As
Filed with the Securities and Exchange Commission on April
24, 2024
Registration
File Nos. 333-257081
811-23707
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM N-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ☒
Pre-Effective Amendment No. ☐
Post-Effective
Amendment No. 4 ☒
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 ☒
Amendment No. 5 ☒
(Check
appropriate box or boxes)
Protective NY
COLI VUL
(Exact name of registrant)
Protective
Life and Annuity Insurance Company
(Name of depositor)
2801
Highway 280 South
Birmingham,
Alabama 35223
(Address of depositor’s
principal executive offices)
(800)
265-1545
Depositor’s Telephone
Number, including Area Code
BRADLEY
A. STRICKLING, Esq.
2801
Highway 280 South
Birmingham,
Alabama 35223
(Name and address of
agent for service)
Copy
to:
Joshua Lindauer, Esq.
Faegre
Drinker Biddle & Reath LLP
1177 Avenue of the Americas, 41st Floor
New York, NY 10036
It is proposed that this filing will become effective (check appropriate box):
☐ immediately upon filing pursuant to paragraph (b) of Rule 485
☒ on May 1, 2024 pursuant to paragraph (b) of
Rule 485
☐ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
☐ on pursuant to paragraph (a)(1) of Rule 485
Title of Securities Being Registered: Individual Flexible
Premium Variable Universal Life Insurance Policies
PROSPECTUS
May 1, 2024
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Protective Executive Benefits Registered VUL NY A Flexible Premium Variable Universal
Life Insurance Policy |
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Issued by Protective NY COLI VUL separate account
and Protective Life and Annuity Insurance Company 2801 Highway 280 South Birmingham, Alabama 35223 Telephone:
(800) 265‑1545 |
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This Prospectus describes the Protective Executive
Benefits Registered VUL NY policy, an individual, flexible premium variable universal life insurance policy (the “Policy”)
issued by Protective Life and Annuity Insurance Company (the “Company” or “Protective Life”). In this Prospectus,
the words “we,” “our” or “us” refer to the Company and the words “you” or “your”
refer to the Owner (defined below). The “Owner” is the corporation, employer or individual to whom the Policy is issued and
the “Insured” is the individual whose life is insured by the Policy. The Policy is offered for sale only in New York State.
The Policy is designed for use by corporations and employers to provide life
insurance coverage in connection with, among other things, deferred compensation plans and employer-financed insurance purchase arrangements.
The Owner is entitled to all rights in the Policy, including the right to designate a Beneficiary. The Policy is designed to meet the
definition of a “life insurance contract” for federal income tax purposes. The Policy provides life insurance and a cash surrender
value that varies with the investment performance of one or more of the underlying Funds that you select. The available Funds are listed
in Appendix A to this Prospectus. The Policy also provides a fixed option.
Right to Cancel. The Owner may return
the Policy to the Company or an authorized representative within 10 days of receiving it without paying fees or penalties. If replacement
of an existing policy is involved, the right to cancel period is extended to 60 days. If returned during the right to cancel period, the
Policy will be deemed void from the start, and the Company will refund the greater of: (1) premiums received less any withdrawals and
distributions; or (2) the Policy Value less any withdrawals and distributions. You should review this Prospectus, or consult with your
investment professional, for additional information about the specific cancellation terms.
This Prospectus contains important information you should
understand before purchasing a Policy, including a description of the material rights and obligations under the Policy. We use certain
special terms that are defined in the Special Terms section. Your Policy and any riders or endorsements are the formal contractual agreement
between you and the Company. It is important that you read the Policy and endorsements which reflect other variations. You should keep
this Prospectus on file for future reference.
The U.S. Securities and Exchange Commission
(“SEC”) has not approved or disapproved the Policy or determined that this Prospectus is accurate or complete. Any representation
to the contrary is a criminal offense. Additional information about certain investment products, including
variable life insurance, has been prepared by the SEC’s staff and is available at Investor.gov.
Please note that the Policy is not guaranteed to provide
any benefits; is not insured by the FDIC or any other government agency; is not a bank deposit or other obligations of a bank and is not
bank guaranteed; and is subject to risks, including loss of the amount invested, tax risks and Lapse of the Policy.
The Prospectus and Statement of Additional Information for
the Policy are available upon request by calling 1-800-265-1545 or by sending an email request to prospectus@protective.com.
PRO.EXECUTIVEBENEFITSVULNY.0524
TABLE OF CONTENTS
This Prospectus discusses the following categories of information:
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The prospectuses of the available underlying Funds contain
important information that you should know about the investments that may be made under the Policy. You should read the portfolio prospectuses
carefully before you invest. You can obtain the portfolio prospectuses, free of charge, by visiting http://www.protective.com/eprospectus,
calling 1-800-265-1545 or emailing prospectus@protective.com.
This Prospectus (and the life insurance policy)
is not considered an offering in any jurisdiction where such offering may not be lawfully made. We do not authorize any information or
representations regarding the offering described in this prospectus and the Statement of Additional Information (“SAI”) other
than as contained in these materials or any supplements to them, or in any other materials (such as summary prospectuses) or supplemental
sales material we authorize.
SPECIAL TERMS
“We”, “us”, “our”,
“Protective Life”, and “Company” Refer to Protective Life and Annuity Insurance Company. “You”,
“your” and “Owner” refer to the person(s) who have been issued a Policy.
Attained Age The Insured’s
age as of the nearest birthday on the Policy Effective Date, plus the number of complete Policy Years since the Policy Effective Date.
Base Policy Face Amount The
amount of life insurance coverage identified as the Base Policy Face Amount on the Policy Schedule.
Beneficiary The person, persons
or entity whom the Owner designates to receive the proceeds of the Policy upon the death of the Insured. The Owner may designate a primary
Beneficiary or Beneficiaries, as well as a contingent Beneficiary or Beneficiaries to receive the proceeds if there is no primary Beneficiary(ies)
living at the time of the Insured’s death. A Beneficiary may also be designated as irrevocable which may limit the Owner’s
ability to alter that designation or make future Policy changes.
Cancellation Period Period
described in the “Cancellation Period” provision during which the Owner may exercise the right to cancel and return the Policy
for a refund. The Cancellation Period is referred to as the “Right to Cancel” or “Free-Look Period” in the Policy.
Cash Surrender Value Calculated
on the effective date of the surrender is equal to (a) Cash Value; less (b) Policy Debt.
Cash Value Policy Value plus
any applicable Return of Expense Charge Benefit.
Death Benefit The amount of
insurance provided under the Policy used to determine the Death Benefit Proceeds.
Death Benefit Option One of
two options that an Owner may select for the computation of Death Benefit Proceeds, Total Face Amount (Option 1, Level), or Total Face
Amount Plus Policy Value (Option 2, Increasing).
Death Benefit Proceeds The
amount payable to the Beneficiary if the Insured dies while the Policy is in force. It is equal to the Death Benefit plus any Death Benefit
under any rider or endorsement to the Policy less (1) any Policy Debt (2) any liens and (3) less any unpaid Monthly Deductions
if the Insured dies during a grace period.
Due Proof of Death Receipt
at our Home Office of a certified death certificate or judicial order from a court of competent jurisdiction or similar tribunal.
Evidence of Insurability Information
about an Insured which is used to approve or reinstate this Policy or any additional benefit.
Fixed Account Part of Protective
Life’s General Account to or from which Policy Value may be transferred and into which Net Premiums may be allocated under a Policy.
Fixed Account Value The Policy
Value in the Fixed Account.
Fund An underlying mutual
fund in which a Sub-Account invests. Each Fund is an investment company registered with the SEC or a separate investment series of a registered
investment company.
General Account All of the
Company’s assets other than those allocated to the Variable Account or any other separate account. The Company has complete ownership
and control of the assets in the General Account.
Good Order A
Request or transaction generally is considered in “Good Order” if we receive it at our Home Office within the time limits,
if any, we prescribe for a particular transaction or instruction, it includes all information necessary for us to execute the requested
instruction or transaction, and is signed by the individual or individuals authorized to provide the instruction or engage in the transaction.
A Request or transaction may be rejected or delayed if not in Good Order. Good Order generally means the actual receipt by us of the instructions
relating to the requested transaction in writing (or, when permitted, by telephone or Internet as described above) along with all forms,
information and supporting legal documentation we require to affect the instruction or transaction. This information and documentation
generally includes, to the extent applicable: the completed application or instruction form; Evidence of Insurability; your Policy number;
the transaction amount (in dollars or percentage terms); the names and allocations to and/or from the Funds affected by the requested
transaction; the signatures of the Policy Owner (exactly as indicated on the Policy), if necessary; Social Security Number or Tax I.D.;
and any other information or supporting documentation that we may require, including any consents. With respect to premium payments, Good
Order also generally includes receipt by us of sufficient funds to affect the purchase. We may, in our sole discretion, determine whether
any particular
transaction Request is in Good Order, and we reserve the right to change
or waive any Good Order requirement at any time. If you have questions, you should contact us or your financial professional before submitting
the form or Request.
Home Office 2801 Highway 280
South, Birmingham, Alabama 35223. The mailing address for the Home Office is P.O. Box 292 Birmingham, AL 35201-0292. The Home Office is
referred to as the “Administrative Office” in the Policy.
Insured The person whose life
is covered by the Policy.
Issue Age The Insured’s
age as of the nearest birthday on the Policy Effective Date.
Issue Date The date the Policy
is issued.
Lapse Termination of the Policy
at the expiration of the grace period while the Insured is still living.
Loan Account An account within
Protective Life’s General Account to which Fixed Account Value and/or Variable Account Value plus interest credited on the portion
of the Policy Value being used as collateral for the outstanding Policy loans is transferred as collateral for Policy loans.
Loan Account Value The Policy
Value in the Loan Account.
Loan Interest Credit Spread An
amount deducted from the loan interest rate to cover the costs the Company incurs by providing the loaned cash value. The maximum Loan
Interest Credit Spread is 1.5% and is shown on the Policy Schedule and in the table of Periodic Charges Other Than Fund Operating Expenses.
Money Market Sub-Account A
Sub-Account that invests in the Fidelity® VIP Government Money Market Portfolio which seeks a high level of current income as is
consistent with the preservation of capital and liquidity and investing in short term, high quality, liquid debt and monetary instruments.
Monthly Anniversary Day The
same day in each month as the Policy Effective Date.
Monthly Deduction The fees
and charges deducted monthly from the Fixed Account Value and/or Variable Account Value as described on the Policy Schedule.
Net Amount at Risk The
Net Amount at Risk as of any Monthly Anniversary Day is equal to: (a) the Death Benefit discounted at one plus the monthly guaranteed
interest rate minus the Policy Value (prior to deducting the Cost of Insurance), if the Death Benefit Option is Death Benefit Option1
(Level Death); or, (b) the Death Benefit minus the Policy Value discounted at one plus the monthly guaranteed interest rate, if the
Death Benefit Option is Death Benefit Option 2 (Coverage Plus).
Net Premium A premium payment
minus the applicable premium expense charges.
Owner The
person, or persons, or entity entitled to all rights in this Policy while the Insured is living including designation as a Beneficiary.
These rights are subject to any assignment and to the rights of any irrevocable Beneficiary. The Owner may name a contingent Owner who
will own this Policy if the Owner dies while this Policy is in force. If the Owner dies before the Insured, any contingent Owner named
in the application, or subsequent endorsement, will become the new Owner. If no contingent Owner is named, the Owner’s estate becomes
the new Owner. The Owner may change the Owner (including a contingent Owner) by Written Notice.
Policy Anniversary The same
day and month in each Policy Year as the Policy Effective Date.
Policy Debt The
sum of all outstanding Policy loans plus accrued interest.
Policy Effective Date The date
shown in the Policy as of which coverage under the Policy begins.
Policy Month The Policy Month
begins on a Monthly Anniversary Day and ends on the day prior to the next Monthly Anniversary Day.
Policy Schedule The
Policy Schedule summarizes information specific to your Policy at the time the Policy is issued.
Policy Value The sum of the
Variable Account Value, the Fixed Account Value, and the Loan Account Value.
Policy Year Each period of
twelve months commencing with the Policy Effective Date and each Policy Anniversary thereafter.
Return of Expense Charge Benefit Where
applicable, the Company will calculate and return a percentage of the expense charge. The Return of Expense Charge Benefit calculation
is based on a percentage of the Policy Value, and is only payable upon a complete surrender of the Policy. Refer to the “Return
of Expense Charge Benefit” provision in the Policy for the percentage and duration of the Return of Expense Charge Benefit and any
limitations and requirements.
Request Any written, telephoned, electronic
or computerized instruction in a form satisfactory to the Company and received at the Home or Administrative Office from the Owner or
an assignee of record, as specified in a form acceptable to the Company and which may be required in writing, or the Beneficiary (as applicable)
as required by any provision of the Policy or as required by the Company. In addition, subject to the Company’s administrative requirements
as they may exist from time to time and to any requirements that may be imposed by the Funds or other investments, the Company reserves
the right to require advance Written Notice from the Owner.
Sub-Account A separate division
of the Variable Account established to invest in a particular Fund.
Sub-Account Value The sum of
the values of the Sub-Accounts credited to the Owner as Policy Value.
Total Face Amount Total Face
Amount is the sum of the Base Policy Face Amount (life insurance coverage) as shown on the Policy Schedule plus any endorsements or riders
attached to the Policy that provided additional life insurance coverage on the Insured, if applicable, as shown on the Policy Schedule.
If no additional endorsement or riders attach to the Policy, then the Total Face Amount and Base Policy Face Amount will be the same.
The minimum Total Face Amount permitted under the Policy is $100,000.
Valuation Date The
date on which the net asset value of each Fund is determined. A Valuation Date is each day that the New York Stock Exchange is open for
regular business. The value of a Sub-Account’s assets is determined at the end of each Valuation Date. To determine the value of
an asset on a day that is not a Valuation Date, the value of that asset as of the end of the previous Valuation Date will be used.
Valuation Period The period
commencing with the close of regular trading on the New York Stock Exchange on any Valuation Date and ending at the close of regular trading
on the New York Stock Exchange on the next succeeding Valuation Date.
Variable Account One
of the accounts into which premiums may be paid under this Policy, net of Policy fees and charges described herein. The account, named
the Protective NY COLI VUL separate account, is a segregated investment account established and maintained by the Company pursuant to
Alabama Code § 27-38-1 and other applicable laws and regulations, including those of New York and Alabama. The Company owns the assets
in the Variable Account. The investments held in the Variable Account provide variable life insurance benefits under this Policy. This
account is kept separate from the General Account and other separate accounts the Company may have. The Variable Account is registered
with the SEC under the Investment Company Act of 1940, as amended (“1940 Act”). Protective NY COLI VUL separate account, a
separate investment account of Protective Life to and from which Policy Value may be transferred and into which Net Premiums may be allocated.
Variable Account Value The sum
of all Sub-Account Values.
Written Notice A notice or Request
submitted in writing in a form satisfactory to Protective Life and received at the Home Office via U.S. postal service or nationally recognized
overnight delivery service.
IMPORTANT INFORMATION YOU SHOULD CONSIDER ABOUT THE
PROTECTIVE EXECUTIVE BENEFITS REGISTERED VUL NY POLICY
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FEES AND EXPENSES |
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Charges for Early Withdrawals |
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There is no surrender charge associated with your Policy. A partial withdrawal fee of $25
will be deducted from Policy Value for all partial withdrawals after the first made in the same Policy Year.
For additional information about charges for surrenders and early withdrawals, see “FEE TABLE”
and “CHARGES AND DEDUCTIONS” in the Prospectus. |
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Transaction Charges |
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You will also be charged for other transactions, including Premium Expense Charge (consisting of the Sales Load and Premium Tax)
and Transfer Fees.
For additional information about transaction charges, see “FEE TABLE — Transaction Fees”
in the Prospectus. |
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Ongoing Fees and Expenses (annual charges) |
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In addition to transaction charges, you are also subject to certain ongoing fees and expenses under the Policy, including fees and
expenses covering the cost of insurance (“COI”) under the Policy and the cost of optional benefits available under the Policy.
Such fees and expenses are set based on characteristics of the insured (e.g., age, sex, and rating classification). You should review
the Policy Schedule for rates applicable to the Policy. For additional information on ongoing fees and expenses, see “FEE TABLE”
in this Prospectus and “ APPENDIX A - FUNDS AVAILABLE UNDER THE POLICY”, which is part of the Prospectus.
You will also bear expenses associated with the Funds available under the Policy, as shown in the following
table: |
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Annual Fee |
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Minimum |
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Maximum |
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Investment Options (Portfolio fees and expenses) |
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0.10%
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4.26%
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RISKS |
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Risk of Loss |
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You can lose money by purchasing the Policy.
For additional information about the risk of loss, see “PRINCIPAL RISKS OF INVESTING IN THE POLICY”
in the Prospectus. |
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Not a Short-Term Investment |
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The Policy is not a short-term investment and is not appropriate for an investor who needs ready access to cash. Before purchasing
a Policy for a specialized purpose, you should consider whether the long-term nature of the Policy is consistent with the purpose for
which it is being considered.
For additional information about the investment profile of the Policy, see “PRINCIPAL RISKS OF INVESTING
IN THE POLICY” in the Prospectus. |
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Risks Associated with Investment Options |
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An investment in the Policy is subject to the risk of poor investment performance and can vary depending on the performance of the
investment options, or Funds, available under the Policy. Each Fund (including any fixed account investment option) will have its own
unique risks, and investors should review these investment options before making an investment decision.
For additional information about the risks associated with Investment Options, see “PRINCIPAL RISKS
OF INVESTING IN THE POLICY”, and “THE VARIABLE ACCOUNT AND THE FUNDS” in the Prospectus and “FUND APPENDIX —
FUNDS AVAILABLE UNDER THE POLICY” which is part of this Prospectus. |
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Insurance Company Risks |
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An investment in the Policy is subject to the risks related to the depositor, Protective Life, including that any obligations (including
under any fixed account investment options), guarantees, or benefits are subject to the claims-paying ability of the depositor. More information
about the depositor including its financial strength ratings is available upon request by calling toll-free 1-888-353-2654.
For additional information about Company risks, see “PRINCIPAL RISKS OF INVESTING IN THE POLICY”
and “THE COMPANY AND THE FIXED ACCOUNT” in the Prospectus. |
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RISKS |
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Contract Lapse |
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Your Policy could terminate if the value of your Policy becomes too low to support the Policy’s monthly charges. Your Policy
may also Lapse due to insufficient Premium payments, withdrawals, unpaid loans or loan interest.
There is a cost associated with reinstating a Lapsed Policy. Death benefits will not be paid if the Policy
has Lapsed.
For additional information about Company risks, see “LAPSE AND REINSTATEMENT”, “PRINCIPAL
RISKS OF INVESTING IN THE POLICY”, “POLICY LOANS” and “PREMIUMS” in the Prospectus.
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RESTRICTIONS |
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Investment Options |
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While you may transfer amounts in the Sub-Accounts (which invest in shares of a corresponding Fund) and the Fixed Account, certain
restrictions and transfer fees apply with regard to the number and amount of such transfers. Transfers are also subject to the excessive
trading and market timing policies described in the Prospectus.
We reserve the right to remove or substitute Funds as investment options.
For additional information about Investment Options, see “TRANSFERS” and “TRANSFERS –
Reservation of Rights” in the Prospectus. |
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Optional Benefits |
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Optional benefits are subject to additional charges and are available only at the time your Policy is issued and may not be available
for all Owners or Insureds.
For additional information about the optional benefits, see “OPTIONAL BENEFITS UNDER THE POLICY”
in the Prospectus. |
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TAXES |
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Tax Implications |
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You should consult with a tax professional to determine the tax implications regarding the purchase, ownership, and use of a Policy
(such as in connection with a plan involving covered employees). Withdrawals and surrenders may be subject to income tax and will be taxed
at ordinary rates. In addition, withdrawals and surrenders may be subject to an additional tax depending on the circumstances. There is
no additional tax benefit if the Policy is purchased through a tax-qualified plan. Purchases through individual retirement accounts (IRAs)
are not permitted under the Internal Revenue Code of 1986, as amended (the “Code”).
For additional information about tax implications, see “TAX CONSIDERATIONS” in the Prospectus.
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CONFLICTS OF INTEREST |
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Investment Professional Compensation |
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Some investment professionals have and may continue to receive compensation for selling the Policy, which may include commissions,
revenue sharing, compensation from affiliates and third parties. These investment professionals may have a financial incentive to offer
or recommend the Policy over another investment.
For additional information about compensation, see “SALE OF THE POLICIES” in the Prospectus.
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Exchanges |
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Some investment professionals may have a financial incentive to offer an Owner a new policy in place of the one he or she already
owns. You should only exchange your Policy if you determine, after comparing the features, fees, and risks of both policies, that it is
preferable for you to purchase the new policy rather than continue to own the existing Policy.
For additional information about exchanges, see “USE OF THE POLICY — Replacement of Life Insurance
or Annuities” in the Prospectus. |
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OVERVIEW OF THE PROTECTIVE EXECUTIVE
BENEFITS REGISTERED VUL NY POLICY
1. What is the Policy and what is it designed to do?
The Policy is an individual flexible premium variable universal life insurance
policy, designed primarily for use by corporations, employers and certain individuals to provide life insurance coverage in connection
with, among other things, deferred compensation plans and employer-financed insurance purchase agreements. The Owner of the Policy
is the person, persons, or entity entitled to all rights in this Policy while the Insured
(the person whose life is covered by the Policy) is living, including designation of a Beneficiary. See the Policy and Use of the Policy.
Your Policy is a “flexible premium” policy because you have
considerable flexibility in determining when and how much Premium you want to pay. Your Policy is “variable” because the Death
Benefit and Policy Value vary according to the investment performance of the Sub-Accounts to which you have allocated your Premiums. The
Policy provides you with an opportunity to take advantage of any increase in your Policy Value but you also bear the risk of any decrease.
See Premiums, Standard Death Benefits and Calculation of Policy Value.
Because the Policy is designed to provide benefits on a long-term basis
and is not intended for short-term investing, the Policy may not be appropriate for those who have a short-term investment horizon. See
Principal Risks of Investing in the Policy.
2. What are the Premiums for this Policy?
The Policy is designed to be flexible to meet your specific life insurance
needs. You have the flexibility to choose the investment options and premiums you pay.
Premium is an amount you pay to the Company to establish and maintain life
insurance coverage. The minimum initial premium will vary based on various factors, including the age of the Insured and the Death Benefit
Option you select, but may not be less than $100.00. Thereafter, you have the flexibility to choose the amount and timing of premium payments,
within certain limits. Before your Premiums are allocated to a Sub-Account, we deduct any applicable charges. See Fee Tables and Charges
and Deductions.
You may establish a planned periodic premium. You are
not required to pay the planned periodic premium and we will not terminate your Policy merely because you did not. However, payment of
insufficient premiums may result in a Lapse of the Policy. Your Policy could Lapse if the value of your Policy becomes too low to support
the Policy’s monthly charges. See Periodic Premium and Lapse and Reinstatement.
You may allocate premium to your choice of numerous
different investment options available in the Sub-Accounts, as well as a Fixed Account, within your Policy. The Sub-Accounts are separate
divisions of the Variable Account (Protective NY COLI VUL separate account) that invest in a particular Fund (an underlying mutual fund).
See Appendix A — Funds Available Under The Policy for a listing of the Sub-Accounts currently available under the Policy.
ADDITIONAL INFORMATION
ABOUT EACH FUND IS PROVIDED IN AN APPENDIX TO THE PROSPECTUS. See Appendix A — Funds Available Under The Policy.
The Fixed Account is part of the Company’s General Account, which
holds all of the Company’s assets other than those held in the Variable Account or other separate accounts. See the Company and
the Fixed Account.
3. What are the primary features and options that the Policy
offers?
A. Choice of Death Benefit Options.
You may select one of two Death Benefit Options used to determine the amount payable on the death of the Insured:
Option 1: Level Death
The Death Benefit will be the greater of:
a.
The Total Face Amount shown on
the Policy Schedule, less any partial withdrawals; or
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b.
The Cash
Value on the Insured’s date of death multiplied by the applicable factor in the table of death benefit factors shown on the Policy
Schedule for the Insured’s age at date of death.
Option 2: Coverage Plus
The Death Benefit will be the greater of:
a.
The Total Face Amount shown on
the Policy Schedule, plus the Policy Value on the Insured’s date of death; or
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b.
The Cash
Value on the Insured’s date of death multiplied by the applicable factor in the table of death benefit factors shown on the Policy
Schedule for the Insured’s age at date of death.
The Death Benefit may be greater if necessary to satisfy
federal tax law requirements. Policy Value is the sum of the values in the Variable Account, the Fixed Account, and the value in the Loan
Account (an account within the Company’s General Account that holds the collateral for Policy Loans). Cash Value is Policy Value
plus any applicable Return of Expense Charge Benefit (a percentage of the expense charge that is payable upon a complete surrender). For
additional information, see Standard Death Benefits, Calculation of Policy Value and Policy loans.
B. Transfers. At any time after the Cancellation Period
(period during which the Owner may return the Policy for a refund), you may transfer Policy Value among the Sub-Accounts and the Fixed
Account, subject to the restrictions including on amount and frequency of transfers described in Transfers below. The Company also may
restrict or refuse to honor frequent transfers, including “market timing” transfers. See Transfers for more information.
C. Changes in Total Face Amount. You
may increase or decrease the Total Face Amount of the Policy at any time within certain limits. Each increase or decrease in the Total
Face Amount must be at least $25,000. The minimum Total Face Amount is $100,000. See Standard Death Benefits — Changing the Total
Face Amount.
D. Withdrawals.
You may request a partial withdrawal of your Policy at any time while the Policy is in force. The amount of any partial withdrawal must
be at least $500 and may not exceed 90% of your Policy Value less outstanding Policy Debt (sum of all outstanding Policy loans plus accrued
interest). We will charge a partial withdrawal fee of $25 per withdrawal on partial withdrawals after the first in a Policy Year.
The Total Face Amount (if Death Benefit Option 1 applies) and your Policy Value will be reduced by the amount of any withdrawals. Withdrawals
may have tax consequences. See Tax Considerations.
E. Surrender Benefit. The Owner may
surrender this Policy for the surrender benefit. The surrender benefit is the Cash Surrender Value less any monthly cost of insurance
charges on the date of surrender. Cash Surrender Value is the Cash Value minus Policy Debt. All coverage will end on the effective date
of surrender of the Policy. No Death Benefits will be paid after the effective date of surrender of the Policy. Surrenders may have tax
consequences. See Tax Considerations.
F. Loans. While
the Policy is in force, the Owner, by Request, may obtain a Policy loan on the security of the Policy. Policy loan amounts will be withdrawn
first on a pro rata basis from the Sub-Accounts and/or Fixed Account unless the Company, at its discretion, allows the Owner to specify
such Sub-Accounts and/or Fixed Account. See Policy loans.
Loans may be treated as taxable income if your Policy is a “modified
endowment contract” (“MEC”) for federal income tax purposes. See also Tax Considerations — Policies that
are MECs.
G. Return of Expense Charge Benefit.
If the Owner fully surrenders the Policy for its Cash Surrender Value during the first seven Policy Years, the Company will include the
Return of Expense Charge Benefit in the Cash Value. See Surrenders and Withdrawals — Return of Expense Charge Benefit.
H. Optional Benefits. The
following riders and endorsements are available:
•
Term Life Insurance; and
•
Change of Insured (not available
to individual Owners).
There is no charge for the Change of Insured Endorsement; however, there is
a one-time fee assessed for administration and underwriting costs when this endorsement is exercised. For a discussion of the optional
insurance benefits we currently offer, the benefits provided thereunder, and associated costs, see Optional Benefits Available Under the
Policy.
I. Tax Benefits.
Death benefits paid under life insurance policies are generally not subject to federal income tax, but may be subject to federal and state
estate taxes. Investment gains from your Policy are generally not taxed as long as the gains remain in the Policy. If the Policy is not
treated as a MEC under federal income tax law, then distributions from the Policy may be treated first as the return of investments in
the Policy and then, only after the return of all investment in the Policy, as distributions of taxable income (taxed as ordinary income).
Distributions include partial withdrawals and surrenders. See Tax Considerations in this Prospectus for additional information.
FEE TABLE
The following tables describe the fees and expenses that
you pay when buying, owning and surrendering the Policy. Please refer to the Policy Schedule page for information about the specific fees
you will pay each year based on the options you have selected.
The first table describes the maximum fees and expenses
that you pay at the time that you buy the Policy, surrender or make withdrawals from the Policy, or transfer value between investment
options.
|
Transaction Fees
|
|
|
Charge |
|
|
When Charge is Deducted
|
|
|
Amount Deducted — Maximum Guaranteed Charge
|
|
|
Amount Deducted — Current Charge
|
|
|
Premium
Expense Charge (consists of the Sales Load and Premium Tax): |
|
|
Upon
receipt of each premium payment |
|
|
10%
of each premium payment |
|
|
6.0%
of each premium payment |
|
|
Sales
Load: (1) |
|
|
Upon
receipt of each premium payment |
|
|
6.5%
of each premium payment |
|
|
2.5%
of each premium payment up to target and 1.0%
of each premium payment in excess of target for Policy Years 1 through 10 |
|
|
Premium
Tax: (1) |
|
|
Upon
receipt of each premium payment |
|
|
3.5%
of each premium payment |
|
|
3.5%
of each premium payment |
|
|
Surrender
Charge: |
|
|
There
is no surrender charge associated with your Policy. However, the surrender of your Policy may have tax consequences. |
|
|
|
|
|
|
|
|
Transfer
Fee: (2) |
|
|
Upon
each transfer in excess of 12 in a Policy Year |
|
|
$10
per transfer |
|
|
$10
per transfer |
|
|
Withdrawal
Charge: |
|
|
At
the time of each partial withdrawal of Policy Value |
|
|
$100
deducted from Policy Value for all partial withdrawals after the first made in the same Policy Year. |
|
|
$25
deducted from Policy Value for all partial withdrawals made after the first made in the same Policy Year. |
|
(1)
(2)
The table below describes the fees and expenses that you pay periodically
during the time that you own the Policy, not including Fund fees and expenses. If you chose to purchase an Optional Benefit, you will
pay additional charges, as shown below.
|
Periodic Charges Other Than Annual Fund Operating Expenses
|
|
|
Charge |
|
|
When Charge is Deducted
|
|
|
Amount Deducted |
|
|
Base Contract Charges: |
|
|
Cost
of Insurance Charge (per $1,000 Net Amount at Risk) (1) (2) (3) |
|
|
On
the Policy Effective Date and each Monthly Anniversary Day |
|
|
|
|
|
Minimum Charge |
|
|
|
|
|
$0.01
per $1,000 of Net Amount at Risk |
|
|
Maximum Charge |
|
|
|
|
|
$83.33
per $1,000 of Net Amount at Risk |
|
|
Maximum Charge for a 46 year old male, non-smoker, $550,000, Total Face Amount, Option 1 (Level Death)
|
|
|
|
|
|
$0.16 per $1,000 of Net Amount at Risk |
|
|
Mortality
and Expense Risk Charge: (4)
|
|
|
On
the Policy Effective Date and each Monthly Anniversary Day |
|
|
|
|
|
Maximum Charge (5)
|
|
|
|
|
|
0.90%
(of average daily net assets) annually |
|
|
Administration
Charge: |
|
|
On
the Policy Effective Date and each Monthly Anniversary Day |
|
|
|
|
|
Maximum Charge (6)
|
|
|
|
|
|
$10.00 |
|
|
Loan
Interest Credit Spread: |
|
|
On
each Policy Anniversary, as applicable (7) |
|
|
|
|
|
Maximum Charge (8)
|
|
|
|
|
|
1.5% |
|
|
Optional Benefit Charges: |
|
|
Term
Life Insurance Rider |
|
|
On
the Policy Effective Date and each Monthly Anniversary Day |
|
|
|
|
|
Minimum Charge |
|
|
|
|
|
$0.01
per $1,000 of Net Amount at Risk |
|
|
Maximum Charge |
|
|
|
|
|
$83.33
per $1,000 of Net Amount at Risk |
|
|
Change
of Insured Endorsement |
|
|
Upon
change of insured |
|
|
$400
per change |
|
(8)
Fund Annual Operating Expenses (As a Percentage of Fund
Average Daily Net Assets)
The following table shows the minimum and maximum total operating expenses
charged by the Funds that you may pay periodically during the time that you own the Policy. A complete list of Funds available under the
Policy, including their annual expenses, may be found in “Fund Appendix -- Funds Available Under The Policy.”
|
|
|
Minimum |
|
|
|
|
|
|
|
|
Maximum |
|
Total Annual Operating Expenses (1)
|
|
|
|
|
0.10% |
|
|
|
|
|
– |
|
|
|
|
|
4.26% |
|
|
(expenses that are deducted from Fund assets, which may include management fees, distribution
and/or service (12b-1) fees, and other expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRINCIPAL RISKS OF INVESTING IN THE POLICY
Investment Risk (Policy
Value Not Guaranteed). If you invest your Policy Value in one or more Sub-Accounts, then you will be subject to
the risk that investment performance may be unfavorable causing the Policy Value to decrease and the Monthly Deduction to increase (which,
in turn, further decreases future Policy Value). This is because poor investment performance diminishes Policy Value thereby increasing
the Net Amount at Risk (the difference between the Death Benefit and the Policy Value) under the Policy and, correspondingly, increasing
the cost of insurance which is part of the Monthly Deduction. You could lose everything
you invest.
If you allocate
Policy Value to the Fixed Account, then we credit your Policy Value (in the Fixed Account) with a declared rate of interest, but you assume
the risk that the rate may decrease, although it will never be lower than the guaranteed minimum annual interest effective rate of 2%.
See “The Company and the Fixed Account.”
Risk of Lapse. Your
Policy may terminate if your Policy Value on any Monthly Anniversary Day (the same day each month as the Policy Effective Date) is less
than the amount of the Monthly Deduction due on that date. If your Policy would terminate due to insufficient value, we will send you
notice of the premium required to prevent termination of the Policy at the expiration of the grace period while the Insured is living
(“Lapse”). You have a 61-day grace period to make a payment of Net Premium at least sufficient to cover the monthly cost of
insurance for the next three months or the Policy will Lapse. You may reinstate a Lapsed Policy, subject
to certain conditions. There is a cost to reinstate your Policy. See Lapse and Reinstatement.
Your Policy may Lapse if your outstanding loan amounts reduce the Cash Surrender
Value to zero. A Lapse of your Policy at a time when a Policy loan is outstanding may have tax consequences. See Tax Considerations.
Surrender Risks. The
Cash Surrender Value of the Policy is generally the Cash Value less any Policy Debt and less any Monthly Deduction applied on the date
of surrender. No Death Benefit Proceeds will be paid after the effective date of surrender of the Policy.
You should purchase the Policy only if you have the financial ability to
keep it in force for a substantial period of time. You should not purchase the Policy if you intend to surrender all or part of the account
value in the near future. We designed the Policy to meet long-term financial goals. The Policy is not
suitable as a short-term investment.
A surrender or withdrawal may have tax consequences. See Tax Considerations.
Tax Risks. Although
the federal income tax requirements applicable to the Policy are complex and there is limited guidance regarding these requirements, we
anticipate that the Policy will be treated as a life insurance contract for federal income tax purposes. Assuming that a Policy qualifies
as a life insurance contract for federal income tax purposes, you generally should not be considered to be in receipt of any portion of
your Policy’s Cash Value until there is an actual distribution from the Policy. Moreover, Death Benefits payable under the Policy
should be excludable from the gross income of the Beneficiary. Although the Beneficiary generally should not have to pay federal income
tax on the Death Benefit, other taxes, such as estate taxes, may apply. This Policy is intended to qualify as life insurance for tax purposes
and is designed to meet the requirements of Section 7702 of the Code.
The applicable factor used in determining the minimum Death Benefit shall
be the factor required by Section 7702 of the Code as shown in your Policy. Under Death Benefit Option 1, your Death Benefit will generally
be the Total Face Amount. However, in the event the minimum Death Benefit exceeds the Total Face Amount, the Company reserves the right
to refund the portion of any premium or Cash Value such that the minimum Death Benefit no longer exceeds the Total Face Amount. Under
Death Benefit Option 2, your Death Benefit will always vary with the Policy Value. However, in the event the minimum Death Benefit exceeds
the Total Face Amount plus the Policy Value under Death Benefit Option 2, the Company reserves the right to refund the portion of any
premium or Cash Value such that the minimum Death Benefit no longer exceeds the Total Face Amount plus Policy Value. See Death Benefit
Options for detailed information about each Death Benefit Option.
Your Policy may become an MEC as a result of: (1) the payment of premiums
exceeding the limits of Section 7702A of the Code, (2) certain changes to your Policy, such as a reduction in your Death Benefit or certain
rider benefits, or (3) an exchange of a contract which is a Modified Endowment Contract for this Policy.
If your Policy becomes an MEC, transactions such as surrenders, withdrawals
and loans will be treated first as a distribution of the earnings in the Policy and generally will be taxable as ordinary income in the
year received, to the extent there is any gain in the Policy. In addition, if the Policy Owner is under age 59-1/2 at the time of a surrender,
withdrawal or loan, the amount that is included in income is generally subject to a 10% additional tax.
If the Policy is not an MEC, distributions, such as surrenders and withdrawals,
generally are treated first as a return of basis or investment in the Policy and then as taxable income. Moreover, loans are generally
not treated as distributions. Finally, surrenders, withdrawals or loans from a Policy that is not an MEC are not subject to the 10% additional
tax.
The Policy may be used in various arrangements, including non-qualified
deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, and others. The tax consequences
of such plans vary depending on the particular facts and circumstances of each individual arrangement. For more information regarding
certain arrangements, see Tax Considerations and, specifically, the sections discussing Employer-Owned Life Insurance, Split-Dollar Life
Insurance, and Employer-Financed Insurance Purchase Arrangements — Tax and Other Legal Issues.
See Tax Considerations for a discussion of certain tax risks and considerations,
including those relating to employer owned life insurance. You should consult a qualified tax adviser for assistance in all Policy related
tax matters.
Loan Risks. A
Policy loan, whether or not repaid, has a permanent effect on the Policy Value, and potentially the Death Benefit, because the investment
results of the Sub-Accounts and current interest rates credited on the Fixed Account Value do not apply to Policy Value in the Loan Account.
The larger the loan and the longer the loan is outstanding, the greater will be the effect on Policy Value held as collateral in the Loan
Account. Interest credited on the portion of the Policy Value being used as collateral for a Policy loan is the loan interest rate less
an amount deducted from the loan interest rate to cover the costs the Company incurs by providing the loaned cash value (“Loan Interest
Credit Spread”).
Your Policy may Lapse if your outstanding loan amounts reduce the Cash Surrender
Value to zero. If a Policy Lapses with loans outstanding, some or all of the loan amounts may be subject to income tax. See Tax Considerations
— Tax Treatment of Loans. Policy loans also may increase the potential for Lapse if the investment results of the Sub- Accounts
to which Cash Surrender Value is allocated is unfavorable.
If the Insured dies while a loan is outstanding, the loan balance, which
includes any unpaid interest, will be deducted from the Death Benefit. See Policy Loans.
Fund Risks. We
do not guarantee that a Fund will meet its investment objectives and strategies. Policy Value may increase or decrease depending on the
investment performance of the Funds. You bear the risk that those Funds may not meet their investment objectives. A comprehensive discussion
of the risks of each Fund may be found in each Fund’s prospectus, which you may request, free of charge, by visiting https://www.protective.com/eprospectus,
calling 1-800-265-1545 or emailing prospectus@protective.com.
General Account Risks. The
Company’s general obligations and any guaranteed benefits under the Policy are supported by our General Account (and not by the
Variable Account) and are subject to the Company’s claims-paying
ability. The Fixed Account is part of the General Account. An Owner should look to the financial
strength of Protective Life for its claims-paying ability. Assets in the General Account are not segregated for the exclusive benefit
of any particular Policy or obligation. General Account assets are also available to the Company’s general creditors and the conduct
of our routine business activities. For more information on Protective Life’s financial strength, you may review our financial statements
and/or check our current rating with one or more of the independent sources that rate insurance companies for their financial strength
and stability. Such ratings are subject to change and have no bearing on the performance of the Funds. See also The Company and the Fixed
Account — Our General Account.
Potential for Increased
Charges and Fees. The Company has the right to increase (up to the maximum amount noted in the fee table) the
charges and fees we deduct. See also Fee Tables and Charges and Deductions.
THE COMPANY AND THE FIXED ACCOUNT
Protective Life and Annuity Insurance Company
The Policies are issued by Protective Life and Annuity
Insurance Company (formerly American Foundation Life Insurance Company), a wholly owned subsidiary of Protective Life Insurance Company,
which is the principal operating subsidiary of Protective Life Corporation (“PLC”), a U.S. insurance holding company and subsidiary
of Dai-ichi Life Holdings, Inc. (“Dai-ichi”). Dai-ichi’s stock is traded on the Tokyo Stock Exchange. As of December
31, 2023, PLC had total assets of approximately $118.4 billion. Protective Life and Annuity Insurance Company (“Protective Life”)
was organized as an Alabama company in 1978. Protective Life’s address is P.O. Box 10648, Birmingham, Alabama 35202-0648. Protective
Life is authorized to transact business as an insurance company or a reinsurance company in 47 states (including New York) and Washington
D.C. and offers a variety of individual life, individual and group annuity insurance products. The Company’s statutory assets for
fiscal year ended in 2023 were approximately $5.4 billion.
Our General Account
The assets of our General Account support our insurance and annuity obligations
and are subject to our general liabilities from business operations and to claims by our creditors. Because amounts allocated to the Fixed
Account, plus any guarantees under the Policy that exceed your Policy Value (such as those that may be associated with the Death Benefit),
are paid from our General Account, any amounts that we may pay under the Policy in excess of Variable Account Value are subject to our
financial strength and claims-paying ability. It is important to note that there is no guarantee that we will always be able to meet our
claims-paying obligations, and that there are risks to purchasing any insurance product. For this reason, you should consider our financial
strength and claims-paying ability to meet our obligations under the Policy when purchasing a Policy and making investment decisions.
We encourage both existing and prospective Policy Owners to read and understand
our financial statements. We prepare our financial statements on a statutory basis, as required by state regulators. Our audited statutory
financial statements are included in the Statement of Additional Information by reference to the Variable Account’s most recent
Form N-VPFS filed with the SEC (which is available at no charge by calling us at 1-800-456-6330 or writing us at the address shown on
the cover page of this Prospectus). In addition, the Statement of Additional Information is available on the SEC’s website at http://www.sec.gov.
You also will find on our website information on ratings assigned to us
by one or more independent rating organizations. These ratings are opinions of our financial capacity to meet the obligations of our insurance
and annuity contracts based on our financial strength and/or claims-paying ability.
The Fixed Account
The Fixed Account consists of assets owned by Protective Life with respect
to the Policies, other than those in the Variable Account. Subject to applicable law, Protective Life has sole discretion over the investment
of the assets of the Fixed Account. The Fixed Account is part of our General Account. Unlike premiums and Policy Value allocated to the
Variable Account, we assume the risk of investment gain or loss on amounts held in the Fixed Account.
Guarantees of Net Premiums allocated to the Fixed Account, and interest
credited thereto, are backed by Protective Life. The Fixed Account Value is calculated daily.
You generally may allocate some or all of your Net Premium and may transfer
some or all of your Policy Value to the Fixed Account. However, there are limitations on transfers involving the Fixed Account. Due to
these limitations, if you want to transfer all of your Policy Value from the Fixed Account to the Variable Account, it may take several
years to do so. You should carefully consider whether the Fixed Account meets your investment needs. See Fixed Account Transfers.
Because of exemptive and exclusionary provisions, interests in the Fixed
Account have not been registered under the Securities Act of 1933 nor has the Fixed Account been registered as an investment company under
the 1940 Act.
Accordingly, neither the Fixed Account nor any interests therein are subject to the provisions
of these Acts. The disclosure regarding the Fixed Account may, however, be subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements made in prospectuses.
Interest Credited on
Fixed Account Value. Protective Life guarantees that the interest credited on Policy Value allocated to the Fixed
Account will not be less than the annual guaranteed interest rate shown in your Policy and will never be less than the minimum annual
interest rate of 2.00% for all policies sold under this Prospectus. For purposes of crediting interest, amounts deducted, transferred
or withdrawn from the Fixed Account are accounted for on a “firstin- first-out” (FIFO) basis. The Company may credit
interest at higher than the guaranteed interest rate. Any change in the interest rate will not discriminate unfairly within any class
of Owners or Insureds. The Company will review the interest crediting rate monthly and may reset the interest rate monthly. Any additional
interest credited will be credited at least annually.
Payments from the Fixed
Account. The Company may defer payments of any withdrawal, surrender, or Policy loan proceeds from the Fixed Account
for up to 6 months after a Request is received. If the Company delays the payment of surrender benefits under this Policy, the Company
will pay interest at a rate of 2% per year (or an alternative rate if required by applicable state insurance law).
We may delay the payment of proceeds of any partial withdrawal, surrender,
or loan after our receipt of Written Notice in Good Order of your request where the proceeds would be taken from Fixed Account Value.
THE VARIABLE ACCOUNT AND THE FUNDS
Protective NY COLI VUL separate account (referred to herein
as the Variable Account)
Protective NY COLI VUL separate account is a separate investment account
of Protective Life established under Alabama law by the board of directors of Protective Life on February 25, 2020. The Variable Account
is registered with the SEC as a unit investment trust under the 1940 Act and is a “separate account” within the meaning of
the federal securities laws.
Protective Life owns the assets of the Variable Account.
These assets are held separate from other assets of the Company and are not part of Protective Life’s General Account. You assume
all of the investment risk for premiums and Policy Value allocated to the Sub-Accounts. Your Policy Value in the Sub-Accounts is part
of the assets of the Variable Account. Assets of the Variable Account equal to the reserves or other contract liabilities of the Variable
Account will not be charged with liabilities that arise from any other business that Protective Life conducts. Protective Life may transfer
to its General Account any assets of the Variable Account which exceed the reserves and other contract liabilities of the Variable Account
(which are always at least equal to the aggregate Variable Account Values under the Policies). Protective Life may accumulate in the Variable
Account the charge for mortality and expense risks and investment results applicable to those assets that are in excess of the reserves
and other contract liabilities related to the Policies. Protective Life is obligated to pay all benefits provided under the Policies.
The assets of the Variable Account are divided into
a series of Sub-Accounts. Each Sub-Account invests exclusively in shares of a corresponding Fund. Any amounts of income, dividends, and
gains distributed from the shares of a Fund will be reinvested in additional shares of that Fund at its net asset value per share.
When permitted by law and subject to required regulatory approvals, the Company
may:
1.
Create new Variable Accounts;
2.
Combine Variable Accounts;
?
3.
Restrict
premium payments or transfers into any Sub-Account;
4.
Transfer assets of one Variable
Account to another Variable Account;
5.
Add new Sub-Account to or remove
existing Sub-Accounts from the Variable Account or combine Sub-Accounts;
6.
Make new Sub-Accounts or other
Sub-Accounts available to such classes of policies as the Company may determine;
7.
Close certain Sub-Accounts to
allocations or premium payments or transfers of Policy Value;
8.
Add new Funds or remove existing
Funds;
9.
Substitute a different Fund for
any existing Fund if shares of a Fund are no longer available for investment or if the Company determines that investment in a Fund is
no longer appropriate in light of the purpose of the Variable Account;
10.
Deregister the Variable Account under the 1940 Act if such registration
is no longer required;
?
11.
Operate
the Variable Account as a management investment company under the 1940 Act or in any other form permitted by law; and
12.
Make any changes to the Variable
Account or its operations as may be required by the 1940 Act or other applicable law or regulations.
The investment policy of the Variable Account will not be changed without
approval pursuant to the insurance laws of the Company’s state of domicile. Any such approval of or change to the investment policy
will be filed with the Superintendent of the New York Department of Financial Service. Prior written consent of the Owner will be obtained
for any such change that diminishes the rights or benefits under the Policy.
In the event of a material change in the investment policy of the Variable
Account, any Owner objecting to such change shall have the option to convert, without evidence of insurability, to a general account life
insurance policy provided by the Company or an affiliate of the Company in the state of New York. Alternatively, the Owner may elect to
transfer all amounts held in the Variable Account to the Fixed Account, without restriction, if the Company determines, at the time of
such material change of investment policy, that the Fixed Account under this Policy is competitively priced in relation to the other available
general account products. The Company will give appropriate notice to such objecting Owner of all options available. The option to convert
or transfer funds from the Variable Account into the Fixed Account is exercisable within 60 days after (i) the effective date of such
change in the investment policy or (ii) the receipt of the notice of the options available, whichever is later.
The values and benefits of this Policy provided by the Variable Account
depend on the investment performance of the Funds in which your selected Sub-Accounts are invested. The Company does not guarantee the
investment performance of the Funds. The Owner bears the full investment risk for Net Premiums allocated or Policy Value transferred to
the Sub-Accounts.
The Variable Account is divided into Sub-Accounts. The income, gains or
losses, whether or not realized, from the assets of each Sub-Account are credited to or charged against that Sub-Account without regard
to any other income, gains or losses of Protective Life. Each Sub-Account invests exclusively in shares of a corresponding Fund.
Therefore, the investment experience of your Policy depends on the experience
of the Sub-Accounts you select and not the investment experience of Protective Life’s other assets. In the future, the Variable
Account may include other Sub-Accounts that are not available under the Policies and are not otherwise discussed in this Prospectus.
Information regarding each Fund, including (i) its
name, (ii) its type (e.g., money market fund, bond fund, balanced fund, etc.) or a brief statement concerning its investment objectives;
(iii) its investment adviser and any sub-investment adviser; (iv) current expenses; and (v) performance is available in the appendix to
the Prospectus. See Appendix A — Funds Available Under The Policy. Each Fund has issued a prospectus that contains more detailed
information about the Fund.
You should carefully consider the investment objectives,
risks, charges and expenses of the investment alternatives when making an allocation to the Sub-Accounts. The underlying Fund prospectuses
can be found online at https://www.protective.com/eprospectus. You can also request this information at no cost by calling 1-800-265-1545
or by sending an email request to prospectus@protective.com.
Variable insurance Funds might not be managed by the same
portfolio managers who manage retail mutual funds with similar names. These Fund are likely to differ from similarly named retail mutual
funds in assets, cash flow, and tax matters. Accordingly, the holdings and investment results of a variable insurance Fund can be expected
to be higher or lower than the investment results of a similarly named retail mutual fund.
Selection of Funds
We select the Funds offered through the Policies based on several criteria,
including the following:
•
asset class coverage;
•
the strength of the investment
adviser’s (or sub-adviser’s) reputation and tenure;
•
brand recognition;
•
performance;
•
the capability and qualification
of each investment firm; and
•
whether our distributors are
likely to recommend the Funds to Policy Owners.
Another factor we consider during the selection process
is whether the Fund, its adviser, its sub-adviser, or an affiliate will make payments to us or our affiliates. Such payments create
a conflict of interest for us because we have an incentive to offer Funds (or classes of shares of Funds) for which such payments and
fees are available to us. For a more detailed discussion of these payments and the potential conflicts of interest, see Payments We Receive.
For a discussion of these arrangements, see Certain Payments We Receive with Regard to the Funds. We review each Fund periodically after
it is selected. Upon review, we may remove a Fund or restrict allocation of additional Premium payments and/or transfers of Policy Value
to a Fund if we determine the Fund no longer meets one or more of the criteria and/or if the Fund has not attracted significant Policy
Owner assets. We do not recommend or endorse any particular Fund, and we do not provide investment advice.
Other Information About the Funds
Shares of these Funds are offered only to: (1) the
Variable Account, (2) other separate accounts of Protective Life supporting variable annuity contracts or variable life insurance
policies, (3) separate accounts of other life insurance companies supporting variable annuity contracts or variable life insurance
policies, and (4) certain qualified retirement plans. Such shares are not offered directly to investors but are available only through
the purchase of such variable annuity contracts or variable life insurance policies or through such qualified retirement plans. See the
prospectus for each Fund for details about that Fund.
Certain Funds may have investment objectives and policies similar to other
mutual funds (sometimes having similar names) that are managed by the same investment adviser or manager. The investment results of the
Funds, however, may be more or less favorable than the results of such other mutual funds. Protective Life does not guarantee or make
any representation that the investment results of any Fund is, or will be, comparable to any other mutual fund, even one with the same
investment adviser or manager.
For a discussion of the potential conflicts of interest that may arise as
a result of the sale of Fund shares to separate accounts that support variable annuity contracts, variable life insurance policies and
certain qualified pension and retirement plans as well as the sale of Fund shares to the separate accounts of insurance companies that
are not affiliated with Protective Life, see the prospectuses for the Funds. Fund shares are not offered directly to investors but are
available only through the purchase of such contracts or policies or through such plans. See the prospectus for each Fund for details
about that Fund.
There is no guarantee that any Fund will meet its investment objectives.
Please refer to the prospectus for each of the Funds you are considering for more information.
Certain Payments We Receive with Regard to the Funds from
Advisers and/or Distributors
We (and our affiliates) may receive payments from the Funds’ advisers,
sub-advisers, distributors, or affiliates thereof (collectively, “Fund Sponsors”). These payments are negotiated and thus
differ by Fund (sometimes substantially), and the amounts we (or our affiliates) receive may be significant. These payments are made for
various purposes, including payment for services provided and expenses incurred by us (and our affiliates) in promoting, marketing, distributing,
and administering the Policies; and, for our role as intermediary to the Funds. We (and our affiliates) may profit from these payments.
These payments may be derived from revenue sharing arrangements paid from the legitimate profits of Fund Sponsors or 12b-1 fees deducted
from Fund assets. For a more detailed discussion of these payments and the potential conflicts of interest, see Payments We Receive.
Addition, Deletion, or Substitution of Investments
The assets of the Variable Account are divided into a series of Sub-Accounts.
Each Sub-Account invests exclusively in the shares of a corresponding Fund. Protective Life, subject to applicable law and any required
regulatory approvals, may add new Sub-Accounts to or remove existing Sub-Accounts from the Variable Account or combine Sub-Accounts. If
the shares of a Fund are no longer available for investment or further investment in any Fund should become inappropriate in view of the
purposes of the Variable Account, Protective Life may redeem the shares of that Fund and substitute shares of another Fund. Substituted
Funds may have higher fees and expenses or may be available only to certain classes of purchasers. Protective Life will not substitute
any shares without notice and any necessary approval of the SEC and state insurance authorities.
Subject to applicable law and any required regulatory approvals, Protective
Life may establish new Sub-Accounts or eliminate one or more Sub-Accounts if marketing needs, tax considerations or investment conditions
warrant. Any new Sub-Accounts may be made available to existing Owner(s) or may be closed to certain classes of purchasers. Protective
Life may prohibit the allocation of Net Premium and transfer of Policy Value to a Sub-Account.
If any of these substitutions or changes are made,
Protective Life, may by appropriate endorsement change the Policy to reflect the substitution or other change. If Protective Life deems
it to be in the best interest of Owner(s), the
Variable Account may be operated as a management investment company
under the 1940 Act, it may be deregistered under the 1940 Act if registration is no longer required, or it may be combined with other
Protective Life separate accounts, or its assets may be transferred to other Protective Life separate accounts, subject to any required
Owner and/or regulatory approval. Protective Life may make any changes to the Variable Account required by the 1940 Act or other applicable
law or regulation.
Voting Fund Shares
Protective Life is the legal owner of Fund shares held by the Sub-Accounts
and has the right to vote on all matters submitted to shareholders of the Funds. However, in accordance with applicable law, Protective
Life will vote shares held in the Sub-Accounts at meetings of shareholders of the Funds in accordance with instructions received from
Owners with Policy Value in the Sub-Accounts. However, if the law changes to allow the Company to vote the shares in its own right, the
Company may decide to do so.
Protective Life will send or make available to Owners voting instruction
forms and other voting materials (such as Fund proxy statements, reports and other proxy materials) prior to shareholders meetings. The
number of votes as to which an Owner may give instructions is calculated separately for each Sub-Account and may include fractional votes.
An Owner holds a voting interest in each Sub-Account to which Policy Value
is allocated under his or her Policy. Owners only have voting interests while the Insured is alive. The number of votes for which an Owner
may give instructions is based on the Owner’s percentage interest of a Sub-Account determined as of the date established by the
Fund for determining shareholders eligible to vote at the meeting of that Fund.
It is important that each Owner provide voting instructions
to Protective Life because shares as to which no timely instructions are received and shares held directly by Protective Life are voted
by Protective Life in proportion to the voting instructions that are received with respect to all Policies participating in a Sub-Account.
As a result, a small number of Owners may control the outcome of a vote.
Protective Life may, if required by state insurance regulations, disregard
Owner voting instructions if such instructions would require shares to be voted so as to cause a change in sub-classification or investment
objectives of one or more of the Funds, or to approve or disapprove the investment management agreement or an investment advisory agreement.
In addition, Protective Life may under certain circumstances disregard voting instructions that would require changes in the investment
manager or an investment adviser of one or more of the Funds, provided that Protective Life reasonably disapproves of such changes. If
we do disregard voting instructions, we will advise of that action and our reasons for such action in the next annual or semi-annual report.
CHARGES AND DEDUCTIONS
This section describes the charges and deductions we make under the Policy
to compensate us for the services and benefits we provide, costs and expenses we incur, and risks we assume. We may profit from the charges
deducted, and we may use any such profits for any purpose, including payment of distribution expenses. Unless otherwise stated fees and
charges will be deducted from the Policy Value on a pro-rata basis from the Sub-Accounts and/or Fixed Account, where applicable. You may
request that fees and charges be deducted from specific Sub-Accounts and/or the Fixed Account, where applicable or designate a specific
Sub-Account for this purpose.
Any such request is subject to the provisions or restrictions of any riders,
endorsements, or any Sub-Accounts and the available Sub-Account Value(s) or Fixed Account Value where applicable.
If there is insufficient value in a selected Sub-Account(s) or the Fixed
Account, then Protective Life may deduct any fees and charges or the remainder of such fees and charges on a pro-rata basis from the Sub-Accounts
or Fixed Account where applicable. You may be required to maintain in any designated Sub-Account(s) amounts sufficient to cover estimated
Policy fees and charges for a Policy Year. We reserve the right to transfer Sub-Account Value from any Sub-Account or Fixed Account to
a Money Market Sub-Account in amounts sufficient to cover estimated Policy fees and charges for a Policy Year.
Premium Expense Charge
We deduct a premium expense charge from each premium you pay. The premium
expense charge compensates us for certain sales and premium tax expenses associated with the Policies and the Variable Account. The maximum
premium expense charge is equal to 10% of each premium payment you make. This would include any premium paid to reinstate the Policy.
The Company may assess an expense charge less than the maximum expense charge.
We will deduct a maximum charge of 10% from each premium payment, which
is broken down as follows. A maximum of 6.5% will be deducted as sales load to compensate us in part for sales and promotional expenses
in connection with selling the Policies, such as commissions, the cost of preparing sales literature, other promotional activities and
other direct and indirect expenses. A maximum of 3.5% of premium will be used to cover premium
taxes and certain federal income tax obligations resulting from the receipt of premiums. All states and some cities and municipalities
impose taxes on premiums paid for life insurance, which generally range from 2% to 4% of premium but may exceed 4% in some states. The
amount of your state’s premium tax may be higher or lower than the amount attributable to premium taxes that we deduct from your
premium payments.
The current expense charge applied to premium for sales
load is 2.5% of premium up to target and 1.0% of premium in excess of target for Policy Years 1 through 10. Your target premium will depend
on the Base Policy Face Amount, your Issue Age, your sex, and premium class (if any) and equals the maximum premium payable under the
seven-pay test such that the Policy will not constitute an MEC under Section 7702A of the Code. There are other events, however, such
as a decrease in Death Benefit or lapse of the Policy, which could cause the Policy to be An MEC under Section 7702A of the Code. See
Tax Considerations — Policies That Are MECs. Thereafter, there is no charge for sales load. The current expense charge applied to
premium to cover our premium taxes and the federal tax obligation described above is 3.5% in all Policy Years.
For a description of the effects of entering into the Term Life Insurance
Rider, see Optional Benefits Under the Policy below.
Monthly Deduction
Each month we will deduct an amount from your Policy Value to pay for the
benefits provided by your Policy. This amount is called the Monthly Deduction and equals the sum of:
•
the cost of insurance charges;
•
the monthly administration charge;
and
•
the mortality and expense risk
charge.
If you do not select the Sub-Account(s) from which the Monthly Deduction
is deducted, the Monthly Deduction will be deducted from the Sub-Accounts and the Fixed Account pro-rata on the basis of the unloaned
Policy Value.
The Owner may select the Sub-Accounts from which you want us to deduct the
Monthly Deduction. However, if as of the date the Monthly Deduction is to be deducted, the value in any of the selected Sub-Accounts is
less than the charge to be deducted from that Sub-Account, Protective Life will instead deduct the Monthly Deduction on a pro-rata basis
from each Sub-Account and the Fixed Account under the Policy based on the unloaned Policy Value attributable to each Sub-Account and the
Fixed Account.
Cost of Insurance Charge. This
charge compensates Protective Life for the expense of underwriting the Death Benefit.
The cost of insurance charge is calculated as follows:
An amount will be deducted on each Monthly Anniversary from the Policy Value
to pay the cost of insurance for that Policy Month. The cost of insurance is calculated on the Monthly Anniversary Day and is equal to:
a.
The Death Benefit divided by the
death benefit interest rate factor as shown on the Policy Schedule, less the Policy Value on each Monthly Anniversary Day, multiplied
by the current monthly risk rate for the Insured’s Attained Age; plus
b.
The monthly administration charge.
If there has been an increase or decrease in Death Benefit during the Policy
Year, the cost of insurance calculation will be adjusted accordingly to reflect the change.
The Net Amount at Risk is equal to
the Death Benefit divided by the death benefit interest rate as shown on the Policy Schedule minus the Policy Value (prior to deducting
the cost of insurance charge).
Anything that decreases Policy Value, such as negative investment experience
or withdrawals, will increase the Net Amount at Risk and result in higher cost of insurance charges. The Net Amount at Risk is affected
by investment performance, loans, payments of premiums, Policy fees and charges, the Death Benefit Option chosen, withdrawals, and increases
or decreases in Total Face Amount.
The cost of insurance charge for each increment of Total Face Amount is
calculated separately to the extent a different cost of insurance rate applies. If there is a decrease in Total Face Amount after an increase,
the decrease is applied first to decrease any prior increases in Total Face Amount, starting with the most recent increase.
Cost of Insurance Rates. The
cost of insurance rate for a Policy is based on and varies with the Issue Age, sex and premium class of the Insured and on the number
of years that a Policy has been in force. Protective Life places
Insureds in the following premium classes, based on underwriting: fully underwritten (ages
20-75) and guaranteed underwriting (ages 20-70). Protective Life guarantees that the cost of insurance rates used to calculate the monthly
cost of insurance charge will not exceed the maximum cost of insurance rates set forth in the Policies. The guaranteed rates for standard
classes are based on the 2017 Commissioners’ Standard Ordinary Mortality Tables, Male or Female, Smoker or Nonsmoker Mortality Rates
(“2017 CSO Tables”). The guaranteed rates for substandard classes are based on multiples of, or additions to, the 2017 CSO
Tables. Currently, the guaranteed minimum monthly rate is $0.01 per $1000 and the guaranteed maximum monthly rate is $83.33 per $1000.
Protective Life’s current cost of insurance rates may be less than
the guaranteed rates that are set forth in the Policy. Current cost of insurance rates will be determined based on Protective Life’s
expectations as to future mortality, investment earnings, expenses, taxes, and persistency experience. In determining current cost of
insurance charges, we may consider a variety of factors, including those unrelated to mortality experience.
Protective Life will also determine a separate cost of insurance rate for
each increment of Total Face Amount based on the Policy duration and the Issue Age, sex and premium class of the Insured at the time of
the request for an increase. The following rules will apply for purposes of determining the Net Amount at Risk for each premium class.
Protective Life places the Insured in a premium class when the Policy is issued, based on Protective Life’s underwriting of the
application. This original premium class applies to the initial Total Face Amount. When an increase in Total Face Amount is requested,
Protective Life conducts underwriting before approving the increase (except as noted below) to determine whether a different premium class
will apply to the increase. If the premium class for the increase has lower cost of insurance rates than the original premium class (or
the premium class of a previous increase), the premium class for the increase also will be applied to the initial Total Face Amount and
any previous increases in Total Face Amount beginning as of the effective date of the current increase. If the premium class for the increase
has a higher cost of insurance rate than the original premium class (or the premium class of a previous increase), the premium class for
the increase will apply only to the increase in Total Face Amount.
Monthly
Risk Rates. The maximum monthly risk rate is shown on the Policy Schedule. The Company may charge a lower monthly
risk rate. The maximum risk rates shown are based on the mortality tables as shown on the Policy Schedule, age nearest birthday. The Company
reserves the right to change the monthly risk rate based on changes in the Company’s expectations future mortality, investment earnings,
persistency, capital and reserve requirements, reinsurance cost and expenses (including taxes) subject to the maximum risk rates. Any
change in the monthly risk rate will not discriminate unfairly within any class of Owners or Insureds.
Legal Considerations
Relating to Sex — Distinct Premium Payments and Benefits. Mortality tables for the Policies generally distinguish
between males and females. Thus, premiums and benefits under Policies covering males and females of the same age will generally differ.
Employers and employee organizations considering purchase of a Policy should
consult with their legal advisors to determine whether purchase of a Policy based on sex-distinct actuarial tables is consistent with
Title VII of the Civil Rights Act of 1964 or other applicable law.
Monthly Administration
Charge. We will deduct a maximum of $10 from your Policy Value on the Monthly Anniversary Day to cover
our administrative costs, such as salaries, postage, telephone, office equipment and periodic reports. This charge may be increased or
decreased by us from time to time based on our expectations of future expenses, but will never exceed $10.
Supplemental Rider and
Endorsement Charges. There is no cost to add the Change of Insured Endorsement to the Policy; however, we will
assess a one-time fee at the time it is exercised. See Fee Tables and Optional Benefits Under the Policy.
Mortality and Expense
Risk Charge. We deduct a mortality and expense risk charge each month from your Policy Value. This charge compensates
Protective Life for the mortality risk it assumes under the Policies. The mortality risk is that the Insureds will live for a shorter
time than we project. The expense risk Protective Life assumes is that the expenses that we incur in issuing and administering the Policies
and the Variable Account will exceed the amounts realized from the administration charges assessed against the Policies.
Protective Life deducts a monthly charge from assets in the Sub-Accounts
attributable to the Policies. It is based on an annual charge that we accrue against each Sub-Account on a daily basis and is deducted
on each Monthly Anniversary Day by cancelling accumulation units on a pro-rata basis across all Sub-Accounts.
We convert the mortality and expense risk charge into a daily rate by dividing
the annual rate by 365. The mortality and expense risk charge will be determined by us but will not exceed 0.90% annually. The Company
reserves the right to change the mortality and expense risk charge from, and any change will be based on our expectations of investment
income, mortality, persistency, and expense. Furthermore, if a change is made, then it will not discriminate unfairly within
any class of Owners or Insureds. Currently, the charge is 0.28% for Policy Years 1 through
20 and 0.10% thereafter. On surrender and payment of the death benefit, we will deduct the pro-rata portion of the mortality and expense
risk charge that has accrued.
Transfer Fee
We allow you to make 12 free transfers of Policy Value each Policy Year.
In order to cover administrative expenses, Protective Life will charge a maximum transfer fee of $10 on any additional transfers
in a Policy Year. If the fee is imposed, it will be deducted from the amount requested to be transferred. If an amount is being transferred
from more than one Sub-Account or the Fixed Account (subject to the Fixed Account transfer restrictions discussed herein), the transfer
fee will be deducted proportionately from the amount being transferred from each. Currently, electronic transfers do not count towards
the 12 free transfers; however, we reserve the right, at any time, to charge for electronic transfers in excess of the free transfers
allowed.
Withdrawal Charges
Protective Life will deduct a partial withdrawal fee of $25 for all
withdrawals after the first made in the same Policy Year. This charge will be deducted from the Policy Value in addition to the amount
requested to be withdrawn. The partial withdrawal fee will be deducted proportionally from all Sub-Accounts.
Fund Expenses
The value of the net assets of each Sub-Account reflects the investment
management fees and other expenses incurred by the corresponding Fund in which the Sub-Account invests. For further information, consult
the Funds’ prospectuses.
Other Information
We sell the Policies through registered representatives of broker-dealers.
These registered representatives are also appointed and licensed as insurance agents of Protective Life. We pay commissions and other
compensation to the broker-dealers for selling the Policies. You do not directly pay the commissions and other compensation, we do. We
intend to recover commissions and other compensation, marketing, administrative and other expenses and costs of Policy benefits through
the fees and charges imposed under the Policies. See “Sale of the Policies” for more information about payments we make to
the broker-dealers.
Corporate Purchasers or Eligible Groups
The Policy is available for individuals and for corporations and other institutions.
For corporate or other group or sponsored arrangements, fee-only arrangements or clients of registered investment advisers purchasing
one or more Policies, Protective Life may reduce the amount of the premium expense charge, monthly administration charge, or other charges
where the expenses associated with the sale of the Policy or Policies or the underwriting or other administrative costs associated with
the Policy or Policies are reduced. Sales, underwriting or other administrative expenses may be reduced for reasons such as expected economies
resulting from a corporate purchase, a group or sponsored arrangement or arrangements, fee-only arrangements or clients of registered
investment advisers.
THE POLICY
Purchasing a Policy
For insurance coverage to take effect under a Policy, you must submit a
completed application and at least the minimum initial premium payment through a licensed representative of Protective Life who is also
a registered representative of a broker-dealer having a distribution agreement with Investment Distributors, Inc., the principal underwriter
and distributor of the Policy. Protective Life requires satisfactory evidence of the insurability, which may include a medical examination
of the Insured. Protective Life will issue a Policy covering an Insured up to age 75 if Evidence of Insurability satisfies Protective
Life’s underwriting rules. No Policy will be issued to an Insured under the age of 20 years. Minimum age requirements may apply.
Acceptance of an application depends on Protective Life’s underwriting rules, and Protective Life may reject an application. Applicants
must be acceptable risks based on our applicable underwriting limits and standards. We will not issue a Policy until the underwriting
process has been completed to our satisfaction. We reserve the right to reject an application for any lawful reason or to “rate”
an Insured as a substandard risk, which will result in increased cost of insurance rates. The cost of insurance rate also may vary depending
on the type of underwriting we use. A Policy is issued after Protective Life approves the application.
Payment of premium is not a requirement to issue a Policy but your insurance will not take effect until you pay your minimum initial premium.
Premium may be collected at the time of Policy delivery. We generally do not accept
premium payments before approval of an application. We will not credit
interest or allocate your premium payment for the period while your application is in underwriting.
Insurance coverage under a Policy begins on the Policy Effective Date.
In order to obtain a more favorable Issue Age, Protective Life may permit
the Owner to “backdate” a Policy by electing a Policy Effective Date up to six months prior to the date of the original application.
Charges for the Monthly Deduction for the backdated period are deducted as of the Policy Effective Date.
The Owner of the Policy may exercise all rights provided under the Policy.
By Written Notice received by Protective Life at the Home Office while the Insured is living, the Owner may name a contingent Owner or
a new Owner. A change in Owner may have tax consequences. See Tax Considerations — Other Considerations.
Fees, charges and benefits available under the Policy may vary depending on
the state in which the Policy is issued.
Cancellation Privilege
The Owner may return the Policy to the Company or an authorized representative
within 10 days of receiving it. If replacement of an existing policy is involved, the right to cancel period is extended to 60 days. If
returned during the right to cancel period, the Policy will be deemed void from the start, and the Company will refund the greater of:
(1) premiums received less any withdrawals and distributions; or (2) the Policy Value less any withdrawals and distributions. During the
right to cancel period Net Premium will be allocated to the Sub-Accounts selected by the Owner.
Age Requirements
An Insured’s Issue Age must be between 20 and 75 for Policies issued
on a fully underwritten basis and between 20 and 70 for Policies issued on a guaranteed underwriting or a simplified underwriting basis.
Changes in the Policy or Benefits
At any time Protective Life, subject to the approval
of state authorities if required, may make such changes in the Policy as are necessary to assure compliance with any applicable laws or
with regulations or rulings issued by a government agency. This includes, but is not limited to, changes necessary to comply at all times
with the definition of life insurance prescribed by the Code. Any such changes will apply uniformly to all affected Policies, and Owners
will receive notification of such changes. The Company will obtain all required legal and regulatory approvals.
Specialized Uses of the Policy
Because your Policy provides for an accumulation of
Policy Values as well as Death Benefit, you may wish to use it for various individual and business planning purposes. Purchasing the Policy
in part for such purposes may involve certain risks. For example, if the investment performance of the Sub-Accounts is poorer than expected
or if sufficient premiums are not paid, the Policy may Lapse or may not accumulate sufficient Policy Value to fund the purpose for which
you purchased the Policy. Withdrawals and Policy loans may significantly affect current and future Policy Value, Cash Surrender Value
or Death Benefit Proceeds. The Policy is designed to provide benefits on a long-term basis. In addition, using a Policy for a specialized
purpose may have tax consequences. See “Tax Considerations — Other Considerations.”
PREMIUMS
Minimum Initial Premium. The
minimum initial premium required depends on a number of factors, including the age, sex and premium class of the proposed Insured, the
initial Total Face Amount requested by the applicant, any supplemental riders and endorsements requested by the applicant and the planned
periodic premiums that the applicant selects. Consult your sales representative for information about the initial premium required for
the coverage you desire.
Periodic
Premiums. The Company does not require that additional premiums be paid. However, it may recommend a periodic
premium amount. The actual amount of premium needed may change, depending on the number of premium payments made, changes in coverage,
investment experience, monthly risk rate, and partial withdrawals and Policy loans made. While you are not required to make additional
premium payments according to a fixed schedule, you may select a periodic premium schedule and corresponding billing period, subject to
our limits. We will send you reminder notices for the periodic premium, unless you request to have reminder notices suspended. You are
not required, however, to pay the periodic premium; you may increase or decrease the periodic premium subject to our limits, and you may
skip a payment or make unscheduled payments. The actual amount of premium required to prevent Policy Lapse may change, depending on the
number of premium payments made, changes in coverage, investment experience, monthly risk rate, and partial withdrawals and Policy loans
made.
Additional,
Unscheduled Premiums. You may pay additional, unscheduled premium payments to us in the amounts and at the times
you choose, subject to the limitations described below. To find out whether your premium
payment has been received, contact us at the Home Office address or
telephone number shown on the first page of this Prospectus. We reserve the right to limit the number of premium payments we accept on
an annual basis. No premium payment may be less than $100 per Policy without our consent, although we will accept a smaller premium payment
if necessary to keep your Policy in force. We reserve the right to restrict or refuse any premium payments that exceed the initial premium
amount shown on your Policy.
Protective Life reserves the right to limit the amount and frequency of
periodic premiums and additional premium under the Policy or the amount and frequency of Net Premiums that may be allocated to the Fixed
Account at any time. Protective Life also reserves the right to refuse to accept such additional premium under the Policy or allocate
additional Net Premium to the Fixed Account at any time without prior notice. In all cases, Protective Life will accept additional premium
necessary to prevent the Policy from lapsing.
Premium Limitations. Premiums
are accepted until Attained Age of 121. Premiums may be paid by any method acceptable to Protective Life. If by check, the check
must be from an Owner (or the Owner’s designee other than a sales representative), payable to Protective Life, and be dated prior
to its receipt at the Home Office.
Additional limitations apply to premiums. Premium payments must be at least
$100 and must be remitted to the Home Office although we will accept a smaller premium payment if necessary to keep your Policy in force.
We also reserve the right not to accept a premium payment
that causes the Death Benefit to increase by an amount that exceeds the premium received. Evidence of Insurability satisfactory to us
may be required before we accept any such premium. Protective Life also reserves the right to limit the amount and frequency of any premium
payment. See Tax Considerations and the discussion of Cash Value Accumulation Test under Standard Death Benefits. If the Death Benefit
is based on the applicable factor in the table of death benefit factors shown in the Policy Schedule, the Company reserves the right to
refund the portion of any premium or Cash Value which causes the Death Benefit to be based on such factors. Protective Life will also
monitor Policies and will notify the Owner on a timely basis if his or her Policy is in jeopardy of becoming a MEC under the Code, if
applicable. See Tax Considerations.
Premium Payments Upon
Increase in Total Face Amount. Depending on the Policy Value at the time of an increase in the Total Face Amount
and the amount of the increase requested, an additional premium payment may be necessary to keep the Policy in force or a change in the
amount of planned periodic premiums may be advisable. You will be notified if a premium payment is necessary or a change is appropriate.
Net Premium Allocations
You must indicate in the application how Net Premiums are to be allocated
to the Sub-Accounts and/or to the Fixed Account. These allocation instructions apply to both initial and subsequent Net Premiums. You
may change the allocation instructions in effect at any time by Written Notice to Protective Life at the Home Office or by emailing us
at GWExecBenefits@protective.com.
Whole percentages must be used. The sum of the allocations to the Sub-Accounts
and the Fixed Account must be equal to 100% of any Net Premiums. Protective Life reserves the right to establish (i) a limitation on the
number of Sub-Accounts to which Net Premiums may be allocated and/or (ii) a minimum allocation requirement for the Sub-Accounts and the
Fixed Account.
If Protective Life receives a premium payment at the
Home Office before 3:00 P.M. Central Time, Protective Life will process the payment as of the Valuation Date it is received. Protective
Life processes premium payments received at the Home Office at or after 3:00 P.M. Central Time as of the next Valuation Date. However,
premium will not be accepted in connection with an increase in Total Face Amount until underwriting has been completed. When approved,
Net Premium received will be allocated in accordance with your allocation instructions then in effect.
Unless designated by the Owner as a loan repayment, premiums received from
Owners (other than planned periodic premiums) are treated as unscheduled premiums.
Protective Life reserves the right to limit the amount
and frequency of planned periodic premiums and additional unscheduled premiums (each an “additional premium”) under the Policy
or the amount and frequency of Net Premiums that may be allocated to the Fixed Account at any time and to refuse to accept such additional
premium under the Policy or allocate additional Net Premium to the Fixed Account at any time without prior notice. In all cases, Protective
Life will accept additional premium necessary to prevent the Policy from lapsing. Protective Life will notify the Owner that a premium
payment, whether a planned periodic premium or additional premium, may result in a Policy becoming a MEC. Protective Life reserves the
right not to accept a premium that will cause the Policy to become a MEC, unless otherwise instructed by the Owner.
If mandated by law, we may reject a premium payment. We may also provide
information about you and your account to a government regulator.
CALCULATION OF POLICY VALUE
Variable Account Value
Each premium less any expense charge will be credited to the Policy Value
on the date received at the Home Office. On the Monthly Anniversary Day, a deduction will be made for the cost of insurance. Variable
Account Value reflects the investment experience of the Sub-Accounts to which it is allocated, any premiums allocated to the Sub-Accounts,
transfers in or out of the Sub-Accounts (including loans), any withdrawals of Variable Account Value and Monthly Deductions. There is
no guaranteed minimum Variable Account Value. A Policy’s Variable Account Value therefore depends upon a number of factors.
The Variable Account Value for a Policy at any time is the sum of the Sub-Account
Values for the Policy on the Valuation Date most recently completed.
Determination of Units
For each Sub-Account, the Net Premium(s) or unloaned Policy Value transferred
are converted into units. The number of units credited is determined by dividing the dollar amount directed to each Sub-Account
by the value of the unit for that Sub-Account for the Valuation Date on which the Net Premium(s) or transferred amount is invested in
the Sub-Account. Therefore, Net Premiums allocated to or amounts transferred to a Sub-Account under a Policy increase the number of units
of that Sub-Account credited to the Policy.
Determination of Unit Value
The unit value at the end of every Valuation Date is
the unit value at the end of the previous Valuation Date times the net investment factor, as described below. The Sub-Account Value for
a Policy is determined on any day by multiplying the number of units attributable to the Policy in that Sub-Account by the unit value
for that Sub-Account on that day as further described below.
Units for the initial Premium will be credited to the Sub-Accounts selected
and Units for subsequent Premium payments will be credited at the end of the Valuation Period during which the Company receives the Premium.
In addition, whenever a Valuation Period includes a Monthly Anniversary,
the value of each Sub-Account at the end of such period is reduced by the portion of any accrued policy fees or charges as are described
in the Policy as being allocated to the Sub-Account.
Sub-Account Value
The Sub-Account Value is the total dollar amount of all units credited to
the Owner’s Policy under each of the Sub-Accounts and excluding the Fixed Account, if applicable. Each Sub-Account’s Value
is equal to the sum of:
•
The net asset value of the Fund(s)
in the Sub-Account at the last Valuation Date;
•
Any premium, less expense charges
deducted from premiums received during the current Valuation Period which is allocated to the Sub-Account;
?
•
Any Policy
loan repayment amount allocated to the Sub-Account;
•
All values transferred to the
Sub-Account;
•
Any net investment return allocated
to the Sub-Account.
Minus
the following:
•
All values transferred to another
Sub-Account, the Fixed Account if applicable, and Policy Debt taken from the Sub-Account during the current Valuation Period;
•
All partial withdrawals from
the Sub-Account during the current Valuation Period;
•
Monthly Deductions;
?
•
An amount
for transfer fees.
Net Investment Factor
The net investment factor is an index applied to measure
the investment performance of a Sub-Account from one Valuation Period to the next. Each Sub-Account has a net investment factor for each
Valuation Period which may be
greater or less than one. Therefore, the value of a unit may increase
or decrease. The net investment factor for any Valuation Period is determined by dividing (1) by (2), where:
1.
Is the net result of:
a.
The net asset value per share
of the Fund(s) held in the Sub-Account, determined as of the end of the current Valuation Period; plus
b.
The per share amount of any dividend
(or, if applicable, capital gain distributions) made by the Fund(s) to the Sub-Account, if the “ex-dividend” date occurs during
the current Valuation Period; minus or plus
c.
A per share charge or credit
for any taxes incurred by or reserved for the Fund(s), which is determined by the Company to have resulted from the operations of the
Sub-Account.
2.
Is the net asset value per share
of the Fund(s) held in the Sub-Account, determined at the end of the last Valuation Period.
Fixed Account Value
The Fixed Account Value under a Policy at any time is equal to the sum of:
•
the Net Premium(s) allocated
to the Fixed Account; plus
•
Sub-Account Value transferred
to the Fixed Account; plus
•
interest credited to the Fixed
Account.
MINUS
the following
•
The portion of any accrued Policy
fees and charges allocated to the Fixed Account;
•
An amount for the cost of insurance
(as defined in the “Cost of Insurance” provision of the Policy) deducted from the Fixed Account on the Monthly Anniversary
Day;
?
•
An amount
for transfer fees deducted from the Fixed Account;
•
Partial withdrawals from the
Fixed Account including any applicable partial withdrawal charges; and
•
Transfers from the Fixed Account.
See The Fixed Account for a discussion of how interest is credited to the
Fixed Account.
STANDARD DEATH BENEFITS
As long as the Policy remains in force, Protective Life will pay the Beneficiary
the Death Benefit Proceeds upon receipt at the Home Office of Due Proof of Death of the Insured. Protective Life may require return of
the Policy. The Death Benefit Proceeds are paid to the primary Beneficiary or a contingent Beneficiary. The Owner may name one or more
primary or contingent Beneficiaries. Unless designated irrevocably, the Owner may change the Beneficiary by Written Notice prior to the
death of any Owner. If no Beneficiary survives the Insured, the Death Benefit Proceeds are paid to the Owner or the Owner’s estate.
Death Benefit Proceeds are paid in a lump sum or under a settlement option that the Company is then offering. Payment of the Death Benefit
Proceeds may have tax consequences. See Tax Considerations — Tax Treatment of Life Insurance Death Benefit Proceeds.
Please note that any Death Benefit payment we make in excess of the Variable
Account Value, including payments under any rider, is subject to our financial strength and claims-paying ability.
Limits on Policy Rights
Incontestability. Unless
fraud is involved, Protective Life will not contest the Policy, or any supplemental rider or endorsement, after the Policy, rider, or
endorsement has been in force during the Insured’s lifetime for two years from the Policy Effective Date or the effective date of
the rider or endorsement. Likewise, unless fraud is involved, Protective Life will not contest an increase in the Total Face Amount with
respect to statements made in the Evidence of Insurability for that increase after the increase has been in force during the life of the
Insured for two years after the effective date of the increase.
Suicide Exclusion. If
the Insured dies by suicide, within two years from the Issue Date, the Death Benefit will be limited to the premium payments made before
death, less any Policy Debt, and any withdrawals. If the Total Face Amount is increased and if the Insured commits suicide, within 2 years
from the effective date of any increase, the Company
will refund the cost of insurance paid for the amount of increase. The Total Face Amount
of the Policy will be reduced to the Total Face Amount that was in effect prior to the increase. The Company will not pay any portion
of the increased Total Face Amount, other than the Death Benefit (and only if it is greater than the Total Face Amount prior to the increase).
The Company reserves the right to request and obtain evidence as to the
manner and/or cause of the Insured’s death where not prohibited by law. Such request:
1.
will be reasonable;
2.
will clearly set forth the reasons
why an autopsy is warranted; and
3.
the autopsy will be at the Company’s
expense.
Misstatement of Age
or Sex. If the Insured’s age and/or sex on the Policy Date has been misstated and the misstatement is discovered
on or after the death of the Insured, then the benefits payable under this Policy will be the amount of insurance that the cost of insurance
would have purchased for the correct age and/or sex on the Policy Date. The applicable factor used in determining the Death Benefit shall
be the factor required by Section 7702 of the Code reflecting the Insured’s correct age and/or sex. If the Insured is alive at the
time the misstatement of age and/or sex is discovered, then we will adjust the Policy Value Account and other benefits under the Policy
as of the Policy Date based on the correct age and/or sex. Future monthly deductions from the Policy Value Account will be based upon
the correct age and/or sex.
Calculation of Death Benefit Proceeds
The Death Benefit Proceeds are equal to the Death Benefit calculated as
of the date of the Insured’s death, less (1) any Policy Debt on that date, and less (2) any past due Monthly Deductions.
The calculation of the Death Benefit depends on the Death Benefit Option elected.
Federal Tax Compliance Test. Under
Section 7702 of the Code, a Policy will generally be treated as life insurance for federal tax purposes if, at all times, it satisfies
the Cash Value Accumulation Test.
The Cash Value Accumulation Test (“CVAT”) does not have a premium
limit, but does require that the Death Benefit be at least a certain percentage (varying based on the Attained Age, sex and premium class
of the Insured) of the Cash Value.
The Death Benefit Option you choose will also affect the amount of your Death
Benefit.
Under Death Benefit Option 1, your Death Benefit will generally be the Total
Face Amount but may vary based on the Cash Value if the minimum Death Benefit is greater than the Total Face Amount.Under Death Benefit
Option 2, your Death Benefit will always vary with the Policy Value, and may also vary based on the Cash Value if the minimum Deathbenefit
is greater than the Total Face Amount plus the Policy Value. See Death Benefit Options for detailed information about each Death Benefit
Option.
You should consult your tax advisor or registered representative
for more information about which death benefit option you should choose in light of your specific goals and circumstances.
The Death Benefit Proceeds are payable when Protective Life receives a properly
completed claim form and Due Proof of Death of the Insured while the Policy is in force. The Death Benefit Proceeds will be paid to the
Beneficiary, or Beneficiaries, in a lump sum, unless a settlement option currently being offered by the Company is selected. If there
is more than one Beneficiary, each Beneficiary must submit instructions in Good Order specifying the manner in which they wish to receive
their portion of the Death Benefit Proceeds. The Death Benefit Proceeds are determined as of the date of the Insured’s death and
are moved to the General Account until payment is made. Protective Life will pay interest on the Death Benefit Proceeds payable to each
Beneficiary determined in accordance with applicable state law to the date of payment.
Death Benefit Options
The Policy has two Death Benefit options.
Option 1. The “Level
Death” Option. Under this option, the death benefit is the greater of —
•
the Policy’s Total Face
Amount shown on the Policy Schedule, less any partial withdrawals; or
?
•
the Cash Value on the Insured’s
date of death multiplied by the applicable factor in the table of death benefit factors shown in the Policy Schedule for the Insured’s
age at date of death.
This death benefit option should be selected if you want to minimize your cost of insurance.
Option 2. The “Coverage
Plus” Option. Under this option, the death benefit is the greater of —
•
The Total Face Amount shown on
the Policy Schedule, plus the Policy Value on the Insured’s date of death; or,
?
•
the Cash Value on the Insured’s
date of death multiplied by the applicable factor in the table of death benefit factors shown in the Policy Schedule for the Insured’s
age at date of death.
This death benefit option should be selected if you want to maximize your
death benefit.
Your Cash Value and Death Benefit fluctuate based on the performance of
the investment options you select and the expenses and deductions charged to your account. The Cash Value includes the Return of Expense
Charge Benefit, if applicable, and thus the amount of this benefit can affect the amount of the Death Benefit.
There is no minimum Death Benefit guarantee associated with this Policy.
Changing Death Benefit Options
The Owner must indicate a Death Benefit Option in the application for the
Policy. On or after the first Policy Anniversary, but not more than once each Policy Year, the Owner may change the Death Benefit Option
on the Policy for any reason subject to the following rules. The Company must be notified by receipt of the request in writing in Good
Order at the Home Office. After any change, the Total Face Amount must be at least $100,000. Protective Life may require satisfactory
Evidence of Insurability. All changes must be approved by Protective Life at the Home Office before they will be effective. Any change
will be effective on the Monthly Anniversary Day following the date the Company approves the Request (or on that Monthly Anniversary Day
that coincides with request approval). Protective Life reserves the right to decline to change the Death Benefit Option if after the change
the Death Benefit would be based on the applicable factor in the table of death benefit factors shown in the Policy Schedule.
When a change from Option 1 to Option 2 is made, the Total Face Amount after
the change is effected will be equal to the Total Face Amount before the change less the Policy Value on the effective date of the change.
When a change from Option 2 to Option 1 is made, the Total Face Amount after the change will be equal to the Total Face Amount before
the change is effected plus the Policy Value on the effective date of the change.
Changing the Total Face Amount
The Owner may request a change in the Total Face Amount of the Policy at
any time within certain limits. The request must be received in writing in Good Order at the Home Office.
Increasing the Total
Face Amount. Any increase in the Total Face Amount must be at least $25,000 and an application must be submitted
in Good Order. Protective Life will require satisfactory Evidence of Insurability. In addition, the Insured’s current Attained Age
must be less than the maximum Issue Age for the Policies, as determined by Protective Life from time to time. A
change in periodic premiums may be advisable. See Premiums — Premium Payments Upon Increase in Total Face Amount. The increase
in Total Face Amount will become effective as of the Monthly Anniversary Day following the date that Protective Life approves the request
for the increase, and the Policy Value will be adjusted to the extent necessary to reflect a Monthly Deduction as of the effective date
based on the increase in Total Face Amount.
Each increase to the Total Face Amount is considered to be a new segment
to the Policy for Policy administration purposes. When an increase is approved, Net Premium is allocated against the original Policy segment
up to the seven-pay premium limit established on the Issue Date. Any excess Net Premium is then allocated toward the new segment. Each
segment will have a separate target premium associated with it. The expense charge applied to net premium is higher up to target and lower
for Net Premium in excess of the target as described in detail in the Charges and Deductions section of this Prospectus. The expense charge
formula will apply to each segment based on the target Net Premium for that segment. In addition, each segment will have a new incontestability
period and suicide exclusion period as described in the Standard Death Benefits — Limits on Policy Rights section of this Prospectus.
Increasing the Total Face Amount of the Policy may increase the Death Benefit
and may have the effect of increasing monthly cost of insurance charges. Increasing the Total Face Amount may also have tax consequences.
See Tax Considerations. Please consult your tax advisor.
Decreasing the Total
Face Amount. The minimum decrease in the Total Face Amount is $25,000 and a request must be submitted in Good
Order. The decrease in Total Face Amount will become effective on the Monthly Anniversary Day following the date that Protective Life
approves the request for the decrease. If the decrease would cause the Death Benefit to be based on the applicable factor in the table
of death benefit factors shown in the Policy Schedule,
Protective Life reserves the right to decline or limit the amount of such decrease. Although
Protective Life will attempt to notify an Owner if a decrease in the Total Face Amount will cause a Policy to be considered a modified
endowment contract under Section 7702A of the Code, we will not automatically return premium. See Tax Considerations — Policies
That Are MECs. Decreasing the Total Face Amount also may have other tax consequences. See Tax Considerations — Certain Distributions
Required by the Tax Law in the First 15 Policy Years.
The Total Face Amount after any decrease must be at least $100,000. If the
initial Total Face Amount of the Policy has been increased prior to the requested decrease, then the decrease will first be applied against
any previous increases in Total Face Amount in the reverse order in which they occurred.
Decreasing the Total Face Amount of the Policy may reduce the Death Benefit
and may have the effect of decreasing monthly cost of insurance charges.
Settlement Options
The Death Benefit on the Insured’s death will be paid in a lump sum
unless the Owner elects to receive all or a portion of the Death Benefit Proceeds under a settlement option that the Company is then offering.
The Company shall make settlement to the Beneficiary, not later than 30 days after the Company receives due proof of the Insured’s
death. The Company will pay interest, computed daily, from the date of death equal to the rate required by the state in which the Policy
was delivered. See Tax Considerations — Tax Treatment of Life Insurance Death Benefit Proceeds.
Escheatment of Death Benefit
Every state has unclaimed property laws which generally declare life insurance
policies to be abandoned after a period of inactivity of 3 to 5 years from the date the Death Benefit is due and payable. For example,
if the payment of a Death Benefit has been triggered, but, if after a thorough search, Protective Life is still unable to locate the Beneficiary
of the Death Benefit, or the Beneficiary does not come forward to claim the Death Benefit in a timely manner, the Death Benefit will be
paid to the abandoned property division or unclaimed property office of the state in which the Beneficiary or the Owner last resided,
as shown on our books and records, or to our state of domicile. This “escheatment” is revocable, however, and the state is
obligated to pay the Death Benefit (without interest) if your Beneficiary steps forward to claim the Death Benefit with the proper documentation.
To prevent such escheatment, it is important that you update your Beneficiary designations, including addresses, if and as they change.
Such updates should be communicated in writing, by telephone, or other approved electronic means to the Home Office.
OPTIONAL BENEFITS UNDER THE POLICY
In addition to the standard death benefits associated with your Policy, other
optional benefits may also be available to you. The following table summarizes information about these optional benefits. Information
about the fees associated with each benefit included in the table may be found in the Fee Table.
|
Name of Benefit |
|
|
Purpose |
|
|
Description of Restrictions/Limitations |
|
|
Term Life Insurance Rider
|
|
|
To
provide for level term insurance on the life of the Insured. |
|
|
•
Only available at the time of Policy issue.
•
Only available should the purchaser
satisfy certain criteria (1) at the time of purchase.
|
|
|
Change of Insured Endorsement
|
|
|
Allows
the Owner to change the named Insured under the Policy. |
|
|
•
Not available to individual Owners.
•
Only available at the time of Policy
issue.
|
|
(1)
The following supplemental benefits available through riders and endorsements
may be available to be added to your Policy. Monthly charges, if applicable, for these riders and endorsements will be deducted from your
Policy Value as part of the monthly deduction. See Monthly Deduction.
The Term Life Insurance Rider (i) can only be added at the time of Policy
issue and (ii) the purchaser must satisfy certain criteria such as the number of Policies it expects to purchase and the expected aggregate
Total Face Amount under all such Policies.
The Change of Insured Endorsement (i) is not available to individual Owners, and (ii) can
only be added at the time of Policy issue, as further discussed below under Change of Insured Endorsement (not available to individual
Owners). Please ask your Protective Life agent for further information, or contact the Home Office.
Term Life Insurance Rider.
This rider provides term life insurance on the Insured. Coverage is automatically
annually renewable until the Insured’s Attained Age 121. The amount of Death Benefit provided under this rider may vary on a monthly
basis as described below. The Company will pay the Term Life Insurance Rider’s Death Benefit (“Rider Death Benefit”)
to the Beneficiary when the Company receives proof of the death of the Insured and that the death occurred while this rider was in force.
This rider does not have a Cash Value.
We offer this rider in circumstances that result in the savings of sales
and distribution expenses and administrative costs. To qualify, a corporation, employer, or other purchaser must satisfy certain criteria
such as, for example, the number of Policies it expects to purchase and the expected Total Face Amount under all such Policies. Generally,
the sales contacts and effort and administrative costs per Policy depend on factors such as the number of Policies purchased by a single
Owner, the purpose for which the Policies are purchased, and the characteristics of the proposed Insureds. The amount of reduction and
the criteria for qualification are related to the sales effort and administrative costs resulting from sales to a qualifying Owner. Protective
Life from time to time may modify on a uniform basis both the amounts of reductions and the criteria for qualification. Reductions in
these charges will not be unfairly discriminatory against any person, including the affected Owners funded by the Variable Account.
If you purchase this rider, the Total Face Amount, as selected by the Owner,
will be the sum of the Base Policy Face Amount and the amount of coverage provided by this rider (the “Term Life Insurance Rider
Face Amount”). The Owner elects the Total Face Amount and the applicable percentage of Term Life Insurance Rider Face Amount which
ranges from 10% to 90% of the Total Face Amount.
The amount of the Rider Death Benefit depends on the death benefit option
that applies under your Policy. The Rider Death Benefit will be determined on each Monthly Anniversary Day in accordance with one of those
options. While this rider is in force, the Rider Death Benefit is included in the Death Benefit payable under the Policy and will at all
times be the same as the option you have chosen for your Policy.
Option 1: Level Death
The Rider Death Benefit will be:
•
the greater of:
a.
the Total Face Amount shown on the
Policy Schedule, less any partial withdrawals; or
?
b.
the Cash Value on the Insured’s
date of death multiplied by the applicable factor shown in the table on the Policy Schedule and based on the age of the Insured on date
of death.
•
less the greater of:
c.
the Base Policy Face Amount shown
on the Policy Schedule; or
d.
the Policy Value of the Policy.
Option 2: Coverage Plus
The Rider Death Benefit will be:
•
the greater of:
a.
the Total Face Amount shown on the
Policy Schedule, plus the Policy Value Account on the Insured’s date of death; or
?
b.
the Cash Value on the Insured’s
date of death multiplied by the applicable factor shown in the table on the Policy Schedule based on the age of the Insured at date of
death.
•
less
c.
the Base Policy Face Amount shown
on the Policy Schedule; plus
d.
the Policy Value of the Policy.
If the Total Face Amount is changed based on the Request of the Owner to
change the Death Benefit Option, then the Base Policy Face Amount and the Term Life Insurance Rider Face Amount will be changed proportionally
to the change in the Total Face Amount.
If you purchase this rider, the sales load will be proportionately lower as a result of
a reduction in commission payments. Commissions payable to sales representatives for the sale of the Policy are calculated based on the
total premium payments. As a result, this rider generally is not offered in connection with any Policy with annual premium payments of
less than $100,000, except for policies issued on a guaranteed issue basis. In our discretion, we may decline to offer this rider or refuse
to consent to a proposed allocation of coverage between a Policy and term rider.
If this rider is offered, the commissions will vary depending on the allocation
of your coverage between the Policy and the term rider. The same initial Death Benefit will result in the highest commission when there
is no term rider, with the commission declining as the portion of the Death Benefit coverage allocated to the term rider increases. Thus,
the lowest commission amount is payable, and the lowest amount of sales load deducted from your premiums will occur, when the maximum
term rider is purchased.
This rider will terminate upon the earliest of:
•
Request by the Owner;
•
The date the Policy is surrendered
or coverage has ceased; or
•
The death of the Insured.
The fees and rider are subject to the terms and conditions contained in
the “Fees and Charges” provision in the Policy and are described in detail in the Charges and Deductions section of this Prospectus,
where applicable.
The calculation of the fees and charges described in detail in the Charges
and Deductions section of this Prospectus are modified as follows if this rider is elected:
Cost of Insurance under
the Term Life Insurance Rider. While this rider is in force, the Death Benefit described in the Policy includes
the Rider Death Benefit. The cost of insurance for the Policy and this rider is calculated as follows and there is no additional cost
of insurance charge for this rider.
a.
The Death Benefit divided by
the death benefit interest rate factor as shown on the Policy Schedule, less the Policy Value Account on each Monthly Anniversary, multiplied
by the current monthly risk rate for the Insured’s Attained Age; plus
b.
The monthly administration charge.
If there has been an increase or decrease in the Death Benefit during the
Policy Year, the cost of insurance calculation will be adjusted accordingly to reflect the change.
Expense Charge under
the Term Life Insurance Rider. While this rider is in force, a reduction of the current expense charge assessed
will be made in proportion to the applicable percentage of the Term Life Insurance Rider Face Amount which is equal to the Term Life Insurance
Rider Face Amount divided by the Total Face Amount. The expense charge assessed will not exceed the maximum expense charge shown on the
Policy Schedule. The Return of Expense Charge Benefit as described in the “Return of Expense Charge Benefit” section in this
Prospectus will be calculated for the current expense charge as assessed, as described above, when this rider is elected. The Return of
Expense Charge Schedule is shown on the Policy Schedule.
Mortality and Expense
Charges under the Term Life Insurance Rider. While this rider is in force, a reduction of the current mortality
and expense charges assessed will be based on the applicable percentage of the Term Life Insurance Rider Face Amount which is equal to
the Term Life Insurance Rider Face Amount divided by the Total Face Amount. The mortality and expense charges assessed per year will be
determined by us but will not exceed 0.90% annually.
Example of the Operation of the
Term Life Insurance Rider.
The Term Life Insurance Rider — if purchased with the Base Policy
— will not impact the Death Benefit provided by the Total Face Amount, but will cause a reduction in the expense charges applied
against the Policy Value. This reduction in charges will provide for higher Policy Values than if no Term Life Insurance Rider were elected.
For example, if the Term Life Insurance Rider Face Amount is equal to $25,000 and the Total Face Amount equals $100,000, there will be
a 25% reduction in the assessed expense charge. Similarly, there is a reduction of the current Mortality and Expense Charges, down to
0.10% when the maximum percentage of Term Life Insurance Rider Face Amount is utilized. Accordingly, for a purchase of $100,000
of life insurance coverage ($75,000 Base and $25,000 Term), Death Benefits over the life of the Policy due to the expense charge reductions
may exceed the Death Benefits provided if no Term Rider was purchased and the $100,000 coverage was provided solely under the Base Policy.
Change of Insured Endorsement
(not available to Individual Owners). This endorsement permits you to change the Insured under your Policy or
any Insured that has been named by virtue of this endorsement. Before we change
the Insured you must provide us with (1) a written Request in Good Order for the change
signed by you and approved by us; (2) evidence of Insurability for the new Insured; (3) evidence that there is an insurable interest between
you and the new Insured; (4) evidence that the new Insured’s age, at the nearest birthday, is under 70 years; and (5) evidence that
the new Insured was born prior to the Policy Effective Date. We may charge a fee for administrative and underwriting expenses when you
change the Insured. The minimum charge is $100 per change and the maximum charge is $400 per change. When a change of Insured takes effect,
premiums will be based on the new Insured’s age, sex, mortality class and the premium rate in effect on the Change of Insured Date,
which is the Monthly Anniversary on or following the date of approval by the Company of the new Insured. See also Tax Considerations —
Change of Insured Endorsement. The monthly risk rates will be based on the new Insured’s age and sex as of the Policy Date and the
premium class as of the Change of Insured Date. The maximum monthly risk rates are shown on the updated Policy Schedule and are based
on the Mortality Table as shown on the updated Policy Schedule, age nearest birthday. The Company may charge a lower monthly risk rate
than shown on the Policy Schedule. The Total Face Amount of the Policy will not change on the Change of Insured Date.
TRANSFERS
Upon receipt of Written Notice in Good Order to Protective Life at the Home
Office you may transfer the Fixed Account Value to the Variable Account or the Variable Account Value to the Fixed Account subject to
certain restrictions described below. Transfer requests received at the Home Office before 3:00 P.M. Central Time are processed as of
the Valuation Date the request is received. Requests received in Good Order at or after 3:00 P.M. Central Time are processed as of the
next Valuation Date.
Fixed Account Transfers
Transfers into the Fixed Account are limited to once every 60 days and to
a maximum amount of $20 million. Your transfer will be rejected if it would cause the value of the Fixed Account to exceed such
maximum dollar amount.
Transfers from the Fixed Account may only be made once
every 365 days. The maximum to be transferred out will be the greater of 25% of your balance in the Fixed Account or the amount of the
transfer in the previous 365-day period. Due to these limitations, if you want to transfer all of your Policy Value from the Fixed Account
to the Variable Account, it may take several years to do so. Partial withdrawals are treated as Transfers out of the Fixed Account. Except
for the time period and percentage allowed for transfers out of the Fixed Account, which are set at issue of the Policy and will not change,
the Company will give 30 days’ written notice to the Owner if any of the limitations and time periods referred to above or in the
Policy and Policy Schedule are changed. Any changes will not discriminate unfairly against any class of Owners or Insureds.
Guaranteed Paid-Up Option:
Once every Policy Anniversary, the Owner may Transfer all amounts in the Variable Account into the Fixed Account and apply the Cash Surrender
Value, excluding the Return of Expense Charge Benefit, as a single premium to provide an amount of guaranteed paid-up insurance. This
net single premium will be based on the Insured’s Attained Age, sex and premium class on the date of the transfer, as adjusted for
any substandard rating, the Mortality Table as shown on the Policy Schedule, and computed at an interest rate of 4%. Any payments necessary
to keep a rider or endorsement in force may be deducted from the paid-up policy. The Owner may increase the Total Face Amount of such
paid-up policy subject to evidence of insurability. Future Cash Surrender Values of the paid-up policy will be calculated by multiplying
the amount of guaranteed paid-up insurance by a net single premium at each successive duration. The net single premium will be based on
the Insured’s Attained Age, sex and premium class, as adjusted for any substandard rating, the Mortality Table as shown on the Policy
Schedule, and computed at an interest rate of 4%.
Sub-Account Transfers
Subject to our rules as they may exist from time to time, you may at any
time (in some circumstances only after the Cancellation Period) transfer to another Sub-Account, all or a portion of the Variable Account
Value allocated to a Sub-Account. The Company may limit the availability of any Sub-Account with respect to Transfers if required by any
law, regulation or governing body to do so or where the Sub-Account is not meeting performance objectives and notice of any such limitations
will be given in compliance with any regulatory requirements where applicable.
A fee of $10 per transfer will apply for all
non-electronic transfers in excess of 12 made in a Policy Year. We may change the amount of the transfer fee; however, it is guaranteed
to never exceed $10 per transfer. All transfers requested on the same business day will count as only one transfer toward the 12 free
transfers. Currently, electronic transfers do not count towards the 12 free transfers; however, we reserve the right, at any time, to
charge for electronic transfers in excess of the free transfers allowed.
Upon receipt of Written Notice in Good Order, or where transfers are allowed
to be made electronically or in such manner as Protective Life authorizes from time to time, to Protective Life at the Home Office, you
may transfer the Variable
Account Value between Sub-Accounts, subject to certain restrictions described below. Transfers
may be requested by indicating the transfer of either a specified dollar amount or a specified percentage of the Sub-Account Value from
which the transfer will be made. Transfer requests received at the Home Office before 3:00 P.M. Central Time are processed as of the Valuation
Date the request is received. Requests received in Good Order at or after 3:00 P.M. Central Time are processed as of the next Valuation
Date.
Transfer privileges are subject to our consent. We reserve the right to
impose limitations on transfers, including, but not limited to: (1) the minimum amount that may be transferred to a Sub-Account; and (2)
the minimum Sub-Account Value that must remain following a transfer from that Sub-Account. In addition, we may enforce the restriction
on transfers set forth in your Policy and in cases of identified market timing unless the Sub-Account has additional restrictions that
are noted in the respective Fund’s prospectus. See Limitations on frequent transfers, including ‘market timing’ transfers
below.
Protective Life may, however defer transfers under the same conditions that
payment of Death Benefit Proceeds, withdrawals and surrenders may be delayed. See Suspensions or Delays in Payments. The minimum amount
that may be transferred is the lesser of $100 or the entire amount in any Sub-Account from which the transfer is made. If, after
the transfer, the amount remaining in a Sub-Account(s) would be less than $1000, Protective Life reserves the right to transfer the entire
amount instead of the requested amount.
We will give written notice thirty (30) days before we limit the number
of transfers. The transfer fee, if any, is deducted from the amount being transferred. Protective Life reserves the right to terminate,
suspend or modify transfer privileges at any time.
Limitations on frequent
transfers, including “market timing” transfers. Frequent transfers may involve an effort to take advantage
of the possibility of a lag between a change in the value of a Fund’s portfolio securities and the reflection of that change in
the Fund’s share price. This strategy, sometimes referred to as “market timing,” involves an attempt to buy shares of
a Fund at a price that does not reflect the current market value of the portfolio securities of the Fund, and then to realize a profit
when the Fund shares are sold the next Valuation Date or thereafter.
When you request a transfer among the Sub-Accounts, your request triggers
the purchase and redemption of Fund shares. Frequent transfers cause frequent purchases and redemptions of Fund shares. Frequent purchases
and redemptions of Fund shares can cause adverse effects for a Fund, Fund shareholders, the Variable Account, other Owners, beneficiaries
or Owners of other variable life insurance policies we issue that invest in the Variable Account and the Funds. Frequent transfers can
result in the following adverse effects:
•
Increased brokerage trading and
transaction costs;
•
Disruption of planned investment
strategies;
•
Forced and unplanned liquidation
and portfolio turnover;
•
Lost opportunity costs; and
•
Large asset swings that decrease
the Fund’s ability to provide maximum investment return to all Policy Owners.
In order to try to protect our Policy Owners and the
Funds from the potential adverse effects of frequent transfer activity, the Company has implemented certain market timing policies and
procedures (the “Market Timing Procedures”). Our Market Timing Procedures are designed to detect and prevent frequent, short-term
transfer activity that may adversely affect the Funds, Fund shareholders, the Variable Account, other Policy Owners’ beneficiaries
and Policy Owners of other variable life policies we issue that invest in the Funds.
We monitor transfer activity in the Policies to identify frequent transfer
activity in any Policy. Our current Market Timing Procedures are intended to detect transfer activity in which the transfers exceed a
certain dollar amount and a certain number of transfers involving the same Sub-Accounts within a specific time period. We regularly review
transaction reports in an attempt to identify transfers that exceed our established parameters.
When we identify transfer activity exceeding our established parameters
in a Policy or group of Policies that appear to be under common control, we suspend non-written methods of requesting transfers for that
Policy or group of Policies. All transfer requests for the affected Policy or group of Policies must be made by Written Notice in Good
Order to the Home Office. We notify the affected Policy Owner(s) in writing of these restrictions.
In addition to our Market Timing Procedures, the Funds may have their own
market timing policies and restrictions. While we reserve the right to enforce the Funds’ policies and procedures, Owners and other
persons with interests under the Policies should be aware that we may not have the contractual authority or the operational capacity to
apply the market timing policies and procedures of the Funds. However, under SEC rules, we are required to: (1) enter into a written
agreement with each Fund or its principal underwriter that obligates us to provide to the
Fund promptly upon request certain information about the trading activity of individual Owners, and (2) execute instructions from
the Fund to restrict or prohibit further purchases or transfers by specific Owners who violate the market timing policies established
by the Fund.
Some of the Funds have reserved the right to temporarily or permanently
refuse payments or transfer requests from us if, in the judgment of the Fund’s investment adviser, the Fund would be unable to invest
effectively in accordance with its investment objective or policies, or would otherwise potentially be adversely affected. To the extent
permitted by law, we reserve the right to delay or refuse to honor a transfer request, or to reverse a transfer at any time we are unable
to purchase or redeem shares of any of the Funds because of the Fund’s refusal or restriction on purchases or redemptions. We will
notify the Policy Owner(s) of any refusal or restriction on a purchase or redemption by a Fund relating to that Policy Owner’s transfer
request. Some Funds also may impose redemption fees on short-term trading (i.e., redemptions of
mutual Fund shares within a certain number of business days after purchase). We also reserve the right to implement, administer, and collect
any redemption fees imposed by any of the Funds. You should read the prospectus of each of the Funds for more information about its ability
to refuse or restrict purchases or redemptions of its shares, which may be more or less restrictive than our Market Timing Procedures
and those of other Funds, and to impose redemption fees.
We apply our Market Timing Procedures consistently to all Policy Owners
without special arrangement, waiver or exception. We reserve the right to change our Market Timing Procedures at any time without prior
notice as we deem necessary or appropriate to better detect and deter potentially harmful frequent transfer activity, to comply with state
or federal regulatory requirements, or both. We may change our parameters to monitor for different dollar amounts, number of transfers,
time period of the transfers, or any of these.
Policy Owners seeking to engage in frequent transfer activity may employ
a variety of strategies to avoid detection. Our ability to detect and deter such transfer activity is limited by operational systems and
technological limitations. Furthermore, the identification of Policy Owners determined to be engaged in transfer activity that may adversely
affect others involves judgments that are inherently subjective. Accordingly, despite our best efforts, we cannot guarantee that our Market
Timing Procedures will detect or deter every potential market timer. In addition, because other insurance companies, retirement plans,
or both may invest in the Funds, we cannot guarantee that the Funds will not suffer harm from frequent transfer activity in contracts
or policies issued by other insurance companies or by retirement plan participants.
Reservation of Rights
Protective Life reserves the right without prior notice to modify, restrict,
suspend or eliminate the transfer privileges at any time, for any class of Policies, for any reason. In particular, we reserve the right
not to honor transfer requests by a third party holding a power of attorney from an Owner where that third party requests simultaneous
transfers on behalf of the Owners of two or more Policies. In the event Protective Life chooses to exercise these rights, we will notify
the affected Owners in writing or through a supplement to this Prospectus.
SURRENDERS AND WITHDRAWALS
Surrender Privileges
At any time while the Policy is still in force and while the Insured is
still living, you may surrender your Policy for its Cash Surrender Value less any monthly cost of insurance charges on the date of surrender.
Cash Surrender Value is determined as of the end of the Valuation Period during which the Written Notice in Good Order requesting the
surrender, the Policy and any other required documents are received by Protective Life at the Home Office. Valuation Periods end at the
close of regular trading on the New York Stock Exchange, which is generally at 3:00 P.M. Central Time. Protective Life will process any
surrender request in Good Order received at the Home Office at or after the end of the Valuation Period on the next Valuation Date. The
Cash Surrender Value is paid in a lump sum unless the Owner requests payment under a settlement option that the Company is then offering.
Payment is generally made within 7 calendar days but may be subject to postponement. See Suspensions or Delays in Payments. A Policy which
terminates upon surrender cannot later be reinstated. Surrenders may have tax consequences, including a possible 10% additional tax if
withdrawn before a certain age. See Tax Considerations.
Return of Expense Charge Benefit
If the Policy is surrendered for the surrender benefit within the first
7 Years from the Policy Effective Date then, the Company will return a percentage of the expense charge. The Return of Expense Charge
Benefit is calculated by applying a percentage of the Policy Value Account on the date the surrender Request is received at the Administrative
Office. The Return of Expense Charge Benefit will equal the percentage of expense charge paid plus 1% in Policy
Year 1, and will then be reduced by a proportional amount in each Policy Year thereafter with
it equaling 1% in Policy Year 7. Beginning in Policy Year 8 and all subsequent Policy Years, the Return of Expense Charge Benefit will
be 0%.
The Return of Expense Charge Benefit is not available
if the Policy is surrendered under the terms of Section 1035 of the Code and is not calculated for a Policy loan, partial withdrawal or
when coverage under the Policy Lapses.
The Return of Expense Charge Benefit creates a General Account obligation
of the Company. The Return of Expense Charge Benefit is payable to the Owner. The Company may reduce or eliminate any Return of Expense
Charge Benefit when there is a change of Owner or an assignment of the Policy.
The following examples demonstrate the Return of Expense Charge Benefit. They
assume you have a Policy Value of $10,000, have not taken any loans, and have not elected the Term Life Insurance Rider.
Example 1: Policy Year 1 (Return of Expense Charge Benefit % = 7%)
|
|
|
|
Formula |
|
|
Return of Expense Charge Benefit (Expense Charge % + 1%) = |
|
|
7% (6% + 1%) |
|
|
Policy Value = |
|
|
$10,000 |
|
|
Return of Expense Charge Benefit $ in Year 1 = |
|
|
$700 ($10,000 x 7%) |
|
Example 2: Policy Year 7 (Return of Expense Charge Benefit % = 1%)
|
|
|
|
Formula |
|
|
Return of Expense Charge Benefit = |
|
|
1% |
|
|
Policy Value = |
|
|
$10,000 |
|
|
Return of Expense Charge Benefit $ in Year 7 = |
|
|
$100 ($10,000 x 1%) |
|
Withdrawal Privileges
You may request, by Written Notice in Good Order received
at the Home Office, a partial withdrawal of your Policy at any time while the Policy is in force. The amount of any partial withdrawal
must be at least $500 and may not exceed 90% of your Policy Value less outstanding Policy Debt. We will charge a partial withdrawal fee
of $25 per withdrawal on partial withdrawals after the first in a Policy Year. The partial withdrawal fee will be deducted proportionally
from all Sub-Accounts and the Fixed Account. There are limits to taking partial withdrawals from the Fixed Account. See The Fixed Account.
The Total Face Amount (if Death Benefit Option 1 applies) and your Policy
Value will be reduced by the amount of any withdrawals. Withdrawals, including partial withdrawals, may increase the risk that the Policy
will lapse, and may have tax consequences, including a possible 10% additional tax if withdrawn before a certain age. See Tax Considerations.
Protective Life will withdraw the amount requested, plus a withdrawal charge from unloaned Policy Value as of the end of the Valuation
Period during which the Written Notice in Good Order is received at the Home Office. Valuation Periods end at the close of regular trading
on the New York Stock Exchange, which is generally at 3:00 P.M. Central Time.
Protective Life will process any withdrawal request in Good Order received
at the Home Office at or after the end of the Valuation Period on the next Valuation Date.
The amount of a withdrawal will be withdrawn from the Sub-Accounts and the
Fixed Account in proportion to the amounts in the Sub-Accounts and the Fixed Account bearing on your Policy Value. You cannot repay amounts
taken as a partial withdrawal. Any subsequent payments received by us will be treated as additional premium payments and will be subject
to our limitations on premiums.
POLICY LOANS
You may request a loan under your Policy. Loans allow you to access Policy
Value without incurring charges associated with withdrawals. Policy loans must be requested by Written Notice in Good Order received at
the Home Office. The minimum loan amount is $500 and the maximum Policy loan value is equal to: 90% of the Policy Value Account at the
time of the Policy loan; less any outstanding Policy loans and accrued loan interest; less the current cost of insurance remaining for
the balance of the Policy Year; less interest on the Policy loan to the next Policy Anniversary date.
Outstanding Policy Debt, and the Monthly Deductions therefore reduces the
amount available for new Policy loans. Loan proceeds generally are mailed within seven calendar days of the loan being approved. A Policy
loan will be a first lien on the Policy in favor of the Company. Loan amounts taken from the Fixed Account may, at the Company’s
discretion, be postponed for a period of up to 6 months.
Loan Collateral
When a Policy loan is made, an amount equal to the loan is transferred out
of the Sub-Accounts and/or the Fixed Account and into a Loan Account established for the Policy. Like the Fixed Account, a Policy’s
Loan Account is part of Protective Life’s General Account and amounts therein earn interest as credited by Protective Life from
time to time. Because Loan Account values are part of Policy Value, a loan will have no immediate effect on the Policy Value. In contrast,
Cash Surrender Value (including, as applicable, Variable Account Value and Fixed Account Value) under a Policy is reduced immediately
by the amount transferred to the Loan Account. The Owner can, by Request, specify the Sub-Accounts and/or the Fixed Account from which
collateral is transferred to the Loan Account. If no allocation is specified, collateral is transferred from each Sub-Account and from
the Fixed Account in the same proportion that the value in each Sub-Account and the Fixed Account bears to the total unloaned Policy Value
on the date that the loan is made.
On each Policy Anniversary, an amount of Policy Value equal to any due and
unpaid loan interest (explained below), is also transferred to the Loan Account. Such interest is transferred from each Sub-Account and
the Fixed Account in the same proportion that each Sub-Account Value and the Fixed Account Value bears to the total unloaned Policy Value.
Loan Repayment
You may repay all or part of your Policy Debt (the amount borrowed plus
accrued interest) at any time while the Insured is living and the Policy is in force. Loan repayments in Good Order must be sent to the
Home Office and are credited as of the Valuation Date received. The Owner must specify by Written Notice that any unscheduled premiums
paid while a loan is outstanding be applied as loan repayments. (Loan repayments, unlike unscheduled premium payments, are not subject
to the premium expense charge.) When a loan repayment is made, Policy Value in the Loan Account in an amount equal to the repayment is
transferred from the Loan Account to the Sub-Accounts and the Fixed Account. Thus, a loan repayment will have no immediate effect on the
Policy Value, but the Cash Surrender Value (including, as applicable, Variable Account Value and Fixed Account Value) under a Policy is
increased immediately by the amount transferred from the Loan Account. Unless specified otherwise by the Owner(s), amounts are transferred
to the Sub-Accounts and/or the Fixed Account in the same proportion that Net Premiums are allocated. Protective Life’s ability to
credit interest on Policy Value in the Loan Account is subject to the Company’s financial strength and claims paying ability.
Interest
The interest rate on the Policy loan will be determined annually, using
a simple interest formula, at the beginning of each Policy Year. Specific loan interest rate information can be obtained by calling 888-353-2654.
That interest rate will be guaranteed not to increase for that Policy Year and will apply to all Policy loans outstanding during that
Policy Year. We have the right, in our sole discretion, to charge a lower interest rate at any time. Charging a lower interest rate may
reduce the interest rate credited to the Loan Account. In no event will the Loan Account crediting interest rate be less than what is
required by state law. Interest is due and payable on each Policy Anniversary. Interest not paid when due will be added to the principal
amount of the loan and will bear interest at the loan interest rate.
Presently, the maximum interest rate for Policy loans is the Moody’s
Corporate Bond Yield Average — Monthly Average Corporates, which is published by Moody’s Investor Service, Inc. If the Moody’s
Corporate Bond Yield Average ceases to be published, the maximum interest rate for Policy loans will be derived from a substantially similar
average adopted by the Superintendent of the New York Department of Financial Services.
We must reduce our Policy loan interest rate if the maximum loan interest
rate is lower than the loan interest rate for the previous Policy Year by one-half of one percent or more.
We may increase the Policy loan interest rate but such increase must be
at least one-half of one percent. No increase may be made if the Policy loan interest rate would exceed the maximum loan interest rate.
The Company will send to the Owner and any assignee of record advance notice,
as soon as is reasonably possible of any increase in the rate, but no less than 30 days’ notice will be given. The Policy will not
lapse as a result of a change in the Policy loan interest rate during the Policy Year of such change.
Non-Payment of Policy Loan
If the Insured dies while a loan is outstanding, the Policy Debt (which
includes any accrued but unpaid interest) is deducted from the Death Benefit in calculating the Death Benefit Proceeds.
Effect of Policy Loans
A loan, whether or not repaid, has a permanent effect on the Death Benefit
and Policy Value because the investment results of the Sub-Accounts and current interest rates credited on Fixed Account Value do not
apply to Policy Value in the
Loan Account. The larger the loan and longer the loan is outstanding, the greater will be
the effect of Policy Value held as collateral in the Loan Account. Depending on the investment results of the Sub-Accounts or credited
interest rates for the Fixed Account while the loan is outstanding, the effect could be favorable or unfavorable. Policy loans also may
increase the potential for Lapse if investment results of the Sub-Accounts to which Cash Surrender Value is allocated is unfavorable.
Since interest credited on the Loan Account is transferred to the Sub-Accounts, even if the interest rate charged on the Policy Debt is
equal to the rate credited on Policy Value in the Loan Account, unpaid interest will be added to the outstanding loan balance and will
increase Policy Debt. If a Policy lapses with loans outstanding, certain amounts may be subject to income tax. In addition, if your Policy
is a MEC, loans may be currently taxable and subject to a 10% additional tax. See “Tax Considerations,” for a discussion of
the tax treatment of Policy loans.
SUSPENSION OR DELAYS IN PAYMENTS
Protective Life will ordinarily pay any Death Benefit proceeds, Policy loans,
withdrawals, or surrenders within seven calendar days after receipt at the Home Office of all the documents required for such a payment.
Other than the Death Benefit, which is determined as of the date of death of the Insured, the amount will be determined as of the Valuation
Date of receipt of all required documents in Good Order at the Home Office. However, Protective Life may delay making a payment or processing
a transfer request if (1) the New York Stock Exchange is closed for other than a regular holiday or weekend, trading on the Exchange
is restricted by the SEC, or the SEC declares that an emergency exists as a result of which the disposal or valuation of Variable Account
assets is not reasonably practicable; (2) the SEC by order permits postponement of payment to protect Owners; or (3) your premium check
has not cleared your bank. See also Payments from the Fixed Account.
In certain circumstances, applicable federal law may require Protective
Life to “freeze” your account and refuse your request for a transfer, withdrawal, surrender, loan or death proceeds until
receipt of instructions from the appropriate regulator. We also may be required to provide information about you and your account to a
government regulator. If, pursuant to SEC rules, the Money Market Sub-Account suspends payment of redemption proceeds in connection with
a liquidation of the Fund, we will delay payment of any transfer, partial withdrawal, surrender, loan, or death benefit from the Money
Market Sub-Account until the Fund is liquidated. During the postponement period, the Sub-Account Value may continue to be subject to the
investment experience (gains or losses) of the Fund(s) and all applicable charges.
The Company may defer payment of any withdrawal, surrender or Policy loan
proceeds from the Fixed Account for up to 6 months after a Request is received. If the Company delays payment of surrender benefits under
this Policy, the Company will pay interest at the rate specified under applicable state law as required, if any, at the time of the Request.
LAPSE AND REINSTATEMENT
Lapse
Failure to pay planned periodic premiums will not necessarily cause a Policy
to Lapse (terminate without value). Paying all planned periodic premiums will not necessarily prevent a Policy from lapsing. A Policy
will Lapse if its Policy Value less the Policy Debt is insufficient to cover the Monthly Deduction on the Monthly Anniversary Day. If
the Cash Surrender Value on any Monthly Anniversary Day is less than the amount of the Monthly Deduction due on that date, the Policy
will be in default and a grace period will begin. This could happen if investment experience has been sufficiently unfavorable that it
has resulted in a decrease in Cash Surrender Value or the Cash Surrender Value has decreased because you have not paid sufficient Net
Premiums to offset prior Monthly Deductions.
You have a 61-day grace period to make a payment of Net Premium at least
sufficient to cover the monthly cost of insurance for the next three months. Protective Life will send you, at your last known address
and the last known address of any assignee of record, notice of the premium required to prevent Lapse. A Policy will remain in effect
during the grace period. If the Insured should die during the grace period, the Death Benefit Proceeds payable to the Beneficiary will
reflect a reduction for the Monthly Deductions due on or before the date of the Insured’s death as well as any unpaid Policy Debt
or liens (including accrued interest). See Standard Death Benefits. Unless the premium stated in the notice is paid before the grace period
ends, the Policy will Lapse. A Policy Lapse may have tax consequences.
See Tax Considerations.
Policy Maturity. If
the Insured is living and the Policy is in force on the Policy Anniversary at attained age 121 then this Policy will remain in force.
The Death Benefit will be equal to the Policy Value. No premium payments will be allowed except for those that are required in order to
prevent the Policy from lapsing. Partial withdrawals, Policy loans and Policy loan repayments will be permitted, subject to the provisions
herein and the provisions of any riders and endorsements attached to the Policy. No further cost of insurance charges will be deducted.
If this Policy is continued beyond the Policy Anniversary nearest the 121st birthday it may be subject
to adverse tax consequences. Please consult a tax advisor prior to continuing coverage beyond that time.
The Policy Value will remain in the Sub-Accounts and/or Fixed Account, in accordance with
your then current allocation instructions. You may change your Sub-Account allocation instructions and you may transfer your Policy Value
among the Sub-Accounts and Fixed Account. Any amounts transferred into the Fixed Account after policy maturity and any amounts already
invested in the Fixed Account at policy maturity will continue to earn interest at the guaranteed interest rate. All charges under your
Policy, to the extent applicable, will continue to be assessed, except we will no longer make a deduction each Policy Month for the cost
of insurance. As your Policy Value changes based on the investment experience of the Sub-Accounts, the Death Benefit will increase or
decrease accordingly. You may surrender the matured Policy at any time. Please see Tax Considerations
— Treatment When Insured Reaches Attained Age 121.
Reinstatement
A Policy may be reinstated within 3 years after the coverage ceased, unless
it has been surrendered. For a Policy to be reinstated, the Company must receive:
1.
A Request from the Owner;
?
2.
Evidence
of Insurability for the Insured, at the Owner’s expense;
3.
Payment of the cost of insurance
for the grace period;
4.
Payment of an amount equal to
3 months’ cost of insurance and other expense charges. Such payment less the expense charges will be credited to the Policy Value
as of the date of reinstatement; and
5.
Payment or reinstatement of any
Policy Debt which was outstanding as of the date the coverage ceased, including interest thereon. Interest will be the current loan interest
rate per year and will be compounded annually to the date of the Policy reinstatement.
Reinstatement will become effective on the date the application
for reinstatement is approved by the Company. In some circumstances, the reinstated Policy may be a MEC under Section 7702A of the Code,
even if the Policy was not a MEC prior to Lapse. Please see Tax Considerations — Policies That Are MECs-Modified Endowment Contracts.
EXCHANGE OF POLICY
At any time during the first 18 policy months, so long as this Policy is in
force, any Owner may exchange this Policy, without evidence of insurability, for a policy of general account life insurance that the Company
then offers in the state of New York on the life of the Insured for the Total Face Amount of this Policy. Alternatively, the Owner may
elect to transfer all amounts from the Variable Account into the Fixed Account without restriction, if the Company determines at the time
of the exchange, that the Fixed Account under this Policy is competitively priced in relation to other general account products. The exchange
to a general account policy is subject to the following requirements: (i) the new policy shall bear the same date of issue and issue age
as this Policy and at the rates in effect on that date for the same premium class; (ii) the new policy shall include such incidental insurance
benefits as are included in this Policy if such incidental insurance benefits are available for issue with the new policy; and (iii) the
exchange shall be subject to an equitable premium or policy value adjustment that takes appropriate account of the premiums and policy
values under this Policy. An Owner should consult with legal and tax advisors prior to any exchange of the Policy. See Tax Considerations
— Other Employee Benefit Programs.
REPORTS TO OWNERS
The Company maintains all records relating to the Variable Account, Sub-Accounts
and the Fixed Account. We will send you a report at least once each Policy Year within 30 days after a Policy Anniversary. The report
will show the current Policy Value, current allocation to each Sub-Account and/or the Fixed Account, death benefit, premiums paid, investment
experience since your last report, deductions made since the last report, and any further information that may be required by the laws
of the state in which your Policy was issued. It will also show the balance of all outstanding Policy loans and accrued interest on such
loans as well as available loan amounts. There is no charge for this report.
We also will mail you confirmation notices or other appropriate notices of
Policy transactions quarterly or more frequently within the time periods specified by law. Please give us prompt written notice of any
address change. Please read your statements and confirmations carefully and verify their accuracy and contact us promptly with any questions.
TAX CONSIDERATIONS
The following discussion of the federal income tax treatment
of the Policy is not exhaustive, does not purport to cover all situations, and is not intended as tax advice. The federal income tax treatment
of the Policy is unclear in certain circumstances, and a qualified tax adviser should always be consulted with regard to the application
of law to individual circumstances. This discussion is based on the Code, Treasury Department regulations, and interpretations existing
on the date of this Prospectus. These authorities, however, are subject to change by Congress, the Treasury Department, and judicial decisions.
The Policy may be used in various arrangements, including non-qualified deferred
compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others.
The tax consequences of such plans vary depending on the particular facts and circumstances of each individual arrangement. Therefore,
if the use of the Policy in any such arrangement is contemplated, you should consult a qualified tax adviser for advice on the tax attributes
and consequences of the particular arrangement. See also Employer-Owned Life Insurance, Split-Dollar Life Insurance, and Employer-Financed
Insurance Purchase Arrangements — Tax and Other Legal Issues for more information regarding certain arrangements.
This discussion does not address state or local tax consequences associated
with the purchase of the Policy. The state and local tax consequences with respect to your Policy may be different than the federal tax
consequences. In addition, PROTECTIVE LIFE MAKES NO GUARANTEE REGARDING ANY TAX TREATMENT — FEDERAL, STATE OR LOCAL — OF ANY
POLICY OR OF ANY TRANSACTION INVOLVING A POLICY.
Tax Status of Protective Life
Protective Life is taxed as a life insurance company under the Code. Since
the operations of the Variable Account are a part of, and are taxed with, the operations of Protective Life, the Variable Account is not
separately taxed as a “regulated investment company” under the Code. Under existing federal income tax laws, Protective Life’s
federal taxes are not increased from the Variable Account’s premiums, investment income, and realized capital gains. This is because
these items generally cause Protective Life’s tax-basis policy benefit reserves to increase by a similar amount. Currently, a charge
for federal income taxes is not deducted from the Sub-Accounts or the Policy’s Cash Value. However, Protective Life does deduct
a premium expense charge from each premium payment in all Policy Years in part to compensate us for the federal tax treatment of deferred
acquisition costs. Protective Life reserves the right in the future to make a charge against the Variable Account or the Cash Values of
a Policy for any federal, state, or local income taxes that we incur and determine to be properly attributable to the Variable Account
or the Policy. Protective Life will promptly notify the Owner of any such charge.
Taxation of Insurance Policies
Tax Status of the Policies. Section 7702
of the Code establishes a statutory definition of life insurance for federal tax purposes. While the requirements of this section of the
Code are complex, and limited guidance has been provided from the Internal Revenue Service (“IRS”) or otherwise, Protective
Life believes that the Policy will meet the current statutory definition of life insurance, which places limitations on the Cash Values
that can accumulate relative to the Death Benefit. As a result, the Death Benefit payable under the Policy will generally be excludable
from the Beneficiary’s gross income, and interest and other income credited under the Policy will not be taxable unless certain
withdrawals are made (or are deemed to be made) from the Policy prior to the Insured’s death, as discussed below. This tax treatment
will only apply, however, if (1) the investments of the Variable Account are “adequately diversified” in accordance
with Treasury Department regulations, and (2) Protective Life, rather than the Owner, is considered the owner of the assets of the
Variable Account for federal income tax purposes.
Diversification Requirements.
The Code and Treasury Department regulations prescribe the manner in which the investments of a segregated asset account, such as the
Variable Account, are to be “adequately diversified”. If the Variable Account fails to comply with these diversification standards,
the Policy will not be treated as a life insurance contract for federal income tax purposes and the Owner would generally be taxed currently
on the income on the contract (as defined in the tax law). Protective Life expects that the Variable Account, through the Funds, will
comply with the diversification requirements prescribed by the Code and Treasury Department regulations.
Ownership Treatment.
In certain circumstances, variable life insurance contract owners may be considered the owners, for federal income tax purposes, of the
assets of a segregated asset account, such as the Variable Account, used to support their contracts. In those circumstances, income and
gains from the segregated asset account would be includible in the contract owners’ gross income. The IRS has stated in published
rulings that a variable
contract owner will be considered the owner of the assets of a segregated
asset account if the owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the
assets.
The ownership rights under the Policy are similar to, but
differ in certain respects from, the ownership rights described by the IRS in certain rulings where it was determined that contract owners
were not owners of the assets of a segregated asset account (and thus were not currently taxable on the income and gains). For example,
the Owner of this Policy has the choice of more investment options to which to allocate premium payments and Variable Account Value than
were addressed in such rulings. These differences could result in the Policy Owner being treated as the owner of a portion of the assets
of the Variable Account and thus subject to current taxation on the income and gains from those assets. In addition, Protective Life does
not know what standards will be set forth in any further regulations or rulings which the Treasury Department or IRS may issue. Protective
Life therefore reserves the right to modify the Policy as necessary to attempt to prevent Owners from being considered the owners of the
assets of the Variable Account. However, there is no assurance that such efforts would be successful.
The remainder of this discussion assumes that the Policy will be treated as
a life insurance contract for federal tax purposes.
Tax Deferral During Accumulation
Period. Under existing provisions of the Code, except as described below, any increase in an Owner’s Cash
Value is generally not taxable to the Owner unless amounts are received (or are deemed to be received) from the Policy prior to the Insured’s
death. If there is a surrender of the Policy, an amount equal to the excess of the amount received over the “investment in the contract”
will generally be includible in the Owner’s income. The “investment in the contract” generally is the aggregate premiums
paid less the aggregate amount previously received under the Policy to the extent such amounts received were excludable from gross income.
Whether withdrawals (or other amounts deemed to be distributed) from the Policy constitute income to the Owner depends, in part, upon
whether the Policy is considered a MEC for federal income tax purposes.
Policies Not Owned by Individuals
In the case of a Policy issued to a nonnatural taxpayer, or held for the benefit
of such an entity, a portion of the taxpayer’s otherwise deductible interest expenses may not be deductible as a result of ownership
of a Policy even if no loans are taken under the Policy. An exception to this rule is provided for certain life insurance contracts which
cover the life of an individual who is a 20 percent owner, or an officer, director, or employee, of a trade or business. Entities
that are considering purchasing the Policy, or entities that will be beneficiaries under a Policy, should consult a tax advisor.
Policies That Are MECs
Modified Endowment Contracts. Section
7702A of the Code treats certain life insurance contracts as MECs. In general, a Policy will be treated as a MEC if total premiums paid
at any time during the first seven Policy Years exceed the sum of the net level premiums which would have been paid on or before that
time if the Policy provided for paid-up future benefits after the payment of seven level annual premiums (“seven-pay test”).
A Policy also may become a MEC in certain other circumstances. For example, if there is a “material change” to the Policy
(including certain increases in the Death Benefit), the seven-pay test generally is applied anew and limits premiums which can be paid
for a further seven years in order to avoid MEC status. A Policy may be treated as a MEC upon a “material change” to the Policy,
such as where premium paid at the time of the material change exceeds the new seven-pay test limit.
We will monitor your premium payments and other Policy transactions and notify
you if a payment or other transaction might cause your Policy to become a MEC. We will not invest any premium or portion of a premium
that would cause your Policy to become a MEC without instruction to do so from you. We will promptly notify you or your agent of the excess
cash received. We will not process the premium payment unless we receive a MEC acceptance form or Policy change form within 48 hours of
receipt of the excess funds. If paperwork is received that allows us to process the transaction, the effective date generally will be
the date of the new paperwork.
Further, if a transaction occurs which decreases the
Total Face Amount of your Policy during the first seven years, we will retest your Policy, as of the date of its purchase, based on the
lower Total Face Amount to determine compliance with the seven-pay test. Also, if a decrease in Total Face Amount occurs within seven
years of a “material change,” we will retest your Policy for compliance with the new seven-pay test from the date of the “material
change.” Failure to comply in either case would result in the Policy’s classification as a MEC regardless of our efforts to
provide a payment schedule that would not otherwise violate the seven-pay test. A decrease in the Total Face Amount due to a Lapse of
the Policy during a seven-pay test period also can cause the Policy to be treated as a MEC, although there is a limited exception to such
treatment where the Lapse resulted from nonpayment of premiums and benefits are reinstated within 90 days of the decrease.
The rules relating to whether a Policy will be treated as a MEC are complex and cannot be
fully described in the limited confines of this summary. Therefore, you should consult with a competent tax adviser to determine whether
a particular transaction will cause your Policy to be treated as a MEC.
Distributions
Distributions Under a Policy
that is Not a MEC. If the Policy is not a MEC, the amount of any withdrawal from the Policy generally will be
treated first as non-taxable recovery of premium and then as income from the Policy. Thus, a withdrawal from a Policy that is not a MEC
generally will not be includible in income except to the extent it exceeds the investment in the contract immediately before the withdrawal.
Certain Distributions Required
by the Tax Law in the First 15 Policy Years. As indicated above, Section 7702 of the Code places limitations on
the Cash Values that can accumulate relative to the Death Benefit. Where cash distributions are required under Section 7702 of the Code
in connection with a reduction in benefits during the first 15 years after the Policy is issued (or if withdrawals are made in anticipation
of a reduction in benefits, within the meaning of the tax law, during this period), some or all of such amounts may be includible in income
notwithstanding the general rule described in the preceding paragraph. A reduction in benefits may result upon a decrease in the Total
Face Amount, a change from one Death Benefit Option to the other, if withdrawals are made, and in certain other instances.
Tax
Treatment of Loans. If a Policy is not classified as a MEC, a loan received under the Policy generally will be
treated as indebtedness of the Owner. As a result, no part of any loan under a Policy will constitute income to the Owner so long as the
Policy remains in force. However, in those situations where the interest rate credited to the Loan Account is identical (or nearly identical)
to the interest rate charged for the loan, it is possible that some or all of the loan proceeds may be includible in income. If a Policy
Lapses or is surrendered when a loan is outstanding, the Cash Value of the Policy that served as collateral for, and repays, the outstanding
loan will be treated as the proceeds of a surrender for purposes of determining whether any amounts are includable in the Owner’s
income. This treatment applies both under Policies that are not classified as MECs and under Policies that are classified as MECs. As
a result, the amount of your taxable income could increase by some or all of the outstanding loan upon a Lapse or surrender.
Generally, interest paid on any loans under this Policy will not be tax deductible.
The non-deductibility of interest includes interest paid or accrued on indebtedness with respect to one or more life insurance policies
owned by a taxpayer covering any individual who is or has been an officer or employee of, or financially interested in, any trade or business
carried on by the taxpayer. A limited exception to this rule exists for certain interest paid in connection with certain “key person”
insurance. In the case of interest paid in connection with a loan with respect to a Policy covering the life of any key person, interest
is deductible only to the extent that the aggregate amount of loans under one or more life insurance policies does not exceed $50,000.
Further, even as to such loans up to $50,000, interest would not be deductible if the Policy were deemed for federal tax purposes to be
a single premium life insurance policy or, in certain circumstances, if the loans were treated as “systematic borrowing” within
the meaning of the tax law. A “key person” is an individual who is either an officer or a 20 percent owner of the taxpayer.
The maximum number of individuals who can be treated as key persons may not exceed the greater of (1) 5 individuals or (2) the
lesser of 5 percent of the total number of officers and employees of the taxpayer or 20 individuals. Owners should consult a tax advisor
regarding the deductibility of interest incurred in connection with this Policy.
Distributions Under a
Policy That Is a MEC. If treated as a MEC, your Policy will be subject to the following tax rules:
•
First, partial withdrawals are treated
as ordinary income subject to ordinary income tax up to the amount equal to the excess (if any) of your Cash Value immediately before
the distribution over the “investment in the contract” at the time of the distribution.
•
Second, Policy loans and loans secured
by a Policy are treated as partial withdrawals and taxed accordingly. Any past-due loan interest that is added to the amount of the loan
is treated as a loan.
•
Third, a ten percent additional
tax is imposed on that portion of any distribution (including distributions upon surrender), Policy loans, or loans secured by a Policy,
that is included in income, except where the distribution or loan is made to a taxpayer that is a natural person, and:
1.
is made when the taxpayer is
age 59½ or older (where the taxpayer is a natural person);
2.
is attributable to the taxpayer
becoming disabled; or
3.
is part of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies)
of such taxpayer and his beneficiary, as defined in the tax law.
If the Owner assigns or pledges any portion of the Policy Value (or agrees
to assign or pledge any portion), such portion will be treated as a withdrawal for tax purposes. If the entire Policy Value is assigned
or pledged, subsequent increases in the Policy Value are also treated as withdrawals for as long as the assignment or pledge remains in
place. The Owner’s investment in the contract is increased by the amount includible in income with respect to any assignment, pledge,
or loan, though it is not affected by any other aspect of the assignment, pledge, or loan (including its release or repayment). Before
assigning, pledging, or requesting a loan under a Policy treated as a MEC, an Owner should consult a tax advisor.
Aggregation of Policies. All
life insurance contracts which are treated as MECs and which are purchased by the same policyholder from Protective Life or any of its
affiliates within the same calendar year will be aggregated and treated as one contract for purposes of determining the tax on withdrawals
(including deemed withdrawals). The effects of such aggregation are not always clear; however, it could affect the amount of a surrender
or a withdrawal (or a deemed withdrawal) that is taxable and the amount which might be subject to the 10% additional tax described above.
Treatment When Insured
Reaches Attained Age 121. As described above, when the Insured reaches Attained Age 121, no further premiums can
be paid and no cost of insurance charges will be deducted. We believe that the Policy will continue to qualify as a “life insurance
contract” under the Code. However, there is uncertainty regarding the tax treatment of the Policy at such time. It is possible,
for example, that you would be viewed as constructively receiving the Cash Value in the year in which the Insured attains age 121 and
would realize taxable income at that time, even if no actual distribution is made at that time.
Section 1035 Exchanges
Section 1035 of the Code provides that no gain or loss will be recognized
on the exchange of a life insurance policy for another life insurance policy, endowment contract, annuity contract, or qualified long-term
care insurance contract, provided that certain requirements are met. If the Policy is being issued in exchange for another life insurance
policy, the requirements that must be met to receive tax-free treatment under Section 1035 of the Code include but are not limited
to: (1) the policies must have the same insured, and (2) the exchange must occur through an assignment of your old policy to
us or by a direct transfer of the policy value of the old policy to us by the issuer of the old policy. If your old policy was a MEC,
the Policy will also be a MEC. If any money or other property is received in the exchange (“boot”), gain (but not loss) will
be recognized equal to the lesser of the gain realized on the exchange or the amount of the boot received. You cannot exchange an endowment,
annuity, or long-term care insurance contract for a life insurance policy tax-free. Generally, the Policy will have the same investment
in the contract as the exchanged policy. However, if boot is received in the exchange the investment in the contract will be adjusted.
Special rules and procedures apply to Section 1035 exchanges. These rules can be complex, and if you wish to take advantage of Section 1035,
you should consult a tax and/or legal adviser.
Actions to Ensure Compliance with the Tax Law
Protective Life reserves the right to increase the Death
Benefit (which may result in larger charges under a Policy) or to take any other action deemed necessary to ensure the compliance of the
Policy with the federal tax definition of life insurance. If the Death Benefit is based on the applicable factor in the table of death
benefit factors shown on the Policy Schedule, the Company in its sole discretion may refund all or a portion of the Cash Value which causes
the Death Benefit to be based on such applicable factor.
Other Considerations
Changing the Owner, designating an irrevocable beneficiary, exchanging the
Policy, increasing the Total Face Amount, changing from one Death Benefit Option to another, and other changes under the Policy may have
tax consequences (other than those discussed herein) depending on the circumstances of such change or withdrawal. For example, in addition
to consequences under Sections 7702 and 7702A of the Code, changes to a Policy may affect the application of Section 101(j) (relating
to employer-owned life insurance) and Section 264(f) (disallowing certain interest expense deductions), with adverse tax consequences
to the Owner. In addition, special tax consequences may apply if you sell your Policy.
Estate, Gift and Generation-Skipping Transfer Tax Considerations
The transfer of the Policy or designation of a beneficiary may have federal,
state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer
taxes. For example, the transfer of the Policy to, or the designation as a beneficiary of, or the payment of proceeds to, a person who
is assigned to a generation which is two or more generations below the generation assignment of the owner may have generation-skipping
transfer tax consequences in addition to gift and estate tax consequences under federal tax law. The individual situation of each Owner
or beneficiary will determine the extent, if any, to which federal, state, and local transfer and inheritance taxes may be imposed and
how ownership or receipt of Policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation-skipping
and other taxes. If this Policy is used with estate and gift tax planning in mind, you should consult with your tax advisor as to the
most up-to-date information as to federal estate, gift and generation skipping tax rules.
Medicare Hospital Insurance Tax
A Medicare hospital insurance tax of 3.8% will apply to some types of investment
income. This tax will apply to the taxable portion of (1) any proceeds distributed from the Policy as annuity payments pursuant
to a settlement option prior to the death of the Insured, or (2) the proceeds of any sale or disposition of the Policy. This tax
only applies to taxpayers with “modified adjusted gross income” above $250,000 in the case of married couples filing jointly
or a qualifying widow(er) with dependent child, $125,000 in the case of married couples filing separately, and $200,000 for all others.
For more information regarding this tax and whether it may apply to you, please consult your tax advisor.
Federal Income Tax Withholding
In General. Protective
Life will withhold and remit to the federal government a part of the taxable portion of a surrender and withdrawal made under a Policy
unless the Owner notifies Protective Life in writing and such notice is received at the Home Office at or before the time of the surrender
or withdrawal that he or she elects not to have any amounts withheld. Regardless of whether the Owner requests that no taxes be withheld
or whether Protective Life withholds a sufficient amount of taxes, the Owner will be responsible for the payment of any taxes including
any additional tax that may be due on the amounts received. The Owner may also be required to pay penalties under the estimated tax rules
if the Owner’s withholding and estimated tax payments are insufficient to satisfy the Owner’s tax liability.
Trade or Business Entity Owns or Is Directly or Indirectly
a Beneficiary of the Policy
Where a Policy is owned by other than a natural person, the Owner’s
ability to deduct interest on business borrowing unrelated to the Policy can be impacted as a result of its ownership of cash value life
insurance. No deduction generally will be allowed for a portion of a taxpayer’s otherwise deductible interest expense unless the
Policy covers only one individual and such individual is, at the time first covered by the Policy, a 20 percent owner of the trade or
business entity that owns the Policy, or an officer, director, or employee of such trade or business.
Although this limitation generally does not apply to Policies held by natural
persons, if a trade or business (other than one carried on as a sole proprietorship) is directly or indirectly the beneficiary under a
Policy (e.g., pursuant to a split-dollar agreement), the Policy will be treated as held by such
trade or business. The effect will be that a portion of the trade or business entity’s deduction for its interest expenses will
be disallowed unless the above exception for a 20 percent owner, employee, officer or director applies.
The portion of the entity’s interest deduction that is disallowed will
generally be a pro rata amount which bears the same ratio to such interest expense as the taxpayer’s average unborrowed cash value
bears to the sum of the taxpayer’s average unborrowed cash value and average adjusted bases of all other assets. Any corporate or
business use of the Policy should be carefully reviewed by your tax adviser with attention to these rules as well as any other rules and
possible tax law changes that could occur with respect to corporate-owned life insurance. In the case of a Policy owned by an insurance
company, similar rules apply under Sections 807 and 832 of the Code.
Employer-Owned Life Insurance
Section 101(j) of to the Code denies the tax-free treatment of death
benefits payable under an employer-owned life insurance contract unless certain notice and consent requirements are met and either (1) certain
rules relating to the insured employee’s status are satisfied or (2) certain rules relating to the payment of the “amount
received under the contract” to, or for the benefit of, certain beneficiaries or successors of the insured employee are satisfied.
These rules apply to life insurance contracts owned by corporations (including S corporations), individual sole proprietors, estates and
trusts, and partnerships that are engaged in a trade or business. Any business contemplating the purchase
of a Policy on the life of an employee should consult with its legal and tax advisers regarding
the applicability of Section 101(j) of the Code to the proposed purchase.
Split Dollar Life Insurance
A tax adviser should also be consulted if you have purchased or are considering
the purchase of a Policy for a split dollar insurance plan. Any business contemplating the purchase of a new life insurance contract or
a change in an existing contract should consult a tax adviser.
Other Employee Benefit Programs
Complex rules may apply when a Policy is held by an employer or a trust, or
acquired by an employee, in connection with the provision of employee benefits. These Policy owners also must consider whether the Policy
was applied for by, or issued to, a person having an insurable interest under applicable state law, as the lack of insurable interest
may, among other things, affect the qualification of the Policy as life insurance for federal income tax purposes and the right of the
Beneficiary to death benefits. Employers and employer-created trusts may be subject to reporting, disclosure and fiduciary obligations
under the Employee Retirement Income Security Act of 1974, as amended. You should consult your legal advisor.
Employer-Financed Insurance Purchase Arrangements
In addition to corporations and other employers, the Policy is also available
for purchase by individuals whose employers will pay some or all of the premiums due under the Policy pursuant to an employer-financed
insurance purchase arrangement. In such cases, references in this Prospectus to the “Owner” of the Policy will refer to the
individual and, depending on the context, references to the “payment of premiums” will refer to payments to Protective Life
under the Policy by the employer and/or by the employee.
Employers and employees contemplating the purchase of a Policy as a part of
an employer-financed insurance purchase arrangement should consult qualified legal and tax counsel with regard to the issues presented
by such a transaction. For this purpose, an employer-financed insurance purchase arrangement is a plan or arrangement which contemplates
that an employer will pay one or more premiums for the purchase of a Policy that will be owned, subject to certain restrictions, by an
employee or by a person or entity designated by the employee.
The tax rules that apply to employer-financed insurance purchase arrangements
are complex and depend on the particular facts associated with the arrangement. Thus, your qualified legal and tax advisors will need
to evaluate the tax treatment of the arrangement based on your specific facts. The following general considerations often are relevant
to such arrangements:
1.
Payments by the employer under
typical employer-financed insurance purchase arrangements are only deductible for income tax purposes when the payments are taxable to
the employee with respect to whom they are made.
2.
The payment of some or all of
the premiums by the employer may create an ERISA welfare benefit plan which is subject to the reporting, disclosure, fiduciary and enforcement
provisions of ERISA.
3.
The payment of some or all of
the premiums by the employer usually will not prevent the Owner from being treated as the owner of the Policy for federal income tax purposes.
?
4.
A number
of factors, including the performance of the Policy and whether the employer pays planned premiums, may cause a Lapse of the Policy or
may result in a need for later additional unscheduled premiums to keep your Policy in force.
5.
An employee considering whether
to participate in an employer-financed insurance purchase arrangement should consider whether the financial and tax benefits of the ownership
of the Policy outweigh the costs, such as sales loads and cost of insurance charges that will be incurred as a result of the purchase
and ownership of the Policy.
6.
An employee considering whether
to participate in an employer-financed insurance purchase arrangement should consider whether the designation of another person or entity
as the owner of the Policy will have adverse consequences under applicable gift, estate, inheritance, or income tax laws.
7.
An employee considering whether
to participate in an employer-financed insurance purchase arrangement should consider whether the financial performance of the Policy
will support any planned withdrawals or borrowings under the Policy.
8.
In an employer-financed insurance purchase arrangement, the procedures
described in Transfers — Limitations on frequent transfers, including ‘market timing’ transfers, which are designed
to prevent or minimize market timing and excessive trading by Owners may, in certain circumstances, require us to perform standardized
trade monitoring; in other circumstances such monitoring will be performed by the Fund. Certain Funds require us to provide reports of
the Owner’s trading activity, if prohibited trading, as defined by the Fund, is suspected. The determination of whether there is
prohibited trading based on the Funds’ definition of prohibited trading may be made by us or by the Fund. The Fund determines the
restrictions imposed, which could be one of the four restrictions described in this Prospectus or by restricting the Owner from making
Transfers into the identified Fund for the period of time specified by the Fund.
Change of Insured Endorsement
If the Insured is changed pursuant to the Change of Insured Endorsement, the
Policy will be treated for tax purposes as if it were exchanged for a new Policy. The exchange will be taxable under Section 1001 of the
Code, and the transaction will not qualify for tax-free treatment under Section 1035 of the Code. The Company makes no representations
concerning the tax effects of the Change of Insured Endorsement. Owners are responsible for seeking tax counsel regarding the tax effects
of the endorsement. Upon a change of Insured pursuant to the Change of Insured Endorsement, the guaranteed mortality charges under the
Policy after the change will be based on the new Insured, and those charges may need to be based on a different mortality table than applied
prior to the change, such as to ensure compliance with Section 7702 of the Code. The Company also reserves the right to refund Cash Value
at the time of such change, including for purposes of maintaining compliance with Section 7702 of the Code.
Nonresident Aliens and Foreign Corporations
The discussion above provides general information regarding U.S. federal income
and withholding tax consequences to life insurance purchasers that are U.S. citizens or residents. Purchasers or beneficiaries that are
not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions (including taxable Death
Benefits) from life insurance policies at a 30% rate, unless a lower treaty rate applies. Prospective purchasers that are not U.S. citizens
or residents are advised to consult with a tax advisor regarding federal tax withholding with respect to distributions from a Policy.
FATCA Withholding
If the payee of a distribution (including the Death Benefit) from the Policy
is a foreign financial institution (“FFI”) or a non-financial foreign entity (“NFFE”) within the meaning of the
Code as amended by the Foreign Account Tax Compliance Act (“FATCA”), the distribution could be subject to U.S. federal withholding
tax on the taxable amount of the distribution at a 30% rate irrespective of the status of any beneficial owner of the Policy or the nature
of the distribution. The rules relating to FATCA are complex, and a tax advisor should be consulted if an FFI or NFFE is or may be designated
as a payee with respect to the Policy.
USE OF THE POLICY
Life insurance, including variable life insurance, can be used to provide
for many individual and business needs, in addition to providing a death benefit. Possible applications of a variable life insurance policy,
such as this Policy include: (1) serving as vehicle for accumulating funds for a college education, (2) estate planning, (3) serving
as an investment vehicle on various types of deferred compensation arrangements, (4) buy-sell arrangements, (5) split dollar
arrangements, and (6) a supplement to other retirement plans. The Policy described in this Prospectus is offered to corporations
and other employers to provide life insurance coverage in connection with, among other things, deferred compensation plans and employer-financed
insurance purchase arrangements.
As with any investment, using this Policy under these or other applications
entails certain risks. For example, if investment performance of Sub-Accounts to which Policy Value is allocated is poorer than expected
or if sufficient premiums are not paid, the Policy may Lapse or may not accumulate Cash Surrender Value sufficient to adequately fund
the application for which the Policy was purchased. Similarly, certain transactions under a Policy entail risks in connection with the
application for which the Policy is purchased. Withdrawals, Policy loans and interest paid on Policy loans may significantly affect current
and future Policy Value, Cash Surrender Value or Death Benefit Proceeds. If, for example, a Policy loan is taken but not repaid prior
to the death of the Insured, the Policy Debt is subtracted from the Death Benefit in computing the Death Benefit Proceeds to be paid to
a Beneficiary.
Prior to utilizing this Policy for the above applications, you should consider
whether the anticipated duration of the Policy is appropriate for the application for which you intend to purchase it.
In addition, you need to consider the tax implications of using the Policy with these applications.
The tax implications of using this Policy with these applications can be complex and generally are not addressed in the discussion of
“Tax Considerations” above. Loans and withdrawals will affect the Policy Value and Death Benefit. There may be penalties and
taxes if the Policy is surrendered, Lapses, matures or if a withdrawal or a loan is made. Because of these
risks, you need to carefully consider how you use this Policy. This Policy may not be suitable for all persons, under any of these applications.
Replacement of Life Insurance or Annuities
The term replacement has a special meaning in the life insurance industry.
Before you make a decision to buy, we want you to understand what impact a replacement may have on your existing insurance policy.
A replacement occurs when you buy a new life insurance policy or annuity contract,
and a policy or contract you already own has or will be:
1.
Lapsed, forfeited, surrendered
or partially surrendered, assigned to the replacing insurer, or otherwise terminated;
?
2.
Converted
to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits
or other policy values;
?
3.
Amended to
effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be
paid
?
4.
Reissued
with any reduction in cash value; or
?
5.
Pledged as
collateral or subject to borrowing, whether in a single loan or under a schedule of borrowing over a period of time.
There are circumstances when replacing your existing life insurance policy
or annuity contract can benefit you. As a general rule, however, replacement is not in your best interest. A replacement may affect your
plan of insurance in the following ways:
1.
You will pay new acquisition
costs;
2.
You may have to submit to new
medical examinations;
3.
You may pay increased premiums
because of the increased age or changed health of the Insured;
4.
Claims made in the early policy
years may be contested;
5.
You may have to pay surrender
charges and/or income taxes on your current policy or contract values;
6.
Your new policy or contract values
may be subject to surrender charges; and
7.
If part of a financed purchase,
your existing policy or contract values or Death Benefit may be reduced.
You should carefully compare the costs and benefits of your existing policy
or contract with those of the new policy or contract to determine whether replacement is in your best interest.
SALE OF THE POLICIES
We have entered into an agreement with Investment Distributors, Inc. (“IDI”)
under which IDI has agreed to distribute the Policies on a “best efforts” basis. Under the agreement, IDI serves as principal
underwriter (as defined under Federal securities laws and regulations) for the Policies. IDI is a Tennessee corporation and was established
in 1993. IDI, a wholly owned subsidiary of PLC, is an affiliate of Protective Life, and its Home Office shares the same address as Protective
Life. IDI is registered with the SEC under the Securities Exchange Act of 1934 as a broker-dealer and is a member firm of the Financial
Industry Regulatory Authority (“FINRA”).
IDI does not sell Policies directly to purchasers. IDI, together with Protective
Life, enters into distribution agreements with other broker-dealers (collectively, “Selling Broker-Dealers”) for the sale
of the Policies. Registered representatives of the Selling Broker-Dealers must be licensed as insurance agents by applicable state insurance
authorities and appointed as agents of Protective Life in order to sell the Policies.
We pay commissions and additional asset-based compensation to Selling Broker-Dealers
through IDI. IDI does not retain any commission payment or other amounts as principal underwriter for the Policies. However, we may pay
some or all of IDI’s operating and other expenses.
We paid the following aggregate dollar amounts to IDI in commissions and additional asset-based
compensation relating to sales of our variable contracts, other than the Policy. IDI did not retain any of these amounts, and passed along
this compensation directly to the Selling Broker-Dealers.
Fiscal Year Ended |
|
|
Amount Paid to IDI
|
|
December 31, 2021 |
|
|
|
$ |
36 |
|
|
December 31, 2022 |
|
|
|
$ |
1,293 |
|
|
December 31, 2023 |
|
|
|
$ |
2,625 |
|
|
We offer the Policies on a continuous basis. While we anticipate continuing
to offer the Policies, we reserve the right to discontinue the offering at any time.
Selling Broker-Dealers
We pay commissions and may provide some form of non-cash compensation to
all Selling Broker-Dealers in connection with the promotion and sale of the Policies. A portion of any payments made to Selling Broker-Dealers
may be passed on to their registered representatives in accordance with their internal compensation programs. We may use any of our corporate
assets to pay commissions and other costs of distributing the Policies, including any profit from the mortality and expense risk charge.
Commissions and other incentives or payments described below are not charged directly to Policy Owners or the Variable Account. We intend
to recoup commissions and other sales expenses through fees and charges deducted under the Policies.
Compensation We Pay
to All Selling Broker-Dealers. We pay commissions as a percentage of initial and subsequent premium payments at
the time we receive them, as a percentage of Policy Value on an ongoing basis, or a combination of both. The maximum sales commission
is 25% of premium. We may also pay to selected Selling Broker-Dealers additional compensation in the form of (1) payments
for participation in meetings and conferences that include presentations about our products (including the Policies), and (2) payments
to help defray the costs of sales conferences and educational seminars for the Selling Broker-Dealers’ registered representatives.
The registered representative who sells you the Policy
typically receives a portion of the compensation we pay to his or her Selling Broker-Dealer, depending on the agreement between the Selling
Broker-Dealer and your registered representative and the Selling Broker-Dealer’s internal compensation program. These programs may
include other types of cash and non-cash compensation and other benefits. A registered representative may be required to return all or
a portion of the commissions paid if: (i) a Policy terminates prior to the third Policy Anniversary; or (ii) a Policy is surrendered
for the surrender benefit within the first seven Policy Years and applicable state insurance law permits a return of expense charge. If
you would like information about what your registered representative and the Selling Broker-Dealer for whom he or she works may receive
in connection with your purchase of a Policy, please ask your registered representative.
Non-Cash Compensation. In
the normal course of business, we may also provide non-cash compensation in connection with the promotion of the Policies, including conferences
and seminars (including travel, lodging and meals in connection therewith), and items of relatively small value, such as promotional gifts,
meals, or tickets to sporting or entertainment events, in accordance with all applicable federal and state rules, including FINRA’s
non-cash compensation rules.
Additional Compensation
We Pay to Selected Selling Broker-Dealers. In addition to the cash and non-cash compensation described above,
we may pay additional asset-based compensation in the form of marketing allowances and “revenue sharing” to selected Selling
Broker-Dealers. These payments may be (1) additional amounts as a percentage of premium payments on our variable insurance products,
and (2) additional “trail” commissions, which are periodic payments as a percentage of the contract and policy values
or variable account values of our variable insurance products. Some or all of these additional asset-based compensation payments may be
conditioned upon the Selling Broker-Dealer producing a specified amount of new premium payments and/or premiums and/or maintaining a specified
amount of contract and policy value with us.
The Selling Broker-Dealers to whom we pay additional asset-based compensation
provide preferential treatment with respect to our products in their marketing programs. Preferential treatment of our products by a Selling
Broker-Dealer may include any or all of the following: (1) enhanced marketing of our products over non-preferred products; (2) increased
access to the Selling Broker-Dealer’s registered representatives; and (3) payment of higher compensation to registered representatives
for selling our products than for selling non-preferred products.
Conflicts of Interest. The
prospect of receiving, or the receipt of, additional asset-based and/or incentive compensation creates a conflict of interest because
it may provide Selling Broker-Dealers and/or their registered
representatives with an incentive to favor sales of our variable insurance products (including
the Policies) over other variable insurance products (or other investments) with respect to which a Selling Broker-Dealer does not receive
additional compensation, or receives lower levels of additional compensation. You may wish to take such payment arrangements into account
when considering and evaluating any recommendation relating to the Policies. If you would like information about what your registered
representative and the Selling Broker-Dealer for whom he or she works may receive in connection with your purchase of a Policy, please
ask your registered representative.
Fund Payments to Broker-Dealers. The
Funds and their related companies may pay a broker-dealer for services provided with regard to the sale of Fund shares to the Sub-Accounts
under the Policy. The amount and/or structure of the compensation can possibly create a conflict of interest as it may influence the broker-dealer
and your registered representative to present this Policy (and certain Sub-Accounts under the Policy) over other investment alternatives.
The variations in compensation, however, may also reflect differences in sales effort or ongoing customer services expected of the broker-dealer
or other intermediary or your salesperson. You should ask your registered representative about variations and how he or she and his or
her broker-dealer are compensated for selling the Policy.
PAYMENTS WE RECEIVE
Fund Sponsors may compensate us for providing the administrative, recordkeeping
and reporting services they would normally be required to provide to individual shareholders or for cost savings experienced by the Fund
Sponsors.
Such compensation is typically a percentage of the Variable Account assets
invested in the relevant Fund and generally may range up to 0.35% of net assets. IDI, a broker-dealer and affiliate of Protective Life
and the principal underwriter and distributor of the Policy, may also receive Rule 12b-1 fees (ranging up to 0.25%) directly from certain
Funds for providing marketing and distribution related services related to shares of Funds (or certain classes of shares of Funds) offered
in connection with a Fund’s Rule 12b-1 plan. If IDI receives 12b-1 fees, combined compensation for administrative and distribution
related services generally ranges up to 0.60% annually of the Variable Account assets invested in a Fund.
Other Payments.
A Fund Sponsor may provide us (or our affiliates) and/ or broker-dealers that sell the Policies (“selling firms”) with marketing
support, may pay us (or our affiliates) and/or selling firms amounts to participate in national and regional sales conferences and meetings
with the sales desks, and may occasionally provide us (or our affiliates) and/or selling firms with items of relatively small value, such
as promotional gifts, meals, tickets, or other similar items in the normal course of business.
Conflicts of Interest.
Such payments and fees create a conflict of interest for the Company because we have an incentive to offer Funds (or classes of shares
of Funds) for which such payments and fees are available to us. We consider such payments and fees, among other things, when deciding
to include a Fund (or class of shares of a Fund) as an investment option under the Policy. Other available investment portfolios (or other
available classes of shares of the Funds) may have lower fees and better overall investment performance than the Funds (or classes of
shares of the Funds) offered under the Policy.
For details about the compensation payments we make in connection with the
sale of the Policies, see Sale of the Policies.
LEGAL PROCEEDINGS
Protective Life, like other insurance companies, in the ordinary course
of business are involved in some class action and other lawsuits, or alternatively in arbitration. In some class action and other lawsuits
involving insurance companies, substantial damages have been sought and material payments have been made. Although the outcome of any
litigation or arbitration cannot be predicted, Protective Life believes that at the present time there are no pending or threatened lawsuits
that are reasonably likely to have a material adverse impact on the Variable Account, the ability of IDI to perform its contract with
the Variable Account, or the ability of Protective Life to meet its obligations under the Policies.
FINANCIAL STATEMENTS
The audited statements of assets and liabilities of
the subaccounts of Protective NY COLI VUL as of December 31, 2023, and the related statements of operations and of changes in net assets
for each of the years or periods presented as well as the Report of Independent Registered Public Accounting Firm are incorporated into
the Statement of Additional Information by reference to the Variable Account’s
Form
N-VPFS, File No. 811-23707, filed with the SEC on April 17, 2024.
The audited statutory statements of admitted assets,
liabilities and capital and surplus of Protective Life and Annuity Insurance Company as of December 31, 2023 and 2022, and the related
statutory statements of operations, changes in capital and surplus and cash flow for each of the years in the three-year period ended
December 31, 2023, as
well as the Independent Auditors’ Report are incorporated into
the Statement of Additional Information by reference to the Variable Account’s
Form
N-VPFS, File No. 811-23707, filed with the SEC on March 28, 2024. Protective Life’s statutory financial statements should be
considered only as bearing on its ability to meet its obligations under the Contracts. They should not be considered as bearing on the
investment performance of the assets held in the Variable Account.
APPENDIX A
FUNDS AVAILABLE UNDER THE
POLICY
The following is a list of Funds available under the Policy.
More information about the Funds is available in the prospectuses for the Funds, which may be amended from time to time and can be found
online at www.protective.com/eprospectus. You can also request this information at no cost by calling 1-800-265-1545 or by sending
an email request to prospectus@protective.com.
The current expenses and performance information below reflects
fees and expenses of the Funds, but do not reflect the other fees and expenses that your Policy may charge. Expenses would be higher and
performance would be lower if these other charges were included. Each Fund’s past performance is not necessarily an indication of
future performance.
|
|
Asset Allocation Type |
|
|
|
Portfolio Company
Investment Adviser; SubAdviser(s), as applicable |
|
|
|
Current Expenses |
|
|
|
Average Annual Total Returns (as of 12/31/2023)
|
|
|
|
1 Year |
|
|
|
5 Year |
|
|
|
10 Year |
|
|
|
|
Taxable Bond |
|
|
|
American
Funds Insurance Series® Capital World Bond Fund®
-Class 2 |
|
|
|
0.73%
|
|
|
|
6.14%
|
|
|
|
-0.33%
|
|
|
|
0.36%
|
|
|
|
|
International Equity |
|
|
|
American
Funds Insurance Series® Capital World Growth and Income Fund®
- Class 2(1) |
|
|
|
0.66%
|
|
|
|
20.88%
|
|
|
|
10.34%
|
|
|
|
7.62%
|
|
|
|
|
International Equity |
|
|
|
American
Funds Insurance Series® Global Small Capitalization Fund -
Class 2(1) |
|
|
|
0.91%
|
|
|
|
16.17%
|
|
|
|
8.31%
|
|
|
|
5.78%
|
|
|
|
|
U.S. Equity |
|
|
|
American
Funds Insurance Series® Growth Fund - Class 2
|
|
|
|
0.59%
|
|
|
|
38.49%
|
|
|
|
18.68%
|
|
|
|
14.36%
|
|
|
|
|
U.S. Equity |
|
|
|
American
Funds Insurance Series® Growth-Income Fund - Class 2
|
|
|
|
0.53%
|
|
|
|
26.14%
|
|
|
|
13.36%
|
|
|
|
10.91%
|
|
|
|
|
International Equity |
|
|
|
American
Funds Insurance Series® International Fund ‑ Class
2 |
|
|
|
0.78%
|
|
|
|
15.84%
|
|
|
|
4.83%
|
|
|
|
3.41%
|
|
|
|
|
International Equity |
|
|
|
American
Funds Insurance Series® New World Fund®
‑ Class 2(1) |
|
|
|
0.82%
|
|
|
|
15.99%
|
|
|
|
8.64%
|
|
|
|
4.69%
|
|
|
|
|
U.S. Equity |
|
|
|
American
Funds Insurance Series® Washington Mutual Investors Fund℠
- Class 2(1) |
|
|
|
0.52%
|
|
|
|
17.29%
|
|
|
|
12.60%
|
|
|
|
9.91%
|
|
|
|
|
Allocation |
|
|
|
BlackRock
60/40 Target Allocation ETF V.I. Fund - Class I(1)
|
|
|
|
0.31%
|
|
|
|
15.62%
|
|
|
|
8.95%
|
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
BlackRock
Global Allocation V.I. Fund - Class I - BlackRock
(Singapore) Limited; BlackRock
International Limited(1) |
|
|
|
0.76%
|
|
|
|
12.83%
|
|
|
|
7.65%
|
|
|
|
4.88%
|
|
|
|
|
Taxable Bond |
|
|
|
BlackRock
High Yield V.I. Fund - Class I - BlackRock
International Limited(1) |
|
|
|
0.56%
|
|
|
|
13.21%
|
|
|
|
5.74%
|
|
|
|
4.46%
|
|
|
|
|
U.S. Equity |
|
|
|
BNY
Mellon Stock Index Fund, Inc. - Initial Shares - Mellon
Investments Corporation |
|
|
|
0.27%
|
|
|
|
25.93%
|
|
|
|
15.38%
|
|
|
|
11.75%
|
|
|
|
|
U.S. Equity |
|
|
|
ClearBridge
Variable Mid Cap Portfolio - Class I - ClearBridge
Investments, LLC |
|
|
|
0.83%
|
|
|
|
12.92%
|
|
|
|
10.73%
|
|
|
|
7.10%
|
|
|
|
|
U.S. Equity |
|
|
|
ClearBridge
Variable Small Cap Growth Portfolio - Class I - ClearBridge
Investments, LLC |
|
|
|
0.80%
|
|
|
|
8.40%
|
|
|
|
9.56%
|
|
|
|
7.89%
|
|
|
|
|
Sector Equity |
|
|
|
Davis
Financial Portfolio - Davis
Selected Advisers (New York) Inc. |
|
|
|
0.78%
|
|
|
|
15.29%
|
|
|
|
10.24%
|
|
|
|
8.79%
|
|
|
|
|
Taxable Bond |
|
|
|
DFA
VIT Inflation-Protected Securities Portfolio - Institutional Class - Dimensional
Fund Advisors Ltd; DFA
Australia Limited |
|
|
|
0.11%
|
|
|
|
4.02%
|
|
|
|
3.10%
|
|
|
|
— |
|
|
|
|
U.S. Equity |
|
|
|
DWS
Core Equity VIP - Class A |
|
|
|
0.61%
|
|
|
|
25.57%
|
|
|
|
15.00%
|
|
|
|
11.56%
|
|
|
|
|
Taxable Bond |
|
|
|
DWS
High Income VIP - Class A(1) |
|
|
|
0.70%
|
|
|
|
11.34%
|
|
|
|
5.34%
|
|
|
|
4.05%
|
|
|
|
|
U.S. Equity |
|
|
|
DWS
Small Cap Index VIP - Class A - Northern
Trust Investments, Inc.(1) |
|
|
|
0.38%
|
|
|
|
16.76%
|
|
|
|
9.67%
|
|
|
|
6.89%
|
|
|
|
|
Taxable Bond |
|
|
|
Eaton
Vance VT Floating-Rate Income Fund - Initial Class |
|
|
|
1.17%
|
|
|
|
11.21%
|
|
|
|
4.13%
|
|
|
|
3.22%
|
|
|
|
|
Allocation |
|
|
|
Empower
Aggressive Profile Fund - Investor Class |
|
|
|
1.16%
|
|
|
|
16.94%
|
|
|
|
10.86%
|
|
|
|
8.02%
|
|
|
|
|
U.S. Equity |
|
|
|
Empower
Ariel Mid Cap Value Fund - Investor Class - Ariel
Investments, LLC(1) |
|
|
|
1.05%
|
|
|
|
10.45%
|
|
|
|
10.46%
|
|
|
|
6.36%
|
|
|
|
|
Taxable Bond |
|
|
|
Empower
Bond Index Fund - Investor Class |
|
|
|
0.50%
|
|
|
|
5.02%
|
|
|
|
0.50%
|
|
|
|
1.29%
|
|
|
|
|
Allocation |
|
|
|
Empower
Conservative Profile Fund - Investor Class(1)
|
|
|
|
0.78%
|
|
|
|
8.25%
|
|
|
|
4.59%
|
|
|
|
3.71%
|
|
|
|
|
Asset Allocation Type |
|
|
|
Portfolio Company
Investment Adviser; SubAdviser(s), as applicable |
|
|
|
Current Expenses |
|
|
|
Average Annual Total Returns (as of 12/31/2023)
|
|
|
|
1 Year |
|
|
|
5 Year |
|
|
|
10 Year |
|
|
|
|
Taxable Bond |
|
|
|
Empower
Core Bond Fund - Investor Class(1) |
|
|
|
0.70%
|
|
|
|
6.20%
|
|
|
|
1.02%
|
|
|
|
1.63%
|
|
|
|
|
International Equity |
|
|
|
Empower
Emerging Markets Equity Fund - Investor Class - Goldman
Sachs Asset Management, L.P.; Lazard
Asset Management LLC(1) |
|
|
|
1.25%
|
|
|
|
9.67%
|
|
|
|
3.44%
|
|
|
|
— |
|
|
|
|
Money Market |
|
|
|
Empower
Government Money Market Fund - Investor Class(1)
(Note: Will be closed to new investors on May 14, 2024, and will
be liquidated on or about June 14, 2024.) |
|
|
|
0.46%
|
|
|
|
4.52%
|
|
|
|
1.54%
|
|
|
|
0.95%
|
|
|
|
|
Taxable Bond |
|
|
|
Empower
Inflation-Protected Securities Fund - Investor Class - Goldman
Sachs Asset Management, L.P.(1) |
|
|
|
0.70%
|
|
|
|
4.76%
|
|
|
|
2.72%
|
|
|
|
— |
|
|
|
|
International Equity |
|
|
|
Empower
International Index Fund - Investor Class - Irish
Life Inv Managers Ltd |
|
|
|
0.62%
|
|
|
|
17.52%
|
|
|
|
7.66%
|
|
|
|
3.79%
|
|
|
|
|
International Equity |
|
|
|
Empower
International Value Fund - Investor Class - LSV
Asset Management; Massachusetts
Financial Services Company |
|
|
|
1.07%
|
|
|
|
18.03%
|
|
|
|
8.25%
|
|
|
|
5.89%
|
|
|
|
|
U.S. Equity |
|
|
|
Empower
Large Cap Growth Fund - Investor Class - Amundi
Asset Management US, Inc.; JPMorgan
Investment Management Inc.(1) |
|
|
|
0.98%
|
|
|
|
33.57%
|
|
|
|
19.04%
|
|
|
|
14.14%
|
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2015 Fund - Investor Class(1) |
|
|
|
0.77%
|
|
|
|
10.33%
|
|
|
|
6.07%
|
|
|
|
4.87%
|
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2020 Fund - Investor Class(1) |
|
|
|
0.80%
|
|
|
|
10.97%
|
|
|
|
6.45%
|
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2025 Fund - Investor Class(1) |
|
|
|
0.82%
|
|
|
|
11.91%
|
|
|
|
7.07%
|
|
|
|
5.60%
|
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2030 Fund - Investor Class(1) |
|
|
|
0.85%
|
|
|
|
13.07%
|
|
|
|
7.80%
|
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2035 Fund - Investor Class(1) |
|
|
|
0.88%
|
|
|
|
14.40%
|
|
|
|
8.68%
|
|
|
|
6.58%
|
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2040 Fund - Investor Class(1) |
|
|
|
0.90%
|
|
|
|
15.73%
|
|
|
|
9.42%
|
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2045 Fund - Investor Class |
|
|
|
0.92%
|
|
|
|
16.73%
|
|
|
|
9.83%
|
|
|
|
7.07%
|
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2050 Fund - Investor Class |
|
|
|
0.92%
|
|
|
|
17.05%
|
|
|
|
9.94%
|
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2055 Fund - Investor Class |
|
|
|
0.93%
|
|
|
|
17.06%
|
|
|
|
9.86%
|
|
|
|
7.00%
|
|
|
|
|
Allocation |
|
|
|
Empower
Lifetime 2060 Fund - Investor Class |
|
|
|
0.93%
|
|
|
|
16.97%
|
|
|
|
— |
|
|
|
— |
|
|
|
|
U.S. Equity |
|
|
|
Empower
Mid Cap Value Fund - Investor Class - Goldman
Sachs Asset Management, L.P.(1) |
|
|
|
1.15%
|
|
|
|
15.15%
|
|
|
|
9.70%
|
|
|
|
8.12%
|
|
|
|
|
Allocation |
|
|
|
Empower
Moderate Profile Fund - Investor Class(1) |
|
|
|
0.92%
|
|
|
|
11.93%
|
|
|
|
7.59%
|
|
|
|
5.74%
|
|
|
|
|
Allocation |
|
|
|
Empower
Moderately Aggressive Profile Fund - Investor Class(1)
|
|
|
|
1.01%
|
|
|
|
13.60%
|
|
|
|
8.69%
|
|
|
|
6.51%
|
|
|
|
|
Allocation |
|
|
|
Empower
Moderately Conservative Profile Fund - Investor Class(1)
|
|
|
|
0.83%
|
|
|
|
9.90%
|
|
|
|
6.05%
|
|
|
|
4.71%
|
|
|
|
|
Taxable Bond |
|
|
|
Empower
Multi-Sector Bond Fund - Investor Class(1) |
|
|
|
0.90%
|
|
|
|
7.88%
|
|
|
|
3.28%
|
|
|
|
2.68%
|
|
|
|
|
Sector Equity |
|
|
|
Empower
Real Estate Index Fund - Investor Class - Irish
Life Inv Managers Ltd(1) |
|
|
|
0.65%
|
|
|
|
13.31%
|
|
|
|
5.42%
|
|
|
|
6.25%
|
|
|
|
|
U.S. Equity |
|
|
|
Empower
S&P Mid Cap 400® Index Fund - Investor Class
- Irish Life Inv Managers Ltd
|
|
|
|
0.55%
|
|
|
|
15.76%
|
|
|
|
11.99%
|
|
|
|
8.66%
|
|
|
|
|
U.S. Equity |
|
|
|
Empower
S&P SmallCap 600® Index Fund - Investor Class
- Irish Life Inv Managers Ltd(1)
|
|
|
|
0.56%
|
|
|
|
15.47%
|
|
|
|
10.49%
|
|
|
|
8.09%
|
|
|
|
|
Taxable Bond |
|
|
|
Empower
Short Duration Bond Fund - Investor Class(1)
|
|
|
|
0.59%
|
|
|
|
5.67%
|
|
|
|
2.21%
|
|
|
|
1.68%
|
|
|
|
|
U.S. Equity |
|
|
|
Empower
Small Cap Growth Fund - Investor Class(1) |
|
|
|
1.19%
|
|
|
|
15.76%
|
|
|
|
11.36%
|
|
|
|
— |
|
|
|
|
U.S. Equity |
|
|
|
Empower
Small Cap Value Fund - Investor Class(1) |
|
|
|
1.09%
|
|
|
|
17.81%
|
|
|
|
12.25%
|
|
|
|
7.64%
|
|
|
|
|
U.S. Equity |
|
|
|
Empower
T. Rowe Price Mid Cap Growth Fund - Investor Class - T.
Rowe Price Associates, Inc. |
|
|
|
1.02%
|
|
|
|
19.92%
|
|
|
|
11.61%
|
|
|
|
10.38%
|
|
|
|
|
Taxable Bond |
|
|
|
Empower
U.S. Government Securities Fund - Investor Class(1)
|
|
|
|
0.59%
|
|
|
|
4.44%
|
|
|
|
0.19%
|
|
|
|
1.10%
|
|
|
|
|
Taxable Bond |
|
|
|
Federated
Hermes High Income Bond Fund II - Primary Class(1)
|
|
|
|
0.81%
|
|
|
|
12.71%
|
|
|
|
4.75%
|
|
|
|
4.13%
|
|
|
|
|
Asset Allocation Type |
|
|
|
Portfolio Company
Investment Adviser; SubAdviser(s), as applicable |
|
|
|
Current Expenses |
|
|
|
Average Annual Total Returns (as of 12/31/2023)
|
|
|
|
1 Year |
|
|
|
5 Year |
|
|
|
10 Year |
|
|
|
|
International Equity |
|
|
|
Fidelity®
VIP Emerging Markets Portfolio - Service Class 2 - FMR
Investment Management (U.K.) Limited; Fidelity
Management & Research (Japan) Limited; FIL Investment Advisors; FIL Investment Advisors (UK) Ltd; Fidelity Management & Research
(HK) Ltd |
|
|
|
1.14%
|
|
|
|
9.49%
|
|
|
|
7.55%
|
|
|
|
4.92%
|
|
|
|
|
U.S. Equity |
|
|
|
Fidelity®
VIP Extended Market Index Portfolio - Service Class 2 - Geode
Capital Management, LLC |
|
|
|
0.38%
|
|
|
|
17.11%
|
|
|
|
11.02%
|
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2025 Portfolio℠ - Service Class 2 |
|
|
|
0.74%
|
|
|
|
13.32%
|
|
|
|
7.98%
|
|
|
|
5.93%
|
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2030 Portfolio℠ - Service Class 2 |
|
|
|
0.77%
|
|
|
|
14.46%
|
|
|
|
9.02%
|
|
|
|
6.59%
|
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2035 Portfolio℠ - Service Class 2 |
|
|
|
0.82%
|
|
|
|
16.53%
|
|
|
|
10.57%
|
|
|
|
7.40%
|
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2040 Portfolio℠ - Service Class 2 |
|
|
|
0.86%
|
|
|
|
18.61%
|
|
|
|
11.65%
|
|
|
|
7.87%
|
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2045 Portfolio℠ - Service Class 2 |
|
|
|
0.87%
|
|
|
|
19.13%
|
|
|
|
11.75%
|
|
|
|
7.92%
|
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2050 Portfolio℠ - Service Class 2 |
|
|
|
0.87%
|
|
|
|
19.19%
|
|
|
|
11.74%
|
|
|
|
7.91%
|
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2055 Portfolio℠ - Service Class 2 |
|
|
|
0.87%
|
|
|
|
19.12%
|
|
|
|
— |
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2060 Portfolio℠ - Service Class 2 |
|
|
|
0.87%
|
|
|
|
19.12%
|
|
|
|
— |
|
|
|
— |
|
|
|
|
Allocation |
|
|
|
Fidelity®
VIP Freedom Funds - Freedom 2065 Portfolio℠ - Service Class 2 |
|
|
|
0.87%
|
|
|
|
19.12%
|
|
|
|
— |
|
|
|
— |
|
|
|
|
Money Market |
|
|
|
Fidelity®
VIP Government Money Market Portfolio - Service Class 2 - FMR
Investment Management (U.K.) Limited; Fidelity
Management & Research (Japan) Limited; Fidelity Management & Research (HK) Ltd |
|
|
|
0.52%
|
|
|
|
4.63%
|
|
|
|
1.57%
|
|
|
|
0.97%
|
|
|
|
|
U.S. Equity |
|
|
|
Fidelity®
VIP Index 500 Portfolio - Initial Class - Geode
Capital Management, LLC |
|
|
|
0.10%
|
|
|
|
26.19%
|
|
|
|
15.56%
|
|
|
|
11.92%
|
|
|
|
|
International Equity |
|
|
|
Fidelity®
VIP International Index Portfolio - Service Class 2 - Geode
Capital Management, LLC |
|
|
|
0.42%
|
|
|
|
15.88%
|
|
|
|
6.89%
|
|
|
|
— |
|
|
|
|
Taxable Bond |
|
|
|
Fidelity®
VIP Investment Grade Bond Portfolio - Service Class 2 - FMR
Investment Management (U.K.) Limited; Fidelity
Management & Research (Japan) Limited; Fidelity Management & Research (HK) Ltd |
|
|
|
0.63%
|
|
|
|
6.00%
|
|
|
|
1.72%
|
|
|
|
2.08%
|
|
|
|
|
Money Market |
|
|
|
Goldman
Sachs VIT Government Money Market Fund - Service Class(1)
|
|
|
|
0.43%
|
|
|
|
4.79%
|
|
|
|
1.64%
|
|
|
|
1.02%
|
|
|
|
|
U.S. Equity |
|
|
|
Invesco®
V.I. Diversified Dividend Fund - Series I |
|
|
|
0.68%
|
|
|
|
9.05%
|
|
|
|
9.81%
|
|
|
|
7.80%
|
|
|
|
|
International Equity |
|
|
|
Invesco®
V.I. EQV International Equity Fund - Series I |
|
|
|
0.90%
|
|
|
|
18.15%
|
|
|
|
8.42%
|
|
|
|
4.33%
|
|
|
|
|
Sector Equity |
|
|
|
Invesco®
V.I. Global Real Estate Fund - Series I - Invesco
Asset Management Limited |
|
|
|
1.02%
|
|
|
|
9.05%
|
|
|
|
2.11%
|
|
|
|
3.10%
|
|
|
|
|
U.S. Equity |
|
|
|
Invesco®
V.I. Main Street Small Cap Fund® - Series I |
|
|
|
0.88%
|
|
|
|
18.13%
|
|
|
|
13.07%
|
|
|
|
8.93%
|
|
|
|
|
Allocation |
|
|
|
Janus
Henderson Balanced Portfolio - Institutional Shares |
|
|
|
0.62%
|
|
|
|
15.41%
|
|
|
|
9.64%
|
|
|
|
7.99%
|
|
|
|
|
U.S. Equity |
|
|
|
Janus
Henderson Enterprise Portfolio - Institutional Shares |
|
|
|
0.72%
|
|
|
|
18.07%
|
|
|
|
13.42%
|
|
|
|
12.10%
|
|
|
|
|
Taxable Bond |
|
|
|
Janus
Henderson Flexible Bond Portfolio - Institutional Shares(1)
|
|
|
|
0.57%
|
|
|
|
5.50%
|
|
|
|
1.79%
|
|
|
|
1.91%
|
|
|
|
|
U.S. Equity |
|
|
|
Janus Henderson
Forty Portfolio - Institutional Shares |
|
|
|
0.55%
|
|
|
|
39.96%
|
|
|
|
16.92%
|
|
|
|
13.73%
|
|
|
|
|
International Equity |
|
|
|
Janus
Henderson Global Sustainable Equity Portfolio - Institutional Shares(1)
|
|
|
|
0.87%
|
|
|
|
23.32%
|
|
|
|
— |
|
|
|
— |
|
|
|
|
Asset Allocation Type |
|
|
|
Portfolio Company
Investment Adviser; SubAdviser(s), as applicable |
|
|
|
Current Expenses |
|
|
|
Average Annual Total Returns (as of 12/31/2023)
|
|
|
|
1 Year |
|
|
|
5 Year |
|
|
|
10 Year |
|
|
|
|
Sector Equity |
|
|
|
Janus
Henderson Global Technology and Innovation Portfolio - Institutional Shares |
|
|
|
0.73%
|
|
|
|
54.55%
|
|
|
|
20.34%
|
|
|
|
17.14%
|
|
|
|
|
Taxable Bond |
|
|
|
Lord
Abbett Series Fund - Total Return Portfolio - Class VC |
|
|
|
0.71%
|
|
|
|
6.03%
|
|
|
|
1.23%
|
|
|
|
1.84%
|
|
|
|
|
U.S. Equity |
|
|
|
LVIP
American Century Capital Appreciation Fund - Standard Class II(1)
(formerly, American Century Investments®
VP Capital Appreciation Fund - Class I)(2)
|
|
|
|
0.79%
|
|
|
|
20.69%
|
|
|
|
13.24%
|
|
|
|
9.36%
|
|
|
|
|
U.S. Equity |
|
|
|
LVIP
American Century Mid Cap Value Fund - Standard Class II(1)
(formerly, American Century Investments®
VP Mid Cap Value Fund - Class I)(2) |
|
|
|
0.86%
|
|
|
|
6.13%
|
|
|
|
11.05%
|
|
|
|
8.77%
|
|
|
|
|
U.S. Equity |
|
|
|
LVIP
American Century Ultra Fund - Standard Class II(1)
(formerly, American Century Investments®
VP Ultra® Fund - Class I)(2)
|
|
|
|
0.75%
|
|
|
|
43.51%
|
|
|
|
19.24%
|
|
|
|
14.64%
|
|
|
|
|
U.S. Equity |
|
|
|
LVIP
American Century Value Fund - Standard Class II(1)
(formerly, American Century Investments®
VP Value Fund - Class I)(2) |
|
|
|
0.71%
|
|
|
|
9.10%
|
|
|
|
11.87%
|
|
|
|
8.53%
|
|
|
|
|
U.S. Equity |
|
|
|
LVIP
JPMorgan Small Cap Core Fund - Standard Class(3)
|
|
|
|
0.78%
|
|
|
|
13.10%
|
|
|
|
9.41%
|
|
|
|
7.10%
|
|
|
|
|
U.S. Equity |
|
|
|
LVIP
JPMorgan U.S. Equity Fund - Standard Class(3) |
|
|
|
0.69%
|
|
|
|
27.16%
|
|
|
|
17.15%
|
|
|
|
12.44%
|
|
|
|
|
U.S. Equity |
|
|
|
MFS®
VIT Growth Series - Initial Class(1) |
|
|
|
0.73%
|
|
|
|
35.86%
|
|
|
|
15.89%
|
|
|
|
12.97%
|
|
|
|
|
International Equity |
|
|
|
MFS®
VIT II International Growth Portfolio - Initial Class(1)
|
|
|
|
0.88%
|
|
|
|
14.72%
|
|
|
|
9.47%
|
|
|
|
6.36%
|
|
|
|
|
International Equity |
|
|
|
MFS®
VIT II Research International Portfolio - Initial Class(1)
|
|
|
|
0.89%
|
|
|
|
13.01%
|
|
|
|
8.49%
|
|
|
|
4.15%
|
|
|
|
|
U.S. Equity |
|
|
|
MFS®
VIT III Blended Research® Small Cap Equity Portfolio - Initial
Class(1) |
|
|
|
0.51%
|
|
|
|
18.96%
|
|
|
|
10.28%
|
|
|
|
8.27%
|
|
|
|
|
Sector Equity |
|
|
|
MFS®
VIT III Global Real Estate Portfolio - Initial Class(1)
|
|
|
|
0.90%
|
|
|
|
11.46%
|
|
|
|
6.41%
|
|
|
|
6.55%
|
|
|
|
|
U.S. Equity |
|
|
|
MFS®
VIT III Mid Cap Value Portfolio - Initial Class(1) |
|
|
|
0.79%
|
|
|
|
12.73%
|
|
|
|
12.90%
|
|
|
|
8.73%
|
|
|
|
|
U.S. Equity |
|
|
|
MFS®
VIT Mid Cap Growth Series - Initial Class(1) |
|
|
|
0.80%
|
|
|
|
21.32%
|
|
|
|
13.31%
|
|
|
|
11.12%
|
|
|
|
|
U.S. Equity |
|
|
|
MFS®
VIT New Discovery Series - Initial Class(1) |
|
|
|
0.87%
|
|
|
|
14.41%
|
|
|
|
11.08%
|
|
|
|
7.67%
|
|
|
|
|
U.S. Equity |
|
|
|
MFS®
VIT Research Series - Initial Class(1) |
|
|
|
0.79%
|
|
|
|
22.42%
|
|
|
|
14.41%
|
|
|
|
10.82%
|
|
|
|
|
Taxable Bond |
|
|
|
MFS®
VIT Total Return Bond Series - Initial Class(1) |
|
|
|
0.53%
|
|
|
|
7.38%
|
|
|
|
1.85%
|
|
|
|
2.22%
|
|
|
|
|
U.S. Equity |
|
|
|
MFS®
VIT Value Series - Initial Class(1) |
|
|
|
0.69%
|
|
|
|
7.93%
|
|
|
|
11.34%
|
|
|
|
8.52%
|
|
|
|
|
U.S. Equity |
|
|
|
Neuberger
Berman AMT Sustainable Equity Portfolio - Class I |
|
|
|
0.90%
|
|
|
|
26.90%
|
|
|
|
13.97%
|
|
|
|
9.99%
|
|
|
|
|
Commodities |
|
|
|
PIMCO
VIT CommodityRealReturn® Strategy Portfolio - Administrative
Class(1) |
|
|
|
1.48%
|
|
|
|
-7.85%
|
|
|
|
8.55%
|
|
|
|
-0.80%
|
|
|
|
|
Taxable Bond |
|
|
|
PIMCO
VIT Global Bond Opportunities Portfolio (Unhedged) - Administrative Class |
|
|
|
1.01%
|
|
|
|
5.26%
|
|
|
|
0.97%
|
|
|
|
1.09%
|
|
|
|
|
Taxable Bond |
|
|
|
PIMCO VIT High
Yield Portfolio - Administrative Class |
|
|
|
0.77%
|
|
|
|
12.22%
|
|
|
|
4.83%
|
|
|
|
4.15%
|
|
|
|
|
Taxable Bond |
|
|
|
PIMCO
VIT Income Portfolio - Institutional Class |
|
|
|
0.88%
|
|
|
|
8.41%
|
|
|
|
3.48%
|
|
|
|
— |
|
|
|
|
Taxable Bond |
|
|
|
PIMCO
VIT International Bond Portfolio (U.S. Dollar-Hedged) - Administrative Class |
|
|
|
1.28%
|
|
|
|
9.02%
|
|
|
|
1.64%
|
|
|
|
3.06%
|
|
|
|
|
Taxable Bond |
|
|
|
PIMCO
VIT Low Duration Portfolio - Administrative Class |
|
|
|
0.69%
|
|
|
|
4.97%
|
|
|
|
0.99%
|
|
|
|
0.92%
|
|
|
|
|
Taxable Bond |
|
|
|
PIMCO
VIT Real Return Portfolio - Administrative Class |
|
|
|
0.84%
|
|
|
|
3.67%
|
|
|
|
3.16%
|
|
|
|
2.25%
|
|
|
|
|
Taxable Bond |
|
|
|
PIMCO
VIT Total Return Portfolio - Administrative Class |
|
|
|
0.75%
|
|
|
|
5.93%
|
|
|
|
1.08%
|
|
|
|
1.71%
|
|
|
|
|
International Equity |
|
|
|
Putnam
VT Focused International Equity Fund - Class IA - The
Putnam Advisory Company, LLC; Putnam
Investments Limited(1) |
|
|
|
0.82%
|
|
|
|
19.56%
|
|
|
|
9.15%
|
|
|
|
5.93%
|
|
|
|
|
Allocation |
|
|
|
Putnam
VT Global Asset Allocation Fund - Class IA - The
Putnam Advisory Company, LLC; Putnam
Investments Limited(1) |
|
|
|
0.86%
|
|
|
|
17.78%
|
|
|
|
8.41%
|
|
|
|
6.61%
|
|
|
|
|
Asset Allocation Type |
|
|
|
Portfolio Company
Investment Adviser; SubAdviser(s), as applicable |
|
|
|
Current Expenses |
|
|
|
Average Annual Total Returns (as of 12/31/2023)
|
|
|
|
1 Year |
|
|
|
5 Year |
|
|
|
10 Year |
|
|
|
|
Taxable Bond |
|
|
|
Putnam
VT High Yield Fund - Class IA - Putnam
Investments Limited |
|
|
|
0.75%
|
|
|
|
12.29%
|
|
|
|
4.82%
|
|
|
|
3.87%
|
|
|
|
|
Taxable Bond |
|
|
|
Putnam
VT Income Fund - Class IB - Putnam
Investments Limited |
|
|
|
0.89%
|
|
|
|
4.69%
|
|
|
|
0.37%
|
|
|
|
1.43%
|
|
|
|
|
International Equity |
|
|
|
Putnam
VT International Value Fund - Class IA - The
Putnam Advisory Company, LLC; Putnam
Investments Limited |
|
|
|
0.88%
|
|
|
|
19.08%
|
|
|
|
9.96%
|
|
|
|
4.14%
|
|
|
|
|
U.S. Equity |
|
|
|
Putnam
VT Large Cap Growth Fund - Class IA - Putnam
Investments Limited |
|
|
|
0.65%
|
|
|
|
44.89%
|
|
|
|
18.80%
|
|
|
|
14.68%
|
|
|
|
|
U.S. Equity |
|
|
|
Putnam
VT Large Cap Value Fund - Class IA - Putnam
Investments Limited |
|
|
|
0.57%
|
|
|
|
15.92%
|
|
|
|
14.78%
|
|
|
|
10.54%
|
|
|
|
|
U.S. Equity |
|
|
|
Putnam
VT Research Fund - Class IA - The
Putnam Advisory Company, LLC; Putnam
Investments Limited |
|
|
|
0.74%
|
|
|
|
29.16%
|
|
|
|
16.45%
|
|
|
|
12.24%
|
|
|
|
|
U.S. Equity |
|
|
|
Putnam
VT Small Cap Value Fund - Class IA - Putnam
Investments Limited |
|
|
|
0.78%
|
|
|
|
24.13%
|
|
|
|
14.45%
|
|
|
|
8.09%
|
|
|
|
|
U.S. Equity |
|
|
|
Putnam
VT Sustainable Future Fund - Class IA - Putnam
Investments Limited(1) |
|
|
|
0.82%
|
|
|
|
28.83%
|
|
|
|
12.56%
|
|
|
|
8.72%
|
|
|
|
|
U.S. Equity |
|
|
|
T.
Rowe Price® Blue Chip Growth Portfolio-II Class(1) |
|
|
|
1.00%
|
|
|
|
48.96%
|
|
|
|
13.22%
|
|
|
|
12.03%
|
|
|
|
|
Taxable Bond |
|
|
|
Vanguard®
VIF Global Bond Index Portfolio |
|
|
|
0.13%
|
|
|
|
6.52%
|
|
|
|
0.99%
|
|
|
|
0.88%
|
|
|
|
|
Sector Equity |
|
|
|
Vanguard®
VIF Real Estate Index Portfolio |
|
|
|
0.26%
|
|
|
|
11.70%
|
|
|
|
7.18%
|
|
|
|
7.29%
|
|
|
|
|
Taxable Bond |
|
|
|
Vanguard®
VIF Total Bond Market Index Portfolio |
|
|
|
0.14%
|
|
|
|
5.58%
|
|
|
|
1.04%
|
|
|
|
1.71%
|
|
|
|
|
U.S. Equity |
|
|
|
Victory
RS Small Cap Growth Equity VIP Series - Class I(1)
|
|
|
|
0.88%
|
|
|
|
20.40%
|
|
|
|
5.63%
|
|
|
|
6.48%
|
|
|
You can call us at 1-800-265-1545 to ask us questions, to request information about the Policy,
and to obtain copies of the SAI, personalized illustrations or other documents. You also can write to us at the address given on the first
page of this Prospectus.
The current SAI is dated May 1, 2024. The SAI contains
additional information about the Policy and is included in this Prospectus. You can obtain a free copy of the SAI upon request, by writing
us or calling at the number given above. You are encouraged to read the SAI.
Our SEC reports and other information about us are also available to the public
at the SEC’s web site at sec.gov. Copies of any of the information filed with the SEC may be obtained, upon payment of a duplicating
fee, by electronic request at the following email address: publicinfo@sec.gov.
EDGAR Contract Identifier: C000229537
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STATEMENT OF ADDITIONAL INFORMATION
May 1, 2024
PROTECTIVE EXECUTIVE BENEFITS REGISTERED VUL NY
A Flexible Premium Variable Universal Life Insurance Policy
Issued by
PROTECTIVE NY COLI VUL
(Registrant)
and
PROTECTIVE LIFE AND ANNUITY INSURANCE COMPANY
(Depositor)
2801 Highway 280 South
Birmingham, Alabama 35223
This Statement of Additional Information ("SAI") is not a prospectus. This SAI should be read together with the Prospectus for the Policy dated May 1, 2024 and the prospectuses for the Funds. You may obtain a copy of the Prospectus without charge by calling us at 1-800-265-1545 or writing to us at gwexecbenefits@protective.com or visiting www.protective.com/productprospectus. Capitalized terms in this SAI have the same meanings as in the Prospectus for the Policy.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
GENERAL INFORMATION AND HISTORY | 3 |
Company | 3 |
Variable Account | 3 |
NON-PRINCIPAL RISKS OF INVESTING IN THE POLICY | 3 |
SERVICES | 4 |
PREMIUMS | 4 |
DISTRIBUTION | 4 |
Policy Owner Control | 5 |
Financial Statements | 5 |
CEFLI | 6 |
Other Investors in the Funds | 6 |
Assignment | 6 |
State Regulation | 6 |
Reports to Owners | 6 |
Legal Matters | 7 |
Experts | 7 |
Reinsurance | 7 |
GENERAL INFORMATION AND HISTORY
Protective Life and Annuity Insurance Company ("Protective Life") (formerly American Foundation Life Insurance Company) was formed in 1978 under the laws of the State of Alabama. Protective Life is a wholly owned subsidiary of Protective Life Insurance Company, which is the principal operating subsidiary of Protective Life Corporation (“PLC”), a U.S. insurance holding company and subsidiary of the Dai-ichi Life Insurance Company, Limited (“Dai-ichi”).
Protective NY COLI VUL separate account is a separate investment account of Protective Life established under Alabama law by the board of directors of Protective Life on February 25, 2020.
NON-PRINCIPAL RISKS OF INVESTING IN THE POLICY
Cyber Security Risks. With the increasing reliance on digital technology to conduct necessary business functions and engage customers and business partners, we are susceptible to ongoing risks and threats of cyber security incidents. These risks include the occurrence of deliberate or malicious attacks, as well as unintentional incidents. These risks are heightened by our offering of products with certain features, including those with automatic asset transfer or re-allocation strategies, and by our offering of unaffiliated underlying funds and administrators. To provide reasonable assurance, we employ people, process and technology, and related protocols to protect computer hardware, networks, systems and applications and the data transmitted and stored therewith. These measures are intended to safeguard the reliability of our systems, as well as the security, availability, integrity, and confidentiality of our data assets. We also contract with vendors who we ensure have their own safeguards for our data.
Deliberate cyber-attacks include but are not limited to: gaining unauthorized access (including physical break-ins and attempts to fraudulently induce employees, customers or other users of these systems to disclose sensitive information in order to gain access) to computer systems in order to misappropriate financial assets and/or disclose sensitive or confidential information; deleting, corrupting or modifying data; and causing operational disruptions. Cyber-attacks can also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites to prevent access to computer networks. In addition to deliberate breaches engineered by external actors, cyber security risks can also result from the conduct of malicious, exploited or careless insiders whose actions may result in the destruction, release or disclosure of confidential or proprietary information stored on our systems.
Cyber security incidents that could impact us and our Policy Owners, whether deliberate or unintentional, could arise not only during our own administration of the Policy, but also at entities operating the Policy’s underlying funds intermediaries, and third-party service providers. Cyber security failures originating with any of the entities involved with the servicing and administration of the Policy may cause significant disruptions in the business operations related to the Policy. Potential impacts of a cyber security incident include but are not limited to: financial losses under the Policy; your inability to conduct transactions under the Policy that may involve an underlying fund; an inability to calculate unit values under the Policy and/or the net asset value (“NAV”) of an underlying fund; and disclosures of your confidential personal financial information.
In addition to direct impacts to you, cyber security incidents may have adverse impacts on us. For instance, such cyber security incidents may prompt regulatory inquiries and could result in regulatory proceedings that cause us to incur regulatory, legal and/or litigation costs and may cause reputational damage. Costs incurred by us may include expenses related to reimbursement, litigation and litigation settlements, and additional compliance costs. We may also incur considerable expenses when enhancing and upgrading computer systems and systems security to prevent or remediate a cyber security failure.
The rapid proliferation of technologies-as well as the increased sophistication of organized crime, hackers, terrorists, hostile foreign governments, and others--continue to pose new and significant cyber security threats. Although we, our service providers, and the underlying funds offered under the Policy have established business continuity plans and risk management systems to mitigate cyber security risks, there can be no guarantee or assurance that such plans or systems will be effective in avoiding losses affecting your Policy due to cyber-attacks or information security breaches, or that all risks that exist or may develop in the future have been completely anticipated and identified or can be protected against. Nor can we control or assure the efficacy of the cyber security plans and systems implemented by third-party service providers, the underlying funds, and the issuers in which the underlying funds invest.
COVID-19. The outbreak of COVID-19 pandemic has caused increased volatility of interest rates and investment returns of equity and financial markets. Such events can adversely impact us and our operations. Management believes it is taking appropriate actions to mitigate the negative impact to our business and operations. Although vaccines for COVID-19 have become more widely available, the full impact of COVID-19 is unknown and cannot be reasonably estimated or predicted at this time as these events are still developing.
Moreover, these market conditions may have impacted the performance of the Portfolios underlying the Sub-Accounts. If these market conditions continue, and depending on your individual circumstances (e.g., your selected investment options and the timing of any contributions, transfers, or withdrawals), you may experience (perhaps significant) negative returns under the Policy. The duration of the COVID-19 pandemic, the pace of recovery (which may vary from market to market) and the future impact that the pandemic may have on the financial markets and global economy, remain unknown. You should consult with a financial professional about how the COVID-19 pandemic and the recent market conditions may impact your future investment decisions related to the Policy, such as purchasing the Policy or making contributions, transfers, or withdrawals, based on your individual circumstances.
Expenses paid by third parties.
Not Applicable
Service agreements.
Not Applicable
Administrative Procedures.
Not Applicable
Investment Distributors, Inc. (“IDI”) under which IDI has agreed to distribute the Policies on a “best efforts” basis. Under the agreement, IDI serves as principal underwriter (as defined under Federal securities laws and regulations) for the Policies. IDI is a Tennessee corporation and was established in 1993. IDI, a wholly owned subsidiary of PLC, is an affiliate of Protective Life, and its Home Office shares the same address as Protective Life. IDI is registered with the SEC under the Securities Exchange Act of 1934 as a broker-dealer and is a member firm of the Financial Industry Regulatory Authority (“FINRA”).
IDI does not sell Policies directly to purchasers. IDI, together with Protective Life, enters into distribution agreements with other broker-dealers (collectively, “Selling Broker-Dealers”) for the sale of the Policies. Registered representatives of the Selling Broker-Dealers must be licensed as insurance agents by applicable state insurance authorities and appointed as agents of Protective Life in order to sell the Policies.
Protective NY COLI VUL separate account is newly offered and therefore IDI did not receive any compensation for its services related to the Policy during the last three fiscal years.
For a variable life insurance policy to qualify for tax deferral, assets in the separate accounts supporting the Policy must be considered to be owned by the insurance company and not by the policy owner. Under current U.S. tax law, if a policy owner has excessive control over the investments made by a separate account, or the underlying fund, the policy owner will be taxed currently on income and gains from the account or fund. In other words, in such a case of "investor control" the policy owner would not derive the tax benefits normally associated with variable life insurance. We urge you to consult your own tax advisor with respect to the application of the investor control doctrine.
The audited
statements of assets and liabilities of the subaccounts of Protective NY COLI
VUL as of December 31, 2023, and the related statements of
operations and of changes in net assets for each of the years or periods presented as
well as the Report of Independent Registered Public Accounting Firm are
incorporated into the Statement of Additional Information by reference to the
Variable Account’s Form N-VPFS, File No. 811-23707, filed with the SEC on April 17, 2024. The audited
statutory statements of admitted assets, liabilities and capital and surplus of Protective Life and Annuity Insurance Company as of December 31, 2023 and 2022, and the related statutory statements of operations, changes in capital and surplus, and cash flow for each of the years in the three-year
period ended December 31, 2023, as well as the Independent Auditors' Report are incorporated into the Statement of Additional
Information by reference to the Variable Account’s Form N-VPFS, File
No. 811-23707, filed with the SEC on March 28, 2024. Protective Life's statutory financial statements should be considered only as bearing on its ability to meet its obligations under the Policies. They should not be considered as bearing on the investment performance of the assets held in the Variable Account.
Protective Life is a member of the Compliance & Ethics Forum for Life Insurers ("CEFLI"), and as such may include the CEFLI logo and information about CEFLI membership in Protective advertisements. Companies that belong to CEFLI subscribe to a set of ethical standards covering the various aspects of sales and service for individually sold life insurance and annuities.
Other Investors in the Funds
Shares of the underlying Funds (a complete list of the Funds is included in the Prospectus, under Appendix A- Funds Available Under The Policy) are sold to separate accounts of insurance companies, which may or may not be affiliated with Protective Life or each other, a practice known as "shared funding." They may also be sold to separate accounts to serve as the underlying investment for both variable annuity contracts and variable life insurance policies, a practice known as "mixed funding." Shares of some of these Funds may also be sold to certain qualified pension and retirement plans. As a result, there is a possibility that, a material conflict may arise among and between the interests of Policy Owners and other of the Funds' various investors. In the event of any such material conflicts, Protective Life will consider what action may be appropriate, including removing a Fund from the Variable Account or replacing a Fund with another Fund. The board of directors (or trustees) of each of the Funds monitors events related to their Funds to identify possible material irreconcilable conflicts among and between the interests of the Fund's various investors. There are certain risks associated with mixed and shared funding and with the sale of shares to qualified pension and retirement plans, as disclosed in each Fund’s prospectus.
The Policy may be assigned in accordance with its terms. An assignment is binding upon Protective Life only if it is in writing and filed at the Home Office. Once Protective Life has received a signed copy of the assignment, the Owner's rights and the interest of any beneficiary (or any other person) will be subject to the assignment. Protective Life assumes no responsibility for the validity or sufficiency of any assignment. An assignment is subject to any Policy Debt and any liens. An assignment may result in certain amounts being subject to income tax and a 10% additional tax. (See "Tax Considerations" in the Prospectus.)
Protective Life is subject to regulation and supervision by the Department of Insurance of the State of Alabama which periodically examines its affairs. It is also subject to the insurance laws and regulations of all jurisdictions where it is authorized to do business. A copy of the Policy form has been filed and approved by insurance officials in the state of New York, the only state in which the Policy is sold.
Protective Life is required to submit annual statements of operations, including financial statements, to the insurance departments of the various jurisdictions where it does business to determine solvency and compliance with applicable insurance laws and regulations.
Each year you will be sent a report at your last known address showing, as of the end of the current report period: the Death Benefit; Policy Value; Fixed Account Value; Variable Account Value; Loan Account Value; Sub-Account Values; premiums paid since the last report; withdrawals since the last report; any Policy loans and accrued interest; Surrender Value; current Net Premium allocations; charges deducted since the last report; any liens and accrued interest; and any other information required by law. We will also make available an annual and a semi-annual report for each Fund underlying a Sub-Account to which you have allocated Policy Value, including a list of the securities held in each Fund, as required by the Investment Company Act of 1940, as amended (the "1940 Act"). In addition, when you pay premiums or request any other financial transaction under your Policy you will receive a written confirmation of these transactions.
Faegre Drinker Biddle & Reath LLP has provided advice on certain matters relating to the federal securities laws.
The financial statements of the subaccounts that comprise Protective NY COLI VUL as of December 31, 2023,
and for each of the years or periods presented, have been incorporated by reference in
this Statement of Additional Information in reliance upon the report of KPMG
LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing.
The statutory financial statements and financial statement schedules of Protective Life and Annuity Insurance Company as of December 31, 2023 and 2022, and for each of years in the three-year period ended December 31, 2023, have been incorporated by reference in this Statement of Additional Information in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The audit report covering the December 31, 2023 statutory financial statements includes explanatory language that states that the financial statements are prepared by Protective Life and Annuity Insurance Company using statutory accounting practices prescribed or permitted by the Alabama Department of Insurance, which is a basis of accounting other than U.S. generally accepted accounting principles. Accordingly, the audit report states that the financial statements are not intended to be and, therefore, are not presented fairly in accordance with U.S. generally accepted accounting principles and further states that those financial statements are presented fairly, in all material respects, in accordance with statutory accounting practices prescribed or permitted by the Alabama Department of Insurance.
The business address for KPMG LLP is 420 20th Street North, Suite 1800, Birmingham, Alabama 35203.
The Company may reinsure a portion of the risks assumed under the Policies.
PART C
OTHER INFORMATION
Item 30. Exhibits
(a) Board of Directors Resolutions
(b) Custodial Agreements - Not Applicable.
(c) Underwriting Contracts
(d) Contracts
(d) (2)
Specimen Term Life Rider is incorporated herein by reference to the Form N-6 Registration Statement (File No. 333-257081), filed with the Commission on June 14, 2021.
(e) Applications
(f) Depositor's Certificate of Incorporation and By-Laws
(g) Reinsurance Contracts
(g) (3)
List of Reinsurers is incorporated herein by reference to Pre-Effective Amendment No. 1 to the Form N-6 Registration Statement (File No. 333-257081), filed with the Commission on September 21, 2021.
(h) Participation Agreements
(i)
Administrative Contracts - Not Applicable
(j) Other Material Contracts - Not Applicable
(k) Legal Opinion.
(l) Actuarial Opinion - Not Applicable
(m) Calculation - Not Applicable
(n) Other Opinions
- Filed herein
(n) (3)
Powers of Attorney is incorporated herein by reference to Post-Effective Amendment No. 9 to the Form N-4 Registration Statement (File No. 333-201920), filed with the Commission on April 25, 2023.
(o)
Omitted Financial Statements - No financial statements are omitted from Item 28.
(p)
Initial Capital Agreements - Not Applicable
(q)
Redeemability Exemption
(r)
Form of Initial Summary Prospectuses is incorporated herein by reference to Post-Effective Amendment No. 1 to the Form N-6 Registration Statement (File No. 333-257081), filed with the Commission on April 26, 2022.
Item 31. Directors and Officers of the Depositor
Name and Principal Business Address* | | Position and Offices with Depositor |
Adams, D. Scott | | Executive Vice President, Chief Transformation and Strategy Officer |
Banerjee Choudhury, Shiladitya (Deep) | | Senior Vice President, and Treasurer |
Bartlett, Malcolm Lee | | Senior Vice President, Corporate Tax |
Bielen, Richard J. | | Chairman of the Board, Chief Executive Officer, President, and Director |
Black, Lance P. | | Executive Vice President, Acquisitions and Corporate Development |
Byrd, Kenneth | | Senior Vice President, Operations |
Cox, Kathryn S. | | Senior Vice President, and President, Protection Division |
Cramer, Steve | | Senior Vice President, and Chief Product Officer |
Creutzmann, Scott E. | | Senior Vice President, and Chief Compliance Officer |
Drew, Mark L. | | Executive Vice President, and Chief Legal Officer |
Evesque, Wendy K. | | Executive Vice President, and Chief Human Resources Officer
|
Hardeman, James | | Senior Vice President, Financial Planning and Analysis |
Harrison, Wade V. | | Executive Vice President, and Chief Retail Officer |
Karchunas, M. Scott | | Senior Vice President, and President, Asset Protection Division |
Kohler, Matthew | | Senior Vice President, and Chief Information Officer |
Laeyendecker, Ronald | | Senior Vice President, Executive Benefit Markets |
Lawrence, Mary Pat | | Senior Vice President, Government Affairs |
Lee, Felicia M. | | Secretary, Vice President, and Senior Counsel |
McDonald, Laura Y. | | Senior Vice President, and Chief Mortgage and Real Estate Officer |
Passafiume, Philip E. | | Executive Vice President, and Chief Investment Officer |
Peeler, Rachelle R. | | Senior Vice President, and Senior Human Resources Partner |
Pugh, Barbara N. | | Senior Vice President, and Chief Accounting Officer |
Radnoti, Francis | | Senior Vice President, and Chief Product Officer |
Ray, Webster M. | | Senior Vice President, Investments |
Riebel, Matthew A. | | Senior Vice President, and Chief Distribution Officer |
Seurkamp, Aaron C. | | Senior Vice President, and President, Retirement Division |
Wagner, James | | Senior Vice President, and Chief Distribution Officer |
Wahlheim, Cary T. | | Senior Vice President, and Senior Counsel |
Walker, Steven G. | | Vice Chairman, Finance and Risk, and Director |
Wells, Paul R. | | Executive Vice President, Chief Financial Officer, and Director |
Whitcomb, John | | Senior Vice President, Retirement Operations and Strategic Planning |
Williams, Doyle J. | | Senior Vice President, and Chief Marketing Officer |
* Unless otherwise indicated, principal business address is 2801 Highway 280 South, Birmingham, Alabama 35223
Item 32. Persons Controlled by or Under Common Control With the Depositor or Registrant
The registrant is a segregated asset account of the Company and is therefore owned and controlled by the Company. All of the Company’s outstanding voting common stock is owned by Protective Life Corporation, a subsidiary of Dai-ichi Life Holdings, Inc. Protective Life Corporation is described more fully in the prospectus included in this registration statement.
For more information regarding the company structure of Protective Life Corporation and Dai-ichi Life Holdings, Inc., please refer to the organizational chart incorporated herein by reference to Post-Effective Amendment No. 5 to the Form N-4 Registration Statement (File No. 333-261426), filed with the Commission on February 21, 2024.
Item 33. Indemnification
Article XI of the By-laws of Protective Life provides, in substance, that any of Protective Life’s directors and officers, who is a party or is threatened to be made a party to any action, suit or proceeding, other than an action by or in the right of Protective Life, by reason of the fact that he is or was an officer or director, shall be indemnified by Protective Life against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such claim, action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Protective Life and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. If the claim, action or suit is or was by or in the right of Protective Life to procure a judgment in its favor, such person shall be indemnified by Protective Life against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Protective Life, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to Protective Life unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. To the extent that a director or officer has been successful on the merits or otherwise in defense of any such action, suit or proceeding, or in defense of any claim, issue or matter therein, he shall be indemnified by Protective Life against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith, not withstanding that he has not been successful on any other claim issue or matter in any such action, suit or proceeding. Unless ordered by a court, indemnification shall be made by Protective Life only as authorized in the specific case upon a determination that indemnification of the officer or director is proper in the circumstances because he has met the applicable standard of conduct. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to, or who have been successful on the merits or otherwise with respect to, such claim action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (c) by the shareholders.
In addition, the executive officers and directors are insured by PLC’s Directors’ and Officers’ Liability Insurance Policy including Company Reimbursement and are indemnified by a written contract with PLC which supplements such coverage.
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, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 34. Principal Underwriters
(a) Investment Distributors, Inc. (“IDI”) is the principal underwriter of the Policies as defined in the Investment Company Act of 1940. IDI is also principal underwriter for the Protective Variable Annuity Separate Account, Protective Variable Life Separate Account, PLICO Variable Annuity Account S, Protective COLI VUL, Protective COLI PPVUL, Variable Annuity Separate Account A of Protective Life, and PLAIC Variable Annuity Account S. The principal underwriter, IDI, is also currently distributing units of interest in the following separate accounts: Variable Annuity-1 Series Account, Variable Annuity-1 Series Account of Great West Life & Annuity Insurance Company of New York, Variable Annuity-2 Series Account, Variable Annuity-2 Series Account [New York], Variable Annuity-3 Series Account, COLI VUL-2 Series Account, COLI VUL-2 Series Account of Great West Life & Annuity Insurance Company of New York, COLI VUL-4 Series Account of Great-West Life & Annuity Insurance Company, Maxim Series Account of Great West Life & Annuity Insurance Company, Prestige Variable Life Account, Pinnacle Series Account of Great West Life & Annuity Insurance Company, and Trillium Variable Annuity Account.
(b) The following information is furnished with respect to the officers and directors of IDI:
Name and Principal Business Address* | | Position and Offices | | Position and Offices with Registrant |
Carlson, Martha H. | | Designated Responsible Licensed Producer | | Vice President, National Sales Manager Annuity |
Coffman, Benjamin P. | | Senior Director Financial Reporting | | Vice President, Financial Reporting |
Creutzmann, Scott E. | | Director | | Senior Vice President and Chief Compliance Officer |
Guerrera, Darren C. | | Chief Financial Officer | | Vice President and Chief Financial Officer, Concourse |
Johnson, Julena G. | | Director Regulatory | | Director Regulatory |
Lee, Felicia M. | | Secretary | | Secretary, Vice President, and Senior Counsel |
McCreless, Kevin L. | | Chief Compliance Officer | | Senior Director Regulatory |
Morsch, Letitia A. | | Assistant Secretary, and Director | | Vice President, Head of Retail Retirement Operations |
Reed, Alisha D. | | Director | | Vice President, Head of Marketing Strategy |
Richards, Megan P. | | Assistant Secretary | | Assistant Secretary |
Tennent, Rayburn | | Senior Analyst Financial Reporting | | Senior Analyst Financial Reporting
|
Wagner, James | | President and Director | | Senior Vice President and Chief Distribution Officer |
* Unless otherwise indicated, principal business address is 2801 Highway 280 South, Birmingham, Alabama, 35223.
(c) The following commissions were received by each principal underwriter, directly or indirectly, from the Registrant during the Registrant’s last fiscal year:
(1) Name of Principal Underwriter |
|
(2) Net Underwriting Discounts |
|
(3) Compensation on Redemption |
|
(4) Brokerage Commissions |
|
(5) Other Compensation |
Investment Distributors, Inc. |
|
N/A |
|
None |
|
N/A |
|
N/A |
Item 35. Location of Accounts and Records.
All accounts and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder are maintained by Protective Life and Annuity Insurance Company at 2801 Highway 280 South, Birmingham, Alabama 35223.
Item 36. Management Services.
All management contracts are discussed in the Prospectus or Statement of Additional Information.
Item 37. Fee Representation.
Protective Life and Annuity Insurance Company represents that the fees and charges deducted under the Policy, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Protective Life and Annuity Insurance Company.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant of this Registration Statement certifies that it meets all of the requirements for effectiveness of this Registration Statement under Rule 485(b) of the Securities Act and has duly caused this Post-Effective Amendment to the Registration Statement on Form N-6 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Birmingham, State of Alabama, on April 24, 2024.
PROTECTIVE NY COLI VUL |
|
|
|
By: |
* |
|
Richard J. Bielen, President |
|
Protective Life and Annuity Insurance Company |
|
|
|
PROTECTIVE LIFE AND ANNUITY INSURANCE COMPANY |
|
|
|
By: |
* |
|
Richard J. Bielen, President |
|
Protective Life and Annuity Insurance Company |
|
|
|
|
|
As required by the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement on Form N-6 has been signed by the following persons in the capacities and on the dates indicated:
Signature | | Title | | Date |
* | | Chairman
of the Board, President | | April
24, 2024
|
Richard
J. Bielen | | Chief
Executive Officer, and Director | | |
| | (Principal
Executive Officer) | | |
| | | | |
* | | Vice
Chairman, Finance and Risk, and Director | | April
24, 2024 |
Steven
G. Walker | | | | |
| | | | |
* | | Executive
Vice President, Chief Financial Officer, and Director (Principal Accounting and Financial
Officer) | | April
24, 2024 |
Paul
R. Wells | | | | |
| | | | |
*BY: | /S/
BRADLEY A. STRICKLING | | | | April
24, 2024 |
Bradley
A. Strickling | | | | |
Attorney-in-Fact | | | | |
| | | | | |
EXHIBIT INDEX