Report of Independent Registered Public Accounting Firm

Transcription

1 KPMG LLP One Financial Plaza 755 Main Street Hartford, CT Report of Independent Registered Public Accounting Firm The Board of Directors of C.M. Life Insurance Company and Policy Owners of C.M. Life Variable Life Separate Account I: Opinion on the Financial Statements We have audited the accompanying statement of assets and liabilities of C.M. Life Variable Life Separate Account I (comprised of the divisions listed in Appendix A to the opinion) (collectively, the Separate Account ) as of December 31, 2017, the related statements of operations and changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements ) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Separate Account as of December 31, 2017, the results of its operations and the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements and financial highlights are the responsibility of the Separate Account s management. Our responsibility is to express an opinion on these financial statements and financial highlights 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 and financial highlights 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 and financial highlights, 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 and financial highlights. Such procedures also included confirmation of securities owned as of December 31, 2017, by correspondence with the underlying mutual funds or their transfer agent. 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 and financial highlights. We believe that our audits provide a reasonable basis for our opinion. We have served as the Separate Account s auditor since Hartford, Connecticut March 5, 2018 KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. LA2049 F-1

2 Appendix A The C.M. Life Variable Life Separate Account I is composed of the following divisions and the activities of each division have been included within the accompanying statement of assets and liabilities as of December 31, 2017 and the related statements of operations and changes in net assets for each of the years in the two-year period then ended. American Century VP Income & Growth Equity Index American Century VP Value Inflation-Protected and Income American Funds Asset Allocation Managed Bond American Funds Growth-Income Managed Volatility Deutsche Small Cap Index Small Cap Equity Fidelity VIP Contrafund Small Cap Growth Equity Fidelity VIP High Income Sub-Account ** U.S. Government Money Market Fidelity VIP Index 500 Sub-Account *** Oppenheimer Capital Appreciation Fidelity VIP Government Money Market Sub-Account ** Oppenheimer Conservative Balanced ** Franklin Small Cap Value VIP Oppenheimer Discovery Mid Cap Growth Goldman Sachs Strategic Growth Oppenheimer Global Invesco V.I. Diversified Dividend Oppenheimer Global Strategic Income Invesco V.I. Global Health Care Oppenheimer Income Sub-Account Invesco V.I. Technology Oppenheimer International Equity Sub-Account ** Janus Henderson Balanced * Oppenheimer International Growth ** Janus Henderson Forty * Oppenheimer Main Street Janus Henderson Global Research * Oppenheimer Total Return Bond * MFS Investors Trust T. Rowe Price Blue Chip Growth MFS New Discovery T. Rowe Price Equity Income Blend T. Rowe Price Mid-Cap Growth Blue Chip Growth Templeton Foreign VIP Equity * See Note 2 to the financial statements for the previous name of this division. ** had no investment or unit activity in 2017 or *** had no income or unit activity in 2016 F-2

3 C. M. Life Variable Life Separate Account I STATEMENT OF ASSETS AND LIABILITIES December 31, 2017 American Century VP Income & Growth American Century VP Value American Funds Asset Allocation American Funds Growth-Income Deutsche Small Cap Index Fidelity Fidelity VIP VIP Contrafund Index 500 Sub-Account Franklin Small Cap Value VIP ASSETS Investments Number of shares... 2,471, , , , ,030 1,482, ,598 Identified cost... $17,560,082 $ 1,562,527 $ 7,348,621 $ 7,753,080 $ 3,196,824 $40,161,746 $ 4,763 $ 4,270,260 Value... $26,471,194 $ 2,289,601 $ 8,523,705 $ 9,506,016 $ 4,097,517 $56,234,924 $ 4,999 $ 4,486,647 Receivable from C.M. Life Insurance Company Total assets... 26,471,194 2,289,601 8,523,705 9,506,016 4,097,517 56,234,924 4,999 4,486,647 LIABILITIES Payable to C.M. Life Insurance Company NET ASSETS (For variable life insurance policies)... $26,471,177 $ 2,289,592 $ 8,523,695 $ 9,506,003 $ 4,097,499 $56,234,911 $ 4,987 $ 4,486,642 Outstanding Units Policy owners... 10,236, ,097 2,752,115 2,637,056 1,249,252 15,161, ,006,915 UNIT VALUE Executive Benefit Variable Universal Life... $ - $ - $ - $ - $ - $ - $ 5.45 $ - Survivorship Variable Universal Life Variable Universal Life Survivorship Variable Universal Life II See Notes to Financial Statements. F-3

4 C. M. Life Variable Life Separate Account I STATEMENT OF ASSETS AND LIABILITIES (Continued) December 31, 2017 Goldman Sachs Strategic Growth Invesco V.I. Diversified Dividend Invesco V.I. Global Health Care Invesco V.I. Technology Janus Henderson Balanced Janus Henderson Forty Janus Henderson Global Research MFS Investors Trust ASSETS Investments Number of shares ,270 50,254 28,649 31, , , ,785 5,646 Identified cost... $ 3,061,186 $ 1,243,224 $ 868,769 $ 608,676 $ 3,255,501 $13,064,683 $ 5,925,898 $ 146,589 Value... $ 4,069,711 $ 1,365,912 $ 757,477 $ 719,172 $ 3,797,133 $14,512,262 $ 9,512,216 $ 169,778 Receivable from C.M. Life Insurance Company Total assets... 4,069,711 1,365, , ,172 3,797,133 14,512,278 9,512, ,778 LIABILITIES Payable to C.M. Life Insurance Company NET ASSETS (For variable life insurance policies)... $ 4,069,697 $ 1,365,896 $ 757,459 $ 719,151 $ 3,797,130 $14,512,278 $ 9,512,226 $ 169,759 Outstanding Units Policy owners... 1,924, , , ,542 1,238,845 5,762,276 7,765,162 47,480 UNIT VALUE Executive Benefit Variable Universal Life... $ - $ - $ - $ - $ - $ - $ - $ - Survivorship Variable Universal Life Variable Universal Life Survivorship Variable Universal Life II See Notes to Financial Statements. F-4

5 C. M. Life Variable Life Separate Account I STATEMENT OF ASSETS AND LIABILITIES (Continued) December 31, 2017 MFS New Discovery Blend Blue Chip Growth Equity Equity Index Inflation- Protected and Income Managed Bond Managed Volatility ASSETS Investments Number of shares... 44, , ,805 1,249,344 1,366, , , ,206 Identified cost... $ 727,270 $14,783,099 $ 3,923,949 $27,668,012 $25,923,618 $ 1,721,913 $ 9,478,213 $ 2,595,427 Value... $ 903,119 $18,226,387 $ 4,819,169 $39,585,973 $42,377,057 $ 1,692,634 $ 9,210,718 $ 2,706,467 Receivable from C.M. Life Insurance Company Total assets ,119 18,226,391 4,819,169 39,585,973 42,377,063 1,692,634 9,210,718 2,706,467 LIABILITIES Payable to C.M. Life Insurance Company NET ASSETS (For variable life insurance policies)... $ 903,106 $18,226,391 $ 4,819,164 $39,585,955 $42,377,063 $ 1,692,630 $ 9,210,709 $ 2,706,462 Outstanding Units Policy owners ,265 7,014,747 2,800,634 17,860,985 16,283,493 1,019,194 4,024,578 1,371,587 UNIT VALUE Executive Benefit Variable Universal Life... $ - $ - $ - $ - $ - $ - $ - $ - Survivorship Variable Universal Life Variable Universal Life Survivorship Variable Universal Life II See Notes to Financial Statements. F-5

6 C. M. Life Variable Life Separate Account I STATEMENT OF ASSETS AND LIABILITIES (Continued) December 31, 2017 Small Cap Equity Small Cap Growth Equity U.S. Government Money Market Oppenheimer Capital Appreciation Oppenheimer Discovery Mid Cap Growth Oppenheimer Global Oppenheimer Global Strategic Income Oppenheimer International Growth ASSETS Investments Number of shares... 1,401, ,029 7,306, , ,299 1,087,196 1,827,064 1,806,356 Identified cost... $11,954,099 $ 5,728,387 $ 7,302,931 $32,756,670 $30,293,004 $33,828,458 $ 9,701,851 $ 3,955,353 Value... $14,430,795 $ 5,646,589 $ 7,306,615 $39,588,321 $45,582,778 $51,554,855 $ 9,372,839 $ 4,678,461 Receivable from C.M. Life Insurance Company Total assets... 14,430,797 5,646,589 7,306,633 39,588,332 45,582,799 51,554,867 9,372,849 4,678,461 LIABILITIES Payable to C.M. Life Insurance Company NET ASSETS (For variable life insurance policies)... $14,430,797 $ 5,646,580 $ 7,306,633 $39,588,332 $45,582,799 $51,554,867 $ 9,372,849 $ 4,678,453 Outstanding Units Policy owners... 3,725,486 2,118,852 5,901,033 15,787,312 18,977,862 11,197,353 3,637,972 1,802,532 UNIT VALUE Executive Benefit Variable Universal Life... $ - $ - $ - $ - $ - $ - $ - $ - Survivorship Variable Universal Life Variable Universal Life Survivorship Variable Universal Life II See Notes to Financial Statements. F-6

7 C. M. Life Variable Life Separate Account I STATEMENT OF ASSETS AND LIABILITIES (Continued) December 31, 2017 Oppenheimer Main Street Oppenheimer Total Return Bond T. Rowe Price Blue Chip Growth T. Rowe Price Equity Income T. Rowe Price Mid-Cap Growth Templeton Foreign VIP ASSETS Investments Number of shares , , , ,968 1,930, ,083 Identified cost... $ 9,633,225 $ 3,199,296 $ 2,855,609 $ 5,609,691 $46,351,335 $ 4,347,694 Value... $13,089,844 $ 3,171,914 $ 4,944,350 $ 6,496,999 $54,538,906 $ 4,750,573 Receivable from C.M. Life Insurance Company Total assets... 13,089,844 3,171,914 4,944,350 6,496,999 54,538,910 4,750,573 LIABILITIES Payable to C.M. Life Insurance Company NET ASSETS (For variable life insurance policies)... $13,089,834 $ 3,171,901 $ 4,944,349 $ 6,496,987 $54,538,910 $ 4,750,560 Outstanding Units Policy owners... 5,768,583 2,082,608 1,140,081 2,002,805 9,124,288 2,504,727 UNIT VALUE Executive Benefit Variable Universal Life... $ 3.31 $ - $ - $ - $ - $ - Survivorship Variable Universal Life Variable Universal Life Survivorship Variable Universal Life II See Notes to Financial Statements. F-7

8 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS For The Year Ended December 31, 2017 American Century VP Income & Growth American Century VP Value American Funds Asset Allocation American Funds Growth-Income Deutsche Small Cap Index Fidelity Fidelity VIP VIP Contrafund Index 500 Sub-Account Franklin Small Cap Value VIP Investment income Dividends... $ 580,654 $ 35,991 $ 125,254 $ 124,106 $ 37,061 $ 528,533 $ 91 $ 21,786 Expenses Mortality and expense risk fees and administrative charges ,051 9,877 33,081 36,793 17, , ,816 Net investment income (loss) ,603 26,114 92,173 87,313 19, , ,970 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares , , , , , , ,232 Realized gain distribution , , , ,506 2,784, ,970 Realized gain (loss) , , ,324 1,064, ,191 3,784, ,202 Change in net unrealized appreciation/depreciation of investments... 3,124,958 2, , ,941 (65,747) 6,077, (544) Net gain (loss) on investments... 4,002, ,628 1,097,772 1,670, ,444 9,862, ,658 Net increase (decrease) in net assets resulting from operations... 4,466, ,742 1,189,945 1,757, ,442 10,141, ,628 Capital transactions: Transfer of net premiums... 1,113,544 78, , , ,320 2,221,413 4, ,095 Transfers due to death benefits... (92,091) (166) (95,164) (114,087) (486,935) (415,344) - (18,394) Transfers due to withdrawal of funds... (971,478) (108,368) (612,159) (306,166) (137,554) (1,945,999) 15 (272,705) Transfers due to policy loans, net of repayments... (296,219) (19,039) (124,866) (79,653) (40,588) (604,100) (1,843) (49,683) Transfers due to charges for administrative and insurance costs... (960,588) (71,435) (261,161) (235,126) (97,143) (1,937,433) (3,755) (126,669) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account , , ,021 (305,077) (15,222) (302,804) 5,361 (192,277) Net increase (decrease) in net assets resulting from capital transactions... (1,082,650) (12,281) (339,667) (750,640) (626,122) (2,984,267) 4,433 (441,633) Total increase (decrease)... 3,383, , ,278 1,007,049 (117,680) 7,157,121 4,987 (20,005) NET ASSETS, at beginning of the year... 23,087,317 2,127,131 7,673,417 8,498,954 4,215,179 49,077,790-4,506,647 NET ASSETS, at end of the year... $26,471,177 $ 2,289,592 $ 8,523,695 $ 9,506,003 $ 4,097,499 $56,234,911 $ 4,987 $ 4,486,642 See Notes to Financial Statements. F-8

9 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2017 Goldman Sachs Strategic Growth Invesco V.I. Diversified Dividend Invesco V.I. Global Health Care Invesco V.I. Technology Janus Henderson Balanced Janus Henderson Forty Janus Henderson Global Research MFS Investors Trust Investment income Dividends... $ 19,683 $ 22,402 $ 2,791 $ - $ 50,016 $ - $ 71,807 $ 1,077 Expenses Mortality and expense risk fees and administrative charges... 15,619 4,245 3,069 2,848 16,872 59,910 40, Net investment income (loss)... 4,064 18,157 (278) (2,848) 33,144 (59,910) 31, Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares ,102 25,769 (1,919) 20,754 51, , ,812 5,917 Realized gain distribution ,563 45,919 38,762 34,186 6, ,039-5,812 Realized gain (loss) ,665 71,688 36,843 54,940 58, , ,812 11,729 Change in net unrealized appreciation/depreciation of investments ,438 11,547 69, , ,468 2,487,161 1,812,514 19,245 Net gain (loss) on investments ,103 83, , , ,531 3,471,989 1,977,326 30,974 Net increase (decrease) in net assets resulting from operations , , , , ,675 3,412,079 2,008,940 31,409 Capital transactions: Transfer of net premiums ,208 17,792 22,512 36,953 71, , ,235 4,253 Transfers due to death benefits... (9,143) (24,255) (25,710) - Transfers due to withdrawal of funds... (81,997) (2,450) (35,451) (29,171) (43,982) (612,657) (292,428) (15,401) Transfers due to policy loans, net of repayments... (43,037) (3,288) (12,899) (48,255) (21,572) (184,994) (110,970) (2,038) Transfers due to charges for administrative and insurance costs... (122,524) (39,009) (34,613) (39,021) (155,972) (427,388) (266,785) (7,513) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... (54,624) 152,198 6,982 49, , ,100 75,054 (1,612) Net increase (decrease) in net assets resulting from capital transactions... (179,117) 125,243 (53,469) (30,444) 278,054 (652,584) (165,604) (22,311) Total increase (decrease) , ,635 52, , ,729 2,759,495 1,843,336 9,098 NET ASSETS, at beginning of the year... 3,273,647 1,139, , ,022 2,960,401 11,752,783 7,668, ,661 NET ASSETS, at end of the year... $ 4,069,697 $ 1,365,896 $ 757,459 $ 719,151 $ 3,797,130 $14,512,278 $ 9,512,226 $ 169,759 See Notes to Financial Statements. F-9

10 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2017 MFS New Discovery Blend Blue Chip Growth Equity Equity Index Inflation- Protected and Income Managed Bond Managed Volatility Investment income Dividends... $ - $ 366,654 $ 481 $ 682,814 $ 464,904 $ 55,497 $ 293,733 $ 33,928 Expenses Mortality and expense risk fees and administrative charges... 4,030 77,067 18, , ,278 7,537 38,774 9,044 Net investment income (loss)... (4,030) 289,587 (17,651) 497, ,626 47, ,959 24,884 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares... (2,416) 244, , ,857 2,309,665 (57,903) (50,541) 8,353 Realized gain distribution... 16, , , ,975 1,052, Realized gain (loss)... 13, , , ,832 3,361,801 (57,903) (50,541) 8,353 Change in net unrealized appreciation/depreciation of investments ,231 1,165, ,925 4,218,918 3,927,403 55, , ,726 Net gain (loss) on investments ,972 2,084,908 1,309,229 4,871,750 7,289,204 (2,744) 131, ,079 Net increase (decrease) in net assets resulting from operations ,942 2,374,495 1,291,578 5,369,724 7,578,830 45, , ,963 Capital transactions: Transfer of net premiums... 26, , ,517 2,047,748 1,435,927 81, , ,132 Transfers due to death benefits... - (14,307) (1,932) (178,293) (2,806,947) (1,501) (9,896) - Transfers due to withdrawal of funds... (46,066) (337,262) (102,573) (1,764,230) (1,114,982) (69,938) (355,991) (123,516) Transfers due to policy loans, net of repayments... (7,492) (205,157) (41,320) (557,391) (399,456) (29,026) (76,505) (24,646) Transfers due to charges for administrative and insurance costs... (27,938) (796,650) (143,102) (1,749,207) (1,262,608) (87,996) (470,151) (85,137) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... (57,927) 18,219 6,123 (70,441) 347,198 (10,004) (103,499) 36,955 Net increase (decrease) in net assets resulting from capital transactions... (113,185) (557,306) (142,287) (2,271,814) (3,800,868) (117,391) (599,797) (60,212) Total increase (decrease)... 82,757 1,817,189 1,149,291 3,097,910 3,777,962 (72,175) (213,208) 158,751 NET ASSETS, at beginning of the year ,349 16,409,202 3,669,873 36,488,045 38,599,101 1,764,805 9,423,917 2,547,711 NET ASSETS, at end of the year... $ 903,106 $18,226,391 $ 4,819,164 $39,585,955 $42,377,063 $ 1,692,630 $ 9,210,709 $ 2,706,462 See Notes to Financial Statements. F-10

11 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2017 Small Cap Equity Small Cap Growth Equity U.S. Government Money Market Oppenheimer Capital Appreciation Oppenheimer Discovery Mid Cap Growth Oppenheimer Global Oppenheimer Global Strategic Income Oppenheimer International Growth Investment income Dividends... $ 115,412 $ - $ 26,595 $ 87,594 $ 12,666 $ 427,983 $ 210,996 $ 61,293 Expenses Mortality and expense risk fees and administrative charges... 61,781 23,672 28, , , ,353 40,659 19,018 Net investment income (loss)... 53,631 (23,672) (1,688) (84,151) (186,946) 203, ,337 42,275 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares ,752 48,096 2, ,256 1,246, ,739 (130,788) 348,731 Realized gain distribution , , ,334,865 4,160, Realized gain (loss) , ,761 2,434 4,246,121 5,406, ,739 (130,788) 348,731 Change in net unrealized appreciation/ depreciation of investments... 1,024, ,698 (2,419) 4,373,737 5,003,439 12,956, , ,462 Net gain (loss) on investments... 1,729,870 1,067, ,619,858 10,410,215 13,839, ,587 1,037,193 Net increase (decrease) in net assets resulting from operations... 1,783,501 1,043,787 (1,673) 8,535,707 10,223,269 14,042, ,924 1,079,468 Capital transactions: Transfer of net premiums , ,062 1,025,625 1,859,823 2,020,898 2,101, , ,373 Transfers due to death benefits... (53,577) (31,791) (148,654) (491,379) (84,960) (219,226) (672,696) (1,375,659) Transfers due to withdrawal of funds... (420,236) (102,324) (1,245,207) (1,280,257) (1,436,728) (1,769,512) (271,931) (101,578) Transfers due to policy loans, net of repayments... (159,349) (85,808) (26,311) (808,530) (675,319) (679,509) (96,439) (27,122) Transfers due to charges for administrative and insurance costs... (383,622) (161,085) (877,251) (1,523,987) (1,446,977) (1,703,203) (367,655) (150,637) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... 57,221 9,511 1,334,061 (229,201) (76,339) (260,280) 266,815 (137,007) Net increase (decrease) in net assets resulting from capital transactions... (506,330) (180,435) 62,263 (2,473,531) (1,699,425) (2,530,143) (724,233) (1,629,630) Total increase (decrease)... 1,277, ,352 60,590 6,062,176 8,523,844 11,512,573 (193,309) (550,162) NET ASSETS, at beginning of the year... 13,153,626 4,783,228 7,246,043 33,526,156 37,058,955 40,042,294 9,566,158 5,228,615 NET ASSETS, at end of the year... $14,430,797 $ 5,646,580 $ 7,306,633 $39,588,332 $45,582,799 $51,554,867 $ 9,372,849 $ 4,678,453 See Notes to Financial Statements. F-11

12 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2017 Oppenheimer Main Street Oppenheimer Total Return Bond T. Rowe Price Blue Chip Growth T. Rowe Price Equity Income T. Rowe Price Mid-Cap Growth Templeton Foreign VIP Investment income Dividends... $ 156,320 $ 72,629 $ - $ 107,437 $ - $ 115,428 Expenses Mortality and expense risk fees and administrative charges... 56,987 13,038 18,891 28, ,681 19,620 Net investment income (loss)... 99,333 59,591 (18,891) 78,966 (242,681) 95,808 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares ,836 (48,062) 397, , ,643 78,660 Realized gain distribution ,727-56, ,982 6,281,669 - Realized gain (loss) ,563 (48,062) 454, ,226 6,908,312 78,660 Change in net unrealized appreciation/depreciation of investments... 1,381, , ,966 (91,377) 4,218, ,033 Net gain (loss) on investments... 1,781,741 75,272 1,376, ,849 11,127, ,693 Net increase (decrease) in net assets resulting from operations... 1,881, ,863 1,357, ,815 10,884, ,501 Capital transactions: Transfer of net premiums , , , ,331 1,665, ,612 Transfers due to death benefits... (201,368) (642,659) (23,304) (83,180) (279,638) (70,047) Transfers due to withdrawal of funds... (247,443) (100,205) (159,285) (231,964) (1,604,675) (247,989) Transfers due to policy loans, net of repayments... (119,698) (19,768) (46,047) (60,345) (541,125) (77,745) Transfers due to charges for administrative and insurance costs... (483,098) (133,153) (171,169) (236,075) (1,777,582) (158,916) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... (56,154) 104,600 (121,722) (93,852) 104,914 (104,348) Net increase (decrease) in net assets resulting from capital transactions... (516,930) (652,156) (411,512) (537,085) (2,432,899) (467,433) Total increase (decrease)... 1,364,144 (517,293) 946, ,730 8,451, ,068 NET ASSETS, at beginning of the year... 11,725,690 3,689,194 3,998,270 6,141,257 46,087,325 4,528,492 NET ASSETS, at end of the year... $13,089,834 $ 3,171,901 $ 4,944,349 $ 6,496,987 $54,538,910 $ 4,750,560 See Notes to Financial Statements. F-12

13 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS For The Year Ended December 31, 2016 American Century VP Income & Growth American Century VP Value American Funds Asset Allocation American Funds Growth-Income Deutsche Small Cap Index Fidelity Fidelity VIP VIP Contrafund Index 500 Sub-Account Franklin Small Cap Value VIP Investment income Dividends... $ 519,499 $ 34,815 $ 119,742 $ 118,458 $ 42,162 $ 386,005 $ - $ 31,430 Expenses Mortality and expense risk fees and administrative charges ,025 9,298 29,562 32,544 15, , ,335 Net investment income (loss) ,474 25,517 90,180 85,914 26, ,445 (2) 15,095 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares , , , , , , ,223 Realized gain distribution , , , ,731 3,801, ,602 Realized gain (loss) , , , , ,459 4,116, ,825 Change in net unrealized appreciation/depreciation of investments... 1,619, , ,182 (245,888) 253,777 (796,558) - 329,118 Net gain (loss) on investments... 2,271, , , , ,236 3,320, ,005,943 Net increase (decrease) in net assets resulting from operations... 2,686, , , , ,713 3,482, ,021,038 Capital transactions: Transfer of net premiums... 1,209,331 93, , , ,376 2,346,583 3, ,023 Transfers due to death benefits... (115,520) (41,530) (17,261) (69,157) (7,324) (120,221) - (34,832) Transfers due to withdrawal of funds... (821,809) (170,180) (164,192) (368,073) (222,971) (1,845,485) (2) (111,438) Transfers due to policy loans, net of repayments... (206,179) (29,359) (28,647) (49,041) (22,850) (641,471) - (41,524) Transfers due to charges for administrative and insurance costs... (999,410) (91,155) (274,314) (254,480) (101,021) (2,004,823) (3,833) (163,110) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... 29,559 12, , ,148 (95,775) (1,064,023) ,581 Net increase (decrease) in net assets resulting from capital transactions... (904,028) (225,590) 23,116 58,921 (323,565) (3,329,440) (24) (57,300) Total increase (decrease)... 1,782, , , , , , ,738 NET ASSETS, at beginning of the year... 21,305,205 1,983,875 7,025,633 7,630,320 3,818,031 48,924,420-3,542,909 NET ASSETS, at end of the year... $23,087,317 $ 2,127,131 $ 7,673,417 $ 8,498,954 $ 4,215,179 $49,077,790 $ - $ 4,506,647 See Notes to Financial Statements. F-13

14 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2016 Goldman Sachs Strategic Growth Invesco V.I. Diversified Dividend Invesco V.I. Global Health Care Invesco V.I. Technology Janus Aspen Balanced Janus Aspen Forty Janus Aspen Global Research MFS Investors Trust Investment income Dividends... $ 20,324 $ 14,492 $ - $ - $ 59,123 $ - $ 82,459 $ 1,577 Expenses Mortality and expense risk fees and administrative charges... 14,284 2,565 3,523 2,494 14,628 52,461 35, Net investment income (loss)... 6,040 11,927 (3,523) (2,494) 44,495 (52,461) 47, Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares ,885 51,481 48,208 9,183 26,630 (164,576) 218,577 6,626 Realized gain distribution ,028 25,949 43,496 1,591,954-20,156 Realized gain (loss) ,214 51, ,236 35,132 70,126 1,427, ,577 26,782 Change in net unrealized appreciation/depreciation of investments... (262,338) 27,510 (276,767) (41,773) (237) (1,182,898) (149,023) (14,067) Net gain (loss) on investments... 61,876 78,991 (106,531) (6,641) 69, ,480 69,554 12,715 Net increase (decrease) in net assets resulting from operations... 67,916 90,918 (110,054) (9,135) 114, , ,989 13,506 Capital transactions: Transfer of net premiums ,347 19,445 25,545 51,838 96, , ,058 8,336 Transfers due to death benefits... (38,785) (34,647) (17,655) (3,043) - (53,076) (11,266) (32,426) Transfers due to withdrawal of funds... (107,444) (1,845) (25,958) (18,878) (97,199) (813,542) (294,565) (976) Transfers due to policy loans, net of repayments... (31,377) (6,083) (23,844) (7,707) (54,692) (207,875) (163,451) (2,663) Transfers due to charges for administrative and insurance costs... (132,286) (30,448) (38,642) (35,792) (120,044) (445,568) (264,988) (10,145) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... (539,586) 625,963 (29,103) (31,583) (150,371) 76,688 (35,440) 2,094 Net increase (decrease) in net assets resulting from capital transactions... (705,131) 572,385 (109,657) (45,165) (325,607) (932,286) (287,652) (35,780) Total increase (decrease)... (637,215) 663,303 (219,711) (54,300) (211,223) (740,267) (170,663) (22,274) NET ASSETS, at beginning of the year... 3,910, , , ,322 3,171,624 12,493,050 7,839, ,935 NET ASSETS, at end of the year... $ 3,273,647 $ 1,139,261 $ 705,118 $ 563,022 $ 2,960,401 $11,752,783 $ 7,668,890 $ 160,661 See Notes to Financial Statements. F-14

15 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2016 MFS New Discovery Blend Blue Chip Growth Equity Equity Index Inflation- Protected and Income Managed Bond Managed Volatility Investment income Dividends... $ - $ 337,433 $ - $ 600,482 $ 683,164 $ 48,499 $ 281,349 $ 44,700 Expenses Mortality and expense risk fees and administrative charges... 3,725 70,821 15, , ,801 9,061 40,688 9,092 Net investment income (loss)... (3,725) 266,612 (15,039) 431, ,363 39, ,661 35,608 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares... (20,514) 275, , ,315 1,799,053 (123,304) (27,733) 109,976 Realized gain distribution... 36,095 1,472, ,055 2,195, ,261-44, ,937 Realized gain (loss)... 15,581 1,747, ,028 2,303,837 2,660,314 (123,304) 16, ,913 Change in net unrealized appreciation/depreciation of investments... 53,080 (669,959) (527,764) 1,198, , ,022 (8,402) (544,766) Net gain (loss) on investments... 68,661 1,077,745 31,264 3,502,554 3,311,023 76,718 8,563 46,147 Net increase (decrease) in net assets resulting from operations... 64,936 1,344,357 16,225 3,933,859 3,835, , ,224 81,755 Capital transactions: Transfer of net premiums... 23, , ,356 2,238,799 1,678,484 82, , ,688 Transfers due to death benefits... - (86,148) (52,715) (184,937) (23,837) (24,349) (56,732) (26,667) Transfers due to withdrawal of funds... (16,946) (526,139) (90,915) (2,102,553) (1,608,511) (192,714) (708,990) (123,317) Transfers due to policy loans, net of repayments... (2,793) (89,349) (88,763) (456,706) (529,905) (52,071) (89,811) (31,885) Transfers due to charges for administrative and insurance costs... (26,483) (895,943) (140,281) (1,865,718) (1,343,919) (106,829) (512,933) (98,695) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... (40,097) 144, ,154 (256,785) (1,040,612) (346,434) (64,304) (94,789) Net increase (decrease) in net assets resulting from capital transactions... (62,337) (541,343) (30,164) (2,627,900) (2,868,300) (639,807) (953,126) (262,665) Total increase (decrease)... 2, ,014 (13,939) 1,305, ,086 (523,651) (703,902) (180,910) NET ASSETS, at beginning of the year ,750 15,606,188 3,683,812 35,182,086 37,632,015 2,288,456 10,127,819 2,728,621 NET ASSETS, at end of the year... $ 820,349 $16,409,202 $ 3,669,873 $36,488,045 $38,599,101 $ 1,764,805 $ 9,423,917 $ 2,547,711 See Notes to Financial Statements. F-15

16 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2016 Small Cap Equity Small Cap Growth Equity U.S. Government Money Market Oppenheimer Capital Appreciation Oppenheimer Discovery Mid Cap Growth Oppenheimer Global Oppenheimer Global Strategic Income Oppenheimer International Growth Investment income Dividends... $ 124,586 $ - $ 10 $ 136,525 $ - $ 413,839 $ 456,475 $ 59,618 Expenses Mortality and expense risk fees and administrative charges... 52,509 20,417 29, , , ,696 39,949 20,958 Net investment income (loss)... 72,077 (20,417) (29,038) (18,251) (177,663) 224, ,526 38,660 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares... (40,833) (42,061) 2, ,126 1,292, ,602 (72,513) 153,325 Realized gain distribution , ,155-3,459,170 2,850,038 2,623, ,826 Realized gain (loss) , ,094 2,699 4,127,296 4,143,019 2,827,762 (72,513) 280,151 Change in net unrealized appreciation/ depreciation of investments... 1,665,014 (162,486) 6,511 (5,103,428) (3,298,387) (3,317,120) 194,349 (471,116) Net gain (loss) on investments... 1,892, ,608 9,210 (976,132) 844,632 (489,358) 121,836 (190,965) Net increase (decrease) in net assets resulting from operations... 1,964, ,191 (19,828) (994,383) 666,969 (265,215) 538,362 (152,305) Capital transactions: Transfer of net premiums , ,229 1,557,638 2,022,254 2,212,254 2,225, , ,843 Transfers due to death benefits... (15,819) (37,531) (9,169) (75,232) (80,870) (65,019) (42,718) (66,683) Transfers due to withdrawal of funds... (311,648) (120,318) (2,566,133) (1,324,988) (1,421,181) (1,638,347) (295,252) (143,591) Transfers due to policy loans, net of repayments... (118,358) (59,643) (168,235) (602,252) (744,688) (728,294) (145,236) (32,814) Transfers due to charges for administrative and insurance costs... (401,662) (172,654) (1,459,111) (1,594,969) (1,491,990) (1,685,404) (383,460) (183,065) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account ,553 (263,976) 743,939 88,566 17,705 69, ,353 67,888 Net increase (decrease) in net assets resulting from capital transactions... (167,234) (455,893) (1,901,071) (1,486,621) (1,508,770) (1,822,003) (43,199) (170,422) Total increase (decrease)... 1,797,382 82,298 (1,920,899) (2,481,004) (841,801) (2,087,218) 495,163 (322,727) NET ASSETS, at beginning of the year... 11,356,244 4,700,930 9,166,942 36,007,160 37,900,756 42,129,512 9,070,995 5,551,342 NET ASSETS, at end of the year... $13,153,626 $ 4,783,228 $ 7,246,043 $33,526,156 $37,058,955 $40,042,294 $ 9,566,158 $ 5,228,615 See Notes to Financial Statements. F-16

17 C. M. Life Variable Life Separate Account I STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Continued) For The Year Ended December 31, 2016 Oppenheimer Main Street Oppenheimer Core Bond T. Rowe Price Blue Chip Growth T. Rowe Price Equity Income T. Rowe Price Mid-Cap Growth Templeton Foreign VIP Investment income Dividends... $ 128,132 $ 123,739 $ - $ 132,463 $ - $ 94,387 Expenses Mortality and expense risk fees and administrative charges... 51,472 13,534 15,339 26, ,854 19,710 Net investment income (loss)... 76, ,205 (15,339) 106,394 (216,854) 74,677 Net realized and unrealized gain (loss) on investments Realized gain (loss) on sale of fund shares ,081 7, , , ,218 90,434 Realized gain distribution... 1,361, ,210 2,971,359 84,540 Realized gain (loss)... 1,560,037 7, , ,152 3,511, ,974 Change in net unrealized appreciation/depreciation of investments... (430,549) (36,752) (280,580) 28,545 (750,740) 20,347 Net gain (loss) on investments... 1,129,488 (29,744) 13, ,697 2,760, ,321 Net increase (decrease) in net assets resulting from operations... 1,206,148 80,461 (1,754) 984,091 2,543, ,998 Capital transactions: Transfer of net premiums , , , ,140 1,800, ,676 Transfers due to death benefits... (59,290) (2,411) (34,262) (62,794) (77,320) (56,570) Transfers due to withdrawal of funds... (717,084) (70,777) (189,132) (234,096) (2,134,037) (272,231) Transfers due to policy loans, net of repayments... (206,742) (59,029) (62,228) (32,982) (591,442) (71,661) Transfers due to charges for administrative and insurance costs... (504,594) (142,784) (164,805) (259,560) (1,819,762) (181,123) Transfers between divisions/sub-accounts and to/from Guaranteed Principal Account/Fixed Account... (41,308) 522, ,625 10,877 (367,258) (687,989) Net increase (decrease) in net assets resulting from capital transactions... (936,059) 399, ,223 (351,415) (3,189,671) (1,020,898) Total increase (decrease) , , , ,676 (645,688) (750,900) NET ASSETS, at beginning of the year... 11,455,601 3,209,007 3,672,801 5,508,581 46,733,013 5,279,392 NET ASSETS, at end of the year... $11,725,690 $ 3,689,194 $ 3,998,270 $ 6,141,257 $46,087,325 $ 4,528,492 See Notes to Financial Statements. F-17

18 C. M. Life Variable Life Separate Account I Notes To Financial Statements 1. ORGANIZATION C.M. Life Variable Life Separate Account I ( the Separate Account ) is a separate investment account of C.M. Life Insurance Company ( C.M. Life ) established on February 2, The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940 ( the 1940 Act ). C.M. Life was formerly a wholly owned stock life insurance subsidiary of Connecticut Mutual Life Insurance Company ( CML ). On February 29, 1996, CML merged with and into Massachusetts Mutual Life Insurance Company ( MassMutual ). Upon the merger, CML s existence ceased and MassMutual became the surviving company under the name Massachusetts Mutual Life Insurance Company. C.M. Life became a wholly owned subsidiary of MassMutual. C.M. Life maintains the following four segments within the Separate Account: Executive Benefit Variable Universal Life, Survivorship Variable Universal Life, Variable Universal Life, and Survivorship Variable Universal Life II. The assets and liabilities of the Separate Account are clearly identified and distinguished from C.M. Life s other assets and liabilities. The portion of the Separate Account s assets applicable to the variable life contracts is not chargeable with liabilities arising from any other C.M. Life business. 2. INVESTMENT OF THE SEPARATE ACCOUNT S ASSETS As of December 31, 2017, the Separate Account consists of forty-three divisions/sub-accounts that invest in the following mutual funds. All of the funds may not be available to all of the four segments of the Separate Account: The division/sub-account listed in the first column s/sub-accounts invests in the fund in this column American Century VP Income & Growth American Century VP Income & Growth Fund 1 American Century VP Value American Century VP Value Fund 1 American Funds Asset Allocation American Funds Insurance Series Asset Allocation Fund 2 American Funds Growth-Income American Funds Insurance Series Growth-Income Fund 2 Deutsche Small Cap Index Deutsche Small Cap Index VIP Fund 3 Fidelity VIP Contrafund Fidelity VIP Contrafund Portfolio 4 Fidelity VIP High Income Sub-Account 5 Fidelity VIP High Income Portfolio 4, 5 Fidelity VIP Index 500 Sub-Account Fidelity VIP Index 500 Portfolio 4 Fidelity VIP Government Money Market Sub-Account 5 Fidelity VIP Government Money Market Portfolio 4, 5 Franklin Small Cap Value VIP Franklin Small Cap Value VIP Fund 6 Goldman Sachs Strategic Growth Goldman Sachs Strategic Growth Fund 7 Invesco V.I. Diversified Dividend Invesco V.I. Diversified Dividend Fund 8 Invesco V.I. Global Health Care Invesco V.I. Global Health Care Fund 8 Invesco V.I. Technology Invesco V.I. Technology Fund 8 Janus Henderson Balanced 17 Janus Henderson Balanced Portfolio 9, 17 Janus Henderson Forty 18 Janus Henderson Forty Portfolio 9, 18 Janus Henderson Global Research 19 Janus Henderson Global Research Portfolio 9, 19 MFS Investors Trust MFS Investors Trust Series 10 MFS New Discovery MFS New Discovery Series 10 Blend Blend Fund 11 F-18

19 Notes To Financial Statements (Continued) The division/sub-account listed in the first column s/sub-accounts invests in the fund in this column Blue Chip Growth Blue Chip Growth Fund 12 Equity Equity Fund 11 Equity Index Equity Index Fund 12 Inflation-Protected and Income Inflation-Protected and Income Fund 11 Managed Bond Managed Bond Fund 11 Managed Volatility Managed Volatility Fund 12 Small Cap Equity Small Cap Equity Fund 11 Small Cap Growth Equity Small Cap Growth Equity Fund 12 U.S. Government Money Market U.S. Government Money Market Fund 11 Oppenheimer Capital Appreciation Oppenheimer Capital Appreciation Fund/VA 13 Oppenheimer Conservative Balanced 5 Oppenheimer Conservative Balanced Fund 5, 13 Oppenheimer Discovery Mid Cap Growth Oppenheimer Discovery Mid Cap Growth Fund/VA 13 Oppenheimer Global Oppenheimer Global Fund/VA 13 Oppenheimer Global Strategic Income Oppenheimer Global Strategic Income Fund/VA 13 Oppenheimer Income Sub-Account Oppenheimer Income Fund/VA 13 Oppenheimer International Equity Sub-Account 5 Oppenheimer International Equity Fund/VA 5, 13 Oppenheimer International Growth 5 Oppenheimer International Growth Fund/VA 13 Oppenheimer Main Street Oppenheimer Main Street Fund /VA 13 Oppenheimer Total Return Bond 16 Oppenheimer Total Return Bond Fund/VA 13, 16 T. Rowe Price Blue Chip Growth T. Rowe Price Blue Chip Growth Portfolio 14 T. Rowe Price Equity Income T. Rowe Price Equity Income Portfolio 14 T. Rowe Price Mid-Cap Growth T. Rowe Price Mid-Cap Growth Portfolio 14 Templeton Foreign VIP Templeton Foreign VIP Fund 15 In addition to the forty-three divisions/sub-accounts, some policy owners may also allocate funds to the Guaranteed Principal Account ( GPA ), which is part of C.M. Life s general investment account ( General Account ). Because of exemptive and exclusionary provisions in the securities law, interests in the GPA are not registered under the Securities Act of 1933, and the General Account and the GPA are not registered as an investment company under the 1940 Act. 1 American Century Investment Management, Inc. is the investment adviser to this Fund. 2 Capital Research and Management Company is the investment adviser to the listed Funds. 3 Deutsche Investment Management Americas Inc. is the investment adviser to this Fund. 4 Fidelity Management & Research Company is the investment adviser to the listed Portfolios. 5 This sub-account/portfolio did not have any investment or unit activity in 2016 and Franklin Advisory Services, LLC is the investment adviser to this Fund. 7 Goldman Sachs Asset Management, L.P., a separate business unit of the Investment Management of Goldman Sachs & Co., is the investment adviser to this Fund. 8 Invesco Advisers, Inc. is the investment adviser to the listed Funds. 9 Janus Capital Management, LLC is the investment adviser to the listed Portfolios. 10 Massachusetts Financial Services Company is the investment adviser to the listed Series. 11 Investment Advisers, LLC is the investment adviser to the listed II Trust Fund. 12 Investment Advisers, LLC is the investment adviser to the listed Trust Fund. 13 OFI Global Asset Management, Inc. is the investment adviser to the listed Funds/Portfolios. 14 T. Rowe Price Associates, Inc. is the investment adviser to the listed Portfolios. 15 Templeton Investment Counsel, LLC is the investment adviser to this Fund. 16 Oppenheimer Total Return Bond was formerly known as Oppenheimer Core Bond. 17 Janus Henderson Balanced was formerly known as Janus Aspen Balanced. 18 Janus Henderson Forty was formerly known as Janus Aspen Forty. 19 Janus Henderson Global Research was formerly known as Janus Aspen Global Research. F-19

20 Notes To Financial Statements (Continued) 3. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Separate Account in preparation of the financial statements in conformity with generally accepted accounting principles. Separate Account C.M. Life Variable Life Separate Account I follows the accounting and reporting guidance in FASB Accounting Standards Codification 946. A. Investment Valuation Investments in the investment divisions/sub-accounts are valued at the closing net asset value of each of the respective underlying funds, which value their investment securities at fair value. B. Accounting for Investments Investment transactions are accounted for on a trade-date basis and identified cost is the basis followed in determining the cost of investments sold for financial statement purposes. Dividend income and gains from realized gain distributions are recorded on the ex-distribution date, and are reinvested in the underlying investment divisions/ sub-accounts. C. Federal Income Taxes C.M. Life is taxed under federal law as a life insurance company under the provisions of the 1986 Internal Revenue Code, as amended. Under existing federal law, no taxes are payable on net investment income and net realized capital gains attributable to policies, which depend on the Separate Account s investment performance. Accordingly, no provision for federal income tax has been made. C.M. Life may, however, make such a charge in the future if an unanticipated change of current law results in a company tax liability attributable to the Separate Account. D. Policy Charges See Note 8B for charges associated with the policies. E. Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F. Policy Loans When a policy loan is made, the Separate Account transfers the amount of the loan to C.M. Life, thereby decreasing both the investments and the net assets of the Separate Account by an equal amount. The policy owner is charged interest on the outstanding policy loan amount generally equal to either a fixed interest rate of 4% to 8% per year or (in all qualifying jurisdictions) an adjustable loan rate, where applicable. The adjustable loan rate is determined each year for the following policy year. As long as a loan is outstanding, a portion of the policy account value equal to the loan is invested in the GPA. The amount of the loan earns interest at a rate equal to the greater of either a fixed interest rate generally equal to 3% of the loan or the policy loan rate less the loan interest rate expense charge. This amount does not participate in the Separate Account s investment performance. G. Life Reserves Life reserves are developed by using accepted actuarial methods and are computed using the 1980 CSO mortality table. 4. FAIR VALUE OF FINANCIAL INSTRUMENTS The Separate Account 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. Investments in mutual funds are valued at the mutual fund s closing net asset value per share on the day of valuation. F-20

21 Notes To Financial Statements (Continued) Valuation Inputs: Various inputs are used to determine the value of the Separate Account s investments. These inputs are summarized in the three broad levels listed below: Level 1 quoted prices in active markets for identical securities Level 2 observable inputs other than Level 1 quoted prices (including, but not limited to, quoted prices for similar securities, interest rates, prepayment speeds and credit risk) Level 3 unobservable inputs The net assets of the Separate Account are measured at fair value. All the net assets are categorized as Level 1 as of December 31, There have been no transfers between levels for the year ended December 31, RELATED PARTY TRANSACTIONS A. Sales Agreements Pursuant to separate underwriting agreements with C.M. Life, on its own behalf and on the behalf of the Separate Account, Investors Services, LLC ( IS ) serves as principal underwriter of the policies sold by its registered representatives, and Distributors, LLC ( Distributors ) and/or Strategic Distributors, LLC ( MSD ) serve as principal underwriters of the policies sold by registered representatives of other broker-dealers who have entered into distribution agreements with Distributors and/or MSD. IS, Distributors and MSD are registered with the Securities and Exchange Commission (the SEC ) as broker-dealers under the Securities Exchange Act of 1934 and are members of the Financial Industry Regulatory Authority ( FINRA ). Commissions for sales of policies by IS registered representatives are paid on behalf of IS to its registered representatives. Commissions for sales of policies by registered representatives of other broker-dealers are paid on behalf of Distributors and/or MSD to those broker-dealers. IS, Distributors and MSD also receive compensation for their actions as principal underwriters of the policies. The policies are no longer offered for sale to the public. Policy owners may continue, however, to make purchase payments under existing policies. B. Receivable from/payable to C.M. Life Certain fees such as cost of insurance fees and mortality and expense fees are charges paid between the General Account and the Separate Account. 6. PURCHASES AND SALES OF INVESTMENTS The cost of purchases and proceeds from sales of investments for the year ended December 31, 2017 were as follows: American Century VP Income & Growth American Century VP Value American Funds Asset Allocation American Funds Growth-Income Deutsche Small Cap Index Fidelity Fidelity VIP VIP Contrafund Index 500 Sub-Account Franklin Small Cap Value VIP Cost of purchases... $ 1,611,809 $ 297,052 $ 1,287,705 $ 1,001,634 $ 463,999 $ 4,142,699 $ 10,133 $ 593,354 Proceeds from sales... (1,671,016) (283,217) (1,169,648) (1,105,697) (926,608) (4,062,833) (5,621) (733,049) Goldman Sachs Strategic Growth Invesco V.I. Diversified Dividend Invesco V.I. Global Health Care Invesco V.I. Technology Janus Henderson Balanced Janus Henderson Forty Janus Henderson Global Research MFS Investors Trust Cost of purchases... $ 332,180 $ 259,916 $ 80,637 $ 120,418 $ 626,008 $ 1,234,429 $ 362,996 $ 49,693 Proceeds from sales... (336,670) (70,593) (95,623) (119,513) (307,852) (1,233,896) (496,997) (65,752) F-21