXPENSES The following table summarizes the charges we will make. The table also summarizes the fees and expenses of the Eligible Portfolios. You should consider this information with the information under the heading "Charges and Deductions" on page 26. SALES LOAD AS A PERCENTAGE OF PURCHASE PAYMENTS 0% DEFERRED SALES LOAD ("SURRENDER CHARGE") SURRENDER CHARGE CONTRACT YEAR AS A OF PERCENTAGE OF WITHDRAWAL EACH WITHDRAWAL --------------- ---------------- 1 7 2 7 3 6 4 5 5 4 6 3 7 2 8 and thereafter 0 EXCHANGE FEE $0 ANNUAL CONTRACT FEE $0 SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS) Mortality and Expense Risk Fee 1.15% Other Account Fees (administrative asset fee) 0.10% Total Separate Account Annual Expense 1.25% PORTFOLIO COMPANY ANNUAL EXPENSES American National Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees after reimbursement * ** 0.40% Service Fee 0.25% Other Expenses 0.22% Total Portfolio Annual Expenses 0.87% * Without reimbursement, management fees would have been 0.50% and the total portfolio annual expense would have been 0.97%. American National Balanced Portfolio Annual Expenses (as a percentage of average net assets) Management Fees after reimbursement * ** 0.33% Service Fee 0.25% Other Expenses 0.32% Total Portfolio Annual Expenses 0.90% * Without reimbursement, management fees would have been 0.50% and the total portfolio annual expense would have been 1.07%. American National Equity Income Portfolio Annual Expenses (as a percentage of average net assets) Management Fees after 0.50% Service Fee 0.25% Other Expenses 0.15% Total Portfolio Annual Expenses 0.90% American National High Yield Bond Portfolio Annual Expenses (as a percentage of average net assets) Management Fees * ** 0.55% Service Fee 0.25% Other Expenses 0.13% Total Portfolio Annual Expenses 0.93% * With reimbursement, management fees would have been 0.42% and the total portfolio annual expense would have been 0.80%. American National International Stock Portfolio Annual Expenses (as a percentage of average net assets) Management Fees * ** 0.75% Service Fee 0.25% Other Expenses 0.54% Total Portfolio Annual Expenses 1.54% * With reimbursement, management fees wereo 0.31% and the total portfolio annual expense were 1.10%. American National Small-Cap/Mid-Cap Portfolio Annual Expenses (as a percentage of average net assets) Management Fees * ** 1.25% Service Fee* 0.25% Other Expenses 1.32% Total Portfolio Annual Expenses 2.82% * With reimbursement, management fees were 0.00%, service fees 0.18% and the total portfolio annual expense were 1.50%. American National Government Bond Portfolio Annual Expenses (as a percentage of average net assets) Management Fees * ** 0.50% Service Fee 0.25% Other Expenses 0.29% Total Portfolio Annual Expenses 1.04% * With reimbursement, management fees were 0.10% and the total portfolio annual expense were 0.64%. American National Money Market Portfolio Annual Expenses (as a percentage of average net assets) Management Fees after reimbursement * ** 0.34% Service Fee 0.25% Other Expenses 0.28% Total Portfolio Annual Expenses 0.87% * Without reimbursement, management fees would have been 0.50% and the total portfolio annual expense would have been 1.03%. ** 1 Under its Administrative Service Agreement with the American National Growth Portfolio, the American National Equity Income Portfolio and the American National Balanced Portfolio, Securities Management and Research, Inc. (SM&R), the fund's adviser and manager, has agreed to pay (or reimburse each portfolio for) each portfolio's regular operating expenses (including the advisory fee and administrative service fee paid to SM&R, but exclusive of interest, commissions and other expenses incidental to portfolio transactions) in excess of 1.50% per year of such Portfolio's average daily net assets. SM&R has also agreed to pay (or reimburse) the American National Money Market Portfolio's regular operating expenses (including the advisory fee and administrative service fee paid to SM&R, but exclusive of interest, commissions and other expenses incidental to portfolio transactions) in excess of 0.87% per year of the portfolio's average daily net assets. In addition, SM&R has entered into a separate undertaking with the fund through April 30, 2003, pursuant to which SM&R has agreed to reimburse the American National Growth Portfolio for expenses in excess of 0.87%, the American National Balanced Portfolio for expenses in excess of 0.90%, the American National Government Bond Portfolio for expenses in excess of 0.35%, the American National High Yield Bond Portfolio for expenses in excess of 0.80%, the American National Equity Income Portfolio for expenses in excess of 0.93%, the American National International Stock Portfolio for expenses in excess of 1.10%, and the American National Small-Cap/Mid-Cap Portfolio for expenses in excess of 1.50% of each of such Portfolio's average daily net assets during such period. SM&R is under no obligation to renew this undertaking for any Portfolio at the end of such period. Fidelity Index 500 Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.24% Distribution and Service (12b-1) Fees 0.25% Other Expenses 0.12% Total Portfolio Annual Expenses* 0.61% * Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund's expenses. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances are used to reduce a portion of the fund's custodian expenses. These offsets may be discontinued at any time. Including this reimbursement, the annual class operating expenses were 0.53%. Fidelity Mid Cap Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.58% Distribution and Service (12b-1) 0.25% Other Expenses after reimbursement 0.11% Total Portfolio Annual Expenses* 0.94% * Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund's expenses. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances are used to reduce a portion of the fund's custodian expenses. These offsets may be discontinued at any time. Including this reimbursement, the annual class operating expenses were 0.88%. Fidelity Contrafund Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.58% Distribution and Service (12b-1) Fees 0.25% Other Expenses after reimbursement 0.11% Total Portfolio Annual Expenses* 0.94% * Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund's expenses. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances are used to reduce a portion of the fund's custodian expenses. These offsets may be discontinued at any time. Including this reimbursement, the annual class operating expenses were 0.90%. Fidelity Aggressive Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.63% Distribution and Service (12b-1) Fees 0.25% Other Expenses 2.35% Total Portfolio Annual Expenses* 3.23% * Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund's expenses. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances are used to reduce a portion of the fund's custodian expenses. These offsets may be discontinued at any time. The fund's manager has voluntarily agreed to reimburse the class to the extent that total operating expenses (excluding interest, taxes, certain securities lending costs, brokerage commissions and extraordinary expenses) exceed 1.75%. This arrangement can be discontinued by the fund's manager at any time.Including this reimbursement, the management fee, other expenses and total annual expenses in 2001 were 0.63%, 0.87% and 1.75%, respectively. Fidelity Growth Opportunities Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.58% Distribution and Service (12b-1) Fees 0.25% Other Expenses after reimbursement 0.12% Total Portfolio Annual Expenses** 0.95% ** Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund expenses, and/or because through arrangements with the funds custodian, credits realized as a result of uninvested cash balances were used to reduce a portion of the fund's custodian expenses. These offsets may be discontinued at any time. Including this reimbursement, the annual class operating expenses were 0.93%. T. Rowe Price Equity Income Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.85% Other Expenses 0.00% Total Portfolio Annual Expenses* 0.85% T. Rowe Price International Stock Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 1.05% Other Expenses 0.00% Total Portfolio Annual Expenses* 1.05% T. Rowe Price Mid-Cap Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.85% Other Expenses 0.00% Total Portfolio Annual Expenses* 0.85% T. Rowe Price Limited - Term Bond Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.70% Other Expenses 0.00% Total Portfolio Annual Expenses* 0.70% * Management fees include operating expenses. MFS Capital Opportunities Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.16% Total Portfolio Annual Expenses 0.91% MFS Emerging Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.12% Total Portfolio Annual Expenses 0.87% MFS Research Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.15% Total Portfolio Annual Expenses 0.90% MFS Investors Trust Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.15% Total Portfolio Annual Expenses 0.90% Federated Utility Fund II Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Shareholders Services Fee 0.25% Other Expenses 0.17% Total Portfolio Annual Expenses* 1.17% *The portfolio's investment advisor voluntarily reduced the portfolio's expenses. After reimbursement, management fee, shareholders services fee, other expenses, and total expenses were 0.75%, 0.00% 0.17%, and 0.92% respectively. Federated Growth Strategies Fund II Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Distribution (12b-1) Fee 0.00% Shareholders Services Fee 0.00% Other Expenses 0.28% Total Portfolio Annual Expenses* 1.01% *The portfolio's investment advisor voluntarily reduced the portfolio's expenses. After reimbursement, management fee, distribution (12b-1) fee, shareholders services fee, other expenses and total expenses were 0.68%, 0.00%, 0.00%, 0.22%, and 0.90% respectively. Federated International Small Company Fund II Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 1.25% Distribution (12b-1) Fee 0.25% Shareholders Services Fee 0.25% Other Expenses 3.79% Total Portfolio Annual Expenses* 5.54% *The portfolio's investment advisor voluntarily reduced the portfolio's expenses. After reimbursement, management fee, distribution (12b-1) fee, shareholders services fee, other expenses and total expenses were 0.00%, 0.00%, 0.10%, 1.55% and 1.65% respectively. Federated High Income Bond Fund II Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.60% Shareholders Services Fee 0.25% Other Expenses 0.16% Total Portfolio Annual Expenses* 1.01% *The portfolio's investment advisor voluntarily reduced the portfolio's expenses. After reimbursement, management fee, shareholders services fee, other expenses, and total expenses were 0.60%, 0.00%, 0.16%, and 0.76% respectively. Federated Equity Income Fund II Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Distribution 12-b1 Fees 0.25% Shareholders Services Fee 0.25% Other Expenses 0.24% Total Portfolio Annual Expenses* 1.49% *The portfolio's investment advisor voluntarily reduced the portfolio's expenses. After reimbursement, management fee, distribution 12-b1 fee, shareholders services fee, other expenses and total expenses were 0.73%, 0.00%, 0.00%, 0.24%, and 0.97% respectively. Alger American Small Capitalization Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.85% Other Expenses 0.07% Total Portfolio Annual Expenses 0.92% Alger American Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.06% Total Portfolio Annual Expenses 0.81% Alger American MidCap Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.80% Other Expenses 0.08% Total Portfolio Annual Expenses 0.88% Alger American Leveraged AllCap Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.85% Other Expenses* 0.07% Total Portfolio Annual Expenses 0.92% Alger American Income & Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.625% Other Expenses 0.095% Total Portfolio Annual Expenses 0.72% Alger American Balanced Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.10% Total Portfolio Annual Expenses 0.85% INVESCO VIF-Dynamics Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.33% Total Portfolio Annual Expenses 1.08% INVESCO VIF-Financial Services Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.32% Total Portfolio Annual Expenses 1.07% INVESCO VIF-Health Sciences Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.31% Total Portfolio Annual Expenses 1.06% INVESCO VIF-Real Estate Opportunity Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.90% Other Expenses 1.80% Total Portfolio Annual Expenses* 1.38% INVESCO VIF-Small Company Growth Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.59% Total Portfolio Annual Expenses* 1.29% INVESCO VIF-Technology Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.32% Total Portfolio Annual Expenses 1.07% INVESCO VIF-Telecommunications Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.75% Other Expenses 0.34% Total Portfolio Annual Expenses 1.09% INVESCO VIF-Utilities Portfolio Annual Expenses (as a percentage of average net assets) Management Fees 0.60% Other Expenses 0.77% Total Portfolio Annual Expenses* 1.37% *Certain expenses of the Fund were absorbed voluntarily by INVESCO pursuant to commitments between the Fund and INVESCO. This commitment may be changed at any time following the consultation with the Board of Directors. After absorption, management fees, other expenses and total expenses were 0.90%, 0.48%, 1.38% for the INVESCO VIF Real Estates Opportunity Portfolio, 0.75%, 0.50%, 1.25% for the INVESCO VIF Small Company Portfolio, and 0.60%, 0.55%, 1.15% for the INVESCO VIF Utilities Portfolio respectively. 15
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EXAMPLES If you terminate your Contract at the end of the applicable time period, you would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets, and assuming none of the proceeds is used to fund Plan benefits. Should any of the proceeds be used to fund Plan benefits, the actual expenses incurred will be less than those represented in the example. [Enlarge/Download Table] FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS American National Growth Portfolio $86 $125 $154 $245 American National Equity Income Portfolio $87 $126 $155 $248 American National Balanced Portfolio $87 $126 $155 $248 American National Money Market Portfolio $86 $125 $154 $245 American National High Yield Bond Portfolio $87 $127 $157 $251 American National International Stock Portfolio $93 $144 $187 $312 American National Small Cap/Mid Cap Portfolio $104 $179 $246 $426 American National Government Bond Portfolio $88 $130 $163 $263 Fidelity Mid-Cap Manager Portfolio $87 $127 $157 $252 Fidelity Index 500 Portfolio $84 $118 $141 $218 Fidelity Contrafund Portfolio $87 $127 $157 $252 Fidelity Aggressive Growth Portfolio $108 $190 $264 $460 Fidelity Growth Opportunities Portfolio $87 $127 $158 $253 T. Rowe Price Equity Income Portfolio $86 $125 $153 $243 T. Rowe Price Mid-Cap Growth Portfolio $86 $125 $153 $243 T. Rowe Price International Stock Portfolio $88 $130 $163 $264 T. Rowe Price Limited--Term Bond Portfolio $85 $120 $145 $227 MFS Capital Opportunities Portfolio $87 $126 $156 $249 MFS Research Portfolio $87 $126 $155 $248 MFS Investors Trust Portfolio $87 $126 $155 $248 MFS Emerging Growth Portfolio $86 $125 $154 $245 Federated Utility Fund II Portfolio $89 $134 $169 $276 Federated Growth Strategies Fund II Portfolio $90 $137 $175 $287 Federated International Small Co. Fund II Portfolio $129 $249 $358 $621 Federated High Income Bond Fund II Portfolio $88 $129 $161 $260 Federated Equity Income Fund II Portfolio $92 $143 $185 $307 Alger American Small Capitalization Portfolio $87 $127 $156 $250 Alger American Growth Portfolio $86 $123 $151 $239 Alger American MidCap Growth Portfolio $86 $125 $154 $246 Alger American Leveraged AllCap Portfolio $87 $127 $156 $250 Alger American Balanced Portfolio $86 $125 $153 $243 Alger American Income & Growth Portfolio $85 $121 $146 $230 INVESCO VIF Dynamics Portfolio $88 $131 $165 $267 INVESCO VIF Health Science Portfolio $88 $131 $164 $265 INVESCO VIF Small Company Portfolio $90 $137 $175 $288 INVESCO VIF Telecommunications Portfolio $88 $131 $165 $268 INVESCO VIF Financial Services Portfolio $88 $131 $164 $266 INVESCO VIF Real Estate Opportunity Portfolio $103 $176 $241 $416 INVESCO VIF Technology Portfolio $88 $131 $164 $266 INVESCO VIF Utilities Portfolio $89 $133 $168 $274 If you do not terminate your Contract, you would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets. 16
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[Enlarge/Download Table] FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS American National Growth Portfolio $22 $66 $114 $245 American National Equity Income Portfolio $22 $67 $115 $248 American National Balanced Portfolio $22 $67 $115 $248 American National Money Market Portfolio $22 $66 $114 $245 American National High Yield Bond Portfolio $22 $68 $117 $251 American National International Stock Portfolio $28 $87 $147 $312 American National Small Cap/Mid Cap Portfolio $41 $124 $208 $426 American National Government Bond Portfolio $23 $72 $123 $263 Fidelity Mid-Cap Manager Portfolio $22 $69 $117 $252 Fidelity Index 500 Portfolio $19 $58 $101 $218 Fidelity Contrafund Portfolio $22 $69 $117 $252 Fidelity Aggressive Growth Portfolio $45 $135 $227 $460 Fidelity Growth Opportunities Portfolio $22 $69 $118 $253 T. Rowe Price Equity Income Portfolio $21 $66 $113 $243 T. Rowe Price Mid-Cap Growth Portfolio $21 $66 $113 $243 T. Rowe Price International Stock Portfolio $23 $72 $123 $264 T. Rowe Price Limited--Term Bond Portfolio $20 $61 $105 $227 MFS Capital Opportunities Portfolio $22 $68 $116 $249 MFS Research Portfolio $22 $67 $115 $248 MFS Investors Trust Portfolio $22 $67 $115 $248 MFS Emerging Growth Portfolio $22 $66 $114 $245 Federated Utility Fund II Portfolio $25 $75 $129 $276 Federated Growth Strategies Fund II Portfolio $26 $79 $135 $287 Federated International Small Co. Fund II Portfolio $67 $198 $325 $621 Federated High Income Bond Fund II Portfolio $23 $71 $121 $260 Federated Equity Income Fund II Portfolio $28 $85 $145 $307 Alger American Small Capitalization Portfolio $22 $68 $116 $250 Alger American Growth Portfolio $21 $65 $111 $239 Alger American MidCap Growth Portfolio $22 $67 $114 $246 Alger American Leveraged AllCap Portfolio $22 $68 $116 $250 Alger American Balanced Portfolio $21 $66 $113 $243 Alger American Income & Growth Portfolio $20 $62 $106 $230 INVESCO VIF Dynamics Portfolio $24 $73 $125 $267 INVESCO VIF Health Science Portfolio $23 $72 $124 $265 INVESCO VIF Small Company Portfolio $26 $79 $135 $288 INVESCO VIF Telecommunications Portfolio $24 $73 $125 $268 INVESCO VIF Financial Services Portfolio $24 $72 $124 $266 INVESCO VIF Real Estate Opportunity Portfolio $40 $120 $203 $416 INVESCO VIF Technology Portfolio $24 $72 $124 $266 INVESCO VIF Utilities Portfolio $24 $75 $128 $274 17
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You should not consider the examples as representative of past or future expenses. The purpose of the preceding tables is to assist you in understanding the various costs and expenses that you will bear directly or indirectly. The tables reflect expenses of the separate account and the Eligible Portfolios. The examples assume that any waiver or reimbursement policies for the Eligible Portfolios are in affect for the time-periods presumed. The expenses shown above for the Eligible Portfolios are assessed at the underlying fund level and are not direct charges against the separate account's assets or reductions from Accumulation Value. These expenses are taken into consideration in computing each Portfolio's net asset value, which is the share price used to calculate the value of an Accumulation Unit. Actual expenses may be more or less than shown. As required by the Securities and Exchange Commission, the example assumes a 5% annual rate of return. This hypothetical rate of return is not intended to be representative of past or future performance of an Eligible Portfolio. For a more complete description of the management fees of the American National Fund, the Fidelity Funds, the T. Rowe Price Funds, the MFS Fund, the Federated Fund, the Alger American Fund, and the INVESCO VIF Funds, see their prospectuses. 18
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ACCUMULATION UNIT VALUES (For an accumulation unit outstanding throughout the period) YEAR ENDED DECEMBER 31, 2001 GROUP CONTRACTS IN THE ACCUMULATION PERIOD 2001 2000 American National Growth Portfolio Accumulation unit value at beginning of period $ 0.953 $ -- Accumulation unit value at end of period $ 0.789 $ 0.953 Number of accumulation units outstanding at end of period 27309 48 American National Balanced Portfolio Accumulation unit value at beginning of period $ 0.987 $ -- Accumulation unit value at end of period $ 0.93 $ 0.987 Number of accumulation units outstanding at end of period 194077 46 American National Equity Income Portfolio Accumulation unit value at beginning of period $ 1.039 $ -- Accumulation unit value at end of period $ 0.904 $ 1.039 Number of accumulation units outstanding at end of period 91692 44 American National Money Market Portfolio Accumulation unit value at beginning of period $ 1.018 $ -- Accumulation unit value at end of period $ 1.037 $ 1.018 Number of accumulation units outstanding at end of period 1864080 62 American National Int'l Stock Portfolio Accumulation unit value at beginning of period $ 0.852 $ -- Accumulation unit value at end of period $ 0.646 $ 0.852 Number of accumulation units outstanding at end of period 14675 82 American National Small Cap/Mid Cap Portfolio Accumulation unit value at beginning of period $ 0.663 $ -- Accumulation unit value at end of period $ 0.298 $ 0.663 Number of accumulation units outstanding at end of period 26248 630 American National Government Bond Portfolio Accumulation unit value at beginning of period $ 1.046 $ -- Accumulation unit value at end of period $ 1.108 $ 1.046 Number of accumulation units outstanding at end of period 16035 52 American National High Yield Bond Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.987 $ -- Number of accumulation units outstanding at end of period 20099 -- Fidelity Index 500 Portfolio Accumulation unit value at beginning of period $ 0.921 $ -- Accumulation unit value at end of period $ 0.798 $ 0.921 Number of accumulation units outstanding at end of period 429546 438 Fidelity Asset Manager Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.91 $ -- Number of accumulation units outstanding at end of period 4632 -- Fidelity Asset Manager Growth Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.817 $ -- Number of accumulation units outstanding at end of period 7062 -- Fidelity Aggressive Growth Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.864 $ 0 Number of accumulation units outstanding at end of period 20105 -- Fidelity Mid Cap Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 1.037 $ -- Number of accumulation units outstanding at end of period 102238 -- Fidelity Contrafund Portfolio Accumulation unit value at beginning of period $ 0.96 $ -- Accumulation unit value at end of period $ 0.83 $ 0.96 Number of accumulation units outstanding at end of period 254493 345 Fidelity Growth Opportunities Portfolio Accumulation unit value at beginning of period $ 0.881 $ -- Accumulation unit value at end of period $ 0.743 $ 0.881 Number of accumulation units outstanding at end of period 123076 352 T. Rowe Price Mid-Cap Growth Portfolio Accumulation unit value at beginning of period $ 1.006 $ -- Accumulation unit value at end of period $ 0.984 $ 1.006 Number of accumulation units outstanding at end of period 221198 347 T. Rowe Price International Stock Portfolio Accumulation unit value at beginning of period $ 0.859 $ -- Accumulation unit value at end of period $ 0.66 $ 0.859 Number of accumulation units outstanding at end of period 99229 736 T. Rowe Price Limited - Term Bond Portfolio Accumulation unit value at beginning of period $ 1.024 $ -- Accumulation unit value at end of period $ 1.104 $ 1.024 Number of accumulation units outstanding at end of period 19317 30 T. Rowe Price Equity Income Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 1.074 $ 0 Number of accumulation units outstanding at end of period 254914 -- MFS Growth with Income Series Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.834 $ 0 Number of accumulation units outstanding at end of period 61882 -- MFS Capital Opportunities Series Portfolio Accumulation unit value at beginning of period $ 0.902 $ -- Accumulation unit value at end of period $ 0.682 $ 0.902 Number of accumulation units outstanding at end of period 71830 133 MFS Emerging Growth Series Portfolio Accumulation unit value at beginning of period $ 0.84 $ -- Accumulation unit value at end of period $ 0.553 $ 0.84 Number of accumulation units outstanding at end of period 158870 499 MFS Research Series Portfolio Accumulation unit value at beginning of period $ 0.894 $ -- Accumulation unit value at end of period $ 0.696 $ 0.894 Number of accumulation units outstanding at end of period 85281 297 Federated Utility II Portfolio Accumulation unit value at beginning of period $ 0.958 $ -- Accumulation unit value at end of period $ 0.821 $ 0.958 Number of accumulation units outstanding at end of period 29322 304 Federated Int'l Small Company II Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.592 $ 0 Number of accumulation units outstanding at end of period 42674 -- Federated Growth Strategies Accumulation unit value at beginning of period $ 0.857 $ -- Accumulation unit value at end of period $ 0.648 $ 0.857 Number of accumulation units outstanding at end of period 32571 289 Federated High Income Bond Portfolio Accumulation unit value at beginning of period $ 0.92 $ -- Accumulation unit value at end of period $ 0.921 $ 0.92 Number of accumulation units outstanding at end of period 20295 46 Federated Equity Income Portfolio Accumulation unit value at beginning of period $ 0.883 $ -- Accumulation unit value at end of period $ 0.776 $ 0.883 Number of accumulation units outstanding at end of period 13462 22 Alger American Small Capit. Portfolio Accumulation unit value at beginning of period $ 0.82 $ -- Accumulation unit value at end of period $ 0.598 $ 0.82 Number of accumulation units outstanding at end of period 76503 475 Alger American Leveraged Portfolio Accumulation unit value at beginning of period $ 0.797 $ -- Accumulation unit value at end of period $ 0.662 $ 0.797 Number of accumulation units outstanding at end of period 100247 303 Alger American Income & Growth Portfolio Accumulation unit value at beginning of period $ 0.95 $ -- Accumulation unit value at end of period $ 0.804 $ 0.95 Number of accumulation units outstanding at end of period 229704 21 Alger American Growth Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.735 $ 0 Number of accumulation units outstanding at end of period 151782 -- Alger American Balanced Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.904 $ 0 Number of accumulation units outstanding at end of period 384464 -- Alger American Mid Cap Growth Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.884 $ 0 Number of accumulation units outstanding at end of period 170686 -- Invesco VIF Utilities Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.712 $ 0 Number of accumulation units outstanding at end of period 15528 -- Invesco VIF Telecommunications Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.569 $ 0 Number of accumulation units outstanding at end of period 20479 -- Invesco VIF Financial Services Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.96 $ 0 Number of accumulation units outstanding at end of period 67137 -- Invesco VIF Dynamics Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.814 $ 0 Number of accumulation units outstanding at end of period 4932 -- Invesco VIF Health Science Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 1.026 $ 0 Number of accumulation units outstanding at end of period 77062 -- Invesco VIF Technology Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.706 $ 0 Number of accumulation units outstanding at end of period 74831 -- Invesco VIF Small Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 0.875 $ 0 Number of accumulation units outstanding at end of period 10395 -- Invesco VIF Real Estate Portfolio Accumulation unit value at beginning of period $ 0 $ -- Accumulation unit value at end of period $ 1.029 $ 0 Number of accumulation units outstanding at end of period 16112 -- 21
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CONTRACT TYPE OF CONTRACT This prospectus offers a group unallocated variable annuity Contract, and our obligations are strictly limited to those set forth in this prospectus. Neither the Plan Participant, nor any person deriving any rights or benefits from a Plan Participant, will at any time have any right, or interest in the Accumulation Value. We incur no liability or obligation to any Plan Participant until there has been a benefit purchased on behalf of a Plan Participant or person deriving rights from a Plan Participant, in accordance with the provisions of the Contract. Our sole responsibility to any such Plan Participant or person deriving rights from a Plan Participant will be the payment of such benefits purchased on his behalf. If the Plan maintains individual accounts for each Plan Participant or beneficiary, the Plan should have accounting procedures to allocate among those accounts the gains, losses and charges under this Contract. The terms of the Contracts may only be changed by mutual agreement between American National and each Contract Owner, unless: . the change is as described in the section entitled "Changes in Investment Options" on page 40; . American National is making the change in order to comply with a law or regulation to which American National or the Contracts are subject; or . American National is making the change in order to maintain the tax status of the Contracts as described in the section entitled "Federal Tax Matters" on page 41. Certain provisions of the contracts may be different than the general description in this prospectus, and certain riders and options may not be available, because of legal restrictions in your state. See your contract for specific variations since any such state variations will be included in your contract or in riders or endorsements attached to your contract. See your agent or contact Us for specific information that may be applicable to your state. CONTRACT APPLICATION AND PURCHASE PAYMENTS To purchase a Contract, you must complete an application and send a Purchase Payment to our home office. (See "Allocation of Purchase Payments", page 24.) If the application cannot be processed within five days after receipt, we will request your permission to retain the payment until the completed application is received. If the application is not completed, and we do not receive such permission within five days after receipt of the payment, we will return your payment. We will credit your initial Purchase Payment to the Contract within two business days after a completed application is received at our home office. All additional Purchase Payments received by us are effective when such Purchase Payments are received at our home office. Purchase Payments paid are allocated as directed by you. Purchase Payments must be for the purpose of providing for Plan benefits. We assume no liability as to the sufficiency of the Accumulation Value to provide benefits according to the provisions of the Plan. ALLOCATION OF PURCHASE PAYMENTS Purchase Payments will be allocated to the subaccounts according to instructions in the application. You can change these allocations at any time by written instruction to our home office, or if a properly completed telephone transfer authorization form is on file with us, by telephone. CREDITING OF ACCUMULATION UNITS Purchase Payments will be used to purchase Accumulation Units in subaccounts as the Contract Owner has instructed. We will determine the number of Accumulation Units purchased by dividing the dollar amount of the Purchase Payment allocated to a subaccount by the Accumulation Unit value for that subaccount computed following such allocation. Purchase Payments are not 22
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credited until actually received by us. A Plan Participant's contribution to a Plan will not be credited until the Contract Owner forwards such contribution to us. DETERMINING ACCUMULATION UNIT VALUES The Accumulation Unit value of each subaccount reflects the investment performance of that subaccount. We calculate Accumulation Unit value on each Valuation Date. The Accumulation Unit value on each Valuation Date is equal to the Accumulation Unit value for the preceding Valuation Date, multiplied by the net investment factor for that subaccount on that Valuation Date. A net investment factor is determined for each subaccount on a Valuation Date as follows. First, we take the net asset value of a share in the corresponding Eligible Portfolio at the close of business that day, and we add the per share amount of any dividends or capital gains distributions declared by the Eligible Portfolio during the Valuation Period. We divide this amount by the per share net asset value on the preceding Valuation Date. Then we reduce the result for the administrative asset fee and the mortality and expense risk fee. We will calculate the Accumulation Unit value for each subaccount at the end of each Valuation Period. Investment performance of the Eligible Portfolios, their expenses and the deduction of certain charges by us affect the Accumulation Unit value for each subaccount. TRANSFERS You can make transfers among the subaccounts at any time. There are no restrictions. We will make transfers and determine values at the end of the Valuation Period in which your transfer request is received, unless you designate a later date. Payment of withdrawal amounts and transfers may be postponed whenever: (1) the NYSE is closed other than customary week-end and holiday closings, or trading on the NYSE is restricted as determined by the SEC; (2) the SEC by order permits postponement for the protection of the Contract Owners; or (3) an emergency exists, as determined by the SEC, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the separate account's net assets. 23
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CHARGES AND DEDUCTIONS SURRENDER CHARGE During the first seven Contract Years, a Surrender Charge may be imposed on withdrawals at a rate of no more than 7% of the amount withdrawn. (See "Deferred Sales Load (`Surrender Charge')" on page 9 for the table of surrender charges rates). We will deduct a surrender charge from the Accumulation Value for withdrawals of all or a portion of Accumulation Value. However, no surrender charge will apply to any such withdrawal: a) if you request a lump sum cash distribution and give us proof that benefits in the amount of the lump sum cash distribution are payable under the Plan to a Plan Participant or beneficiary due to the death, disability, termination of employment or retirement of a Plan Participant; or b) if you request that such withdrawal be applied to purchase from us any of the annuity options available under the Contract. (See "Annuity Options, page 30.) For termination, the surrender charge will be equal to the surrender charge percentage multiplied by the Accumulation Value. The surrender charge percentage will be determined by the Contract Year in which the termination occurs. For withdrawals not exempt from the surrender charge, a surrender charge will be assessed consistent with that for termination. The surrender charge percentage will be determined by the Contract Year in which the withdrawal occurs. Even if your Accumulation Value is less than the total of your Purchase Payments, your Surrender Charge for a full surrender will be based upon the total of your Purchase Payments. Assume that you have $30,000 Accumulation Value, but you have paid $38,000 in Purchase Payments. On a full surrender, you can still withdraw 10% of your Accumulation Value, or $3,000, without a Surrender Charge; however, the applicable Surrender Charge percentage would then be applied to the total Purchase Payments less the free withdrawal amount, or $35,000, not the $30,000 in Accumulation Value. OTHER CHARGES The Contract is subject to certain other charges: . Administrative Asset Fee An administrative asset fee at an annual rate of 0.10% is assessed daily against the separate account. . Mortality and Expense Risk Fee Annuity payments will not decrease because of adverse mortality experience of Plan Participants as a class or increases in our actual expenses over expense charges. We assume the risks that Plan Participants as a class may live longer than expected (requiring a greater number of annuity payments) and that fees may not be sufficient to cover our actual costs. For our promises to accept these risks, a mortality and expense risk fee at an annual rate of 1.15% will be assessed daily against the separate account. . Charges for Taxes None at present. We may, however, make a charge in the future if income or gains within the separate account incur federal, state, or local taxes or if our tax treatment changes. Charges for such taxes, if any, would be deducted from the separate account. . Portfolio Expenses The Eligible portfolios in which you have invested will charge the portfolio company annual expenses described on pages 9-16. For a more complete description of those expenses, see the prospectuses for the Eligible Portfolios. 24
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DISTRIBUTIONS UNDER THE CONTRACT WITHDRAWALS The Contract Owner may make withdrawals under the Contract, in whole or in part, subject to the following limitations: . The request must be made in writing. . If a partial withdrawal would leave less than $1,200 Accumulation Value, we may terminate the Contract. . A partial withdrawal request should specify the allocation of that withdrawal among the subaccounts. If not specified, we will prorate the withdrawal among the subaccounts. Surrender charges will be deducted from the Accumulation Value remaining after a partial withdrawal. Additional limitations apply to withdrawals, as explained in, "Termination of Contract". The Accumulation Unit value for withdrawals will be the applicable Accumulation Unit value determined on the Valuation Date following receipt by us at our home office of your withdrawal request. Accumulation Value can be determined by multiplying the number of Accumulation Units for each subaccount times the Accumulation Unit value and summing the results. The amount available for withdrawal equals the Accumulation Value less any applicable surrender charge. Accumulation Value will be reduced by the amount of any withdrawal and applicable surrender charge. We expect to pay surrenders within seven days of receipt of your written request in proper form, however payment of surrenders may be delayed under certain circumstances. (See "Transfers" on page 24.) TERMINATION OF CONTRACT You may terminate the Contract at any time by giving us written notice. Such notice will specify a date of termination, which may not be earlier than 30 days after receipt at our home office. We may terminate the Contract by giving you written notice, if any one or more of the following events occurs: a) the Accumulation Value is less than $1,200; or b) you failed to provide any information or render any performance required by the terms of this Contract. Such termination notice will specify a date of termination, which will not be earlier than six months after the date you receive such notice. Upon termination, no further Purchase Payment will be accepted, and you shall designate a party to receive the amounts due on termination. We shall transfer the balance of the Accumulation Value less any applicable surrender charge to the designated party. We shall have no obligation or duty to verify that such party has the right to receive such payment, nor that the Plan is or will continue to be qualified under the Internal Revenue Code, nor that such payments will be properly applied by the designated party. Such payment or payments will fully and finally discharge us of all liability under this Contract, except for the payment of annuity benefits previously purchased. (See "Annuity Options, page 30). Termination of this Contract will have no effect upon the payments to be made by us to any person for whom an annuity has been purchased prior to the date of termination. 25
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ANNUITY PAYMENTS You can apply all or part of the Accumulation Value to any of the annuity options described below. These annuity options provide for fixed payments; accordingly, Accumulation Value will be transferred to the General Account and annuity payments will be based upon the annuity option selected. Annuity payments can begin at any time. Such payments must be for the exclusive benefit of a Plan Participant or beneficiary or for a person designated by you for the exclusive benefit of such Plan Participant or beneficiary. ANNUITY OPTIONS The following annuity options are available to Contract Owners. The Plans will specify which of these options are available to individual Plan Participants. . Option 1 - Life Annuity -- monthly payments during the lifetime of an individual, ceasing with the last annuity payment due before the individual's death. This option offers the maximum level of monthly annuity payments since there is no provision for a minimum number of annuity payments or a death benefit for beneficiaries. It would be possible under this option for an individual to receive only one annuity payment if death occurred before the due date of the second annuity payment, two if death occurred before the third annuity payment date, etc. . Option 2 - Life Annuity with ten or 20 Years Certain -- monthly payments during the lifetime of an individual with payments made for a period certain of not less than ten or 20 years, as elected. The annuity payments will be continued to a designated beneficiary until the end of the period certain. . Option 3 - Joint and Survivor Annuity -- monthly payments during the joint lifetime of an individual and another named individual and thereafter during the lifetime of the survivor, ceasing with the last annuity payment due before the survivor's death. It would be possible under this option for only one annuity payment to be made if both individuals under the option died before the second annuity payment date, or only two annuity payments if both died before the third annuity payment date, etc. . Option 4 - Installment Payments, Fixed Period --monthly payments for specified number of years of at least 5, but not exceeding 30. Payments will include interest at the effective rate of 2.5% per year. . Option 5 - Equal Installment Payments, Fixed Amount -- monthly installments (not less than $6.25 per $1,000 applied) until the amount applied, plus interest at an effective rate of 2.5% per year, is exhausted. The final annuity payment will be the remaining sum left with us. It may be more or less than the other payments. . Other Annuity Forms -- May be agreed upon. If a beneficiary dies while receiving annuity payments certain under Option 2, 4 or 5 above, the present value of minimum guaranteed payments will be paid in a lump sum to the estate of the beneficiary. The value of the annuity payment will vary based upon the amount of Accumulation Value applied to the annuity option. In addition, the annuity payment will be greater for shorter guaranteed periods than for longer guaranteed periods, and greater for life annuities than joint and survivor annuities. ANNUITY PROVISIONS We determine life contingent annuity payments based on the Annuity 2000 Mortality Table (50% male, 50% female blend) and 2.5% interest which generally reflects the age of the payee and type of annuity option selected. The payee's attained age at settlement will be adjusted downward by one year for each full five-year period that has lapsed since January 1, 2000. The effect of this adjustment is a reduction in the annuity payment provided. 26
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THE COMPANY, SEPARATE ACCOUNT, AND FUNDS AMERICAN NATIONAL INSURANCE COMPANY The Company is a stock life insurance company chartered in 1905 in the State of Texas. We write individual and group life, accident and health insurance and annuities. Our home office is located in the American National Insurance Building, One Moody Plaza, Galveston, Texas 77550-7999. The Moody Foundation, a charitable foundation, owns approximately 23.7% and the Libbie S. Moody Trust, a private trust, owns approximately 37.6% of our common stock. We are regulated by the Texas Department of Insurance and are subject to the insurance laws and regulations of other states where we operate. Each year, we file a National Association of Insurance Commissioners convention blank with the Texas Department of Insurance. Such convention blank covers our operations and reports on our financial condition and the separate account's financial condition as of December 31 of the preceding year. Periodically, the Texas Department of Insurance examines and certifies the adequacy of the separate accounts and our liabilities and reserves. A full examination of our operations is also conducted periodically by the National Association of Insurance Commissioners. Obligations under the Contract are our obligations. THE SEPARATE ACCOUNT We established the American National Variable Annuity Separate Account under Texas law on July 30, 1991. The separate account's assets are held exclusively for the benefit of persons entitled to payments under variable annuity contracts issued by us. We are the legal holder of the separate account's assets and will cause the total market value of such assets to be at least equal to the separate account's reserve and other contract liabilities. Such assets are held separate and apart from our General Account assets. We maintain records of all purchases and redemptions of shares of Eligible Portfolios by each of the subaccounts. Liabilities arising out of any other business we conduct cannot be charged against the assets of the separate account. Income, as well as both realized and unrealized gains or losses from the separate account's assets, is credited to or charged against the separate account without regard to income, gains or losses arising out of other business that we conduct. However, if the separate account's assets exceed its liabilities, the excess is available to cover the liabilities of our General Account. The separate account is registered with the Securities and Exchange Commission ("SEC") as a unit investment trust, which is a type of investment company. Such registration does not involve any SEC supervision of management or investment policies or practices. There are currently thirty-two subaccounts within the separate account available to Contract Owners and each invests only in a corresponding Eligible Portfolio. Since we are the legal holder of the Eligible Portfolio shares in the separate account we have the right to vote such shares at shareholders' meetings. To the extent required by law, we will vote in accordance with instructions from Contract Owners. The number of votes for which a Contract Owner has the right to provide instructions will be determined as of the record date selected by the Board of Directors of the American National Fund, the Fidelity Funds, the T. Rowe Price Funds, the MFS Fund, the Federated Fund, Alger American Fund, and the INVESCO VIF Funds. We will furnish you proper forms, materials, and reports to enable you to give us instructions if you choose. The number of shares of an Eligible Portfolio for which you can give instructions is determined by dividing the Accumulation Value held in the corresponding subaccount by the net asset value of one share in such Eligible Portfolio. Fractional shares will be counted. Shares of an Eligible Portfolio held in a subaccount for which you have not given timely instructions and other shares held in a subaccount will be voted by us in the same proportion as those shares in that subaccount for which timely instructions are received. Voting instructions to abstain will be applied on a pro rata basis to reduce the votes eligible to be cast. Should applicable federal securities laws or regulations permit, we may vote shares of the Eligible Portfolios in our own right. 27
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The separate account is not the only separate account that invests in the Eligible Portfolios. Other separate accounts, including those funding other variable annuity contracts, variable life policies and other insurance contracts and retirement plans, invest in some of the Eligible Portfolios. We do not believe this results in any disadvantages to you. However, there is a theoretical possibility that a material conflict of interest could arise with owners of variable life insurance policies funded by the separate account and owners of other variable annuity contracts whose values are allocated to other separate accounts investing in the Eligible Portfolios. There is also a theoretical possibility that a material conflict could arise between the interests of Contract Owners or owners of other contracts and the retirement plans which invest in the Eligible Portfolios or their participants. If a material conflict arises, we will take any necessary steps, including removing the Eligible Portfolio from the separate account, to resolve the matter. The Board of Directors of each Eligible Portfolio will monitor events in order to identify any material conflicts that may arise and determine what action, if any, to take in response to those events or conflicts. See the accompanying prospectuses for the Eligible Portfolios for more information. THE FUNDS Each subaccount invests in shares of a corresponding Eligible Portfolio of the American National Fund, the Fidelity Funds, the T. Rowe Price Funds, the MFS Fund, the Federated Fund, and the Alger American Fund. The investment objectives and policies of each Eligible Portfolio are summarized below. You will be notified of and have an opportunity to instruct us how to vote on any proposed material change in the investment policy of any Eligible Portfolio in which you have an interest. . The American National Fund - currently has the following series or Portfolios, each of which is an Eligible Portfolio: . AMERICAN NATIONAL MONEY MARKET PORTFOLIO ... seeks the highest current income consistent with the preservation of capital and maintenance of liquidity. . AMERICAN NATIONAL GROWTH PORTFOLIO ... seeks to achieve capital appreciation. . AMERICAN NATIONAL BALANCED PORTFOLIO ... seeks to conserve principal, produce reasonable current income, and achieve long-term capital appreciation. . AMERICAN NATIONAL EQUITY INCOME PORTFOLIO ... seeks to achieve growth of capital and/or current income. . AMERICAN NATIONAL GOVERNMENT BOND PORTFOLIO ... seeks to provide as high a level of current income, liquidity, and safety of principal as is consistent with prudent investment risks through investment in a portfolio consisting primarily of securities issued or guaranteed by the U.S. Government, its agencies, or instrumentalities. . AMERICAN NATIONAL SMALL-CAP/MID-CAP PORTFOLIO ... seeks to provide long-term capital growth by investing primarily in stocks of small to medium-sized companies. . AMERICAN NATIONAL HIGH YIELD BOND PORTFOLIO ... seeks to provide a high level of current income. As a secondary investment objective, the Portfolio seeks capital appreciation. . AMERICAN NATIONAL INTERNATIONAL STOCK PORTFOLIO ... seeks to obtain long- term growth of capital through investments primarily in the equity securities of established, non-U.S. companies. Securities Management and Research, Inc. ("SM&R"), one of our wholly owned subsidiaries, is the American National Fund's investment adviser. SM&R also provides investment advisory and portfolio management services to us and to other clients. SM&R maintains a staff of experienced investment personnel and related support facilities. . The Fidelity Funds - currently have 13 series or Portfolios, the following five of which are Eligible Portfolios: . FIDELITY MID CAP PORTFOLIO ... seeks long-term growth of capital, investing in stocks of companies with medium market capitalization both domestic and foreign issuers. . FIDELITY INDEX 500 PORTFOLIO ... seeks investment results that correspond to the total return of common stocks publicly traded in the United States, as represented by the S&P 500. The Portfolio normally invests at least 80% of its assets in common 28
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stocks included in the S&P 500. The Portfolio seeks to achieve a 98% or better correlation between its total return and the total return of the index. . FIDELITY CONTRAFUND PORTFOLIO ... seeks long-term capital appreciation. The Portfolio normally invests primarily in common stocks. The Portfolio invests in securities of companies whose value the Portfolio believes is not fully recognized by the public. . FIDELITY AGGRESSIVE GROWTH PORTFOLIO ... seeks capital appreciation in stocks of companies with potential for accelerated earnings or revenue growth, both domestic and foreign issuers. . FIDELITY GROWTH OPPORTUNITIES PORTFOLIO ... seeks to provide capital growth. The Portfolio normally invests its assets primarily in common stocks. The Portfolio may also invest in other types of securities, including bonds, which may be lower-quality debt securities. The Fidelity Asset Manager and the Fidelity Asset Manager: Growth Portfolio are no longer available. The Fidelity Management & Research Company ("FMR") is the Fidelity Funds' investment adviser. FMR provides a number of mutual funds and other clients with investment research and portfolio management services. Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research (Far East), wholly-owned subsidiaries of FMR, provide research with respect to foreign securities. FMR maintains a large staff of experienced investment personnel and a full complement of related support facilities. . The T. Rowe Price Funds - currently have the following series or Portfolios, each of which are Eligible Portfolios: . T. ROWE PRICE EQUITY INCOME PORTFOLIO ... seeks to provide substantial dividend income as well as long-term growth of capital through investments in common stocks of established companies. The Portfolio will normally invest at least 65% of its assets in the common stocks of well-established companies paying above-average dividends. . T. ROWE PRICE MID-CAP GROWTH PORTFOLIO ... seeks to achieve long term capital appreciation by investing in mid-cap stocks with potential for above-average earnings growth. The Portfolio will invest at least 65% of its assets in a diversified portfolio of common stocks of mid-cap companies whose earnings are expected to grow at a faster rate than the average company. The Portfolio considers "mid-cap companies" as companies with market capitalization (number of shares outstanding multiplied by share price) between $300 million and $5 billion. Most of the Portfolio's assets will be invested in U. S. common stocks. . T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO ... seeks to provide long-term growth of capital through investments primarily in common stocks of established non-U.S. companies. The Portfolio expects to invest substantially all of the Portfolio's assets (with a minimum of 65%) in established companies beyond U.S. borders. The Portfolio's focus will typically be on large and, to a lesser extent, medium-sized companies. . T. ROWE PRICE LIMITED-TERM BOND PORTFOLIO ... seeks a high level of income consistent with modest price fluctuation by investing primarily in investment grade debt securities. T. Rowe Price Associates, Inc. is responsible for selection and management of the Portfolio investments of T. Rowe Price Equity Securities and T. Rowe Price Fixed Income Securities. Rowe Price-Fleming International, Inc., a joint venture between T. Rowe Price Associates, Inc. and Robert Fleming Holdings Limited, is responsible for selection and management of the Portfolio investments of T. Rowe Price International Series. . The MFS Fund - currently has the following Portfolios, each of which are Eligible Portfolios: . MFS CAPITAL OPPORTUNITIES PORTFOLIO ... seeks capital appreciation. Dividend income, if any, is a consideration incidental to the Portfolio's objective of capital appreciation. While the Portfolio's policy is to invest primarily in common stocks, it may seek appreciation in other types of securities such as fixed income securities (which may be unrated), convertible bonds, convertible preferred stocks and warrants when relative values make such purchases appear attractive either as individual issues or as types of securities in certain economic environments. The Portfolio may invest in lower rated fixed income securities or comparable unrated securities. 29
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. MFS EMERGING GROWTH PORTFOLIO ... seeks to provide long-term growth of capital through investing primarily in common stocks of emerging growth companies, which involves greater risk than is customarily associated with investments in more established companies. The Portfolio may invest in a limited extent in lower rated fixed income securities or comparable unrated securities. . MFS RESEARCH PORTFOLIO ... seeks to provide long-term growth of capital and future income by investing a substantial proportion of its assets in the common stocks or securities convertible into common stocks of companies believed to possess better than average prospects for long-term growth. No more than 5% of the Portfolio's convertible securities, if any, will consist of securities in lower rated categories or securities believed to be of similar quality to lower rated securities. The Portfolio may invest in a limited extent in lower rated fixed income securities or comparable unrated securities. . MFS INVESTORS TRUST PORTFOLIO ... seeks long term growth of capital with a secondary objective to seek reasonable current income. Massachusetts Financial Service Company is responsible for selection and management of the Portfolio investments of the MFS Variable Series. . The Federated Fund - currently has the following Portfolios, each of which are Eligible Portfolios: . FEDERATED UTILITY FUND II PORTFOLIO ... seeks to achieve high current income and moderate capital appreciation. The Portfolio invests primarily in equity and debt securities of utility companies. . FEDERATED GROWTH STRATEGIES PORTFOLIO ... seeks capital appreciation. The Portfolio invests at least 65% of its assets in equity securities of companies with prospects for above average growth in earnings and dividends. . FEDERATED INTERNATIONAL SMALL COMPANY FUND II PORTFOLIO ... seeks long term growth of capital by investing primarily in equity securities of foreign companies that have a market capitalization at the time of purchase of $1.5 billion or less. . FEDERATED HIGH INCOME BOND PORTFOLIO ... seeks high current income. The Portfolio invests in fixed income securities, which are lower rated corporate debt obligations, which are commonly referred to as "junk bonds." The risk in investing in junk bonds is described in the prospectus for the Federated Insurance Series, which should be read carefully before investing. . FEDERATED EQUITY INCOME FUND II PORTFOLIO ... seeks to provide above average income and capital appreciation by investing in income producing equity securities including common stocks, preferred stocks, and debt securities that are convertible into common stocks, in cash and cash items during times of unusual conditions to maintain liquidity. Cash items may include commercial paper, Europaper, certificates of deposit, obligations of the U.S. Government, repurchase agreements, and other short-term instruments. Federated Advisors makes all investment decisions for the Federated Insurance Series, subject to direction by the Federated Insurance Series Trustees. . The Alger American Fund - currently has the following series or Portfolios, each of which is an Eligible Portfolio: . ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO ... seeks long-term capital appreciation. It focuses on small, fast growing companies that offer innovative products, services, or technologies to a rapidly expanding marketplace. . ALGER AMERICAN GROWTH PORTFOLIO ... seeks to achieve long-term capital appreciation. It focuses on growing companies that generally have broad product lines, markets, financial resources, and depth of management. . ALGER AMERICAN MIDCAP GROWTH PORTFOLIO ... seeks long-term capital appreciation. It focuses on midsize companies with promising growth potential. . ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO ... seeks to achieve long-term capital appreciation. Under normal circumstances, the Portfolio invests in the equity securities of companies of any size which demonstrate promising growth potential. The Portfolio can leverage, that is, borrow money, up to one-third of its total assets to buy additional securities. By 30
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borrowing money, the Portfolio has the potential to increase its returns if the increase in the value of the securities purchased exceeds the cost of borrowing, including interest paid on the money borrowed. . ALGER AMERICAN INCOME & GROWTH PORTFOLIO ... primarily seeks to provide a high level of dividend income; its secondary goal is to provide capital appreciation. The Portfolio invests in dividend paying equity securities, such as common or preferred stocks, preferably those that the manager believes also offer opportunities for capital appreciation. . ALGER AMERICAN BALANCED PORTFOLIO ... seeks current income and long-term capital appreciation. It focuses on stocks of companies with growth potential and fixed-income securities, with emphasis on income-producing securities that appear to have some potential for capital appreciation. Fred Alger Management, Inc. is the Alger American Fund's investment adviser. Fred Alger Management, Inc. maintains a staff of experienced investment personnel and related support facilities. The INVESCO Funds - currently have the following Portfolios, each of which is an Eligible Portfolio: . VIF-HEALTH SCIENCES PORTFOLIO ... seeks long term-capital growth by investing primarily in equity securities of companies that develop, produce or distribute products or services related to health care. These companies include, but are not limited to, medical equipment or supplies, pharmaceuticals, health care facilities, and applied research and development of new products or services. Sector funds may experience greater short-term price volatility than more diversified equity funds, and are most suitable for the aggressive portion of an investment portfolio. . VIF-SMALL COMPANY GROWTH PORTFOLIO ... seeks long-term capital growth by investing primarily in small-capitalization companies -- those with market capitalization of $2 billion or less at the time of purchase. We are primarily looking for companies in the developing stages of their life cycles, which are currently priced below our estimation of their potential, have earnings which may be expected to grow faster than the U.S. economy in general, and/or offer the potential for accelerated earnings growth due to rapid growth of sales, new products, management changes, and/or structural changes in the economy. Investing in smaller companies may entail greater risks because the security prices of small companies tend to fluctuate more rapidly than large, well established companies. . VIF-TELECOMMUNICATIONS PORTFOLIO ... seeks long-term capital growth. Investments are primarily in the equity securities of companies that are engaged in the design, development, manufacture, distribution, or sale of communications services and equipment, and companies that are involved in supplying equipment or services to such companies. Sector funds may experience greater short-term price volatility than more diversified equity funds, and are most suitable for the aggressive portion of an investment portfolio. Foreign investments entail special risks, including currency exchange rate fluctuations, as well as differences in securities regulation and accounting practices. . VIF-UTILITIES PORTFOLIO ... seeks capital appreciation and income. Investments are primarily in equity securities of companies doing business in the utilities economic sector. These companies include companies that produce, generate, transmit or distribute natural gas or electricity, as well as in companies that provide telecommunications services, including local, long distance and wireless. Sector funds may experience greater short-term price volatility than more diversified equity funds, and are most suitable for the aggressive portion of an investment portfolio. . VIF-DYNAMICS PORTFOLIO ... seeks long-term growth by investing primarily in common stocks of mid-sized U.S. companies -- those with market capitalization between $2 billion and $15 billion at the time of purchase -- but also has the flexibility to invest in other types of securities, including preferred stocks, convertible securities and bonds. The core of the Fund's portfolio is invested in securities of established companies that are leaders in attractive growth markets with a history of strong returns. The remainder of the portfolio is invested in securities of companies that show accelerating growth, driven by product cycles, favorable industry or sector conditions and other factors that INVESCO believes will lead to rapid sales or earnings growth. . VIF-REAL ESTATE OPPORTUNITY PORTFOLIO ... seeks to provide capital growth, with current income as a secondary consideration. Investments are primarily in equity securities of companies doing business in the real estate industry. These 31
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companies may include real estate investment trusts, real estate brokers, home builders or real estate developers, companies with substantial real estate holdings, and companies with significant involvement in the real estate industry. Sector funds may experience greater short-term price volatility than more diversified equity funds, and are most suitable for the aggressive portion of an investment portfolio. The real estate industry is highly cyclical, and the value of securities issued by companies doing business in that sector may fluctuate widely. The real estate industry -and, therefore, the performance of the portfolio - is highly sensitive to economic conditions, interest rates, property taxes, overbuilding, real estate values and the changes in rental income. . VIF-FINANCIAL SERVICES PORTFOLIO ... seeks long-term growth. Investments are primarily in equity securities of companies involved in the financial services sector. These companies include, among others, banks (regional and money-centers), insurance companies (life, property and casualty, and multiline), and investment and miscellaneous industries (asset managers, brokerage firms, and government-sponsored agencies). Sector funds may experience greater short-term price volatility than more diversified equity funds, and are most suitable for the aggressive portion of an investment portfolio. Foreign investments entail special risks, including currency exchange rate fluctuations, as well as differences in securities regulation and accounting practices. . VIF-TECHNOLOGY PORTFOLIO ... seeks long-term capital growth. Investments are primarily in the equity securities of companies engaged in technology- related industries. These include, but are not limited to, applied technology, biotechnology, communications, computers, electronics, Internet, IT services and consulting, oceanography, office and factory automation, networking, robotics and video. Many of these products and services are subject to rapid obsolescence, which may lower the market value of the securities of the companies in this sector. Sector funds may experience greater short-term price volatility than more diversified equity funds, and are most suitable for the aggressive portion of an investment portfolio. INVESCO is the INVESCO VIF Fund's investment adviser. INVESCO also provides investment advisory and portfolio management services to us and other clients. INVESCO maintains a staff of experienced investment personnel and related support facilities. The accompanying prospectuses should be read in conjunction with this prospectus before investing and contain a full description of the above funds, their investment policies and restrictions, risks, charges and expenses and other aspects of their operation. We have arrangements to provide services to certain Eligible Portfolios for which the advisor or distributor of such Portfolios pays us fees. The fees are based upon an annual percentage of the average aggregate net amount invested by us in such Eligible Portfolios. Some advisors or distributors pay us higher fees than others do. The Eligible Portfolios and the mutual funds of which they are a part are sold only to separate accounts of insurance companies offering variable annuity and variable life insurance contracts and, in some cases, to certain qualified pension and retirement plans. The Eligible Portfolios and mutual funds are not sold to the general-public and should not be mistaken for other mutual funds offered by the same sponsor or that have similar names. CHANGES IN INVESTMENT OPTIONS We may establish additional subaccounts which would invest in portfolios of other mutual funds chosen by us. We may also, from time to time, discontinue the availability of existing subaccounts. If we do, we may, by appropriate endorsement, make such changes to the Contract as we believe are necessary or appropriate. In addition, if a subaccount is discontinued, we may redeem shares in the corresponding Eligible Portfolio and substitute shares of another mutual fund. We will not do so, or make other changes, without prior notice to you and without complying with other applicable laws. Such laws may require approval by the SEC and the Texas Department of Insurance. If we deem it to be in your best interest, and subject to any required approvals, we may combine the separate account with another of our separate accounts. 32
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FEDERAL TAX MATTERS INTRODUCTION The following discussion is general in nature and is not intended as tax advice for each Contract Owner. It does not address the tax consequences resulting from all situations in which a Contract Owner may maintain such a Contract. Tax advice should be sought from a competent source prior to purchase. The discussion below is based on American National's understanding of the present federal tax law as currently interpreted by the Internal Revenue Service. No representation is made as to the continuation of present federal tax law or its current interpretation. No attempt is made to consider any applicable state tax or other tax laws, or to address any federal estate, or state and local estate, inheritance and other tax consequences of ownership or receipt of distributions under a Contract. TAXATION OF ANNUITIES IN GENERAL Since a group unallocated Contract is not purchased directly by individuals, those portions of the Code relating to individual ownership of annuities are not applicable to the group unallocated Contract Owner. Certain provisions of section 72 of the Code would apply if the Contract Owner is a corporation or is not a natural person and the Contract is not maintained under a plan which has favorable tax treatment under the Code. QUALIFIED CONTRACTS The group unallocated Contract is designed for use with several types of qualifying Plans subject to Code sections 401 and 457. The tax rules applicable to such qualified Plans vary according to the type of Plan and the terms and conditions of the Plan itself. Plan Participants in qualified Plans may include business owners (both self-employed and stockholders) and their employees for whom pension and profit sharing plans have been established and government employees covered by a section 457 deferred compensation plan. As a rule, Purchase Payments made by or for Plan Participants in qualified Plans are not subject to taxation at the time such payments are made in the Contract. In their capacity as Plan trustees or administrators, Contract Owners are responsible for the communication of appropriate information about the operation of the Plan and the tax consequences of making contributions to the Plan, purchasing this Contract under the Plan, and distributing Plan benefits. Distribution of benefits and tax withholding thereon is the sole responsibility of the Contract Owner. Adverse tax consequences may result if contributions, distributions, and other transactions with respect to the Contract do not comply with the law. Corporate pension and profit-sharing plans under section 401(a) of the Code allow corporate employers to establish various types of retirement plans for employees, and self-employed individuals to establish qualified plans for themselves and their employees. A Contract Owner that uses the Contract in conjunction with a defined contribution plan under section 401(a) of the Code (which is also known as an "individual account plan") is solely responsible for allocating the assets of the Contract with respect to participant's individual accounts. Plans established under section 457 of the Code, while not actually providing for a qualified plan as that term is normally used, provide for certain deferred compensation plans with respect to service for state governments, local governments, political subdivisions, agencies, instrumentalities and certain affiliates of such entities, and tax exempt organizations. Under a section 457 Plan, a participant may usually specify the form of investment in which his or her participation will be made. All such investments are, however, owned by and are subject to the claims of the general creditors of the non-governmental sponsoring employer. In general, all amounts received under a section 457 Plan are taxable and are subject to federal income tax withholding as wages. Due to the complexity of the tax rules associated with the sponsorship and operation of qualified Plans, entities contemplating establishment of such Plans should seek advice from competent sources with respect to the responsibilities and obligations associated with such Plans. 33
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We have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment of the group unallocated Contract. We make no guarantee regarding the tax status of the Contract and do not intend the above discussion as tax advice. 34
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PERFORMANCE Performance information for the subaccounts may appear in reports and advertising to current and prospective Contract Owners. The performance information is based on historical investment experience of the subaccounts and the Eligible Portfolios and does not indicate or represent future performance. Total returns are based on the overall dollar or percentage change in value of a hypothetical investment. Total return quotations reflect changes in Eligible Portfolio share prices, the automatic reinvestment by the separate account of all distributions and the deduction of applicable annuity charges (including any contingent deferred sales charges that would apply if a Contract Owner surrendered the Contract at the end of the period indicated). Quotations of total return may also be shown that do not take into account certain contractual charges such as a contingent deferred sales load. The total return percentage will be higher under this method than under the standard method described above. A cumulative total return reflects performance over a stated period. An average annual total return reflects the hypothetical annually compounded return that would have produced the same cumulative total return if the performance had been constant over the entire period. Because average annual total returns tend to smooth out variations in a subaccount's returns, you should recognize that they are not the same as actual year-by-year results. Some subaccounts may also advertise yield. These measures reflect the income generated by an investment in the subaccount over a specified period of time. This income is annualized and shown as a percentage. Yields do not take into account capital gains or losses or the contingent deferred sales load. The American National Money Market subaccount may advertise their current and effective yield. Current yield reflects the income generated by an investment in the subaccount over a 7-day period. Effective yield is calculated in a similar manner except that income earned is assumed to be reinvested. DISTRIBUTOR OF THE CONTRACT Securities Management and Research, Inc. ("SM&R"), 2450 South Shore Boulevard, Suite 400, League City, Texas 77573, our wholly-owned subsidiary, is the principal underwriter of the Contract. SM&R was organized under the laws of the State of Florida in 1964, is a registered broker/dealer, and is a member of the National Association of Securities Dealers. SM&R's registered representatives selling a Contract will receive commissions from SM&R. After issuance of the Contract, broker-dealers will receive commissions aggregating up to 7% of the Purchase Payments. In addition, after the first Contract Year, broker-dealers who have distribution agreements with us may receive an annual commission of up to 0.50% of the Contract's Accumulation Value. 35
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LEGAL MATTERS Various matters of Texas law pertaining to the Contract, including the validity of the Contract and our right to issue the Contract under Texas insurance law, have been reviewed by Greer, Herz and Adams, LLP, General Counsel. LEGAL PROCEEDINGS The Company and its affiliates, like other life insurance companies, are involved in lawsuits, including class action lawsuits. In some class action and other lawsuits involving insurers, substantial damages have been sought and material settlement payments have been made. Although the outcome of any litigation cannot be predicted with certainty, we believe at the present time no lawsuits are pending or threatened that are reasonably likely to have a material adverse impact on the separate account or us. EXPERTS The consolidated financial statements of American National Insurance Company and subsidiaries as of December 31, 2001 and 2000 and for the years then ended and the statements of net assets of American National Variable Annuity Separate Account as of December 31, 2001 and the related statements of operations for the year then ended, and the statements of changes in net assets for the periods presented,included in this prospectus and elsewhere in the registration statement, have been audited by KPMG LLP, independent public accountants, as indicated in their reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. The report of KPMG LLP covering the 2001 consolidated financial statements of American National Insurance Company and subsidiaries refers to the Company's adoption of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." The consolidated statement of income and the related statements of changes in stockholders' equity and cash flows of American National Insurance Company and subsidiaries for the year ended December 31, 1999 included in the registration statement, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. ADDITIONAL INFORMATION A registration statement describing the Contracts has been filed with the Securities and Exchange Commission under the Securities Act of 1933. This Prospectus does not contain all information in the registration statement, to which reference is made for further information concerning us, the separate account, and the Contract offered hereby. Statements contained in this prospectus as to the terms of the Contract and other legal instruments are summaries. For a complete statement of such terms, reference is made to such instruments as filed. 36
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FINANCIAL STATEMENTS Our financial statements should be considered only as bearing on our ability to meet our obligations under the Contracts. They should not be considered as bearing on the investment performance of the assets held in the separate account. The financial statements can be found in the Statement of Additional Information. 37
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TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION Page The Contract............................................... 3 Assignment................................................. 3 Distribution of the Contract............................... 3 Tax Matters................................................ 3 Records and Reports........................................ 4 Performance................................................ 4 Total Return............................................... 4 Other Total Return......................................... 5 Yields..................................................... 5 State Law Differences...................................... 6 Separate Account........................................... 6 Termination of Participating Agreements.................... 7 Financial Statements....................................... 12 Financials................................................. 13 38
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GROUP UNALLOCATED VARIABLE ANNUITY CONTRACT STATEMENT OF ADDITIONAL INFORMATION ISSUED BY AMERICAN NATIONAL INSURANCE COMPANY HOME OFFICE ONE MOODY PLAZA GALVESTON TX 77550-7999 1-800-306-2959 RELATING TO THE PROSPECTUS DATED MAY 1, 2002 CUSTODIAN American National Insurance Company One Moody Plaza Galveston, Texas 77550-7999 PRINCIPAL DISTRIBUTOR Securities Management and Research, Inc. 2450 South Shore Boulevard, Suite 400 League City, Texas 77573 INDEPENDENT AUDITORS KPMG LLP 700 Louisiana Houston, Texas 77002-2786 This Statement of Additional Information is not a prospectus and should be read only in conjunction with the Prospectus for the Contract ("the Contract"). AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF ADDITIONAL INFORMATION MAY 1, 2002 This Statement of Additional Information expands upon subjects discussed in the current prospectus for the Group Unallocated Variable Annuity Contract offered by American National Insurance Company ("American National"). You may obtain a copy of the prospectus dated May 1, 2002, by calling 1-800-306-2959, or writing to American National Insurance Company, One Moody Plaza, Galveston, Texas 77550-7999. Terms used in the current prospectus for the Contract are incorporated in this Statement. All terms not specifically defined in this statement shall have the meaning set forth in the current prospectus. Form 4872-SAI 1
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TABLE OF CONTENTS Page The Contract.............................. 3 Assignment................................ 3 Distribution of the Contract.............. 3 Tax Matters............................... 3 Records and Reports....................... 4 Performance............................... 4 Total Return............................ 5 Other Total Return...................... 5 Yields.................................. 6 State Law Differences..................... 6 Separate Account.......................... 7 Termination of Participating Agreements... 7 Financial Statements...................... 14 Financials................................ 16 2
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THE CONTRACT The following provides additional information about the Contract which supplements the description in the prospectus. ASSIGNMENT The Contract may not be assigned COMPUTATION OF VARIABLE ANNUITY PAYMENTS The amount of the first variable annuity payment to the Annuitant will depend on the amount of his/her Accumulation Value applied to effect the variable annuity as of the tenth day immediately preceding the date annuity payments commence, the amount of any premium tax owed (if applicable), the annuity option selected, and the age of the Annuitant. The Contract contains tables indicating the dollar amount of the first annuity payment under annuity options 1, 2, 4, and 5 for each $1,000 of Accumulation Value at various ages. These tables are based upon the Annuity 2000 Mortality Table (promulgated by the Society of Actuaries) and an Assumed Investment Rate (the "AIR") of 2.5% per annum. In any subsequent month, the dollar amount of the variable annuity payment is determined by multiplying the number of Annuity Units in the applicable subaccount(s) by the value of such Annuity Unit on the tenth day preceding the due date of such payment. The Annuity Unit value will increase or decrease in proportion to the net investment return of the subaccount(s) underlying the Variable Annuity since the date of the previous annuity payment, less an adjustment to neutralize the 2.50% or other AIR referred to above. Therefore, the dollar amount of variable annuity payments after the first will vary depending on whether the net investment return is greater or less than the 2.5% (or other AIR) per annum. For example, assuming a 2.5% AIR, if subaccounts underlying the Contract have a cumulative net investment return of 4% over a one year period, the first annuity payment in the next year will be approximately 1.5 percentage points greater than the payment on the same date in the preceding year, and subsequent payments will continue to vary with the investment experience of the applicable subaccount(s). If such net investment return is 1% over a one year period, the first annuity payment in the next year will be approximately 1.5 percentage points less than the payment on the same date in the preceding year, and subsequent payments will continue to vary with the investment experience of the applicable subaccount(s). DISTRIBUTION OF THE CONTRACT Subject to arrangements with American National, the Contract is sold as part of a continuous offering by independent broker-dealers who are members of the National Association of Security Dealers, Inc., and who become licensed to sell life insurance and variable annuities for American National. Pursuant to a Distribution and Administrative Services Agreement, Securities Management and Research, Inc. ("SM&R"), acts as the principal underwriter on behalf of American National for distribution of the Contract. Under the Agreement, SM&R is to use commercially reasonable efforts to sell the Contract through registered representatives. In connection with these sales activities, SM&R is responsible for: . compliance with the requirements of any applicable state broker-dealer regulations and the Securities Exchange Act of 1934, . keeping correct records and books of account in accordance with Rules 17a-3 and 17a-4 of the Securities Exchange Act, . training agents of American National for the sale of Contracts, and . forwarding all Purchase Payments under the Contracts directly to American National. SM&R is not entitled to any renumeration for its services as underwriter under the Distribution and Administrative Services Agreement; however, SM&R is entitled to reimbursement for all reasonable expenses incurred in connection with its duties as underwriter. TAX MATTERS Diversification Requirements. The Code requires that the investments underlying a separate account be "adequately diversified" in order for contracts to be treated as annuities for federal income tax purposes. We intend that the separate account, through the Eligible Portfolios, will satisfy these diversification requirements. In certain circumstances, owners of variable annuity contracts may be considered for federal income tax purposes to be the owners of the assets of the separate account supporting their contracts due to their ability to exercise investment control over those assets. When this is the case, the contract owners would be currently taxed on income and gains attributable to the separate account assets. There is little guidance in this area, and some features of the Contracts, such as the flexibility of a Contract Owner to allocate Purchase Payments and transfer Accumulation Value, have not been explicitly addressed in published rulings. While we believe that the Contracts do not give Contract Owners investment control over separate account assets, we reserve the right to modify the Contracts as necessary to prevent a Contract Owner from being treated as the owner of the separate account assets supporting a Contract. RECORDS AND REPORTS Reports concerning each Contract will be sent annually to each Contract Owner. Contract Owners will additionally receive annual and semiannual reports concerning the underlying funds and annual reports concerning the separate account. Contract Owners will also receive confirmations of receipt of Purchase Payments, changes in allocation of Purchase Payments and transfer of Accumulation Units. 3
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PERFORMANCE Performance information for any subaccount may be compared, in reports and advertising to: . the Standard & Poor's 500 Composite Stock Price Index ("S & P 500"), . Dow Jones Industrial Average ("DJIA"), . Donoghue's Money Market Institutional Averages; other variable annuity separate accounts or other investment products tracked by Lipper Analytical Services, Lehman-Brothers, Morningstar, or the Variable Annuity Research and Data Service, widely used independent research firms which rank mutual funds and other investment companies by overall performance, investment objectives, and assets, and . the Consumer Price Index (measure for inflation) to assess the real rate of return from an investment in a Contact. Unmanaged indices may assume the reinvestment of dividends but generally do not reflect deductions for annuity charges and investment management costs. Total returns, yields and other performance information may be quoted numerically or in a table, graph, or similar illustration. Reports and advertising may also contain other information including: . the ranking of any subaccount derived from rankings of variable annuity separate accounts or other investment products tracked by Lipper Analytical Series or by rating services, companies, publications or other persons who rank separate accounts or other investment products on overall performance or other criteria, and . the effect of tax deferred compounding on a subaccount's investment returns, or returns in general, which may be illustrated by graphs, charts, or otherwise, and which may include a comparison, at various points in time, of the return from an investment in a Contract (or returns in general) on a tax- deferred basis (assuming one or more tax rates) with the return on a taxable basis. 4
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TOTAL RETURN Total return quoted in advertising reflects all aspects of a subaccount's return, including the automatic reinvestment by the separate account of all distributions and any change in the subaccount's value over the period. Average annual returns are calculated by determining the growth or decline in value of a hypothetical historical investment in the subaccount over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. For example, a cumulative return of 100% over ten years would produce an average annual return of 7.18%, which is the steady rate that would equal 100% growth on a compounded basis in ten years. While average annual returns are a convenient means of comparing investment alternatives, investors should realize that the subaccount's performance is not constant over time, but changes from year to year, and that average annual returns represent averaged figures as opposed to the actual year-to-year performance of a subaccount. Average annual total returns are computed by finding the average annual compounded rates of return over the periods shown that would equate the initial amount invested to the withdrawal value, in accordance with the following formula: P(1+T)/n/ = ERV where P is a hypothetical investment payment of $1,000, T is the average annual total return, n is the number of years, and ERV is the withdrawal value at the end of the periods shown. Since the Contract is intended as a long-term product, the average annual total returns assume that no money was withdrawn from the Contract prior to the end of the period. In addition to average annual returns, the subaccounts may advertise unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. From time to time, sales literature or advertisements may also quote average annual total returns for periods prior to the date the separate account commenced operations. Such performance information for the subaccounts will be calculated based on the performance of the Eligible Portfolios and the assumption that the subaccounts were in existence for the same periods as those indicated for the Eligible Portfolios, with the level of Contract charges currently in effect. OTHER TOTAL RETURN From time to time, sales literature or advertisements may also quote average annual total returns that do not reflect the Surrender Charge. These are calculated in exactly the same way as the average annual total returns described above, except that the ending redeemable value of the hypothetical account for the period is replaced with an ending value for the period that does not take into account any charges on amounts surrendered. Sales literature or advertisements may also quote average annual total returns for periods prior to the date the Separate Account commenced operations, calculated based on the performance of the Eligible Portfolios and the assumption that the subaccounts were in existence for the same periods as those indicated for the Eligible Portfolios, with the level of Contract charges currently in effect except for the Surrender Charge. YIELDS Some subaccounts may also advertise yields. Yields quoted in advertising reflect the change in value of a hypothetical investment in the subaccount over a stated period of time, not taking into account capital gains or losses. Yields are annualized and stated as a percentage. Yields do not reflect the impact of any contingent deferred sales load. Yields quoted in advertising may be based on historical seven-day periods. Current yield of a money market subaccount will reflect the income generated over a 7-day period. Current yield is calculated by determining the net change, exclusive of capital changes, in the value of a hypothetical account having one Accumulation Unit at the beginning of the period and dividing the difference by the value of the account at the beginning of the base period to obtain the base period return, and multiplying the base period return by (365/7). The resulting yield figure will be carried to the nearest hundredth of a percent. Effective yield for a money market subaccount is calculated in a similar manner to current yield except that investment income is assumed to be reinvested throughout the year at the 7-day rate. Effective yield is 5
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obtained by taking the base period returns as computed above, and then compounding the base period return by adding 1, raising the sum to a power equal to (365/7) and subtracting one from the result, according to the formula Effective Yield = [(Base Period Return +1)/365/7/] - 1. Since the reinvestment of income is assumed in the calculation of effective yield, it will generally be higher than current yield. A 30-day yield for bond subaccounts will reflect the income generated by a subaccount over a 30-day period. Yield will be computed by dividing the net investment income per Accumulation Unit earned during the period by the maximum offering price per Accumulation Unit on the last day of the period, according to the following formula: Yield = 2[((a - b)/cd + 1)/6/ - 1] where a = net investment income earned by the applicable Portfolio, b = expenses for the period including expenses charged to the Contract Owner accounts, c = the average daily number of Accumulation Units outstanding during the period, and d = the maximum offering price per Accumulation Unit on the last day of the period. STATE LAW DIFFERENCES Differences in state laws may require American National to offer a Contract in one or more states which is more favorable to a Contract Owner than that offered in other states. 6
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SEPARATE ACCOUNT The separate account will purchase and redeem shares of the Eligible Portfolios at net asset value. The net asset value of a share is equal to the total assets of the Portfolio less the total liabilities of the Portfolio divided by the number of shares outstanding. American National will redeem shares in the Eligible Portfolios as needed to: . collect charges, . pay surrenders, or . provide benefits. Any dividend or capital gain distribution received from an Eligible Portfolio will be reinvested immediately at net asset value in shares of that Eligible Portfolio and retained as assets of the corresponding subaccount. The separate account may include subaccounts that are not available under the Contract. American National may from time to time discontinue the availability of some of the subaccounts. If the availability of a subaccount is discontinued, American National may redeem any shares in the corresponding Eligible Portfolio and substitute shares of another registered open-end management company. American National may also establish additional subaccounts. Each new subaccount would correspond to a portfolio of a registered, open-end management company. American National would establish the terms upon which existing Contract Owners could purchase units of a new subaccount. If any of these substitutions or changes is made, American National may change the Contract by sending an endorsement. American National may: . operate the separate account as a management company, . de-register the separate account if registration is no longer required, . combine the separate account with other separate accounts, restrict or eliminate any voting rights associated with the separate account, or . transfer the assets of the separate account relating to the Contracts to another separate account. American National would, of course, not make any changes to the menu of Eligible Portfolios or to the separate account without complying with applicable laws and regulations. Such laws and regulations may require notice to and approval from the Contract Owners, the SEC, and state insurance regulatory authorities. TERMINATION OF PARTICIPATION AGREEMENTS The participation agreements pursuant to which the funds sell their shares to the separate account contain varying provisions regarding termination. The following generally summarizes those provisions. THE AMERICAN NATIONAL FUND The participation agreement for the American National Fund provides for termination: . upon sixty days advance written notice by any party, . by American National if any of the American National Fund's shares are not reasonably available to meet the requirements of the Contracts, 7
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. by American National if any of the shares of the American National Fund are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes use of such shares as the underlying investment medium of the Contracts, . by American National upon the requisite vote of the Contract Owners having an interest in a particular subaccount to substitute the shares of another investment company for the corresponding American National Fund shares, or . by American National upon institution of formal proceedings against the American National Fund by the SEC. THE FIDELITY FUNDS All participation agreements for the Fidelity Funds provide for termination: . upon sixty days advance written notice by any party, . by American National with respect to any Fidelity Portfolio if American National determines that shares of such Fidelity Portfolio are not reasonably available to meet the requirements of the Contracts, . by American National with respect to any Fidelity Portfolio if any of the shares of such Fidelity Portfolio are not registered, issued, or sold in accordance with applicable state or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts, . by American National with respect to any Fidelity Portfolio if such Fidelity Portfolio ceases to be qualified as a Regulated Investment Company under Subchapter M of the Internal Revenue Code (the "Code"), or if American National reasonably believes the Fidelity Funds may fail to so qualify, . by American National with respect to any Fidelity Portfolio if such Fidelity Portfolio fails to meet the diversification requirements specified in the Fidelity participation agreement, . by the Fidelity Funds or the underwriter, upon a determination by either, that American National has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . by American National upon a determination by American National that either the Fidelity Funds or the underwriter has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . by the Fidelity Funds or the underwriter forty-five days after American National gives the Fidelity Funds and the underwriter written notice of American National's intention to make another investment company available as a funding vehicle for the Contracts, if at the time such notice was given, no other notice of termination of the Fidelity participation agreement was then outstanding, or . upon a determination that a material irreconcilable conflict exists between the interests of the Contract Owners and other investors in the Fidelity Funds or between American National's interests in the Fidelity Funds and the interests of other insurance companies invested in the Fidelity Funds. THE T. ROWE PRICE FUNDS This participation agreement provides for termination: . upon six months advance written notice by any party, . by American National with respect to any T. Rowe Price Portfolio if American National determines that shares of such T. Rowe Price Portfolio are not reasonably available to meet the requirements of the Contracts, 8
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. by American National with respect to any T. Rowe Price Portfolio if any of the shares of such T. Rowe Price Portfolio are not registered, issued, or sold in accordance with applicable state or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts, . by the T. Rowe Price Funds or the underwriter upon the institution of formal proceedings against American National by the SEC, NASD, or any other regulatory body regarding American National's duties under the T. Rowe Price participation agreement or related to the sale of the Contracts, the operation of the separate account, or the purchase of T. Rowe Price Funds shares, if the T. Rowe Price Funds or the underwriter determines that such proceedings will have a material adverse effect on American National's ability to perform under the T. Rowe Price participation agreement, . by American National upon the institution of formal proceedings against the T. Rowe Price Funds or the underwriter by the SEC, NASD, or any other regulatory body, if American National determines that such proceedings will have a material adverse effect upon the ability of the T. Rowe Price Funds or the underwriter to perform its obligations under the T. Rowe Price participation agreement, . by American National with respect to any T. Rowe Price Portfolio if such T. Rowe Price Portfolio ceases to qualify as a Regulated Investment Company under Subchapter M of the Code, or if American National reasonably believes the T. Rowe Price Funds may fail to so qualify, . by American National with respect to any T. Rowe Price Portfolio if such T. Rowe Price Portfolio fails to meet the diversification requirements specified in the T. Rowe Price participation agreement, or American National reasonably believes the T. Rowe Price Portfolio may fail to so comply, . by the T. Rowe Price Funds or the underwriter, upon a determination by either, that American National has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . by American National upon a determination by American National that either the T. Rowe Price Funds or the underwriter has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . by the T. Rowe Price Funds or the underwriter sixty days after American National gives the T. Rowe Price Funds and the underwriter written notice of American National's intention to make another investment company available as a funding vehicle for the Contracts if at the time such notice was given, no other notice of termination of the T. Rowe Price participation agreement was then outstanding, or . upon a determination that a material irreconcilable conflict exists between the Contract Owners and other investors in the T. Rowe Price Funds or between American National's interests in the T. Rowe Price Funds and interests of other insurance companies invested in the T. Rowe Price Funds. THE FEDERATED FUND This participation agreement provides for termination: . upon one hundred eighty days advance written notice by any party, . at American National's option if American National determines that shares of the Federated Portfolios are not reasonably available to meet the requirements of the Contracts, . at the option of the Federated Fund or the underwriter upon the institution of formal proceedings against American National by the SEC, NASD, or any other regulatory body regarding American National's duties under the Federated participation agreement or related to the sale of the Contracts, the operation of the separate account, or the purchase of Federated Fund shares, . at American National's option upon the institution of formal proceedings against the Federated Fund or the underwriter by the SEC, NASD, or any other regulatory body, 9
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. upon a requisite vote of the Contract Owners to substitute shares of another fund for shares of the Federated Fund, . if any of the shares of a Federated Portfolio are not registered, issued, or sold in accordance with applicable state or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts, . upon a determination by the Federated Fund that an irreconcilable conflict exists between the Contract Owners and other investors in the Federated Fund or between American National's interests in the Federated Fund and the interests of other insurance companies invested in the Federated Fund, . at American National's option if the Federated Fund or a Federated Portfolio ceases to qualify as a Regulated Investment Company under Subchapter M of the Code, or . at American National's option if the Federated Fund or a Federated Portfolio fails to meet the diversification requirements specified in the Federated participation agreement. THE MFS FUND This participation agreement provides for termination: . upon six months advance written notice by any party, . at American National's option to the extent the shares of any MFS Portfolio are not reasonably available to meet the requirements of the Contracts or are not "appropriate funding vehicles" for the Contracts, as determined by American National, . at the option of the MFS Fund or the underwriter upon the institution of formal proceedings against American National by the SEC, NASD, or any other regulatory body regarding American National's duties under the MFS participation agreement or related to the sale of the Contracts, the operation of the separate account, or the purchase of shares of the MFS Fund, . at American National's option upon the institution of formal proceedings against the MFS Fund by the SEC, NASD, or any other regulatory body regarding the MFS Fund's or the underwriter's duties under the MFS participation agreement or related to the sale of shares of the MFS Fund, . at the option of any party upon receipt of any necessary regulatory approvals or the vote of the Contract Owners to substitute shares of another fund for the shares of the MFS Fund, provided American National gives the MFS Fund and the underwriter thirty days advance written notice of any proposed vote or other action taken to replace the shares of the MFS Fund, . by the MFS Fund or the underwriter upon a determination by either that American National has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . by American National upon a determination by American National that the MFS Fund or the underwriter has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . at the option of any party, upon another party's material breach of any provision of the MFS participation agreement, or . upon assignment of the MFS participation agreement, unless made with the written consent of the parties to the MFS participation agreement. THE ALGER AMERICAN FUND This participation agreement provides for termination: . upon six months advance written notice by any party, . at American National's option to the extent the shares of any Alger American Portfolio are not reasonably available to meet the requirements of the Contracts or are not "appropriate funding vehicles" for the Contracts, as determined by American National, . at the option of the Alger American Fund or the underwriter upon the institution of formal proceedings against American National by the SEC, NASD, or any other regulatory body regarding American National's duties under the Alger American 10
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participation agreement or related to the sale of the Contracts, the operation of the separate account, or the purchase of shares of the Alger American Fund, . at American National's option upon the institution of formal proceedings against the Alger American Fund by the SEC, NASD, or any other regulatory body regarding the Alger American Fund's or the underwriter's duties under the Alger American participation agreement or related to the sale of shares of the Alger American Fund, . at the option of any party upon receipt of any necessary regulatory approvals or the vote of the Contract Owners to substitute shares of another fund for the shares of the Alger American Fund, provided American National gives the Alger American Fund and the underwriter thirty days advance written notice of any proposed vote or other action taken to replace the shares of the Alger American Fund, . by the Alger American Fund or the underwriter upon a determination by either that American National has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . by American National upon a determination by American National that the Alger American Fund or the underwriter has suffered a material adverse change in its business, operations, financial condition, or prospects, or is the subject of material adverse publicity, . at the option of any party, upon another party's material breach of any provision of the Alger American participation agreement, or . upon assignment of the Alger American participation agreement, unless made with the written consent of the parties to the Alger American participation agreement. 11
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THE INVESCO FUNDS The INVESCO Funds participation agreement provides for termination: upon six months advance written notice by any party, with respect to any INVESCO Portfolio, . by American National, upon written notice with respect to any INVESCO Portfolio, if American National determines that shares of such portfolio are not reasonably available to meet the requirements of the Contracts, . by American National, upon written notice with respect to any INVESCO Portfolio, if the shares of such portfolio are not registered, issued or sold in accordance with applicable state or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts, . by the INVESCO Funds, upon written notice, upon institution of formal proceedings against American National by the NASD, the SEC, any state insurance department or any other regulatory body regarding American National's duties under the participation agreement or related to the sale or administration of the Contracts, the operation of the separate account, or the purchase of INVESCO Funds shares, if the INVESCO Funds determines in good faith that any such proceeding would have a material adverse effect on American National's ability to perform its obligations under the participation agreement, . by American National, upon written notice, upon institution of formal proceedings against the INVESCO Funds or the investment adviser by the NASD, the SEC, any state securities or insurance department or any other regulatory body, if American National determines in good faith that any such proceeding would have a material adverse effect on the INVESCO Funds or the adviser's ability to perform its obligations under the participation agreement, . by American National, upon written notice, if the INVESCO Funds cease to qualify as a Regulated Investment Company under Subchapter M of the Code, or if American National reasonably and in good faith believes that the INVESCO Funds may fail to so qualify, . by American National, upon written notice with respect to any INVESCO Portfolio, if the INVESCO Funds fail to meet the diversification requirements specified in the participation agreement or if American National reasonably and in good faith believes that the INVESCO Funds may fail to meet such requirements, . by any party to the participation agreement, upon written notice, upon another party's material breach of any provision of the participation agreement, . by American National, 60 days after the other parties' receipt of written notice, if American National determines in good faith that either the INVESCO Funds or the adviser has suffered a material adverse change in its business, operations or financial condition since the date of the participation agreement or is the subject of material adverse publicity which is likely to have a material adverse impact upon the business and operations of American National, . by the INVESCO Funds or the adviser, 60 days after the other parties' receipt of written notice, if either of them determines in good faith that American National has suffered a material adverse change in its business, operations or financial condition since the date of the participation agreement or is the subject of material adverse publicity which is likely to have a material adverse impact upon the business and operations of the INVESCO Funds or the adviser, . by American National or the INVESCO Funds upon receipt of any necessary regulatory approvals and/or the vote of the Contract Owners to substitute shares of another investment company for the shares of an INVESCO Portfolio, provided American National gives the INVESCO Funds 60 days advance written notice of any proposed vote or other action taken to replace the shares or the filing of any required regulatory approval, . by American National or the INVESCO Funds upon a determination that an irreconcilable material conflict exists among the interests of all Contract Owners of all separate accounts or the interests of the insurance companies invested in the INVESCO Funds, or 12
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. by the INVESCO Funds, effective immediately without notice, if any of the Contracts are not issued or sold in accordance with applicable federal or state law. FINANCIAL STATEMENTS The financial statements of American National should be considered only as bearing on the ability of American National to meet its obligations under the Contracts. They should not be considered as bearing on the investment performance of the assets held in the separate account. 13
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INDEPENDENT AUDITORS' REPORT To the Board of Directors of American National Insurance Company and Contract Owners of American National Variable Annuity Separate Account: We have audited the accompanying statements of net assets of the American National Variable Annuity Separate Account (comprised of American National (AN) Growth, AN Money Market, AN Balanced, AN Equity Income, AN High Yield Bond, AN Government Bond, AN Small-Cap/Mid-Cap, AN International Stock, Fidelity Asset Manager, Fidelity Index 500, Fidelity Growth Opportunities, Fidelity Contra Fund, Fidelity Asset Manager Growth, Fidelity Growth and Income, Fidelity Equity Income, Fidelity Growth, Fidelity High Income, Fidelity Money Market, Fidelity Overseas, Fidelity Investment Bond, Fidelity Balanced, Fidelity Mid Cap, Fidelity Aggressive Growth II, Fidelity Asset Manager II, Fidelity Asset Manager Growth II, Fidelity Contra Fund II, Fidelity Index 500 II, Fidelity Growth Opportunities II, Fidelity Mid Cap II, T. Rowe Price (TRP) Limited Term Bond, TRP Equity Income, TRP International Stock, TRP Mid-Cap Growth, MFS Research, MFS Capital Opportunities, MFS Emerging Growth, MFS Investors Trust, Van Eck (VE) Worldwide Emerging Markets, VE Worldwide Hard Assets, Lazard (LAZ) Retirement Emerging Markets, LAZ Retirement Small Cap, Federated Growth Strategies, Federated U.S. Government Bond, Federated High Income Bond, Federated Equity Income, Federated Utility, Federated International, Alger American Balanced, Alger American Growth, Alger American Income & Growth, Alger American Leveraged AllCap, Alger American MidCap Growth, Alger American Small Capitalization, INVESCO Dynamics, INVESCO Health Science, INVESCO Technology, INVESCO Small Company Growth, INVESCO Real Estate Opportunity, INVESCO Utilities, INVESCO Telecommunications, and INVESCO Financial Services Portfolio Subaccounts) (collectively, the Account) as of December 31, 2001, and the related statements of operations and changes in net assets for the periods presented. These financial statements are the responsibility of the Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2001 by correspondence with the underlying mutual funds or their transfer agent. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Account as of December 31, 2001 and the results of its operations and changes in net assets for the periods presented, in conformity with accounting principles generally accepted in the United States of America. KPMG LLP Houston, Texas April 25, 2002 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- AN AN AN AN Growth Equity Income Balanced Money Market ---------------------------------------------------------------------------------------------------------------------------------- Assets American National Growth Portfolio - 3,109,640 shares at net asset value of $1.60 4,975 (cost $5,335) American National Equity Income Portfolio - 6,855,274 shares at net asset value of $1.61 11,037 (cost $11,885) American National Balanced Portfolio - 3,030,144 shares at net asset value of $1.34 4,060 (cost $4,460) American National Money Market Portfolio - 9,941,779 shares at net asset value of $1.00 9,942 (cost $9,942) Total Assets 4,975 11,037 4,060 9,942 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 4,975 11,037 4,060 9,942 Contractholders' Equity Wealthquest Variable Annuity 1,497 4,944 2,149 2,614 Investrac Gold Variable Annuity 3,400 5,582 1,526 170 Group Unallocated Variable Annuity 1 1 6 Investrac Gold Annuitized Variable Annuity 0 59 55 0 Wealthquest III Variable Annuity - No Rider 54 209 89 4,628 Wealthquest III Variable Annuity - 6 yr Ratchet 2 92 0 124 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 6 Wealthquest III Variable Annuity - 5% Rollup 0 67 55 468 Group Unallocated Variable Annuity Registered 21 83 180 1,932 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 1,407,613 3,901,865 1,895,220 2,330,961 Investrac Gold Variable Annuity 1,866,472 2,500,728 876,877 137,422 Group Unallocated Variable Annuity 430 489 3,579 Investrac Gold Annuitized Variable Annuity 0 26,463 31,349 0 Wealthquest III Variable Annuity - No Rider 68,227 231,855 96,328 4,470,160 Wealthquest III Variable Annuity - 6 yr Ratchet 2,838 102,253 0 119,640 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 5,671 Wealthquest III Variable Annuity - 5% Rollup 0 75,400 59,445 454,685 Group Unallocated Variable Annuity Registered 27,309 91,692 194,077 1,864,080 Contractholders' Equity- Unit Value Wealthquest Variable Annuity 1.06 1.27 1.13 1.12 Investrac Gold Variable Annuity 1.82 2.23 1.74 1.24 Group Unallocated Variable Annuity 2.08 2.39 1.78 Investrac Gold Annuitized Variable Annuity 1.82 2.23 1.74 1.24 Wealthquest III Variable Annuity - No Rider 0.79 0.90 0.93 1.04 Wealthquest III Variable Annuity - 6 yr Ratchet 0.79 0.90 0.93 1.03 Wealthquest III Variable Anniuty - 3% Rollup 0.79 0.90 0.93 1.03 Wealthquest III Variable Annuity - 5% Rollup 0.78 0.90 0.92 1.03 Group Unallocated Variable Annuity Registered 0.79 0.90 0.93 1.04 [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------ AN Gov't AN High AN Small/ AN Bond Yield Bond MidCap International ------------------------------------------------------------------------------------------------------------------------ Assets American National Government Bond Portfolio - 175,052 shares at net asset value of $1.05 184 (cost $191) American National High Yield Bond Portfolio - 182,848 shares at net asset value of $0.86 157 (cost $174) American National Small Cap/Mid Cap Portfolio - 348,465 shares at net asset value of $0.30 105 (cost $161) American National International Stock Portfolio - 49,570 shares at net asset value of $0.61 30 (cost $38) Total Assets 184 157 105 30 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 184 157 105 30 Contractholders' Equity Wealthquest Variable Annuity 60 87 18 5 Investrac Gold Variable Annuity 36 2 65 0 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 35 6 5 0 Wealthquest III Variable Annuity - 6 yr Ratchet 14 13 9 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 21 29 0 15 Group Unallocated Variable Annuity Registered 18 20 8 10 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 55,461 87,570 66,446 6,253 Investrac Gold Variable Annuity 33,462 1,666 231,454 141 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 31,805 6,483 15,816 0 Wealthquest III Variable Annuity - 6 yr Ratchet 12,497 13,338 29,881 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 18,712 30,251 0 23,484 Group Unallocated Variable Annuity Registered 16,035 20,099 26,248 14,675 Contractholders' Equity- Unit Value Wealthquest Variable Annuity 1.09 0.99 0.28 0.82 Investrac Gold Variable Annuity 1.07 1.00 0.28 0.81 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 1.11 0.99 0.30 0.64 Wealthquest III Variable Annuity - 6 yr Ratchet 1.10 0.98 0.30 0.64 Wealthquest III Variable Anniuty - 3% Rollup 1.10 0.98 0.30 0.64 Wealthquest III Variable Annuity - 5% Rollup 1.10 0.98 0.30 0.64 Group Unallocated Variable Annuity Registered 1.11 0.99 0.30 0.65
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fideltiy Growth & Equity Growth High Income Income Income ---------------------------------------------------------------------------------------------------------------------------------- Assets Fidelity VIP III Growth & Income - 6,989 shares at net asset value of $13.19 92 (cost $111) Fidelity VIP Equity Income - 127,442 shares at net asset value of $22.75 2,899 (cost $3,094) Fidelity VIP Growth - 109,542 shares at net asset value of $33.61 3,682 (cost $5,434) Fidelity VIP High Income - 48,695 shares at net asset value of $6.41 312 (cost $499) Total Assets 92 2,899 3,682 312 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 92 2,899 3,682 312 Contractholders' Equity Wealthquest Variable Annuity Investrac Gold Variable Annuity 92 2,895 3,675 287 Group Unallocated Variable Annuity 4 7 7 Investrac Gold Annuitized Variable Annuity 0 0 18 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity Investrac Gold Variable Annuity 106,154 1,341,769 1,501,581 276,690 Group Unallocated Variable Annuity 1,725 2,681 5,940 Investrac Gold Annuitized Variable Annuity 0 0 17,750 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity- Unit Value Wealthquest Variable Annuity Investrac Gold Variable Annuity 0.87 2.16 2.45 1.04 Group Unallocated Variable Annuity 2.31 2.68 1.11 Investrac Gold Annuitized Variable Annuity 2.16 2.45 1.04 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fideltiy Money Overseas Investment Asset Market Bond Manager ---------------------------------------------------------------------------------------------------------------------------------- Assets Fidelity VIP Money Market - 657,815 shares at net asset value of $1.00 658 (cost $658) Fidelity VIP Overseas - 31,207 shares at net asset value of $13.88 433 (cost $708) Fidelity VIP II Investment Bond - 33,449 shares at net asset value of $12.92 432 (cost $405) Fidelity VIP II Asset Manager - 147,694 shares at net asset value of $14.51 2,143 (cost $2,326) Total Assets 658 433 432 2,143 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 658 433 432 2,143 Contractholders' Equity Wealthquest Variable Annuity 1,387 Investrac Gold Variable Annuity 647 408 427 756 Group Unallocated Variable Annuity 11 0 5 0 Investrac Gold Annuitized Variable Annuity 0 25 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 1,243,493 Investrac Gold Variable Annuity 493,494 328,521 274,976 446,607 Group Unallocated Variable Annuity 8,039 46 2,968 0 Investrac Gold Annuitized Variable Annuity 0 19,985 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity- Unit Value Wealthquest Variable Annuity 1.12 Investrac Gold Variable Annuity 1.31 1.24 1.55 1.69 Group Unallocated Variable Annuity 1.40 1.31 1.60 1.00 Investrac Gold Annuitized Variable Annuity 1.31 1.24 1.55 1.69 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Index Contra- Asset 500 Fund Manager ---------------------------------------------------------------------------------------------------------------------------------- Assets Fidelity VIP II Index 500 - 98,558 shares at net asset value of $130.07 12,819 (cost $13,307) Fidelity VIP II Contra Fund - 357,695 shares at net asset value of $20.13 7,200 (cost $8,415) Fidelity VIP II Asset Mgr Growth - 116,189 shares at net asset value of $12.56 1,459 (cost $1,774) Total Assets 12,819 7,200 1,459 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 Total Liabilities 0 0 0 Net assets applicable to contract owners 12,819 7,200 1,459 Contractholders' Equity Wealthquest Variable Annuity 7,738 5,017 1,062 Investrac Gold Variable Annuity 5,079 2,132 395 Group Unallocated Variable Annuity 2 2 2 Investrac Gold Annuitized Variable Annuity 0 49 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 6,656,634 4,263,833 1,019,729 Investrac Gold Variable Annuity 2,020,535 1,026,955 255,446 Group Unallocated Variable Annuity 595 994 1,386 Investrac Gold Annuitized Variable Annuity 0 23,536 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity- Unit Value Wealthquest Variable Annuity 1.16 1.18 1.04 Investrac Gold Variable Annuity 2.51 2.08 1.55 Group Unallocated Variable Annuity 2.93 2.23 1.61 Investrac Gold Annuitized Variable Annuity 2.51 2.08 1.55 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fideltiy Balanced Growth Midcap Port Opp Port Port ---------------------------------------------------------------------------------------------------------------------------------- Assets Fidelity VIP III Balanced Portfolio - 3,166 shares at net asset value of $13.72 43 (cost $46) Fidelity VIP III Growth Opp Port - 126,201 shares at net asset value of $15.13 1,909 (cost $2,668) Fidelity VIP III Mid Cap Portfolio - 33,258 shares at net asset value of $19.60 652 (cost $615) Total Assets 43 1,909 652 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 Total Liabilities 0 0 0 Net assets applicable to contract owners 43 1,909 652 Contractholders' Equity Wealthquest Variable Annuity 1,872 Investrac Gold Variable Annuity 43 37 652 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 2,095,635 Investrac Gold Variable Annuity 47,473 54,697 426,906 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity- Unit Value Wealthquest Variable Annuity 0.89 Investrac Gold Variable Annuity 0.91 0.68 1.53 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fidelity Aggressive Asset Asset Manager Contra- Growth Manager II Growth II Fund II ------------------------------------------------------------------------------------------------------------------------------- Assets Fidelity VIP Aggressive Growth - Class 2 - 2,497 shares at net asset value of $8.19 20 (cost $20) Fidelity VIP II Asset Manager - Class 2 - 293 shares at net asset value of $14.36 4 (cost $4) Fidelity VIP II Asset Mgr Growth- Class 2 - 464 shares at net asset value of $12.43 6 (cost $6) Fidelity VIP II Contra Fund - Class 2 - 21,194 shares at net asset value of $20.00 424 (cost $417) Total Assets 20 4 6 424 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 20 4 6 424 Contractholders' Equity Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 1 0 0 59 Wealthquest III Variable Annuity - 6 yr Ratchet 2 0 0 26 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 62 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 66 Group Unallocated Variable Annuity Registered 17 4 6 211 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 659 0 0 71,238 Wealthquest III Variable Annuity - 6 yr Ratchet 2,899 0 0 31,697 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 74,882 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 79,700 Group Unallocated Variable Annuity Registered 20,105 4,632 7,062 254,493 Contractholders' Equity- Unit Value Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0.86 0.91 0.82 0.83 Wealthquest III Variable Annuity - 6 yr Ratchet 0.86 0.91 0.81 0.83 Wealthquest III Variable Anniuty - 3% Rollup 0.86 0.91 0.81 0.83 Wealthquest III Variable Annuity - 5% Rollup 0.86 0.90 0.81 0.82 Group Unallocated Variable Annuity Registered 0.86 0.91 0.82 0.83 [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Index 500 II Growth Opp II Midcap II ------------------------------------------------------------------------------------------------------------------------------ Assets Fidelity VIP II Index 500 - Class 2 - 8,753 shares at net asset value of $129.42 1,133 (cost $1,110) Fidelity VIP III Growth Opp Port - Class 2 - 8,922 shares at net asset value of $15.04 134 (cost $132) Fidelity VIP Mid Cap - Class 2 - 8,009 shares at net asset value of $19.49 156 (cost $149) Total Assets 1,133 134 156 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 Total Liabilities 0 0 0 Net assets applicable to contract owners 1,133 134 156 Contractholders' Equity Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 387 28 15 Wealthquest III Variable Annuity - 6 yr Ratchet 56 15 34 Wealthquest III Variable Anniuty - 3% Rollup 92 0 0 Wealthquest III Variable Annuity - 5% Rollup 256 0 1 Group Unallocated Variable Annuity Registered 342 91 106 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 486,518 37,621 14,858 Wealthquest III Variable Annuity - 6 yr Ratchet 70,208 20,068 33,015 Wealthquest III Variable Anniuty - 3% Rollup 116,249 0 0 Wealthquest III Variable Annuity - 5% Rollup 322,927 0 520 Group Unallocated Variable Annuity Registered 429,546 123,076 102,238 Contractholders' Equity- Unit Value Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0.80 0.74 1.04 Wealthquest III Variable Annuity - 6 yr Ratchet 0.80 0.74 1.04 Wealthquest III Variable Anniuty - 3% Rollup 0.79 0.74 1.03 Wealthquest III Variable Annuity - 5% Rollup 0.79 0.74 1.03 Group Unallocated Variable Annuity Registered 0.80 0.74 1.04
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------ T Rowe Price T Rowe Price T Rowe Price Ltd T Rowe Price Equity Income International Term Bond Midcap Growth ------------------------------------------------------------------------------------------------------------------------------ Assets T Rowe Price Equity Income - 205,479 shares at net asset value of $19.17 3,939 (cost $3,947) T Rowe Price International Stock Portfolio - 94,785 shares at net asset value of $11.47 1,087 (cost $1,471) T Rowe Price Limited Term Bond - 252,076 shares at net asset value of $5.06 1,276 (cost $1,237) T Rowe Price Mid Cap Growth - 159,902 shares at net asset value of $18.26 2,920 (cost $2,837) Total Assets 3,939 1,087 1,276 2,920 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 3,939 1,087 1,276 2,920 Contractholders' Equity Wealthquest Variable Annuity 3,230 998 1,173 2,333 Investrac Gold Variable Annuity 76 9 219 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 115 0 40 63 Wealthquest III Variable Annuity - 6 yr Ratchet 77 9 28 3 Wealthquest III Variable Anniuty - 3% Rollup 62 0 0 49 Wealthquest III Variable Annuity - 5% Rollup 105 0 14 35 Group Unallocated Variable Annuity Registered 274 71 21 218 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 2,609,712 1,070,652 971,662 1,513,819 Investrac Gold Variable Annuity 72,467 13,907 184,935 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 107,564 0 36,523 64,280 Wealthquest III Variable Annuity - 6 yr Ratchet 71,498 13,924 26,109 2,782 Wealthquest III Variable Anniuty - 3% Rollup 58,111 0 0 50,534 Wealthquest III Variable Annuity - 5% Rollup 98,605 0 12,441 35,940 Group Unallocated Variable Annuity Registered 254,914 108,405 19,317 221,198 Contractholders' Equity- Unit Value Wealthquest Variable Annuity 1.24 0.93 1.21 1.54 Investrac Gold Variable Annuity 1.05 0.67 1.18 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 1.07 0.66 1.10 0.98 Wealthquest III Variable Annuity - 6 yr Ratchet 1.07 0.66 1.10 0.98 Wealthquest III Variable Anniuty - 3% Rollup 1.07 0.66 1.10 0.98 Wealthquest III Variable Annuity - 5% Rollup 1.07 0.65 1.10 0.98 Group Unallocated Variable Annuity Registered 1.07 0.66 1.10 0.98 [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------- Lazard Small Lazard Emerging Cap Markets ------------------------------------------------------------------------------------------------------------------- Lazard Retirement Small Cap Portfolio - 84,572 shares at net asset value of $13.08 1,106 (cost $921) Lazard Retirement Emerging Markets - 46,533 shares at net asset value of $7.17 334 (cost $446) Total Assets 1,106 334 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 Total Liabilities 0 0 Net assets applicable to contract owners 1,106 334 Contractholders' Equity Wealthquest Variable Annuity 1,106 334 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 786,586 406,638 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity- Unit Value Wealthquest Variable Annuity 1.41 0.82 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts --------------------------------------------------------------------------------------------------------------------------- MFS Emerging MFS Capital MFS Research MFS Growth Growth Opportunity With Income --------------------------------------------------------------------------------------------------------------------------- Assets MFS Emerging Growth Series - 181,893 shares at net asset value of $17.98 3,270 (cost $5,232) MFS Capital Opportunities Series - 183,605 shares at net asset value of $13.56 2,490 (cost $3,556) MFS Research Series - 141,133 shares at net asset value of $14.32 2,021 (cost $2,827) MFS Growth with Income Series - 117,369 shares at net asset value of $17.13 2,011 (cost $2,359) Total Assets 3,270 2,490 2,021 2,011 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 3,270 2,490 2,021 2,011 Contractholders' Equity Wealthquest Variable Annuity 2,927 2,254 1,835 1,894 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 27 45 70 33 Wealthquest III Variable Annuity - 6 yr Ratchet 5 10 5 5 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 223 132 52 27 Group Unallocated Variable Annuity Registered 88 49 59 52 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 2,434,843 1,890,304 1,952,810 2,074,026 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 49,717 65,929 100,749 39,796 Wealthquest III Variable Annuity - 6 yr Ratchet 9,997 15,330 8,073 6,418 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 405,022 194,373 74,981 32,725 Group Unallocated Variable Annuity Registered 158,870 71,830 85,281 61,882 Contractholders' Equity- Unit Value Wealthquest Variable Annuity 1.20 1.19 0.94 0.91 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0.55 0.68 0.69 0.83 Wealthquest III Variable Annuity - 6 yr Ratchet 0.55 0.68 0.69 0.83 Wealthquest III Variable Anniuty - 3% Rollup 0.55 0.68 0.69 0.83 Wealthquest III Variable Annuity - 5% Rollup 0.55 0.68 0.69 0.83 Group Unallocated Variable Annuity Registered 0.55 0.68 0.70 0.83 [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------- Van Eck Hard Van Eck Emerging Assets Markets --------------------------------------------------------------------------------------------------------------------------- Van Eck Worldwide Hard Assets - 16,003 shares at net asset value of $10.69 171 (cost $178) Van Eck Worldwide Emerging Markets - 68,048 shares at net asset value of $8.14 554 (cost $832) Total Assets 171 554 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 Total Liabilities 0 0 Net assets applicable to contract owners 171 554 Contractholders' Equity Wealthquest Variable Annuity 171 554 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 207,056 732,821 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Contractholders' Equity- Unit Value Wealthquest Variable Annuity 0.83 0.76 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Federated Federated Federated International Utility US Gov't Bond ------------------------------------------------------------------------------------------------------------------------------------ Assets Federated International Small Comp Fund II - 10,853 shares at net asset value of $5.55 60 (cost $68) Federated Utility Fund II - 48,727 shares at net asset value of $10.37 505 (cost $596) Federated U S Government Bond - 148,177 shares at net asset value of $11.43 1,694 (cost $1,596) Total Assets 60 505 1,694 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 Total Liabilities 0 0 0 Net assets applicable to contract owners 60 505 1,694 Contractholders' Equity Wealthquest Variable Annuity 365 1,694 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 4 85 Wealthquest III Variable Annuity - 6 yr Ratchet 10 Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup 31 21 Group Unallocated Variable Annuity Registered 25 24 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 447,553 1,411,919 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 5,931 103,803 Wealthquest III Variable Annuity - 6 yr Ratchet 0 12,924 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 53,551 25,683 Group Unallocated Variable Annuity Registered 42,674 29,322 Contractholders' Equity- Unit Value Wealthquest Variable Annuity 0.81 1.20 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0.59 0.82 Wealthquest III Variable Annuity - 6 yr Ratchet 0.59 0.82 Wealthquest III Variable Anniuty - 3% Rollup 0.59 0.82 Wealthquest III Variable Annuity - 5% Rollup 0.59 0.81 Group Unallocated Variable Annuity Registered 0.59 0.82 [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Federated Federated Federated High Income Growth Equity Bond Strategy Income --------------------------------------------------------------------------------------------------------------------------------- Assets Federated High Income Bond Fund II - 306,835 shares at net asset value of $7.72 2,369 (cost $2,770) Federated Growth Strategies Fund II - 82,064 shares at net asset value of $17.65 1,448 (cost $2,226) Federated Equity Income Fund II - 75,439 shares at net asset value of $12.49 942 (cost $1,113) Total Assets 2,369 1,448 942 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 Total Liabilities 0 0 0 Net assets applicable to contract owners 2,369 1,448 942 Contractholders' Equity Wealthquest Variable Annuity 2,079 1,410 766 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 261 1 3 Wealthquest III Variable Annuity - 6 yr Ratchet 0 16 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 10 0 163 Group Unallocated Variable Annuity Registered 19 21 10 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 2,289,895 1,321,261 736,092 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 283,596 2,457 3,864 Wealthquest III Variable Annuity - 6 yr Ratchet 0 24,672 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 11,331 0 211,175 Group Unallocated Variable Annuity Registered 20,295 32,571 13,462 Contractholders' Equity- Unit Value Wealthquest Variable Annuity 0.91 1.07 1.04 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0.92 0.65 0.78 Wealthquest III Variable Annuity - 6 yr Ratchet 0.92 0.65 0.77 Wealthquest III Variable Anniuty - 3% Rollup 0.92 0.65 0.77 Wealthquest III Variable Annuity - 5% Rollup 0.91 0.64 0.77 Group Unallocated Variable Annuity Registered 0.92 0.65 0.78
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------- Alger Alger Growth Alger Growth Alger Alger Alger Small Cap & Income Balanced Mid Cap Leveraged ---------------------------------------------------------------------------------------------------------------------------- Assets Alger American Small Capitalization - 10,474 shares at net asset value of $16.55 173 (cost $195) Alger American Growth - 32,975 shares at net asset value of $36.77 1,212 (cost $1,409) Alger American Income and Growth - 75,966 shares at net asset value of $10.57 803 (cost $898) Alger American Balanced - 57,239 shares at net asset value of $13.08 749 (cost $741) Alger American Mid Cap Growth - 43,700 shares at net asset value of $17.67 772 (cost $978) Alger American Leveraged All Cap - 7,886 shares at net asset value of $31.55 249 (cost $287) Total Assets 173 1,212 803 749 772 249 Liabilities Payable to American National for contract terminations,withdrawal payments and mortality and expense charges 0 0 0 0 0 0 Total Liabilities 0 0 0 0 0 0 Net assets applicable to contract owners 173 1,212 803 749 772 249 Contractholders' Equity Wealthquest Variable Annuity 58 367 406 334 468 96 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 6 63 34 40 45 39 Wealthquest III Variable Annuity - 6 yr Ratchet 0 30 3 0 28 5 Wealthquest III Variable Anniuty - 3% Rollup 47 0 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 17 641 175 27 80 43 Group Unallocated Variable Annuity Registered 45 111 185 348 151 66 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity 104,365 498,225 521,813 374,920 542,161 158,737 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 10,025 86,053 41,849 44,883 50,831 58,083 Wealthquest III Variable Annuity - 6 yr Ratchet 0 41,065 3,822 0 31,582 6,895 Wealthquest III Variable Anniuty - 3% Rollup 78,781 0 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 29,682 878,646 219,725 29,770 91,161 65,632 Group Unallocated Variable Annuity Registered 76,503 151,782 229,704 384,464 170,686 100,247 Contractholders' Equity- Unit Value Wealthquest Variable Annuity 0.55 0.74 0.78 0.89 0.86 0.61 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0.60 0.73 0.80 0.90 0.88 0.66 Wealthquest III Variable Annuity - 6 yr Ratchet 0.60 0.73 0.80 0.90 0.88 0.66 Wealthquest III Variable Anniuty - 3% Rollup 0.60 0.73 0.80 0.90 0.88 0.66 Wealthquest III Variable Annuity - 5% Rollup 0.59 0.73 0.80 0.90 0.88 0.66 Group Unallocated Variable Annuity Registered 0.60 0.74 0.80 0.90 0.88 0.66
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF NET ASSETS As of December 31, 2001 (amounts in thousands, except for unit and share information) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Invesco Invesco Invesco Invesco Small Dynamics Health Technology Company Science Growth ---------------------------------------------------------------------------------------------------------------------------------- Assets Invesco VIF Dynamics - 320 shares at net asset value of $12.54 4 (cost $4) Invesco VIF Health Science - 5,586 shares at net asset value of $18.20 102 (cost $99) Invesco VIF Technology - 3,438 shares at net asset value of $15.37 53 (cost $54) Invesco VIF Small Company Growth - 619 shares at net asset value of $14.72 9 (cost $9) Total Assets 4 102 53 9 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 4 102 53 9 Contractholders' Equity Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 3 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 2 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 18 0 0 Group Unallocated Variable Annuity Registered 4 79 53 9 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 2,968 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 2,012 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 17,133 0 0 Group Unallocated Variable Annuity Registered 4,932 77,062 74,831 10,395 Contractholders' Equity- Unit Value Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0.81 1.03 0.71 0.87 Wealthquest III Variable Annuity - 6 yr Ratchet 0.81 1.02 0.71 0.87 Wealthquest III Variable Anniuty - 3% Rollup 0.81 1.02 0.70 0.87 Wealthquest III Variable Annuity - 5% Rollup 0.81 1.02 0.70 0.87 Group Unallocated Variable Annuity Registered 0.81 1.03 0.71 0.88 [Enlarge/Download Table] Segregated Sub-accounts -------------------------------------------------------------------------------------------------------------------------------- Invesco Real Invesco Invesco Invesco Estate Utilities Telecom Financial Opportunity Service ---------------------------------------------------------------------------------------------------------------------------------- Assets Invesco VIF Real Estate Opportunity - 1,663 shares at net asset value of $9.97 17 (cost $16) Invesco VIF Utilities - 785 shares at net asset value of $14.08 11 (cost $11) Invesco VIF Telecommunications - 2,719 shares at net asset value of $5.57 15 (cost $15) Invesco VIF Financial Services - 5,791 shares at net asset value of $12.42 72 (cost $71) Total Assets 17 11 15 72 Liabilities Payable to American National for contract terminations, withdrawal payments and mortality and expense charges 0 0 0 0 Total Liabilities 0 0 0 0 Net assets applicable to contract owners 17 11 15 72 Contractholders' Equity Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 3 8 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 17 11 12 64 Contractholders' Equity-Units Outstanding Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 6,141 7,805 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 16,112 15,528 20,479 67,137 Contractholders' Equity- Unit Value Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 1.03 0.71 0.57 0.96 Wealthquest III Variable Annuity - 6 yr Ratchet 1.03 0.71 0.57 0.96 Wealthquest III Variable Anniuty - 3% Rollup 1.03 0.71 0.57 0.96 Wealthquest III Variable Annuity - 5% Rollup 1.03 0.71 0.57 0.96 Group Unallocated Variable Annuity Registered 1.03 0.71 0.57 0.96
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ AN AN Equity AN AN Money Growth Income Balanced Market ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 57 422 127 158 Mortality and expense charges: Wealthquest Variable Annuity (20) (64) (28) (34) Investrac Gold Variable Annuity (52) (84) (22) (2) Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 0 Wealthquest III Variable Annuity - No Rider 0 (1) 0 (15) Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 (1) Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 (9) Group Unallocated Variable Annuity Registered 0 (1) (1) (12) Investment income (loss) - net (15) 272 76 85 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 10 1 0 Realized gains (losses) on sales of investments (150) (9) (62) 0 Net realized gains (losses) on investments (150) 1 (61) 0 Net change in unrealized appreciation or depreciation of investments (963) (1,789) (276) 0 Net gains (losses) on investments (1,113) (1,788) (337) 0 Net increase (decrease) in net assets resulting from operations $ (1,128) (1,516) (261) 85 [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ AN Gov't AN High AN Small/ AN Bond Yield Bond Mid Cap International ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 26 15 0 0 Mortality and expense charges: Wealthquest Variable Annuity (1) (1) 0 0 Investrac Gold Variable Annuity 0 0 (1) 0 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 (1) Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Investment income (loss) - net 25 14 (1) (1) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 0 0 Realized gains (losses) on sales of investments (1) (2) (75) (14) Net realized gains (losses) on investments (1) (2) (75) (14) Net change in unrealized appreciation or depreciation of investments (7) (14) (51) (6) Net gains (losses) on investments (8) (16) (126) (20) Net increase (decrease) in net assets resulting from operations $ 17 (2) (127) (21)
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fideltiy Growth & Equity Growth High Income Income Income ---------------------------------------------------------------------------------------------------------------------------------- Investment income (loss): Investment income distributions from underlying mutual fund $ 1 55 3 46 Mortality and expense charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity (1) (44) (59) (5) Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Investment income (loss) - net 0 11 (56) 41 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 3 157 334 0 Realized gains (losses) on sales of investments 0 (87) (485) (40) Net realized gains (losses) on investments 3 70 (151) (40) Net change in unrealized appreciation or depreciation of investments (13) (307) (1,019) (80) Net gains (losses) on investments (10) (237) (1,170) (120) Net increase (decrease) in net assets resulting from operations $ (10) (226) (1,226) (79) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fideltiy Money Overseas Investment Asset Market Bond Manager ---------------------------------------------------------------------------------------------------------------------------------- Investment income (loss): Investment income distributions from underlying mutual fund $ 21 24 26 99 Mortality and expense charges: Wealthquest Variable Annuity (16) Investrac Gold Variable Annuity (9) (6) (7) (12) Group Unallocated Variable Annuity 0 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Investment income (loss) - net 12 18 19 71 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 38 0 37 Realized gains (losses) on sales of investments 0 (18) 7 (133) Net realized gains (losses) on investments 0 20 7 (96) Net change in unrealized appreciation or depreciation of investments 0 (169) 12 (175) Net gains (losses) on investments 0 (149) 19 (271) Net increase (decrease) in net assets resulting from operations $ 12 (131) 38 (200)
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Index Contra- Asset 500 Fund Manager ---------------------------------------------------------------------------------------------------------------------------------- Investment income (loss): Investment income distributions from underlying mutual fund $ 176 63 50 Mortality and expense charges: Wealthquest Variable Annuity (105) (67) (14) Investrac Gold Variable Annuity (80) (31) (6) Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Investment income (loss) - net (9) (35) 30 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 222 61 Realized gains (losses) on sales of investments (421) (301) (152) Net realized gains (losses) on investments (421) (79) (91) Net change in unrealized appreciation or depreciation of investments (1,817) (1,178) (194) Net gains (losses) on investments (2,238) (1,257) (285) Net increase (decrease) in net assets resulting from operations $ (2,247) (1,292) (255) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fideltiy Balanced Growth Midcap Port Opp Port Port ---------------------------------------------------------------------------------------------------------------------------------- Investment income (loss): Investment income distributions from underlying mutual fund $ 1 9 0 Mortality and expense charges: Wealthquest Variable Annuity (26) Investrac Gold Variable Annuity 0 (1) (9) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Investment income (loss) - net 1 (18) (9) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 0 Realized gains (losses) on sales of investments (1) (219) (22) Net realized gains (losses) on investments (1) (219) (22) Net change in unrealized appreciation or depreciation of investments (2) (311) (1) Net gains (losses) on investments (3) (530) (23) Net increase (decrease) in net assets resulting from operations $ (2) (548) (32)
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fidelity Aggressive Asset Asset Manager Contra- Growth Manager II Growth II Fund II ------------------------------------------------------------------------------------------------------------------------------- Investment income (loss): Investment income distributions from underlying mutual fund $ 0 0 0 0 Mortality and expense charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 (1) Group Unallocated Variable Annuity Registered 0 0 0 (1) Investment income (loss) - net 0 0 0 (2) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 0 0 Realized gains (losses) on sales of investments (2) 0 0 (5) Net realized gains (losses) on investments (2) 0 0 (5) Net change in unrealized appreciation or depreciation of investments 1 0 0 6 Net gains (losses) on investments (1) 0 0 1 Net increase (decrease) in net assets resulting from operations $ (1) 0 0 (1) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Index 500 II Growth Opp II Midcap II ------------------------------------------------------------------------------------------------------------------------------- Investment income (loss): Investment income distributions from underlying mutual fund $ 2 0 0 Mortality and expense charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (2) 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup (1) 0 0 Wealthquest III Variable Annuity - 5% Rollup (2) 0 0 Group Unallocated Variable Annuity Registered (2) (1) 0 Investment income (loss) - net (5) (1) 0 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 0 Realized gains (losses) on sales of investments (29) (1) (1) Net realized gains (losses) on investments (29) (1) (1) Net change in unrealized appreciation or depreciation of investments 28 2 7 Net gains (losses) on investments (1) 1 6 Net increase (decrease) in net assets resulting from operations $ (6) 0 6
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ T Rowe Price T Rowe Price T Rowe Price T Rowe Price Equity Income International Ltd Term Bond Midcap Growth ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 86 23 75 0 Mortality and expense charges: Wealthquest Variable Annuity (44) (14) (17) (31) Investrac Gold Variable Annuity (1) 0 (2) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (1) (3) 0 (1) Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered (1) (1) 0 (2) Investment income (loss) - net 39 5 58 (36) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 41 0 0 0 Realized gains (losses) on sales of investments (7) (1) 24 88 Net realized gains (losses) on investments 34 (1) 24 88 Net change in unrealized appreciation or depreciation of investments (41) (293) 18 34 Net gains (losses) on investments (7) (294) 42 122 Net increase (decrease) in net assets resulting from operations $ 32 (289) 100 86 [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Lazard Lazard Small Cap Emerging Mkts ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 3 2 Mortality and expense charges: Wealthquest Variable Annuity (13) (5) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Investment income (loss) - net (10) (3) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 66 0 Realized gains (losses) on sales of investments 80 (73) Net realized gains (losses) on investments 146 (73) Net change in unrealized appreciation or depreciation of investments 99 (18) Net gains (losses) on investments 245 (91) Net increase (decrease) in net assets resulting from operations $ 235 (94)
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ MFS Emerging MFS Capital MFS Growth Growth Opport MFS Research w/ Income ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 0 0 0 13 Mortality and expense charges: Wealthquest Variable Annuity (42) (34) (25) (29) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 (1) 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup (3) (1) (1) 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Investment income (loss) - net (45) (36) (26) (16) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 246 260 288 65 Realized gains (losses) on sales of investments (120) (78) (50) (92) Net realized gains (losses) on investments 126 182 238 (27) Net change in unrealized appreciation or depreciation of investments (1,592) (880) (720) (380) Net gains (losses) on investments (1,466) (698) (482) (407) Net increase (decrease) in net assets resulting from operations $ (1,511) (734) (508) (423) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Van Eck Hard Van Eck Assets Emerging Mkts ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 2 0 Mortality and expense charges: Wealthquest Variable Annuity (2) (8) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Investment income (loss) - net 0 (8) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 Realized gains (losses) on sales of investments 1 (183) Net realized gains (losses) on investments 1 (183) Net change in unrealized appreciation or depreciation of investments (22) (9) Net gains (losses) on investments (21) (192) Net increase (decrease) in net assets resulting from operations $ (21) (200)
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Federated Federated Federated International Utility US Gov't Bond ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 0 21 58 Mortality and expense charges: Wealthquest Variable Annuity (7) (19) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup (1) 0 0 Group Unallocated Variable Annuity Registered 0 0 0 Investment income (loss) - net (1) 14 39 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 0 Realized gains (losses) on sales of investments (2) (65) 32 Net realized gains (losses) on investments (2) (65) 32 Net change in unrealized appreciation or depreciation of investments (8) (68) 36 Net gains (losses) on investments (10) (133) 68 Net increase (decrease) in net assets resulting from operations $ (11) (119) 107 [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Federated Federated Federated High Income Growth Equity Bond Strategy Income ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 247 0 17 Mortality and expense charges: Wealthquest Variable Annuity (30) (22) (11) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (1) 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 (1) Group Unallocated Variable Annuity Registered 0 0 0 Investment income (loss) - net 216 (22) 5 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 32 0 Realized gains (losses) on sales of investments (216) (474) (32) Net realized gains (losses) on investments (216) (442) (32) Net change in unrealized appreciation or depreciation of investments (152) (392) (102) Net gains (losses) on investments (368) (834) (134) Net increase (decrease) in net assets resulting from operations $ (152) (856) (129)
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts -------------------------------------------------------------------------------------------------------------------------------- Alger Alger Growth Alger Growth Alger Alger Alger Small Cap & Income Balanced Mid Cap Leveraged -------------------------------------------------------------------------------------------------------------------------------- Investment income (loss): Investment income distributions from underlying mutual fund $ 0 2 2 3 0 0 Mortality and expense charges: Wealthquest Variable Annuity (1) (4) (5) (2) (5) (2) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 (1) 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 (8) (2) 0 (1) (1) Group Unallocated Variable Annuity Registered 0 (1) (1) (2) (1) 0 Investment income (loss) - net (1) (12) (6) (1) (7) (3) Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 119 43 3 248 10 Realized gains (losses) on sales of investments (4) (55) (27) (8) (108) (57) Net realized gains (losses) on investments (4) 64 16 (5) 140 (47) Net change in unrealized appreciation or depreciation of investments (18) (182) (91) 8 (198) (29) Net gains (losses) on investments (22) (118) (75) 3 (58) (76) Net increase (decrease) in net assets resulting from operations $ (23) (130) (81) 2 (65) (79)
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF OPERATIONS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Invesco Invesco Health Invesco Invesco Small Dynamics Science Technology Co. Growth ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 0 1 0 0 Mortality and expense charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Investment income (loss) - net 0 1 0 0 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 0 0 Realized gains (losses) on sales of investments 0 0 0 0 Net realized gains (losses) on investments 0 0 0 0 Net change in unrealized appreciation or depreciation of investments 0 2 (1) 0 Net gains (losses) on investments 0 2 (1) 0 Net increase (decrease) in net assets resulting from operations $ 0 3 (1) 0 [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Invesco Real Invesco Invesco Invesco Estate Opp Utilities Telecom Financial Svcs. ------------------------------------------------------------------------------------------------------------------------------------ Investment income (loss): Investment income distributions from underlying mutual fund $ 0 0 0 0 Mortality and expense charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Investment income (loss) - net 0 0 0 0 Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund 0 0 0 0 Realized gains (losses) on sales of investments 0 0 0 0 Net realized gains (losses) on investments 0 0 0 0 Net change in unrealized appreciation or depreciation of investments 0 0 0 1 Net gains (losses) on investments 0 0 0 1 Net increase (decrease) in net assets resulting from operations $ 0 0 0 1
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ AN AN Equity AN AN Money Growth Income Balanced Market ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (15) 272 76 85 Net realized gains (losses) on investments (150) 1 (61) 0 Net change in unrealized appreciation or depreciation of investments (963) (1,789) (276) 0 Net increase (decrease) in net assets resulting from operations (1,128) (1,516) (261) 85 contract transactions: contract purchase payments: Wealthquest Variable Annuity 118 816 446 3,383 Investrac Gold Variable Annuity 122 520 58 11 Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 0 Wealthquest III Variable Annuity - No Rider 64 304 166 24,009 Wealthquest III Variable Annuity - 6 yr Ratchet 2 194 12 499 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 301 Wealthquest III Variable Annuity - 5% Rollup 0 60 55 1,984 Group Unallocated Variable Annuity Registered 111 141 198 2,990 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (190) (271) (185) (4,301) Investrac Gold Variable Annuity (434) (681) (17) (28) Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 0 Wealthquest III Variable Annuity - No Rider (11) (79) (76) (19,428) Wealthquest III Variable Annuity - 6 yr Ratchet 0 (102) (12) (375) Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 (295) Wealthquest III Variable Annuity - 5% Rollup 0 0 0 (1,520) Group Unallocated Variable Annuity Registered (88) (46) (21) (1,034) Increase (decrease) in net assets from contract transactions (306) 856 624 6,196 Increase (decrease) in net assets (1,434) (660) 363 6,281 Net assets at the beginning of year 6,409 11,697 3,697 3,661 Net assets at the end of year $ 4,975 11,037 4,060 9,942
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ AN Gov't AN High AN Small/ AN Bond Yield Bond Mid Cap International ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 25 14 (1) (1) Net realized gains (losses) on investments (1) (2) (75) (14) Net change in unrealized appreciation or depreciation of investments (7) (14) (51) (6) Net increase (decrease) in net assets resulting from operations 17 (2) (127) (21) contract transactions: contract purchase payments: Wealthquest Variable Annuity 48 60 8 6 Investrac Gold Variable Annuity 35 2 97 0 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 35 6 5 3,067 Wealthquest III Variable Annuity - 6 yr Ratchet 22 21 10 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 35 13 0 4 Group Unallocated Variable Annuity Registered 18 19 9 12 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (14) (13) (22) 0 Investrac Gold Variable Annuity 0 0 0 0 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 (3,055) Wealthquest III Variable Annuity - 6 yr Ratchet (8) (7) 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup (14) 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 (2) Increase (decrease) in net assets from contract transactions 157 101 107 32 Increase (decrease) in net assets 174 99 (20) 11 Net assets at the beginning of year 10 58 125 19 Net assets at the end of year $ 184 157 105 30
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Fidelity Fidelity Fidelity Growth Equity Fidelity High & Income Income Growth Income ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 11 (56) 41 Net realized gains (losses) on investments 3 70 (151) (40) Net change in unrealized appreciation or depreciation of investments (13) (307) (1,019) (80) Net increase (decrease) in net assets resulting from operations (10) (226) (1,226) (79) contract transactions: contract purchase payments: Wealthquest Variable Annuity Investrac Gold Variable Annuity 12 222 232 40 Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity 0 (542) (482) (19) Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions 12 (320) (250) 21 Increase (decrease) in net assets 2 (546) (1,476) (58) Net assets at the beginning of year 90 3,445 5,158 370 Net assets at the end of year $ 92 2,899 3,682 312 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Fidelity Fidelity Fidelity Money Fidelity Invest. Asset Market Overseas Bonds Mgr. ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 12 18 19 71 Net realized gains (losses) on investments 0 20 7 (96) Net change in unrealized appreciation or depreciation of investments 0 (169) 12 (175) Net increase (decrease) in net assets resulting from operations 12 (131) 38 (200) contract transactions: contract purchase payments: Wealthquest Variable Annuity 255 Investrac Gold Variable Annuity 913 48 142 27 Group Unallocated Variable Annuity 0 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (259) Investrac Gold Variable Annuity (982) (11) (210) (126) Group Unallocated Variable Annuity 0 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions (69) 37 (68) (103) Increase (decrease) in net assets (57) (94) (30) (303) Net assets at the beginning of year 715 527 462 2,446 Net assets at the end of year $ 658 433 432 2,143
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Fidelity Fidelity Fidelity Asset Index 500 Contra Fund Mgr Growth ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (9) (35) 30 Net realized gains (losses) on investments (421) (79) (91) Net change in unrealized appreciation or depreciation of investments (1,817) (1,178) (194) Net increase (decrease) in net assets resulting from operations (2,247) (1,292) (255) contract transactions: contract purchase payments: Wealthquest Variable Annuity 260 140 25 Investrac Gold Variable Annuity 269 178 19 Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (845) (479) (106) Investrac Gold Variable Annuity (1,138) (137) (53) Group Unallocated Variable Annuity 0 0 0 Investrac Gold Annuitized Variable Annuity 0 0 0 Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions (1,454) (298) (115) Increase (decrease) in net assets (3,701) (1,590) (370) Net assets at the beginning of year 16,520 8,790 1,829 Net assets at the end of year $ 12,819 7,200 1,459 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Fidelity Fidelity Growth Fidelity Balanced Port Opp Port Midcap Port ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 1 (18) (9) Net realized gains (losses) on investments (1) (219) (22) Net change in unrealized appreciation or depreciation of investments (2) (311) (1) Net increase (decrease) in net assets resulting from operations (2) (548) (32) contract transactions: contract purchase payments: Wealthquest Variable Annuity 25 Investrac Gold Variable Annuity 9 11 162 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (145) Investrac Gold Variable Annuity 0 0 (85) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions 9 (109) 77 Increase (decrease) in net assets 7 (657) 45 Net assets at the beginning of year 36 2,567 607 Net assets at the end of year $ 43 1,910 652
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Fidelity Fidelity Fidelity Aggressive Asset Asset Mgr Fidelity Growth Manager II Growth II Contra II ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 0 0 (2) Net realized gains (losses) on investments (2) 0 0 (5) Net change in unrealized appreciation or depreciation of investments 1 0 0 6 Net increase (decrease) in net assets resulting from operations (1) 0 0 (1) contract transactions: contract purchase payments: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 1 0 0 71 Wealthquest III Variable Annuity - 6 yr Ratchet 2 0 6 52 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 119 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 77 Group Unallocated Variable Annuity Registered 25 4 6 218 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 (13) Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 (6) (26) Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 (58) Wealthquest III Variable Annuity - 5% Rollup 0 0 0 (12) Group Unallocated Variable Annuity Registered (7) 0 0 (6) Increase (decrease) in net assets from contract transactions 21 4 6 422 Increase (decrease) in net assets 20 4 6 421 Net assets at the beginning of year 0 0 0 3 Net assets at the end of year $ 20 4 6 424 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Fidelity Fidelity Index Growth Fidelity 500 II Opp II Midcap II ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (5) (1) 0 Net realized gains (losses) on investments (29) (1) (1) Net change in unrealized appreciation or depreciation of investments 28 2 7 Net increase (decrease) in net assets resulting from operations (6) 0 6 contract transactions: contract purchase payments: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 380 29 15 Wealthquest III Variable Annuity - 6 yr Ratchet 122 23 58 Wealthquest III Variable Anniuty - 3% Rollup 179 0 0 Wealthquest III Variable Annuity - 5% Rollup 220 0 1 Group Unallocated Variable Annuity Registered 363 95 101 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (76) 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet (68) (8) (25) Wealthquest III Variable Anniuty - 3% Rollup (87) 0 0 Wealthquest III Variable Annuity - 5% Rollup (9) 0 0 Group Unallocated Variable Annuity Registered (18) (5) 0 Increase (decrease) in net assets from contract transactions 1,006 134 150 Increase (decrease) in net assets 1,000 134 156 Net assets at the beginning of year 133 0 0 Net assets at the end of year $ 1,133 134 156
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ T Rowe Price T Rowe Price Equity T Rowe Price T Rowe Price Midcap Income International Ltd Term Bond Growth ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 39 5 58 (36) Net realized gains (losses) on investments 34 (1) 24 88 Net change in unrealized appreciation or depreciation of investments (41) (293) 18 34 Net increase (decrease) in net assets resulting from operations 32 (289) 100 86 contract transactions: contract purchase payments: Wealthquest Variable Annuity 347 47 108 299 Investrac Gold Variable Annuity 72 4 175 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 150 15,272 39 35 Wealthquest III Variable Annuity - 6 yr Ratchet 116 17 31 5 Wealthquest III Variable Anniuty - 3% Rollup 119 0 0 89 Wealthquest III Variable Annuity - 5% Rollup 103 0 14 31 Group Unallocated Variable Annuity Registered 305 75 27 226 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (491) (176) (293) (406) Investrac Gold Variable Annuity 0 0 (2) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (40) (15,310) (6) (15) Wealthquest III Variable Annuity - 6 yr Ratchet (41) (8) (4) (2) Wealthquest III Variable Anniuty - 3% Rollup (58) 0 0 (44) Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered (32) 0 (6) (11) Increase (decrease) in net assets from contract transactions 550 (79) (90) 380 Increase (decrease) in net assets 582 (368) 10 466 Net assets at the beginning of year 3,357 1,455 1,266 2,454 Net assets at the end of year $ 3,939 1,087 1,276 2,920 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Lazard Lazard Small Emerging Cap Mkts ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (10) (3) Net realized gains (losses) on investments 146 (73) Net change in unrealized appreciation or depreciation of investments 99 (18) Net increase (decrease) in net assets resulting from operations 235 (94) contract transactions: contract purchase payments: Wealthquest Variable Annuity 27 9 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (218) (47) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions (191) (38) Increase (decrease) in net assets 44 (132) Net assets at the beginning of year 1,062 466 Net assets at the end of year $ 1,106 334
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ MFS MFS MFS Emerging Capital MFS Growth Growth Opport Research w/ Income ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (45) (36) (26) (16) Net realized gains (losses) on investments 126 182 238 (27) Net change in unrealized appreciation or depreciation of investments (1,592) (880) (720) (380) Net increase (decrease) in net assets resulting from operations (1,511) (734) (508) (423) contract transactions: contract purchase payments: Wealthquest Variable Annuity 25 88 26 177 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 22 12 102 32 Wealthquest III Variable Annuity - 6 yr Ratchet 10 16 6 10 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 331 207 56 27 Group Unallocated Variable Annuity Registered 98 54 67 53 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (510) (433) (225) (356) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 (3) (38) 0 Wealthquest III Variable Annuity - 6 yr Ratchet (6) (6) (1) (5) Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup (125) (66) (1) 0 Group Unallocated Variable Annuity Registered (4) 0 (6) 0 Increase (decrease) in net assets from contract transactions (159) (131) (14) (62) Increase (decrease) in net assets (1,670) (865) (522) (485) Net assets at the beginning of year 4,940 3,355 2,543 2,496 Net assets at the end of year $ 3,270 2,490 2,021 2,011 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Van Eck Van Eck Hard Emerging Assets Mkts ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 (8) Net realized gains (losses) on investments 1 (183) Net change in unrealized appreciation or depreciation of investments (22) (9) Net increase (decrease) in net assets resulting from operations (21) (200) contract transactions: contract purchase payments: Wealthquest Variable Annuity 52 77 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (4) (28) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions 48 49 Increase (decrease) in net assets 27 (151) Net assets at the beginning of year 144 705 Net assets at the end of year $ 171 554
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Federated Federated Federated US International Utility Gov't Bond ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (1) 14 39 Net realized gains (losses) on investments (2) (65) 32 Net change in unrealized appreciation or depreciation of investments (8) (68) 36 Net increase (decrease) in net assets resulting from operations (11) (119) 107 contract transactions: contract purchase payments: Wealthquest Variable Annuity 45 498 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 2 85 Wealthquest III Variable Annuity - 6 yr Ratchet 0 18 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 75 21 Group Unallocated Variable Annuity Registered 27 26 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (20) (374) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 (8) Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup (35) 0 Group Unallocated Variable Annuity Registered (1) 0 Increase (decrease) in net assets from contract transactions 68 167 124 Increase (decrease) in net assets 57 48 231 Net assets at the beginning of year 3 457 1,463 Net assets at the end of year $ 60 505 1,694 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Federated High Federated Federated Income Bond Growth Strat Equity Income ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 216 (22) 5 Net realized gains (losses) on investments (216) (442) (32) Net change in unrealized appreciation or depreciation of investments (152) (392) (102) Net increase (decrease) in net assets resulting from operations (152) (856) (129) contract transactions: contract purchase payments: Wealthquest Variable Annuity 73 10 127 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 251 2 3 Wealthquest III Variable Annuity - 6 yr Ratchet 6 21 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 10 0 187 Group Unallocated Variable Annuity Registered 19 23 11 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (204) (119) (133) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (6) 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet (6) (6) 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 (18) Group Unallocated Variable Annuity Registered 0 0 0 Increase (decrease) in net assets from contract transactions 143 (69) 177 Increase (decrease) in net assets (9) (925) 48 Net assets at the beginning of year 2,378 2,374 894 Net assets at the end of year $ 2,369 1,449 942
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Alger Alger Alger Growth Small Cap Growth & Income ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (1) (12) (6) Net realized gains (losses) on investments (4) 64 16 Net change in unrealized appreciation or depreciation of investments (18) (182) (91) Net increase (decrease) in net assets resulting from operations (23) (130) (81) contract transactions: contract purchase payments: Wealthquest Variable Annuity 52 267 270 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 9 60 56 Wealthquest III Variable Annuity - 6 yr Ratchet 0 49 20 Wealthquest III Variable Anniuty - 3% Rollup 88 0 0 Wealthquest III Variable Annuity - 5% Rollup 17 825 255 Group Unallocated Variable Annuity Registered 51 122 205 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity 0 (2) (12) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (3) (14) (22) Wealthquest III Variable Annuity - 6 yr Ratchet 0 (19) (17) Wealthquest III Variable Anniuty - 3% Rollup (42) 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 (229) (75) Group Unallocated Variable Annuity Registered (5) (2) (15) Increase (decrease) in net assets from contract transactions 167 1,057 665 (Decrease) in net assets from Sponsor equity transfer 0 0 0 Increase (decrease) in net assets 144 927 584 Net assets at the beginning of year 29 285 219 Net assets at the end of year $ 173 1,212 803 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Alger Alger Alger Balanced Mid Cap Leveraged ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (1) (7) (3) Net realized gains (losses) on investments (5) 140 (47) Net change in unrealized appreciation or depreciation of investments 8 (198) (29) Net increase (decrease) in net assets resulting from operations 2 (65) (79) contract transactions: contract purchase payments: Wealthquest Variable Annuity 313 129 0 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 71 40 27 Wealthquest III Variable Annuity - 6 yr Ratchet 0 36 10 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 27 77 88 Group Unallocated Variable Annuity Registered 418 158 74 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity 0 (26) (2) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider (29) (4) (3) Wealthquest III Variable Annuity - 6 yr Ratchet 0 (8) (4) Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 (41) Group Unallocated Variable Annuity Registered (74) (9) (4) Increase (decrease) in net assets from contract transactions 726 393 145 (Decrease) in net assets from Sponsor equity transfer 0 0 0 Increase (decrease) in net assets 728 328 66 Net assets at the beginning of year 21 444 183 Net assets at the end of year $ 749 772 249
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Invesco Invesco Invesco Health Invesco Small Co. Dynamics Science Technology Growth ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 1 0 0 Net realized gains (losses) on investments 0 0 0 0 Net change in unrealized appreciation or depreciation of investments 0 2 (1) 0 Net increase (decrease) in net assets resulting from operations 0 3 (1) 0 contract transactions: contract purchase payments: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 5 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 4 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 17 0 0 Group Unallocated Variable Annuity Registered 4 79 58 9 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 (2) 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 (2) 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 (2) (4) 0 Increase (decrease) in net assets from contract transactions 4 99 54 9 Increase (decrease) in net assets 4 102 53 9 Net assets at the beginning of year 0 0 0 0 Net assets at the end of year $ 4 102 53 9 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2001 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Invesco Invesco Real Invesco Invesco Financial Estate Opp Utilities Telecom Svcs. ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 0 0 0 Net realized gains (losses) on investments 0 0 0 0 Net change in unrealized appreciation or depreciation of investments 0 0 0 1 Net increase (decrease) in net assets resulting from operations 0 0 0 1 contract transactions: contract purchase payments: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 4 10 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 21 11 11 66 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 (3) Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered (4) 0 0 (2) Increase (decrease) in net assets from contract transactions 17 11 15 71 Increase (decrease) in net assets 17 11 15 72 Net assets at the beginning of year 0 0 0 0 Net assets at the end of year $ 17 11 15 72
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- AN AN Equity AN Money Growth Income AN Balanced Market ---------------------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 4 73 84 128 Net realized gains (losses) on investments 190 772 208 0 Net change in unrealized appreciation or depreciation of investments (455) 203 (192) 13 Net increase (decrease) in net assets resulting from operations (261) 1,048 100 141 contract transactions: contract purchase payments: Wealthquest Variable Annuity 676 1,332 554 784 Investrac Gold Variable Annuity 448 367 204 (68) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 3 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 5 0 0 Group Unallocated Variable Annuity Registered 0 2 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (120) (321) (206) (581) Investrac Gold Variable Annuity (382) (481) (245) (27) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Increase (decrease) in net assets from contract transactions 622 904 307 111 Increase (decrease) in net assets 361 1,952 407 252 Net assets at the beginning of year 6,048 9,745 3,290 3,409 Net assets at the end of year $ 6,409 11,697 3,697 3,661 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- AN Gov't AN High AN Small/ AN Bond Yield Bond Mid Cap International ---------------------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 0 4 0 0 Net realized gains (losses) on investments 0 0 0 0 Net change in unrealized appreciation or depreciation of investments 0 (2) (54) (1) Net increase (decrease) in net assets resulting from operations 0 2 (54) (1) contract transactions: contract purchase payments: Wealthquest Variable Annuity 10 40 165 Investrac Gold Variable Annuity 0 10 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 5 3 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 3 16 0 17 Group Unallocated Variable Annuity Registered 0 0 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity 0 0 (1) Investrac Gold Variable Annuity 0 0 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup (3) 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Increase (decrease) in net assets from contract transactions 10 56 179 20 Increase (decrease) in net assets 10 58 125 19 Net assets at the beginning of year 0 0 0 0 Net assets at the end of year $ 10 58 125 19
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fideltiy Growth & Equity Growth High Income Income Income ---------------------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 0 17 (78) 30 Net realized gains (losses) on investments 5 167 897 (8) Net change in unrealized appreciation or depreciation of investments (6) (10) (1,558) (136) Net increase (decrease) in net assets resulting from operations (1) 174 (739) (114) contract transactions: contract purchase payments: Wealthquest Variable Annuity Investrac Gold Variable Annuity 72 (663) 990 (42) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity 0 (625) (898) (16) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions 72 (1,288) 92 (58) Increase (decrease) in net assets 71 (1,114) (647) (172) Net assets at the beginning of year 19 4,559 5,805 542 Net assets at the end of year $ 90 3,445 5,158 370 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Fideltiy Money Overseas Investment Asset Market Bond Manager ---------------------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 30 1 54 48 Net realized gains (losses) on investments 0 159 (31) 201 Net change in unrealized appreciation or depreciation of investments 0 (329) 21 (393) Net increase (decrease) in net assets resulting from operations 30 (169) 44 (144) contract transactions: contract purchase payments: Wealthquest Variable Annuity 202 Investrac Gold Variable Annuity 451 319 (490) 32 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (111) Investrac Gold Variable Annuity (429) (411) (42) (640) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions 22 (92) (532) (517) Increase (decrease) in net assets 52 (261) (488) (661) Net assets at the beginning of year 663 788 950 3,107 Net assets at the end of year $ 715 527 462 2,446
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Index Contra- Asset 500 Fund Manager ---------------------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ (59) (86) 15 Net realized gains (losses) on investments 627 1,284 122 Net change in unrealized appreciation or depreciation of investments (2,474) (1,936) (419) Net increase (decrease) in net assets resulting from operations (1,906) (738) (282) contract transactions: contract purchase payments: Wealthquest Variable Annuity 3,131 2,112 545 Investrac Gold Variable Annuity 468 327 74 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (638) (266) (98) Investrac Gold Variable Annuity (885) (505) (169) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions 2,076 1,668 352 Increase (decrease) in net assets 170 930 70 Net assets at the beginning of year 16,350 7,860 1,759 Net assets at the end of year $ 16,520 8,790 1,829 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Fidelity Fidelity Fideltiy Balanced Growth Midcap Port Opp Port Port ---------------------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 1 3 (4) Net realized gains (losses) on investments (1) 162 8 Net change in unrealized appreciation or depreciation of investments (1) (758) 37 Net increase (decrease) in net assets resulting from operations (1) (593) 41 contract transactions: contract purchase payments: Wealthquest Variable Annuity 430 Investrac Gold Variable Annuity 29 87 694 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (512) Investrac Gold Variable Annuity (43) (49) (132) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions (14) 38 480 Increase (decrease) in net assets (15) 29 (63) Net assets at the beginning of year 51 4 3,204 Net assets at the end of year $ 36 33 3,141
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Fidelity Fidelity Fidelity Aggressive Fidelity Index Growth Fidelity Growth Contra II 500 II Opp II Midcap II ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 0 0 0 0 Net realized gains (losses) on investments 0 0 (2) 0 0 Net change in unrealized appreciation or depreciation of investments 0 0 (6) 0 0 Net increase (decrease) in net assets resulting from operations 0 0 (8) 0 0 contract transactions: contract purchase payments: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 3 83 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 58 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 0 Increase (decrease) in net assets from contract transactions 0 3 141 0 0 Increase (decrease) in net assets 0 3 133 0 0 Net assets at the beginning of year 0 0 0 0 0 Net assets at the end of year $ 0 3 133 0 0
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ T Rowe Price T Rowe Price T Rowe Price T Rowe Price Equity Income International Term Bond Midcap Growth ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 22 (12) 56 (28) Net realized gains (losses) on investments 156 239 (25) 272 Net change in unrealized appreciation or depreciation of investments 163 (568) 61 (136) Net increase (decrease) in net assets resulting from operations 341 (341) 92 108 contract transactions: contract purchase payments: Wealthquest Variable Annuity 68 263 219 724 Investrac Gold Variable Annuity 5 9 50 Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 3 0 7 44 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (253) (436) (63) (252) Investrac Gold Variable Annuity (6) (1) (1) Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Increase (decrease) in net assets from contract transactions (183) (165) 163 565 Increase (decrease) in net assets 158 (506) 255 673 Net assets at the beginning of year 3,199 1,961 1,011 1,781 Net assets at the end of year $ 3,357 1,455 1,266 2,454 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Lazard Lazard Small Cap Emerging Mkts ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (10) (5) Net realized gains (losses) on investments 108 84 Net change in unrealized appreciation or depreciation of investments 87 (267) Net increase (decrease) in net assets resulting from operations 185 (188) contract transactions: contract purchase payments: Wealthquest Variable Annuity 186 279 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (254) (45) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions (68) 234 Increase (decrease) in net assets 117 46 Net assets at the beginning of year 945 420 Net assets at the end of year $ 1,062 466
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ MFS Emerging MFS Capital MFS Growth Growth Opport MFS Research w/ Income ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (74) (40) (31) (19) Net realized gains (losses) on investments 1,253 559 308 121 Net change in unrealized appreciation or depreciation of investments (2,512) (754) (455) (135) Net increase (decrease) in net assets resulting from operations (1,333) (235) (178) (33) contract transactions: contract purchase payments: Wealthquest Variable Annuity 1,857 1,326 802 242 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 8 53 8 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 82 0 7 0 Group Unallocated Variable Annuity Registered 0 0 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (1,210) (281) (301) (162) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 0 0 Group Unallocated Variable Annuity Registered 0 0 0 0 Increase (decrease) in net assets from contract transactions 737 1,098 516 80 Increase (decrease) in net assets (596) 863 338 47 Net assets at the beginning of year 5,536 2,492 2,205 2,449 Net assets at the end of year $ 4,940 3,355 2,543 2,496 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Van Eck Hard Van Eck Assets Emerging Mkts ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ (1) (11) Net realized gains (losses) on investments 3 263 Net change in unrealized appreciation or depreciation of investments 13 (774) Net increase (decrease) in net assets resulting from operations 15 (522) contract transactions: contract purchase payments: Wealthquest Variable Annuity 93 562 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity 0 (194) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider Wealthquest III Variable Annuity - 6 yr Ratchet Wealthquest III Variable Anniuty - 3% Rollup Wealthquest III Variable Annuity - 5% Rollup Group Unallocated Variable Annuity Registered Increase (decrease) in net assets from contract transactions 93 368 Increase (decrease) in net assets 108 (154) Net assets at the beginning of year 36 859 Net assets at the end of year $ 144 705 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------------------ Federated Federated Federated International Utility US Gov't Bond ------------------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 9 60 Net realized gains (losses) on investments 0 4 (49) Net change in unrealized appreciation or depreciation of investments 0 (61) 118 Net increase (decrease) in net assets resulting from operations 0 (48) 129 contract transactions: contract purchase payments: Wealthquest Variable Annuity 14 8 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 3 Wealthquest III Variable Annuity - 6 yr Ratchet 0 Wealthquest III Variable Anniuty - 3% Rollup 0 Wealthquest III Variable Annuity - 5% Rollup 0 Group Unallocated Variable Annuity Registered 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (35) (285) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 Wealthquest III Variable Anniuty - 3% Rollup 0 Wealthquest III Variable Annuity - 5% Rollup 0 Group Unallocated Variable Annuity Registered 0 Increase (decrease) in net assets from contract transactions 3 (21) (277) Increase (decrease) in net assets 3 (69) (148) Net assets at the beginning of year 0 526 1,611 Net assets at the end of year $ 3 457 1,463 AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ---------------------------------------------------------------------------------------------------------------------------------- Federated Federated Federated High Income Growth Equity Bond Strategy Income --------------------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 245 (29) (1) Net realized gains (losses) on investments (209) 365 71 Net change in unrealized appreciation or depreciation of investments (316) (1,040) (199) Net increase (decrease) in net assets resulting from operations (280) (704) (129) contract transactions: contract purchase payments: Wealthquest Variable Annuity 212 2,343 286 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 7 Wealthquest III Variable Annuity - 6 yr Ratchet 0 Wealthquest III Variable Anniuty - 3% Rollup 0 Wealthquest III Variable Annuity - 5% Rollup 0 Group Unallocated Variable Annuity Registered 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (602) (484) (275) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 Wealthquest III Variable Anniuty - 3% Rollup 0 Wealthquest III Variable Annuity - 5% Rollup 0 Group Unallocated Variable Annuity Registered 0 Increase (decrease) in net assets from contract transactions (383) 1,859 11 Increase (decrease) in net assets (663) 1,155 (118) Net assets at the beginning of year 3,041 1,219 1,012 Net assets at the end of year $ 2,378 2,374 894
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------ Alger Alger Growth Alger Growth Small Cap & Income ------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 (1) (1) Net realized gains (losses) on investments 0 (7) 0 Net change in unrealized appreciation or depreciation of investments (3) (19) (8) Net increase (decrease) in net assets resulting from operations (3) (27) (9) contract transactions: contract purchase payments: Wealthquest Variable Annuity 30 173 232 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 2 23 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 116 Group Unallocated Variable Annuity Registered 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity 0 0 (4) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 Group Unallocated Variable Annuity Registered 0 0 Increase (decrease) in net assets from contract transactions 32 312 228 Increase (decrease) in net assets 29 285 219 Net assets at the beginning of year 0 0 0 Net assets at the end of year $ 29 285 219
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ----------------------------------------------------------------------------------------------------------------------- Alger Alger Alger Balanced Mid Cap Leveraged ----------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 0 (2) (1) Net realized gains (losses) on investments 0 0 (1) Net change in unrealized appreciation or depreciation of investments (1) (42) (29) Net increase (decrease) in net assets resulting from operations (1) (44) (31) contract transactions: contract purchase payments: Wealthquest Variable Annuity 23 485 195 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 8 20 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 Group Unallocated Variable Annuity Registered 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (1) (5) (1) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 Group Unallocated Variable Annuity Registered 0 0 Increase (decrease) in net assets from contract transactions 22 488 214 Increase (decrease) in net assets 21 444 183 Net assets at the beginning of year 0 0 0 Net assets at the end of year $ 21 444 183
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ------------------------------------------------------------------------------------------------------------------------ Alger Alger Growth Alger Growth Small Cap & Income ------------------------------------------------------------------------------------------------------------------------ Operations: Investment income (loss) - net $ 0 (1) (1) Net realized gains (losses) on investments 0 (7) 0 Net change in unrealized appreciation or depreciation of investments (3) (19) (8) Net increase (decrease) in net assets resulting from operations (3) (27) (9) contract transactions: contract purchase payments: Wealthquest Variable Annuity 30 173 232 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 2 23 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 116 Group Unallocated Variable Annuity Registered 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity 0 0 (4) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 Group Unallocated Variable Annuity Registered 0 0 Increase (decrease) in net assets from contract transactions 32 312 228 Increase (decrease) in net assets 29 285 219 Net assets at the beginning of year 0 0 0 Net assets at the end of year $ 29 285 219
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT STATEMENT OF CHANGES IN NET ASSETS As of December 31, 2000 (amounts in thousands) [Enlarge/Download Table] Segregated Sub-accounts ----------------------------------------------------------------------------------------------------------------------- Alger Alger Alger Balanced Mid Cap Leveraged ----------------------------------------------------------------------------------------------------------------------- Operations: Investment income (loss) - net $ 0 (2) (1) Net realized gains (losses) on investments 0 0 (1) Net change in unrealized appreciation or depreciation of investments (1) (42) (29) Net increase (decrease) in net assets resulting from operations (1) (44) (31) contract transactions: contract purchase payments: Wealthquest Variable Annuity 23 485 195 Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 8 20 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 Group Unallocated Variable Annuity Registered 0 0 contract terminations, withdrawal payments and charges: Wealthquest Variable Annuity (1) (5) (1) Investrac Gold Variable Annuity Group Unallocated Variable Annuity Investrac Gold Annuitized Variable Annuity Wealthquest III Variable Annuity - No Rider 0 0 Wealthquest III Variable Annuity - 6 yr Ratchet 0 0 Wealthquest III Variable Anniuty - 3% Rollup 0 0 Wealthquest III Variable Annuity - 5% Rollup 0 0 Group Unallocated Variable Annuity Registered 0 0 Increase (decrease) in net assets from contract transactions 22 488 214 Increase (decrease) in net assets 21 444 183 Net assets at the beginning of year 0 0 0 Net assets at the end of year $ 21 444 183
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See accompanying notes to financial statements. 23
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AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT NOTES TO FINANCIAL STATEMENTS December 31, 2001 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General .. American National Variable Annuity Separate Account (Separate Account)was established on July 30,1991 under Texas law as a separate investment account of American National Insurance Company (the Sponsor). The Separate Account began operations on April 20, 1994. The assets of the Separate Account are segregated from the Sponsor's other assets and are used only to support variable annuity products issued by the Sponsor. The Separate Account is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. These financial statements report the results of the subaccounts for the various variable annuity products. There are currently 61 subaccounts within the Separate Account, although not all subaccounts are offered in each product. Each of the subaccounts is invested only in a corresponding portfolio of the American National (AN) Funds, the Fidelity Funds, the MFS Funds, the T. Rowe Price Funds, the Van Eck Funds, the Federated Funds, the Invesco Funds or the Lazard Funds. The American National Funds were organized and are managed for a fee by Securities Management & Research, Inc. (SM&R) which is a wholly-owned subsidiary of the Sponsor. Basis of Presentation .. The financial statements of the Separate Account have been prepared on an accrual basis in accordance with generally accepted accounting principles. Investments .. Investments in shares of the separate investment portfolios are stated at market value which is the net asset value per share as determined by the respective portfolios. Investment transactions are accounted for on the trade date. Realized gains and losses on investments are determined on the basis of identified cost. Capital gain distributions and Dividends from mutual funds are recorded and reinvested upon receipt. Federal Taxes ... Under the Internal Revenue Code, all ordinary income and capital gains allocated to the contract owners are not taxed to the Sponsor. As a result, the net asset values of the subaccounts are not affected by federal income taxes on distributions received by the subaccounts. Accordingly, no provision for income taxes is required in the accompanying financial statements. Use of Estimates .. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates.
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(2) SECURITY PURCHASES AND SALES For the year ended December 31, 2001, the aggregate cost of purchases (including reinvestment of dividend distributions and transfers between funds) and proceeds from sales of investments in the mutual fund portfolios were as follows (in thousands): Purchases Sales ------------------------------------------------------------------------------- Alger Small Capitalization 216 51 Alger Growth Portfolio 1,453 293 Alger Growth & Income 871 174 Alger Balanced 843 117 Alger MidCap Growth 853 254 Alger Leveraged AllCap 249 117 Federated International 104 37 Federated Utility 382 236 Federated U.S. Government Securities 657 491 Federated High Income Bond 848 645 Federated Growth Strategies 359 750 Federated Equity Income 377 194 Fidelity Growth & Income 17 1 Fidelity Equity Income 577 528 Fidelity Growth 1,837 845 Fidelity High Income Bond 91 129 Fidelity Money Market 658 715 Fidelity Overseas 109 20 Fidelity Investment Bond 126 193 Fidelity Asset Manager 527 641 Fidelity Index 500 1,145 3,057 Fidelity Contra Fund 870 1,230 Fidelity Asset Manager: Growth 261 373 Fidelity Balanced Portfolio 13 3 Fidelity Growth Opportunities Port. 197 473 Fidelity Midcap Portfolio 273 205 Fidelity Aggressive Growth 28 7 Fidelity Asset Manager II 4 -- Fidelity Asset Manager: Growth II 13 7 Fidelity Contra Fund II 536 116 Fidelity Index 500 II 1,263 264 Fidelity Growth Opportunities II 147 14 Fidelity Midcap II 175 26 Invesco Dynamics 4 -- Invesco Health Sciences 105 6 Invesco Technology 58 4 Invesco Small Company Growth 9 -- Invesco Real Estate Opportunities 20 4 Invesco Utilities 11 -- Invesco Telecommunications 15 -- Invesco Financial Services 76 5 MFS Emerging Growth 1,014 762 MFS Capital Opportunities 952 711 MFS Research 760 465 MFS Investors' Trust 708 671 Van Eck Hard Assets 55 6 Van Eck Emerging Markets 41 167 AN Growth 626 973 AN Equity Income 2,738 1,502
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Purchases Sales ------------------------------------------------------------------------------- AN Balanced 1,333 668 AN Money Market 34,528 28,247 AN Government Bond 219 37 AN High Yield Bond 137 20 AN Small-Cap/Mid-Cap 134 78 AN International Stock 3,090 3,058 T. Rowe Price Equity Income 1,887 1,209 T. Rowe Price International 15,506 15,564 T. Rowe Price Limited Term Bond 584 607 T. Rowe Price Mid-Cap Growth 1,360 849 Lazard Retirement Small Cap 221 298 Lazard Emerging Markets 34 137 -------------------------------------------------------------------------------- TOTALS $ 82,304 $ 68,274 (3) POLICY CHARGES AND DEDUCTIONS Mortality and Expense Risk Charges .. Mortality risk and expense risk charges are assessed daily against the Separate Account's net asset value. This fee is assessed during both the accumulation period and the annuity period, and varies by product as follows: Wealthquest II Variable Annuity 1.39% Investrac Gold Variable Annuity 1.25% Group Unallocated Variable Annuity 0.85% Wealthquest III Variable Annuity 1.25% (with no riders) Wealthquest III Variable Annuity 1.37% (six-year ratchet) Wealthquest III Variable Annuity 1.50% (3% roll-up) Wealthquest III Variable Annuity 1.67% (5% roll-up) Monthly Administrative Charges .. American National's administrative charges consist of an annual contract fee and a daily administrative asset fee. The annual contract fee ranges between $25 and $35 and is often waived for those contract values greater than $50,000. At the time of full surrender, the annual contract fee will be deducted on a pro rata basis. The administrative asset fee is 0.10% annually for all contracts. These charges are deducted through termination of units of interest from applicable contract owners'accounts. Surrender Charge .. On withdrawals of that portion of the accumulation value representing purchase payments, a surrender charge is imposed based upon the number of years since the year in which the purchase payments withdrawn were paid, on a first paid, first withdrawn basis. Transfer Charge .. A $10 transfer charge is imposed after the first twelve transfers in any one policy year for transfers made among the subaccounts. Premium Charges .. Premium taxes for certain jurisdictions are deducted from premiums paid at rates ranging form zero to 3.5%. American National's current practice is to deduct any state imposed premium tax from Purchase Payments. If a state only imposes premium taxes upon annuitization, American National will deduct these taxes from the contract value upon annuitization. (4) FINANCIAL HIGHLIGHTS American National Insurance Company sells a number of variable annuity products having unique combinations of features and fees that are charged against the contract owner's account balance (see preceding note). Differences in fee structures result in a variety of expense ratios and total returns. The following table was developed by determining which products offered by the Company have the lowest and highest total return (all numbers are percentages): Investment Expense Ratio ** Total Return *** Income lowest to highest lowest to highest Ratio* ________________________________________________________________________________ Alger Small Cap 0.04% 1.25% to 1.77% -30.37% to -27.48% Alger Growth 0.29% 1.25% to 1.77% -13.36% to -12.89% Alger Growth & Income 0.45% 1.25% to 1.77% -15.82% to -15.37% Alger Balanced 0.72% 1.25% to 1.77% -3.65% to -3.13% Alger Mid Cap 0.00% 1.25% to 1.77% -8.16% to -7.66% Alger Leveraged 0.00% 1.25% to 1.77% -17.40% to -16.95% Federated International 0.00% 1.35% to 1.77% -31.24% to -30.95% Federated Utility 4.27% 1.25% to 1.77% -14.78% to -14.75% Federated US Gov't Bond 3.68% 1.25% 5.71% Federated High Inc. Bond 10.40% 1.25% to 1.77% -0.39% to 0.00% Federated Growth Strat 0.00% 1.25% to 1.77% -23.74% to -23.34% Federated Equity Income 1.84% 1.25% to 1.77% -12.55% to -12.08% Fidelity Growth & Income 1.23% 1.25% to 1.40% -10.34% Fidelity Equity Income 1.76% 0.95% to 1.40% -6.37% to -5.96% Fidelity Growth 0.08% 0.95% to 1.40% -18.73% to -18.38% Fidelity High Inc. Bond 13.40% 0.95% to 1.40% -12.88% to -12.49% Fidelity Money Market 3.07% 0.95% to 1.40% 2.78% to 3.25% Fidelity Overseas 5.06% 0.95% to 1.40% -22.31% to -21.11% Fidelity Invest. Bond 5.78% 0.95% to 1.40% 6.98% to 7.45% Fidelity Asset Manager 4.31% 1.35% to 1.40% -5.42% to -5.27% Fidelity Index 500 1.20% 0.95% to 1.40% -13.16% to -12.95% Fidelity Contra Fund 0.79% 0.95% to 1.40% -13.33% to -13.09% Fidelity Asset Mgr: Growth 3.06% 0.95% to 1.40% -8.58% to -8.30% Fidelity Balanced 3.31% 1.35% -3.46% Fidelity Growth Opport 0.39% 1.35% to 1.40% -15.64% to -15.48% Fidelity Mid Cap 0.00% 1.35% -4.53% Fidelity Aggressive Growth 0.00% 1.35% to 1.77% -13.87% to -13.63% Fidelity Asset Manager II 0.00% 1.35% to 1.77% -6.06% to -5.66% Fidelity Asset Mgr Growth 2 0.00% 1.35% to 1.77% -9.22% to -8.84% Fidelity Contra II 0.04% 1.35% to 1.77% -14.00% to -13.64% Fidelity Index 500 II 0.31% 1.35% to 1.77% -13.85% to -13.49% Fidelity Growth Opport II 0.00% 1.35% to 1.77% -16.14% to -15.78% Fidelity Mid Cap II 0.00% 1.35% to 1.77% 3.31% to 3.59% Invesco Dynamics 0.00% 1.35% to 1.77% -18.92% to -18.70% Invesco Health Science 0.00% 1.35% to 1.77% -29.63% to -29.43% Invesco Small Co. Growth 0.00% 1.35% to 1.77% -12.76% to -12.52% Invesco Real Estate Opport 3.05% 1.35% to 1.77% 2.55% to 2.83% Invesco Utilities 1.51% 1.35% to 1.77% -29.04% to -28.85% Invesco Telecom. 0.00% 1.35% to 1.77% -43.29% to -43.14% Invesco Financial Services 0.99% 1.35% to 1.77% -4.34% to -4.08% MFS Emerging Growth 0.00% 1.25% to 1.77% -34.31% MFS Capital Opport 0.01% 1.25% to 1.77% -24.82% to -24.42% MFS Research 0.01% 1.25% to 1.77% -22.35% to -22.22% MFS Growth w/ Income 0.56% 1.25% to 1.77% -17.43% to -16.99% Van Eck Hard Assets 0.98% 1.25% -11.55% Van Eck Emerging Markets 0.00% 1.25% -3.02% SM&R Growth 1.00% 0.95% to 1.77% -17.58% to -17.49% SM&R Equity Income 3.72% 0.95% to 1.77% -14.79% to -13.45% SM&R Balanced 3.28% 0.95% to 1.77% -6.52% to -6.26% SM&R Money Market 2.33% 1.25% to 1.77% 1.27% to 1.42% SM&R US Gov't Bond 26.18% 1.25% to 1.77% 5.42% to 6.00% SM&R High Inc. Bond 14.23% 1.25% to 1.77% -1.29% to -0.73% SM&R Small Cap/Mid Cap 0.00% 1.25% to 1.77% -55.34% to -55.10% SM&R International 0.81% 1.35% to 1.77% -24.60% to -24.28% T Rowe Price Eqiuty Income 2.36% 1.25% to 1.77% -1.53% to 0.21% T Rowe Price International 1.78% 1.25% to 1.77% -23.58% to -23.17% T Rowe Price Ltd term Bond 5.92% 1.25% to 1.77% 6.50% to 7.08% T Rowe Price Mid Cap Grwth 0.00% 1.25% to 1.77% -2.66% to -2.14% Lazard Small Cap 0.31% 1.25% 17.18% Lazard Emerging Markets 0.43% 1.25% -6.23% (a) These funds were added on 5/1/2001 * These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. ** These ratios represent the annualized contract expenses of the separate 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 fund are excluded. *** These amounts represent the total return, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the year 2001 or from the effective date through the end of 2001. 25
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FINANCIAL INFORMATION INDEPENDENT AUDITORS' REPORT To the Stockholders and Board of Directors American National Insurance Company: We have audited the accompanying consolidated statements of financial position of American National Insurance Company and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income and comprehensive income, changes in stockholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The accompanying consolidated financial statements of American National Insurance Company and subsidiaries as of December 31, 1999 were audited by other auditors whose report thereon dated February 11, 2000, expressed an unqualified opinion on those statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of American National Insurance Company and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 2 to the consolidated financial statements, effective January 1, 2001, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." In conjunction with the adoption of SFAS No. 133, the Company was permitted to reclassify bonds from held-to-maturity to available-for-sale. KPMG LLP February 6, 2002 Houston, Texas
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors, American National Insurance Company: We have audited the accompanying consolidated statement of income and the related statements of changes in stockholders' equity, comprehensive income and cash flows of American National Insurance Company and subsidiaries (the Company) for the year ended December 31, 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of operations and cash flows of American National Insurance Company and subsidiaries for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Houston, Texas February 11, 2000 27
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[Enlarge/Download Table] CONSOLIDATED STATEMENTS OF INCOME (In thousands, except for per share data) 2001 2000 1999 Premiums and other revenue Premiums Life........................................................ $ 323,603 $ 301,440 $ 300,326 Annuity..................................................... 35,773 55,504 41,704 Accident and health......................................... 415,124 404,973 396,072 Property and casualty....................................... 666,823 426,786 392,576 Other policy revenues......................................... 104,680 103,323 100,258 Net investment income......................................... 529,146 479,089 473,949 Gain from sale of investments, net............................ 6,545 22,571 149,061 Other income.................................................. 52,687 40,795 35,668 Total revenues.............................................. 2,134,381 1,834,481 1,889,614 Benefits and expenses Death and other benefits: Life........................................................ 240,724 218,652 218,109 Annuity..................................................... 55,196 53,180 45,464 Accident and health......................................... 332,371 316,965 290,846 Property and casualty....................................... 574,610 374,671 311,723 Increase in liability for future policy benefits: Life........................................................ 23,983 15,539 15,546 Annuity..................................................... 2,870 18,991 9,748 Accident and health......................................... 28,196 2,127 4,787 Interest credited to policy account balances.................. 130,551 107,358 117,411 Commissions for acquiring and servicing policies.............. 296,119 256,146 264,808 Other operating costs and expenses............................ 306,867 222,458 210,877 Decrease (increase) in deferred policy acquisition costs...... (15,254) 7,807 (2,188) Taxes, licenses and fees...................................... 46,975 36,694 33,744 Total benefits and expenses................................. 2,023,208 1,630,588 1,520,875 Income from operations before equity in earnings of unconsolidated affiliates and federal income taxes....................................... 111,173 203,893 368,739 Equity in earnings (losses) of unconsolidated affiliates........ (6,054) 3,049 19,942 Income from operations before federal income taxes.............. 105,119 206,942 388,681 Provision (benefit) for federal income taxes Current....................................................... 56,708 83,255 132,128 Deferred...................................................... (16,520) (16,487) (10,060) Net income...................................................... $ 64,931 140,174 $ 266,613 Net income per common share - basic and diluted................. $ 2.45 5.29 $ 10.07 See accompanying notes to consolidated financial statements. 88
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[Enlarge/Download Table] CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In thousands) December 31, 2001 2000 Assets Investments, other than investments in unconsolidated affiliates Debt securities: Bonds held-to-maturity, at amortized cost.................... $3,811,582 $3,534,465 Bonds available-for-sale, at market.......................... 1,578,184 749,268 Marketable equity securities, at market: Preferred stocks............................................. 50,441 24,113 Common stocks................................................ 889,092 844,852 Mortgage loans on real estate.................................. 1,007,993 1,024,312 Policy loans................................................... 324,545 294,313 Investment real estate, net of accumulated depreciation of $132,873 and $121,446............. 233,069 243,263 Short-term investments......................................... 255,476 140,518 Other invested assets.......................................... 129,398 134,857 Total investments............................................ 8,279,780 6,989,961 Cash.............................................................. 188,043 156,785 Investments in unconsolidated affiliates.......................... 173,878 158,229 Accrued investment income......................................... 125,781 107,573 Reinsurance ceded receivables..................................... 645,460 228,062 Prepaid reinsurance premiums...................................... 173,346 191,899 Premiums due and other receivables................................ 214,586 152,218 Deferred policy acquisition costs................................. 829,216 747,884 Property and equipment, net....................................... 73,932 51,194 Other assets...................................................... 243,507 183,992 Separate account assets........................................... 310,608 302,590 Total assets................................................. $11,258,137 $9,270,387 Liabilities Policyholder funds Future policy benefits: Life......................................................... $2,160,613 $1,890,103 Annuity...................................................... 216,627 203,948 Accident and health.......................................... 104,913 67,026 Policy account balances........................................ 2,849,458 2,206,888 Policy and contract claims..................................... 1,226,588 573,742 Other policyholder funds....................................... 958,156 647,911 Total policyholder liabilities............................... 7,516,355 5,589,618 Current federal income taxes...................................... (25,649) (21,818) Deferred federal income taxes..................................... 79,665 148,691 Notes payable..................................................... 204,443 -- Other liabilities................................................. 234,124 227,649 Minority interests in subsidiaires................................ 2,252 -- Separate account liabilities...................................... 310,608 302,590 Total Liabilities............................................ 8,321,798 6,246,730 Stockholders' equity Capital stock..................................................... 30,832 30,832 Additional paid-in capital........................................ 2,947 2,850 Accumulated other comprehensive income............................ 75,940 150,402 Retained earnings................................................. 2,931,218 2,944,453 Treasury stock, at cost........................................... (100,891) (100,862) Restricted stock.................................................. (3,707) (4,018) Total stockholders' equity................................... 2,936,339 3,023,657 Total liabilities and stockholders' equity................... $11,258,137 $9,270,387 See accompanying notes to consolidated financial statements. 89
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[Enlarge/Download Table] CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In thousands, except for per share data) 2001 2000 1999 Common stock Balance at beginning and end of year........... $ 30,832 $ 30,832 $ 30,832 Additional Balance at beginning of year................... 2,850 211 211 paid-in capital Issuance of treasury shares as restricted stock 97 2,639 -- Balance at end of year......................... 2,947 2,850 211 Accumulated Balance at beginning of year................... 150,402 254,820 299,176 other Change in unrealized gains on comprehensive marketable securities, net................... (70,150) (104,313) (44,328) income Foreign exchange adjustments................... (4) (105) (28) Change in fair value of interest rate swap .... (4,308) -- -- Balance at end of year......................... 75,940 150,402 254,820 Retained Balance at beginning of year................... 2,944,453 2,880,010 2,687,120 earnings Net income..................................... 64,931 140,174 266,613 Cash dividends to stockholders ($2.93, $2.86, $2.78 per share)................ (77,585) (75,731) (73,723) Cash dividends to minority stockholders of subsidiaries.............................. (226) -- -- Redemption premium on subsidiary preferred stock........................................ (355) -- -- Balance at end of year......................... 2,931,218 2,944,453 2,880,010 Treasury Balance at beginning of year................... (100,862) (102,727) (102,727) stock Net issuance (redemption) of restricted stock.. (29) 1,865 -- Balance at end of year......................... (100,891) (100,862) (102,727) Restricted Balance at beginning of year................... (4,018) -- -- stock Net redemption (issuance) of restriscted stock. (31) (4,504) -- Amortization of restrictions................... 342 486 -- Balance at end of year......................... (3,707) (4,018) -- Stockholders' equity Balance at end of year......................... $2,936,339 $3,023,657 $3,063,146 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) 2001 2000 1999 Net income................................. $ 64,931 $ 140,174 $ 266,613 Other comprehensive income Change in unrealized gains on marketable securities, net.......................... (70,150) (104,313) (44,328) Foreign exchange adjustments.............. (4) (105) (28) Change in fair value of interest rate swap (4,308) -- -- Total.................................... (74,462) (104,418) (44,356) Comprehensive income....................... $ (9,531) $ 35,756 $ 222,257 See accompanying notes to consolidated financial statements. 90
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[Enlarge/Download Table] CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) 2001 2000 1999 Operating activities Net income........................................................... $ 64,931 $ 140,174 $ 266,613 Adjustments to reconcile net income to net cash provided by operating activities: Increase in liabilities for policyholders' funds.................. 607,666 298,026 125,112 Charges to policy account balances................................ (146,207) (100,422) (101,739) Interest credited to policy account balances...................... 130,551 107,358 117,411 Deferral of policy acquisition costs.............................. (251,765) (229,171) (141,450) Amortization of deferred policy acquisition costs................. 184,089 236,789 135,385 Deferred federal income tax benefit............................... (16,520) (16,487) (10,060) Depreciation...................................................... 25,216 21,564 19,598 Accrual and amortization of discounts and premiums................ (22,762) (17,319) (15,183) Amortization of goodwill.......................................... 3,100 -- -- Gain from sale of investments, net................................ (33,217) (22,571) (149,061) Equity in losses (earnings) of unconsolidated affiliates.......... 6,054 (3,049) (19,942) Increase in premiums receivable................................... (9,800) (55,515) (5,185) Decrease (increase) in accrued investment income.................. (1,380) 2,588 (5,756) Capitalization of interest on policy and mortgage loans........... (15,654) (14,395) (17,099) Other changes, net................................................ (188,055) (152,092) (25,883) Net cash provided by operating activities....................... 336,247 195,478 172,761 Investing activities Proceeds from sale or maturity of investments: Bonds............................................................. 396,344 243,016 257,398 Stocks............................................................ 165,615 198,901 374,615 Real estate....................................................... 9,163 18,766 32,921 Other invested assets............................................. 16,160 18,146 96,670 Principal payments received on: Mortgage loans.................................................... 154,012 89,585 176,394 Policy loans...................................................... 9,092 36,940 37,594 Purchases of investments: Bonds............................................................. (583,203) (99,701) (508,205) Stocks............................................................ (322,276) (143,828) (160,465) Real estate....................................................... (11,741) (2,039) (29,124) Mortgage loans.................................................... (49,828) (34,095) (146,513) Policy loans...................................................... 7,815 (24,217) (22,461) Other invested assets............................................. (69,388) (99,023) (137,683) Increase in short-term investments, net.............................. (114,958) (45,166) (4,984) Decrease (increase) in investment in unconsolidated affiliates, net.. (21,703) (38,857) 726 Payment for acquisition of subsidiary, net of cash acquired.......... (245,418) -- -- Increase in property and equipment, net.............................. (17,953) (12,291) (17,219) Net cash provided by (used in) investing activities............. (678,267) 106,137 (50,336) Financing activities Policyholders' deposits to policy account balances................... 587,685 324,881 309,885 Policyholders' withdrawals from policy account balances.............. (341,039) (408,356) (366,439) Increase in notes payable............................................ 204,443 -- -- Dividends to stockholders............................................ (77,811) (75,731) (73,723) Net cash provided by (used in) financing activities............. 373,278 (159,206) (130,277) Net increase (decrease) in cash........................................ 31,258 142,409 (7,852) Cash: Beginning of the year............................................. 156,785 14,376 22,228 End of the year................................................... $ 188,043 $ 156,785 $ 14,376 See accompanying notes to consolidated financial statements. 91
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(1) NATURE OF OPERATIONS American National Insurance Company and its consolidated subsidiaries (collectively "American National") operate primarily in the insurance industry. Operating on a multiple line basis, American National offers a broad line of insurance coverages, including individual and group life, health, and annuities; personal lines property and casualty; and credit insurance. In addition, through non-insurance subsidiaries, American National offers mutual funds and invests in real estate. The majority (99%) of revenues is generated by the insurance business. Business is conducted in all states, as well as Puerto Rico, Guam and American Samoa. American National is also authorized to sell its products to American military personnel in Western Europe and, through subsidiaries, business is conducted in Mexico. Various distribution systems are utilized, including home service, multiple line ordinary, group brokerage, credit, independent third party marketing organizations and direct sales to the public. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Principles of consolidation and basis of presentation--The consolidated financial statements include the accounts of American National Insurance Company and its subsidiaries. All significant intercompany transactions have been eliminated in consolidation. Investments in unconsolidated affiliates are shown at cost plus equity in undistributed earnings since the dates of acquisition. The consolidated financial statements have been prepared on the basis of Generally Accepted Accounting Principles (GAAP) as defined in the United States of America. GAAP for the insurance companies, differs from the basis of accounting followed in reporting to insurance regulatory authorities. (See Note 16.) Certain reclassifications have been made to the 1999 and 2000 financial information to conform to the 2001 presentation. Use of estimates--The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from reported results using those estimates. Accounting changes Accounting for derivative instruments--FAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by FAS No. 137 and FAS No. 138, is effective for all quarters beginning after June 15, 2000. This statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The statement requires that entities recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. American National adopted FAS No. 133, as amended, on January 1, 2001. The adoption of FAS No. 133 did not have a significant effect on American National's financial position or results from operations. However, in conjunction with the adoption of FAS No. 133, American National was permitted to reclassify bonds with an amortized value of $286,726,000 from held-to-maturity to available-for-sale. This reclassification resulted in an addition to unrealized losses of $3,976,000. Business combinations FAS No. 141, "Business Combinations," is effective for all business combinations initiated after June 30, 2001. This statement establishes the purchase method as the only allowable way to account for business combinations. The statement also establishes the criteria for identifying and initially recognizing goodwill associated with a business combination. American National adopted FAS No. 141 on July 1, 2001. The adoption of FAS No. 141 did not have a significant effect on American National's financial position or results from operations. Goodwill and other intangible assets FAS No. 142, "Goodwill and Other Intangible Assets," is effective for years beginning after December 15, 2001. This statement addresses the initial recognition and measurement of intangible assets that were not acquired as part of a business combination. The statement also addresses the subsequent accounting and measurement of goodwill and intangible assets regardless of how they were acquired. The statement eliminates the expensing of goodwill on a routine periodic basis and establishes an annual impairment evaluation approach for intangible assets. American National adopted FAS No. 142 on January 1, 2002. The adoption of FAS No. 142 will eliminate the future amortization of goodwill associated with the acquisition of Farm Family Holdings, Inc which totaled $3,100,000 before tax, for 2001. (See Note 14.) 92
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Investments Debt securities--Bonds that are intended to be held-to-maturity are carried at amortized cost. The carrying value of these debt securities is expected to be realized, due to American National's ability and intent to hold these securities until maturity. Bonds held as available-for-sale are carried at market. Preferred stocks--All preferred stocks are classified as available-for-sale and are carried at market. Common stocks-- All common stocks are classified as available-for-sale and are carried at market. Unrealized gains--For all investments carried at market, the unrealized gains or losses (differences between amortized cost and market value), net of applicable federal income taxes, are reflected in stockholders' equity as a component of accumulated other comprehensive income. Mortgage loans--Mortgage loans on real estate are carried at amortized cost, less allowance for valuation impairments. The mortgage loan portfolio is closely monitored through the review of loan and property information, such as debt service coverage, annual operating statements and property inspection reports. This information is evaluated in light of current economic conditions and other factors, such as geographic location and property type. As a result of this review, impaired loans are identified and valuation allowances are established. Impaired loans are those which, based on current information and events, it is probable that American National will be unable to collect all amounts due, according to the contractual terms of the loan agreement. Policy loans--Policy loans are carried at cost. Investment real estate--Investment real estate is carried at cost, less allowance for depreciation and valuation impairments. Depreciation is provided over the estimated useful lives of the properties (15 to 50 years) using straight-line and accelerated methods. American National's real estate portfolio is closely monitored through the review of operating information and periodic inspections. This information is evaluated in light of current economic conditions and other factors, such as geographic location and property type. As a result of this review, if there is any indication of an adverse change in the economic condition of a property, a complete cash flow analysis is performed to determine whether or not an impairment allowance is necessary. If a possible impairment is indicated, the fair market value of the property is estimated using a variety of techniques, including cash flow analysis, appraisals and comparison to the values of similar properties. If the book value is greater than the estimated fair market value, an impairment allowance is established. Short-term investments--Short-term investments (primarily commercial paper) are carried at amortized cost. Other invested assets--Other invested assets are carried at cost, less allowance for valuation impairments. Valuation allowances for other invested assets are considered on an individual basis in accordance with the same procedures used for investment real estate. Investment valuation allowances and impairments--Investment valuation allowances are established for other than temporary impairments of mortgage loans, real estate and other assets in accordance with the policies established for each class of asset. The increase in the valuation allowances is reflected in current period income as a realized loss in the gain from sale of investments, net. Management believes that the valuation allowances are adequate. However, it is possible that a significant change in economic conditions in the near term could result in losses exceeding the amounts established. 93
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Cash and cash equivalents American National considers cash on-hand and in-banks plus amounts invested in money market funds as cash for purposes of the consolidated statements of cash flows. Investments in unconsolidated affiliates These assets are primarily investments in real estate and equity fund joint ventures, and are accounted for under the equity method of accounting. Property and equipment These assets consist of buildings occupied by the companies, electronic data processing equipment and furniture and equipment. These assets are carried at cost, less accumulated depreciation. Depreciation is provided using straight- line and accelerated methods over the estimated useful lives of the assets (3 to 50 years). Foreign currencies Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are charged or credited to other accumulated comprehensive income. Insurance specific assets and liabilities Deferred policy acquisition costs--Certain costs of acquiring new insurance business have been deferred. For life, annuity and accident and health business, such costs consist of inspection report and medical examination fees, commissions, related fringe benefit costs and the cost of insurance in force gained through acquisitions. The amount of commissions deferred includes first- year commissions and certain subsequent-year commissions that are in excess of ultimate level commission rates. The deferred policy acquisition costs on traditional life and health products are amortized with interest over the anticipated premium-paying period of the related policies, in proportion to the ratio of annual premium revenue to be received over the life of the policies. Expected premium revenue is estimated by using the same mortality and withdrawal assumptions used in computing liabilities for future policy benefits. The amount of deferred policy acquisition costs is reduced by a provision for possible inflation of maintenance and settlement expenses in the determination of such amounts by means of grading interest rates. Costs deferred on universal life, limited pay and investment type contracts are amortized as a level percentage of the present value of anticipated gross profits from investment yields, mortality and surrender charges. The effect on the deferred policy acquisition costs that would result from realization of unrealized gains (losses) is recognized with an offset to accumulated other comprehensive income in consolidated stockholders' equity as of the balance sheet date. It is possible that a change in interest rates could have a significant impact on the deferred policy acquisition costs calculated for these contracts. 94
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Deferred policy acquisition costs associated with property and casualty insurance business consist principally of commissions and underwriting and issue costs. These costs are amortized over the coverage period of the related policies, in relation to premium revenue recognized. Future policy benefits--For traditional products, liabilities for future policy benefits have been provided on a net level premium method based on estimated investment yields, withdrawals, mortality, and other assumptions that were appropriate at the time that the policies were issued. Estimates used are based on the companies' experience, as adjusted to provide for possible adverse deviation. These estimates are periodically reviewed and compared with actual experience. When it is determined that future expected experience differs significantly from existing assumptions, the estimates are revised for current and future issues. Future policy benefits for universal life and investment-type contracts reflect the current account value before applicable surrender charges. Recognition of premium revenue and policy benefits Traditional ordinary life and health--Life and accident and health premiums are recognized as revenue when due. Benefits and expenses are associated with earned premiums to result in recognition of profits over the life of the policy contracts. This association is accomplished by means of the provision for liabilities for future policy benefits and the amortization of deferred policy acquisition costs. Annuities--Revenues from annuity contracts represent amounts assessed against contract holders. Such assessments are principally surrender charges and, in the case of variable annuities, administrative fees. Policy account balances for annuities represent the deposits received plus accumulated interest less applicable accumulated administrative fees. Universal life and single premium whole life--Revenues from universal life policies and single premium whole life policies represent amounts assessed against policyholders. Included in such assessments are mortality charges, surrender charges actually paid and earned policy service fees. Policyholder account balances consist of the premiums received plus credited interest, less accumulated policyholder assessments. Amounts included in expense represent benefits in excess of account balances returned to policyholders. Property and casualty--Property and casualty premiums are recognized as revenue proportionately over the contract period. Policy benefits consist of actual claims and the change in reserves for losses and loss adjustment expenses. The reserves for losses and loss adjustment expenses are estimates of future payments of reported and unreported claims and the related expenses with respect to insured events that have occurred. These reserves are calculated using case basis estimates for reported losses and experience for claims incurred but not reported. These loss reserves are reported net of an allowance for salvage and subrogation. Management believes that American National's reserves have been appropriately calculated, based on available information as of December 31, 2001. However, it is possible that the ultimate liabilities may vary significantly from these estimated amounts. Participating insurance policies - A portion of the life insurance portfolio is written on a participating basis. Participating business comprised approximately 8.2% of the life insurance in force at December 31, 2001, and 5.6% of life premiums in 2001. Of the total participating business, 72.2% was written by Farm Family Life Insurance Company (Farm Family Life). For the participating business excluding Farm Family Life, the allocation of dividends to participating policyowners is based upon a comparison of experienced rates of mortality, interest and expenses, as determined periodically for representative plans of insurance, issue ages and policy durations, with the corresponding rates assumed in the calculation of premiums. For the Farm Family Life participating business, profits earned on participating business are reserved for the payment of dividends to policyholders, except for the stockholders' share of profits on participating policies, which is limited to the greater of 10% of the profit on participating business, or 50 cents per thousand dollars of the face amount of participating life insurance in force. Participating policyholders' interest includes the accumulated net income from participating policies reserved for payment to such policyholders in the form of dividends (less net income allocated to stockholders as indicated above) as well as a pro rata portion of unrealized investment gains (losses), net of tax. Federal income taxes American National and its eligible subsidiaries will file a consolidated life/non life federal income tax return for 2001. Certain subsidiaries consolidated for financial reporting are not eligible to be included in the consolidated federal income tax return. Separate provisions for income taxes have been determined for these entities. Deferred federal income tax assets and liabilities have been recognized to reflect the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 95
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Separate account assets and liabilities The separate account assets and liabilities represent funds maintained to meet the investment objectives of contract holders who bear the investment risk. The investment income and investment gains and losses from these separate funds accrue directly to the contract holders of the policies supported by the separate accounts. The assets of each separate account are legally segregated and are not subject to claims that arise out of any other business of American National. The assets of these accounts are carried at market value. Deposits, net investment income and realized investment gains and losses for these accounts are excluded from revenues, and related liability increases are excluded from benefits and expenses in this report. (3) INVESTMENTS The amortized cost and estimated market values of investments in held-to- maturity and available-for-sale securities are shown below (in thousands): [Enlarge/Download Table] Gross Gross Estimated Amortized Unrealized Unrealized Market December 31, 2001: Cost Gains Losses Value Debt securities Bonds held-to-maturity: U. S. government and agencies...... $ 43,830 $ 1,258 $ (74) $ 45,014 States and political subdivisions.. 209,731 2,145 (1,266) 210,610 Foreign governments................ 44,175 935 -- 45,110 Public utilities................... 973,502 32,921 (2,891) 1,003,532 All other corporate bonds.......... 2,400,679 94,247 (8,457) 2,486,469 Mortgage-backed securities......... 139,665 6,952 (124) 146,493 Total bonds held-to-maturity..... 3,811,582 138,458 (12,812) 3,937,228 Bonds available-for-sale: U. S. government and agencies...... 22,565 1,044 (62) 23,547 States and political subdivisions.. 97,420 417 (673) 97,164 Foreign governments................ 14,765 1,538 -- 16,303 Public utilities................... 390,847 10,303 (7,811) 393,339 All other corporate bonds.......... 890,397 35,364 (27,442) 898,319 Mortgage-backed securities......... 147,542 2,631 (661) 149,512 Total bonds available-for-sale... 1,563,536 51,297 (36,649) 1,578,184 Total debt securities................ 5,375,118 189,755 (49,461) 5,515,412 Marketable equity securities: Preferred stock.................... 49,405 1,706 (670) 50,441 Common stock....................... 769,306 235,737 (115,951) 889,092 Total marketable equity securities... 818,711 237,443 (116,621) 939,533 Total investments in securities.......... $6,193,829 $427,198 $(166,082) $6,454,945 [Enlarge/Download Table] Gross Gross Estimated Amortized Unrealized Unrealized Market December 31, 2000: Cost Gains Losses Value Debt securities Bonds held-to-maturity: U. S. government and agencies...... $ 58,765 $ 689 $ (201) $ 59,253 States and political subdivisions.. 49,906 591 (145) 50,352 Foreign governments................ 108,541 3,854 -- 112,395 Public utilities................... 998,042 12,715 (19,676) 991,081 All other corporate bonds.......... 2,226,709 40,791 (27,481) 2,240,019 Mortgage-backed securities......... 92,502 4,512 (3) 97,011 Total bonds held-to-maturity..... 3,534,465 63,152 (47,506) 3,550,111 Bonds available-for-sale: U. S. government and agencies...... 19,646 336 -- 19,982 States and political subdivisions.. 38,563 225 (74) 38,714 Foreign governments................ 27,571 2,007 -- 29,578 Public utilities................... 221,886 3,809 (9,098) 216,597 All other corporate bonds.......... 500,045 7,501 (63,149) 444,397 Total bonds available-for-sale... 807,711 13,878 (72,321) 749,268 Total debt securities................ 4,342,176 77,030 (119,827) 4,299,379 Marketable equity securities: Preferred stock.................... 23,970 881 (738) 24,113 Common stock....................... 549,721 372,866 (77,735) 844,852 Total marketable equity securities... 573,691 373,747 (78,473) 868,965 Total investments in securities.......... $4,915,867 $450,777 $(198,300) $5,168,344 96
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Debt Securities--The amortized cost and estimated market value, by contractual maturity of debt securities at December 31, 2001, are shown below (in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. [Enlarge/Download Table] Bonds-Held-to-Maturity Bonds-Available-for-Sale Estimated Estimated Amortized Market Amortized Market Cost Value Cost Value Due in one year or less................. $ 224,572 $ 228,968 $ 82,594 $ 81,760 Due after one year through five years... 1,929,837 2,014,041 813,095 835,858 Due after five years through ten years.. 1,089,002 1,117,451 346,140 340,780 Due after ten years..................... 425,245 427,240 262,411 260,296 3,668,656 3,787,700 1,504,240 1,518,694 Without single maturity date............ 142,926 149,528 59,296 59,490 $3,811,582 $3,937,228 $1,563,536 $1,578,184 97
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For 2001, proceeds from sales of investments in securities classified as available-for- sale (bonds and stocks) totaled $243,096,000. Gross gains of $49,033,000 and gross losses of $11,708,000 were realized on those sales. Securities with an amortized cost of $98,014,000 were transferred from held-to- maturity to available-for-sale due to evidence of a significant deterioration in the issuer's creditworthiness. An unrealized loss of $10,191,000 was established at the time of transfer. For 2000, proceeds from sales of investments in securities classified as available-for- sale (bonds and stocks) totaled $234,477,000. Gross gains of $68,605,000 and gross losses of $48,761,000 were realized on those sales. Included in the proceeds from sales of available-for-sale securities was $8,893,000 from the sale of bonds that had been reclassified from bonds held-to-maturity. The bonds had been reclassified due to evidence of a significant deterioration in the issuer's creditworthiness. The net loss from the sale of these bonds was $7,941,000. For 1999, proceeds from sales of investments in securities classified as available-for- sale (bonds and stocks) totaled $466,899,000. Gross gains of $148,762,000 and gross losses of $6,043,000 were realized on those sales. Included in the proceeds from sales of available-for-sale securities was $33,813,000 of proceeds from the sale of bonds that had been reclassified from bonds held-to-maturity. The bonds had been reclassified due to evidence of a significant deterioration in the issuer's creditworthiness. The net loss from the sale of these bonds was $5,314,000. During 2001, bonds were called or otherwise redeemed by the issuers, resulting in proceeds of $184,404,000 from the disposal. Gross gains of $676,000 and gross losses of $205,000 were realized on those disposals. During 2000, bonds were called or otherwise redeemed by the issuers, resulting in proceeds of $125,271,000 from the disposal. Gross gains of $379,000 were realized on those disposals. During 1999, bonds were called by the issuers, resulting in proceeds of $163,596,000 from the disposal. Gross gains of $688,000 were realized on those disposals. All gains and losses were determined using specific identification of the securities sold. Unrealized gains on securities--Unrealized gains on marketable equity securities and bonds available-for-sale, presented in the stockholders equity section of the consolidated statements of financial position, are net of deferred tax liabilities of $43,916,000, $81,060,000, and $137,222,000 for 2001, 2000, and 1999, respectively. The change in the net unrealized gains on investments for the years ended December 31 are summarized as follows (in thousands): [Enlarge/Download Table] 2001 2000 1999 ------------------------------- Bonds available-for-sale........................... $ 73,091 $ (39,436) $(66,800) Preferred stocks................................... 893 (464) (1,793) Common stocks...................................... (175,345) (117,142) (20,456) Index options...................................... 139 (139) -- Amortization of deferred policy acquisition costs.. (5,624) (3,294) 21,028 (106,846) (160,475) (68,021) Provision for federal income taxes................. 37,144 56,162 23,693 (69,702) $(104,313) $(44,328) Change in unrealized gains of investments attribu- table to participating policyholders interest.... (448) -- -- Total.............................................. $(70,150) $(104,313) $(44,328) 98
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Mortgage loans--In general, mortgage loans are secured by first liens on income- producing real estate. The loans are expected to be repaid from the cash flows or proceeds from the sale of real estate. American National generally allows a maximum loan-to-collateral-value ratio of 75% to 90% on newly funded mortgage loans. As of December 31, 2001, mortgage loans have fixed rates from 6.00% to 12.25% and variable rates from 6.39% to 10.25%. The majority of the mortgage loan contracts require periodic payments of both principal and interest, and have amortization periods of 3 months to 32 years. American National has investments in first lien mortgage loans on real estate with carrying values of $1,007,993,000 and $1,024,312,000 at December 31, 2001 and 2000, respectively. Problem loans, on which valuation allowances were established, totaled $65,875,000 and $42,465,000 at December 31, 2001 and 2000, respectively. The valuation allowances on those loans totaled $8,211,000 and $ 4,838,000 at December 31, 2001 and 2000, respectively. Policy loans--All of the Company's policy loans carry interest rates ranging from 5% to 8% at December 31, 2001. Investment income and realized gains (losses)--Investment income and realized gains (losses) on investments, before federal income taxes, for the years ended December 31 are summarized as follows (in thousands): [Enlarge/Download Table] Gains (Losses) Investment Income on Investments 2001 2000 1999 2001 2000 1999 -------------------------------------------------------------- Bonds....................... $360,907 $322,204 $318,898 $(25,788) $(17,759) $ (5,327) Preferred stocks............ 2,067 1,879 2,599 (298) (36) (1,212) Common stocks............... 19,363 14,802 16,284 37,209 38,018 149,946 Mortgage loans.............. 86,768 94,287 98,111 (233) (7,874) 1,206 Real estate................. 75,485 71,613 65,027 1,196 3,848 6,417 Other invested assets....... 48,709 37,832 36,819 398 (2,015) 2,793 Investment in unconsolidated affiliates.. -- -- -- 1,288 -- -- 593,299 542,617 537,738 13,772 14,182 153,823 Investment expenses......... (64,153) (63,528) (63,789) -- -- -- Decrease (increase) in valuation allowances....... -- -- -- (7,227) 8,389 (4,762) $529,146 $479,089 $473,949 $ 6,545 $ 22,571 $149,061 Included in the realized losses for 2001 is a writedown of $26,672,000 of available-for-sale debt securities, due to evidence of a significant deterioration in the issuer's creditworthiness resulting from other than a temporary decline in the value of the securities. (4) CONCENTRATIONS OF CREDIT RISK ON INVESTMENTS American National employs a strategy to invest funds at the highest return possible commensurate with sound and prudent underwriting practices to ensure a well-diversified investment portfolio. Bonds: Management believes American National's bond portfolio is of investment grade and is diversified. The bond portfolio distributed by quality rating at December 31 is summarized as follows: 2001 2000 ----------- AAA................................................... 8% 6% AA.................................................... 10% 14% A..................................................... 41% 57% BBB................................................... 25% 19% Below BBB............................................. 16% 4% 100% 100% 99
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Common stock: American National's stock portfolio by market sector distribution at December 31 is summarized as follows: 2001 2000 ---------------- Basic materials................................................. 3% 1% Capital goods................................................... 7% 9% Consumer goods.................................................. 19% 18% Energy.......................................................... 7% 8% Finance......................................................... 18% 18% Technology...................................................... 12% 16% Health care..................................................... 11% 13% Miscellaneous................................................... 16% 10% Mutual funds.................................................... 7% 7% 100% 100% Mortgage loans and investment real estate: American National invests primarily in the commercial sector in areas that offer the potential for property value appreciation. Generally, mortgage loans are secured by first liens on income-producing real estate. Mortgage loans and investment real estate by property type distribution at December 31 are summarized as follows: Mortgage Investment Loans Real Estate 2001 2000 2001 2000 --------------------------- Office buildings.. 17% 17% 15% 15% Shopping centers.. 43% 49% 41% 41% Commercial........ 4% 4% 2% 6% Apartments........ 2% 1% 3% 3% Hotels/motels..... 11% 8% 12% 13% Industrial........ 17% 16% 22% 21% Other............. 6% 5% 5% 1% 100% 100% 100% 100% American National has a diversified portfolio of mortgage loans and real estate properties. Mortgage loans and real estate investments by geographic distribution at December 31 are as follows: Mortgage Investment Loans Real Estate 2001 2000 2001 2000 -------------------------- New England......... 7% 9% -- -- Middle Atlantic..... 16% 16% -- -- East North Central.. 7% 9% 19% 18% West North Central.. 2% 2% 16% 17% South Atlantic...... 21% 22% 7% 7% East South Central.. 1% 1% 13% 13% West South Central.. 29% 25% 36% 37% Mountain............ 5% 6% 3% 2% Pacific............. 12% 10% 6% 6% 100% 100% 100% 100% For discussion of other off-balance sheet risks, see Note 5. 100
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(5) FAIR VALUE OF FINANCIAL INSTRUMENTS Estimated market values of financial instruments have been determined using available market information and appropriate valuation methodologies. However, considerable judgment is required in developing the estimates of fair value. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange, or the amounts that may ultimately be realized. The use of different market assumptions or estimating methodologies could have a material effect on the estimated fair values. Debt securities: The estimated market values for bonds represent quoted market values from published sources or bid prices obtained from securities dealers. Marketable equity securities: Market values for preferred and common stocks represent quoted market prices obtained from independent pricing services. Mortgage loans: The market value for mortgage loans is estimated using discounted cash flow analyses based on interest rates currently being offered for comparable loans. Loans with similar characteristics are aggregated for purposes of the analyses. Policy loans: The carrying amount for policy loans approximates their market value. Short-term investments: The carrying amount for short-term investments approximates their market value. Investment contracts: The market value of investment contract liabilities is estimated using a discounted cash flow model, assuming the companies' current interest rates on new products. The carrying value for these contracts approximates their market value. Notes payable: The carrying amount for notes payable approximates their market value. Interest rate swap: The carrying amount for the interest rate swap approximates its market value. Investment commitments: American National's investment commitments are all short-term in duration, and the market value was not significant at December 31, 2001 or 2000. 101
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Values: The carrying amounts and estimated market values of financial instruments at December 31 are as follows (in thousands): [Download Table] 2001 2000 -------------------------------------------------- Estimated Estimated Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Bonds: Held-to-maturity.............. $ 3,811,582 $3,937,228 $3,534,465 $3,550,111 Available-for-sale............ 1,578,184 1,578,184 749,268 749,268 Preferred stock................ 50,441 50,441 24,113 24,113 Common stock................... 889,092 889,092 844,852 844,852 Mortgage loans on real estate.. 1,007,993 1,045,659 1,024,312 1,071,438 Policy loans................... 324,545 324,545 294,313 294,313 Short-term investments......... 255,476 255,476 140,518 140,518 Financial liabilities: Investment contracts........... 1,699,373 1,699,373 1,494,353 1,494,353 Notes payable.................. 204,443 204,443 -- -- Interest rate swap............. 6,627 6,627 -- -- (6) DEFERRED POLICY ACQUISITION COSTS Deferred policy acquisition costs and premiums for the years ended December 31, 2001, 2000, and 1999 are summarized as follows (in thousands): [Enlarge/Download Table] Life Accident Property & & Annuity & Health Casualty Total Balance at December 31, 1998............. $ 615,535 $104,735 $ 11,433 $ 731,703 Additions............................. 82,708 25,315 29,550 137,573 Amortization.......................... (87,701) (21,263) (26,421) (135,385) Effect of change in unrealized gains on available-for-sale securities.... 21,028 -- -- 21,028 Net change.............................. 16,035 4,052 3,129 23,216 Acquisitions............................ 3,652 225 -- 3,877 Balance at December 31, 1999............. 635,222 109,012 14,562 758,796 Additions............................. 132,720 60,838 35,424 228,982 Amortization.......................... (141,591) (63,518) (31,680) (236,789) Effect of change in unrealized gains on available-for-sale securities.... (3,294) -- -- (3,294) Net change.............................. (12,165) (2,680) 3,744 (11,101) Acquisitions............................ 123 66 -- 189 Balance at December 31, 2000............. $ 623,180 $106,398 $ 18,306 $ 747,884 Additions............................. 101,364 25,229 72,750 199,343 Amortization.......................... (89,751) (25,480) (68,858) (184,089) Effect of change in unrealized gains on available-for-sale securities.... (5,524) -- -- (5,524) Net change.............................. 6,089 (251) 3,892 9,730 Acquisitions............................ 52,417 5 19,180 71,602 Balance at December 31, 2001............. $ 681,686 $106,152 $ 41,378 $ 829,216 2001 Premiums............................ $ 359,376 $415,124 $666,823 $1,441,323 2000 Premiums............................ $ 356,944 $404,973 $426,786 $1,188,703 1999 Premiums............................ $ 342,030 $396,072 $392,576 $1,130,678 102
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Commissions comprise the majority of the additions to deferred policy acquisition costs for each year. Acquisitions relate to the purchase of various insurance portfolios under assumption reinsurance agreements and, for the year 2001, the purchase of the Farm Family insurance companies. (See Note 14.) During 2001 American National's evaluation of recoverability and reserve adequacy resulted in the establishment of premium deficiency reserves of $23,436,000. Such reserve charges include $11,087,000 related to the accident and health product line, previously distributed through American National's Multiple Line segment, and $12,349,000 for the long-term care business produced by the Senior Age Marketing segment. No such charges were recorded in 2000 or 1999. (7) FUTURE POLICY BENEFITS AND POLICY ACCOUNT BALANCES Life insurance: Assumptions used in the calculation of future policy benefits or policy account balances for individual life policies are as follows: [Enlarge/Download Table] Percentage of Future Policy Policy Issue Interest Benefits Year Rate So Valued Ordinary-- 1996-2001 7.5% for years 1 through 5, graded to 5.5% at the end of year 25, and level thereafter 5% 1981-1995 8% for years 1 through 5, graded to 6% at the end of year 25, and level thereafter 17% 1976-1981 7% for years 1 through 5, graded to 5% at the end of year 25, and level thereafter 12% 1972-1975 6% for years 1 through 5, graded to 4% at the end of year 25, and level thereafter 4% 1969-1971 6% for years 1 through 5, graded to 3.5% at the end of year 30, and level thereafter 4% 1962-1968 4.5% for years 1 through 5, graded to 3.5% at the end of year 15, and level thereafter 7% 1948-1961 4% for years 1 through 5, graded to 3.5% at the end of year 10, and level thereafter 7% 1947 and prior Statutory rates of 3% or 3.5% 1% Participating business acquired Level rates of 3% to 5.5% 8% Industrial-- 1948-1967 4% for years 1 through 5, graded to 3.5% at the end of year 10, and level thereafter 3% 1947 and prior Statutory rates of 3% 3% Universal Life Future policy benefits for universal life are equal to the current account value 29% 100% Future policy benefits for group life policies have been calculated using a level interest rate of 4%. Mortality and withdrawal assumptions are based on American National's experience. Annuities: Fixed annuities included in future policy benefits are calculated using a level interest rate of 6%. Mortality and withdrawal assumptions are based on American National's experience. Policy account balances for interest-sensitive annuities are equal to the current gross account balance. Health Insurance: Interest assumptions used for future policy benefits on health policies are calculated using a level interest rate of 6%. Morbidity and termination assumptions are based on American National's experience. 103
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(8) LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES Activity in the liability for accident and health, and property and casualty unpaid claims and claim adjustment expenses is summarized as follows (in thousands): 2001 2000 1999 ----------------------------- Balance at January 1............. $453,909 $278,198 $266,832 Balance of Acquisition........... 221,233 -- -- Less reinsurance recoverables.. 154,842 3,988 4,641 Net beginning balance ........... 520,300 274,210 262,191 Incurred related to: Current year................... 912,132 681,794 620,236 Prior years.................... (14,147) 6,311 (18,662) Total incurred................... 897,985 688,105 601,574 Paid related to: Current year................... 572,903 443,453 427,073 Prior years.................... 267,338 182,086 162,482 Total paid....................... 840,241 625,539 589,555 Net Balance at December 31....... 578,044 336,776 274,210 Plus reinsurance recoverables.. 471,553 117,133 3,988 Balance at December 31........... $1,049,597 $453,909 $278,198 The balances at December 31 are included in policy and contract claims on the consolidated statements of financial position. (9) REINSURANCE As is customary in the insurance industry, the companies reinsure portions of certain insurance policies they write, thereby providing a greater diversification of risk and managing exposure on larger risks. The maximum amount that would be retained by one company (American National) would be $700,000 individual life, $250,000 individual accidental death, $100,000 group life and $125,000 credit life (total $1,175,000). If individual, group and credit were in force in all companies at the same time, the maximum risk on any one life could be $2,341,500. American National remains primarily liable with respect to any reinsurance ceded, and would bear the entire loss if the assuming companies were unable to meet their obligations under any reinsurance treaties. To minimize its exposure to significant losses from reinsurer insolvencies, American National evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers. At December 31, 2001, amounts recoverable from reinsurers with a carrying value of $102,599,341 were associated with various auto dealer credit insurance program reinsurers domiciled in the Caribbean islands of Nevis or the Turks and Caicos Islands. American National holds collateral related to these credit reinsurers totaling $80,870,261. This collateral is in the form of custodial accounts controlled by the company, which can be drawn on for amounts that remain unpaid for more than 90 days. American National believes that the failure of any single reinsurer to meet its obligations would not have a significant effect on its financial position or results of operations. As a result of the September 11, 2001 terrorist attack on the United States, American National accrued losses (primarily on reinsurance assumed) totaling $239,406,000. Reinsurance providing coverage of $218,606,000 was in place on these claims. American National has evaluated the reinsurers providing the coverage for these claims, and management believes that all of the ceded amounts are recoverable. However, due to the magnitude of this event, the overall effects on the insurance industry have not yet been determined. American National believes that the failure of any single reinsurer to meet its obligations for these claims would not have a significant effect on the company's financial position. 104
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Premiums, premium-related reinsurance amounts and reinsurance recoveries for the years ended December 31 are summarized as shown in Table 13 (in thousands): [Enlarge/Download Table] 2001 2000 1999 ------------------------------------ Direct premiums.................................... $1,536,932 $1,297,995 $1,268,129 Reinsurance premiums assumed from other companies.. 433,843 260,214 110,180 Reinsurance premiums ceded to other companies...... (529,452) (369,506) (247,631) Net premiums....................................... $1,441,323 $1,188,703 $1,130,678 Reinsurance recoveries............................. $ 629,905 $ 256,731 $ 162,863 Life insurance in force and related reinsurance amounts at December 31 are summarized as follows (in thousands): [Enlarge/Download Table] 2001 2000 1999 ---------------------------------------- Direct life insurance in force.................. $ 53,502,696 $ 47,902,590 $46,156,190 Reinsurance risks assumed from other companies.. 910,942 873,996 797,059 Total life insurance in force................... 54,413,638 48,776,586 46,953,249 Reinsurance risks ceded to other companies...... (14,819,652) (12,573,404) (9,629,707) Net life insurance in force..................... $39,593,986 $ 36,203,182 $37,323,542 (10) NOTES PAYABLE In April 2001, a subsidiary of American National entered into a loan agreement with a bank to borrow $200,000,000. The proceeds of this loan were used in the acquisition of Farm Family Holdings, Inc. (FFH). (See Note 14.) The loan calls for quarterly interest payments but no principal payments until maturity in June 2003. The loan is secured by the stock of FFH and also partially secured by a pledge of fixed maturity investments from American National with a market value of $250,000,000. The loan carries a variable interest rate equal to the six month LIBOR rate plus 0.75%. However, at the time the loan was executed, an interest rate swap agreement was entered into which gave the loan a fixed effective interest rate of 5.58%. The interest rate swap agreement represents a hedge against fluctuations in the interest rate on the loan. At December 31, 2001, the swap agreement represented an obligation with a value of approximately $6,627,000 which is reflected in other liabilities on the consolidated statement of financial position. The change in the value of the swap agreement is reflected in stockholders' equity as a component of accumulated other comprehensive income. At December 31, 2001 other American National subsidiaries had notes payable to third party lenders totaling $4,443,000. These notes are unsecured, have interest rates from 4.5% to 8.5% and maturities from 2004 to 2006. None of the principal on these notes is due before maturity. (11) FEDERAL INCOME TAXES The federal income tax provisions vary from the amounts computed when applying the statutory federal income tax rate. A reconciliation of the effective tax rate of the companies to the statutory federal income tax rate follows (in thousands, except percentages): [Enlarge/Download Table] 2001 2000 1999 ------------------------------------------------------- Amount Rate Amount Rate Amount Rate Tax on pre-tax income.............. $36,792 35.00% $72,430 35.00% $136,038 35.00% Tax-exempt investment income....... (2,808) (2.67) (3,956) (1.91) (1,691) (0.44)% Dividend exclusion................. (3,243) (3.09) (1,247) (0.60) (3,414) (0.88) Exempted losses on sale of assets.. -- 0.00 (2,604) (1.26) (4,470) (1.15) Miscellaneous tax credits, net..... (2,177) (2.07) (2,536) (1.23) (2,262) (0.58) Losses on foreign operations....... 6,599 6.28 1,476 0.71 (585) (0.15) Other items, net................... 5,025 4.78 3,205 1.55 (1,548) (0.40) $40,188 38.23% $66,768 32.26% $122,068 31.40% 105
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The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2001 and December 31, 2000 are as follows (in thousands): [Enlarge/Download Table] 2001 2000 --------------------- Deferred tax assets: -------------------- Investment in bonds, real estate and other invested assets, principally due to investment valuation allowances..... $ 11,282 $ 10,024 Policyowner funds, principally due to policy reserve discount... 174,815 103,866 Policyowner funds, principally due to unearned premium reserve.. 23,652 12,843 Other assets.................................................... 8,057 22,039 Total gross deferred tax assets................................... 217,806 148,772 Less valuation allowance........................................ (3,000) (3,000) Net deferred tax assets........................................... $ 214,806 $ 145,772 Deferred tax liabilities: ------------------------- Marketable equity securities, principally due to net unrealized gains on stock.................................. $ (42,477) $ (81,060) Investment in bonds, principally due to accrual of discount on bonds................................... (33,316) (13,190) Deferred policy acquisition costs, due to difference between GAAP and tax................................ (183,883) (178,788) Property, plant and equipment, principally due to difference between GAAP and tax depreciation methods........... (7,533) (5,278) Non-taxable pension............................................. (14,773) (14,503) Other liabilities............................................... (12,489) (1,644) Net deferred tax liabilities...................................... (294,471) (294,463) Total deferred tax................................................. $ (79,665) $(148,691) Management believes that a sufficient level of taxable income will be achieved to utilize the net deferred tax assets. Through 1983, under the provision of the Life Insurance Company Income Tax Act of 1959, life insurance companies were permitted to defer from taxation a portion of their income (within certain limitations) until and unless it is distributed to stockholders, at which time it was taxed at regular corporate tax rates. No provision for deferred federal income taxes applicable to such untaxed income has been made, because management is of the opinion that no distributions of such untaxed income (designated by federal law as "policyholders' surplus") will be made in the foreseeable future. There was no change in the "policyholders' surplus" between December 31, 2000 and December 31, 2001, and the cumulative balance was approximately $63,000,000 at both dates. Federal income tax totaling approximately $80,985,000 in 2001, $114,415,000 in 2000, and $108,060,000 in 1999 was paid to the Internal Revenue Service. The statute of limitations for the examination of federal income tax returns through 1997 for American National and its subsidiaries by the Internal Revenue Service has expired. All prior year deficiencies have been paid or provided for, and American National has filed appropriate claims for refunds through 1997. In the opinion of management, adequate provision has been made for any tax deficiencies that may be sustained. 106
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(12) Components of comprehensive income The items included in comprehensive income, other than net income, are unrealized gains on available-for-sale securities, net of deferred acquisition costs, and foreign exchange adjustments and the change in fair value of interest rate swap. The details on the unrealized gains included in comprehensive income, and the related tax effects thereon are as follows (in thousands): [Download Table] Before Federal Net of Federal Income Tax Federal Income Tax Expense Income Tax December 31, 2001 ----------------- Unrealized Losses...................... $ 119,046 $(41,666) $ (77,380) Less: reclassification adjustment for gains realized in net income.......... 11,123 3,893 7,230 Net unrealized loss component of comprehensive income............... $(107,923) $(37,773) $ (70,150) December 31, 2000 ----------------- Unrealized Losses...................... $(139,180) $(48,709) $ (90,471) Less: reclassification adjustment for gains realized in net income.......... (21,295) (7,453) (13,842) Net unrealized loss component of comprehensive income............... $(160,475) $(56,162) $(104,313) December 31, 1999 ----------------- Unrealized Gains....................... $ 80,700 $ 28,359 $ 52,341 Less: reclassification adjustment for gains realized in net income.......... (148,721) (52,052) (96,669) Net unrealized loss component of comprehensive income............... $ (68,021) $(23,693) $ (44,328) (13)STOCKHOLDERS' EQUITY AND MINORITY INTERESTS Common Stock-American National has only one class of common stock, with a par value of $1.00 per share and 50,000,000 authorized shares. The amounts outstanding at December 31, were as follows: Common stock: 2001 2000 1999 Shares issued......... 30,832,449 30,832,449 30,832,449 Treasury shares....... 4,273,617 4,274,284 4,274,284 Restricted shares..... 79,000 79,000 79,000 Outstanding shares.... 26,479,832 26,479,165 26,479,165 Stock-based Compensation--During 1999, American National's stockholders approved the "1999 Stock and Incentive Plan." Under this plan, American National can grant Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Rewards, Incentive Awards and any combination of these. The number of shares available for grants under 107
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the plan cannot exceed 900,000 shares, and no more than 50,000 shares may be granted to any one individual in any calendar year. The plan provides for the award of Restricted Stock. Restricted Stock Awards entitle the participant to full dividend and voting rights. Unvested shares are restricted as to disposition, and are subject to forfeiture under certain circumstances. Compensation expense is recognized over the vesting period. The restrictions on these awards lapse after 10 years, and feature a graded vesting schedule in the case of the retirement of an award holder. On August 1, 1999 awards were granted to directors and board consultants, with 60,000 shares granted at an exercise price of zero. These awards result in compensation expense to American National over the vesting period. The amount of compensation expense recorded was $342,000 in 2001, $486,000 in 2000 and zero in 1999. The plan provides for the award of Stock Appreciation Rights (SAR). The SARs give the holder the right to compensation based on the difference between the price of a share of stock on the grant date and the price on the exercise date. The SARs vest at a rate of 20% per year for 5 years and expire 5 years after the vesting period. American National uses the average of the high and low price on the last trading day of the period to calculate the fair value and compensation expense for SARs. The fair value of the SARs was $1,361,000, $709,000 and zero at December 31, 2001, 2000 and 1999 respectively. Compensation expense was recorded totaling $889,000, $709,000 and zero for the years ended December 31, 2001, 2000 and 1999 respectively. SAR and Restricted Stock (RS) information for 2001, 2000 and 1999 follows: SAR Weighted- RS Weighted- SAR Average Price RS Average Price Shares per Share Shares per Share Outstanding at December 31, 1998 -- -- -- Granted 81,500 $ 57.00 79,000 $13.71 Outstanding at December 31, 1999 81,500 57.00 79,000 13.71 Granted 3,000 61.81 -- -- Exercised (1,100) 57.00 -- -- Canceled (1,208) 57.00 -- -- Outstanding at December 31, 2000 82,192 57.18 79,000 13.71 Granted 3,000 80.25 2,000 72.28 Exercised (10,250) 57.00 (666) 57.00 Canceled (1,392) 57.00 (1,334) 57.00 Outstanding at December 31, 2001 73,550 $58.14 79,000 $14.09 The weighted-average contractual remaining life for the 73,550 SAR shares outstanding as of December 31, 2001 is 7.7 years. The weighted-average exercise price for these shares is $58.14 per share. Of the shares outstanding, 21,350 are exercisable at a weighted-average exercise price of $57.14 per share The weighted-average contractual remaining life for the 79,000 Restricted Stock shares outstanding as of December 31, 2001 is 7.8 years. The weighted-average exercise price for these shares is $14.09 per share. None of the shares outstanding was exercisable. Earnings Per Share-Earnings per share for 2001 was calculated using a weighted average number of shares outstanding of 26,479,665. For 2000 and 1999, the weighted-average number of shares outstanding were 26,479,165. In 2001 and 2000, the incremental number of shares to be added to number of shares outstanding was less than 30,000 shares, and had no effect on the earnings per share calculation. In 1999, the average market price, since the grant date of the Restricted Stock Awards, was less than the exercise price. As a result, diluted earnings per share is equal to the basic earnings per share for 2001, 2000 and 1999. 108
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Dividends--American National's payment of dividends to stockholders is restricted by statutory regulations. Generally, the restrictions require life insurance companies to maintain minimum amounts of capital and surplus, and, in the absence of special approval, limit the payment of dividends to statutory net gain from operations on an annual, non-cumulative basis. Additionally, insurance companies are not permitted to distribute the excess of stockholders' equity, as determined on a GAAP basis over that determined on a statutory basis. Generally, the same restrictions on amounts that can transfer in the form of dividends, loans, or advances to the parent company apply to American National's insurance subsidiaries. At December 31, 2001, approximately $910,919,000 of American National's consolidated stockholders' equity represents net assets of its insurance subsidiaries. Any transfer of these net assets to American National would be subject to statutory restrictions and approval. Minority Interests-Two of American National's subsidiaries have preferred stock outstanding to unrelated third parties. These preferred stock issues had a total value of $1,252,000 at December 31, 2001, and carry various terms, including cumulative dividends and voting rights as they apply to the subsidiary. In 2001, American National formed TMNY Investments, LLC (TMNY). Subsequently, TMNY purchased five percent of the common stock of Farm Family Holdings, Inc. from another subsidiary of American National. The purpose of TMNY is to provide certain officers with additional incentive to enhance the profitable growth of the Farm Family companies. Accordingly, shares of TMNY preferred stock, representing 66% of the value of the company, were granted to various officers of American National and its subsidiaries. The preferred shares can not be sold or otherwise traded by the officers for a period of eight years. The total value of these preferred shares was $1,000,000 at December 31, 2001. (14) ACQUISITION On April 10, 2001 American National completed the acquisition of Farm Family Holdings, Inc. (FFH), which is the parent company for Farm Family Casualty Company, Farm Family Life Insurance Company and United Farm Family Insurance Company. These insurance companies market and sell personal lines property and casualty and life insurance to the agribusiness market in the northeastern United States. The purchase price for FFH was $280 million, and was paid in cash, funded in part through a bank loan of $200 million, with the remainder provided by internally generated funds. The acquisition was accounted for by the purchase method of accounting. Accordingly, the results of FFH and its subsidiaries are included in the consolidated statements of income for the nine months since the purchase date. The assets and liabilities for FFH were adjusted to reflect fair market value at the purchase date. Goodwill was recognized for the amount of the excess of the purchase price over the fair market value at the date of purchase. The goodwill was amortized during 2001 on a straight line basis using an average life of 11.5 years, producing a total expense of $3,100,000. With the adoption of FAS 142, the goodwill will no longer be amortized in future periods. It will, however, be subject to annual recoverability analyses. A summary of the assets acquired and liabilities assumed in the acquisition follows (in thousands): Assets acquired Investments......................... $ 1,144,636 Deferred acquisition costs.......... 71,671 Cash................................ 35,152 Goodwill............................ 47,539 Other assets........................ 156,609 Total assets acquired................ 1,455,607 Liabilities assumed Benefit reserves.................... 477,684 Policy account balances............. 411,580 Other liabilities................... 285,773 Total liabilities assumed............ 1,175,037 Net purchase price................... $ 280,570 The following table presents unaudited pro forma results of operations for the years ended December 31, 2001 and 2000, as if FFH and subsidiaries had been combined with American National as of the beginning of the year. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do not include any anticipated cost savings or other effects of the acquisition, and are not necessarily indicative of the results which may occur in the future. Unaudited Pro Forma Year Ended (In thousands, except per share amounts) 2001 2000 Total revenue................................... $ 2,219,055 $ 2,147,408 Total benefits and expenses..................... 2,106,692 1,915,137 Earnings (losses) of unconsolidated affiliates.. (6,055) 3,049 Income before federal income taxes.............. 106,308 235,320 Federal income tax expense...................... 40,756 76,062 Net income...................................... $ 65,552 $ 159,258 Net income per common share - basic and diluted. $ 2.48 $ 6.01 The FFH income included in the pro forma results for the year 2000, contains a non recurring income item of $12,746,000. (15) SEGMENT INFORMATION American National and its subsidiaries are engaged principally in the insurance business. Management organizes the business around its marketing distribution channels. Separate management of each segment is required because each business unit is subject to different marketing strategies. There are eight operating segments based on the company's marketing distribution channels. The operating segments are as follows: Multiple Line Marketing -- This segment derives its revenues from the sale of individual life, annuity, accident and health, and property and casualty products marketed through American National, ANTEX, ANPAC, ANGIC and ANPAC Lloyds. Home Service Division -- This segment derives its revenues from the sale of individual life, annuity and accident and health insurance. In this segment, the agent collects the premiums. This segment includes business in the United States and Mexico. Independent Marketing -- This segment derives its revenues mainly from the sale of life and annuity lines marketed through independent marketing organizations. Health Division -- This segment derives its revenues primarily from the sale of accident and health insurance plus group life insurance marketed through group brokers and third party marketing organizations. Senior Age Marketing -- This segment derives its revenues primarily from the sale of Medicare supplement plans, individual life, annuities, and accident and health insurance marketed through Standard Life and Accident Insurance Company. Direct Marketing -- This segment derives its revenues principally from the sale of individual life insurance, marketed through Garden State Life Insurance Company, using direct selling methods. Credit Insurance Division -- This segment derives its revenues principally from the sale of credit life and credit accident and health insurance. 109
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Capital and Surplus -- This segment derives its revenues principally from investment instruments. All Other -- This category comprises segments which individually insignificant. This category includes non-insurance, reinsurance assumed, and retirement benefits. All income and expense amounts specifically attributable to policy transactions are recorded directly to the appropriate line of business within each segment. Income and expenses not specifically attributable to policy transactions are allocated to the lines within each segment as follows: . Net investment income from fixed income assets (bonds and mortgage loans on real estate) is allocated based on the funds generated by each line at the average yield available from these fixed income assets at the time such funds become available. . Net investment income from all other assets is allocated to capital and surplus to arrive at an underwriting gain from operations. A portion of the income allocated to capital and surplus is then re-allocated to the other segments in accordance with the amount of equity invested in each segment. . Expenses are allocated to the lines based upon various factors, including premium and commission ratios within the respective operating segments. . Gain or loss on the sale of investments is allocated to capital and surplus. . Equity in earnings of unconsolidated affiliates is allocated to the segment that provided the funds to invest in the affiliate. . Federal income taxes have been applied to the net earnings of each segment based on a fixed tax rate. Any difference between the amount allocated to the segments and the total federal income tax amount is allocated to capital and surplus. The following tables summarize net income and various components of net income by operating segment for the years ended December 31, 2001, 2000 and 1999 (in thousands): [Enlarge/Download Table] Gain From Premiums Net Operations Federal and Investment Equity Before Income Other Income Expenses in Federal Tax Policy and and Unconsolidated Income Expense Net Revenue Realized Gains Benefits Affiliates Taxes (Benefit) Income 2001 ---- Multiple Line $ 788,498 $ 147,607 $ 934,143 $ -- $ 1,962 $ 647 $ 1,315 Home Service Division 212,344 118,396 287,223 -- 43,517 14,361 29,156 Independent Marketing 50,045 116,213 157,173 -- 9,085 2,998 6,087 Health Division 249,718 8,483 275,375 -- (17,174) (5,667) (11,507) Credit Insurance Division 65,905 18,458 71,615 -- 12,748 4,207 8,541 Senior Age Marketing 168,039 18,399 193,259 -- (6,821) (2,251) (4,570) Direct Marketing 29,840 3,412 28,948 -- 4,304 1,420 2,884 Capital and Surplus 1,054 74,592 16,988 (8,345) 50,313 22,102 28,211 All Other 33,247 30,131 58,484 2,291 7,185 2,37 4,814 $ 1,598,690 $ 535,691 $2,023,208 $ (6,054) $105,119 $ 40,188 $ 64,931 2000 ---- Multiple Line $ 518,271 $ 95,629 $ 596,098 $ -- $ 17,802 $ 5,874 $ 11,928 Home Service Division 212,951 119,543 276,686 -- 55,808 18,417 37,391 Independent Marketing 76,236 113,107 176,196 -- 13,147 4,339 8,808 Health Division 253,820 8,779 281,837 -- (19,238) (6,349) (12,889) Credit Insurance Division 63,412 17,010 68,466 -- 11,956 3,945 8,011 Senior Age Marketing 148,565 18,292 156,970 -- 9,887 3,263 6,625 Direct Marketing 28,076 3,906 28,678 -- 3,304 1,090 2,214 Capital and Surplus 938 94,795 (264) 100 96,097 30,190 65,907 All Other 30,553 30,599 45,922 2,949 18,179 5,999 12,180 $ 1,332,822 $ 501,660 $1,630,589 $ 3,049 $206,942 $ 66,768 $140,174 110 [Enlarge/Download Table] 1999 ---- Multiple Line Marketing $ 489,263 $ 95,821 $ 530,321 $ -- $ 54,763 $ 18,072 $ 36,691 Home Service Division 209,033 118,978 263,945 -- 64,066 21,142 42,924 Independent Marketing 60,574 118,960 162,052 -- 17,482 5,769 11,713 Health Division 237,446 7,406 256,390 -- (11,538) (3,808) (7,730) Credit Insurance Division 63,262 16,094 65,903 -- 13,453 4,439 9,014 Senior Age Marketing 148,368 18,013 162,209 -- 4,172 1,377 2,795 Direct Marketing 26,857 3,734 24,823 -- 5,768 1,903 3,865 Capital and Surplus 1,087 211,453 256 12,249 224,533 67,900 156,633 All Other 30,714 32,551 54,976 7,693 15,982 5,274 10,708 $1,266,604 $623,010 $1,520,875 $19,942 $388,681 $122,068 $266,613 There were no significant non-cash items to report. Substantially all of the consolidated revenues were derived in the United States. Most of the operating segments provide essentially the same types of products. The following table provides revenues within each segment by line of business for the years ended December 31, 2001, 2000 and 1999 (in thousands): Total Revenues [Enlarge/Download Table] Accident & Property & Total Life Annuity Health Casualty Credit All Other Revenues 2001 ---- Multiple Line $175,781 $ 32,123 $ 19,721 $708,480 $ -- $ -- $ 936,105 Home Service Division 315,456 5,562 9,722 -- -- -- 330,740 Independent Marketing 19,635 146,623 -- -- -- -- 166,258 Health Division 4,336 -- 253,865 -- -- -- 258,201 Credit Insurance Division -- -- -- -- 84,363 -- 84,363 Senior Age Marketing 32,890 2,993 150,555 -- -- -- 186,438 Direct Marketing 33,069 -- 183 -- -- -- 33,252 Capital and Surplus -- -- -- -- -- 75,646 75,646 All Other 32,637 1,809 418 -- -- 28,514 63,378 $613,804 $189,110 $434,464 $708,480 $84,363 $104,160 $2,134,381 2000 ---- Multiple Line $122,302 $ 17,392 $ 17,853 $450,894 $ -- $ -- $ 608,441 Home Service Division 287,057 4,477 9,317 -- -- -- 300,851 Independent Marketing 14,549 162,592 -- -- -- -- 177,141 Health Division 4,055 -- 253,274 -- -- -- 257,329 Credit Insurance Division -- -- -- -- 69,346 -- 69,346 Senior Age Marketing 30,487 1,675 125,541 -- -- -- 157,703 Direct Marketing 31,188 -- 219 -- -- -- 31,407 Capital and Surplus -- -- -- -- -- 173,478 173,478 All Other 29,311 1,671 937 -- -- 26,866 58,785 $518,949 $187,807 $407,141 $450,894 $69,346 $200,344 $1,834,481 1999 ---- Multiple Line $121,753 $ 17,637 $ 19,736 $403,029 $ -- $-- $ 562,155 Home Service Division 283,566 4,576 8,778 -- -- -- 296,920 Independent Marketing 8,938 157,569 -- -- -- -- 166,507 Health Division 3,920 -- 236,559 -- -- -- 240,479 Credit Insurance Division -- -- -- -- 69,007 -- 69,007 Senior Age Marketing 31,577 1,692 125,609 -- -- -- 158,878 Direct Marketing 29,501 146 427 -- -- -- 30,074 Capital and Surplus -- -- -- -- -- 306,797 306,797 All Other 30,120 1,878 1,709 -- -- 25,090 58,797 $509,375 $183,498 $392,818 $403,029 $69,007 $331,887 $1,889,614 The operating segments are supported by the fixed income assets and policy loans. Equity type assets, such as stocks, real estate and other invested assets, are investments of the Capital and Surplus segment. Assets of the non- insurance companies are specifically associated with those companies in the "All Other" segment. Any assets not used in support of the operating segments are assigned to Capital and Surplus. 112
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The following table summarizes assets by operating segment for the years ended December 31, 2001 and 2000 (in thousands): 2001 2000 Multiple Line ............. $3,042,507 $1,687,541 Home Service Division...... 1,833,920 1,815,757 Independent Marketing...... 1,900,552 1,650,600 Health Division............ 713,071 376,246 Credit Insurance Division.. 428,885 408,780 Senior Age Marketing....... 374,024 340,324 Direct Marketing........... 90,665 91,173 Capital & Surplus.......... 1,907,577 2,275,332 All Other.................. 966,936 624,634 $11,258,137 $9,270,387 The net assets of the Capital and Surplus and All Other segments include investments in unconsolidated affiliates. Almost all of American National's assets are located in the United States of America. The amount of each segment item reported is the measure reported to the chief operating decision-maker for purposes of making decisions about allocating resources to the segment and assessing its performance. Adjustments and eliminations are made when preparing the consolidated financial statements, and allocations of revenues, expenses and gains or losses have been included when determining reported segment profit or loss. The reported measures are determined in accordance with the measurement principles most consistent with those used in measuring the corresponding amounts in the consolidated financial statements. The results of the operating segments of the business are affected by economic conditions and customer demands. A portion of American National's insurance business is written through one third-party marketing organization. During 2001, approximately 4% of the total premium revenues and policy account deposits were written through that organization, which is included in the Independent Marketing operating segment. This compares with 10% and 8% in 2000 and 1999, respectively. Of the total business written by this one organization, the majority was annuities. 113
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(16) RECONCILIATION TO STATUTORY ACCOUNTING American National and its insurance subsidiaries are required to file statutory financial statements with state insurance regulatory authorities. Accounting principles used to prepare these statutory financial statements differ from those used to prepare financial statements on the basis of Generally Accepted Accounting Principles. Effective January 1, 2001 new codified statutory accounting principles are required to be adopted. The adoption of these new principles resulted in an increase of $76,814,000 in the statutory capital and surplus as reported in the following tables. Reconciliations of statutory net income and capital and surplus, as determined using statutory accounting principles, to the amounts included in the accompanying consolidated financial statements, as of and for the years ended December 31, are as follows (in thousands): [Download Table] 2001 2000 1999 Statutory net income of insurance companies.. $ 32,070 $ 132,682 $ 159,375 Net gain (loss) of non-insurance companies... 5,310 (17,524) 97,782 Combined net income.......................... 37,380 115,158 257,157 Increases/(decreases): Deferred policy acquisition costs........... 15,524 (7,807) 2,188 Policyholder funds.......................... 26,188 15,851 4,288 Deferred federal income tax benefit......... 16,520 16,487 10,060 Premiums deferred and other receivables..... (131) (2,134) (2,315) Gain on sale of investments................. 118 (752) 416 Change in interest maintenance reserve...... 74 (5,904) (1,033) Asset valuation allowances.................. (16,648) 8,388 (4,762) Investment income........................... (3,817) 44 73 Goodwill amortization....................... (3,100) -- -- Other adjustments, net....................... (582) (284) 875 Consolidating eliminations and adjustments... (6,325) 1,127 (334) Net income reported herein................... $ 64,931 $ 140,174 $ 266,613 [Enlarge/Download Table] 2001 2000 1999 Statutory capital and surplus of insurance companies.............. $ 2,415,330 $ 2,309,259 $2,377,589 Stockholders equity of non-insurance companies.................. 504,144 517,805 523,550 Combined capital and surplus................. 2,919,474 2,827,064 2,901,139 Increases/(decreases): Deferred policy acquisition costs........... 829,216 747,884 758,796 Policyholder funds.......................... 197,830 174,874 159,394 Deferred federal income taxes............... (79,665) (148,691) (221,341) Premiums deferred and other receivables..... (87,615) (82,583) (80,453) Reinsurance in "unauthorized companies"..... 48,716 45,769 37,376 Statutory asset valuation reserve........... 362,952 339,963 370,191 Statutory interest maintenance reserve...... 7,517 4,308 9,729 Asset valuation allowances.................. (37,502) (30,062) (38,285) Investment market value adjustments......... 14,302 (56,087) (9,556) Non-admitted assets and other adjustments, net...................... 149,137 204,393 158,876 Consolidating eliminations and adjustments... (1,388,023) (1,003,175) (982,720) Stockholders' equity reported herein......... $ 2,936,339 $ 3,023,657 $3,063,146 In accordance with various government and state regulations, American National and its insurance subsidiaries had bonds with an amortized value of $84,328,000 on deposit with appropriate regulatory authorities. 114
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(17) RETIREMENT BENEFITS American National and its subsidiaries have one tax-qualified defined-benefit pension plan and one inactive plan. One of the programs is contributory and covers home service agents and managers. The other two programs are noncontributory, with one covering salaried and management employees and the other covering home office clerical employees subject to a collective bargaining agreement. The program covering salaried and management employees provides pension benefits that are based on years of service and the employee's compensation during the five years before retirement. The programs covering hourly employees and agents generally provide benefits that are based on the employee's career average earnings and years of service. The inactive tax-qualified defined-benefit pension plan covers employees of the Farm Family companies hired prior to January 1, 1997. Effective January 1, 1997, benefits through this plan were frozen, and no new participants have been added. American National also sponsors for key executives two non-tax-qualified pension plans that restore benefits that would otherwise be curtailed by statutory limits on qualified plan benefits. The companies' funding policy for the pension plans is to make annual contributions in accordance with the minimum funding standards of the Employee Retirement Income Security Act of 1974. The unfunded plans will be funded out of general corporate assets when necessary. Actuarial computations of pension expense (before income taxes) produced a pension debit of $3,954,000 for 1999, $4,071,000 for 2000 and $4,924,000 for 2001. The pension debit for the years ended December 31, is made up of the following (in thousands): 2001 2000 1999 Service cost-benefits earned during period..... $ 6,900 $ 5,212 $ 5,833 Interest cost on projected benefit obligation.. 10,811 8,927 8,175 Expected return on plan assets................. (10,600) (8,940) (8,946) Amortization of past service cost.............. 361 289 534 Amortization of transition asset............... (2,616) (2,619) (2,619) Amortization of actuarial loss................. 68 1,202 977 Total pension debit................. $ 4,924 $ 4,071 $ 3,954 115
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The following table sets forth the funded status and amounts recognized in the consolidated statements of financial position at December 31 for the pension plans. Actuarial present value of benefit obligation: [Enlarge/Download Table] 2001 2000 -------------------------- -------------------------- Assets Accumulated Assets Accumulated Exceed Benefits Exceed Benefits Accumulated Exceed Accumulated Exceed Benefits Assets Benefits Assets Vested benefit obligation............................. $ (86,075) $ (60,053) $(77,961) $(28,064) Accumulated benefit obligation........................ $ (89,778) $ (60,053) $(80,947) $(28,064) Projected benefit obligation.......................... $(107,233) $ (61,365) $(98,531) $ (29,349) Plan assets at fair value (long term securities)............................... $ 134,600 $ 20,240 $131,439 -- Funded status: Plan assets in excess of projected benefit obligation....................... 27,367 (41,125) 32,908 (29,349) Unrecognized net loss................................ 7,074 494 4,698 545 Prior service cost not yet recognized in periodic pension cost.............................. -- 6,463 -- 208 Unrecognized net transition asset at January 1 being recognized over 15 years..................... -- -- (2,619) -- Adjustment required to recognize minimum liability.................................. -- (5,632) -- -- Offset for intangible asset.......................... -- 5,632 -- -- Prepaid pension cost included in other assets or other liabilities................................. $ 34,441 $ (34,168) $ 34,987 $(28,596) Assumptions used at December 31: 2001 2000 --------------------------------------------------------------------------- Weighted-average discount rate on benefit obligation.... 6.96% 7.40% Rate of increase in compensation levels................. 4.20% 4.80% Expected long-term rate of return on plan assets........ 7.14% 7.00% Health Benefits American National and its subsidiaries provide certain health and/or dental benefits to retirees. Participation in these plans is limited to current retirees and their dependents who met certain age and length of service requirements. No new participants will be added to these plans in the future. The primary retiree health benefit plan provides major medical benefits for participants under the age of 65 and Medicare supplemental benefits for those over 65. Prescription drug benefits are provided to both age groups. The plan is contributory, with the company's contribution limited to $80 per month for retirees and spouses under the age of 65, and $40 per month for retirees and spouses over the age of 65. All additional contributions necessary, over the amount to be contributed by American National, are to be contributed by the retirees. The accrued post-retirement benefit obligation, included in other liabilities, was $7,864,000 and $5,888,000 at December 31, 2001 and 2000, respectively. These amounts were approximately equal to the unfunded accumulated post-retirement benefit obligation. Since American National's contributions to the cost of the retiree benefit plans are fixed, the health care cost trend rate will have no effect on the future expense or the accumulated post-retirement benefit obligation. Under American National and its subsidiaries' various group benefit plans for active employees, life insurance benefits are provided upon retirement for eligible participants who meet certain age and length of service requirements. In addition to the defined benefit pension plans, American National sponsors one defined contribution plan for all employees, excluding those of the Farm Family companies, and an incentive savings plan for employees of the Farm Family companies. The defined contribution plan (also known as a 401k plan) allows employees to contribute up to the maximum allowable amount as determined by the Internal Revenue Service. American National does not contribute to the defined contribution plan. Company contributions are made under the incentive savings plan for the Farm Family companies, with a discretionary portion based on the profits earned by the Farm Family companies. The expense associated with this plan was $1,100,000 for 2001. 116
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(18) COMMITMENTS AND CONTINGENCIES Commitments--American National and its subsidiaries lease insurance sales office space in various cities. The long-term lease commitments at December 31, 2001 were approximately $6,886,000. In the ordinary course of their operations, the companies also had commitments outstanding at December 31, 2001 to purchase, expand or improve real estate, to fund mortgage loans and to purchase other invested assets aggregating $91,909,000, all of which are expected to be funded in 2002. As of December 31, 2001, all of the mortgage loan commitments have interest rates that are fixed. Off-Balance-Sheet Contingencies-American National is a partner in numerous real estate joint ventures. A number of these joint ventures have long-term debt to third parties. The amount of the outstanding debt at December 31, 2001 totaled approximately $99,000,000. All of the debt is secured by the real estate in the joint ventures, and is non-recourse to the partners in the joint ventures, including American National. Therefore, the maximum loss that American National could sustain if the joint ventures failed to pay the debt is the amount of the investment in the joint ventures, or approximately $33,000,000 at December 31, 2001. Litigation-In recent years, various life insurance companies have been named as defendants in class action lawsuits relating to discriminatory practices in life insurance pricing and sales practices. A number of these lawsuits have resulted in substantial settlements across the life insurance industry. American National is a defendant in similar lawsuits. Management believes that American National has meritorious legal defenses against these lawsuits. Therefore, no provision for possible losses on these cases has been recorded in the consolidated financial statements. American National and its subsidiary, Standard Life and Accident Insurance Company are defendants in class action lawsuits alleging fraud and misrepresentation involving the benefits to be paid under certain limited-benefit nursing home policies. Management believes that the companies have meritorious legal defenses against these lawsuits. Therefore, no provision for possible losses on these cases has been recorded in the consolidated financial statements. American National and its subsidiary American National Life Insurance Company of Texas are defendants in several lawsuits alleging, interalia, improper calculation and/or cancellation of benefits under certain group health contracts. Class action certification in these lawsuits has been requested by the plaintiffs, but has not yet been granted. Management believes that the companies have meritorious legal defenses against these lawsuits. Therefore, no provision for possible losses on these cases has been recorded in the consolidated financial statements. Based on information currently available, management also believes that amounts ultimately paid, if any, arising from these cases would not have a material effect on the company's results of operations and financial position. However, it should be noted that the frequency of large damage awards, that bear little or no relation to the economic damages incurred by plaintiffs in some jurisdictions, continues to create the potential for an unpredictable judgment in any given lawsuit. It is possible that, if the defenses in these lawsuits are not successful, and the judgments are greater than management can anticipate, the resulting liability could have a material impact on the consolidated financial results. The companies are also defendants in various other lawsuits concerning alleged failure to honor certain loan commitments, alleged breach of certain agency and real estate contracts, various employment matters, allegedly deceptive insurance sales and marketing practices, and other litigation arising in the ordinary course of operations. Certain of these lawsuits include claims for compensatory and punitive damages. After reviewing these matters with legal counsel, management is of the opinion that the ultimate resultant liability, if any, would not have a material adverse effect on the companies' consolidated financial position or results of operations. However, these lawsuits are in various stages of development, and future facts and circumstances could result in management changing its conclusions. 61
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INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION To the Stockholders and Board of Directors American National Insurance Company: We have audited and reported separately herein on the consolidated financial statements of American National Insurance Company and subsidiaries as of and for the years ended December 31, 2001 and 2000. Our audit was made for the purpose of forming an opinion on the basic consolidated financial statements of American National Insurance Company and subsidiaries taken as a whole. The supplementary information included in Schedules I, III, IV and V as of December 31, 2001 and 2000 and the years then ended, is presented for the purposes of complying with the Securities and Exchange rules and is not a required part of the basic consolidated financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole. As discussed in Note 2 to the consolidated financial statements, effective January 1, 2001, the company adopted Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities." KPMG LLP Houston, Texas February 6, 2002 26
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors, American National Insurance Company We have audited in accordance with auditing standards generally accepted in the United States, the 1999 consolidated financial statements of American National Insurance Company and subsidiaries included in this registration statement and have issued our report thereon dated February 11, 2000. Our audit was made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The accompanying schedules are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not a required part of the basic consolidated financial statements. The 1999 information presented in these schedules have been subjected to the auditing procedures applied in our audit of the basic consolidated financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole. ARTHUR ANDERSEN LLP Houston, Texas February 11, 2000 63
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American National Insurance Company and Subsidiaries SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES (IN THOUSANDS) December 31, 2001 [Enlarge/Download Table] Amount at Which Market Shown in the Type of Investment Cost (a) Value Balance Sheet ------------------ ------- ------ --------------- Fixed Maturities: Bonds Held-to-Maturity: United States Government and government agencies and authorities $ 43,830 $ 45,014 $ 43,830 States, municipalities and political subdivisio 209,731 210,610 209,731 Foreign governments 44,175 45,110 44,175 Public utilities 973,502 1,003,532 973,502 All other corporate bonds 2,540,344 2,632,962 2,540,344 Bonds Available-for-Sale: United States Government and government agencies and authorities 22,565 23,547 23,547 States, municipalities and political subdivisio 97,420 97,164 97,164 Foreign governments 14,765 16,303 16,303 Public utilities 390,847 393,339 393,339 All other corporate bonds 1,037,939 1,047,831 1,047,831 Redeemable preferred stock 49,405 50,441 50,441 ---------- ---------- ---------- Total fixed maturities $ 5,424,523 $ 5,565,853 $ 5,440,207 ---------- ---------- ---------- Equity Securities: Common stocks: Public utilities $ 29,278 $ 26,651 $ 26,651 Banks, trust and insurance companies 79,050 112,776 112,776 Industrial, miscellaneous and all other 660,978 749,665 749,665 ---------- ---------- ---------- Total equity securities $ 769,306 $ 889,092 $ 889,092 ---------- ---------- ---------- Mortgage loans on real estate $ 1,007,993 XXXXXX $ 1,007,993 Investment real estate 224,784 XXXXXX 224,784 Real estate acquired in satisfaction of debt 8,285 XXXXXX 8,285 Policy loans 324,545 XXXXXX 324,545 Other long-term investments 129,398 XXXXXX 129,398 Short-term investments 255,476 XXXXXX 255,476 ---------- XXXXXX ---------- Total investments $ 8,144,310 XXXXXX $ 8,279,780 ---------- ---------- (a) Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and valuation write-downs and adjusted for amortization of premiums or accrual of discounts. 64
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American National Insurance Company and Subsidiaries SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION (IN THOUSANDS) American National Insurance Company and Subsidiaries SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION (IN THOUSANDS) [Download Table] Future Policy Deferred Benefits, Other Policy Policy Losses, Claims Claims and Acquisition and Loss Unearned Benefits Premium Segment Cost Expenses Premiums Payable Revenue ------------------------ --------- --------- ------- ------- -------- 2001 Multiple Line Marketing $ 210,931 $ 1,543,800 $ 578,482 $ 526,939 $ 729,585 Home Service 226,294 1,458,751 4,381 29,650 192,522 Independent Marketing 145,922 1,738,806 45 18,748 30,690 Health Insurance 12,566 18,860 11,767 556,169 218,720 Credit Insurance 72,276 -- 252,047 51,207 58,308 Senior Age Marketing 77,182 199,360 39,740 107,444 174,666 Direct Marketing 45,937 47,397 196 5,478 29,130 Capital and Surplus -- -- -- (4,044) -- All other 38,108 324,637 331 6,164 7,702 --------- --------- ------- --------- --------- Total $ 829,216 $ 5,331,611 $ 886,989 $1,297,755 $ 1,441,323 --------- --------- ------- --------- --------- 2000 Multiple Line Marketing $ 132,540 $ 875,128 $ 251,972 $ 244,187 $ 470,240 Home Service 232,075 1,438,917 4,560 34,316 193,252 Independent Marketing 144,708 1,491,296 32 17,750 49,784 Health Insurance 15,493 20,392 14,111 219,774 231,347 Credit Insurance 67,544 -- 245,056 51,037 55,300 Senior Age Marketing 76,480 170,082 36,465 90,326 153,148 Direct Marketing 39,289 45,901 223 4,837 27,268 Capital and Surplus -- -- -- -- -- All other 39,755 326,249 316 6,691 8,364 --------- --------- ------- --------- --------- Total $ 747,884 $ 4,367,965 $ 552,735 $ 668,918 $ 1,188,703 --------- --------- ------- --------- --------- 1999 Multiple Line Marketing $ 126,950 $ 867,916 $ 239,825 $ 201,544 $ 441,299 Home Service 233,883 1,419,161 5,060 30,171 189,449 Independent Marketing 161,578 1,562,493 21 11,302 36,729 Health Insurance 18,658 22,612 14,121 91,518 223,638 Credit Insurance 65,801 -- 235,200 45,074 55,294 Senior Age Marketing 76,359 160,815 35,908 41,321 149,142 Direct Marketing 33,656 43,911 291 3,934 25,929 Capital and Surplus -- -- -- -- -- All other 41,911 330,137 394 5,403 9,198 --------- --------- ------- --------- --------- Total $ 758,796 $ 4,407,045 $ 530,820 $ 430,267 $ 1,130,678 --------- --------- ------- --------- --------- [Enlarge/Download Table] Benefits, Amortization Claims, Losseof Deferred Net and Policy Other Investment Settlement Acquisition Operating Premiums Segment Income (a) Expenses Costs Expenses (b) Written ----------------------- ------------ ----------- ----------- --------- ----------- 2001 Multiple Line Marketing $ 147,598 $ 659,010 $ 87,281 $ 113,677 $ 705,869 Home Service 118,773 117,743 31,835 116,011 -- Independent Marketing 116,213 41,110 21,177 24,878 -- Health Insurance 8,307 195,305 17,730 56,908 -- Credit Insurance 18,457 23,631 9,620 38,364 -- Senior Age Marketing 18,784 123,191 11,042 44,019 -- Direct Marketing 3,547 15,587 5,404 6,629 -- Capital and Surplus 67,337 -- -- 15,381 -- All other 30,130 27,324 -- 24,039 -- ------------ ------------ ----------- ------------- ---------- Total $ 529,146 $ 1,202,901 $ 184,089 $ 439,906 $ 705,869 ------------ ------------ ----------- ------------- ---------- 2000 Multiple Line Marketing $ 95,630 $ 436,080 $ 46,560 $ 86,528 $ 441,035 Home Service 119,694 115,877 30,253 107,485 -- Independent Marketing 113,107 39,832 33,433 22,482 -- Health Insurance 8,722 193,593 61,454 22,680 -- Credit Insurance 17,010 22,776 55,998 (10,309) -- Senior Age Marketing 18,349 110,897 5,041 39,157 -- Direct Marketing 3,906 16,524 4,050 6,190 -- Capital and Surplus 72,891 -- -- (318) -- All other 29,780 27,889 -- 16,387 -- ------------ ------------ ----------- ------------- ---------- Total $ 479,089 $ 963,468 $ 236,789 $ 290,282 $ 441,035 ------------ ------------ ----------- ------------- ---------- 1999 Multiple Line Marketing $ 95,820 $ 375,364 $ 39,863 $ 84,284 $ 404,817 Home Service 119,065 118,638 27,921 94,825 -- Independent Marketing 118,961 30,575 33,419 17,089 -- Health Insurance 7,398 165,525 21,475 67,902 -- Credit Insurance 16,094 21,859 6,209 37,834 -- Senior Age Marketing 18,021 111,573 3,039 43,751 -- Direct Marketing 3,734 14,584 3,459 5,179 -- Capital and Surplus 62,305 -- -- 225 -- All other 32,551 28,024 -- 20,767 -- ------------ ------------ ----------- ------------- ---------- Total $ 473,949 $ 866,142 $ 135,385 $ 371,856 $ 404,817 ------------ ------------ ----------- ------------- ---------- (a) Net investment income from fixed income assets (bonds and mortgage loans on real estate) is allocated to insurance lines based on the funds generated by each line at the average yield available from these fixed income assets at the time such funds become available. Net investment income from policy loans is allocated to the insurance lines according to the amount of loans made by each line. Net investment income from all other assets is allocated to the insurance lines as necessary to support the equity assigned to that line with the remainder allocated to capital & surplus. (b) Identifiable commissions and expenses are charged directly to the appropriate line of business. The remaining expenses are allocated to the lines based upon various factors including premium and commission ratios within the respective lines. 65
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American National Insurance Company and Subsidiaries SCHEDULE IV - REINSURANCE (IN THOUSANDS) [Enlarge/Download Table] Ceded to Assumed Percentage of Gross Other from Other Net Amount Assumed Amount Companies Companies Amount to Net ------------ ---------- ---------- ---------- ----------- 2001 Life insurance in force $ 53,502,696 $ 14,819,652 $ 910,942 $ 39,593,986 2.3% ------------ ---------- ---------- ---------- Premiums: Life insurance 415,149 67,021 11,248 359,376 3.1% Accident and health insurance 419,377 411,748 407,495 415,124 98.2% Property and liability insurance 702,406 50,683 15,100 666,823 2.3% ------------ ---------- ---------- ---------- Total premiums $ 1,536,932 $ 529,452 $ 433,843 $ 1,441,323 30.1% ============ ========== ========== =========== 2000 Life insurance in force $ 47,902,590 $ 12,573,404 $ 873,996 $ 36,203,182 2.4% ------------ ---------- ---------- ---------- Premiums: Life insurance 405,161 61,820 13,603 356,944 3.8% Accident and health insurance 435,354 267,238 236,857 404,973 58.5% Property and liability insurance 457,480 40,448 9,754 426,786 2.3% ------------ ---------- ---------- ---------- Total premiums $ 1,297,995 $ 369,506 $ 260,214 $ 1,188,703 21.9% ============ ========== ========== =========== 1999 Life insurance in force $ 46,156,190 $ 9,629,707 $ 797,059 $ 37,323,542 2.1% ------------ ---------- ---------- ---------- Premiums: Life insurance 393,410 65,761 14,381 342,030 4.2% Accident and health insurance 451,614 144,298 88,756 396,072 22.4% Property and liability insurance 423,105 37,572 7,043 392,576 1.8% ------------ ---------- ---------- ---------- Total premiums $ 1,268,129 $ 247,631 $ 110,180 $ 1,130,678 9.7% ============ ========== ========== ===========
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American National Insurance Company and Subsidiaries SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS) [Enlarge/Download Table] Deductions - Describe ------------------------------ Balance at Additions Amounts Balance at Beginning of Charged to Written off Due Amounts End of Description Period Expense to Disposal (a) Commuted (b) Period -------------------------------- ------------- ----------- ---------------- ------------- ------------ 2001 Investment valuation allowances: Mortgage loans on real estate $ 12,134 $ ---- $ 18 $ (3,501) $ 15,617 Investment real estate 19,413 ---- $ (2,502) $ ---- 21,915 Investment in unconsolidated affiliates 5,128 ---- ---- (140) 5,268 Other assets 1,022 ---- 600 (1,702) 2,124 -------------------------------- ------------- ----------- ---------------- ------------- ------------ Total $ 37,697 $ 0 $ (1,884) $ (5,343) $ 44,924 ============= =========== ================ ============= ============ 2000 Investment valuation allowances: Mortgage loans on real estate $ 19,833 $ ---- $ 7,214 $ 485 $ 12,134 Investment real estate 19,447 1,711 $ 1,745 $ ---- 19,413 Investment in unconsolidated affiliates 5,006 122 ---- ---- 5,128 Other assets 1,800 1,022 1,800 ---- 1,022 -------------------------------- ------------- ----------- ---------------- ------------- ------------ Total $ 46,086 $ 2,855 $ 10,759 $ 485 $ 37,697 ============= =========== ================ ============= ============ 1999 Investment valuation allowances: Mortgage loans on real estate $ 12,800 $ 8,953 $ ---- $ 1,920 $ 19,833 Investment real estate 21,718 3,528 $ 5,799 $ ---- 19,447 Investment in unconsolidated affiliates 5,006 ---- ---- ---- 5,006 Other assets 1,800 ---- ---- ---- 1,800 -------------------------------- ------------- ----------- ---------------- ------------- ------------ Total $ 41,324 $ 12,481 $ 5,799 $ 1,920 $ 46,086 ============= =========== ================ ============= ============ (a) Amounts written off due to disposal represent reductions or (additions) in the balance due to sales, transfers or other disposals of the asset with which the allowance is associated. (b) Amounts commuted represent reductions in the allowance balance due to changes in requirements or investment conditions.
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PART C ITEM AND CAPTION Items 24. Financial Statements and Exhibits. (a) Financial Statements FINANCIAL STATEMENTS and FINANCIAL STATEMENT SCHEDULES sections of Statement of Additional Information (b) Exhibits Exhibit "1" - Copy of the resolutions of the Board of Directors of the Depositor authorizing the establishment of the Registrant (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "2" - Not applicable Exhibit "3" - Distribution and Administrative Services Agreement (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "4" - Form of each variable annuity contract (incorporated herein by reference to pre-effective amendment number 1 (333-33856) filed on August 7, 2001) Exhibit "5" - Form of application used with any variable annuity contract (incorporated herein by reference to pre-effective amendment number 1 (333-33856) filed on August 7, 2001) Exhibit "6a" - Copy of the Articles of Incorporation of the Depositor (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "6b" - Copy of the By-laws of the Depositor (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "7" - Not applicable Exhibit "8a" Form of American National Investment Account, Inc. Participation Agreement (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "8b" Form of Variable Insurance Products Fund II Participation Agreement (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "8c" Form of Variable Insurance Products Fund III Participation Agreement (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000)
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Exhibit "8d" Form of T. Rowe Price International Series, Inc. T. Rowe Price Equity Series, Inc., and T. Rowe Price Fixed Income Series, Inc. (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "8e" Form of MFS Variable Insurance Trust Participation Agreement (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "8f" Form of Federated Insurance Series Fund Participation Agreement (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "8g" Form of Fred Alger American Fund Participation Agreement (incorporated herein by reference to registration statement on Form N-4 (333-33856) filed on April 3, 2000) Exhibit "8h" Form of Invesco Fund Participation Agreement Exhibit "9" - An opinion of counsel and consent to its use as to the legality of the securities being registered, indicating whether they will be legally issued and will represent binding obligations of the depositor Exhibit "10a" - Consent of independent accountants for KPMG LLP Exhibit "10b" - Consent of independent accountants for Arthur Andersen LLP Exhibit "11" - Not applicable Exhibit "12" - Not applicable Exhibit "13" - Not applicable Exhibit "14" - Control chart of Depositor Exhibit "27" - Not applicable
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Item 25. Directors and Officers of the Depositor. Directors Name Business Address G. Richard Ferdinandtsen American National Insurance Company One Moody Plaza Galveston, Texas 77550 Irwin M. Herz, Jr. Greer, Herz & Adams, L.L.P. One Moody Plaza, 18th Floor Galveston, Texas 77550 R. Eugene Lucas Gal-Tex Hotel Corporation 2302 Postoffice, Suite 504 Galveston, Texas 77550 E. Douglas McLeod The Moody Foundation 2302 Postoffice, Suite 704 Galveston, Texas 77550 Frances Anne Moody 7031 Inwood Dallas, Texas 75209
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Robert L. Moody 2302 Postoffice, Suite 702 Galveston, Texas 77550 Russell S. Moody 6016 Mount Bonnell Hollow Austin, Texas 78731 W.L. Moody, IV 2302 Postoffice, Suite 502 Galveston, Texas 77550 James D Yarbrough Galveston County Courthouse 722 Moody Galveston, Texas 77550 Officers The principal business address of the officers, unless indicated otherwise in the "Directors" section, or unless indicated by an asterisk (*), is American National Insurance Company, One Moody Plaza, Galveston, Texas 77550. Those officers with an asterisk by their names have a principal business address of 2450 South Shore Boulevard, League City, Texas 77573. Name Office R.L. Moody Chairman of the Board and Chief Executive Officer G.R. Ferdinandtsen President and Chief Operating Officer D.A. Behrens Executive Vice President, Independent Marketing R.A. Fruend Executive Vice President, Director of Multi Line Special Markets B.J. Garrison Executive Vice President, Director of Home Service Division M.W. McCroskey * Executive Vice President, Investments G.V. Ostergren Executive Vice President, Director of Multiple Line J.E. Pozzi Executive Vice President, Corporate Planning R.J. Welch Executive Vice President and Chief Actuary C.H. Addison Senior Vice President, Systems Planning and Computing A.L. Amato, Jr. Senior Vice President, Life Policy Administration G.C. Langley Senior Vice President, Human Resources
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S.E. Pavlicek Senior Vice President and Controller S.H. Schouweiler Senior Vice President, Health Insurance Operations J.R. Thomason Senior Vice President, Credit Insurance Services G.W. Tolman Senior Vice President, Corporate Affairs J.M. Flippin Secretary J.J. Antkowiak Vice President, Director of Computing Services D.M. Azur Vice President, Claims P. Barber Vice President, Human Resources S.F. Brast * Vice President, Real Estate Investments D. D. Brichler * Vice President, Mortgage Loan Production F.V. Broll, Jr. Vice President & Actuary W.F. Carlton Vice President & Assistant Controller, Financial Reports K.M. Collier Vice President, Alternative Distribution R.T. Crawford Vice President & Assistant Controller, General Accounting G.C. Crume Vice President, Independent Marketing D.A. Culp Vice President, Independent Marketing G.D. Dixon * Vice President, Stocks S.L. Dobbe Vice President, Independent Marketing D.S. Fuentes Vice President, Health Claims F.J. Gerren Vice President, Independent Marketing B.S. Gerwel Vice-President, Agency Administration J.F. Grant, Jr. Vice President, Group Actuary R.D. Hemme Vice President and Actuary M.E. Hogan Vice President, Credit Insurance Operations
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D.M. Jensen Vice President, Multiple Line Marketing C.J. Jones Vice President, Health Administration D.D. Judy Vice President, Financial Marketing Dr. H.B. Kelso, Jr. Vice President & Medical Director G.W. Kirkham Vice President, Director of Planning and Support George A. Macke Vice President, General Auditor G.W. Marchand Vice President, Life Underwriting D.N. McDaniel Vice President, Home Service Administration M.M. Mitchell Vice-President, Director of Life/Annuities Sales J.W. Pangburn Vice President, Credit Insurance/Special Markets E.B. Pavelka Vice President, Life Premium Accounting & Policy Service R.A. Price Vice President, Director of Training and Market Development R.C. Price Vice President, Multiple Line, Chief Marketing Officer J.T. Smith Vice President, 401(K) Pension Sales G.A. Sparks, Sr. Vice President, Director of Field Services W.H. Watson III Vice President, Health Actuary G.W. Williamson Vice President, Assistant Director, Home Service Division J.L. Broadhurst Asst. Vice President, Director Individual Health/Group Systems J.J. Cantu Asst. Vice President and Illustration Actuary J.D. Ferguson Asst. Vice President, Creative Services D.N. Fullilove Asst. Vice President, Director, Agents Employment B.J. Huerta Asst. Vice President, Director of Financial and Administrative Systems K.E. Johnston Asst. Vice President, Asst. Director of Financial Marketing K.J. Juneau Asst. Vice President, Director, Advisory Systems Engineer C.A. Kratz Asst. Vice President, Human Resources
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D.L. Leining Asst. Vice President, Life Underwriting R.G. McCrary Asst. Vice President, Application Development Division J.B. McEniry Asst. Vice President, Director of Telecommunications M.S. Nimmons Asst. Vice President; Associate General Auditor, Home Office R.J. Ostermayer Asst. Vice President, Director of Group Quality Assurance M.C. Paetz Asst. Vice President, Director of Group Underwriting R.E. Pittman, Jr. Asst. Vice President, Director of Marketing/Career Development S.B. Saunders Asst. Vice President, Real Estate Services G.A. Schillaci Asst. Vice President & Actuary M.J. Soler Asst. Vice President, Health Marketing Administration J.P. Stelling Asst. Vice President, Health Compliance C.E. Tipton Asst. Vice President & Assistant Actuary D.G. Trevino Asst. Vice President, Director, Computing Services J.A. Tyra Asst. Vice President, Life Insurance Systems M.L. Waugh, Jr. Asst. Vice President, Claims J.O. Norton Life Product Actuary R.M. Williams Life Product Actuary J.E. Cernosek Asst. Secretary V.J. Krc Asst. Treasurer Item 26. Persons Controlled by or Under Common Control with Depositor of Registrant. Exhibit "14" - control chart of depositor Item 27. Number of Contractowners. As of December 31, 2001, the Registrant had 1,368 Contractowners of the Flexible Purchase Payment Deferred Annuity Contracts.
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Item 28. Indemnification. The following provision is in the Distribution and Administrative Services Agreement: "American National agrees to indemnify SM&R for any liability that SM&R may incur to a Contractowner or party-in-interest under a Contract (i) arising out of any act or omission in the course of, or in connection with, rendering services under this Agreement, or (ii) arising out of the purchase, retention or surrender of a Contract; provided, however, that American National will not indemnify SM&R for any such liability that results from the willful misfeasance, bad faith or gross negligence of SM&R, or from the reckless disregard, by SM&R, of its duties and obligations arising under this Agreement." The officers and directors of American National are indemnified by American National in the American National By-Laws for liability incurred by reason of the officer and directors serving in such capacity. This indemnification would cover liability arising out of the variable annuity sales of American National Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefor, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 29. Principal Underwriters. (a)SM&R Investments, Inc.and American National Investment Accounts, Inc. (b) The Registrant's principal underwriter is Securities Management and Research, Inc. The following are the officers and directors of Securities Management and Research, Inc. Principal Business Name Position Address ---- ------------------ ---------------- David B. Behrens Director American National Insurance Company, One Moody Plaza, Galveston, Texas, 77550 Gordon D. Dixon Director, Securities Management Senior Vice and Research, Inc. President 2450 South Shore Boulevard and Chief League City, Texas 77573 Investment Officer
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G. Richard Ferdinandtsen Director American National Insurance Company One Moody Plaza Galveston, Texas 77550 Robert A. Fruend, C.L.U. Director American National Insurance Company One Moody Plaza Galveston, Texas 77550 R. Eugene Lucas Director Gal-Tenn Hotel Corporation 504 Moody National Bank Tower Galveston, Texas 77550 Michael W. McCroskey Director, Securities Management President and Research, Inc. and Chief 2450 South Shore Boulevard Executive League City, Texas 77573 Officer Ronald J. Welch Director American National Insurance Company One Moody Plaza Galveston, Texas 77550 Teresa E. Axelson Vice President and Securities Management and Secretary Research, Inc. 2450 South Shore Boulevard League City, Texas 77573 T. Brett Harrington Vice Securities Management and President Research, Inc. 2450 South Shore Boulevard League City, Texas 77573 Brenda T. Koelemay Vice President, Securities Management and Chief Administrative Research, Inc. Officer and Chief 2450 South Shore Boulevard Financial Officer League City, Texas 77573 Emerson V. Unger Vice President Securities Management and Research, Inc. 2450 South Shore Boulevard League City, Texas 77573
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Vicki R. Douglas Assistant Vice Securities Management and President Research, Inc. 2450 South Shore Boulevard League City, Texas 77573 Steven Douglas Geib Assistant Vice Securities Management and President Research, Inc. 2450 South Shore Boulevard League City, Texas 77573 Michele S. Lord Assistant Vice Securities Management and President Research, Inc. 2450 South Shore Boulevard League City, Texas 77573 Sally F. Praker Assistant Vice Securities Management and President Research, Inc. 2450 South Shore Boulevard League City, Texas 77573 (c) Not Applicable Item 30. Location of Accounts and Records. All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder will be maintained at the offices of American National Insurance Company, One Moody Plaza, Galveston, Texas 77550. Item 31. Management Services. Not Applicable Item 32. Undertakings. (a) Registrant undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted.
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(b) Registrant undertakes to include as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information. (c) Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request. (d) The Registrant hereby represents that it is relying upon a No Action Letter issued to the American Council of Life Insurance dated November 28, 1988 (Commission ref. IP-6-88) and that the following provisions have been complied with: (i) Include appropriate disclosure regarding the redemption restrictions imposed by Section 403 (b) (11) in each registration statement, including the prospectus, used in connection with the offer of the contract; (ii) Include appropriate disclosure regarding the redemption restrictions imposed by Section 403 (b) (11) in any sales literature used in connection with the offer of the contract; (iii) Instruct sales representatives who solicit participants to purchase the contract specifically to bring the redemption restrictions imposed by Section 403(b) (11) to the attention of the potential participants; (iv) Obtain from each plan participant who purchases a Section 403 (b) annuity contract, prior to or at the time of such purchase, a signed statement acknowledging the participant's understanding of (1) the restrictions on redemption imposed by Section 403 (b) (11), and (2) other investment alternatives available under the employer's Section 403 (b) arrangement to which the participant may elect to transfer his contract value. (e) Representation pursuant to Section 26(e)(2)(A). American National Insurance Company hereby represents that the fees and charges deducted under the contracts described in this pre-effective amendment are, in the aggregate, reasonable in relationship to the services rendered, the expenses expected to be incurred, and the risks assumed by American National Insurance Company.
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SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment and has caused this amended Registration Statement to be signed on its behalf, in the City of Galveston, and the State of Texas on the 30th day of April, 2002. AMERICAN NATIONAL VARIABLE ANNUITY SEPARATE ACCOUNT (Registrant) By: AMERICAN NATIONAL INSURANCE COMPANY By: /s/ Robert L. Moody -------------------------- Robert L. Moody, Chairman of the Board and Chief Executive Officer AMERICAN NATIONAL INSURANCE COMPANY (Sponsor) By: /s/ Robert L. Moody ------------------------- Robert L. Moody, Chairman of the Board and Chief Executive Officer ATTEST: /s/ J. Mark Flippin --------------------------------------- J. Mark Flippin Secretary As required by the Securities Act of 1933, this amended Registration Statement has been signed by the following persons in their capacities and on the dates indicated: Signature Title Date --------- ----- ---- /s/ Michael W. McCroskey Executive Vice President - April 30, 2002 - -------------------------- Investments Michael W. McCroskey (Principal Financial Officer) /s/ Stephen E. Pavlicek Senior Vice President and April 30, 2002 - -------------------------- Controller Stephen E. Pavlicek (Principal Accounting Officer)
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Signature Title Date --------- ----- ---- /s/ Robert L. Moody Chairman of the Board, April 30, 2002 - ----------------------------- Director, and Chief Robert L. Moody Executive Officer /s/ G. Richard Ferdinandtsen Director, President April 30, 2002 - ----------------------------- and Chief Operating G. Richard Ferdinandtsen Officer /s/ Irwin M. Herz, Jr. Director April 30, 2002 ----------------------------- Irwin M. Herz, Jr. /s/ R. Eugene Lucas Director April 30, 2002 ----------------------------- R. Eugene Lucas /s/ E. Douglas McLeod Director April 30, 2002 ----------------------------- E. Douglas McLeod - ----------------------------- Director Frances Anne Moody - ----------------------------- Director Russell S. Moody - ----------------------------- Director W. L. Moody IV - ----------------------------- Director James D. Yarbrough

Dates Referenced Herein   and   Documents Incorporated by Reference

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4/30/039
Filed on / Effective on:5/1/02131485BPOS
4/30/02134135
4/25/0244
3/30/021
2/6/0286116
1/1/0292
12/31/01112924F-2NT,  NSAR-U
12/15/0192
9/11/01104
8/7/01123
7/1/0192
6/30/0192
4/10/01109
1/1/0186116
12/31/002811624F-2NT,  NSAR-U
6/15/0092
4/3/00123124N-4
2/11/0086117
1/1/0018
12/31/992811024F-2NT,  NSAR-U
8/1/99108
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4/20/9483
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