PHL VARIABLE
ACCUMULATION
ACCOUNT II
Annual Report
To
Contract Owners
December 31, 2023
PHL VARIABLE INSURANCE COMPANY
KPMG LLP
One Financial Plaza
755 Main Street
Hartford, CT 06103
Report of Independent Registered Public Accounting Firm
To the Board of Directors of PHL Variable Insurance Company
and Contract Owners of PHL Variable Accumulation Account II:
Opinion on the Financial Statements
We have audited the accompanying statements of assets, liabilities and contract owners’ equity of the subaccounts listed in the Appendix that comprise PHL Variable Accumulation Account II (the Separate Account) as of December 31, 2023, the related statements of operations for the year then ended (or the period indicated in the Appendix), statements of changes in net assets for each of the years in the two-year period then ended (or the period indicated in the Appendix), and the related notes including the financial highlights in Note 6 for each of the years or periods in the five-year period then ended (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of each subaccount as of December 31, 2023, the results of their operations for the year then ended (or for the period indicated in the Appendix), the changes in their net assets for each of the years in the two-year period then ended (or for the period indicated in the Appendix), and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Separate Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Such procedures also included confirmation of securities owned as of December 31, 2023, by correspondence with the transfer agents of the underlying mutual funds. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ KPMG LLP
We have served as the auditor of one or more of the PHL Variable Insurance Company’s separate accounts since 2015.
Hartford, Connecticut
April 17, 2024
| KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. |
Appendix
ALPS FUNDS
ALPS Variable Investment Trust - Morningstar Conservative ETF Asset Allocation Portfolio: Class II (ACEAA2)
ALPS Variable Investment Trust - Morningstar Growth ETF Asset Allocation Portfolio: Class II (AGEAA2)
ALPS Variable Investment Trust - Morningstar Income and Growth ETF Asset Allocation Portfolio: Class II (AUGEA2)
AMUNDI US
Pioneer Variable Contracts Trust - Pioneer Equity Income VCT Portfolio: Class II (PIVEI2)
BNY MELLON INVESTMENT MANAGEMENT
BNY Mellon Stock Index Fund, Inc.: Service Shares (DSIFS)
BNY Mellon Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares (DVSCS) (1) (2)
FIDELITY INVESTMENTS
Fidelity Variable Insurance Products Fund - VIP Strategic Income Portfolio: Service Class 2 (FVSIS2) (1) (3)
FRANKLIN TEMPLETON DISTRIBUTORS, INC.
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond VIP Fund: Class 2 (FTVGI2)
GUGGENHEIM INVESTMENTS
Rydex Variable Trust - Multi-Hedge Strategies Fund (RVARS)
INVESCO INVESTMENTS
Invesco - Invesco V.I. Government Money Market Fund: Series I Shares (IVGMMI)
PIMCO FUNDS
PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class (PMVAAA)
PIMCO Variable Insurance Trust - High Yield Portfolio: Advisor Class (PMVHYD)
PIMCO Variable Insurance Trust - CommodityRealReturn(R) Strategy Portfolio: Advisor Class (PMVRSD)
PIMCO Variable Insurance Trust - Total Return Portfolio: Advisor Class (PMVTRD)
PIMCO Variable Insurance Trust - Short-Term Portfolio: Administrative Class (PVSTA)
T. ROWE PRICE
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: II (TRBCG2)
VAN ECK ASSOCIATES CORPORATION
VanEck VIP Trust - VanEck VIP Emerging Markets Fund: Initial Class (VWEM) (1) (3)
VanEck VIP Trust - VanEck VIP Global Resources Fund: Class S (VWHAS)
VANGUARD GROUP OF INVESTMENT COMPANIES
Vanguard Variable Insurance Fund - Total Bond Market Index Portfolio (VVHGB) (1) (3)
Vanguard Variable Insurance Fund - International Portfolio (VVI)
Vanguard Variable Insurance Fund - Total Stock Market Index Portfolio (VVTSM)
| (1) | At December 31, 2023, contract owners were not invested in this fund – no statements of assets, liabilities and contract owners’ equity included. |
| (2) | Only financial highlights for the year ended December 31, 2019 are included. |
| (3) | Only statement of changes for the period ended December 31, 2022 and financial highlights for each of the years or periods in the three-year period ended December 31, 2021 are included. |
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF ASSETS, LIABILTIES AND CONTRACT OWNERS’ EQUITY
DECEMBER 31, 2023
| Subaccount*,** | Shares | Cost | Investments, at fair value |
Accounts Receivable |
Total Assets | Accounts Payable |
Contract |
Accumulation Units |
Contracts in Payout |
Contract Owners’ Equity |
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| ACEAA2 |
3 | $ | 36 | $ | 34 | $ | - | $ | 34 | $ | 2 | $ | 32 | $ | 32 | $ | - | $ | 32 | |||||||||||||||||||||
| AGEAA2 |
34,080 | 365,471 | 386,472 | - | 386,472 | 1 | 386,471 | 386,471 | - | 386,471 | ||||||||||||||||||||||||||||||
| AUGEA2 |
270 | 2,806 | 2,662 | - | 2,662 | - | 2,662 | 2,662 | - | 2,662 | ||||||||||||||||||||||||||||||
| PIVEI2 |
730 | 12,886 | 11,004 | - | 11,004 | - | 11,004 | 11,004 | - | 11,004 | ||||||||||||||||||||||||||||||
| DSIFS |
164 | 9,827 | 11,364 | - | 11,364 | - | 11,364 | 11,364 | - | 11,364 | ||||||||||||||||||||||||||||||
| FTVGI2 |
1,826 | 26,424 | 23,440 | - | 23,440 | - | 23,440 | 23,440 | - | 23,440 | ||||||||||||||||||||||||||||||
| RVARS |
1,407 | 34,784 | 36,430 | - | 36,430 | - | 36,430 | 36,430 | - | 36,430 | ||||||||||||||||||||||||||||||
| IVGMMI |
41,070 | 41,070 | 41,070 | 1 | 41,071 | - | 41,071 | 41,071 | - | 41,071 | ||||||||||||||||||||||||||||||
| PMVAAA |
10,267 | 106,169 | 92,913 | 2 | 92,915 | - | 92,915 | 92,915 | - | 92,915 | ||||||||||||||||||||||||||||||
| PMVHYD |
6,475 | 49,319 | 46,494 | - | 46,494 | 1 | 46,493 | 46,493 | - | 46,493 | ||||||||||||||||||||||||||||||
| PMVRSD |
4,190 | 26,180 | 22,878 | - | 22,878 | - | 22,878 | 22,878 | - | 22,878 | ||||||||||||||||||||||||||||||
| PMVTRD |
57,151 | 611,872 | 524,643 | 1 | 524,644 | - | 524,644 | 524,644 | - | 524,644 | ||||||||||||||||||||||||||||||
| PVSTA |
503 | 5,162 | 5,147 | 1 | 5,148 | - | 5,148 | 5,148 | - | 5,148 | ||||||||||||||||||||||||||||||
| TRBCG2 |
468 | 18,573 | 20,360 | - | 20,360 | 2 | 20,358 | 20,358 | - | 20,358 | ||||||||||||||||||||||||||||||
| VWHAS |
397 | 9,020 | 10,084 | - | 10,084 | - | 10,084 | 10,084 | - | 10,084 | ||||||||||||||||||||||||||||||
| VVI |
3,488 | 101,353 | 85,711 | - | 85,711 | - | 85,711 | 85,711 | - | 85,711 | ||||||||||||||||||||||||||||||
| VVTSM |
5,430 | 204,790 | 268,521 | 2 | 268,523 | - | 268,523 | 268,523 | - | 268,523 | ||||||||||||||||||||||||||||||
* Represents abbreviation of investment name. For full investment name and related abbreviation, see note 1(b).
** For all subaccounts not included herein but listed as an investment option in note 1(b), Total Assets and Contract Owners’ Equity at the end of the period are $0. See note 1(b) for all investments available for which no contract owners were invested at December 31, 2023, if applicable.
See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2023
| Investment Activity: | ACEAA2 | AGEAA2 | AUGEA2 | PIVEI2 | DSIFS | FTVGI2 | RVARS | IVGMMI | ||||||||||||||||||||||||
| Reinvested dividends |
$ | 1 | 6,658 | 55 | 208 | 159 | - | 1,013 | 1,842 | |||||||||||||||||||||||
| Mortality and expense risk charges (note 2) |
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| Net investment income (loss) |
1 | 6,658 | 55 | 208 | 159 | - | 1,013 | 1,842 | ||||||||||||||||||||||||
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| Realized gain (loss) on investments |
- | 5,881 | (351 | ) | (1,018 | ) | 1,271 | (203 | ) | 99 | - | |||||||||||||||||||||
| Change in unrealized gain (loss) on investments |
2 | 39,655 | 798 | 524 | 1,020 | 879 | 412 | - | ||||||||||||||||||||||||
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| Net gain (loss) on investments |
2 | 45,536 | 447 | (494 | ) | 2,291 | 676 | 511 | - | |||||||||||||||||||||||
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| Reinvested capital gains |
- | 8,619 | 25 | 996 | 607 | - | - | - | ||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
$ | 3 | 60,813 | 527 | 710 | 3,057 | 676 | 1,524 | 1,842 | |||||||||||||||||||||||
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| Investment Activity: | PMVAAA | PMVHYD | PMVRSD | PMVTRD | PVSTA | TRBCG2 | VWHAS | VVI | ||||||||||||||||||||||||
| Reinvested dividends |
$ | 2,601 | 2,428 | 3,226 | 17,391 | 218 | - | 380 | 1,243 | |||||||||||||||||||||||
| Mortality and expense risk charges (note 2) |
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
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| Net investment income (loss) |
2,601 | 2,428 | 3,226 | 17,391 | 218 | - | 380 | 1,243 | ||||||||||||||||||||||||
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| Realized gain (loss) on investments |
(83 | ) | (22 | ) | (221 | ) | (2,698 | ) | (1 | ) | (11 | ) | 1,903 | 7 | ||||||||||||||||||
| Change in unrealized gain (loss) on investments |
4,342 | 2,643 | (4,593 | ) | 14,217 | 62 | 4,051 | (2,824 | ) | 7,238 | ||||||||||||||||||||||
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| Net gain (loss) on investments |
4,259 | 2,621 | (4,814 | ) | 11,519 | 61 | 4,040 | (921 | ) | 7,245 | ||||||||||||||||||||||
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| Reinvested capital gains |
- | - | - | - | - | - | - | 2,681 | ||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
$ | 6,860 | 5,049 | (1,588 | ) | 28,910 | 279 | 4,040 | (541 | ) | 11,169 | |||||||||||||||||||||
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See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2023
| Investment Activity: | VVTSM | |||||||||||||||||||||||||||||||
| Reinvested dividends |
$ | 2,891 | ||||||||||||||||||||||||||||||
| Mortality and expense risk charges (note 2) |
- | |||||||||||||||||||||||||||||||
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| Net investment income (loss) |
2,891 | |||||||||||||||||||||||||||||||
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| Realized gain (loss) on investments |
4,569 | |||||||||||||||||||||||||||||||
| Change in unrealized gain (loss) on investments |
36,554 | |||||||||||||||||||||||||||||||
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| Net gain (loss) on investments |
41,123 | |||||||||||||||||||||||||||||||
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| Reinvested capital gains |
14,088 | |||||||||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
$ | 58,102 | ||||||||||||||||||||||||||||||
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* For all subaccounts not included herein but listed as an investment option in note 1(b), there was no activity during the period. See note 1(b) for all investments available for which no contract owners were invested at December 31, 2023, if applicable.
See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY
YEARS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022
| ACEAA2 | AGEAA2 | AUGEA2 | PIVEI2 | |||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| Investment activity: |
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| Net investment income (loss) |
$ | 1 | 1 | 6,658 | 8,091 | 55 | 132 | 208 | 230 | |||||||||||||||||||||||
| Realized gain (loss) on investments |
- | - | 5,881 | 4,615 | (351 | ) | (472 | ) | (1,018 | ) | (72 | ) | ||||||||||||||||||||
| Change in unrealized gain (loss) on investments |
2 | (7 | ) | 39,655 | (114,378 | ) | 798 | (1,694 | ) | 524 | (3,111 | ) | ||||||||||||||||||||
| Reinvested capital gains |
- | 1 | 8,619 | 20,323 | 25 | 331 | 996 | 1,767 | ||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
3 | (5 | ) | 60,813 | (81,349 | ) | 527 | (1,703 | ) | 710 | (1,186 | ) | ||||||||||||||||||||
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| Equity transactions: |
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| Purchase payments received from contract owners (note 4) |
- | - | (2 | ) | (19 | ) | - | - | - | - | ||||||||||||||||||||||
| Transfers between funds |
- | - | - | - | - | - | (2,701 | ) | 11,765 | |||||||||||||||||||||||
| Redemptions (notes 2, 3, and 4) |
(4 | ) | (5 | ) | (158,854 | ) | (67,158 | ) | (5,103 | ) | (5,151 | ) | (155 | ) | (143 | ) | ||||||||||||||||
| Adjustments to maintain reserves |
- | 1 | (1 | ) | - | (1 | ) | - | (1 | ) | (2 | ) | ||||||||||||||||||||
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| Net equity transactions |
(4 | ) | (4 | ) | (158,857 | ) | (67,177 | ) | (5,104 | ) | (5,151 | ) | (2,857 | ) | 11,620 | |||||||||||||||||
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| Net change in contract owners’ equity | (1 | ) | (9 | ) | (98,044 | ) | (148,526 | ) | (4,577 | ) | (6,854 | ) | (2,147 | ) | 10,434 | |||||||||||||||||
| Contract owners’ equity at beginning of period | 33 | 42 | 484,515 | 633,041 | 7,239 | 14,093 | 13,151 | 2,717 | ||||||||||||||||||||||||
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| Contract owners’ equity at end of period | $ | 32 | 33 | 386,471 | 484,515 | 2,662 | 7,239 | 11,004 | 13,151 | |||||||||||||||||||||||
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| CHANGE IN UNITS: |
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| Beginning units |
24 | 27 | 238,542 | 270,362 | 4,505 | 7,672 | 4,394 | 836 | ||||||||||||||||||||||||
| Units purchased |
- | - | - | 873 | - | - | - | 4,431 | ||||||||||||||||||||||||
| Units redeemed |
(3 | ) | (3 | ) | (73,472 | ) | (32,693 | ) | (3,007 | ) | (3,167 | ) | (964 | ) | (873 | ) | ||||||||||||||||
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| Ending units |
21 | 24 | 165,070 | 238,542 | 1,498 | 4,505 | 3,430 | 4,394 | ||||||||||||||||||||||||
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See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY
YEARS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022
| DSIFS | FVSIS2 | FTVGI2 | RVARS | |||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| Investment activity: |
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| Net investment income (loss) |
$ | 159 | 210 | - | - | - | - | 1,013 | 388 | |||||||||||||||||||||||
| Realized gain (loss) on investments |
1,271 | 2,114 | - | (1,197 | ) | (203 | ) | (669 | ) | 99 | 394 | |||||||||||||||||||||
| Change in unrealized gain (loss) on investments |
1,020 | (8,723 | ) | - | 10 | 879 | (425 | ) | 412 | (2,276 | ) | |||||||||||||||||||||
| Reinvested capital gains |
607 | 1,720 | - | 6 | - | - | - | 337 | ||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
3,057 | (4,679 | ) | - | (1,181 | ) | 676 | (1,094 | ) | 1,524 | (1,157 | ) | ||||||||||||||||||||
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| Equity transactions: |
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| Purchase payments received from contract owners (note 4) |
(2 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
| Transfers between funds |
(6,620 | ) | (6,406 | ) | - | (5,415 | ) | 1,159 | (1,255 | ) | 1,147 | (3,389 | ) | |||||||||||||||||||
| Redemptions (notes 2, 3, and 4) |
(185 | ) | (257 | ) | - | (70 | ) | (24 | ) | (24 | ) | (38 | ) | (39 | ) | |||||||||||||||||
| Adjustments to maintain reserves |
1 | 1 | - | 1 | 1 | - | - | - | ||||||||||||||||||||||||
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| Net equity transactions |
(6,806 | ) | (6,662 | ) | - | (5,484 | ) | 1,136 | (1,279 | ) | 1,109 | (3,428 | ) | |||||||||||||||||||
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| Net change in contract owners’ equity |
(3,749 | ) | (11,341 | ) | - | (6,665 | ) | 1,812 | (2,373 | ) | 2,633 | (4,585 | ) | |||||||||||||||||||
| Contract owners’ equity at beginning of period |
15,113 | 26,454 | - | 6,665 | 21,628 | 24,001 | 33,797 | 38,382 | ||||||||||||||||||||||||
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| Contract owners’ equity at end of period |
$ | 11,364 | 15,113 | - | - | 23,440 | 21,628 | 36,430 | 33,797 | |||||||||||||||||||||||
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| CHANGE IN UNITS: |
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| Beginning units |
4,287 | 6,114 | - | 3,266 | 15,037 | 15,861 | 29,392 | 32,245 | ||||||||||||||||||||||||
| Units purchased |
- | 190 | - | 2,344 | 1,208 | 634 | 2,229 | 894 | ||||||||||||||||||||||||
| Units redeemed |
(1,720 | ) | (2,017 | ) | - | (5,610 | ) | (405 | ) | (1,458 | ) | (1,265 | ) | (3,747 | ) | |||||||||||||||||
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| Ending units |
2,567 | 4,287 | - | - | 15,840 | 15,037 | 30,356 | 29,392 | ||||||||||||||||||||||||
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See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY
YEARS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022
| IVGMMI | PMVAAA | PMVHYD | PMVRSD | |||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| Investment activity: |
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| Net investment income (loss) |
$ | 1,842 | 441 | 2,601 | 6,829 | 2,428 | 2,155 | 3,226 | 5,028 | |||||||||||||||||||||||
| Realized gain (loss) on investments |
- | - | (83 | ) | (354 | ) | (22 | ) | (136 | ) | (221 | ) | 1,997 | |||||||||||||||||||
| Change in unrealized gain (loss) on investments |
- | - | 4,342 | (24,923 | ) | 2,643 | (7,024 | ) | (4,593 | ) | (3,688 | ) | ||||||||||||||||||||
| Reinvested capital gains |
- | - | - | 7,053 | - | - | - | - | ||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
1,842 | 441 | 6,860 | (11,395 | ) | 5,049 | (5,005 | ) | (1,588 | ) | 3,337 | |||||||||||||||||||||
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| Equity transactions: |
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| Purchase payments received from contract owners (note 4) |
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| Transfers between funds |
2,276 | 37,573 | 3,078 | (3,322 | ) | 119 | (1,865 | ) | 3,695 | (7,629 | ) | |||||||||||||||||||||
| Redemptions (notes 2, 3, and 4) |
(716 | ) | (5,076 | ) | (96 | ) | (96 | ) | (48 | ) | (48 | ) | (23 | ) | (24 | ) | ||||||||||||||||
| Adjustments to maintain reserves |
- | - | 2 | (1 | ) | - | 1 | - | 1 | |||||||||||||||||||||||
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| Net equity transactions |
1,560 | 32,497 | 2,984 | (3,419 | ) | 71 | (1,912 | ) | 3,672 | (7,652 | ) | |||||||||||||||||||||
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| Net change in contract owners’ equity |
3,402 | 32,938 | 9,844 | (14,814 | ) | 5,120 | (6,917 | ) | 2,084 | (4,315 | ) | |||||||||||||||||||||
| Contract owners’ equity at beginning of period |
37,669 | 4,731 | 83,071 | 97,885 | 41,373 | 48,290 | 20,794 | 25,109 | ||||||||||||||||||||||||
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| Contract owners’ equity at end of period |
$ | 41,071 | 37,669 | 92,915 | 83,071 | 46,493 | 41,373 | 22,878 | 20,794 | |||||||||||||||||||||||
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| CHANGE IN UNITS: |
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| Beginning units |
3,551 | 453 | 44,748 | 46,482 | 20,125 | 21,052 | 29,340 | 38,498 | ||||||||||||||||||||||||
| Units purchased |
207 | 4,038 | 1,745 | 492 | 564 | - | 7,565 | 4,342 | ||||||||||||||||||||||||
| Units redeemed |
(65 | ) | (940 | ) | (211 | ) | (2,226 | ) | (513 | ) | (927 | ) | (1,844 | ) | (13,500 | ) | ||||||||||||||||
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| Ending units |
3,693 | 3,551 | 46,282 | 44,748 | 20,176 | 20,125 | 35,061 | 29,340 | ||||||||||||||||||||||||
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See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY
YEARS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022
| PMVTRD | PVSTA | TRBCG2 | VWEM | |||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| Investment activity: |
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| Net investment income (loss) |
$ | 17,391 | 13,393 | 218 | 131 | - | - | - | - | |||||||||||||||||||||||
| Realized gain (loss) on investments |
(2,698 | ) | (4,548 | ) | (1 | ) | (151 | ) | (11 | ) | 778 | - | (678 | ) | ||||||||||||||||||
| Change in unrealized gain (loss) on investments |
14,217 | (95,442 | ) | 62 | (65 | ) | 4,051 | (6,396 | ) | - | 45 | |||||||||||||||||||||
| Reinvested capital gains |
- | - | - | 18 | - | 266 | - | - | ||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
28,910 | (86,597 | ) | 279 | (67 | ) | 4,040 | (5,352 | ) | - | (633 | ) | ||||||||||||||||||||
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| Equity transactions: |
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| Purchase payments received from contract owners (note 4) |
- | (2 | ) | - | - | - | - | - | (1 | ) | ||||||||||||||||||||||
| Transfers between funds |
9,335 | (4,674 | ) | 195 | 603 | 11,676 | (11,229 | ) | - | (10,767 | ) | |||||||||||||||||||||
| Redemptions (notes 2, 3, and 4) |
(11,860 | ) | (99,062 | ) | (60 | ) | (95 | ) | (110 | ) | (127 | ) | - | (36 | ) | |||||||||||||||||
| Adjustments to maintain reserves |
- | 4 | 1 | - | (1 | ) | - | - | 1 | |||||||||||||||||||||||
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| Net equity transactions |
(2,525 | ) | (103,734 | ) | 136 | 508 | 11,565 | (11,356 | ) | - | (10,803 | ) | ||||||||||||||||||||
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| Net change in contract owners’ equity |
26,385 | (190,331 | ) | 415 | 441 | 15,605 | (16,708 | ) | - | (11,436 | ) | |||||||||||||||||||||
| Contract owners’ equity at beginning of period |
498,259 | 688,590 | 4,733 | 4,292 | 4,753 | 21,461 | - | 11,436 | ||||||||||||||||||||||||
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| Contract owners’ equity at end of period |
$ | 524,644 | 498,259 | 5,148 | 4,733 | 20,358 | 4,753 | - | - | |||||||||||||||||||||||
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| CHANGE IN UNITS: |
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| Beginning units | 323,258 | 382,474 | 3,658 | 3,312 | 1,299 | 3,596 | - | 7,019 | ||||||||||||||||||||||||
| Units purchased | 7,037 | 2,786 | 144 | 5,383 | 2,459 | 178 | - | - | ||||||||||||||||||||||||
| Units redeemed | (8,637 | ) | (62,002 | ) | (45 | ) | (5,037 | ) | (24 | ) | (2,475 | ) | - | (7,019 | ) | |||||||||||||||||
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| Ending units | 321,658 | 323,258 | 3,757 | 3,658 | 3,734 | 1,299 | - | - | ||||||||||||||||||||||||
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See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II
STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY
YEARS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022
| VWHAS | VVHGB | VVI | VVTSM | |||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| Investment activity: |
||||||||||||||||||||||||||||||||
| Net investment income (loss) |
$ | 380 | 238 | - | - | 1,243 | 1,164 | 2,891 | 3,264 | |||||||||||||||||||||||
| Realized gain (loss) on investments |
1,903 | 2,940 | - | (551 | ) | 7 | (400 | ) | 4,569 | 1,742 | ||||||||||||||||||||||
| Change in unrealized gain (loss) on investments |
(2,824 | ) | (2,115 | ) | - | 167 | 7,238 | (49,059 | ) | 36,554 | (77,267 | ) | ||||||||||||||||||||
| Reinvested capital gains |
- | - | - | - | 2,681 | 17,258 | 14,088 | 17,481 | ||||||||||||||||||||||||
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| Net increase (decrease) in contract owners’ equity resulting from operations |
(541 | ) | 1,063 | - | (384 | ) | 11,169 | (31,037 | ) | 58,102 | (54,780 | ) | ||||||||||||||||||||
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| Equity transactions: |
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| Purchase payments received from contract owners (note 4) |
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| Transfers between funds |
(4,260 | ) | (1,501 | ) | - | (12,277 | ) | (1,429 | ) | 12,176 | (18,720 | ) | 6,361 | |||||||||||||||||||
| Redemptions (notes 2, 3, and 4) |
(171 | ) | (165 | ) | - | (39 | ) | (211 | ) | (235 | ) | (827 | ) | (858 | ) | |||||||||||||||||
| Adjustments to maintain reserves |
- | 2 | - | - | - | - | - | 1 | ||||||||||||||||||||||||
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| Net equity transactions |
(4,431 | ) | (1,664 | ) | - | (12,316 | ) | (1,640 | ) | 11,941 | (19,547 | ) | 5,504 | |||||||||||||||||||
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| Net change in contract owners’ equity |
(4,972 | ) | (601 | ) | - | (12,700 | ) | 9,529 | (19,096 | ) | 38,555 | (49,276 | ) | |||||||||||||||||||
| Contract owners’ equity at beginning of period |
15,056 | 15,657 | - | 12,700 | 76,182 | 95,278 | 229,968 | 279,244 | ||||||||||||||||||||||||
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| Contract owners’ equity at end of period |
$ | 10,084 | 15,056 | - | - | 85,711 | 76,182 | 268,523 | 229,968 | |||||||||||||||||||||||
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| |||||||||
| CHANGE IN UNITS: |
||||||||||||||||||||||||||||||||
| Beginning units |
16,443 | 18,489 | - | 7,703 | 37,519 | 32,790 | 64,149 | 62,634 | ||||||||||||||||||||||||
| Units purchased |
- | 6,603 | - | - | 1,359 | 7,857 | 236 | 3,851 | ||||||||||||||||||||||||
| Units redeemed |
(4,990 | ) | (8,649 | ) | - | (7,703 | ) | (2,061 | ) | (3,128 | ) | (4,915 | ) | (2,336 | ) | |||||||||||||||||
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| Ending units |
11,453 | 16,443 | - | - | 36,817 | 37,519 | 59,470 | 64,149 | ||||||||||||||||||||||||
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* For all subaccounts not included herein but listed as an investment option in note 1(b), there was no activity during the two-year period. See note 1(b) for all investments available for which no contract owners were invested at December 31, 2023, if applicable.
See accompanying notes to financial statements.
PHL VARIABLE ACCUMULATION ACCOUNT II NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023
(1) Background and Summary of Significant Accounting Policies
(a) Organization and Nature of Operations
The PHL Variable Accumulation Account II (the “Separate Account”), is a separate account of PHL Variable Insurance Company (“PHL”, ”PHL Variable”, the Company, “we” or “us”).PHL is a wholly-owned subsidiary of PHL Delaware, LLC (“PHL Delaware” or the “Parent”). PHL is a provider of life insurance and annuity products. In November 2019, PHL stopped marketing and selling new business.
(b) The Contracts
The Separate Account offers variable annuity insurance benefits intended to serve the long-term saving needs of investors. The primary distribution for the contracts is through the brokerage community; however, other distributors are utilized. Contract features are described in the applicable prospectus.
A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.
Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially.
With certain exceptions, contract owners in either the accumulation or payout phase may invest in any of the following:
ALPS FUNDS
ALPS Variable Investment Trust - Morningstar Conservative ETF Asset Allocation Portfolio: Class II (ACEAA2)
ALPS Variable Investment Trust - Morningstar Growth ETF Asset Allocation Portfolio: Class II (AGEAA2)
ALPS Variable Investment Trust - Morningstar Income and Growth ETF Asset Allocation Portfolio: Class II (AUGEA2)
AMUNDI US
Pioneer Variable Contracts Trust - Pioneer Equity Income VCT Portfolio: Class II (PIVEI2)
BNY MELLON INVESTMENT MANAGEMENT
BNY Mellon Stock Index Fund, Inc.: Service Shares (DSIFS)
BNY Mellon Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares (DVSCS)*
FIDELITY INVESTMENTS
Fidelity Variable Insurance Products Fund - VIP Strategic Income Portfolio: Service Class 2 (FVSIS2)*
FRANKLIN TEMPLETON DISTRIBUTORS, INC.
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond VIP Fund: Class 2 (FTVGI2)
GUGGENHEIM INVESTMENTS
Rydex Variable Trust - Multi-Hedge Strategies Fund (RVARS)
INVESCO INVESTMENTS
Invesco - Invesco V.I. Government Money Market Fund: Series I Shares (IVGMMI)
PIMCO FUNDS
PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class (PMVAAA)
PIMCO Variable Insurance Trust - High Yield Portfolio: Advisor Class (PMVHYD)
PIMCO Variable Insurance Trust - CommodityRealReturn(R) Strategy Portfolio: Advisor Class (PMVRSD)
PIMCO Variable Insurance Trust - Total Return Portfolio: Advisor Class (PMVTRD)
PIMCO Variable Insurance Trust - Short-Term Portfolio: Administrative Class (PVSTA)
T. ROWE PRICE
T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: II (TRBCG2)
VAN ECK ASSOCIATES CORPORATION
VanEck VIP Trust - VanEck VIP Emerging Markets Fund: Initial Class (VWEM)*
VanEck VIP Trust - VanEck VIP Global Resources Fund: Class S (VWHAS)
VANGUARD GROUP OF INVESTMENT COMPANIES
Vanguard Variable Insurance Fund - Total Bond Market Index Portfolio (VVHGB)*
Vanguard Variable Insurance Fund - International Portfolio (VVI)
Vanguard Variable Insurance Fund - Total Stock Market Index Portfolio (VVTSM)
| * | At December 31, 2023, contract owners were not invested in this fund. |
There were no subaccounts with inception or liquidation dates for each of the years in the two-year period ended December 31, 2023.
There were no underlying mutual fund mergers for each of the years in the two-year period ending December 31, 2023.
PHL VARIABLE ACCUMULATION ACCOUNT II NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023
There were no subaccount name changes for the one-year period ended December 31, 2023.
The contract owners’ equity is affected by the investment results of each fund, equity transactions by contract owners and certain contract expenses (see note 2). The accompanying financial statements include only contract owners’ purchase payments pertaining to the variable portions of their contracts and exclude any purchase payments for fixed dollar benefits, the latter being included in the accounts of the Company.
A purchase payment could be presented as a negative equity transaction in the Statements of Changes in Contract Owners’ Equity if a prior period purchase payment is refunded to a contract owner due to a contract cancellation during the free look period, and/or if a gain is realized by the contract owner during the free look period.
The Company allocates purchase payments to subaccounts and/or the fixed account as instructed by the contract owner. Shares of the subaccounts are purchased at Net Asset Value, then converted into accumulation units. Certain transactions may be subject to conditions imposed by the underlying mutual funds, as well as those set forth in the contract.
(c) Security Valuation, Transactions and Related Investment Income
Investments in underlying mutual funds are valued at the closing Net Asset Value per share at December 31, 2023 of such funds. The cost of investments sold is determined on a first in - first out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends and capital gain distributions are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.
(d) Federal Income Taxes
The operations of the Separate Account are included in the federal income tax return of PHL, which is taxed as a life insurance company under the provisions of the Internal Revenue Code (IRC). Under the current provisions of the IRC, PHL does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under contracts. Based on this, no charge is being made currently to the Separate Account for federal income taxes. PHL will review periodically the status of this policy in the event of changes in the tax law.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statement and accompanying notes. Actual results could differ from those estimates.
In applying these estimates and assumptions, management makes subjective and complex judgments that frequently require assumptions about matters that are uncertain and inherently subject to change, such as possibility for elevated mortality and investment market volatility.
(f) Calculation of Annuity Reserves
At each financial reporting date, the Separate Account financial statements include an aggregate amount of net assets allocated to future contract benefits for the contracts in the payout (annuitization) period. The payout (annuitization) period begins when amounts accumulated under the contract (the contract value) are applied according to the payment method selected by the contract owner.
Annuity reserves are computed for contracts in the variable payout stage according to industry standard mortality tables. The assumed investment return is 3.5% unless the annuitant elects otherwise, in which case the rate may vary from 3.5% to 6%, as regulated by the laws of the respective states. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Separate Account by the Company to cover greater longevity of annuitants than expected. Conversely, if reserves exceed amounts required, transfers may be made to the Company.
(2) Expenses
Although periodic retirement payments to contract owners vary according to the investment performance of the portfolios, such payments are not affected by mortality or expense experience because the Company assumes the mortality and expense risks under the contracts.
The mortality risk assumed by the Company results from the life annuity payment option in the contracts in which the Company agrees to make annuity payments regardless of how long a particular annuitant or other payee lives. The annuity payments are determined in accordance with annuity purchase rate provisions established at the time the contracts are issued. Based on the actuarial determination of expected mortality, the Company is required to fund any deficiency in the annuity payment reserves from its general account assets.
The Company deducts a monthly subscription charge of $20.00 to issue and administer each contract. These fees were $3,500 and $3,840 for the years ended December 31, 2023 and December 31, 2022, respectively. This charge is recorded as a redemption in the accompanying Statements of Changes in Net Assets.
The Company deducts a transaction fee, ranging from $19.99 to $49.99 based upon number of transactions, for any contract owner transaction in or out of certain investment portfolios. This fee is recorded as a redemption in the accompanying Statements of Changes in Net Assets. The transaction fees were $1,050 and $1,250 for the years ended December 31, 2023 and December 31, 2022, respectively.
PHL VARIABLE ACCUMULATION ACCOUNT II NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023
The Company also deducts a guaranteed minimum withdrawal benefit fee if this optional benefit is selected. These fees were $8,294 and $8,402 for the years ended December 31, 2023 and December 31, 2022, respectively. This charge is recorded as a redemption in the accompanying Statements of Changes in Net Assets.
(3) Annuity Benefits
Annuity benefit proceeds result in a redemption of the policy value from the Separate Account and payment of those proceeds, less any outstanding policy loans (and policy charges), to the legal beneficiary. For last survivor flexible premium policies, the proceeds are payable on the death of the last surviving insured. In the event that the guaranteed death benefit exceeds the policy value on the date of death, the excess is paid by the Company’s general account.
(4) Related Party Transactions
The Company performs various services on behalf of the mutual fund companies in which the Separate Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company.
(5) Fair Value Measurement
FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Separate Account generally uses the market approach as the valuation technique due to the nature of the mutual fund investments offered in the Separate Account. This technique maximizes the use of observable inputs and minimizes the use of unobservable inputs.
In accordance with FASB ASC 820, the Separate Account categorized its financial instruments into a three-level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.
The Separate Account categorizes financial assets recorded at fair value as follows:
• Level 1 – Unadjusted quoted prices accessible in active markets and mutual funds where the value per share (unit) is determined and published and is the basis for current transactions for identical assets or liabilities at the measurement date.
• Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets, quotes prices for identical or similar assets or liabilities in markets that are not active or inputs (other than quotes prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. Primary inputs to this valuation technique may include comparative trades, bid/asks, interest rate movements, U.S. Treasury rates, Secures Overnight Financing Rate, prime rates, cash flows, maturity dates, callability, estimated prepayments and/or underlying collateral values.
• Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs.
The investments used by all subaccounts are mutual funds and are valued using daily Net Asset Values (NAVs), which are deemed to approximate fair values. As such, all funds are classified as Level 1 Investments.
The cost of purchases and proceeds from sales of Investments for the year ended December 31, 2023 are as follows:
| Subaccount |
Purchases of Investments |
Sales of Investments |
||||||
| ACEAA2 |
$ | 1 | $ | 4 | ||||
| AGEAA2 |
15,277 | 158,856 | ||||||
| AUGEA2 |
80 | 5,103 | ||||||
| PIVEI2 |
1,204 | 2,857 | ||||||
| DSIFS |
766 | 6,807 | ||||||
| FTVGI2 |
1,711 | 576 | ||||||
| RVARS |
3,661 | 1,540 | ||||||
| IVGMMI |
4,118 | 716 | ||||||
| PMVAAA |
5,975 | 391 | ||||||
| PMVHYD |
3,637 | 1,138 | ||||||
| PMVRSD |
8,180 | 1,282 | ||||||
| PMVTRD |
28,371 | 13,505 | ||||||
| PVSTA |
413 | 60 | ||||||
| TRBCG2 |
11,676 | 110 | ||||||
PHL VARIABLE ACCUMULATION ACCOUNT II NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023
| VWHAS |
380 | 4,431 | ||||||
| VVI |
6,895 | 4,611 | ||||||
| VVTSM |
17,889 | 20,459 |
* Represents abbreviation of investment name. For full investment name and related abbreviation, see note 1(b).
PHL VARIABLE ACCUMULATION ACCOUNT II NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023
(6) Financial Highlights
The following tabular presentation is a summary of units, unit fair values, contract owners’ equity outstanding and contract expense rates for variable annuity contracts as of December 31, 2023, and the investment income ratio and total return for each of the periods in the five-year period ended December 31, 2023. Total return and investment income ratio for periods with no ending Contract Owners’ Equity were considered to be irrelevant, and therefore are not presented. Contract Owners’ Equity presented below may not agree to the Contract Owners’ Equity presented in the Statements of Changes in Contract Owners’ Equity due to reserves for annuity contracts in payout.
| Contract Expense Rate* |
Units**** | Unit Fair Value | Contract Owners’ Equity**** |
Investment Income Ratio** |
Total Return*** | |||||||||||||||||||||||
| ALPS Variable Investment Trust - Morningstar Conservative ETF Asset Allocation Portfolio: Class II (ACEAA2) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 21 | $1.50 | $32 | 2.26 | % | 7.84 | % | ||||||||||||||||||||
| 2022 |
0.00% | 24 | 1.39 | 33 | 1.43 | % | -11.82 | % | ||||||||||||||||||||
| 2021 |
0.00% | 27 | 1.57 | 42 | 1.33 | % | 2.28 | % | ||||||||||||||||||||
| 2020 |
0.00% | 33 | 1.54 | 51 | 1.70 | % | 6.49 | % | ||||||||||||||||||||
| 2019 |
0.00% | - | 1.47 | - | 0.00 | % | 11.36 | % | ||||||||||||||||||||
| ALPS Variable Investment Trust - Morningstar Growth ETF Asset Allocation Portfolio: Class II (AGEAA2) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 165,070 | 2.34 | 386,471 | 1.49 | % | 15.27 | % | ||||||||||||||||||||
| 2022 |
0.00% | 238,542 | 2.03 | 484,515 | 1.51 | % | -13.25 | % | ||||||||||||||||||||
| 2021 |
0.00% | 270,362 | 2.34 | 633,041 | 1.17 | % | 14.88 | % | ||||||||||||||||||||
| 2020 |
0.00% | 324,531 | 2.04 | 661,426 | 2.01 | % | 10.01 | % | ||||||||||||||||||||
| 2019 |
0.00% | 362 | 1.85 | 671 | 1.98 | % | 19.35 | % | ||||||||||||||||||||
| ALPS Variable Investment Trust - Morningstar Income and Growth ETF Asset Allocation Portfolio: Class II (AUGEA2) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 1,498 | 1.78 | 2,662 | 0.96 | % | 10.59 | % | ||||||||||||||||||||
| 2022 |
0.00% | 4,505 | 1.61 | 7,239 | 1.08 | % | -12.54 | % | ||||||||||||||||||||
| 2021 |
0.00% | 7,672 | 1.84 | 14,093 | 1.29 | % | 6.47 | % | ||||||||||||||||||||
| 2020 |
0.00% | 10,438 | 1.73 | 18,010 | 1.76 | % | 8.43 | % | ||||||||||||||||||||
| 2019 |
0.00% | 14 | 1.59 | 22 | 1.84 | % | 12.77 | % | ||||||||||||||||||||
| Pioneer Variable Contracts Trust - Pioneer Equity Income VCT Portfolio: Class II (PIVEI2) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 3,430 | 3.21 | 11,004 | 1.66 | % | 7.17 | % | ||||||||||||||||||||
| 2022 |
0.00% | 4,394 | 2.99 | 13,151 | 1.68 | % | -7.94 | % | ||||||||||||||||||||
| 2021 |
0.00% | 836 | 3.25 | 2,717 | 1.23 | % | 25.33 | % | ||||||||||||||||||||
| 2020 |
0.00% | 841 | 2.59 | 2,182 | 1.14 | % | -0.26 | % | ||||||||||||||||||||
| 2019 |
0.00% | 7 | 2.60 | 19 | 2.36 | % | 25.00 | % | ||||||||||||||||||||
| BNY Mellon Stock Index Fund, Inc.: Service Shares (DSIFS) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 2,567 | 4.43 | 11,364 | 1.06 | % | 25.60 | % | ||||||||||||||||||||
| 2022 |
0.00% | 4,287 | 3.53 | 15,113 | 1.06 | % | -18.52 | % | ||||||||||||||||||||
| 2021 |
0.00% | 6,114 | 4.33 | 26,454 | 0.83 | % | 28.12 | % | ||||||||||||||||||||
| 2020 |
0.00% | 6,153 | 3.38 | 20,780 | 1.14 | % | 17.71 | % | ||||||||||||||||||||
| 2019 |
0.00% | 62 | 2.87 | 177 | 1.51 | % | 31.05 | % | ||||||||||||||||||||
| BNY Mellon Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares (DVSCS) |
|
|||||||||||||||||||||||||||
| 2019 |
0.00% | 15 | 3.00 | 44 | 0.86 | % | 22.45 | % | ||||||||||||||||||||
| Fidelity Variable Insurance Products Fund - VIP Strategic Income Portfolio: Service Class 2 (FVSIS2) |
|
|||||||||||||||||||||||||||
| 2021 |
0.00% | 3,266 | 2.04 | 6,665 | 2.44 | % | 3.53 | % | ||||||||||||||||||||
| 2020 |
0.00% | 3,287 | 1.97 | 6,479 | 0.00 | % | 7.16 | % | ||||||||||||||||||||
| 2019 |
0.00% | 15 | 1.84 | 28 | 3.11 | % | 10.84 | % | ||||||||||||||||||||
| Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond VIP Fund: Class 2 (FTVGI2) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 15,840 | 1.48 | 23,440 | 0.00 | % | 2.88 | % | ||||||||||||||||||||
| 2022 |
0.00% | 15,037 | 1.44 | 21,628 | 0.00 | % | -4.95 | % | ||||||||||||||||||||
| 2021 |
0.00% | 15,861 | 1.51 | 24,001 | 0.00 | % | -4.99 | % | ||||||||||||||||||||
| 2020 |
0.00% | 13,561 | 1.59 | 21,599 | 9.28 | % | -5.28 | % | ||||||||||||||||||||
| 2019 |
0.00% | 28 | 1.68 | 47 | 7.03 | % | 1.82 | % | ||||||||||||||||||||
| Rydex Variable Trust - Multi-Hedge Strategies Fund (RVARS) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 30,356 | 1.20 | 36,430 | 2.89 | % | 4.37 | % | ||||||||||||||||||||
| 2022 |
0.00% | 29,392 | 1.15 | 33,797 | 1.11 | % | -3.40 | % | ||||||||||||||||||||
| 2021 |
0.00% | 32,245 | 1.19 | 38,382 | 0.00 | % | 8.10 | % | ||||||||||||||||||||
| 2020 |
0.00% | 31,512 | 1.10 | 34,697 | 1.27 | % | 7.39 | % | ||||||||||||||||||||
| 2019 |
0.00% | 31 | 1.03 | 32 | 2.38 | % | 5.10 | % | ||||||||||||||||||||
| Invesco - Invesco V.I. Government Money Market Fund: Series I Shares (IVGMMI) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 3,693 | 11.12 | 41,071 | 4.76 | % | 4.86 | % | ||||||||||||||||||||
| 2022 |
0.00% | 3,551 | 10.61 | 37,669 | 1.96 | % | 1.45 | % | ||||||||||||||||||||
PHL VARIABLE ACCUMULATION ACCOUNT II NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023
| Contract Expense Rate* |
Units**** | Unit Fair Value | Contract Owners’ Equity**** |
Investment Income Ratio** |
Total Return*** | |||||||||||||||||||||||
| 2021 |
0.00% | 453 | 10.46 | 4,731 | 0.00 | % | 0.01 | % | ||||||||||||||||||||
| 2020 |
0.00% | 1,017 | 10.45 | 10,632 | 0.25 | % | 0.29 | % | ||||||||||||||||||||
| 2019 |
0.00% | 2 | 10.42 | 17 | 1.98 | % | 1.86 | % | ||||||||||||||||||||
| PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class (PMVAAA) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 46,282 | 2.01 | 92,915 | 2.99 | % | 8.14 | % | ||||||||||||||||||||
| 2022 |
0.00% | 44,748 | 1.86 | 83,071 | 7.82 | % | -11.84 | % | ||||||||||||||||||||
| 2021 |
0.00% | 46,482 | 2.11 | 97,885 | 11.10 | % | 16.23 | % | ||||||||||||||||||||
| 2020 |
0.00% | 48,094 | 1.81 | 87,135 | 4.93 | % | 8.01 | % | ||||||||||||||||||||
| 2019 |
0.00% | 49 | 1.68 | 82 | 2.75 | % | 12.00 | % | ||||||||||||||||||||
| PIMCO Variable Insurance Trust - High Yield Portfolio: Advisor Class (PMVHYD) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 20,176 | 2.30 | 46,493 | 5.56 | % | 12.09 | % | ||||||||||||||||||||
| 2022 |
0.00% | 20,125 | 2.06 | 41,373 | 4.95 | % | -10.38 | % | ||||||||||||||||||||
| 2021 |
0.00% | 21,052 | 2.29 | 48,290 | 4.35 | % | 3.53 | % | ||||||||||||||||||||
| 2020 |
0.00% | 19,595 | 2.22 | 43,415 | 4.75 | % | 5.64 | % | ||||||||||||||||||||
| 2019 |
0.00% | 27 | 2.10 | 57 | 4.85 | % | 14.75 | % | ||||||||||||||||||||
| PIMCO Variable Insurance Trust - CommodityRealReturn(R) Strategy Portfolio: Advisor Class (PMVRSD) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 35,061 | 0.65 | 22,878 | 15.07 | % | -7.93 | % | ||||||||||||||||||||
| 2022 |
0.00% | 29,340 | 0.71 | 20,794 | 22.47 | % | 8.66 | % | ||||||||||||||||||||
| 2021 |
0.00% | 38,498 | 0.65 | 25,109 | 4.10 | % | 33.11 | % | ||||||||||||||||||||
| 2020 |
0.00% | 45,615 | 0.49 | 22,351 | 5.91 | % | 1.23 | % | ||||||||||||||||||||
| 2019 |
0.00% | 39 | 0.48 | 18 | 4.34 | % | 11.63 | % | ||||||||||||||||||||
| PIMCO Variable Insurance Trust - Total Return Portfolio: Advisor Class (PMVTRD) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 321,658 | 1.63 | 524,644 | 3.46 | % | 5.82 | % | ||||||||||||||||||||
| 2022 |
0.00% | 323,258 | 1.54 | 498,259 | 2.51 | % | -14.39 | % | ||||||||||||||||||||
| 2021 |
0.00% | 382,474 | 1.80 | 688,590 | 1.72 | % | -1.36 | % | ||||||||||||||||||||
| 2020 |
0.00% | 376,208 | 1.83 | 686,679 | 2.03 | % | 8.54 | % | ||||||||||||||||||||
| 2019 |
0.00% | 410 | 1.68 | 689 | 2.91 | % | 8.39 | % | ||||||||||||||||||||
| PIMCO Variable Insurance Trust - Short-Term Portfolio: Administrative Class (PVSTA) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 3,757 | 1.37 | 5,148 | 4.47 | % | 5.89 | % | ||||||||||||||||||||
| 2022 |
0.00% | 3,658 | 1.29 | 4,733 | 1.49 | % | -0.15 | % | ||||||||||||||||||||
| 2021 |
0.00% | 3,312 | 1.30 | 4,292 | 1.10 | % | -0.06 | % | ||||||||||||||||||||
| 2020 |
0.00% | 3,334 | 1.30 | 4,323 | 1.38 | % | 2.24 | % | ||||||||||||||||||||
| 2019 |
0.00% | 28 | 1.27 | 35 | 2.46 | % | 3.25 | % | ||||||||||||||||||||
| T. Rowe Price Equity Series, Inc. - T. Rowe Price Blue Chip Growth Portfolio: II (TRBCG2) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 3,734 | 5.45 | 20,358 | 0.00 | % | 48.96 | % | ||||||||||||||||||||
| 2022 |
0.00% | 1,299 | 3.66 | 4,753 | 0.00 | % | -38.66 | % | ||||||||||||||||||||
| 2021 |
0.00% | 3,596 | 5.97 | 21,461 | 0.00 | % | 17.33 | % | ||||||||||||||||||||
| 2020 |
0.00% | 3,619 | 5.09 | 18,406 | 0.00 | % | 33.92 | % | ||||||||||||||||||||
| 2019 |
0.00% | 4 | 3.80 | 16 | 0.00 | % | 29.69 | % | ||||||||||||||||||||
| VanEck VIP Trust - VanEck VIP Emerging Markets Fund: Initial Class (VWEM) |
|
|||||||||||||||||||||||||||
| 2021 |
0.00% | 7,019 | 1.63 | 11,436 | 0.92 | % | -11.87 | % | ||||||||||||||||||||
| 2020 |
0.00% | 7,064 | 1.85 | 13,058 | 2.03 | % | 17.25 | % | ||||||||||||||||||||
| 2019 |
0.00% | 8 | 1.58 | 12 | 0.28 | % | 30.58 | % | ||||||||||||||||||||
| VanEck VIP Trust - VanEck VIP Global Resources Fund: Class S (VWHAS) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 11,453 | 0.88 | 10,084 | 2.86 | % | -3.84 | % | ||||||||||||||||||||
| 2022 |
0.00% | 16,443 | 0.92 | 15,056 | 1.81 | % | 8.12 | % | ||||||||||||||||||||
| 2021 |
0.00% | 18,489 | 0.85 | 15,657 | 0.31 | % | 18.68 | % | ||||||||||||||||||||
| 2020 |
0.00% | 18,607 | 0.71 | 13,278 | 0.85 | % | 18.83 | % | ||||||||||||||||||||
| 2019 |
0.00% | 11 | 0.60 | 7 | 0.00 | % | 11.11 | % | ||||||||||||||||||||
| Vanguard Variable Insurance Fund - Total Bond Market Index Portfolio (VVHGB) |
|
|||||||||||||||||||||||||||
| 2021 |
0.00% | 7,703 | 1.65 | 12,700 | 2.07 | % | -1.72 | % | ||||||||||||||||||||
| 2020 |
0.00% | 7,752 | 1.68 | 13,003 | 3.79 | % | 7.58 | % | ||||||||||||||||||||
| 2019 |
0.00% | 248 | 1.56 | 387 | 2.53 | % | 9.09 | % | ||||||||||||||||||||
| Vanguard Variable Insurance Fund - International Portfolio (VVI) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 36,817 | 2.33 | 85,711 | 1.52 | % | 14.65 | % | ||||||||||||||||||||
| 2022 |
0.00% | 37,519 | 2.03 | 76,182 | 1.41 | % | -30.12 | % | ||||||||||||||||||||
| 2021 |
0.00% | 32,790 | 2.91 | 95,278 | 0.27 | % | -1.54 | % | ||||||||||||||||||||
| 2020 |
0.00% | 30,875 | 2.95 | 91,118 | 1.63 | % | 57.58 | % | ||||||||||||||||||||
PHL VARIABLE ACCUMULATION ACCOUNT II NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023
| Contract Expense Rate* |
Units**** | Unit Fair Value | Contract Owners’ Equity**** |
Investment Income Ratio** |
Total Return*** | |||||||||||||||||||||||
| 2019 |
0.00% | 72 | 1.87 | 134 | 1.40 | % | 30.77 | % | ||||||||||||||||||||
| Vanguard Variable Insurance Fund - Total Stock Market Index Portfolio (VVTSM) |
|
|||||||||||||||||||||||||||
| 2023 |
0.00% | 59,470 | 4.52 | 268,523 | 1.16 | % | 25.95 | % | ||||||||||||||||||||
| 2022 |
0.00% | 64,149 | 3.58 | 229,968 | 1.33 | % | -19.59 | % | ||||||||||||||||||||
| 2021 |
0.00% | 62,634 | 4.46 | 279,244 | 1.20 | % | 25.64 | % | ||||||||||||||||||||
| 2020 |
0.00% | 70,592 | 3.55 | 250,503 | 1.60 | % | 20.55 | % | ||||||||||||||||||||
| 2019 |
0.00% | 78 | 2.94 | 231 | 1.54 | % | 30.67 | % | ||||||||||||||||||||
| * | This represents the annual contract expense rate of the variable account at the period end indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying mutual funds and charges made directly to contract owner accounts through the redemption of units. |
| ** | This represents the ratio of dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by monthly average net assets (excluding months where net assets are zero). The investment income ratio for subaccounts initially funded during the period presented has not been annualized. The ratios exclude those expenses that result in direct reductions to the contract owner accounts through reductions in unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. |
| *** | This represents the total return for the period indicated, including changes in the value of the underlying mutual fund, which reflects the reduction of unit values for expenses assessed. The total returns do not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return is not annualized if the underlying mutual fund option was initially added and funded during the period presented. |
| ***** | Units and Contract Owners’ Equity is presented rounded (in 000’s) for the year 2019 and is presented unrounded for 2020 – 2023, as applicable. |
(7) Subsequent Events
The Separate Account has performed an evaluation of subsequent events through the date the financial statements were issued and has determined that no items require recognition or disclosure.
PHL Variable Insurance Company
PO Box 22012
Albany, NY 12201-2012
Not insured by FDIC/NCUSIF or any federal government agency.
No bank guarantee. Not a deposit. May lose value.
PHL Variable Insurance Company
A member of The Nassau Companies of New York
www.nfg.com
| OL4258 © 2023 The Nassau Companies of New York |
12-23 |