TRANSAMERICA SEPARATE ACCOUNT VA-6
485BPOS, 2000-04-27
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             As filed with the Securities and Exchange Commission on
                                 April 27, 2000
                    Registration Nos. 333-9745 No. 811-07753


     ----------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
      ---------------------------------------------------------------------

                                    FORM N-4
           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
                           Pre-Effective Amendment No.

                         Post-Effective Amendment No. 10
                                       --

                                       |X|
                                       and

       REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940|_|
                               Amendment No. 11|X|
                                       --


                              SEPARATE ACCOUNT VA-6
                              ---------------------
                           (Exact Name of Registrant)

                 TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
                 -----------------------------------------------
                               (Name of Depositor)

  TRANSAMERICA SQUARE, 401 NORTH TRYON STREET, CHARLOTTE, NORTH CAROLINA 28202
             -------------------------------------------------------
              (Address of Depositor's Principal Executive Offices)
        Depositor's Telephone Number, including Area Code: (704) 330-5600

Name and Address of Agent for Service:    Copy to:

JAMES W. DEDERER, ESQ.                    FREDERICK R. BELLAMY, ESQ.
GENERAL COUNSEL AND SECRETARY             SUTHERLAND, ASBILL & BRENNAN LLP
TRANSAMERICA LIFE INSURANCE               1275 PENNSYLVANIA AVENUE, N.W.
AND ANNUITY COMPANY                       WASHINGTON, D.C. 20004-2415
1150 SOUTH OLIVE STREET
LOS ANGELES, CALIFORNIA  90015-2211

     Title of securities being  registered:  Flexible premium deferred  variable
annuity contracts.




         It  is proposed  that this filing will become  effective:
             |_|immediately  upon filing pursuant to paragraph (b)
             |X| on May 1, 2000  pursuant to paragraph  (b)
             |_| 60 days after filing pursuant to paragraph (a)(1)
             |_| on ___ pursuant to paragraph (a)(1)

         If appropriate, check the following box:
                           |_| this  Post-Effective  Amendment  designates a new
            effective date for a previously filed Post-Effective Amendment.



<PAGE>



                              CROSS REFERENCE SHEET
                              Pursuant to Rule 495

                    Showing Location in Part A (Prospectus),
             Part B (Statement of Additional Information) and Part C
           of Registration Statement Information Required by Form N-4
           ----------------------------------------------------------
<TABLE>
<CAPTION>

                                                           PART A

Item of Form N-4                                              Prospectus Caption

<S>  <C>                                                         <C>
1.    Cover Page..............................................    Cover Page

2.    Definitions.............................................    Definitions

3.    Synopsis................................................    Summary of this Prospectus; Variable Account
                                                                       Fee Table

4.    Condensed Financial Information.........................    Condensed Financial Information

5.    General
      (a)  Depositor..........................................    Transamerica and the Separate Account
      (b)  Registrant.........................................    Transamerica and the Separate Account
      (c)  Portfolio Company..................................    The Funds
      (d)  Fund Prospectus....................................    The Funds
      (e)  Voting Rights......................................    Voting Rights
      (f)  Administrator.......................................   Charges under the Contracts

6.    Deductions and Expenses
      (a)  General............................................    Charges under the Contracts
      (b)  Sales Load %.......................................    Charges under the Contracts
      (c)  Special Purchase Plan..............................    Not Applicable
      (d)  Commissions........................................    Underwriter
      (e)  Fund Expenses......................................    Charges under the Contracts
      (f)  Operating Expenses.................................    Fee Table

7.    Contracts
      (a)  Persons with Rights................................    Description of the Contracts; Surrender of a
                                                                  Contract; Death Benefits; Voting Rights;
                                                                  Ownership
      (b)  (i)   Allocation of Purchase Payments
                 Payments.....................................    Description of the Contracts
           (ii)  Transfers....................................    Transfers
           (iii) Exchanges....................................    Federal Tax Matters
      (c)  Changes............................................    The Funds; Voting Rights

      (d)  Inquiries..........................................    Voting Rights

8.    Annuity Period..........................................    Settlement Payments

9.    Death Benefit...........................................    Death Benefits

10.   Purchase and Contract Value
      (a)  Purchases..........................................    Description of the Contracts
      (b)  Valuation..........................................    Description of the Contracts
      (c)  Daily Calculation..................................    Description of the Contracts
      (d)  Underwriter........................................    Underwriter

11.   Redemptions
      (a)  By Contract Owners.................................    Surrender of a Contract
           By Annuitant.......................................    Not Applicable
      (b)  Texas ORP..........................................    Not Applicable
      (c)  Check Delay........................................    Surrender of a Contract
      (d)  Lapse..............................................    Not Applicable
      (e)  Free Look..........................................    Right to Cancel

12.   Taxes................................Federal Tax Matters

13.   Legal Proceedings.......................................    Legal Proceedings

14.   Table of Contents for the
      Statement of
      Additional Information..................................    Table of Contents of the Statement of
                                                                  Additional Information


                                                           PART B

Item of Form N-4                                                  Statement of Additional Information Caption

15.   Cover Page..............................................    Cover Page

16.   Table of Contents.......................................    Table of Contents

17.   General Information
      and History.............................................    General Information and History

18.   Services
      (a)  Fees and Expenses
           of Registrant......................................    (Prospectus) Variable Account Fee Table;
                                                                  (Prospectus) The Funds
      (b)  Management Contracts...............................    Not Applicable
      (c)  Custodian..........................................    Safekeeping of Separate Account Assets; Records
                                                                     and Reports
           Independent Auditors  .............................    Accountants
      (d)  Assets of Registrant...............................    Not Applicable
      (e)  Affiliated Person..................................    Not Applicable
      (f)  Principal Underwriter..............................    The Underwriter

19.   Purchase of Securities
      Being Offered...........................................    (Prospectus) Description of the Contracts
      Offering Sales Load.....................................    Charges under the Contracts

20.   Underwriters............................................    The Underwriter
21.   Calculation of Performance
      Data ...........Calculation of Yields and Total Returns
22.   Annuity Payments........................................    (Prospectus) Settlement Option Payments
23.   Financial Statements....................................    Financial Statements



                                                 PART C -- OTHER INFORMATION

Item of Form N-4                                                  Part C Caption

24.   Financial Statements
      and Exhibits
      (a)  Financial Statements...............................    Financial Statements
      (b)  Exhibits...........................................    Exhibits

25.   Directors and Officers of
      the Depositor...........................................    Directors and Officers of the Depositor

26.   Persons Controlled By or Under Common Control
      with the Depositor or Registrant .......................    Persons Controlled By or Under Common Control
                                                                  with the Depositor or Registrant

27.   Number of Contract Owners...............................    Number of Contract Owners

28.   Indemnification.........................................    Indemnification

29.   Principal Underwriters..................................    Principal Underwriter

30.   Location of Accounts
      and Records.............................................    Location of Accounts and Records

31.   Management Services.....................................    Management Services

32.   Undertakings............................................    Undertakings

      Signature Page..........................................    Signature Page



</TABLE>
<PAGE>

                               PROSPECTUS FOR THE

                    TRANSAMERICA CLASSIC(R) VARIABLE ANNUITY
                  A FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY

                                    ISSUED BY

                           TRANSAMERICA LIFE INSURANCE
                                       AND
                                 ANNUITY COMPANY

              OFFERING 19 SUB-ACCOUNTS WITHIN THE VARIABLE ACCOUNT
                       DESIGNATED AS SEPARATE ACCOUNT VA-6

                                 IN ADDITION TO:

                                 A FIXED ACCOUNT
                                        &
                           A GUARANTEE PERIOD ACCOUNT
<TABLE>
<CAPTION>


<S>     <C>                                                 <C>
o        THIS PROSPECTUS CONTAINS                            PORTFOLIOS ASSOCIATED WITH SUB-ACCOUNTS
                                                             ---------------------------------------
     INFORMATION YOU SHOULD                                      ALGER AMERICAN INCOME & GROWTH
     KNOW BEFORE INVESTING.                                       ALLIANCE VP GROWTH AND INCOME
                                                                   ALLIANCE VP PREMIER GROWTH
PLEASE KEEP THIS PROSPECTUS                                         DREYFUS VIF APPRECIATION
     FOR FUTURE REFERENCE.                                            DREYFUS VIF SMALL CAP

                                                                   JANUS ASPEN SERIES BALANCED

o        YOU CAN OBTAIN MORE INFORMATION ABOUT                 JANUS ASPEN SERIES WORLDWIDE GROWTH
     THE CONTRACT BY REQUESTING A COPY OF THE                        MFS VIT EMERGING GROWTH
     STATEMENT OF ADDITIONAL INFORMATION ("SAI")                   MFS VIT GROWTH WITH INCOME
     DATED MAY 1, 2000. THE SAI IS AVAILABLE FREE                       MFS VIT RESEARCH
     BY WRITING TO TRANSAMERICA LIFE INSURANCE                   MS UIF EMERGING MARKETS EQUITY
     AND ANNUITY COMPANY,                                              MS UIF FIXED INCOME
     ANNUITY SERVICE CENTER,                                            MS UIF HIGH YIELD
     401 N. TRYON ST., SUITE 700,                                  MS UIF INTERNATIONAL MAGNUM
     CHARLOTTE, NC 28202 OR                                      OCC ACCUMULATION TRUST MANAGED
     BY CALLING 877-717-8861.                                   OCC ACCUMULATION TRUST SMALL CAP
                                                              PIMCO VIT STOCKSPLUS GROWTH & INCOME
     THE CURRENT SAI HAS BEEN FILED WITH THE                         TRANSAMERICA VIF GROWTH
SECURITIES AND EXCHANGE COMMISSION AND                            TRANSAMERICA VIF MONEY MARKET
     IS INCORPORATED BY REFERENCE INTO THIS
     PROSPECTUS. THE TABLE OF CONTENTS OF THE SAI
     IS INCLUDED AT THE END OF THIS PROSPECTUS.

</TABLE>

o        THE SEC'S WEB SITE IS HTTP://WWW.SEC.GOV

o        TRANSAMERICA'S WEB SITE IS
           HTTP://WWW.TRANSAMERICA.COM

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THIS INVESTMENT
OFFERING  OR  DETERMINED  THAT THIS  PROSPECTUS  IS ACCURATE  OR  COMPLETE.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


PLEASE NOTE THAT THE CONTRACT AND THE PORTFOLIOS ARE NOT BANK DEPOSITS,  ARE NOT
FEDERALLY  INSURED,  ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT  AGENCY, ARE NOT
GUARANTEED TO ACHIEVE  THEIR GOALS AND ARE SUBJECT TO RISKS,  INCLUDING THE LOSS
OF PURCHASE PAYMENTS.
                                   MAY 1, 2000

<PAGE>
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

<S>                                                                                                        <C>
Summary.....................................................................................................5
Transamerica Life Insurance and Annuity Company and the Variable Account...................................16

         Transamerica Life Insurance and Annuity Company...................................................16
         Published Ratings.................................................................................17
         Insurance Marketplace Standards Association.......................................................17
         The Variable Account..............................................................................17
The Portfolios.............................................................................................17
         Portfolios Not Publicly Available.................................................................21
         Addition, Deletion, or Substitution...............................................................22
The Contract...............................................................................................22
         Ownership.........................................................................................23
Purchase Payments..........................................................................................23
         Allocation of Purchase Payments...................................................................23
         Free Look Option..................................................................................24
         Investment Option Limit...........................................................................24

Account Value..............................................................................................24
         How Variable Accumulation Units Are Valued........................................................24
Transfers..................................................................................................25
         Before the Annuity Date...........................................................................25
         Telephone Transfers...............................................................................25
         Other Restrictions................................................................................25
         Dollar Cost Averaging.............................................................................26
         Eligibility Requirement for Dollar Cost Averaging ................................................26
         Special Dollar Cost Averaging Option..............................................................26
         Automatic Asset Rebalancing.......................................................................27
         After the Annuity Date............................................................................27

Cash Withdrawals...........................................................................................27
         Systematic Withdrawal Option......................................................................28
         Automatic Payment Option (APO)....................................................................28
Death Benefit..............................................................................................29
         Ownership Changes.................................................................................29
         Payment of Death Benefit..........................................................................30
         Designation of Beneficiaries......................................................................30
         Death of Owner of Joint Owner Before the Annuity Date.............................................30
         If the Annuitant Dies Before the Annuity Date.....................................................31
         Death After the Annuity Date......................................................................31
         Survival Provision................................................................................31
Charges, Fees and Deductions...............................................................................31
         Contingent Deferred Sales Load/Surrender Charge...................................................31
         Free Withdrawals - Allowed Amount.................................................................32
         Free Withdrawals - Living Benefits Rider..........................................................32
         Other Free Withdrawals............................................................................33
         Administrative Charges............................................................................33
         Mortality and Expense Risk Charge.................................................................33
         Living Benefits Rider Fee.........................................................................34
         Premium Tax Charges...............................................................................34
         Transfer Fee......................................................................................34
         Option and Service Fees...........................................................................34
         Taxes.............................................................................................34
         Portfolio Expenses................................................................................34
         Interest Adjustment...............................................................................34
         Sales in Special Situations.......................................................................34

DISTRIBUTION OF THE CONTRACT...............................................................................35
Settlement Option Payments.................................................................................35

         Annuity Date......................................................................................35
         Annuity Amount....................................................................................35
         Settlement Option Payments........................................................................36
         Election of Settlement Option Forms and Payment Options...........................................36
         Payment Options...................................................................................36
         Fixed Payment Option..............................................................................36
         Variable Payment Option...........................................................................36
         Settlement Option Forms...........................................................................37
Federal Tax Matters........................................................................................38
         Introduction......................................................................................38
         Purchase Payments.................................................................................38
         Taxation of Annuities.............................................................................39
         Qualified Contracts...............................................................................41
         Contracts Purchased by Nonresident Aliens and Foreign Corporations................................42
         Taxation of Transamerica .........................................................................43
         Tax Status of the Contract........................................................................43
         Possible Changes in Taxation......................................................................44
         Other Tax Consequences............................................................................44
Performance Data.............................................................................................44
Legal Proceedings..........................................................................................46
Legal Matters..............................................................................................46
Accountants AND FINANCIAL STATEMENTS.......................................................................46
Voting Rights................................................................................................46
Available Information......................................................................................46
Statement of Additional Information - Table of Contents....................................................47
Appendix A - The General Account Options...................................................................48
         The General Account Options.......................................................................48
         The Fixed Account ................................................................................48
         The Guarantee Period Account .....................................................................49
Appendix B.................................................................................................51
         Example of Variable Accumulation Unit Value Calculations..........................................51
         Example of Variable Annuity Unit Value Calculations...............................................51
         Example of Variable Annuity Payment Calculations..................................................51
APPENDIX C.................................................................................................52
         Condensed Financial Information...................................................................52
APPENDIX D...................................................................................................55
         Definitions.......................................................................................55
Appendix E.................................................................................................57
         Disclosure Statement for Individual Retirement Annuities..........................................57

</TABLE>


<PAGE>


                                        9
SUMMARY


This summary  provides you with a brief  overview of some of the more  important
aspects of the Transamerica  Classic(R) Variable Annuity contract. The remainder
of the prospectus and the contract provide further details.

The  contract is a flexible  purchase  payment  deferred  annuity and it has two
phases,  the  accumulation  phase  and  the  annuitization   phase.  During  the
accumulation  phase,  your  earnings  accumulate  on a  tax-deferred  basis  for
individuals.  Tax deferral is not available for non-qualified contracts owned by
corporations and some trusts.

As long as the contract is in effect, you may make additional  purchase payments
before the annuity date and before any  owner's,  joint  owner's or  annuitant's
91st birthday,  transfer money among the investment options and withdraw some or
all of the account value.

On a future date you select,  the annuity date, the annuitization  phase begins.
During this phase, we apply the account value, after certain  adjustments,  to a
settlement  option that provides  periodic payments to you. The dollar amount of
the payments  will depend on the amount of the money  invested and earned during
the accumulation  phase,  and on other factors,  such as the annuitant's age and
sex and if variable payouts are elected.

If you or a joint owner dies during the accumulation  phase, we will pay a death
benefit to the  beneficiary  you  designate  in an amount at least  equal to the
account value.

SUB-ACCOUNT  VALUES WILL VARY  ACCORDING TO  INVESTMENT  EXPERIENCE.  Except for
amounts in the general account options, the account value will vary depending on
the investment  experience of each of the variable  sub-accounts you select. All
benefits and values  provided  under the contract,  when based on the investment
experience of the variable  account,  are variable and are not  guaranteed as to
dollar  amount.  Therefore,  before  the  annuity  date,  you  bear  the  entire
investment  risk  under the  contract  for  amounts  allocated  to the  variable
account.


There is no guaranteed or minimum cash surrender  value on amounts  allocated to
the  variable  account,  so the  proceeds of a surrender  could be less than the
amount invested.


WHAT IS THE CONTRACT'S OBJECTIVE?

We designed the contract to assist  individuals in long-term  financial planning
for retirement or other purposes. You may use the contract as:

a)       a non-qualified annuity;

b)       a qualified annuity as:

o    a rollover or contributory  individual  retirement  annuity,  or IRA, under
     Sections 408(a) and 408(b) of the Internal Revenue Code, or Code;

o    a conversion, rollover or contributory Roth IRA under Code Section 408A;

o    a simplified employee pension plan, or SEP/IRA, under Code Section 408(k);

a    Rev. Rul. 90-24 transfer or rollover tax sheltered  annuity,  or TSA, under
     Code Section 403(b), with no additional purchase payments allowed; and

o        a qualified pension or profit sharing plan under Code Section 401.

Generally,  qualified  contracts  contain  restrictive  provisions  limiting the
timing and amount of purchase payments to, and distributions from, the qualified
contract.  Some qualified contracts may not be available in all states or in all
situations.

WHO SHOULD PURCHASE THE CONTRACT?

The contract is designed for people seeking long-term tax deferred  accumulation
of assets, generally for retirement or other long-term purposes, and for persons
who have maximized their use of other retirement savings methods, such as 401(k)
plans and  individual  retirement  accounts.  The  tax-deferred  feature is most
attractive to people in high federal and state tax brackets.  You should not buy
this  contract if you are looking for a short-term  investment  or if you cannot
take the risk of losing money that you put in.

There  are  various   additional  fees  and  charges  associated  with  variable
annuities.  You should  consider  whether the features  and  benefits  unique to
variable  annuities,  such as the opportunity for lifetime  income  payments,  a
guaranteed  death  benefit  and the  guaranteed  level of  certain  charges  are
appropriate for your needs. Because variable annuities also provide tax-deferral
outside of qualified plans, the tax deferral features of variable  annuities are
unnecessary when purchased to fund a qualified plan.

HOW MUCH CAN I INVEST AND HOW OFTEN?

To purchase a contract,  you must make an initial  purchase  payment of at least
$5,000 or, if for contributory  IRAs,  SEP/IRAs and Roth IRAs,  $2,000.  Once we
receive the initial purchase  payment,  we establish and maintain an account for
each contract.

You may also make  additional  purchase  payments  of at least  $200,  unless an
automatic purchase payment plan is selected. See PURCHASE PAYMENTS on page 23.

HOW CAN I ALLOCATE MY MONEY?

You may choose to allocate all or part of your purchase payments to:

o    one or more of the 19 variable sub-accounts  described in THE PORTFOLIOS on
     page 17; and/or

o        one or more of the guarantee period account options.

CAN I EXAMINE THE CONTRACT?

Yes. As the owner,  you have the right to  examine  the  contract  for a limited
     period, or free look period. You

may cancel the contract  during this period by  delivering  or mailing a written
notice of  cancellation,  or sending a telegram to our Service Center.  You must
return  the  contract  before  midnight  of the tenth day after  receipt  of the
contract, or longer in some situations or if required by state law. Notice given
by mail and the return of the  contract  by mail will be  effective  on the date
received by us.  Unless  otherwise  required by law, we will refund the purchase
payments  allocated to any general account option,  minus any withdrawals,  plus
the variable  accumulated value as of the date your written notice to cancel and
your contract are received by us. See PURCHASE PAYMENTS on page 23.

WHAT CHARGES, EXPENSES AND FEES WILL
I INCUR?

The following table assists you in understanding  the various costs and expenses
that you will incur directly and indirectly.  The table reflects expenses of the
variable  account and the mutual fund portfolios,  as well as contract  expenses
and the fees for the optional riders.  The table assumes that the entire account
value is in the variable  account.  You should  consider the  information  below
together  with the  narrative  provided  under  the  heading  CHARGES,  FEES AND
DEDUCTIONS  on page 31 of this  prospectus,  and with the  prospectuses  for the
portfolios.  In addition to the expenses  listed below,  premium tax charges may
apply.



<PAGE>


                                  SALES LOAD(1)

         Sales Load Imposed on Purchase Payments                              0%
         Maximum Contingent Deferred Sales Load(2)                            6%

         RANGE OF CONTINGENT DEFERRED SALES LOAD OVER TIME:
                                                  CONTINGENT DEFERRED
         YEARS SINCE                                  SALES LOAD
         PURCHASE PAYMENT RECEIPT         as a percentage of purchase payment
         Less than 1 year                                 6%
         1 year but less than 2 years                     6%
         2 years but less than 3 years                    5%
         3 years but less than 4 years                    5%
         4 years but less than 5 years                    4%
         5 years but less than 6 years                    4%
         6 years but less 7 years                         2%
         7 or more years                                  0%


<PAGE>


                                         OTHER CONTRACT EXPENSES


         Transfer Fee, first 18 per contract year(3)       0
         Fees For Other Services and Options(4)            0
         Annual Account Fee(5)                             $30
         Living Benefits Rider Fee, if elected(6)          0.05%


                                   VARIABLE ACCOUNT ANNUAL EXPENSES(7)
                                   -----------------------------------
                            as a percentage of the variable accumulated value
         Mortality and Expense Risk Charge                  1.20%
         Administrative Expense Charge(8)                   0.15%
         Total Variable Account Annual Expenses             1.35%

                               PORTFOLIO EXPENSES
   as a percentage of assets after fee waiver and/or expense reimbursement(9)
<TABLE>
<CAPTION>

                                                                                                 TOTAL
                                                              MANAGEMENT         OTHER         PORTFOLIO
       PORTFOLIO                                                 FEES           EXPENSES        ANNUAL
       ---------                                                 ----           --------
                                                                                               EXPENSES

<S>                                                             <C>              <C>             <C>
       Alger American Income & Growth                           0.625%           0.075%          0.70%
       Alliance VP Growth & Income                              0.63%            0.08%           0.71%
       Alliance VP Premier Growth                               1.00%            0.05%           1.05%
       Dreyfus VIF Appreciation                                 0.75%            0.03%           0.78%
       Dreyfus VIF Small Cap                                    0.75%            0.03%           0.78%
       Janus Aspen Series Balanced(10)                          0.65%            0.02%           0.67%
       Janus Aspen Series Worldwide Growth(10)                  0.65%            0.05%           0.70%
       MFS VIT Emerging Growth                                  0.75%            0.09%           0.84%
       MFS VIT Growth with Income                               0.75%            0.13%           0.88%
       MFS VIT Research                                         0.75%            0.11%           0.86%
       MS UIF Emerging Markets Equity                           0.42%            1.37%           1.79%
       MS UIF Fixed Income                                      0.14%            0.56%           0.70%
       MS UIF High Yield                                        0.19%            0.61%           0.80%
       MS UIF International Magnum                              0.29%            0.87%           1.16%
       OCC Accumulation Trust Managed(11)                       0.77%            0.06%           0.83%
       OCC Accumulation Trust Small Cap                         0.80%            0.09%           0.89%
       PIMCO VIT StocksPLUS Growth & Income(12)                 0.40%            0.25%           0.65%
       Transamerica VIF Growth                                  0.70%            0.15%           0.85%
       Transamerica VIF Money Market                            0.00%            0.60%           0.60%
</TABLE>

The  portfolios  have  provided  us  with  expense  information   regarding  the
portfolios.  In  preparing  the  tables  above and below and the  examples  that
follow,  we have relied on the figures  provided by the  portfolios.  We have no
reason to doubt the accuracy of that information, but we have not verified those
figures. These figures are for the year ended December 31, 1999. Actual expenses
in future years may be higher or lower than these figures.


Notes to Fee Table:

1.   The contingent deferred sales load applies to each contract,  regardless of
     how the account  value is allocated  between the  variable  account and the
     general account options.


2.   A portion of the  purchase  payments may be withdrawn  each  contract  year
     without imposition of any contingent  deferred sales load. After a purchase
     payment has been in the contract for seven years,  it may be withdrawn free
     of any contingent deferred sales load. See CHARGES,  FEES AND DEDUCTIONS on
     page 31.


3.   A transfer fee of $10 will be imposed for each  transfer in excess of 18 in
     a contract year.

4.   We  currently  do not  impose  fees for any  other  services,  or  options.
     However,  we reserve  the right to impose a fee for  various  services  and
     options including dollar cost averaging, systematic withdrawals,  automatic
     payouts, asset allocation and asset rebalancing.

5.   The current  account fee is $30, or 2% of the account  value,  if less, per
     contract  year.  This fee will be waived for account  values over  $50,000.
     This limit may be changed in the future. The fee may be changed, but it may
     not exceed $60, or 2% of the account value, if less.


6.   If you elect a rider,  we  deduct  the rider fee at the rate of 1/12 of the
     annual rate at the end of each contract month based on the account value at
     that time.


7.   The variable  account annual  expenses do not apply to the general  account
     options.

8.   The current annual administrative  expense charge of 0.15% may be increased
     to no more than 0.35%.


9.   From time to time, the  portfolios'  investment  advisers,  each in its own
     discretion,  may  voluntarily  waive  all or  part  of  their  fees  and/or
     voluntarily  assume certain portfolio  expenses.  The expenses shown in the
     Portfolio Expenses table are the expenses paid for 1999. The expenses shown
     in  that  table  reflect  a  portfolio's   adviser's  waivers  of  fees  or
     reimbursement  of expenses,  if  applicable.  It is  anticipated  that such
     waivers or  reimbursements  will continue for calendar  year 2000.  Without
     such  waivers  or  reimbursements,  the  annual  expenses  for 1999 for the
     following portfolios would have been, as a percentage of assets:

<TABLE>
<CAPTION>

                                                       MANAGEMENT         OTHER        TOTAL PORTFOLIO
                                                           FEE           EXPENSES      ANNUAL EXPENSE

<S>                                                       <C>             <C>               <C>
     MS UIF Emerging Markets Equity                       1.25%           1.37%             2.62%
     MS UIF Fixed Income                                  0.40%           0.56%             0.96%
     MS UIF High Yield                                    0.50%           0.61%             1.11%
     MS UIF International Magnum                          0.80%           0.87%             1.67%
     Transamerica VIF Growth                              0.75%           0.15%             0.90%
     Transamerica VIF Money Market                        0.35%           1.04%             1.39%

</TABLE>


10.  Expenses  are based upon  expenses  for the fiscal year ended  December 31,
     1999,  restated to reflect a reduction in the management  fee. All expenses
     are shown without the effect of expense offset arrangements.

11.  The  Adviser  is  contractually  obligated  to waive  that  portion  of the
     advisory  fee and assume any  necessary  expense to limit  total  operating
     expenses of the  portfolio  to 1.00% of average net assets (net of expenses
     offset) on an annual basis.

12.  PIMCO has contractually  agreed to reduce total annual portfolio  operating
     expenses to the extent these  expenses  would exceed 0.65% of average daily
     net assets due to the  payment of  organizational  expenses  and  Trustees'
     fees. Without such reductions, total operating expenses for the fiscal year
     ended December 31, 1999 were 0.65%. Under the Expense Limitation Agreement,
     PIMCO may recoup these waivers and  reimbursements  in future periods,  not
     exceeding three years, provided total expenses,  including such recoupment,
     do not exceed the annual expense  limit.  Fees expressed are restated as of
     April 1, 2000.


EXAMPLES


The  following  tables  show the  total  expenses  you  would  incur in  various
situations assuming the following assumptions:

o        a $1,000 investment;

o        a 5% annual return on assets; and

o        all amounts were allocated to the variable sub-account indicated.

These  examples show expenses for contracts  based on total  portfolio  expenses
after fee waivers and  reimbursements,  if  applicable,  for the  portfolios for
1999. There is no guarantee that any fee waivers or expense  reimbursements will
continue.  These  examples  assume an  average  account  value of  $40,000  and,
therefore,  a deduction  of 0.075% has been made to reflect the $30 account fee.
No transfer fees, optional rider fees or other option or service fees or premium
tax charges have been assessed.  Premium tax charges may apply.  See Premium Tax
Charges on page 30. For  annuitizations  before the first contract  anniversary,
and for  annuitizations  under a form that does not include life  contingencies,
the  contingent  deferred  sales  load may  apply.  The Year 1 column in expense
example 3 illustrates this occurrence.
<TABLE>
<CAPTION>

EXAMPLE 1: If you  surrender  the  contract  at the end of the  applicable  time
period:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

<S>                                                <C>            <C>             <C>             <C>
     Alger American Income & Growth                $73            $109            $148            $246
     Alliance VP Growth & Income                  $73           $109            $149            $247
     Alliance VP Premier Growth                   $76           $120            $166            $281
     Dreyfus VIF Appreciation                     $73           $111            $152            $254
     Dreyfus VIF Small Cap                        $73           $111            $152            $254
     Janus Aspen Series Balanced                  $72           $108            $147            $243
     Janus Aspen Series Worldwide Growth          $73           $109            $148            $246
     MFS VIT Emerging Growth                      $74           $113            $155            $260
     MFS VIT Growth with Income                   $74           $114            $157            $264
     MFS VIT Research                             $74           $114            $156            $262
     MS UIF Emerging Markets Equity               $83           $142            $202            $352
     MS UIF Fixed Income                          $73           $109            $148            $246
     MS UIF High Yield                            $74           $112            $153            $256
     MS UIF International Magnum                  $77           $123            $171            $292
     OCC Accumulation Trust Managed               $74           $113            $155            $259
     OCC Accumulation Trust Small Cap             $74           $115            $158            $265
     PIMCO VIT StocksPLUS Growth & Income         $72           $108            $146            $241
     Transamerica VIF Growth                      $74           $114            $156            $261
     Transamerica VIF Money Market                 $72            $106            $143            $235

     --------------------------------------------------------------------------------------------------------










EXAMPLE 2: If you do not surrender and do not annuitize the contract:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth                $22             $67            $114            $246
     Alliance VP Growth & Income                  $22           $67           $115            $247
     Alliance VP Premier Growth                   $25           $77           $132            $281
     Dreyfus VIF Appreciation                     $22           $69           $118            $254
     Dreyfus VIF Small Cap                        $22           $69           $118            $254
     Janus Aspen Series Balanced                  $21           $66           $113            $243
     Janus Aspen Series Worldwide Growth          $22           $67           $114            $246
     MFS VIT Emerging Growth                      $23           $71           $121            $260
     MFS VIT Growth with Income                   $23           $72           $123            $264
     MFS VIT Research                             $23           $71           $122            $262
     MS UIF Emerging Markets Equity               $32           $99           $168            $352
     MS UIF Fixed Income                          $22           $67           $114            $246
     MS UIF High Yield                            $23           $70           $119            $256
     MS UIF International Magnum                  $26           $80           $137            $292
     OCC Accumulation Trust Managed               $23           $70           $121            $259
     OCC Accumulation Trust Small Cap             $23           $72           $124            $265
     PIMCO VIT StocksPLUS Growth & Income         $21           $65           $112            $241
     Transamerica VIF Growth                      $23           $71           $122            $261
     Transamerica VIF Money Market                 $21             $64            $109            $235

     --------------------------------------------------------------------------------------------------------



EXAMPLE 3: If you elect to annuitize at the end of the applicable period under a
Settlement Option with life contingencies:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth                $73             $67            $114            $246
     Alliance VP Growth & Income                  $73           $67           $115            $247
     Alliance VP Premier Growth                   $76           $77           $132            $281
     Dreyfus VIF Appreciation                     $73           $69           $118            $254
     Dreyfus VIF Small Cap                        $73           $69           $118            $254
     Janus Aspen Series Balanced                  $72           $66           $113            $243
     Janus Aspen Series Worldwide Growth          $73           $67           $114            $246
     MFS VIT Emerging Growth                      $74           $71           $121            $260
     MFS VIT Growth with Income                   $74           $72           $123            $264
     MFS VIT Research                             $74           $71           $122            $262
     MS UIF Emerging Markets Equity               $83           $99           $168            $352
     MS UIF Fixed Income                          $73           $67           $114            $246
     MS UIF High Yield                            $74           $70           $119            $256
     MS UIF International Magnum                  $77           $80           $137            $292
     OCC Accumulation Trust Managed               $74           $70           $121            $259
     OCC Accumulation Trust Small Cap             $74           $72           $124            $265
     PIMCO VIT StocksPLUS Growth & Income         $72           $65           $112            $241
     Transamerica VIF Growth                      $74           $71           $122            $261
     Transamerica VIF Money Market                 $72             $64            $109            $235

     --------------------------------------------------------------------------------------------------------



The  following  tables  show the  total  expenses  you  would  incur in  various
situations assuming the following assumptions:

o        a $1,000 investment;

o        a 5% annual return on assets;

o        all amounts were allocated to the variable sub-account indicated; and

o        you elected the optional Living Benefits Rider.

These  examples show expenses for contracts  based on total  portfolio  expenses
after fee waivers and  reimbursements,  if  applicable,  for the  portfolios for
1999. There is no guarantee that any fee waivers or expense  reimbursements will
continue.  These  examples  assume an  average  account  value of  $40,000  and,
therefore, a deduction of 0.075% has been made to reflect the $30 account fee. A
deduction of 0.05% has been made to reflect the optional  Living  Benefits Rider
fee. No  transfer  fees or other  option or service  fees or premium tax charges
have been  assessed.  Premium tax charges may apply.  See Premium Tax Charges on
page 30. For  annuitizations  before  the first  contract  anniversary,  and for
annuitizations  under a form  that  does not  include  life  contingencies,  the
contingent deferred sales load may apply. The Year 1 column in expense example 3
illustrates this occurrence.

EXAMPLE 4: If you  surrender  the  contract  at the end of the  applicable  time
period:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth               $77            $123            $171           $291
     Alliance VP Growth & Income                   $77            $123            $171            $292
     Alliance VP Premier Growth                    $81            $133            $188            $325
     Dreyfus VIF Appreciation                      $78            $125            $175            $299
     Dreyfus VIF Small Cap                        $78            $125            $175           $299
     Janus Aspen Series Balanced                  $77            $122            $169           $288
     Janus Aspen Series Worldwide Growth          $77            $123            $171           $291
     MFS VIT Emerging Growth                      $78            $127            $178           $305
     MFS VIT Growth with Income                   $79            $128            $180           $308
     MFS VIT Research                             $79            $127            $179           $307
     MS UIF Emerging Markets Equity               $88            $155            $223           $392
     MS UIF Fixed Income                          $77            $123            $171           $291
     MS UIF High Yield                            $78            $126            $176           $301
     MS UIF International Magnum                  $82            $136            $193           $335
     OCC Accumulation Trust Managed               $78            $126            $177           $304
     OCC Accumulation Trust Small Cap             $79            $128            $180           $309
     PIMCO VIT StocksPLUS Growth & Income         $77            $121            $168           $286
     Transamerica VIF Growth                      $79            $127            $178           $306
     Transamerica VIF Money Market                $76            $120            $166           $281

     --------------------------------------------------------------------------------------------------------










EXAMPLE 5: If you do not surrender and do not annuitize the contract:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth               $26           $80           $137            $291
     Alliance VP Growth & Income                  $26           $80           $137            $292
     Alliance VP Premier Growth                   $30           $91           $154            $325
     Dreyfus VIF Appreciation                     $27           $82           $141            $299
     Dreyfus VIF Small Cap                        $27           $82           $141            $299
     Janus Aspen Series Balanced                  $26           $79           $135            $288
     Janus Aspen Series Worldwide Growth          $26           $80           $137            $291
     MFS VIT Emerging Growth                      $27           $84           $144            $305
     MFS VIT Growth with Income                   $28           $85           $146            $308
     MFS VIT Research                             $28           $85           $145            $307
     MS UIF Emerging Markets Equity               $37          $112           $189            $392
     MS UIF Fixed Income                          $26           $80           $137            $291
     MS UIF High Yield                            $27           $83           $142            $301
     MS UIF International Magnum                  $31           $94           $159            $335
     OCC Accumulation Trust Managed               $27           $84           $143            $304
     OCC Accumulation Trust Small Cap             $28           $86           $146            $309
     PIMCO VIT StocksPLUS Growth & Income         $26           $79           $134            $286
     Transamerica VIF Growth                      $28           $85           $144            $306
     Transamerica VIF Money Market                $25           $77           $132            $281

     --------------------------------------------------------------------------------------------------------



EXAMPLE 6: If you elect to annuitize at the end of the applicable period under a
Settlement Option with life contingencies:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth               $77           $80           $137            $291
     Alliance VP Growth & Income                  $77           $80           $137            $292
     Alliance VP Premier Growth                   $81           $91           $154            $325
     Dreyfus VIF Appreciation                     $78           $82           $141            $299
     Dreyfus VIF Small Cap                        $78           $82           $141            $299
     Janus Aspen Series Balanced                  $77           $79           $135            $288
     Janus Aspen Series Worldwide Growth          $77           $80           $137            $291
     MFS VIT Emerging Growth                      $78           $84           $144            $305
     MFS VIT Growth with Income                   $79           $85           $146            $308
     MFS VIT Research                             $79           $85           $145            $307
     MS UIF Emerging Markets Equity               $88          $112           $189            $392
     MS UIF Fixed Income                          $77           $80           $137            $291
     MS UIF High Yield                            $78           $83           $142            $301
     MS UIF International Magnum                  $82           $94           $159            $335
     OCC Accumulation Trust Managed               $78           $84           $143            $304
     OCC Accumulation Trust Small Cap             $79           $86           $146            $309
     PIMCO VIT StocksPLUS Growth & Income         $77           $79           $134            $286
     Transamerica VIF Growth                      $79           $85           $144            $306
     Transamerica VIF Money Market                $76           $77           $132            $281

     --------------------------------------------------------------------------------------------------------

</TABLE>


These  examples  should  not be  considered  representations  of past or  future
expenses.  Actual expenses paid may be greater or less than those shown, subject
to the guarantees in the contract and any optional riders you elect. The assumed
5%  annual  rate of  return is  hypothetical  and  should  not be  considered  a
representation  of past or future annual  returns,  which may be greater or less
than this assumed rate.



<PAGE>


CONDENSED FINANCIAL INFORMATION


You will find condensed financial  information on each sub-account in APPENDIX C
on page 52.  You will  find the  audited  financial  statements  and  report  of
independent  auditors for the variable  account in the  Statement of  Additional
Information.

WHAT ARE MY INVESTMENT CHOICES?

The contract  gives you the  opportunity  to select from a number of  investment
options.  Investment  options include variable  sub-accounts and general account
options. Currently, you may not elect more than a total of 18 investment options
over the life of the contract.

VARIABLE SUB-ACCOUNT OPTIONS

The variable account is a separate  account,  designated  Separate Account VA-6,
that  is  subdivided  into  variable  sub-accounts.   Assets  of  each  variable
sub-account  are  invested in a specified  mutual fund  portfolio.  The variable
sub-accounts currently available for investment are:

Alger American Income & Growth Alliance VP Growth & Income*  Alliance VP Premier
Growth*  Dreyfus VIF  Appreciation*  Dreyfus  VIF Small Cap Janus  Aspen  Series
Balanced  Janus Aspen Series  Worldwide  Growth MFS VIT Emerging  Growth MFS VIT
Growth with Income MFS VIT Research MS UIF Emerging Markets Equity* MS UIF Fixed
Income* MS UIF High Yield* MS UIF International  Magnum* OCC Accumulation  Trust
Managed OCC  Accumulation  Trust Small Cap PIMCO VIT StocksPLUS  Growth & Income
Transamerica VIF Growth Portfolio Transamerica VIF Money Market

*Several  funds have changed their names,  These name changes have no reflection
on  the  investment  policies,  strategies,  management  or any  other  material
function of the funds. The Alliance VP Growth & Income  sub-account was formerly
known as the Alliance VPF Growth & Income  sub-account.  The Alliance VP Premier
Growth  sub-account  was  formerly  known as the  Alliance  VPF  Premier  Growth
sub-account.  The Dreyfus VIF Appreciation sub-account was formerly known as the
Dreyfus VIF Capital Appreciation sub-account. The MS UIF Emerging Markets Equity
sub-account  was  formerly  known  as  the  MSDW  UF  Emerging   Markets  Equity
sub-account.  The MS UIF Fixed Income sub-account was formerly known as the MSDW
UF Fixed  Income  sub-account.  The MS UIF High Yield  sub-account  was formerly
known as the MSDW UF High Yield  sub-account.  The MS UIF  International  Magnum
sub-account was formerly known as the MSDW UF International Magnum sub-account.

The portfolios pay their  investment  advisers and  administrators  certain fees
charged against the assets of each portfolio. The variable accumulated value, if
any, of a contract and the amount of any  variable  settlement  option  payments
will vary to reflect the investment  performance of the variable sub-accounts to
which  amounts  have  been  allocated.  Additionally,   applicable  charges  are
deducted.  For more information see CHARGES, FEES AND DEDUCTIONS on page 31, THE
PORTFOLIOS on page 17, and the accompanying portfolio prospectuses.


GENERAL ACCOUNT OPTIONS

There are two types of general account options:

o        the fixed account; and

o        the guarantee period account.


We credit  interest  on the  amounts in the fixed  account at a rate of not less
than 3%  annually.  We may  credit  interest  at a rate in  excess  of 3% at our
discretion  for any class.  Each interest rate will be guaranteed to be credited
for at least 12 months.


The other  general  account  option,  the  guarantee  period  account,  provides
specified rates of interest for specified terms, currently three, five and seven
years.  These rates are subject to interest  adjustments on early withdrawals or
transfers  which,  if applicable,  could reduce the interest  credited to the 3%
minimum rate.

The general  account  options  are not  available  in all  states.  Refer to the
contract for limitations.


CAN I MAKE TRANSFERS AMONG THE SUB-ACCOUNTS AND THE GENERAL ACCOUNT OPTIONS?


Before  the  annuity  date,  you  may  transfer   values  between  the  variable
sub-accounts  and the general account  options.  For transfers after the annuity
date, see After the Annuity Date on page 27.

Transfers out of the fixed account are  restricted to four per contract year and
to a limited  percentage of the fixed account value.  We may allow more frequent
transfers  under  certain  services  and  options,  for  example,   dollar  cost
averaging. Transfers out of a guarantee period before the end of the term may be
subject to an interest  adjustment which may reduce interest  credited to the 3%
minimum rate.

We currently impose a transfer fee of $10 for each transfer in excess of 18 made
during the same contract year.


WHAT IF I NEED MY MONEY?

You may  withdraw  all or part of the  cash  surrender  value on or  before  the
annuity date.  The cash  surrender  value of your contract is the account value,
less any account fee and interest  adjustment,  and less any contingent deferred
sales load and applicable premium tax charges. The account fee generally will be
deducted on a full  surrender  of a contract  if the account  value is then less
than $50,000.  We may delay payment of any withdrawal  from the general  account
options for up to six months.

Withdrawals  may be  taxable  and  subject  to  withholding  and a penalty  tax.
Withdrawals from qualified  contracts may be subject to severe restrictions and,
in certain circumstances, prohibited. See FEDERAL TAX MATTERS on page 38.

WHAT CHARGES WILL I INCUR ON A WITHDRAWAL?


We do not  deduct a sales  charge  when  purchase  payments  are made,  although
premium tax charges may be deducted.  However,  if any part of the account value
is  withdrawn,  we may deduct a  contingent  deferred  sales load,  or surrender
charge,  of up to  6%  of  purchase  payments.  See  Contingent  Deferred  Sales
Load/Surrender Charge on page 31.

We do not  assess  the  contingent  deferred  sales  load on  payment  of  death
benefits, on transfers within the contract, or on certain annuitizations.

In most states,  you may elect, for an extra charge, an optional Living Benefits
Rider.  It provides  that we will waive the  contingent  deferred  sales load in
certain circumstances.

Also,  beginning 30 days from the contract  effective date, or at the end of the
free look period if this ends later, you may withdraw any portion of the allowed
amount each contract year without  imposition of any  contingent  deferred sales
load/surrender charge.

Depending on state  availability,  for contracts issued on or after September 7,
1999, the allowed amount each contract year is equal to:

a)       during the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or

o    15% of the total purchase  payments  received as of the date of withdrawal;
     and

b)       after the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or

o        15% of purchase  payments  received less than seven  complete  contract
         years determined as of the last contract anniversary.

Withdrawals will be made first from earnings and then from purchase  payments on
a  first-in/first-out  basis. The allowed amount may vary depending on the state
in which your contract is issued. If an allowed amount is not withdrawn during a
contract year, it does not carry over to the next contract year.

Purchase  payments not  previously  withdrawn that have been held at least seven
full contract years and  accumulated  earnings not  previously  withdrawn may be
withdrawn without charge.

For contracts  issued before September 7, 1999, the allowed amount each contract
year is equal to 15% of:



a)   the total purchase payments received during the last seven years determined
     as of the last contract anniversary; minus

b)       any withdrawals during the present contract year.

Withdrawals  will be made first from purchase  payments on a  first-in/first-out
basis and then from earnings. The allowed amount may vary depending on the state
in which your contract is issued.  If the allowed amount is not fully  withdrawn
or paid out during a contract  year, it does not carry over to the next contract
year.

Purchase  payments held for seven full contract  years may be withdrawn  without
charge.


WHAT ARE THE OTHER CHARGES AND DEDUCTIONS?


We deduct:

o    a mortality and expense risk charge of 1.20%  annually of the assets in the
     variable account;

o    an  administrative  expense charge of 0.15%  annually of these assets.  The
     administrative  expense charge may change, but we guarantee it won't exceed
     a maximum effective annual rate of 0.35%; and

o    an account fee of currently  $30, or 2% of the account  value,  if less, at
     the end of each contract year and upon surrender.  This fee may change, but
     we  guarantee  that it won't exceed the lesser of $60, or 2% of the account
     value,  per contract year. If the account value is more than $50,000 on the
     last  business  day of a contract  year,  or as of the date the contract is
     surrendered, we will waive the account fee for that year.

After the annuity  date,  we will deduct the annual  annuity fee of $30 in equal
installments from each periodic payment under the variable payment option.

For each  transfer  in excess of 18 during a  contract  year,  we will  impose a
transfer fee of $10. See Transfer Fee on page 34.

We do not currently  deduct  charges for premium  taxes,  including  retaliatory
premium taxes,  except for  annuitizations.  But we could impose such charges in
some  jurisdictions.  Depending  on the  applicability  of such taxes,  we could
deduct the charges from purchase payments,  from amounts withdrawn,  and/or upon
annuitization. See Premium Tax Charges on page 34.

In addition,  amounts withdrawn or transferred out of a guarantee period account
before the end of its term may be subject to an interest adjustment.

LIVING  BENEFITS RIDER. If you elect the Living Benefits Rider, we will deduct a
fee of 1/12 of 0.05% of the account value at the end of each contract month. The
rate is 1/12 times 0.05% times the account  value.  The Living  Benefit Rider is
not available in all states,  or may be called a Waiver of  Contingent  Deferred
Sales Load Rider.


OTHER SERVICES OR OPTIONS


Currently,  we do not deduct fees for any other  services  or options  under the
contract.  However,  we reserve the right to impose fees to cover processing for
certain  services  and  options in the  future.  This may  include  dollar  cost
averaging,  systematic  withdrawals,  automatic  payouts,  asset  allocation and
automatic asset rebalancing.


HOW AND WHEN ARE SETTLEMENT OPTION
PAYMENTS MADE?

You may  select to  receive  settlement  option  payments  on a fixed  basis,  a
variable  basis  or a  combination  of a fixed  and  variable  basis.  You  have
flexibility  in choosing the annuity  date,  but it may  generally not be a date
later than an  annuitant's  85th  birthday  or the tenth  contract  anniversary,
whichever  occurs last.  The annuity date may never be later than an annuitant's
97th  birthday.  Certain  qualified  contracts may have  restrictions  as to the
annuity date and the types of settlement options available.


Four settlement options are available under the contract:

1.       life annuity;

2.       life and contingent annuity;

3.       life annuity with period certain; or

4.       joint and survivor annuity.


WHAT HAPPENS IF I DIE BEFORE THE ANNUITY
DATE?

If you or a joint  owner die  before the  annuity  date and both you and a joint
owner are under age 85, the death benefit will be the greatest of three amounts:


a)       the account value;


b)   the sum of all purchase payments, less previous withdrawals taken, and less
     any contingent  deferred sales loads and premium tax charges  applicable to
     those withdrawals; or

c)   the highest account value on any contract anniversary before the earlier of
     your or a joint owner's 85th  birthday,  plus purchase  payments made since
     that contract  anniversary,  less previous  withdrawals taken, and less any
     contingent deferred sales loads and premium tax charges since that contract
     anniversary applicable to those withdrawals.

If you or a joint owner dies before the annuity  date and after either your or a
joint owner's 85th birthday, the death benefit will be the greater of:


a)       the account value; or


b)   the total of all purchase payments made, less previous  withdrawals  taken,
     and less any  contingent  deferred  sales  loads and  premium  tax  charges
     applicable to those withdrawals.


The death  benefit  will  generally  be paid within seven days of receipt of the
required  proof of death of an owner and election of the method of settlement or
as soon thereafter as we have sufficient  information to make the payment. If no
settlement method is elected,  the death benefit will be distributed within five
years after the owner's death. No contingent deferred sales load is imposed. The
death  benefit  may be paid as  either  a lump  sum or as a  settlement  option.
Amounts  in the  guarantee  period  account  will  not be  subject  to  interest
adjustments in calculating the death benefit.

If the owner is not a natural  person,  we will treat the annuitant as the owner
for purposes of the death benefit.


WHAT ARE THE FEDERAL INCOME TAX
CONSEQUENCES?

An owner who is a natural person  generally  should not be taxed on increases in
the account  value until a  distribution  under the contract  occurs.  A taxable
event would  occur,  for  example,  with a  withdrawal  or a  settlement  option
payment,  or as the  result of a pledge,  loan,  or  assignment  of a  contract.
Generally,  a portion, up to 100%, of any distribution or deemed distribution is
taxable as ordinary  income.  The taxable portion of  distributions is generally
subject  to income  tax  withholding  unless  the  recipient  elects  otherwise.
Withholding is mandatory for certain qualified contracts. In addition, a federal
penalty tax may apply to certain distributions.  See FEDERAL TAX MATTERS on page
38.

WHO DO I CONTACT IF I HAVE QUESTIONS?


We will answer your questions about procedures or the contract if you write to:

                     The Transamerica Annuity Service Center
                                                  P.O. Box 31848
                            Charlotte, North Carolina
                                   28231-1848

                                           Or call us at: 1-877-717-8861

NOTE: Effective June 5, 2000, you can write us at:

                                                  P. O. Box 3181
                          Cedar Rapids, Iowa 52406-3183


All inquiries should include the contract number and the owner's name.


Please Note: The foregoing  summary is qualified in its entirety by the detailed
information in the remainder of this prospectus and in the  prospectuses for the
portfolios.  Please refer to this prospectus and the portfolio  prospectuses for
more  detailed  information.  For qualified  contracts,  the  requirements  of a
particular  retirement  plan, an endorsement to the contract,  or limitations or
penalties imposed by the Code or the Employee  Retirement Income Security Act of
1974, or ERISA, as amended, may impose additional limits or restrictions.  These
limits or restrictions may be on purchase payments, withdrawals,  distributions,
or benefits,  or on other  provisions of the contract.  This prospectus does not
describe such limitations or restrictions. See FEDERAL TAX MATTERS on page 38.


TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY AND THE VARIABLE ACCOUNT

TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY


Transamerica  Life Insurance and Annuity Company,  or  Transamerica,  is a stock
life insurance company incorporated under the laws of the State of California in
1966.  The  Company  moved  to North  Carolina  in  1994.  It is a  wholly-owned
subsidiary  of AEGON,  N.V.  and it is  principally  engaged in the sale of life
insurance and annuity  policies.  The address of Transamerica is 401 North Tryon
Street, Charlotte, North Carolina 28202.


PUBLISHED RATINGS


We may from time to time publish our ratings in advertisements, sales literature
and reports to owners. We receive ratings and other information from one or more
independent rating  organizations such as A.M. Best Company,  Standard & Poor's,
Moody's,  and Duff & Phelps.  The ratings reflect our financial  strength and/or
claims-paying  ability. These ratings should not be considered as bearing on the
investment performance or safety of the variable account. Ratings and investment
performance are unrelated. Each year the A.M. Best Company reviews the financial
status of thousands of insurers,  resulting in the assignment of Best's Ratings.
These ratings  reflect A.M.  Best's  current  opinion of the relative  financial
strength and operating  performance of an insurance company in comparison to the
norms of the life/health insurance industry.

In  addition,  our  claims-paying  ability  as  measured  by  Standard  & Poor's
Insurance  Ratings  Services,  Moody's,  or Duff & Phelps may be  referred to in
advertisements  or sales  literature or in reports to owners.  These ratings are
opinions  provided by the companies  named above.  These opinions  relate to how
well they have determined we are prepared, from a financial standpoint,  to meet
our insurance and annuity  obligations.  The terms of our obligations are stated
within the  general  account  options  of this  contract.  These  ratings do not
reflect the investment performance of the variable account or the degree of risk
associated with an investment in the variable account.


INSURANCE MARKETPLACE STANDARDS
ASSOCIATION


In recent  years,  the  insurance  industry has  recognized  the need to develop
specific  principles  and  practices to help  maintain the highest  standards of
marketplace  behavior and enhance  credibility with consumers.  As a result, the
industry established the Insurance Marketplace Standards Association, or IMSA.


As an IMSA member,  we agree to follow a set of  standards  in our  advertising,
sales and service for individual life insurance and annuity  products.  The IMSA
logo,  which  you  will  see  on  our  advertising  and  promotional  materials,
demonstrates that we take our commitment to ethical conduct seriously.

THE VARIABLE ACCOUNT

Separate Account VA-6 of Transamerica,  or the variable account, was established
by  Transamerica  as a  separate  account  under  the laws of the State of North
Carolina following June 11, 1996, resolutions adopted by Transamerica's Board of
Directors.  The variable  account is registered with the Securities and Exchange
Commission,  or the  Commission,  under the Investment  Company Act of 1940 as a
unit investment  trust. It meets the definition of a separate  account under the
federal  securities  laws.  However,  the  Commission  does  not  supervise  the
management or the investment practices or policies of the variable account.


We own the assets of the variable account, but they are held separately from our
other assets.  Section 58-7-95 of the North Carolina Insurance Law provides that
the assets of a separate account are not chargeable with liabilities incurred in
any other business operation of the insurance  company.  This is the case except
to the extent that assets in the separate  account exceed the reserves and other
liabilities of the separate account.

Income, gains and losses incurred on the assets in the variable account, whether
or not realized, are credited to or charged against the variable account without
regard  to  our  other  income,  gains  or  losses.  Therefore,  the  investment
performance  of the variable  account is entirely  independent of the investment
performance  of our  general  account  assets  or  any  other  separate  account
maintained by us.


The variable account currently has 19 variable sub-accounts  available under the
contract, each of which invests solely in a specific corresponding portfolio. At
our discretion, we may make changes to the variable sub-accounts.

THE PORTFOLIOS

Each of the variable sub-accounts offered under the contract invests exclusively
in one of the portfolios.  Descriptions of each portfolio's investment objective
follow.  The  management  fees  listed  below are  specified  in each  portfolio
adviser's contract before any fee waivers.

THE INCOME & GROWTH  PORTFOLIO OF THE ALGER  AMERICAN FUND seeks,  primarily,  a
high level of dividend income.  Capital appreciation is a secondary objective of
the portfolio. The portfolio invests in dividend paying equity securities,  such
as common or preferred stocks,  preferably those which the Manager believes also
offer opportunities for capital appreciation.

Adviser: Fred Alger Management, Inc.
Management Fee: 0.625%.


THE GROWTH AND INCOME PORTFOLIO OF THE ALLIANCE  VARIABLE  PRODUCTS SERIES FUND,
INC. seeks reasonable current income and reasonable opportunity for appreciation
through investments primarily in dividend-paying  common stocks of good quality.
Whenever the economic  outlook is  unfavorable  for  investment in common stock,
this  portfolio  may  invest  in  other  types  of  securities,  such as  bonds,
convertible  bonds,  preferred  stock  and  convertible  preferred  stocks.  The
portfolio  managers will purchase and sell portfolio  securities at times and in
amounts as  management  deems  advisable in light of market,  economic and other
conditions.


Adviser: Alliance Capital Management L.P.
Management Fee: 0.63%.

THE PREMIER GROWTH PORTFOLIO OF THE ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
seeks growth of capital by pursuing aggressive  investment policies.  Since this
portfolio's  investments  will be made based upon their  potential  for  capital
appreciation, current income will not be a high priority for this portfolio. The
portfolio  will  invest  mainly in  equity  securities,  such as common  stocks,
securities  convertible  into common stocks and rights and warrants to subscribe
for or purchase common stocks. Equity investments will be in a limited number of
large,  carefully  selected,  high-quality  U.S.  companies.  In  the  Adviser's
judgement,  the  companies  chosen  will be those  that are  likely  to  achieve
superior earnings growth.  Approximately 25 companies believed by the Adviser to
show  superior  potential  for  capital  appreciation  will  usually  constitute
approximately  70% of the  portfolio's net assets at any one time. The portfolio
thus  differs  from more typical  equity  mutual funds by investing  most of its
assets in a relatively small number of intensively  researched companies.  Under
normal  circumstances the portfolio will invest at least 85% of the value of its
total assets in the equity securities of U.S. companies.


Adviser: Alliance Capital Management L.P.
Management Fee: 1.00%.


THE  APPRECIATION  PORTFOLIO  OF THE  DREYFUS  VARIABLE  INVESTMENT  FUND  seeks
long-term  capital growth  consistent with the preservation of capital;  current
income is a secondary  goal.  To pursue these goals,  the  portfolio  invests in
common stocks focusing on "blue chip" companies with total market values of more
than $5 billion at the time or purchase.


Adviser: The Dreyfus Corporation.
Sub-Adviser: Fayez Sarofim & Co.
Management Fee: 0.75%.


THE SMALL  CAP  PORTFOLIO  OF THE  DREYFUS  VARIABLE  INVESTMENT  FUND  seeks to
maximize  capital  appreciation.  To pursue this goal,  the portfolio  generally
invests  at least 65% of its  assets in the  common  stock of U.S.  and  foreign
companies. The portfolio focuses on small-cap companies with total market values
of less than $1.5 million.


Adviser: The Dreyfus Corporation.
Management Fee: 0.75%.

THE BALANCED  PORTFOLIO OF THE JANUS ASPEN SERIES seeks long-term capital growth
consistent  with  preservation  of capital and current  income.  Normally,  this
diversified  portfolio  invests  40-60%  of its  assets in  securities  selected
primarily for their growth potential. The balance of its holdings is invested in
securities  selected  primarily  for their  capacity  to generate  income.  Such
holdings  are likely to consist of bonds and  preferred  stocks.  Typically,  at
least 25% of this portfolio is made up of fixed-income securities.


Adviser: Janus Capital Corporation.
Management Fee: 0.65%.


THE WORLDWIDE  GROWTH PORTFOLIO OF THE JANUS ASPEN SERIES seeks long-term growth
of capital in a manner  consistent  with the  preservation  of capital.  It is a
diversified  portfolio that pursues its objective  primarily through investments
in common  stocks  of  foreign  and  domestic  issuers.  The  portfolio  has the
flexibility to invest on a worldwide basis in companies and other  organizations
of any size,  regardless  of  country of origin or place of  principal  business
activity. The portfolio normally invests in issuers from at least five different
countries,  including  the United  States.  The portfolio may at times invest in
fewer than five countries or even a single country.


Adviser: Janus Capital Corporation.
Management Fee: 0.65%.

THE EMERGING  GROWTH SERIES OF THE MFS VARIABLE  INSURANCE TRUST seeks long-term
growth of capital.  The series may invest up to 25% of its net assets in foreign
securities, including emerging market securities. Emerging markets are generally
defined as countries  in the initial  stages of their  industrialization  cycles
with low per capita income.

Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.

THE  GROWTH  WITH  INCOME  SERIES  OF THE MFS  VARIABLE  INSURANCE  TRUST  seeks
long-term  growth of capital and future  income  while  providing  more  current
dividend  income than is  normally  obtainable  from a portfolio  of only growth
stocks. The series invests, under normal market conditions,  at least 65% of its
total assets in common stock and related  securities,  such as preferred stocks,
convertible securities and depositary receipts for those securities.  The series
will also seek to provide  income  equal to  approximately  90% of the  dividend
yield on the Standard & Poor's 500 Composite Index. While the fund may invest in
companies  of any size,  the fund  generally  focuses on  companies  with larger
market capitalizations that the series' adviser believes have sustainable growth
prospects and attractive  valuations  based on current and expected  earnings or
cash flow. The series may invest in foreign securities through which it may have
exposure to foreign currencies.


Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.


THE RESEARCH SERIES OF THE MFS VARIABLE  INSURANCE TRUST seeks long-term  growth
of  capital  and  future  income.  The  series  invests,   under  normal  market
conditions,  at least 80% of its  total  assets in  common  stocks  and  related
securities,  such as preferred  stocks,  convertible  securities  and depositary
receipts. The series focuses on companies that the series' adviser believes have
favorable prospects for long-term growth, attractive valuations based on current
and  expected  earnings  or cash  flow,  dominant  or growing  market  share and
superior  management.  The  series  may  invest  in  foreign  equity  securities
(including  emerging  market  securities)  through which it may have exposure to
foreign currencies.


Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.

MORGAN STANLEY UNIVERSAL  INSTITUTIONAL  FUNDS EMERGING MARKETS EQUITY PORTFOLIO
seeks long-term capital appreciation by investing primarily in equity securities
of issuers in emerging market  countries.  The Adviser seeks to maximize returns
by investing in  growth-oriented  equity  securities  in emerging  markets.  The
Adviser's   investment   approach  combines  top-down  country  allocation  with
bottom-up stock selection.  Investment  selection  criteria  include  attractive
growth  characteristics,  reasonable  valuations and  managements  with a strong
shareholder  value  orientation.  The Adviser  allocates the portfolio's  assets
among  emerging  markets  based  on  relative  economic,  political  and  social
fundamentals, stock valuations and investor sentiments.

Adviser:  Morgan Stanley Asset  Management*  Management  Fee: 1.25% of the first
$500 million;  1.20% of the next $500  million;  and 1.15% of the assets over $1
billion.

*On December 1, 1998,  Morgan Stanley Asset  Management Inc. changed its name to
Morgan  Stanley Dean Witter  Investment  Management  Inc.,  but  continues to do
business in certain instances using the name Morgan Stanley Asset Management.


MORGAN  STANLEY  UNIVERSAL  INSTITUTIONAL  FUNDS FIXED  INCOME  PORTFOLIO  seeks
above-average  total  return  over a market  cycle  of  three  to five  years by
investing primarily in a diversified mix of dollar denominated  investment grade
fixed income securities,  particularly U.S.  Government,  corporate and mortgage
securities.  The Portfolio ordinarily will maintain an average weighted maturity
in  excess  of  five  years.  The  Portfolio  may  invest  opportunistically  in
non-dollar denominated securities and below investment grade securities.

Adviser:  Miller  Anderson & Sherrerd,  LLP.  Management Fee: 0.40% of the first
$500 million;  0.35% of the next $500  million;  and 0.30% of the assets over $1
billion.

MORGAN  STANLEY  UNIVERSAL   INSTITUTIONAL  FUNDS  HIGH  YIELD  PORTFOLIO  seeks
above-average  total  return  over a market  cycle  of  three  to five  years by
investing  primarily  in high yield  securities  (commonly  referred to as "junk
bonds").  The  Portfolio  also may  invest  in  investment  grade  fixed  income
securities,  including U.S. Government securities,  corporate bonds and mortgage
securities. The Portfolio may invest to a limited extent in foreign fixed income
securities, including emerging market securities.

Adviser:  Miller  Anderson & Sherrerd,  LLP.  Management Fee: 0.50% of the first
$500 million;  0.45% of the next $500  million;  and 0.40% of the assets over $1
billion.

MORGAN STANLEY  UNIVERSAL  INSTITUTIONAL  FUNDS  INTERNATIONAL  MAGNUM PORTFOLIO
seeks long-term capital appreciation by investing primarily in equity securities
of non-U.S.  issuers  domiciled in EAFE countries.  The Adviser seeks to achieve
superior  long-term  returns by creating a diversified  portfolio of undervalued
international  equity  securities.  To achieve  this goal,  the  Adviser  uses a
combination of strategic  geographic  asset  allocation and  fundamental,  value
oriented stock  selection.  The countries in which the portfolio will invest are
those  comprising the Morgan Stanley  Capital  International  EAFE Index,  which
includes Australia,  Japan, New Zealand,  most nations located in Western Europe
and the more  developed  countries  in Asia,  such as Hong  Kong and  Singapore.
Collectively,  we refer to these as the EAFE countries. The portfolio may invest
up to 5% of its total  assets in  securities  of issuers  domiciled  in non-EAFE
countries.  Under normal circumstances,  at least 65% of the total assets of the
portfolio  will be  invested in equity  securities  of issuers in at least three
different EAFE countries.

Adviser: Morgan Stanley Asset Management Management Fee: 0.80% of the first $500
million;  0.75% of the next  $500  million;  and  0.70%  of the  assets  over $1
billion.

THE MANAGED PORTFOLIO OF THE OCC ACCUMULATION TRUST seeks growth of capital over
time through  investment in a portfolio  consisting of common stocks,  bonds and
cash  equivalents,  the  percentages  of which will vary based on the  Adviser's
assessments of the relative  outlook for such  investments.  Debt securities are
expected to be  predominantly  investment  grade  intermediate to long term U.S.
government  and corporate  debt.  The portfolio will also invest in high quality
short term money market and cash equivalent securities and may invest almost all
of its  assets  in such  securities  when  necessary  to  preserve  capital.  In
addition,  the  portfolio may also purchase  foreign  securities.  These foreign
securities  must be listed on a  domestic  or  foreign  securities  exchange  or
represented by American depositary receipts.

Adviser: OpCap Advisors.
Management  Fee:  0.80% of the  first  $400  million  and 0.75% of the next $400
million and 0.70% of net assets over $800  million.  THE SMALL CAP  PORTFOLIO OF
THE OCC ACCUMULATION TRUST seeks capital  appreciation  through investments in a
diversified  portfolio of stocks issued by small  companies.  It will consist of
primarily of equity securities of companies with market capitalizations of under
$1 billion.  Under normal circumstances,  at least 65% of the portfolio's assets
will be invested in equity securities.  The majority of securities  purchased by
the portfolio will be traded on the New York Stock Exchange,  the American Stock
Exchange or in the  over-the-counter  market. The portfolio's  holdings may also
include options,  warrants, bonds, notes and convertible bonds. In addition, the
portfolio may also  purchase  foreign  securities.  Foreign  securities  must be
listed on a  domestic  or  foreign  securities  exchange  or be  represented  by
American depositary receipts.

Adviser:  OpCap  Advisors.  Management  Fee: 0.80% of the first $400 million and
0.75% of the next $400 million and 0.70% of net assets over $800 million.

THE STOCKSPLUS GROWTH AND INCOME PORTFOLIO OF THE PIMCO VARIABLE INSURANCE TRUST
seeks to achieve a total return which  exceeds the total return  performance  of
the S&P 500. The Portfolio invests in common stocks, options,  futures,  options
on futures and swaps.  Under normal market  conditions,  the  Portfolio  invests
substantially all of its assets in S&P 500 derivatives, backed by a portfolio of
fixed income instruments.  The Portfolio uses S&P 500 derivatives in addition to
or in place of S&P 500 stocks to attempt to equal or exceed the  performance  of
the S&P 500. The Adviser  actively  manages the fixed income  assets held by the
Portfolio,  with a view to enhancing  the  Portfolio's  total return  investment
performance,  subject to an overall  portfolio  duration  which is normally  not
expected to exceed one year. The Portfolio may invest up to 10% of its assets in
high yield bonds rated B or higher by Moody's or S&P, or if unrated,  determined
by the Adviser to be comparable quality. The Portfolio may also invest up to 20%
of its assets in securities  denominated  in foreign  currencies  and may invest
beyond this limit in U.S. dollar denominated securities of foreign issuers.

Adviser: Pacific Investment Management Company.
Management Fee: 0.40%

THE GROWTH  PORTFOLIO OF THE  TRANSAMERICA  VARIABLE  INSURANCE FUND, INC. seeks
long-term capital growth. It invests at least 65% of its assets in a diversified
selection of equity  securities of domestic  growth  companies of any size.  The
manager uses a "bottom-up"  approach to investing and  constructs  the portfolio
one company at a time. The manager focuses on identifying  fundamental change in
its early stages and  investing in premier  companies.  In the  manager's  view,
characteristics  of  premier  companies  include  one or more of the  following:
share-holder-oriented  management;  dominance in market share;  cost  production
advantages;  leading brands;  self-financed growth; and attractive  reinvestment
opportunities.  The manager of the portfolio believes in long-term investing and
does not try to time the market.  However,  when in the  judgment of the manager
market conditions warrant,  the portfolio may, for temporary defensive purposes,
hold part or all of its assets in cash or cash equivalents.

Adviser: Transamerica Investment Management, LLC.
Sub-Adviser: Transamerica Investment Services, Inc.
Management Fee: 0.75%.

THE MONEY MARKET  PORTFOLIO OF THE  TRANSAMERICA  VARIABLE  INSURANCE FUND, INC.
seeks to maximize current income  consistent with liquidity and the preservation
of   principal.   The   portfolio   invests   primarily  in  high  quality  U.S.
dollar-denominated  money market  instruments  with  remaining  maturities of 13
months or less. These include:  obligations issued or guaranteed by the U.S. and
foreign  governments  and their agencies and  instrumentalities;  obligations of
U.S. and foreign  banks,  or their foreign  branches,  and U.S.  savings  banks;
short-term corporate  obligations,  including commercial paper, notes and bonds;
other short-term debt obligations with remaining maturities of 397 days or less;
and repurchase  agreements  involving any of the securities mentioned above. The
portfolio may also purchase  other  marketable,  non-convertible  corporate debt
securities  of  U.S.  issuers.  These  investments  include  bonds,  debentures,
floating rate obligations, and issues with optional maturities.

Adviser: Transamerica Investment Management, LLC.
Sub-Adviser: Transamerica Investment Services, Inc.
Management Fee: 0.35%.

Meeting  investment  objectives depends on various factors,  including,  but not
limited to, how well the portfolio  managers  anticipate  changing  economic and
market  conditions.  There is no  assurance  that any of these  portfolios  will
achieve their stated objectives.

An investment  in the contract is not a deposit or obligation  of, or guaranteed
or endorsed,  by any bank. Nor is the contract  federally insured by the Federal
Deposit Insurance  Corporation or any other government agency.  Investing in the
contract  involves  certain   investment  risks,   including  possible  loss  of
principal.

Since all of the  portfolios  are  available  to  registered  separate  accounts
offering  variable  annuity and variable  life products of  Transamerica  and to
other  insurance  companies  as  well,  there  is a  possibility  of a  material
conflict.  If such a conflict  arises  between  the  interests  of the  variable
account and one or more other separate accounts investing in the portfolios, the
affected insurance companies will take steps to resolve the matter.  These steps
may include  stopping their separate  accounts from investing in the portfolios.
See the portfolios' prospectuses for greater detail on this subject.

You can find  additional  information  concerning the investment  objectives and
policies of all of the portfolios and the  investment  advisory  services in the
current prospectuses for the portfolios which accompany this prospectus.

Carefully read the  prospectuses of the portfolios which interest you before you
make any decision  concerning how you will invest in, or transfer  monies among,
the variable sub-accounts.

We may receive payments from some or all of the portfolios or their advisers, in
varying  amounts.  These payments may be based on the amount of assets allocated
to the portfolios. The payments are for administrative or distribution services.

PORTFOLIOS NOT PUBLICLY AVAILABLE

The portfolios are open-end management  investment  companies,  or portfolios or
series of, open-end management  companies registered with the SEC under the 1940
Act, that are often referred to as mutual funds.  This SEC registration does not
involve  SEC  supervision  of the  investments  or  investment  policies  of the
portfolios. Shares of the portfolios are not offered to the public but solely to
the  insurance  company  separate  accounts and other  qualified  purchasers  as
limited by federal tax laws.  These  portfolios are not the same as mutual funds
that may have very similar names that are sold  directly to the public,  and the
performance of such publicly  available funds,  which have different  portfolios
and expenses,  should not be considered as an indication of the  performance  of
the  portfolios.  The assets of each portfolio are held separate from the assets
of the other portfolios. Each portfolio operates as a separate

investment vehicle.  The income or losses of one portfolio have no effect on the
investment performance of another portfolio. The sub-accounts reinvest dividends
and/or capital gains  distributions  received from a portfolio in more shares of
that portfolio as retained assets.

ADDITION, DELETION, OR SUBSTITUTION

We do not control the portfolios.  For this reason, we cannot guarantee that any
of the variable sub-accounts offered under the contract or any of the portfolios
will always be available to you for investment purposes.

We  retain  the  right  to  make  changes  in the  variable  account  and in its
investments.

We reserve the right to eliminate the shares of any portfolio held by a variable
sub-account.  We may also substitute  shares of another  portfolio or of another
investment  company  for the  shares of any  portfolio.  We would do this if the
shares of the  portfolio are no longer  available  for  investment or if, in our
judgment,  investment in any  portfolio  would be  inappropriate  in view of the
purposes of the variable account.  To the extent required by the 1940 Act, if we
substitute  shares in a variable  sub-account  that you own, we will provide you
with advance notice.  We will also seek advance  permission from the Commission.
This does not prevent the variable  account from purchasing other securities for
other series or classes of variable annuity  contracts.  Nor does it prevent the
variable  account  from  effecting  an  exchange  between  series or  classes of
variable contracts on the basis of requests made by owners.

We reserve the right to create new variable sub-accounts for the contracts when,
in our sole discretion,  marketing,  tax, investment or other conditions warrant
that we do. Any new  variable  sub-accounts  will be made  available to existing
owners on a basis to be determined by us. Each additional  variable  sub-account
will purchase shares in a mutual fund portfolio or other investment  vehicle. We
may also eliminate one or more variable sub-accounts if, in our sole discretion,
marketing,  tax,  investment or other conditions  warrant that we do. So, in the
event any variable sub-account is eliminated,  we will notify owners and request
a re-allocation of the amounts invested in the eliminated variable sub-account.

In the event of any  substitution  or  change,  we may make the  changes  in the
contract  that we deem  necessary or  appropriate  to reflect  substitutions  or
changes.  Furthermore,  if we believe it to be in the best  interest  of persons
having voting rights under the contracts,  the variable  account may be operated
as a management  company under the 1940 Act or any other form  permitted by law.
It may also be de-registered under such Act in the event that registration is no
longer  required.  Finally,  it may  also be  combined  with  one or more  other
separate accounts.

THE CONTRACT

The  Transamerica  Classic(R)  contract  is  subject to the  insurance  laws and
regulations  of  each  state  or  jurisdiction  in  which  it is  available  for
distribution.  There may be  differences  between  the  contract  issued and the
general   contract   description   contained  in  this  prospectus   because  of
requirements  of the state  where your  contract  is  issued.  Some of the state
specific differences are included in the prospectus, but the prospectus does NOT
include  references  to all  state  specific  differences.  All  state  specific
contract features will be described in your contract.

The contract is a flexible  purchase payment deferred variable annuity contract.
It is part of the Transamerica  Series(R) of variable insurance products.  Other
variable  contracts are also  available from us. The rights and benefits of this
contract are described below and in the contract. They will also be described in
the contract. We reserve the right to modify the contract if required by law. We
also  reserve  the right to give you,  the owner,  the benefit of any federal or
state  statute,  rule or  regulation.  The  obligations  under the  contract are
obligations of Transamerica.

The contracts are available on a non-qualified  basis and on a qualified  basis.
Contracts available on a qualified basis are as follows:

a)       rollover and regular IRAs under Code Sections 408(a) and 408(b);

b)   conversion, rollover and contributory Roth IRAs under Code Section 408A;

c)   SEP/IRAs that qualify for special  federal income tax treatment  under Code
     Section 408(k);

d)   rollover  Code  Section  403(b)   annuities,   including  Rev.  Rul.  90-24
     transfers, with no additional premiums; and

e) qualified  pension and profit  sharing  plans  intended to qualify under Code
Section  401.   Generally,   qualified  contracts  contain  certain  restrictive
provisions  limiting  the  timing  and  amount  of  purchase  payments  to,  and
distributions from, the qualified contract.

OWNERSHIP

As the owner,  you are entitled to the rights granted by the contract.  If there
are joint owners,  the one designated as the primary owner will receive all mail
and any tax reporting information.

For non-qualified contracts, the owner is entitled to designate the annuitant(s)
and, if the owner is an individual,  as opposed to a trust, corporation or other
legal  entity,  the owner can change  the  annuitant(s)  at any time  before the
annuity date.  Any such change will be subject to our then current  underwriting
requirements.  We reserve the right to reject any change of annuitants which has
been made without our prior written consent.

If the owner of a non-qualified contract is not an individual,  the annuitant(s)
may not be  changed  once the  contract  is  issued.  Different  rules  apply to
qualified contracts.

For each contract, a different account will be established and values,  benefits
and charges will be  calculated  separately.  The various  administrative  rules
described below will apply separately to each contract, unless otherwise noted.

PURCHASE PAYMENTS

All purchase  payments can be paid to our Service  Center in a check  payable to
Transamerica.  We will  issue you a  confirmation  upon the  acceptance  of each
purchase payment.

The initial  purchase  payment must be at least $5,000 or, if for regular  IRAs,
SEP/IRAs and Roth IRAs, it must be for at least $2,000.

We will issue your contract and credit your initial purchase  payment  generally
within two  business  days after we receive  sufficient  information  to issue a
contract and the initial purchase payment.  For us to issue you a contract,  you
must provide  sufficient  information in a form acceptable to us. We reserve the
right to reject any  purchase  payment or request  for  issuance  of a contract.
Normally we will not issue  contracts with owners,  joint owners,  or annuitants
more than 90 years old. Nor will we normally accept purchase  payments after any
owner's,  (or  annuitant's  if  non-individual  owner),  91st  birthday.  In our
discretion we may waive these restrictions in appropriate cases.

If we cannot  credit the initial  purchase  payment  allocated  to the  variable
sub-account(s) within two days of receipt because the information is incomplete,
or for any other reason, we will contact you. We will explain the reason for the
delay and will refund the initial purchase payment within five business days. If
you consent to us retaining the initial purchase  payment,  we will credit it to
the  variable  sub-account  of  your  choice  as soon  as the  requirements  are
fulfilled.

Before the annuity date and before you, a joint owner or any  annuitant  reaches
age 91, you may make additional purchase payments at any time while the contract
is in effect. The minimum amount of each additional  purchase payment must be at
least $200 each, or at least $100 if made through an automatic  purchase payment
plan.  If you elect to use this option,  additional  purchase  payments  will be
automatically  deducted from your bank account and allocated to the contract. In
addition,  minimum allocation amounts apply. See Allocation of Purchase Payments
below.  Additional purchase payments are credited to the contract as of the date
we receive your payment.

Total purchase payments for any contract may not exceed  $1,000,000  without our
prior approval.

In no event may the sum of all  purchase  payments  for a  contract  during  any
taxable year exceed the limits imposed by any  applicable  federal or state law,
rules, or regulations.

ALLOCATION OF PURCHASE PAYMENTS

You specify how purchase payments will be allocated under the contract.  You may
allocate  purchase  payments among one or more of the variable  sub-accounts and
the  general   account  options  as  long  as  the  portions  are  whole  number
percentages.  In  addition,  there is a  minimum  allocation  of  $1,000 to each
guarantee  period.  We may waive this minimum  allocation  amount under  certain
options and circumstances.

Each purchase payment will be subject to the allocation percentages in effect at
the time of  receipt of such  purchase  payment.  You may change the  allocation
percentages for additional purchase payments at any time by submitting a request
for such change to our Service Center in a form and manner acceptable to us. Any
changes to the allocation  percentages are subject to the limitations above. Any
change  will take  effect  with the first  purchase  payment  we  receive  which
accompanies your request.  If we receive your request  separately,  all purchase
payments arriving after it will be subject to its terms. Your allocation choices
will continue in effect until you change them again.

FREE LOOK OPTION

If you exercise the free look option,  unless otherwise required by law, we will
refund:

a)   the purchase  payment  allocated to any general account  option,  minus any
     withdrawals; plus

b)   the  variable  accumulated  value as of the date we  receive  your  written
     notice to cancel and your contract.

In certain jurisdictions,  under certain conditions,  we are legally required to
return either:

a)       the purchase payments, minus any withdrawals; or

b)   the  greater of purchase  payments  minus any  withdrawals,  or the account
     value.

Your initial purchase  payment  allocated to the variable account may be held in
the money market  variable  sub-account  during the applicable  free look period
plus 5 days for delivery.  Any allocations you make to the money market variable
sub-account will automatically be transferred at the end of the free-look period
plus 5 days according to your original  allocation  instructions.  This transfer
will not count against the 18 transfers  allowed free of charge during the first
contract year.

INVESTMENT OPTION LIMIT

Currently,  you may not allocate monies to more than eighteen investment options
over the life of the contract.  Investment options include variable sub-accounts
and general account options. Each variable sub-account, each guarantee period of
the  guarantee  period  account,  and the fixed  account  that ever  received  a
transfer  or purchase  payment  allocation  counts as one towards  this total of
eighteen limit. We may waive this limit in the future.

For example, if you make an allocation to the money market variable  sub-account
and  later  transfer  all of  the  funds  out  of  this  money  market  variable
sub-account,  this would count as one option for the purposes of the limitation,
even if it held no value. If you transfer from a variable sub-account to another
variable  sub-account  and  later  back to the  first,  the  count  towards  the
limitation  would be two, not three. If you select a guarantee  period and renew
for the same term, the count will be one; but if you renew to a guarantee period
with a different term, the count will be two.

ACCOUNT VALUE

Before the annuity date, the account value is equal to:

a)       the general account options accumulated value; plus

b)       the variable accumulated value.

The variable  accumulated  value is determined at the end of each valuation day.
To  determine  the variable  accumulated  value on a day that is not a valuation
day,  the  value as of the end of the  next  valuation  day  will be  used.  The
variable  accumulated  value is  expected  to change  from  valuation  period to
valuation  period,   reflecting  how  investments  within  selected   portfolios
performed.  The  variable  accumulated  value will also reflect  deductions  for
charges and fees. A valuation  period  begins at the close of the New York Stock
Exchange (generally 4:00 p.m. ET) on each valuation day and ends at the close of
the New York Stock  Exchange on the next  succeeding  valuation day. A valuation
day is each day that the New York Stock Exchange is open for regular business.

HOW VARIABLE ACCUMULATION UNITS ARE VALUED

Purchase  payments  allocated  to a variable  sub-account  are  credited  to the
variable  accumulated  value in the form of  variable  accumulation  units.  The
number of variable  accumulation units credited for each variable sub-account is
determined  by  dividing  the  purchase   payment   allocated  to  the  variable
sub-account  by  the  variable   accumulation   unit  value  for  that  variable
sub-account.  In the case of the initial purchase payment, variable accumulation
units for that payment will be credited to the variable accumulated value within
two valuation days of the later of the date our Service Center receives:

a)       sufficient information, in an acceptable manner and form; or

b)       the initial purchase payment.

In the case of any additional purchase payment,  variable accumulation units for
that payment will be credited at the end of the valuation period during which we
receive the payment. The value of a variable accumulation unit for each variable
sub-account is established at the end of each valuation period and is calculated
by multiplying the value of that unit at the end of the prior  valuation  period
by the variable  sub-account's  net investment  factor for the valuation period.
The value of a variable accumulation unit can go either up or down.

The net  investment  factor is used to determine the value of  accumulation  and
annuity unit values for the end of a valuation  period.  The applicable  formula
can be found in the Statement of  Additional  Information.  Transfers  involving
variable  sub-accounts  will  result in the  crediting  and/or  cancellation  of
variable  accumulation  units  having a total value  equal to the dollar  amount
being transferred to or from a particular  variable  sub-account.  The crediting
and  cancellation  of such units is made using the  variable  accumulation  unit
value of the applicable variable  sub-account as of the end of the valuation day
in which the transfer is effective.

TRANSFERS

BEFORE THE ANNUITY DATE

Before the  annuity  date,  you may  transfer  all or any portion of the account
value among the variable sub-accounts and the general account options. Transfers
are restricted into or out of the fixed account.

Transfers among the variable sub-accounts and the general account options may be
made by  submitting  a  request  to our  Service  Center  in a form  and  manner
acceptable to us. The transfer request must specify:

a)   the variable  sub-accounts  and/or the general  account  options from which
     your transfer is to be made;

b)       the amount of your transfer; and

c)   the variable  sub-accounts  and/or general  account  options to receive the
     transferred amount.

The minimum amount which you may transfer from the variable sub-accounts and the
general account options is $1,000. Transfers among the variable sub-accounts are
also subject to the terms and conditions imposed by the portfolios.
When a transfer is made from a guarantee  period before the end of its term, the
amount transferred may be subject to an interest  adjustment.  A transfer from a
guarantee period made within 30 days before the last day of its term will not be
subject to any interest adjustment.

We currently impose a transfer fee of $10 for each transfer in excess of 18 made
during the same contract year. We reserve the right to waive the transfer fee or
vary the number of  transfers  without  charge.  We may also choose not to count
transfers  under certain  options or services for purposes of the allowed number
without  charge.  See  Other  Restrictions  below  for  additional   limitations
regarding  transfers.  A transfer  generally  will be  effective on the date the
request for transfer is received by our Service Center.

If a transfer reduces the value in a variable sub-account or guarantee period or
in the fixed account to less than $1,000,  then we reserve the right to transfer
the remaining amount along with the amount requested to be transferred.  We will
do this  according to the transfer  instructions  provided by you. Under current
law, there will not be any tax liability for transfers within the contract.

TELEPHONE TRANSFERS

We will allow telephone transfers if you have provided proper  authorization for
such  transfers  in a form and  manner  acceptable  to us.  Withdrawals  are not
permitted by  telephone.  We will employ  reasonable  procedures to confirm that
instructions  communicated  by telephone are genuine.  We will not be liable for
any losses  due to  unauthorized  or  fraudulent  instructions  we believe to be
genuine.  The  procedures  we will follow for  telephone  transfers  may include
requiring  some form of personal  identification  before acting on  instructions
received by telephone, providing written confirmation of the transaction, and/or
tape recording the instructions given by telephone.

OTHER RESTRICTIONS

We  reserve  the right  without  prior  notice to modify,  restrict,  suspend or
eliminate the transfer privileges,  including telephone  transfers,  at any time
and for any reason. For example, restrictions may be necessary to protect owners
from adverse impacts on portfolio  management of large and/or numerous transfers
by market timers or others.  We have determined that the movement of significant
variable sub-account values from one variable sub-account to another may prevent
the underlying portfolio from taking advantage of investment opportunities. This
is likely to arise when the volume of  transfers is high,  since each  portfolio
must maintain a significant cash position in order to handle  redemptions.  Such
movement may also cause a substantial  increase in portfolio  transaction  costs
which must be  indirectly  borne by owners.  Therefore,  we reserve the right to
require that all transfer requests be made by the owner and not by a third party
holding a power of attorney.  We also require that each  transfer you request be
made by a separate  communication  to us. We also  reserve  the right to require
that each  transfer  request be submitted  in writing and be manually  signed by
owners. We may choose not to allow telephone or facsimile transfer requests.

DOLLAR COST AVERAGING

Before  the  annuity  date,  you  may  request  that  amounts  be  automatically
transferred on a monthly basis from a source  account.  The source  accounts are
currently the money market sub-account or the fixed account.  You can do this by
submitting a request to our Service  Center in a form and manner  acceptable  to
us.  Other  source  accounts  may be  available.  Call our  Service  Center  for
information regarding availability.

You may  only  dollar  cost  average  from one  source  account  at a time.  The
transfers  will begin when you request,  but no sooner than one week  following,
receipt  of such  request.  For new  variable  annuity  contracts,  dollar  cost
averaging transfers will not begin until the later of:

a)       30 days after the contract effective date; or

b)   the estimated end of the free look period which allows 5 days for delivery.

Transfers will continue for the number of consecutive  months which you selected
unless:

a)       you terminate the transfers;

b)   we  automatically  terminate the transfers  because there are  insufficient
     amounts in the source account; or

c)       for other reasons that are described in the election form.

You may request that monthly  transfers  be continued  for a specific  length of
time.  You can do this by  giving  notice  to our  Service  Center in a form and
manner acceptable to us within 30 days before the last monthly transfer.  If you
do not make a request to  continue  the  monthly  transfers,  this  option  will
terminate  automatically with the last transfer at the end of the length of time
you initially designated.

ELIGIBILITY REQUIREMENTS FOR DOLLAR COST AVERAGING

In order to be  eligible  for dollar  cost  averaging,  the value of your source
account must be at least $5,000.  This limit may be changed for new elections of
this  service.  Dollar cost  averaging  transfers  can not be made from a source
account from which  systematic  withdrawals or automatic  payouts are also being
made.

Currently,  we do not charge for the dollar  cost  averaging  option nor do they
count toward the number of transfers  allowed  without charge per contract year.
We may charge in the future for dollar cost averaging.

Dollar cost averaging  transfers may not be made to or from the guarantee period
account or to the fixed account.

Dollar  cost  averaging  may not be  elected  at the same time that the  special
Dollar Cost Averaging option or the automatic asset rebalancing is in effect.

SPECIAL DOLLAR COST AVERAGING OPTION

(May not be available in all states.  See contract for availability of the fixed
account options.)

Before the annuity date, you may elect to allocate entire  purchase  payments to
either the six or twelve  month  special  Dollar Cost  Averaging  account of the
fixed  account.  The  purchase  payment  will be  credited  with  interest  at a
guaranteed fixed rate.  Amounts will then be transferred from the special Dollar
Cost Averaging account to the variable  sub-accounts pro rata on a monthly basis
for six or twelve months (depending on the option you select) in the allocations
you  specify.  The four  transfers  per year limit does not apply to the special
Dollar Cost Averaging option.

Amounts  from  the  sub-accounts  and/or  general  account  options  may  not be
transferred into the special Dollar Cost Averaging accounts. In addition, if you
request a transfer (other than a Dollar Cost Averaging transfer) or a withdrawal
from a special  Dollar Cost  Averaging  account,  any amounts  remaining  in the
special  account will be transferred to the variable  sub-accounts  according to
your allocation instructions.  The special Dollar Cost Averaging option will end
and cannot be reelected.

AUTOMATIC ASSET REBALANCING

After purchase payments have been allocated among the variable sub-accounts, the
performance of each variable  sub-account may cause proportions of the values in
the  variable  sub-accounts  to vary from the  percentages  which you  initially
defined.  You may  instruct  us to  automatically  rebalance  the amounts in the
variable account by reallocating amounts among the variable sub-accounts, at the
time, and in the percentages,  specified in your instructions to us and accepted
by us. You may elect to have the rebalancing  done on an annual,  semi-annual or
quarterly  basis.  You may elect to have  amounts  allocated  among the variable
sub-accounts using whole percentages. The guaranteed period account and/or fixed
account cannot be rebalanced.

You may elect to establish,  change or terminate the automatic asset rebalancing
by submitting a request to our Service Center in a form and manner acceptable to
us. Automatic asset  rebalancing  currently will not count towards the number of
transfers without charge in a contract year. We reserve the right to discontinue
the automatic  asset  rebalancing  service at any time for any reason.  There is
currently no charge for the automatic asset rebalancing  service.  We may charge
for this service in the future, and may count the transfers toward those allowed
without charge.

Automatic asset rebalancing may not be elected at the same time that dollar cost
averaging is in effect.

AFTER THE ANNUITY DATE

If a variable  payment option is elected,  you may make transfers among variable
sub-accounts  after the annuity date by giving a written  request to our Service
Center, subject to the following provisions:

a)   you may not make any more than four  transfers  per contract year after the
     annuity date; and

b)   the minimum amount transferred from one variable  sub-account to another is
     the amount supporting a current $75 monthly payment.


Transfers among variable  sub-accounts  after the annuity date will be processed
based on the formula  outlined in the appendix in the  Statement  of  Additional
Information. No transfers are allowed into or out of the fixed account.

CASH WITHDRAWALS

If you own a  non-qualified  contract,  you may withdraw all or part of the cash
surrender  value at any time before the annuity date by giving a written request
to our Service Center. For qualified contracts, you should refer to the terms of
the particular retirement plan or arrangement for any additional  limitations or
restrictions, including prohibitions, on cash withdrawals.

The cash surrender  value is equal to the account  value,  minus any account fee
and interest adjustment, and less contingent deferred sales loads and applicable
premium tax charges.  A full surrender will result in a cash withdrawal  payment
equal to the cash  surrender  value at the end of the  valuation  period  during
which the election is  received.  It must be received  along with all  completed
forms  required at that time by us. No  surrenders  or  withdrawals  may be made
after the annuity date. Partial withdrawals must be at least $1,000.

In the case of a  partial  withdrawal,  you may  direct  our  Service  Center to
withdraw  amounts from specific  variable  sub-accounts  and/or from the general
account  options.  If you do not specify,  the withdrawal will be taken pro rata
from the account value.

A partial withdrawal request cannot be fulfilled if it would reduce your account
value to less than $2,000. In such instances, you will be notified.

We will generally process any withdrawal requests, including surrender requests,
as of the end of the valuation period during which the request and all completed
forms are received.  We will pay any cash withdrawal,  settlement option payment
or lump sum death  benefit  due from the  variable  account  and  process of any
transfers within seven days from the date we receive your request.  However,  we
may postpone such payment if:

o    the New York Stock  Exchange  is closed for other  than usual  weekends  or
     holidays, or trading on the Exchange is otherwise restricted;

o    an  emergency  exists  as  defined  by the  Commission,  or the  Commission
     requires that trading be restricted; or

o        the Commission permits a delay for the protection of owners.

The withdrawal request will be effective when we receive all required withdrawal
request forms.  Payments to you for any monies  derived from a purchase  payment
which you made by check may be delayed until your check has cleared your bank.

When you make a withdrawal  from a guarantee  period before the end of its term,
the amount you withdraw may be subject to an interest adjustment.

We may delay payment of any withdrawal  from the general  account options for up
to six months  after we receive  the request  for such  withdrawal.  If we delay
payment for more than 30 days, we will pay interest on the withdrawal  amount up
to the date of payment.

Since you assume the investment risk for all amounts in the variable account and
because certain  withdrawals are subject to a contingent deferred sales load and
other charges, the total amount paid upon surrender of your contract may be more
or less than the total purchase payments.

You may  elect,  under the  systematic  withdrawal  option or  automatic  payout
option,  but not both, to withdraw  certain amounts on a periodic basis from the
variable sub-accounts before the annuity date.

The tax  consequences  of a withdrawal or surrender are discussed  later in this
prospectus,  including  that  withdrawals  and surrenders may be taxable and, if
taken before age 59 1/2, subject to the 10% federal tax penalty tax.

SYSTEMATIC WITHDRAWAL OPTION

Before the annuity date, you may elect to have  withdrawals  automatically  made
from one or more variable  sub-accounts on a monthly basis.  Other  distribution
modes may be permitted. The withdrawals will not begin until the later of:

a)       30 days after the contract effective date; or

b)       the end of the free look period.

Withdrawals will be from the variable sub-accounts and/or the general account in
the  percentage  allocations  that you  specify.  Unless you specify  otherwise,
withdrawals  will be pro rata based on account value. You cannot make systematic
withdrawals  from a  variable  sub-account  from  which  dollar  cost  averaging
transfers are being made. Likewise, systematic withdrawals cannot be used at the
same time that the automatic payout option is in effect.  If you take systematic
withdrawals from the general account,  applicable interest adjustments may apply
to withdrawals from the guarantee periods.

To be eligible for the systematic  withdrawal  option, the account value must be
at least $12,000 at the time of election. The minimum monthly amount that can be
withdrawn is $100.  Currently you can elect any amount over $100 to be withdrawn
systematically. You may also make partial withdrawals while receiving systematic
withdrawals.

If the total of all withdrawals (systematic, automatic or partial) in a contract
year exceed the allowed  amount to be  withdrawn  without  charge for that year,
your account value will be charged any  contingent  deferred sales load that may
apply.

The  withdrawals  will continue  indefinitely  unless you terminate them. If you
choose to terminate this option, you may not elect to use it again until the end
of the next 12 full months.

We  reserve  the  right to  impose  an  annual  fee of up to $25 for  processing
payments  under  this  option.  This fee,  which is  currently  waived,  will be
deducted in equal installments from each systematic withdrawal during a contract
year.

Systematic  withdrawals may be taxable and, before age 59 1/2,  subject to a 10%
federal tax penalty,  including that  withdrawals  and surrenders may be taxable
and, if taken before age 59 1/2, subject to the 10% federal tax penalty.

AUTOMATIC PAYOUT OPTION

Before the annuity date, for qualified  contracts  other than Roth IRAs, you may
elect the  automatic  payout  option,  or APO, to satisfy  minimum  distribution
requirements under the following sections of the Code:

o        401(a)(9);

o        403(b); and

o        408(b)(3).

For IRAs and  SEP/IRAs,  this  option may be elected no earlier  than six months
before the calendar year in which you attain age 70 1/2.  Payments may not begin
earlier than January of such calendar year.

For other  qualified  contracts,  APO can be elected no earlier  than six months
before the later of when you:

a)       attain age 70 1/2; or

b)       retire from employment.

Additionally, APO withdrawals may not begin before the later of:

a)       30 days after the contract effective date; or

b)       the end of the free look period.

APO may be elected in any  calendar  month,  but no later than the month of your
84th birthday.

OTHER AUTOMATIC PAYOUT OPTION INFORMATION. Withdrawals will be from the variable
sub-accounts  and/or the general  account you  designate  and in the  percentage
allocations you specify. If you do not indicate  otherwise,  withdrawals will be
pro  rata  from  account  value.  If you  take  a  withdrawal  from  a  variable
sub-account from which you have designated that dollar cost averaging  transfers
be made, then the dollar cost averaging  option will terminate.  The calculation
of the APO amount will reflect the total account value although the  withdrawals
are only from the  variable  sub-accounts.  This  calculation  and APO are based
solely on the value in this contract.  If you take APO from the general account,
applicable  interest  adjustments  may apply to  withdrawals  from the guarantee
periods.

To be eligible for this option, you must meet the following conditions:

a)   your account value must be at least $12,000 at the time at which you select
     this option; and

b)   the  annual  withdrawal  amount  is  the  larger  of the  required  minimum
     distribution under Code Sections 401(a)(9), 403(b) or 408(b)(3), or $500.

These conditions may change.  Currently,  withdrawals under this option are only
paid annually.

The withdrawals will continue  indefinitely  unless you terminate them. If there
are  insufficient  amounts in the variable  account to make a  withdrawal,  this
option

generally will terminate. Once terminated, APO may not be elected again.

DEATH BENEFIT

If an owner dies before the annuity date and before any owner's  85th  birthday,
the death benefit will be equal to the greatest of:

a)       the account value; and

b)   the sum of all purchase payments, less previous withdrawals taken, and less
     any contingent  deferred sales loads and premium tax charges  applicable to
     those withdrawals; and

c)   the highest account value on any contract anniversary before the earlier of
     the owner's or joint owner's 85th  birthday,  plus  purchase  payments made
     since that contract anniversary, less previous withdrawals taken since that
     contract  anniversary,  and less any  contingent  deferred  sales loads and
     premium tax charges applicable to those withdrawals.

If death occurs  before the annuity date and after an owner's 85th  birthday the
death benefit will be equal to the greater of:

a)       the account value; and

b)   the total of all purchase payments made, less previous  withdrawals  taken,
     and less any  contingent  deferred  sales  loads and  premium  tax  charges
     applicable to those withdrawals.

For purposes of calculating  the death benefit,  the account value is determined
as of the date the benefit is paid.

If the  owner is not a natural  person,  such as a trust,  corporation  or other
legal entity,  an annuitant's death will be treated as the death of an owner for
purposes of the death benefit.

OWNERSHIP CHANGES

An ownership  change will be subject to our current  underwriting  rules and may
decrease the death  benefit.  However,  such  reduction  will never decrease the
death benefit below the account value.



PAYMENT OF DEATH BENEFIT

We will  generally  pay the death  benefit when we receive  proof of death of an
owner.  Once we receive this proof, and the beneficiary has selected a method of
settlement,  the death benefit  generally  will be paid within seven days, or as
soon thereafter as we have sufficient information to make the payment.

The death  benefit  will be  determined  as of the end of the  valuation  period
during which our Service Center receives:

a)       proof of death of the owner or joint owner; and

b)   the written notice of the  settlement  option elected by the person to whom
     the death benefit is payable.

If no  settlement  method  is  elected,  the  death  benefit  will be a lump sum
distributed  within five years after an owner's  death.  No contingent  deferred
sales load nor interest adjustment will apply.

Until the death  benefit is paid,  the account  value  allocated to the variable
account,   and  fluctuates  with   investment   performance  of  the  applicable
portfolios.  For this  reason,  the amount of the death  benefit  depends on the
account value at the time the death benefit is paid, not at the time of death.

DESIGNATION OF BENEFICIARIES

You may select one or more beneficiaries by designating the person or persons to
receive the amounts  payable under the contract.  The persons you designate will
receive the percentage you establish if:

o        you die before the annuity date and there is no joint owner; or

o    you die after the annuity date and  settlement  option  payments have begun
     under a selected  settlement option that guarantees  payments for a certain
     period of time.

If a  beneficiary  dies  before the owner,  that  beneficiary's  interest in the
annuity will end upon his or her death.

A  beneficiary  may be  named  or  changed  at any  time  in a form  and  manner
acceptable  to us.  Any  change  made to an  irrevocable  beneficiary  must also
include the

written consent of the beneficiary, except as otherwise required by law.

If more than one beneficiary is named, each named beneficiary will share equally
in any  benefits  or rights  granted by the  contract  unless the owner gives us
other instructions at the time the beneficiaries are named.

We may rely on any  affidavit  by any  responsible  person  in  determining  the
identity or non-existence of any beneficiary not identified by name.

DEATH OF OWNER OR JOINT OWNER BEFORE THE ANNUITY DATE

If the owner or joint owner dies before the annuity  date, we will pay the death
benefit  as  specified  in  this  section.  The  entire  death  benefit  must be
distributed  within five years after the owner's  death.  If the owner is not an
individual,  an  annuitant's  death will be treated as the death of the owner as
provided in Code Section 72 (s)(6).  The contract  will remain in force with the
annuitant's surviving spouse as the new annuitant, however, if:

o        the contract is owned by a trust; and

o    the  beneficiary is either the  annuitant's  surviving  spouse,  or a trust
     holding the contract solely for the benefit of such spouse.

The manner in which we will pay the death  benefit  depends on the status of the
persons involved in the contract. The death benefit will be payable to the first
person from the applicable list below:

If the owner is the annuitant:

o        the joint owner, if any; or

o        the beneficiary, if any

If the owner is not the annuitant:

o        the joint owner, if any; or

o        the beneficiary, if any; or

o        the annuitant; or

o        the joint annuitant; if any.

If the death benefit is payable to the owner's  surviving  spouse, or to a trust
for the sole benefit of such  surviving  spouse,  we will  continue the contract
with the owner's  spouse as the new annuitant  (if the owner was the  annuitant)
and the new owner (if applicable),  unless such spouse selects another option as
provided below.

If the death  benefit is payable to  someone  other than the  owner's  surviving
spouse,  we will pay the  death  benefit  in a lump sum  payment  to, or for the
benefit of, such person within five years after the owner's  death,  unless such
person or persons selects another option as provided below.

In lieu of the automatic form of death benefit  specified  above,  the person or
persons to whom the death benefit is payable may elect to receive it:

o        in a lump sum; or

o    as settlement  option payments,  provided the person making the election is
     an  individual.  Such payments must begin within one year after the owner's
     death  and must be in equal  amounts  over a period  of time not  extending
     beyond the individual's life or life expectancy.

Election of either option must be made no later than 60 days before the one-year
anniversary of the owner's death.  Otherwise,  the death benefit will be settled
under the appropriate automatic form of benefit specified above.

If the person to whom the death  benefit is payable dies before the entire death
benefit is paid,  we will pay the  remaining  death benefit in a lump sum to the
payee named by such person or, if no payee was named, to such person's estate.

If the death benefit is payable to a non-individual, subject to the special rule
for a trust for the sole  benefit of a surviving  spouse,  we will pay the death
benefit in a lump sum within one year after the owner's death.

IF THE ANNUITANT DIES BEFORE THE ANNUITY DATE

If an owner and an annuitant are not the same  individual and the annuitant,  or
the last of joint  annuitants,  dies  before the  annuity  date,  the owner will
become the annuitant until a new annuitant is selected.

DEATH AFTER THE ANNUITY DATE

If an owner or the annuitant  dies after the annuity date,  any amounts  payable
will continue to be  distributed at least as rapidly as under the settlement and
payment option then in effect on the date of death.

Upon the owner's death after the annuity date,  any remaining  ownership  rights
granted  under the  contract  will pass to the person to whom the death  benefit
would have been paid if the owner had died before the annuity date, as specified
above.

SURVIVAL PROVISION

The interest of any person to whom the death  benefit is payable who dies at the
time of, or within 30 days after,  the death of the owner will also terminate if
no benefits  have been paid to such  beneficiary,  unless the owner had given us
written notice of some other arrangement.

CHARGES, FEES AND DEDUCTIONS

No deductions are currently made from purchase payments, although we reserve the
right to charge for any  applicable  premium tax  charges.  Therefore,  the full
amount of the  purchase  payments  are  invested in one or more of the  variable
sub-accounts and/or the general account options.

CONTINGENT DEFERRED SALES LOAD/
SURRENDER CHARGE

No deduction for sales  charges is made from purchase  payments at the time they
are made.  However, a contingent deferred sales load, or surrender charge, of up
to 6% of purchase payments may be imposed on certain  withdrawals or surrenders.
This charge is designed  to  partially  cover  certain  expenses  incurred by us
relating  to  the  sale  of  the  contract,   including   commissions   paid  to
salespersons, the costs of preparation of sales literature and other promotional
costs and acquisition expenses.

The contingent deferred sales load/surrender  charge percentage varies according
to the number of years  between  when a purchase  payment  was  credited  to the
contract  and  when the  withdrawal  is  made.  The  amount  of this  charge  is
determined by multiplying the amount  withdrawn that is subject to the charge by
the contingent deferred sales load percentage  according to the following table.
In no event  will the total  contingent  deferred  sales  load/surrender  charge
assessed against the contract exceed 6% of the total purchase payments.


                                 CONTINGENT DEFERRED
                                   SALES LOAD AS A
NUMBER OF YEARS                     PERCENTAGE OF
SINCE RECEIPT OF                  PURCHASE PAYMENT
                                  ----------------
PURCHASE PAYMENT
- ----------------
Less than 2 years                        6%
2 years but less than 3 years            5%
3 years but less than 4 years            5%
4 years but less than 5 years            4%
5 years but less than 6 years            4%
6 years but less than 7 years            2%
7 years or more                          0%

FREE WITHDRAWALS-ALLOWED AMOUNT

Beginning 30 days after the contract effective date, or the end of the free look
period,  if later,  you may make a withdrawal up to the allowed  amount  without
incurring a contingent deferred sales  load/surrender  charge each contract year
before the annuity date.

Depending on state  availability,  for contracts issued on or after September 7,
1999, the allowed amount each contract year is equal to:

a)       during the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or

o    15% of the total purchase  payments  received as of the date of withdrawal;
     and

b)   after the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or

o        15% of purchase  payments  received less than seven  complete  contract
         years determined as of the last contract anniversary.

Withdrawals will be made first from earnings and then from purchase  payments on
a  first-in/first-out  basis. The allowed amount may vary depending on the state
in which your contract is issued. If an allowed amount is not withdrawn during a
contract year, it does not carry over to the next contract year.

Purchase  payments not  previously  withdrawn that have been held at least seven
full contract years and  accumulated  earnings not  previously  withdrawn may be
withdrawn  without charge.  For contracts  issued before  September 7, 1999, the
allowed amount each contract year is equal to 15% of:

a)   the total purchase payments received during the last seven years determined
     as of the last contract anniversary; minus

b)       any withdrawals during the present contract year.

Withdrawals  will be made first from purchase  payments on a  first-in/first-out
basis and then from earnings. The allowed amount may vary depending on the state
in which your contract is issued.  If the allowed amount is not fully  withdrawn
or paid out during a contract  year, it does not carry over to the next contract
year.

Purchase  payments held for seven full contract  years may be withdrawn  without
charge.

FREE WITHDRAWALS - LIVING BENEFITS RIDER

When the contract is purchased,  you may also elect, in certain states, a Living
Benefits  Rider for an additional  fee. This rider  provides that the contingent
deferred sales load will be waived in any of the three following instances:

a)   if you or a joint  owner  receive  extended  medical  care in a  qualifying
     institution (as defined in the contract) for at least 60 consecutive  days,
     and the request for the  withdrawal  or  surrender,  together with proof of
     such extended  care,  is received at our Service  Center during the term of
     such  care,  or within 90 days  after the last day upon  which you or joint
     owner received such extended care; or

b)   if you or a joint owner receive medically  required hospice or in-home care
     for at least 60  consecutive  days and such extended care is certified by a
     qualified  medical  professional.  You may also be required to submit other
     evidence as required by us such as evidence of Medicare eligibility; or

c)   if you or a joint  owner are  diagnosed  as  terminally  ill by a qualified
     medical  professional  after the  first  contract  year and are  reasonably
     expected to die within 12 months.

NEITHER A) NOR B) APPLY IF YOU OR A JOINT OWNER ARE RECEIVING  EXTENDED  MEDICAL
CARE IN A  QUALIFYING  INSTITUTION  OR  RECEIVING  IN-HOME  CARE AT THE TIME THE
CONTRACT IS PURCHASED.

We reserve the right to not accept purchase  payments after you or a joint owner
have qualified for any of these waivers. Any withdrawals on which the contingent
deferred  sales load is waived  under this  section  will not reduce the allowed
amount for the contract year.

OTHER FREE WITHDRAWALS

In addition, no contingent deferred sales load is assessed:

o    upon  annuitization  after the first  contract year to an option  involving
     life contingencies; or

o        upon payment of the death benefit before the annuity date.

Any applicable  contingent  deferred sales load will be deducted from the amount
requested  for  both  partial  withdrawals,   including  withdrawals  under  the
systematic  withdrawal option or the APO, and full surrenders,  unless you elect
to add the amount of the applicable  load to the amount  requested for a partial
withdrawal  to  cover  the  applicable   contingent  deferred  sales  load.  The
contingent  deferred  sales  load and any  premium  tax charge  applicable  to a
withdrawal  from the guarantee  period  account will be deducted from the amount
withdrawn after the interest  adjustment,  if any, is applied and before payment
is made.

ADMINISTRATIVE CHARGES

ACCOUNT FEE. At the end of each  contract  year and before the annuity  date, we
deduct an annual account fee as partial  compensation  for expenses  relating to
the issue and maintenance of the contract and the variable  account.  The annual
account  fee is equal  to the  lesser  of $30 or 2% of the  account  value.  The
account fee may be increased  upon 30 days  advance  written  notice,  but in no
event may it exceed $60, or 2% of the account value, if less, per contract year.
If the contract is surrendered, the account fee, unless waived, will be deducted
from a full surrender  before the  application of any contingent  deferred sales
load.  The account  fee will be  deducted on a pro rata basis,  based on values,
from the account value.  The fee  deductions  will be based on both the variable
sub-accounts  and the general account  options.  No interest  adjustment will be
assessed on any deduction  for the account fee taken from the  guarantee  period
account.  We will waive the account fee for a contract year if the account value
exceeds $50,000 on the last business day of that

contract year or as of the date you, as owner, surrender the contract.

ANNUITY FEE.  After the annuity date, we deduct an annual  annuity fee of $30 to
help cover  processing  costs.  This fee will be deducted in equal  amounts from
each  variable  payment  made  during the year.  This fee is $2.50 each month if
monthly payments are made. This fee will not be changed.  No annuity fee will be
deducted from fixed payments. This fee may be waived.

ADMINISTRATIVE   EXPENSE  CHARGE.  We  also  make  a  daily  deduction  for  the
administrative  expense charge from the variable account before the annuity date
at an  effective  current  annual rate of 0.15% of assets held in each  variable
sub-account to reimburse us for administrative  expenses. We have the ability in
most states to increase or decrease  this charge,  but the charge is  guaranteed
not to exceed  0.35%.  We will provide 30 days  written  notice of any change in
fees.  The  administrative  charges do not bear any  relationship  to the actual
administrative costs of a particular contract. The administrative expense charge
is reflected in the variable  accumulation  or variable  annuity unit values for
each variable sub-account.

MORTALITY AND EXPENSE RISK CHARGE

Before the annuity  date, we deduct a charge for bearing  certain  mortality and
expense risks under the contracts. This is a daily charge at an effective annual
rate of 1.20% of the assets in the  variable  account.  We  guarantee  that this
charge of 1.20% will never  increase.  The  mortality and expense risk charge is
reflected in the variable accumulation and variable annuity unit values for each
variable sub-account.

Variable  accumulated  values and variable  settlement  option  payments are not
affected by changes in actual mortality experience incurred by us. The mortality
risks assumed by us arise from our  contractual  obligations to make  settlement
option payments  determined in accordance with the settlement  option tables and
other provisions  contained in the contract and to pay death benefits before the
annuity date.

The  expense  risk  assumed  by us is the  risk  that  our  actual  expenses  in
administering  the  contracts  and the  variable  account will exceed the amount
recovered through the administrative expense charge, account fees, transfer fees
and any fees imposed for certain options and services.

If the mortality and expense risk charge is  insufficient  to cover actual costs
and  risks  assumed,  we will bear  these  losses.  If this  charge is more than
sufficient,  any excess  will accrue to us.  Currently,  we expect a profit from
this charge.

We  anticipate  that the  contingent  deferred  sales  load  will  not  generate
sufficient  funds to pay the cost of distributing  the contracts.  To the extent
that the contingent deferred sales load is insufficient to cover the actual cost
of contract distribution,  the deficiency will be met from our general corporate
assets which may include amounts, if any, derived from the mortality and expense
risk charge.

LIVING BENEFITS RIDER FEE

If you elect the Living  Benefits  Rider when the contract is  purchased,  a fee
will be deducted at the end of each contract month while the rider  continues in
force.  The fee each  month will be 1/12 of 0.05% of the  account  value at that
time.  The fee is deducted  from each variable  sub-account  on a pro rata basis
based on the value in each  variable  sub-account  through the  cancellation  of
variable  accumulation  units.  If there is  insufficient  variable  accumulated
value,  the fee will be deducted pro rata from the values in the general account
options.  Any interest adjustments will apply. We reserve the right to waive the
interest  adjustment  for deduction  from the guarantee  period account for this
rider fee.

PREMIUM TAX CHARGES

Currently  there is no charge  for  premium  taxes  except  upon  annuitization.
However,  we may be  required  to pay  premium or  retaliatory  taxes  currently
ranging from 0% to 5%. We reserve the right to deduct a charge for these premium
taxes from premium payments,  from amounts withdrawn, or from amounts applied on
the annuity date. In some  jurisdictions,  charges for both direct premium taxes
and retaliatory premium taxes may be imposed at the same or different times with
respect to the same purchase payment, depending upon applicable law.

TRANSFER FEE

We  currently  impose a fee for each  transfer  in  excess  of the first 18 in a
single  contract  year.  We will deduct the charge from the amount  transferred.
This  fee is $10  and  will  be  used to help  cover  our  costs  of  processing
transfers.  We  reserve  the right to waive  this fee or to not count  transfers
under  certain  options  and  services  as part of the number of allowed  annual
transfers without charge.

OPTION AND SERVICE FEES

We  reserve  the right to impose  reasonable  fees for  administrative  expenses
associated  with processing  certain  options and services.  These fees would be
deducted from each use of the option or service during a contract year.

TAXES

No charges are currently made for taxes. However, we reserve the right to deduct
charges in the future for federal, state, and local taxes or the economic burden
resulting  from  the  application  of any  tax  laws  that  we  determine  to be
attributable to the contracts.

PORTFOLIO EXPENSES

The value of the assets in the variable  account reflects the value of portfolio
shares and  therefore  the fees and expenses  paid by each  portfolio.  For more
information, see the portfolios' prospectuses.

INTEREST ADJUSTMENT

For a description of the interest adjustment applicable to early withdrawals and
transfers from the guaranteed period account,  see The General Account Options -
the Guarantee Period Account in APPENDIX A of this prospectus.

SALES IN SPECIAL SITUATIONS

We may sell the  contracts  in special  situations  that are expected to involve
reduced expenses for us. These instances may include sales:

o        in certain group arrangements, such as employee savings plans;

o    to current or former officers, directors and employees, and their families,
     of Transamerica and its affiliates;

o    to  officers,  directors,  and  employees,  and  their  families,  and  the
     portfolios' investment advisers and their affiliates; or

o    to officers, directors, employees and sales agents also known as registered
     representatives, and their families, and broker-dealers and other financial
     institutions that have sales agreements with us to sell the contracts.

In these situations:

a)       the contingent deferred sales load may be reduced or waived;

b)   the  mortality  and expense  risk charge or  administration  charges may be
     reduced or waived; and/or

c)   certain  amounts  may  be  credited  to the  contract  account  value  (for
     examples,  amounts related to commissions or sales  compensation  otherwise
     payable to a broker-dealer may be credited to the contract account value.

These  reductions  in fees or  charges  or  credits  to  account  value will not
unfairly  discriminate  against any contract owner.  These reductions in fees or
charges  or credits to account  value may be  taxable  and  treated as  purchase
payments for purposes of income tax and any possible premium tax charge.

DISTRIBUTION OF THE CONTRACT

Transamerica  Securities Sales Corporation (TSSC), is the principal  underwriter
of the contracts under a Distribution Agreement with Transamerica. TSSC may also
serve as an underwriter and  distributor of other  contracts  issued through the
variable  account and  certain  other  separate  accounts  of  Transamerica  and
affiliates  of  Transamerica.  TSSC is an indirect  wholly-owned  subsidiary  of
Transamerica Corporation, a subsidiary of AEGON N.V. TSSC is registered with the
Commission as a  broker/dealer  and is a member of the National  Association  of
Securities Dealers, Inc. (NASD). Its principal offices are located at 1150 South
Olive  Street,  Los  Angeles,  California  90015.  TSSC  may  enter  into  sales
agreements with broker/dealers to solicit applications for the contracts through
registered  representatives  who are  licensed to sell  securities  and variable
insurance products.

Under the Sales Agreements, TSSC will pay broker-dealers compensation based on a
percentage  of each purchase  payment.  The  percentage  may be up to 6%, and in
certain  situations  additional  amounts for  marketing  allowances,  production
bonuses,  service  fees,  sales  awards and  meetings,  and asset based  trailer
commissions may be paid.

SETTLEMENT OPTION PAYMENTS

ANNUITY DATE

The  annuity  date is the date  that  the  annuitization  phase of the  contract
begins. On the annuity date, we will apply the annuity amount, defined below, to
provide  payments  under the settlement  option you select.  You also select the
annuity date which you may change the date from time to time by giving notice to
our Service Center in a form and manner  acceptable to us. Notice of each change
must be received by our Service Center at least 30 days before the  then-current
annuity  date.  The  annuity  date  cannot be  earlier  than the first  contract
anniversary except for certain qualified contracts.

The latest annuity date which may be elected is the later of:

a)   the first day of the calendar month immediately  preceding the month of the
     annuitant's or joint annuitants' 85th birthday; or

b)   the first  day of the month  coinciding  with or next  following  the tenth
     contract  anniversary,  but in no  event  later  than an  annuitant's  97th
     birthday.

The latest  allowed  annuity  date may vary in certain  jurisdictions,  or under
certain programs or circumstances.

The annuity date must be the first day of a calendar month. The first settlement
option payment will be on the first day of the month  immediately  following the
annuity  date.  Certain  qualified  contracts  may have  restrictions  as to the
annuity date and the types of settlement options available.

ANNUITY AMOUNT

The annuity amount is the account value,  minus any interest  adjustment,  minus
any applicable  contingent deferred sales load, and minus any applicable premium
tax charges. Any contingent deferred sales load will be waived if the settlement
option  payments  involve  life  contingencies  and  begin on or after the first
contract anniversary.

If the amount of the monthly  payment  from the  settlement  option you selected
would result in a monthly settlement option payment of less than $150, or if the
annuity  amount  is less  than  $5,000,  we  reserve  the  right to offer a less
frequent  mode of payment  or pay the cash  surrender  value in a cash  payment.
Monthly settlement option payments from the variable payment option will further
be subject to a minimum  monthly  payment of $75 from each variable  sub-account
from which such payments are made.

SETTLEMENT OPTION PAYMENTS

You may choose from the settlement  options below. We may consent to other plans
of payment  before the annuity  date.  For  settlement  options  involving  life
contingencies,  the actual age and/or sex of the annuitant, or a joint annuitant
will affect the amount of each  payment.  Sex-distinct  rates  generally are not
allowed under certain qualified contracts and in some jurisdictions.  We reserve
the right to ask for satisfactory  proof of the annuitant's or joint annuitant's
age.  We may  delay  settlement  option  payments  until  satisfactory  proof is
received. Since payments to older annuitants are expected to be fewer in number,
the amount of each annuity  payment shall be greater for older  annuitants  than
for younger annuitants.

You may choose from the two payment options  described  below.  The annuity date
and settlement options available for qualified  contracts may also be controlled
by endorsements, the plan or applicable law.

ELECTION OF SETTLEMENT OPTION FORMS AND PAYMENT OPTIONS

Before the annuity date, and while the annuitant is living,  you may, by written
request,  change the settlement option or payment option. The request for change
must be received by our Service Center at least 30 days before the annuity date.

In the event that a settlement option form and payment option is not selected at
least 30 days before the annuity date, we will make  settlement  option payments
according to the 120 month  period  certain and life  settlement  option and the
applicable provisions of the contract.

PAYMENT OPTIONS

You may elect a fixed or a variable payment option, or a combination of both, in
25% increments of the annuity amount.

Unless specified  otherwise,  the annuity amount in the variable account will be
used to provide a variable  payment option and the amount in the general account
options  will be used to provide a fixed  payment  option.  In this  event,  the
initial allocation of variable annuity units for the variable  sub-accounts will
be in  proportion  to the  account  value in the  variable  sub-accounts  on the
annuity date.

FIXED PAYMENT OPTION

A fixed  payment  option  provides  for  payments  which  will  remain  constant
according  to the terms of the  settlement  option you  select.  If you select a
fixed  payment  option,  the portion of the annuity  amount used to provide that
payment  option  will  be   transferred   to  the  general   account  assets  of
Transamerica. The amount of payments will be established by the fixed settlement
option  which  you  select  and by the age and sex,  if  sex-distinct  rates are
allowed by law, of the annuitants.  Payment amounts will not reflect  investment
performance  after the annuity date. The fixed payment amounts are determined by
applying the fixed  settlement  option purchase rate,  which is specified in the
contract,  to the portion of the annuity amount  applied to the payment  option.
Payments  may vary  after the death of an  annuitant  under  some  options;  the
amounts of variances are fixed on the annuity date.

VARIABLE PAYMENT OPTION

A variable  payment  option  provides for payments  that vary in dollar  amount,
based on the investment performance of the selected variable  sub-accounts.  The
variable  settlement  option  purchase  rate tables in the  contract  reflect an
assumed,  but not  guaranteed,  annual interest rate of 5.35%. If the actual net
investment performance of the variable sub-accounts is less than 5.35%, then the
dollar amount of the actual payments will decrease. If the actual net investment
performance of the variable  sub-accounts is higher than 5.35%,  then the dollar
amount of the actual payments will increase.  If the net investment  performance
exactly  equals the 5.35% rate,  then the dollar  amount of the actual  payments
will remain constant. We may offer other assumed annual interest rates.

Variable payments will be based on the variable  sub-accounts you select, and on
the monies which you allocate among them.

For  further  details as to the  determination  of  variable  payments,  see the
Statement of Additional Information.



SETTLEMENT OPTION FORMS

As owner,  you may choose any of the settlement  option forms  described  below.
Subject  to our  approval,  you may  select any other  settlement  option  forms
offered by us in the future.

1.   Life  Annuity.  Payments  start on the first  day of the month  immediately
     following the annuity  date, if the annuitant is living.  Payments end with
     the  payment  due just  before  the  annuitant's  death.  There is no death
     benefit.  It is possible that no payment will be made if the annuitant dies
     after the  annuity  date but  before  the first  payment  is due;  only one
     payment  will be made if the  annuitant  dies before the second  payment is
     due, and so forth.

2.   Life and Contingent  Annuity.  Payments start on the first day of the month
     immediately  following  the  annuity  date,  if the  annuitant  is  living.
     Payments  will  continue  for as long as the  annuitant  lives.  After  the
     annuitant  dies,  payments will be made to the contingent  annuitant for as
     long as the contingent  annuitant lives.  The continued  payments can be in
     the same amount as the original payments, or in an amount equal to one-half
     or two-thirds  thereof.  Payments will end with the payment due just before
     the death of the contingent annuitant. There is no death benefit after both
     die. If the contingent  annuitant does not survive the annuitant,  payments
     will end with the payment due just before the death of the annuitant. It is
     possible  that no  payments  or very  few  payments  will be  made,  if the
     annuitant and contingent annuitant die shortly after the annuity date.

     The written request for this form must:

a)       name the contingent annuitant; and

b)       state the percentage of payments to be made after the annuitant dies.

     Once payments start under this settlement  option form, the person named as
     contingent  annuitant for purposes of being the measuring  life, may not be
     changed. We will require proof of age for the

     annuitant and for the contingent annuitant before payments start.


3.   Life Annuity With Period  Certain.  Payments  start on the first day of the
     month  immediately  following the annuity date, if the annuitant is living.
     Payments will be made for the longer of:

a)       the annuitant's life; or

b)       the period certain.

     The period certain may be 120, 180 or 240 months.

     If the  annuitant  dies  after all  payments  have been made for the period
     certain,  payments will cease with the payment that is paid just before the
     annuitant dies. No death benefit will then be payable to the beneficiary.

     If the  annuitant  dies during the period  certain,  the rest of the period
     certain  payments  will be  made to the  beneficiary,  unless  you  provide
     otherwise.

     The written request for this form must:

a)       state the length of the period certain; and

b)       name the beneficiary.

4.   Joint and Survivor Annuity. Payments will be made starting on the first day
     of the month immediately  following the annuity date, if and for as long as
     the annuitant and joint annuitant are living.  After the annuitant or joint
     annuitant  dies,  payments  will  continue as long as the  survivor  lives.
     Payments  end with the payment  due just before the death of the  survivor.
     The continued  payments can be in the same amount as the original payments,
     or in an amount  equal to one-half or  two-thirds  thereof.  It is possible
     that no payments or very few payments  will be made under this  arrangement
     if the  annuitant  and joint  annuitant  both die shortly after the annuity
     date.

     The written request for this form must:

a)       name the joint annuitant; and

b)   state the percentage of continued payments to be made upon the first death.

     Once payments start under this settlement  option form, the person named as
     joint  annuitant,  for the purpose of being the measuring  life, may not be
     changed.  We will need proof of age for the annuitant  and joint  annuitant
     before payments start.

5.   Other Forms of Payment.  We can provide benefits under any other settlement
     option not  described in this section as long as we agree to these  options
     and they comply  with any  applicable  state or federal law or  regulation.
     Requests  for any other  settlement  option  must be made in writing to our
     Service Center at least 30 days before the annuity date.

After the annuity date:

a)   you will not be allowed to make any  changes in the  settlement  option and
     payment option;

b)   no additional purchase payments will be accepted under the contract; and

c)   no further  withdrawals  will be allowed for fixed  payment  options or for
     variable  payment options under which payments are being made based on life
     contingencies.

As the  owner of a  non-qualified  contract,  you may,  at any  time  after  the
contract date, write to us at our Service Center to change the payee of benefits
being provided under the contract. The effective date of change in payee will be
the later of:

a)       the date we receive the written request for such change; or

b)       the date specified by you.

As the owner of a  qualified  contract,  you may not  change  payees,  except as
permitted by the retirement plan, arrangement or federal law.

FEDERAL TAX MATTERS

INTRODUCTION

The following  discussion is a general description of federal tax considerations
for U.S.  persons  relating to the  contract  and is not intended as tax advice.
This discussion is not intended to address the tax  consequences  resulting from
all of the  situations  in which a person may be  entitled  to or may  receive a
distribution  under  the  contract.   If  you  are  concerned  about  these  tax
implications,  you should consult a competent tax adviser before  initiating any
transaction.
This  discussion is based upon our  understanding  of the present federal income
tax laws as they are currently  interpreted by the Internal Revenue Service,  or
IRS. No  representation  is made as to the likelihood of the continuation of the
present  federal  income tax laws or of the current  interpretation  by the IRS.
Moreover, no attempt has been made to consider any applicable state or other tax
laws. If a prospective  owner is not a U.S. person,  see Contracts  Purchased by
Nonresident Aliens and Foreign Corporations below.

The contract may be purchased on a non-tax  qualified  basis, as a non-qualified
contract,  or  purchased  and used in  connection  with  plans  or  arrangements
qualifying  for  special  tax  treatment  as  a  qualified  contract.  Qualified
contracts are designed for use in connection with plans or arrangements entitled
to special income tax treatment under Code Sections 401,  403(b),  408 and 408A.
The  ultimate  effect  of  federal  income  taxes on the  amounts  held  under a
contract,  on settlement  option  payments,  and on the economic  benefit to the
owner, the annuitant, or the beneficiary may depend on:

o    the type of  retirement  plan or  arrangement  for  which the  contract  is
     purchased;

o        the tax and employment status of the individual concerned; or

o        our tax status.

In addition,  certain requirements must be satisfied when purchasing a qualified
contract  with  proceeds  from  a  tax  qualified   retirement   plan  or  other
arrangement.  Certain requirements must also be met when receiving distributions
from a  qualified  contract,  in  order  to  continue  receiving  favorable  tax
treatment.  Therefore,  purchasers of qualified  contracts should seek competent
legal  and tax  advice  regarding  the  suitability  of the  contract  for their
individual situation, the applicable requirements,  and the tax treatment of the
rights and benefits of the contract.  The  following  discussion is based on the
assumption  that the  contract  qualifies  as an annuity for federal  income tax
purposes  and that all purchase  payments  made to  qualified  contracts  are in
compliance with all requirements under the Code and the specific retirement plan
or arrangement.

PURCHASE PAYMENTS

At the time the initial purchase payment is paid, as prospective purchaser,  you
must specify whether you are purchasing a non-qualified  contract or a qualified
contract. If the initial purchase payment is derived from an exchange, transfer,
conversion  or surrender of another  annuity  contract,  we may require that the
prospective  purchaser  provide  information  regarding  the federal  income tax
status of the  previous  annuity  contract.  We require  that  persons  purchase
separate  contracts if they desire to invest  monies  qualifying  for  different
annuity tax treatment under the Code. Each such separate  contract  requires the
minimum initial  purchase  payment  previously  described.  Additional  purchase
payments under a contract must qualify for the same federal income tax treatment
as the  initial  purchase  payment  under the  contract.  We will not  accept an
additional purchase payment under a contract if the federal income tax treatment
of such purchase  payment would be different  from that of the initial  purchase
payment.

TAXATION OF ANNUITIES

IN GENERAL. Code Section 72 governs taxation of annuities in general. We believe
that an owner who is a natural person generally is not taxed on increases in the
value of a contract until distribution  occurs by withdrawing all or part of the
account value for example,  via withdrawals or settlement  option payments.  For
this  purpose,  the  assignment,  pledge,  or  agreement to assign or pledge any
portion of the  account  value,  and in the case of a  qualified  contract,  any
portion of an interest in the plan, generally will be treated as a distribution.
The taxable portion of a distribution is taxable as ordinary income.

The owner of any contract who is not a natural person  generally must include in
income any increase in the excess of the account value over the  "investment  in
the contract"  during the taxable year.  There are some  exceptions to this rule
and a prospective owner that is not a natural person should discuss these with a
competent tax adviser.

The  following  discussion  generally  applies to a contract  owned by a natural
person.

WITHDRAWALS.  For  non-qualified  contracts,   partial  withdrawals,   including
withdrawals  under the systematic  withdrawal  option,  are generally treated as
taxable  income to the extent  that the  account  value  immediately  before the
withdrawal  exceeds the  investment in the contract at that time. The investment
in the contract generally equals the amount of non-deductible  purchase payments
made.

For  withdrawals  from  qualified  contracts,  including  withdrawals  under the
systematic  withdrawal  option or the automatic payout option, a ratable portion
of  the  amount  received  is  taxable,  generally  based  on the  ratio  of the
investment in the contract to the  individual's  total accrued benefit under the
retirement plan or arrangement.  The investment in the contract generally equals
the  amount  of  non-deductible  purchase  payments  made by or on behalf of any
individual.  For certain qualified contracts, the investment in the contract can
be zero.  Special tax rules applicable to certain  distributions  from qualified
contracts are discussed below, under Qualified Contracts.

If a partial  withdrawal  from the  guarantee  period  account  is subject to an
interest  adjustment,  the account value immediately  before the withdrawal will
not be altered to take into account the interest  adjustment.  As a result,  for
purposes of determining the taxable portion of a partial withdrawal, the account
value will be treated as including the amount deducted from the guarantee period
account due to the interest adjustment.

Full  surrenders  are  treated as taxable  income to the extent  that the amount
received exceeds the investment in the contract.

SETTLEMENT OPTION PAYMENTS.  Although the tax consequences may vary depending on
the settlement  option elected under the contract,  in general a ratable portion
of each payment that  represents  the amount by which the account  value exceeds
the  investment  in the  contract  will  be  taxed  based  on the  ratio  of the
investment in the contract to the total benefit payable. After the investment in
the contract is recovered,  the full amount of any additional  settlement option
payments is taxable.

For  variable  payments,  the  taxable  portion is  generally  determined  by an
equation that  establishes a specific  dollar amount of each payment that is not
taxed.  The dollar  amount is  determined  by  dividing  the  investment  in the
contract by the total number of expected periodic payments.  However, the entire
distribution  will be taxable once the recipient has recovered the dollar amount
of his or her investment in the contract.

For fixed  payments,  in general  there is no tax on the portion of each payment
which represents the same ratio that the investment in the contract bears to the
total  expected  value of the  payments  for the  term  selected.  However,  the
remainder of each settlement  option payment is taxable.  Once the investment in
the  contract  has been  fully  recovered,  the full  amount  of any  additional
settlement option payments is taxable.  If settlement option payments cease as a
result of an  annuitant's  death before full  recovery of the  investment in the
contract,  consult  a  competent  tax  adviser  regarding  deductibility  of the
unrecovered amount.

WITHHOLDING.   The  Code  requires  us  to  withhold  federal  income  tax  from
withdrawals.  However,  except for certain qualified contracts, an owner will be
entitled to elect, in writing,  not to have tax withholding  apply.  Withholding
applies to the portion of the  distribution  which is  includible  in income and
subject to federal income tax. The federal income tax  withholding  rate is 10%,
or 20% in the case of certain  qualified  plans,  of the  taxable  amount of the
distribution. Withholding applies only if the taxable amount of the distribution
is at least $200. Some states also require withholding for state income taxes.

The  withholding  rate  varies  according  to the type of  distribution  and the
owner's tax status.  Eligible rollover  distributions  from Section 401(a) plans
and Section  403(b) tax  sheltered  annuities  are subject to mandatory  federal
income tax withholding at the rate of 20%. An eligible rollover  distribution is
the taxable  portion of any  distribution  from such a plan,  except for certain
distributions  or settlement  option  payments made in a specified form. The 20%
mandatory  withholding does not apply,  however, for certain direct rollovers to
other plans or arrangements.

The  federal  income  tax  withholding  rate for a  distribution  that is not an
eligible rollover distribution is 10% of the taxable amount of the distribution.
If  distributions  are delivered to foreign  countries,  federal income tax will
generally  be withheld at a 10% rate unless you certify to us that you are not a
U.S.  citizen  residing abroad or a tax avoidance  expatriate as defined in Code
Section 877. Such  certification may result in mandatory  withholding of federal
income taxes at a different rate.

PENALTY TAX. A federal  income tax penalty equal to 10% of the amount treated as
taxable income may be imposed. In general,  however,  there is no penalty tax on
distributions:

a)       made on or after the date on which the owner attains age 59 1/2;


b)       made as a result of death or disability of the owner; or

c)   received in  substantially  equal periodic  payments as a life annuity or a
     joint and survivor annuity for the life(ves) or life expectancy(ies) of the
     owner and a designated beneficiary.

Other  exceptions to the tax penalty may apply to certain  distributions  from a
qualified contract.

TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from the contract
because of the death of an owner.  Generally  such amounts are includible in the
income of the recipient as follows:

a)   if  distributed  in a lump sum, they are taxed in the same manner as a full
     surrender as described above; or

b)   if distributed under a settlement option, they are taxed in the same manner
     as settlement option payments, as described above.

For these  purposes,  the  investment  in the  contract  is not  affected by the
owner's death. That is, the investment in the contract remains the amount of any
purchase payments paid which are not excluded from gross income.

TRANSFERS,   ASSIGNMENTS,  OR  EXCHANGES  OF  THE  CONTRACT.  For  non-qualified
contracts,  a  transfer  of  ownership  of a  contract,  the  designation  of an
annuitant,  payee,  or  other  beneficiary  who is not also  the  owner,  or the
exchange of a contract may result in certain tax  consequences to the owner that
are not discussed herein. An owner contemplating any such designation, transfer,
assignment,  or exchange  should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.  Qualified contracts may not be
assigned or transferred, except as permitted by the Code or ERISA.

MULTIPLE  CONTRACTS.  All deferred  non-qualified  contracts  that are issued by
Transamerica  or its  affiliates  to the same owner during any calendar year are
treated as one contract for purposes of  determining  the amount  includible  in
gross income under Code Section 72(e). In addition,  the Treasury Department has
specific  authority to issue  regulations  that prevent the avoidance of Section
72(e) through the serial  purchase of contracts or otherwise.  Congress has also
indicated  that  the  Treasury  Department  may  have  authority  to  treat  the
combination  purchase of an immediate  annuity  contract  and separate  deferred
annuity  contracts as a single annuity  contract under its general  authority to
prescribe rules that may be necessary to enforce the income tax laws.

QUALIFIED CONTRACTS

IN GENERAL.  The qualified  contracts are designed for use with several types of
retirement plans and arrangements.  The tax rules applicable to participants and
beneficiaries in retirement plans or arrangements  vary according to the type of
plan and the terms and  conditions  of the plan.  Special tax  treatment  may be
available  for certain types of  contributions  and  distributions.  Adverse tax
consequences  may  result  from  contributions  in excess of  specified  limits;
distributions  before age 59 1/2, subject to certain  exceptions;  distributions
that do not conform to specified  commencement and minimum  distribution  rules;
and in other specified circumstances.

We make no attempt to provide  more than  general  information  about use of the
contracts with the various types of retirement  plans.  Owners and  participants
under retirement plans, as well as annuitants and  beneficiaries,  are cautioned
that the rights of any person to any benefits under  qualified  contracts may be
subject to the terms and conditions of the plans  themselves,  regardless of the
terms and  conditions of the contract  (including  any  endorsements)  issued in
connection with such a plan.  Some retirement  plans are subject to distribution
and other  requirements  that are not incorporated in the  administration of the
contracts.  Owners are responsible for determining that  contributions and other
transactions with respect to the contracts satisfy applicable law. Purchasers of
contracts for use with any  retirement  plan should  consult their legal counsel
and tax adviser regarding the suitability of the contract.

For qualified plans under Section 401(a),  403(a) and 403(b),  the Code requires
that  distributions  generally  must begin no later than the later of April 1 of
the calendar year following the year in which the owner:

a)       reaches age 70 1/2; or

b)       retires and distribution must be made in a specified manner.

If  the  plan  participant  is a 5  percent  owner,  as  defined  in  the  Code,
distributions  generally  must begin no later than April 1 of the calendar  year
following the

calendar year in which the participant reaches age 70 1/2.

For IRAs and SEP/IRAs  described in Section 408,  distributions  generally  must
begin no later  than the later of April 1 of the  calendar  year  following  the
calendar  year in which the owner or plan  participant  reaches age 70 1/2. Roth
IRAs under  Section  408A do not  require  distributions  at any time before the
owner's death.

QUALIFIED  PENSION  AND  PROFIT  SHARING  PLANS.  Code  Section  401(a)  permits
employers to establish  various types of retirement  plans for  employees.  Such
retirement  plans may permit the  purchase  of the  contract in order to provide
retirement savings under the plans. Adverse tax consequences to the plan, to the
participant or to both may result if this contract is assigned or transferred to
any  individual  as a means to provide  benefits  payments.  If you are buying a
contract for use with such plans, you should seek competent  advice.  Advice you
receive  should  address the  suitability of the proposed plan documents and the
contract to your specific needs.

INDIVIDUAL RETIREMENT ANNUITIES (IRA),  SIMPLIFIED EMPLOYEE PLANS (SEP) AND ROTH
IRAS.  The sale of a  contract  for use with any IRA may be  subject  to special
disclosure  requirements  of the IRS,  which are included in this  prospectus as
APPENDIX E - DISCLOSURE STATEMENT for Individual  Retirement  Annuities.  If you
purchase a contract for use with an IRA, you will be provided  with another copy
of the Disclosure Statement for Individual Retirement Annuities.

You will have the right to cancel your  purchase  within 7 days of  whichever is
earliest:

a)       the establishment of your IRA; or

b)       your purchase.

If you intend to make such a purchase,  you should seek  competent  advice as to
the suitability of the contract you are  considering  purchasing for use with an
IRA.

The contract is designed for use with traditional IRA rollovers and contributory
IRAs. A contributory IRA is a contract to which initial and subsequent  purchase
payments  are  subject to  limitations  imposed by the Code.  Code  Section  408
permits eligible  individuals to contribute to an individual  retirement program
known as an Individual  Retirement Annuity or Individual  Retirement Account, or
IRA.  Also,  distributions  from certain  other types of qualified  plans may be
rolled over on a tax-deferred basis into an IRA.

Earnings  in an IRA are not  taxed  until  distributed.  IRA  contributions  are
limited  each year to the lesser of $2,000 or 100% of the owner's  compensation,
including   earned   income  as  defined  in  Code  Section   401(c)(2).   These
contributions   may  be  deductible  in  whole  or  in  part  depending  on  the
individual's  adjusted  gross  income  and  whether  or not  the  individual  is
considered an active  participant  in a qualified  plan. The limit on the amount
contributed to an IRA does not apply to  distributions  from certain other types
of  qualified  plans that are rolled over on a  tax-deferred  basis into an IRA.
Amounts  in the IRA,  other  than  nondeductible  contributions,  are taxed when
distributed  from the  IRA.  Distributions  before  age 59 1/2,  unless  certain
exceptions apply, are subject to a 10% penalty tax.

Eligible  employers that meet specified criteria under Code Section 408(k) could
establish simplified employee pension plans, referred to as SEP/IRAs,  for their
employees using IRAs. Employer  contributions that may be made to such plans are
larger than the amounts  that may be  contributed  to regular  IRAs,  and may be
deductible  to the employer.  SEP/IRAs are subject to certain Code  requirements
regarding participation and amounts of contributions.

The contract may also be used for Roth IRA  conversions  and  contributory  Roth
IRAs.  A  contributory  Roth IRA is a contract to which  initial and  subsequent
purchase  payments are subject to limitations  imposed by the Code. Code Section
408A permits  eligible  individuals  to contribute  to an individual  retirement
program known as a Roth IRA, although  contributions are not tax deductible.  In
addition,  distributions  from a non-Roth  IRA may be converted to a Roth IRA. A
non-Roth IRA is an individual retirement account or annuity described in Section
408(a) or 408(b), other than a Roth IRA. Distributions from a Roth IRA generally
are not taxed, except that, once total distributions exceed contributions to the
Roth IRA, income tax and a 10% penalty tax may apply to distributions you take:

a)       before age 59 1/2, subject to certain exceptions; or

b)   during the five  taxable  years  starting  with the year in which you first
     contributed to a Roth IRA.



If you intend to purchase such a contract,  you should seek competent  advice as
to the suitability of the contract for use with Roth IRAs.

TAX  SHELTERED  ANNUITIES.  Under Code Section  403(b),  payments made by public
school  systems  and  certain  tax  exempt  organizations  to  purchase  annuity
contracts  for their  employees  are  excludable  from the gross  incomes of the
employees,  subject to  certain  limitations.  However,  these  payments  may be
subject to Social Security and Medicare (FICA) taxes.

Code Section  403(b)(11)  restricts the  distribution  under Code Section 403(b)
annuity contracts of:

a)       elective contributions made in years beginning after December 31, 1988;

b)       earnings on those contributions; and

c)   earnings in such years on amounts held as of the last year beginning before
     January 1, 1989.

Distribution  of  those  amounts  may only  occur  upon  death of the  employee,
attainment  of age 59 1/2,  separation  from service,  disability,  or financial
hardship. In addition,  income attributable to elective contributions may not be
distributed in the case of hardship.

Pre-1989 contributions and earnings through December 31, 1989 are not subject to
the restrictions  described  above.  However,  funds  transferred to a qualified
contract  from a Section  403(b)(7)  custodial  account  will be  subject to the
restrictions.

RESTRICTIONS  UNDER QUALIFIED  CONTRACTS.  There may be other  restrictions that
apply to the election, commencement, or distribution of benefits under qualified
contracts,  or under the terms of the plans under which contracts are issued.  A
qualified  contract will be amended as necessary to conform to the  requirements
of the Code.

CONTRACTS PURCHASED BY
NONRESIDENT ALIENS AND FOREIGN
CORPORATIONS

The discussion above provides general information  regarding U.S. federal income
tax consequences to annuity owners that are U.S. persons.  Taxable distributions
made to owners  who are not U.S.  persons  will  generally  be  subject  to U.S.
federal  income  tax  withholding  at a 30%  rate,  unless a lower  treaty  rate
applies.  In addition,  distributions  may be subject to state and/or  municipal
taxes and taxes that may be imposed by the  owner's  country of  citizenship  or
residence.  Prospective  foreign  owners are advised to consult with a qualified
tax adviser regarding U.S., state, and foreign taxation for any annuity contract
purchase.

TAXATION OF TRANSAMERICA

We are taxed as a life  insurance  company  under Part I of  Subchapter L of the
Code.  Since the variable  account is not an entity separate from  Transamerica,
and its operations form a part of Transamerica,  it will not be taxed separately
as a regulated  investment  company under  Subchapter M of the Code.  Investment
income and realized capital gains are automatically applied to increase reserves
under the contracts.  Under existing federal income tax law, we believe that the
variable  account  investment  income and realized net capital gains will not be
taxed to the extent  that such  income and gains are  applied  to  increase  the
reserves under the contracts.

Accordingly,  we do not  anticipate  that it will incur any  federal  income tax
liability attributable to the variable account and, therefore,  we do not intend
to make  provisions for any such taxes.  However,  if changes in the federal tax
laws or  interpretations  thereof  result in our being  taxed on income or gains
arising  from the  variable  account,  then we may impose a charge  against  the
variable  account (with respect to some or all  contracts) in order to set aside
provisions to pay such taxes.

TAX STATUS OF THE CONTRACT

DIVERSIFICATION   REQUIREMENTS.   Code   Section   817(h)   requires   that  for
non-qualified  contracts,  the  investments  of  the  portfolios  be  adequately
diversified in accordance  with Treasury  regulations in order for the contracts
to qualify as annuity  contracts  under  federal tax law. The variable  account,
through the portfolios,  intends to comply with the diversification requirements
prescribed  by  the  Treasury  in  Reg.  Sec.  1.817-5,  which  affect  how  the
portfolios' assets may be invested.

In certain circumstances, owners of variable annuity contracts may be considered
the  owners,  for federal  income tax  purposes,  of the assets of the  separate
accounts used to support their  contracts.  In those  circumstances,  income and
gains from the  separate  account  assets  would be  includible  in the variable
contract  owner's gross income.  The IRS has stated in published  rulings that a
variable  contract owner will be considered the owner of separate account assets
if the contract owner possesses  incidents of ownership in those assets, such as
the ability to exercise investment control over the assets.

The Treasury  Department has also announced,  in connection with the issuance of
regulations concerning  diversification,  that those regulations "do not provide
guidance  concerning  the  circumstances  in  which  investor  control  for  the
investments of a segregated asset account may cause the investor,  as the owner,
rather than the insurance  company,  to be treated as the owner of the assets in
the account." This announcement also stated that guidance would be issued by way
of regulations or rulings on the "extent to which policyholders may direct their
investments  to particular  sub-accounts  without being treated as owners of the
underlying assets."

The ownership rights under the contract are similar to, but different in certain
respects from,  those described by the IRS in rulings in which it was determined
that contract owners were not owners of separate  account  assets.  For example,
the owner has additional  flexibility in allocating premium payments and account
values. These differences could result in an owner being treated as the owner of
a pro rata portion of the assets of the variable account. In addition, We do not
know what  standards  will be set forth,  if any, in the  regulations or rulings
which the  Treasury  Department  has stated it expects  to issue.  We  therefore
reserve the right to modify the  contract as  necessary to attempt to prevent an
owner from being  considered  the owner of a pro rata share of the assets of the
variable account.

REQUIRED  DISTRIBUTIONS.  In order to be  treated  as an  annuity  contract  for
federal  income tax  purposes,  Code Section  72(s)  requires any  non-qualified
contract to provide that:

a)   if any owner  dies on or after the  annuity  date but  before  the time the
     entire interest in the contract has been distributed, the remaining portion
     of such  interest  will be  distributed  at least as  rapidly  as under the
     method of distribution being used as of the date of that owner's death; and

b)   if any owner dies  before the  annuity  date,  the entire  interest  in the
     contract  will be  distributed  within  five  years  after  the date of the
     owner's  death.  This  requirement  will be considered  satisfied as to any
     portion of the owner's interest,  which is payable to or for the benefit of
     a designated  beneficiary,  provided it is distributed over the life of the
     designated  beneficiary,  or over a period  not  extending  beyond the life
     expectancy  of that  beneficiary,  provided that such  distributions  begin
     within one year of the owner's death.

The owner's designated  beneficiary refers to a natural person designated by the
owner as a beneficiary. Upon the owner's death, ownership of the contract passes
to the designated  beneficiary and the mandatory  distribution rules above still
apply. However, if the owner's designated beneficiary is the surviving spouse of
the deceased owner,  the contract may be continued with the surviving  spouse as
the new owner, postponing application of such payout requirements.

The non-qualified contracts contain provisions which are intended to comply with
the  requirements  of Code Section 72(s),  although no regulations  interpreting
these  requirements have yet been issued. All provisions in the contract will be
interpreted to maintain this tax qualification.  We may make changes in order to
maintain this qualification or to conform the contract to any applicable changes
in the tax  qualification  requirements.  We will provide you with a copy of any
changes made to the contract.

POSSIBLE CHANGES IN TAXATION

Legislation  has been  proposed in the past that,  if enacted,  would  adversely
modify the federal  taxation of certain  insurance  and annuity  contracts.  For
example,  one proposal  would tax  transfers  among  investment  options and tax
exchanges  involving  variable  contracts.  A second  proposal  would reduce the
investment in the contract under cash value life  insurance and certain  annuity
contracts  by  certain  amounts,  thereby  increasing  the  amount of income for
purposes of computing  gain.  Although the likelihood of there being any changes
is  uncertain,  there is always the  possibility  that the tax  treatment of the
contracts could be changed by legislation or other means.  Moreover,  it is also
possible that any change could be  retroactive,  that is,  effective  before the
date of the change. You should consult a tax adviser with respect to legislative
developments and their effect on the contract.

OTHER TAX CONSEQUENCES

As noted above, the foregoing  discussion of the federal income tax consequences
is not  exhaustive  and special  rules are  provided  with  respect to other tax
situations  not discussed in this  prospectus.  Further,  the federal income tax
consequences  discussed herein reflect our  understanding of current law and the
law may change.  Federal  estate and gift tax  consequences  and state and local
estate,  inheritance,  and other tax  consequences  of  ownership  or receipt of
distributions under the contract depend on the individual  circumstances of each
owner or  recipient  of the  distribution.  A competent  tax  adviser  should be
consulted for further information.

PERFORMANCE DATA

From time to time, we may advertise  yields and average annual total returns for
the variable sub-accounts.  In addition, we may advertise the effective yield of
the money market variable sub-account. THESE FIGURES WILL BE BASED ON HISTORICAL
INFORMATION AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.

The yield of the money  market  variable  sub-account  refers to the  annualized
income generated by an investment in that variable  sub-account over a specified
seven-day period.  The yield is calculated by assuming that the income generated
for that  seven-day  period is generated  each  seven-day  period over a 52-week
period and is shown as a percentage of the  investment.  The effective  yield is
calculated similarly but, when annualized, the income earned by an investment in
that variable sub-account is assumed to be reinvested.  The effective yield will
be slightly  higher  than the yield  because of the  compounding  effect of this
assumed  reinvestment.  These money market yields will not reflect deductions of
fees for optional riders, unless otherwise noted.

The  yield of a  variable  sub-account,  other  than the money  market  variable
sub-account,  refers to the annualized  income generated by an investment in the
variable sub-account over a specified thirty-day period. The yield is calculated
by assuming that the income  generated by the investment  during that thirty-day
period is generated each  thirty-day  period over a  twelve-month  period and is
shown as a percentage  of the  investment.  These money  market  yields will not
reflect deductions of fees for optional riders, unless otherwise noted.

The yield  calculations  do not  reflect the effect of any  contingent  deferred
sales load or premium taxes that may be applicable to a particular contract.  To
the  extent  that the  contingent  deferred  sales  load or  premium  taxes  are
applicable to a particular contract, the yield of that contract will be reduced.
For additional  information regarding yields and total returns,  please refer to
the Statement of Additional Information.

The  average  annual  total  return of a variable  sub-account  refers to return
quotations assuming an investment has been held in the variable  sub-account for
various  periods of time  including,  but not limited to, a period measured from
the date the variable sub-account began operations.  When a variable sub-account
has been in operation for 1, 5, and 10 years,  respectively,  the average annual
total return for these periods will be provided. The average annual total return
quotations  will  represent the average annual  compounded  rates of return that
would equate an initial  investment  of $1,000 to the  redemption  value of that
investment,  including the deduction of any applicable contingent deferred sales
load but excluding deduction of any premium taxes, as of the last day of each of
the periods for which total return quotations are provided.  These total returns
will not reflect deductions of fees for optional riders, unless otherwise noted.

Performance   information  for  any  variable   sub-account  reflects  only  the
performance of a hypothetical contract under which account value is allocated to
a variable sub-account during a particular time period on which the calculations
are  based.  Performance  information  should  be  considered  in  light  of the
investment  objectives  and policies and  characteristics  of the  portfolios in
which the variable  sub-account  invests,  and the market  conditions during the
given time period,  and should not be considered as a representation of what may
be achieved in the future.  For a  description  of the methods used to determine
yield and total returns, see the Statement of Additional Information.

Reports and promotional literature may also contain other information including:

a)   the ranking of any variable  sub-account  derived from rankings of variable
     annuity separate  accounts or their  investment  products tracked by Lipper
     Analytical  Services,  Inc.,  VARDS,   IBC/Donoghue's  Money  Fund  Report,
     Financial Planning Magazine,  Money Magazine,  Bank Rate Monitor,  Standard
     and  Poor's  Indices,  Dow  Jones  Industrial  Average,  and  other  rating
     services,  companies,  publications,  or other  persons  who rank  separate
     accounts  or other  investment  products  on overall  performance  or other
     criteria; and

b)   the effect of tax deferred compounding on variable  sub-account  investment
     returns, or returns in general, which may be illustrated by graphs, charts,
     or  otherwise,  and which may include a  comparison,  at various  points in
     time,  of the  return  from an  investment  in a  contract,  or  returns in
     general, on a tax-deferred basis,  assuming one or more tax rates, with the
     return on a currently taxable basis. Other ranking services and indices may
     be used.

In our advertisements and sales literature,  we may discuss,  and may illustrate
by graphs, charts, or through other means of written communication:

o        the implications of longer life expectancy for retirement planning;

o        the tax and other consequences of long-term investment in the contract;

o        the effects of the contract's lifetime payout options; and

o    the  operation of certain  special  investment  features of the contract --
     such as the dollar cost averaging option.

We may explain and depict in charts,  or other graphics,  the effects of certain
investment strategies,  such as allocating purchase payments between the general
account  options  and a variable  sub-account.  We may also  discuss  the Social
Security system and its projected  payout levels and retirement plans generally,
using graphs, charts and other illustrations.

We may  from  time  to  time  also  disclose  average  annual  total  return  in
non-standard formats and cumulative non-annualized total return for the variable
sub-accounts.  The non-standard average annual total return and cumulative total
return  will  assume  that no  contingent  deferred  sales  load is  applicable.
Transamerica may from time to time also disclose yield,  standard total returns,
and non-standard total returns for any or all variable sub-accounts.

All  non-standard  performance  data  will  only be  disclosed  if the  standard
performance  data is also disclosed.  For additional  information  regarding the
calculation  of  other  performance  data,  please  refer  to the  Statement  of
Additional Information.

We may also advertise performance figures for the variable sub-accounts based on
the  performance  of a  portfolio  before the time the  variable  account  began
operations.

LEGAL PROCEEDINGS

There is no pending material legal proceeding  affecting the variable account or
the principal underwriter of the contracts.  Transamerica is involved in various
kinds of routine litigation which, in management's judgment, are not of material
importance to Transamerica's assets or to the variable account.

LEGAL MATTERS

The  organization of  Transamerica,  its authority to issue the contract and the
validity of the form of the contract  have been passed upon by James W. Dederer,
General Counsel and Secretary of Transamerica.

ACCOUNTANTS AND FINANCIAL
STATEMENTS

The  statutory-basis  financial  statements of Transamerica at December 31, 1999
and 1998,  and for each of the three years in the  periods  ended  December  31,
1999, and the financial statements of Separate Account VA-6 at December 31, 1999
and  for the  period  then  ended,  appearing  in the  Statement  of  Additional
Information have been audited by Ernst & Young LLP, Independent Auditors, as set
forth in their reports appearing in the Statement of Additional Information. The
financial statements audited by Ernst & Young LLP have been included in reliance
upon such reports given upon the authority of such firm as experts in accounting
and auditing.

VOTING RIGHTS

To the extent  required by  applicable  law,  all  portfolio  shares held in the
variable   account  will  be  voted  by  Transamerica  at  regular  and  special
shareholder  meetings of the respective  portfolio.  The shares will be voted in
accordance with  instructions  received from persons having voting  interests in
the  corresponding  variable  sub-account.  If,  however,  the  1940  Act or any
regulation  thereunder  should  be  amended,  or if the  present  interpretation
thereof should change, or if Transamerica  determines that it is allowed to vote
all portfolio shares in its own right, Transamerica may elect to do so.

The person with the voting interest is the owner.  The number of votes which are
available  to  an  owner  will  be  calculated   separately  for  each  variable
sub-account. Before the annuity date, that number will be determined by applying
his or her percentage interest,  if any, in a particular variable sub-account to
the total number of votes attributable to that variable  sub-account.  The owner
holds a voting interest in each variable  sub-account to which the account value
is  allocated.  After  the  annuity  date,  the  number  of votes  decreases  as
settlement  option  payments  are  made  and as the  reserves  for the  contract
decrease.

The number of votes of a portfolio will be determined as of the date  coincident
with  the  date  established  by that  portfolio  for  determining  shareholders
eligible to vote at the meeting of the portfolios.  Voting  instructions will be
solicited  by written  communication  before  such  meeting in  accordance  with
procedures established by the respective portfolios.

Shares  for  which no  timely  instructions  are  received  and  shares  held by
Transamerica  for which  owners  have no  beneficial  interest  will be voted in
proportion  to the voting  instructions  which are received  with respect to all
contracts  participating  in the variable  sub-account.  Voting  instructions to
abstain on any item to be voted upon will be applied on a pro rata basis.

Each person or entity having a voting  interest in a variable  sub-account  will
receive proxy material,  reports and other material  relating to the appropriate
portfolio.

It should be noted that generally the  portfolios  are not required,  and do not
intend, to hold annual or other regular meetings of shareholders.

AVAILABLE INFORMATION

Transamerica has filed a registration statement with the Securities and Exchange
Commission  under  the  1933  Act  relating  to the  contract  offered  by  this
prospectus.  THIS  PROSPECTUS  HAS  BEEN  FILED  AS A PART  OF THE  REGISTRATION
STATEMENT  AND  DOES  NOT  CONTAIN  ALL  OF THE  INFORMATION  SET  FORTH  IN THE
REGISTRATION STATEMENT AND EXHIBITS thereto.

Reference is hereby made to such Registration Statement and exhibits for further
information  relating to Transamerica and the contract.  Statements contained in
this prospectus,  as to the content of the contract and other legal instruments,
are summaries. For a complete statement of the terms thereof,  reference is made
to the  instruments  filed  as  exhibits  to  the  Registration  Statement.  The
Registration  Statement and the exhibits  thereto may be inspected and copied at
the office of the Commission, located at 450 Fifth Street, N.W., Washington, D.C


<PAGE>




<TABLE>
<CAPTION>


STATEMENT OF ADDITIONAL INFORMATION

A Statement of Additional  Information is available  which contains more details
concerning the subjects discussed in this prospectus. The following is the Table
of Contents for that Statement:

TABLE OF CONTENTS                                                                             PAGE
<S>                                                                                                <C>
THE CONTRACT ....................................................................................  3
NET INVESTMENT FACTOR ...........................................................................  3
VARIABLE PAYMENT OPTIONS.........................................................................  3
Variable Annuity Units and Payments..............................................................  3
Variable Annuity Unit Value......................................................................  3
Transfers After the Annuity Date.................................................................  4
GENERAL PROVISIONS...............................................................................  4
         Non-Participating.......................................................................  4
         Misstatement of Age or Sex..............................................................  4
         Proof of Existence and Age..............................................................  4
         Annuity Data............................................................................  4
         Assignment..............................................................................  4
         Annual Report...........................................................................  5
         Incontestability........................................................................  5
         Entire Contract.........................................................................  5
         Changes in the Contract.................................................................  5
         Protection of Benefits..................................................................  5
         Delay of Payments.......................................................................  5
         Notices and Directions..................................................................  6
CALCULATION OF YIELDS AND TOTAL RETURNS .........................................................  6
         Money Market Sub-Account Yield Calculation..............................................  6
         Other Sub-Account Yield Calculations....................................................  7
         Standard Total Return Calculations......................................................  7
         Adjusted Historical Portfolio Performance Data..........................................  7
         Other Performance Data..................................................................  7
HISTORICAL PERFORMANCE DATA......................................................................  8
         General Limitations.....................................................................  8
         Historical Performance Data.............................................................  8
DISTRIBUTION OF THE CONTRACT..................................................................... 18
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS........................................................... 18
STATE REGULATION................................................................................. 18
RECORDS AND REPORTS.............................................................................. 18
FINANCIAL STATEMENTS............................................................................. 18
APPENDIX......................................................................................... 19


</TABLE>



<PAGE>





APPENDIX A

THE GENERAL ACCOUNT OPTIONS
(Not available in all states)

This prospectus is generally intended to serve as a disclosure document only for
the contract and the  variable  account.  For  complete  details  regarding  the
general account options, see the contract itself.

THE ACCOUNT VALUE  ALLOCATED TO THE GENERAL  ACCOUNT OPTIONS BECOMES PART OF THE
GENERAL  ACCOUNT  OF   TRANSAMERICA,   WHICH  SUPPORTS   INSURANCE  AND  ANNUITY
OBLIGATIONS.  BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE
GENERAL ACCOUNT HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933 (THE
"1933 ACT"),  NOR IS THE GENERAL  ACCOUNT  REGISTERED AS AN  INVESTMENT  COMPANY
UNDER THE 1940 ACT.

ACCORDINGLY, NEITHER OUR GENERAL ACCOUNT NOR ANY INTERESTS THEREIN ARE GENERALLY
SUBJECT  TO THE  PROVISIONS  OF THE 1933 ACT OR THE 1940  ACT,  AND WE HAVE BEEN
ADVISED  THAT THE  STAFF  OF THE  SECURITIES  AND  EXCHANGE  COMMISSION  HAS NOT
REVIEWED THE DISCLOSURES IN THIS PROSPECTUS  WHICH RELATE TO THE GENERAL ACCOUNT
OPTIONS.

The general account options are part of our general account. Our general account
consists of all our general assets, other than those in the variable account, or
in any other separate  account.  We have sole discretion to invest the assets of
our general account subject to applicable law.

The  allocation  or transfer of funds to the general  account  options  does not
entitle the owner to share in the investment performance of our general account.

There are two general  account  options:  the fixed  account  and the  guarantee
period  account,  as described  below.  These  options are not  available in all
states.

THE FIXED ACCOUNT

Currently,  we guarantee that we will credit interest at a rate of not less than
3% per year,  compounded  annually,  to amounts  allocated to the fixed  account
under the  contracts.  However,  we reserve the right to change the minimum rate
according to state  insurance law. We may credit interest at a rate in excess of
3% per year.






There is no specific formula for the  determination of excess interest  credits.
Some of the factors that we may consider in determining whether to credit excess
interest  to  amounts  allocated  to the fixed  account  and the  amount in that
account are:

o        general economic trends;

o        rates of return currently available;

o        returns anticipated on the company's investments;

o        regulatory and tax requirements; and

o        competitive factors.

ANY INTEREST  CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3%
PER YEAR WILL BE DETERMINED AT OUR SOLE  DISCRETION.  THE OWNER ASSUMES THE RISK
THAT  INTEREST  CREDITED  TO THE FIXED  ACCOUNT  ALLOCATIONS  MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.

Rates of interest  credited to the fixed account will be guaranteed for at least
twelve months and will vary according to the timing and class of the allocation,
transfer or renewal.  At any time after the end of the twelve month period for a
particular allocation, we may change the annual rate of interest for that class.
This new annual  rate of  interest  will  remain in effect  for at least  twelve
months.  New purchase  payments made to the contract  which are allocated to the
fixed account may receive different rates of interest.

These rates of interest may differ from those interest rates credited to amounts
transferred from the variable  sub-accounts or guarantee period account and from
those credited to amounts  remaining in the fixed account and receiving  renewal
rates.  These  rates of  interest  may also  differ  from rates for  allocations
applied under certain options and services we may be offering.

TRANSFERS

Each contract year, you may transfer a portion of the value of the fixed account
to  variable  sub-accounts  or to the  guarantee  period  accounts.  The maximum
percentage  that  may be  transferred  will be  declared  annually  by us.  This
percentage will be determined by us at our sole discretion, but will not be less
than 10% of the value of the fixed account on the preceding contract anniversary
and will be declared each year. Currently, this percentage is 25%.

You are limited to four transfers from the fixed account each contract year, and
the total of all such transfers cannot exceed the current maximum.  If we permit
dollar cost averaging from the fixed account to the variable  sub-accounts,  the
above restrictions are not applicable.

Generally,  transfers may not be made from any variable sub-account to the fixed
account for the six-month  period  following any transfer from the fixed account
to one or more of the variable sub-accounts.  Additionally, transfers may not be
made from the fixed account to:

a)       any guarantee period;

b)       the Transamerica VIF Money Market Sub-Account; or

c)   any variable  sub-account  identified  by  Transamerica  and investing in a
     portfolio of fixed income investments.

We reserve  the right to modify the  limitations  on  transfers  to and from the
fixed account and to defer transfers from the fixed account for up to six months
from the date of request.

SPECIAL DOLLAR COST AVERAGING OPTION

(May not be available in all states.  See contract for availability of the fixed
account options.)

Before the annuity date, you may elect to allocate entire  purchase  payments to
either the six or twelve  month  special  Dollar Cost  Averaging  account of the
fixed  account.  The  purchase  payment  will be  credited  with  interest  at a
guaranteed fixed rate.  Amounts will then be transferred from the special Dollar
Cost Averaging account to the variable  sub-accounts pro rata on a monthly basis
for six or twelve months (depending on the option you select) in the allocations
you  specify.  The four  transfers  per year limit does not apply to the special
Dollar Cost Averaging option.

Amounts  from  the  sub-accounts  and/or  general  account  options  may  not be
transferred into the special Dollar Cost Averaging accounts. In addition, if you
request a transfer (other than a Dollar Cost Averaging transfer) or a withdrawal
from a special  Dollar Cost  Averaging  account,  any amounts  remaining  in the
special  account will be transferred to the variable  sub-accounts  according to
your allocation instructions.  The special Dollar Cost Averaging option will end
and cannot be reelected.

THE GUARANTEE PERIOD ACCOUNT

The  guarantee  period  account  provides  guaranteed  fixed  rates of  interest
compounded  annually for specific  guarantee  periods.  Amounts allocated to the
guarantee  period  account will be credited with interest of no less than 3% per
year.  Amounts withdrawn from a guarantee period before the end of its guarantee
period will be subject to an interest adjustment, as explained below.

Each  guarantee  period  offers  a  specified   duration  with  a  corresponding
guaranteed  interest rate.  Currently we are offering three, five and seven year
guarantee periods but these may change at any time.

YOU BEAR THE RISK THAT, AFTER THE INITIAL  GUARANTEE  PERIOD, WE WILL NOT CREDIT
INTEREST IN EXCESS OF 3% PER YEAR TO AMOUNTS  ALLOCATED TO THE GUARANTEE  PERIOD
ACCOUNT.

Each amount  allocated  or  transferred  to the  guarantee  period  account will
establish a new guarantee period of a duration  selected by the owner from among
those then  being  offered by us.  Every  guarantee  period we offer will have a
duration of at least one year.  The  minimum  amount  that may be  allocated  or
transferred to a guarantee period is $1,000.  Purchase  payments  allocated to a
guarantee  period  will be  credited  on the date the payment is received at our
Service Center.  Any amount  transferred from another guarantee period or from a
variable sub-account to a guarantee period will establish a new guarantee period
as of the effective  date of the transfer.  The guarantee  period account and/or
the fixed account may not be available in all states.

GUARANTEE PERIOD

Each guarantee period will have its own guaranteed  interest rate and expiration
date. The guaranteed  interest rate applicable to a guarantee period will depend
on the date the guarantee period is established, the duration you choose and the
class of that guarantee  period. A guarantee period chosen may not extend beyond
the annuity date.
We reserve the right to limit the maximum  number of guarantee  periods that may
be in effect at any one time.

We will establish  effective annual rates of interest for each guarantee period.
The effective  annual rate of interest we establish for a guarantee  period will
remain in effect for the  duration of the  guarantee  period.  Interest  will be
credited to a guarantee  period based on its daily balance at a daily rate which
is  equivalent to the  guaranteed  interest  rate  applicable to that  guarantee
period for amounts held during the entire guarantee period.

Amounts  withdrawn or transferred  from a guarantee period before its expiration
date will be subject to an interest  adjustment as described  below. In no event
will the effective  annual rate of interest  applicable to a guarantee period be
less than 3% per year.

INTEREST ADJUSTMENT

If any amount is withdrawn or  transferred  from a guarantee  period  before its
expiration  date,  excluding  withdrawals  for the  purpose  of paying the death
benefit,  the amount  withdrawn  or  transferred  will be subject to an interest
adjustment.  The interest  adjustment reflects the impact that changing interest
rates have on the value of money invested at a fixed interest rate. The interest
adjustment is computed by multiplying the amount withdrawn or transferred by the
following factor:

[(1 + I) divided by (1 + J + 0.005)]N/12 -1 where:

     I   is the guaranteed interest rate in effect;

     J is the current  interest rate  available for a period equal to the number
     of years  remaining in the  guarantee  period at the time of  withdrawal or
     transfer; fractional years are rounded up to the next full year; and

N    is the  number  of  full  months  remaining  in the  term at the  time  the
     withdrawal or transfer request is processed

In general,  the  interest  adjustment  will  operate to decrease the value upon
withdrawal  or transfer  when the  guaranteed  interest  rate in effect for that
allocation  is  lower  than the  current  interest  rate,  as of the date of the
transaction, that would apply for a guarantee period equal to the number of full
years  remaining  in the  guarantee  period as of that  date.  For  purposes  of
determining the interest  adjustment,  if we do not offer a guarantee  period of
that duration, the applicable current interest rate will be determined by linear
interpolation between current interest rates for the two time periods closest to
the duration  remaining  that are available.  If the current  interest rate thus
determined plus 1/2 of one percent is greater than the guaranteed interest rate,
the interest  adjustment  will be negative and amount  withdrawn or  transferred
will be decreased.  However, the value will never be decreased below the initial
allocation  plus daily  interest at 3% interest per year.  There are no positive
interest adjustments.

EXPIRATION OF A GUARANTEE PERIOD

At least 45 days,  but not more than 60 days,  before the  expiration  date of a
guarantee  period,  we  will  notify  you as to  the  options  available  when a
guarantee period expires. You may elect one of the following:

a)   transfer the amount held in that guarantee period to a new guarantee period
     from among those being offered by us at such time; or

b)   transfer the amount held in that guaranteed  period to one or more variable
     sub-accounts or to another general account option then available.

We must receive your notice  electing one of these at our Service  Center by the
expiration date of the guarantee  period. If such election has not been received
by us at our  Service  Center,  the amount  held in that  guarantee  period will
remain in the  guaranteed  period  account.  A new guarantee  period of the same
duration as the expiring  guarantee  period, if offered,  will  automatically be
established  by us with a new  guaranteed  interest rate declared by us for that
guarantee  period.  The new guarantee period will start on the day following the
expiration date of the previous guarantee period.

If we are not currently  offering a guarantee period having the same duration as
the expiring  guarantee period, the new guarantee period will be the next longer
duration,  or if we are not offering a guarantee period longer than the duration
of the  expiring  guarantee  period,  the next  shorter  duration.  However,  no
guarantee period can extend beyond the annuity date.

If the amount  held in an  expiring  guarantee  period is less than  $1,000,  we
reserves  the  right to  transfer  such  amount  to the  money  market  variable
sub-account.


<PAGE>


APPENDIX B

EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATIONS

Suppose the net asset  value per share of a portfolio  at the end of the current
valuation period is $20.15;  at the end of the immediately  preceding  valuation
period it was $20.10;  the  valuation  period is one day;  and no  dividends  or
distributions  caused the  portfolio  to go  "ex-dividend"  during  the  current
valuation period. $20.15 divided by $20.10 is 1.002488.

Subtracting  the one day risk factor for  mortality  and expense risk charge and
the  administrative  expense  charge of  .00367%  (the daily  equivalent  of the
current  charge of 1.35% on an annual  basis) gives a net  investment  factor of
1.00245.

If the value of the variable  accumulation  unit for the  immediately  preceding
valuation period had been 15.500000,  the value for the current valuation period
would be 15.53798 (15.5 x 1.00245).

EXAMPLE OF VARIABLE ANNUITY UNIT VALUE CALCULATIONS

Suppose  the  circumstances  of the  first  example  exist,  and the  value of a
variable  annuity unit for the immediately  preceding  valuation period had been
13.500000.

If the first variable  annuity payment is determined by using an annuity payment
based on an  assumed  interest  rate of 4% per year,  the value of the  variable
annuity unit for the current  valuation period would be 13.53163 (13.5 x 1.00245
(the net investment factor) x 0.999893).

 0.999893 is the factor,  for a one day valuation  period,  that neutralizes the
assumed  rate of four  percent  (4%) per year  used to  establish  the  variable
annuity rates found in the contract.



EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATIONS

Suppose  that the  account is  currently  credited  with  3,200.000000  variable
accumulation units of a particular variable sub-account.

Also suppose that the variable  accumulation unit value and the variable annuity
unit value for the  particular  variable  sub-account  for the valuation  period
which ends  immediately  preceding  the first day of the month is 15.500000  and
13.500000  respectively,  and that  the  variable  annuity  rate for the age and
elected is $5.73 per $1,000.

Then the first variable annuity payment would be:

3,200 x 15.5 x 5.73 divided by 1,000 = $284.21,

and the number of variable annuity units credited for future payments would be:

284.21 divided by 13.5 = 21.052444.

For the second monthly payment,  suppose that the variable annuity unit value on
the 10th day of the second month is 13.565712.  Then the second variable annuity
payment would be

$285.59 (21.052444 x 13.565712).


<PAGE>


APPENDIX C

CONDENSED FINANCIAL INFORMATION

The  following  condensed  financial   information  is  derived  from  financial
statements of the variable account.  The data should be read in conjunction with
the  financial  statements,  related  notes,  and  other  financial  information
included in the Statement of Additional Information.

The following table sets forth certain  information  regarding the  sub-accounts
for the period from





January 1, 1998, the inception of the  sub-account,  through  December 31, 1999.
The variable  account  received its first deposits on January 12, 1998. The MSDW
Emerging  Markets Equity  sub-account and the PIMCO  StocksPLUS  Growth & Income
sub-account  commenced  on September 7, 1999.  The  variable  accumulation  unit
values  and the  number of  variable  accumulation  units  outstanding  for each
sub-account for the periods shown are as follows:


<PAGE>

<TABLE>
<CAPTION>




                         PERIOD ENDING DECEMBER 31, 1999

                       Alger American       Alliance VP         Alliance VP        Dreyfus VIF         Dreyfus VIF
                       Income & Growth    Growth & Income     Premier Growth         Capital            Small Cap
                         Sub-Account        Sub-Account         Sub-Account        Appreciation        Sub-Account
                                                                                   Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
<S>                        <C>                 <C>                <C>                 <C>                 <C>
  Value at Beginning       $13.12              $11.88             $14.46              $12.73              $9.57
  of Period
Accumulation Unit
  Value at End of          $18.45              $13.05             $18.88              $14.01             $11.63
  Period
Number of
  Accumulation Units
  Outstanding at End    1,102,496.260      1,135,587.446       2,081,825.689      1,093,808.832        639,456.014
  of Period


                         Janus Aspen     Janus Aspen Series       MFS VIT            MFS VIT             MFS VIT
                       Series Balanced    Worldwide Growth    Emerging Growth   Growth with Income      Research
                         Sub-Account        Sub-Account         Sub-Account        Sub-Account         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $13.24              $12.65             $13.21              $12.06             $12.15
  of Period
Accumulation Unit
  Value at End of          $16.55              $20.53             $23.04              $12.69             $14.87
  Period
Number of
  Accumulation Units
  Outstanding at End    1,886,693.794      1,643,533.430        760,433.531        965,409.265         399,512.466
  of Period


                           MSDW UF            MSDW UF             MSDW UF            MSDW UF        OCC Accumulation
                       Emerging Mkts.       Fixed Income        High Yield         Int'l Magnum       Trust Managed
                           Equity           Sub-Account         Sub-Account        Sub-Account         Sub-Account
                         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.60             $10.31              $10.71             $10.54
  of Period
Accumulation Unit
  Value at End of          $14.43              $10.29             $10.90              $13.23             $10.92
  Period
Number of
  Accumulation Units
  Outstanding at End     39,511.653         633,201.933         563,904.809        187,194.949         439,082.233
  of Period

                      OCC Accumulation       PIMCO VIT         Transamerica        Transamerica
                       Trust Small Cap   StocksPlus Growth      VIF Growth       VIF Money Market
                         Sub-Account          & Income          Sub-Account        Sub-Account
                                            Sub-Account
                      ------------------ ------------------- ------------------ -------------------

Accumulation Unit
  Value at Beginning        $8.97              $10.00             $14.12              $1.41
  of Period
Accumulation Unit
  Value at End of           $8.68              $10.85             $19.19              $1.07
  Period
Number of
  Accumulation Units
  Outstanding at End     101,045.650         9,289.183         3,988,508.416      8,145,374.551
  of Period

                         PERIOD ENDING DECEMBER 31, 1998

                       Alger American       Alliance VP         Alliance VP        Dreyfus VIF         Dreyfus VIF
                       Income & Growth    Growth & Income     Premier Growth         Capital            Small Cap
                         Sub-Account        Sub-Account         Sub-Account        Appreciation        Sub-Account
                                                                                   Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.00             $10.00              $10.00             $10.00
  of Period
Accumulation Unit
  Value at End of          $13.12              $11.88             $14.46              $12.73              $9.57
  Period
Number of
  Accumulation Units     309,748.942        339,540.067         427,648.138        376,620.359         275,526.474
  Outstanding at End
  of Period

                         Janus Aspen        Janus Aspen           MFS VIT            MFS VIT             MFS VIT
                          Balanced        Worldwide Growth    Emerging Growth   Growth with Income      Research
                         Sub-Account        Sub-Account         Sub-Account        Sub-Account         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.00             $10.00              $10.00             $10.00
  of Period
Accumulation Unit
  Value at End of          $13.24              $12.65             $13.21              $12.06             $12.15
  Period
Number of
  Accumulation Units     368,928.321        450,342.300         298,213.933        342,844.524         151,312.906
  Outstanding at End
  of Period

                           MSDW UF            MSDW UF             MSDW UF        OCC Accumulation   OCC Accumulation
                        Fixed Income         High Yield        Int'l Magnum       Trust Managed      Trust Small Cap
                         Sub-Account        Sub-Account         Sub-Account        Sub-Account         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.00             $10.00              $10.00             $10.00
  of Period
Accumulation Unit
  Value at End of          $10.60              $10.31             $10.71              $10.54              $8.97
  Period
Number of
  Accumulation Units     259,236.465        272,870.757         94,555.328         199,167.982         47,897.168
  Outstanding at End
  of Period




                        Transamerica        Transamerica
                         VIF Growth       VIF Money Market
                         Sub-Account        Sub-Account
                      ------------------ -------------------

Accumulation Unit
  Value at Beginning       $10.00              $1.00
  of Period
Accumulation Unit
  Value at End of          $14.12              $1.41
  Period
Number of
  Accumulation Units    1,424,841.423      4,129,893.964
  Outstanding at End
  of Period


</TABLE>

<PAGE>




APPENDIX D

DEFINITIONS

ACCOUNT VALUE: The sum of the variable accumulated value and the general account
options accumulated value.

ANNUITY DATE: The date on which the annuitization phase of the contract begins.

CASH  SURRENDER  VALUE:  The amount we will pay to the owner if the  contract is
surrendered on or before the annuity date. The cash surrender value is equal to:
the  account  value;  LESS any  account  fee,  interest  adjustment,  contingent
deferred sales load, and premium tax charges.

CODE:  The  Internal  Revenue  Code of  1986,  as  amended,  and the  rules  and
regulations issued under it.

CONTINGENT  DEFERRED  SALES LOAD:  A charge  equal to a  percentage  of purchase
payments  withdrawn  from the  contract  that are less than seven years old. See
Contingent  Deferred  Sales  Load/Surrender  Charge on page 31 for the  specific
percentages.

CONTRACT ANNIVERSARY: The anniversary of the contract effective date each year.

CONTRACT  EFFECTIVE  DATE:  The  effective  date of the contract as shown in the
contract.

CONTRACT  YEAR: A 12-month  period  starting on the contract  effective date and
ending with the day before the contract  anniversary,  and each 12-month  period
thereafter.

FIXED  ACCOUNT:  An account  which credits a rate of interest for a period of at
least twelve months for each allocation or transfer.

GENERAL ACCOUNT: The assets of Transamerica that are not allocated to a separate
account.

GENERAL  ACCOUNT  OPTIONS:  The fixed account and the guarantee  period  account
offered by us to which the owner may allocate purchase payments and transfers.

GENERAL ACCOUNT OPTIONS ACCUMULATED VALUE: The total dollar value of all amounts
the owner allocates or transfers to any general account  options;  PLUS interest
credited; LESS any amounts withdrawn, applicable fees

or premium tax charges,  and/or transfers out to the variable account before the
annuity date.

GUARANTEED  INTEREST  RATE:  The annual  effective  rate of interest after daily
compounding credited to a guarantee period.

GUARANTEE PERIOD: The number of years that a guaranteed rate of interest will be
credited to a guarantee period.

GUARANTEE PERIOD ACCOUNT: An account which credits a guaranteed rate of interest
for a specified guarantee period. There may be several guarantee periods offered
under the guarantee  period  account,  each with a different  guaranteed rate of
interest.

LIVING BENEFITS RIDER: Also called a "Waiver of Contingent  Deferred Sales Load"
rider in some contracts, it provides benefits described on page 35.

PORTFOLIO:  The investment  portfolio  underlying  each variable  sub-account in
which  we  will  invest  any  amounts  the  owner  allocates  to  that  variable
sub-account.

SERVICE  CENTER:  Transamerica's  Annuity  Service  Center,  at P.O.  Box 31848,
Charlotte, North Carolina 28231-1848, telephone 877-717-8861.  Effective June 5,
2000, our address will change to P.O. Box 3183, Cedar Rapids, Iowa 52406-3183.

STATUS,  QUALIFIED AND NON-QUALIFIED:  The contract has a qualified status if it
is issued in connection with a retirement plan or program. Otherwise, the status
is non-qualified.

SURRENDER CHARGE: See CONTINGENT DEFERRED SALES LOAD.

VALUATION  DAY: Any day the New York Stock  Exchange is open.  To determine  the
value of an asset on a day that is not a valuation day, we will use the value of
that asset as of the end of the next valuation day.

VALUATION PERIOD: The time interval between the closing, which is generally 4:00
p.m. Eastern Time of the New York Stock Exchange on consecutive valuation days.




VARIABLE  ACCOUNT:  Separate  Account VA-6, a separate  account  established and
maintained  by  Transamerica  for the  investment  of a  portion  of its  assets
pursuant to Section 58-7-95 of the North Carolina Insurance Code.

VARIABLE  ACCUMULATION  UNIT: A unit of measure  used to determine  the variable
accumulated value before the annuity date. The value of a variable  accumulation
unit varies with each variable sub-account.


VARIABLE ACCUMULATED VALUE: The total dollar value of all variable  accumulation
units under the contract before the annuity date.

VARIABLE  SUB-ACCOUNT(S):  One or more  divisions of the variable  account which
invests solely in shares of one of the underlying portfolios.


<PAGE>





APPENDIX E

TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY

DISCLOSURE STATEMENT
FOR INDIVIDUAL RETIREMENT ANNUITIES

The following  information  is being  provided to you, the owner,  in accordance
with the  requirements of the Internal  Revenue  Service (IRS).  This Disclosure
Statement  contains  information  about  opening and  maintaining  an Individual
Retirement  Account or Annuity (IRA),  and summarizes  some of the financial and
tax consequences of establishing an IRA.

Part I of this Disclosure  Statement  discusses  Traditional IRAs, while Part II
addresses Roth IRAs.  Because the tax consequences of the two categories of IRAs
differ  significantly,  it is important that you review the correct part of this
Disclosure  Statement  to learn  about  your  particular  IRA.  This  Disclosure
Statement does not discuss Education IRAs or SIMPLE-IRAs, except as necessary in
the context of discussing other types of IRAs.

Your  Transamerica Life Insurance and Annuity  Company's  Individual  Retirement
Annuity, also referred to as a Transamerica Life IRA Contract, has been approved
as to  form  by the  IRS.  In  addition,  we are  using  an IRA  and a Roth  IRA
Endorsement  based on the  IRS-approved  text.  Please  note  that IRS  approval
applies only to the form of the contract and does not represent a  determination
of the merits of such IRA contract.

It may be  necessary  for us to  amend  your  Transamerica  Life IRA or Roth IRA
Contract  in  order  for us to  obtain  or  maintain  IRS  approval  of its  tax
qualification.  In  addition,  laws and  regulations  adopted  in the future may
require  changes to your  contract in order to preserve its status as an IRA. We
will send you a copy of any such amendment.

No contribution to a Transamerica  Life IRA will be accepted under a SIMPLE plan
established by any employer pursuant to Internal Revenue Code Section 408(p). No
transfer or rollover of funds  attributable to contributions made by an employer
to your SIMPLE IRA under the employer's SIMPLE plan may be transferred or rolled
over to your  Transamerica Life IRA before the expiration of the two year period
beginning on the date you first  participated in the employer's  SIMPLE plan. In
addition, depending on the annuity contract you purchased, contributory IRAs may
or may not be available.

This Disclosure Statement includes the non-technical  explanation of some of the
changes  made by the Tax Reform Act of 1986  applicable  to IRAs and more recent
changes  made by the Small  Business  Job  Protection  Act of 1996,  the  Health
Insurance Portability and Accountability Act of 1996, the Tax Relief Act of 1997
and the IRS Restructuring and Reform Act of 1998.

The  information  provided  applies  to  contributions  made  and  distributions
received after  December 31, 1986,  and reflects the relevant  provisions of the
Code as in effect on January 1, 2000. This Disclosure  Statement is not intended
to constitute tax advice,  and you should consult a tax professional if you have
questions about your own circumstances.

REVOCATION OF YOUR IRA OR ROTH IRA

You have the  right to  revoke  your  Traditional  IRA or Roth IRA  issued by us
during  the  seven  calendar  day  period  following  its   establishment.   The
establishment  of your Traditional IRA or Roth IRA contract will be the contract
effective  date. This seven day calendar period may or may not coincide with the
free look period of your contract.

In order to  revoke  your  Traditional  IRA or Roth IRA,  you must  notify us in
writing and you must mail or deliver your revocation to us postage prepaid,  at:
401 North Tryon Street,  Charlotte,  NC 28202. The date of the postmark,  or the
date of  certification  or registration if sent by certified or registered mail,
will be considered your revocation  date. If you revoke your  Traditional IRA or
Roth IRA during the seven day period,  an amount  equal to your  premium will be
returned to you without any adjustment.

DEFINITIONS

CODE -  Internal  Revenue  Code of 1986,  as  amended,  and  regulations  issued
thereunder.

CONTRIBUTIONS - Purchase payments paid to your contract.


CONTRACT - The annuity policy, certificate or contract which you purchased.

COMPENSATION - For purposes of  determining  allowable  contributions,  the term
compensation   includes  all  earned   income,   including   net  earnings  from
self-employment  and alimony or separate  maintenance  payments received under a
decree of divorce or separate  maintenance  and includable in your gross income,
but does not include  deferred  compensation or any amount received as a pension
or annuity.

REGULAR CONTRIBUTIONS - IN GENERAL

As is more fully discussed  below,  for 1998 and later years,  the maximum total
amount that you may  contribute  for any tax year to your  regular IRAs and your
regular Roth IRAs combined is $2,000,  or if less,  your  compensation  for that
year.  Once you attain  age 70 1/2,  this limit is reduced to zero only for your
regular  IRAs,  not for  your  Roth  IRAs,  but the  separate  limit on Roth IRA
contributions  can be reduced to zero for taxpayers  with adjusted gross income,
or AGI, above certain  levels,  as described  below in Part II, Section 1. While
your Roth IRA contributions are never deductible, your regular IRA contributions
are fully deductible,  unless you, or your spouse,  is an active  participant in
some form of tax-qualified retirement plan for the tax year. In the latter case,
any  deductible  portion  of your  regular  IRA  contributions  for each year is
subject to the limits  that are  described  below in Part I,  Section 2, and any
remaining regular IRA contributions for that year must be reported to the IRS as
nondeductible IRA contributions, along with your Roth IRA contributions.

IRA PART I: TRADITIONAL IRAS

The rules that apply to a Traditional  Individual Retirement Account or Annuity,
which is referred  to in this  Disclosure  Statement  simply as an "IRA" or as a
"Traditional  IRA" and which  includes a regular  or Spousal  IRA and a rollover
IRA,  generally also apply to IRAs under  Simplified  Employee  Pension plans or
SEP-IRAs, unless specific rules for SEP-IRAs are stated.

1. CONTRIBUTIONS

(A) REGULAR IRA.  Regular IRA  contributions  must be in cash and are subject to
the limits described above.  Such  contributions are also subject to the minimum
amount under the  Transamerica  IRA contract.  In addition,  any of your regular
contributions  to an IRA for a tax  year  must be  made  by the  due  date,  not
including  extensions,  for your federal tax return for that tax year.  See also
Part II, Section 4 below about  recharacterizing  IRA and Roth IRA contributions
by such date.

(B) SPOUSAL IRA. If you and your spouse file a joint  federal  income tax return
for the taxable year and if your spouse's  compensation,  if any,  includable in
gross income for the year is less than the compensation includable in your gross
income for the year,  you and your spouse may each  establish  your own separate
regular  IRA,  and Roth IRA,  and may make  contributions  to such IRAs for your
spouse  that are not  limited by your  spouse's  lower  amount of  compensation.
Instead,  the limit for the total  contribution to spousal IRAs that can be made
by you or your spouse for the tax year is:

1.       $2,000; or

2.   if less,  the  total  combined  compensation  for both you and your  spouse
     reduced by any deductible IRA  contributions and any Roth IRA contributions
     for such year.

As with any regular IRA contributions,  those for your spouse cannot be made for
any tax year in which your spouse has attained age 70 1/2, must be in cash,  and
must be made by the due date, not including extensions,  for your federal income
tax return for that tax year.

(C) ROLLOVER IRA.  Rollover  contributions to a Traditional IRA are unlimited in
dollar   amount.   These  can  include   rollover   contributions   of  eligible
distributions  received by you from  another  Traditional  IRA or  tax-qualified
retirement plan.  Generally,  any distribution  from a tax-qualified  retirement
plans,  such as a pension or profit sharing plan, Code Section 401(k) plan, H.R.
10 or Keogh plan, or a Traditional  IRA can be rolled over to a Traditional  IRA
unless it is a  required  minimum  distribution  as  discussed  below in Part I,
Section  4(a) or it is part of a series of  payments to be paid to you over your
life,  life  expectancy or a period of at least 10 years.  In addition,  certain
hardship withdrawals and distributions of "after-tax" plan contributions,  i.e.,
amounts  which are not  subject to federal  income tax when  distributed  from a
tax-qualified retirement plan, are not eligible to be rolled over to an IRA.

If a distribution from a tax-qualified  plan or a Traditional IRA is paid to you
and you want to roll over all or part of the  eligible  distributed  amount to a
Transamerica  Life Traditional IRA, the rollover must be accomplished  within 60
days of the date you receive the amount to be rolled over. However, you may roll
over any amount from one Traditional IRA into another  Traditional IRA only once
in any 365-day period.

A timely  rollover of an eligible  distributed  amount that has been paid to you
directly will prevent its being taxable to you at the time of distribution; that
is, none of it will be  includable  in your gross income until you withdraw some
amount from your rollover IRA. However,  any such  distribution  directly to you
from a  tax-qualified  retirement  plan is generally  subject to a mandatory 20%
withholding tax.

By  contrast,  a  direct  transfer  from a  tax-qualified  retirement  plan to a
Traditional  IRA is  considered  a "direct"  rollover  and is not subject to any
mandatory  withholding  tax,  or other  federal  income  tax,  upon  the  direct
transfer.  If you elect to make such a "direct"  rollover  from a  tax-qualified
plan to a Transamerica  Life  Traditional  IRA, the  transferred  amount will be
deposited directly into your rollover IRA.

Strict limitations apply to rollovers,  and you should seek competent tax advice
in order to comply with all the rules governing rollovers.

(D) DIRECT  TRANSFERS FROM ANOTHER  TRADITIONAL  IRA. You may make an initial or
subsequent  contribution to your  Transamerica Life Traditional IRA by directing
the fiduciary or issuer of any of your  existing IRAs to make a direct  transfer
of all or part of such IRAs in cash to your  Transamerica  Life Traditional IRA.
Such a direct transfer  between  Traditional IRAs is not considered a rollover ,
e.g., for purposes of the 1-year waiting period or withholding.

(E) SIMPLIFIED  EMPLOYEE PENSION PLAN, OR SEP-IRA. If an IRA is established that
meets the  requirements of a SEP-IRA,  generally your employer may contribute an
amount not to exceed the lesser of 15% of your includable compensation ($160,000
for 1999, adjusted for inflation  thereafter) or $30,000,  even after you attain
age 70 1/2. The amount of such contribution is not includable in your income for
federal income tax purposes.  In the case of a SEP-IRA that has a  grandfathered
qualifying  form  of  salary  reduction,  referred  to  as a  SARSEP,  that  was
established  by an employer  before 1997,  generally any  employee,  including a
self-employed individual, who:

1.       has worked for the employer for 3 of the last 5 preceding tax years;

2.       is at least age 21; and

3.   has  received  from the  employer  compensation  of at  least  $400 for the
     current tax year, adjusted for inflation after 2000;

is eligible to make a before tax salary reduction contribution to the SARSEP for
the  current  tax year of up to  $10,500,  adjusted  for  inflation  after 2000,
subject to the overall limits for SEP-IRA contributions.

Your  employer is not  required to make a SEP-IRA  contribution  in any year nor
make the same percentage  contribution each year. But if contributions are made,
they  must be made to the  SEP-IRA  for all  eligible  employees  and  must  not
discriminate in favor of highly  compensated  employees.  If these rules are not
met, any SEP-IRA  contributions  by the employer  could be treated as taxable to
the employees and could result in adverse tax consequences to the  participating
employee.  For further  details about SARSEPs and SEP-IRAs,  e.g., for computing
contribution limits for self-employed  individuals,  see IRS Publication 590, as
indicated below.

(F) RESPONSIBILITY OF THE OWNER.  Contributions,  rollovers, or transfers to any
IRA must be made in accordance with the appropriate  sections of the Code. It is
your full and sole  responsibility  to determine  the tax  deductibility  of any
contribution  to  your  Traditional  IRA,  and to  make  such  contributions  in
accordance with the Code.  Transamerica does not provide tax advice, and assumes
no liability for the tax consequences of any  contribution to your  Transamerica
Life Traditional IRA.

2. DEDUCTIBILITY OF CONTRIBUTIONS FOR A REGULAR IRA

(A) GENERAL  RULES.  The  deductible  portion of the  contributions  made to the
regular IRAs for you, or your spouse,  for a tax year depends on whether you, or
your  spouse,  is an  "active  participant"  in  some  type  of a  tax-qualified
retirement plan for such year, as described in Section 2(b) immediately below.

If you and your spouse file a joint  return for a tax year and neither of you is
an active  participant for such year, then the permissible  contributions to the
regular IRAs for each of you are fully  deductible up to $2,000 each, i.e., your
combined deductible IRA contribution limit for the tax year could be $4,000.

Similarly,  if you are not married, or treated as such, for the tax year and you
are not an active  participant for such year, the permissible  contributions  to
your  regular  IRAs for the tax year are  fully  deductible  up to  $2,000.  For
instance,  if you and your spouse file separate returns for the tax year and you
did not live together at any time during such tax year,  then you are treated as
unmarried for such year, and if you were not an active  participant  for the tax
year,  then your deductible  limit for your regular IRA  contribution is $2,000,
even if your spouse was an active participant for such year.

If you are an active  participant  for the tax year,  then your $2,000  limit is
subject to a phase-out rule if your AGI for such year exceeds a Threshold Level,
depending on your tax filing status and the calendar year. If, however,  you are
not an active  participant for the tax year but your spouse is, then your $2,000
limit  is  subject  to the  phase-out  rule  only if your AGI  exceeds  a higher
Threshold Level. See Part I, Section 2(c), below.

(B)  ACTIVE  PARTICIPANT.  You  are an  "active  participant"  for a year if you
participate in some type of tax-qualified  retirement plan. For example,  if you
participate in a qualified pension or profit sharing plan,

a  Code  Section  401(k)  plan,   certain   government  plans,  a  tax-sheltered
arrangement  under Code  Section 403, a SIMPLE plan or a SEP-IRA  plan,  you are
considered  to be an  active  participant.  Your  Form W-2 for the  year  should
indicate your participation status.

(C) ADJUSTED GROSS INCOME,  OR AGI. If you are an active  participant,  you must
look at your  AGI for the  year,  or if you and  your  spouse  file a joint  tax
return,  you use  your  combined  AGI,  to  determine  whether  you  can  make a
deductible IRA contribution for that taxable year. The instructions for your tax
return will show you how to calculate  your AGI for this purpose.  If you are at
or below a certain AGI level,  called the Threshold Level, you are treated as if
you were not an active  participant  and you can make a deductible  contribution
under the same rules as a person who is not an active participant.

If you are an active  participant  for the tax year,  then your Threshold  Level
depends upon whether you are a married  taxpayer  filing a joint tax return,  an
unmarried  taxpayer,  or a married taxpayer filing a separate tax return. If you
are a married  taxpayer but file a separate tax return,  the Threshold  Level is
$0. If you are a married  taxpayer  filing a joint tax return,  or an  unmarried
taxpayer,  your  Threshold  Level  depends  upon the  taxable  year,  and can be
determined using the appropriate table below:


<PAGE>

<TABLE>
<CAPTION>

         MARRIED FILING JOINTLY                               UNMARRIED

         TAXABLE      THRESHOLD                               TAXABLE        THRESHOLD
         YEAR         LEVEL                                   YEAR           LEVEL

<S>      <C>          <C>                                     <C>             <C>
         1999         $51,000                                 1999            $31,000
         2000         $52,000                                 2000            $32,000
         2001         $53,000                                 2001            $33,000
         2002         $54,000                                 2002            $34,000
         2003         $60,000                                 2003            $40,000
         2004         $65,000                                 2004            $45,000
         2005         $70,000                                 2005 and
         2006         $75,000                                  thereafter     $50,000
         2007 and
              thereafter   $80,000
</TABLE>


If you are not an active  participant  for the tax year but your  spouse is, and
you are not treated as unmarried for filing purposes,  then your Threshold Level
is $150,000.

If your AGI is less than  $10,000  above your  Threshold  Level,  or $20,000 for
married  taxpayers  filing  jointly for the taxable  year  beginning on or after
January 1, 2007, you will still be able to make a deductible  contribution,  but
it will be  limited  in  amount.  The  amount  by which  your AGI  exceeds  your
Threshold  Level is called your Excess AGI. The Maximum  Allowable  Deduction is
$2,000, even for Spousal

IRAs. You can calculate your Deduction Limit as follows:

10,000 - Excess AGI  X                     Maximum Allowable   =  Deduction
      10,000                Deduction =       Limit

For taxable  years  beginning  on or after  January 1, 2007,  married  taxpayers
filing  jointly  should  substitute  20,000  for  10,000  in the  numerator  and
denominator of the above equation.

You must round up any computation of the Deduction Limit to the next highest $10
level,  that is, to the next highest number which ends in zero. For example,  if
the result is $1,525,  you must  round it up to $1,530.  If the final  result is
below $200 but above zero,  your Deduction  Limit is $200.  Your Deduction Limit
cannot in any event exceed 100% of your compensation.

3. NONDEDUCTIBLE CONTRIBUTIONS TO REGULAR IRAS

The amounts of your regular IRA  contributions  which are not deductible will be
nondeductible  contributions  to  such  IRAs.  You  may  also  choose  to make a
nondeductible  contribution to your regular IRA, even if you could have deducted
part or all of the contribution.  Interest or other earnings on your regular IRA
contributions,  whether from deductible or nondeductible contributions, will not
be taxed until taken out of your IRA and distributed to you.

If you make a  nondeductible  contribution to an IRA, you must report the amount
of the  nondeductible  contribution  to the IRS as a part of your tax return for
the year, e.g., on Form 8606.

4. DISTRIBUTIONS

(A) REQUIRED MINIMUM DISTRIBUTIONS,  OR RMD. Distributions from your Traditional
IRAs must be made or begin no later than April 1 of the calendar year  following
the calendar year in which you attain age 70 1/2, the required  beginning  date.
You may take RMDs from any Traditional  IRA you maintain,  but not from any Roth
IRA, as long as:

1.       distributions begin when required;

2.       distributions are made at least once a year; and

3.   the amount to be  distributed  is not less than the minimum  required under
     current federal tax law.

If you own more than one  Traditional  IRA, you can choose  whether to take your
RMD from one  Traditional  IRA or a  combination  of your  Traditional  IRAs.  A
distribution  may  be  made  at  once  in a  lump  sum,  as  qualifying  partial
withdrawals or as qualifying  settlement  option  payments.  Qualifying  partial
withdrawals   and  settlement   option   payments  must  be  made  in  equal  or
substantially equal amounts over:

1.       your life or the joint lives of you and your beneficiary; or

2.   a period not exceeding your life expectancy, as redetermined annually under
     IRS tables in the income tax  regulations,  or the joint life expectancy of
     you and your beneficiary,  as redetermined annually, if that beneficiary is
     your spouse.

Also,  special rules may apply if your designated  beneficiary,  other than your
spouse, is more than ten years younger than you.

If qualifying  settlement option payments start before the April 1 following the
year you  turn  age 70 1/2,  then the  annuity  date of such  settlement  option
payments will be treated as the required  beginning date for purposes of the RMD
provisions, above, and the death benefit provisions, below.

If you die before the entire interest in your Traditional IRAs is distributed to
you,  but after  your  required  beginning  date,  the entire  interest  in your
Traditional  IRAs must be distributed to your  beneficiaries at least as rapidly
as under the method in effect at your  death.  If you die before  your  required
beginning date and if you have a designated  beneficiary,  distributions to your
designated  beneficiary can be made in substantially equal installments over the
life or life expectancy of the designated beneficiary,  beginning by December 31
of the calendar  year that is one year after the year of your death.  Otherwise,
if you die before your required  beginning date and your surviving spouse is not
your designated  beneficiary,  distributions must be completed by December 31 of
the calendar year that is five years after the year of your death.

If your designated beneficiary is your surviving spouse, and you die before your
required   beginning   date,   your   surviving   spouse   can  become  the  new
owner/annuitant  and can continue the  Transamerica  Life Traditional IRA on the
same basis as before  your  death.  If your  surviving  spouse  does not wish to
continue  the  contract  as his or her IRA,  he or she may elect to receive  the
death benefit in the form of qualifying  settlement  option payments in order to
avoid the 5-year rule. Such payments must be made in substantially equal amounts
over  your  spouse's  life or a  period  not  extending  beyond  his or her life
expectancy.  Your  surviving  spouse must elect this option and begin  receiving
payments no later than the later of the following dates:

1.       December 31 of the year following the year you died; or

2.   December  31 of the year in which  you  would  have  reached  the  required
     beginning date if you had not died.

Either you or, if applicable, your beneficiary, is responsible for assuring that
the RMD is taken in a timely manner and that the correct amount is distributed.

(B)  TAXATION  OF  IRA  DISTRIBUTIONS.  Because  nondeductible  Traditional  IRA
contributions  are made using income which has already been taxed, that is, they
are  not  deductible   contributions,   the  portion  of  the   Traditional  IRA
distributions consisting of nondeductible  contributions will not be taxed again
when  received  by you.  If you make  any  nondeductible  contributions  to your
Traditional  IRAs,  each  distribution  from any of your  Traditional  IRAs will
consist of a nontaxable portion,  return of nondeductible  contributions,  and a
taxable portion, return of deductible contributions, if any, and earnings.

Thus, if you receive a distribution  from any of your  Traditional  IRAs and you
previously made deductible and nondeductible contributions to such IRAs, you may
not  take a  Traditional  IRA  distribution  which  is  entirely  tax-free.  The
following  formula  is  used  to  determine  the  nontaxable   portion  of  your
distributions for a taxable year.

    Remaining nondeductible contributions

    Divided by

   Year-end total adjusted Traditional IRA balances

    Multiplied by

    Total distributions
    for the year



    Equals:

    Nontaxable distributions
    for the year

To figure the year-end total adjusted  Traditional  IRA balance,  you must treat
all of your  Traditional  IRAs as a single  Traditional  IRA.  This includes all
regular IRAs, as well as SEP-IRAs,  SIMPLE IRAs and Rollover  IRAs, but not Roth
IRAs.  You  also add  back to your  year-end  total  Traditional  IRA  balances,
specifically the distributions taken during the year from your Traditional IRAs.
Please refer to IRS Publication  590,  Individual  Retirement  Arrangements  for
instructions,  including worksheets,  that can assist you in these calculations.
Transamerica  Life Insurance and Annuity  Company will report all  distributions
from your  Transamerica  Traditional  IRA to the IRS as fully taxable  income to
you.

Even if you withdraw all of the assets in your  Traditional  IRAs in a lump sum,
you  will  not be  entitled  to use any form of lump  sum  treatment  or  income
averaging  to reduce the  federal  income  tax on your  distribution.  Also,  no
portion  of  your  distribution  qualifies  as a  capital  gain.  Moreover,  any
distribution  made before you reach age 59 1/2,  may be subject to a 10% penalty
tax on early distributions, as indicated below.

(C) WITHHOLDING.  Unless you elect not to have withholding apply, federal income
tax will be withheld from your  Traditional  IRA  distributions.  If you receive
distributions under a settlement option, tax will be withheld in the same manner
as taxes  withheld on wages,  calculated  as if you were married and claim three
withholding allowances. If you are receiving any other type of distribution, tax
will be  withheld  in the amount of 10% of the  distribution.  If  payments  are
delivered to foreign  countries,  federal income, tax will generally be withheld
at a 10% rate unless you certify to Transamerica that you are not a U.S. citizen
residing  abroad or a tax  avoidance  expatriate as defined in Code Section 877.
Such  certification may result in mandatory  withholding of federal income taxes
at a different rate.

5. PENALTY TAXES

(A) EXCESS  CONTRIBUTIONS.  If at the end of any taxable year the total  regular
IRA  contributions  you made to your  Traditional IRAs and your Roth IRAs, other
than  rollovers  or  transfers,  exceed the  maximum  allowable  deductible  and
nondeductible  contributions for that year, the excess  contribution amount will
be subject to a  nondeductible  6% excise  penalty tax.  Such penalty tax cannot
exceed 6% of the value of your IRAs at the end of such year.

However,  if you  withdraw  the excess  contribution,  plus any  earnings on it,
before  the due date for  filing  your  federal  income  tax  return,  including
extensions, for the taxable year in which you made the excess contribution,  the
excess contribution will not be subject to the 6% penalty tax. The amount of the
excess contribution withdrawn will not be considered an early distribution,  nor
otherwise be  includible  in your gross income if you have not taken a deduction
for the excess amount.

However, the earnings withdrawn will be taxable income to you and may be subject
to  the  10%  penalty  tax  on  early   distributions.   Alternatively,   excess
contributions  for one year may be  withdrawn  in a later year or may be carried
forward as regular IRA  contributions  in the following  year to the extent that
the excess, when aggregated with your regular IRA contributions, if any, for the
subsequent  year,  does  not  exceed  the  maximum   allowable   deductible  and
nondeductible  amount for that year. The 6% excise tax will be imposed on excess
contributions  in each  subsequent  year they are  neither  returned  to you nor
applied as permissible regular IRA contributions for such year.

(B) EARLY DISTRIBUTIONS.  Since the purpose of an IRA is to accumulate funds for
retirement, your receipt or use of any portion of your IRA before you attain age
59 1/2 constitutes an early distribution subject to a 10% penalty tax unless the
distribution  occurs as a result  of your  death or  disability  or is part of a
series of  substantially  equal  payments made over your life  expectancy or the
joint life  expectancies  of you and your  beneficiary,  as determined  from IRS
tables in the income tax regulations.

Also,  the 10% penalty tax will not apply if  distributions  are used to pay for
medical expenses in excess of 7.5% of your AGI or if  distributions  are used to
pay for health insurance premiums for you, your spouse and/or your dependents if
you are an  unemployed  individual  who is receiving  unemployment  compensation
under  federal or state  programs  for at least 12  consecutive  weeks.  The 10%
penalty tax also will not apply to an early distribution made to pay for certain
qualifying  first-time  homebuyer expenses of you or certain family members,  or
for certain  qualifying  higher  education  expenses  for you or certain  family
members.

First-time  homebuyer  expenses must be paid within 120 days of the distribution
from the IRA and include up to $10,000 of the costs of acquiring,  constructing,
or  reconstructing  a principal  residence,  including  any usual or  reasonable
settlement,  financing or other closing costs. Higher education expenses include
tuition,   fees,  books,   supplies,  and  equipment  required  for  enrollment,
attendance, and room and board at a post-secondary educational institution.  The
amount  of an  early  distribution,  excluding  any  nondeductible  contribution
included  therein,  is includable in your gross income and may be subject to the
10% penalty tax unless you transfer it to another IRA as a  qualifying  rollover
contribution.

Effective  January 1, 2000, the 10% penalty tax will not apply if  distributions
are made pursuant to an IRS levy to pay your outstanding tax liability.

(C) FAILURE TO SATISFY RMD. If the RMD rules  described above in Part I, Section
4(a) apply to you and if the amount  distributed  during a calendar year is less
than the minimum  amount  required to be  distributed,  you will be subject to a
penalty tax equal to 50% of the excess of the amount  required to be distributed
over the amount actually distributed.

(D) POLICY LOANS AND PROHIBITED  TRANSACTIONS.  If you or any beneficiary engage
in any  prohibited  transaction,  such as any sale,  exchange  or leasing of any
property  between  you and the  Traditional  IRA, or any  interference  with the
independent  status of such IRA, the Traditional IRA will lose its tax exemption
and be  treated  as having  been  distributed  to you.  The value of the  entire
Traditional IRA,  excluding any  nondeductible  contributions  included therein,
will be includable in your gross income;  and, if at the time of the  prohibited
transaction you are under age 59 1/2, you may also be subject to the 10% penalty
tax on early distributions, as described above in Part I, Section 5(b).

If you borrow from or pledge your  Traditional  IRA, or your benefits  under the
contract,  as security for a loan,  the portion  borrowed or pledged as security
will cease to be  tax-qualified,  the value of that  portion  will be treated as
distributed  to you,  and you will  have to  include  the  value of the  portion
borrowed  or  pledged as  security  in your  income  that year for  federal  tax
purposes. You may also be subject to the 10% penalty tax on early distributions.

(E)  OVERSTATEMENT  OR  UNDERSTATEMENT  OF NONDEDUCTIBLE  CONTRIBUTIONS.  If you
overstate  your  nondeductible  Traditional  IRA  contributions  on your federal
income tax return,  without  reasonable cause, you may be subject to a reporting
penalty.  Such a penalty also  applies for failure to file any form  required by
the IRS to report nondeductible  contributions.  These penalties are in addition
to any ordinary income or penalty taxes,  interest,  and penalties for which you
may be liable if you underreport  income upon receiving a distribution from your
Traditional  IRA. See Part I,  Section 4(b) above for the tax  treatment of such
distributions.

IRA PART II: ROTH IRAS

1. CONTRIBUTIONS

(A) REGULAR  ROTH IRA. You may make  contributions  to a regular Roth IRA in any
amount up to the  contribution  limits  described in Part II,  Section 3, below.
Such contributions are also subject to the minimum amount under the Transamerica
Life Roth IRA contract. Such contribution must be in cash. Your contribution for
a tax year  must be made by the due date,  not  including  extensions,  for your
federal income tax return for that tax year.  Unlike  Traditional  IRAs, you may
continue making Roth IRA  contributions  after reaching age 70 1/2 to the extent
that your AGI does not exceed the levels described below.

(B) SPOUSAL  ROTH IRA. If you and your  spouse file a joint  federal  income tax
return  for  the  taxable  year  and if  your  spouse's  compensation,  if  any,
includable in gross income for the year is less than the compensation includable
in your gross income for the year,  you and your spouse may each  establish your
own  individual  Roth  IRA and may make  contributions  to  those  Roth  IRAs in
accordance  with the rules and limits for  contributions  contained in the Code,
which are described in Part II, Section 3, below. Such  contributions must be in
cash. Your contribution to a Spousal Roth IRA for a tax year must be made by the
due date, not including extensions,  for your federal income tax return for that
tax year.

(C) ROLLOVER ROTH IRA. You may make  contributions to a Rollover Roth IRA within
60 days after  receiving a  distribution  from an existing Roth IRA,  subject to
certain limitations discussed in Part II, Section 3, below.

(D) TRANSFER  ROTH IRA. You may make an initial or  subsequent  contribution  to
your  Transamerica  Life Roth IRA by  directing a fiduciary  or issuer of any of
your  existing  Roth IRAs to make a direct  transfer  of all or a portion of the
assets from such Roth IRAs to your Transamerica Life Roth IRA.

(E) CONVERSION  ROTH IRA. You may make  contributions  to a Conversion  Roth IRA
within 60 days of receiving a distribution  from an existing  Traditional IRA or
by instructing the fiduciary or issuer of any of your existing  Traditional IRAs
to  make a  direct  transfer  of all or a  portion  of the  assets  from  such a
Traditional  IRA  to  your  Transamerica  Life  Roth  IRA,  subject  to  certain
restrictions and subject to income tax on some or all of the converted  amounts.
If your AGI, not including the conversion  amount,  is greater than $100,000 for
the tax year,  or if you are married and you and your spouse file  separate  tax
returns,  you may not convert or transfer any amount from a Traditional IRA to a
Roth IRA.

(F)  RESPONSIBILITY  OF  THE  OWNER.  Contributions,   rollovers,  transfers  or
conversions  to a Roth  IRA  must be made in  accordance  with  the  appropriate
sections  of  the  Code.  It is  your  full  and  sole  responsibility  to  make
contributions  to your Roth IRA in accordance with the Code.  Transamerica  Life
Insurance  and Annuity  Company  does not  provide  tax  advice,  and assumes no
liability for the tax consequences of any contribution to your Roth IRA.

2. DEDUCTIBILITY OF CONTRIBUTIONS

Your Roth IRA  permits  only  nondeductible  after-tax  contributions.  However,
distributions  from your Roth IRA are  generally  not subject to federal  income
tax. See Part II, 4(b) below.  This is unlike a Traditional  IRA,  which permits
deductible  and  nondeductible  contributions,  but  which  provides  that  most
distributions are subject to federal income tax.

3. CONTRIBUTION LIMITS

Contributions  for each  taxable year to all  Traditional  and Roth IRAs may not
exceed the lesser of 100% of your  compensation or $2,000 for any calendar year,
subject  to AGI  phase-out  rules  described  below in Section  3(a).  Rollover,
transfer and  conversion  contributions,  if properly made, do not count towards
your maximum  annual  contribution  limit,  nor do employer  contributions  to a
SEP-IRA or SIMPLE IRA.

(A) REGULAR ROTH IRAS.  The maximum  amount you may contribute to a regular Roth
IRA will depend on the amount of your AGI for the  calendar  year.  Your maximum
$2,000  contribution  limit begins to phase out when your AGI reaches $95,000 as
unmarried or $150,000 when married  filing  jointly.  Under this phase out, your
maximum  regular Roth IRA  contributions  generally  will not be less than $200;
however, no contribution is allowed if your AGI exceeds $110,000 as unmarried or
$160,000 when married filing jointly. If you are married and you and your spouse
file separate tax returns, your maximum regular Roth IRA contribution phases out
between $0 and  $10,000.  If you are married but you and your spouse lived apart
for the entire taxable year and file separate  federal income tax returns,  your
maximum  contribution  is  calculated  as if you were not  married.  You  should
consult your tax adviser to determine your maximum contribution.

You may make  contributions  to a regular Roth IRA after age 70 1/2,  subject to
the phase-out  rules.  Regular Roth IRA  contributions  for a tax year should be
reported on your tax return for that year, specifically, on Form 8606.

(B) SPOUSAL ROTH IRAS. Contributions to your lower-earning spouse's Spousal Roth
IRA may not exceed the lesser of:

1.   100%  of  both  spouses'  combined  compensation  minus  any  Roth  IRA  or
     deductible  Traditional  IRA  contribution  for the spouse  with the higher
     compensation for the year; or

2.   $2,000,  as reduced by the phase-out rules described above for regular Roth
     IRAs.

A maximum of $4,000 may be contributed to both spouses' Roth IRAs. Contributions
can be divided  between the spouses' Roth IRAs as you and your spouse wish,  but
no more than $2,000 in regular  Roth IRA  contributions  can be  contributed  to
either individual's Roth IRA each year.

(C) ROLLOVER  ROTH IRAS.  There is no limit on the amounts that you may rollover
from one Roth IRA into another Roth IRA,  including your  Transamerica Life Roth
IRA. You may roll over a  distribution  from any single Roth IRA to another Roth
IRA only once in any 365-day period.

(D)  TRANSFER  ROTH  IRAS.  There is no limit on amounts  that you may  transfer
directly from one Roth IRA into another Roth IRA,  including  your  Transamerica
Life Roth  IRA.  Such a direct  transfer  does not  constitute  a  rollover  for
purposes of the 1-year waiting period.
(E) CONVERSION ROTH IRAS. There is no limit on amounts that you may convert from
your Traditional IRA into your Transamerica Life Roth IRA if you are eligible to
open a Conversion Roth IRA as described in Part II, Section 1(e),  above. In the
case of a conversion  from a SIMPLE-IRA,  the  conversion may only be done after
the  expiration of your 2-year  participation  period  described in Code Section
72(t)(6).  However,  the  distribution  proceeds from your  Traditional  IRA are
includable in your taxable  income to the extent that they represent a return of
deductible  contributions  and earnings on any  contributions.  The distribution
proceeds from your Traditional IRA are not subject to the 10% early distribution
penalty tax, described below, if the distribution proceeds are deposited to your
Roth IRA within 60 days.

You can also make  contributions  to a Roth IRA by instructing  the fiduciary or
issuer,  custodian or trustee of your existing  Traditional IRAs to transfer the
assets in your  Traditional  IRAs to the Roth IRA,  which can be a successor  to
your existing  Traditional  IRAs. The transfer will be treated as a distribution
from your  Traditional  IRAs, and that amount will be includable in your taxable
income to the extent that it represents a return of deductible contributions and
earnings  on any  contributions,  but  will  not be  subject  to the  10%  early
distribution penalty tax.

If you converted  from a Traditional  IRA to a Roth IRA during 1998,  the income
reportable upon distribution from the Traditional IRA may be reportable entirely
for 1998 or reportable ratably over four years beginning in 1998.

4. RECHARACTERIZATION OF IRA CONTRIBUTIONS

(A)  ELIGIBILITY.  By making a timely  transfer and election,  you generally can
treat a contribution  made to one type of IRA as made to a different type of IRA
for a taxable year.  For example,  if you make  contributions  to a Roth IRA and
later discover that you are not eligible to make Roth IRA contributions, you may
recharacterize  all  or a  portion  of the  contribution  as a  Traditional  IRA
contribution by the filing due date,  including  extensions,  for the applicable
tax year.

You may not recharacterize  amounts paid into a Traditional IRA that represented
tax-free rollovers or transfers, or employer contributions.

(B) ELECTION.  You may elect to recharacterize a contribution amount made to one
type of IRA by simply making a trustee-to-trustee  transfer of such amount, plus
net income  attributable to it, to a second type of IRA on or before the federal
income  tax due  date,  including  extensions,  for the tax year for  which  the
contribution was initially made. After the recharacterization has been made, you
may not revoke or modify the election.

(C)  TAXATION  OF A  RECHARACTERIZATION.  For  federal  income tax  purposes,  a
recharacterized  contribution  will be treated as having been contributed to the
transferee  IRA, rather than to the transferor IRA, on the same date and for the
same tax year that the  contribution was initially made to the transferor IRA. A
recharacterized transfer is not considered a rollover for purposes of the 1-year
waiting period.

The transfer of the contribution amount being  recharacterized  must include the
net income  attributable  to such  amount.  If such amount has  experienced  net
losses  as  of  the  time  of  the   recharacterization   transfer,  the  amount
transferred,  the original  contribution  amount less any losses, will generally
constitute  a transfer  of the entire  contribution  amount.  You must treat the
contribution  amount as made to the  transferee  IRA on your federal  income tax
return for the year to which the original contribution amount related.

For  reconversions  following  a  recharacterization,  see  Publication  590 and
Treasury Regulation Section 1.408A-5.

5. DISTRIBUTIONS

(A) REQUIRED MINIMUM  DISTRIBUTION,  OR RMD. Unlike a Traditional IRA, there are
no rules that  require that any  distribution  be made to you from your Roth IRA
during your lifetime.

If you die before the entire value of your Roth IRA is  distributed  to you, the
balance of your Roth IRA must be distributed by December 31 of the calendar year
that is  five  years  after  your  death.  However,  if you  die and you  have a
designated beneficiary,  your beneficiary may elect to take distributions in the
form  of  qualifying   settlement   option  payments  in   substantially   equal
installments  over the life or life  expectancy of the  designated  beneficiary,
beginning by December 31 of the calendar year that is one year after your death.

If your  beneficiary  is your  surviving  spouse,  he or she can  become the new
owner/annuitant  and can  continue  the  Transamerica  Life Roth IRA on the same
basis as before your death.  If your surviving  spouse does not wish to continue
the  Transamerica  Life Roth IRA as his or her Roth IRA,  he or she may elect to
receive the death benefit in the form of qualifying  settlement  option payments
in order to avoid the 5-year  distribution  requirement.  Such  payments must be
made in  substantially  equal  amounts over your  spouse's  life or a period not
extending  beyond his or her life  expectancy.  Your surviving spouse must elect
this  option  and  begin  receiving  payments  no later  than  the  later of the
following dates:

1.       December 31 of the year following the year you died; or

2.       December 31 of the year in which you would have reached age 70 1/2.

Your  beneficiary is responsible  for assuring that the RMD following your death
is taken in a timely manner and that the correct amount is distributed.

(B) TAXATION OF ROTH IRA DISTRIBUTIONS.  The amounts that you withdraw from your
Roth IRA are generally  tax-free.  For federal income tax purposes,  all of your
Roth IRAs are  aggregated and Roth IRA  distributions  are treated as made first
from Roth IRA  contributions  and second from earnings.  Distributions  that are
treated  as made from Roth IRA  contributions  are  treated  as made  first from
regular  Roth IRA  contributions,  which are always  tax-free,  and second  from
conversion or rollover Roth IRA contributions on a first-in,  first-out basis. A
distribution   allocable  to  a  particular  conversion  or  rollover  Roth  IRA
contribution  is treated as  consisting  first of the  portion,  if any,  of the
conversion contribution that was previously includible in gross income by reason
of the conversion.

In any  event,  since  the  purpose  of a Roth IRA is to  accumulate  funds  for
retirement,  your receipt or use of Roth IRA  earnings  before you attain age 59
1/2 , or within 5 years of your first  contribution to the Roth IRA, including a
contribution rolled over,  transferred or converted from a Traditional IRA, will
generally be treated as an early distribution  subject to regular income tax and
to the 10% penalty tax described below in Section 6(b).

No income tax will apply to earnings that are withdrawn before you attain age 59
1/2, but which are withdrawn five or more years after the first  contribution to
the Roth IRA, including a rollover or transfer contribution or conversion from a
Traditional IRA, where the withdrawal is made:
1.       upon your death or disability; or

2.   to pay qualified  first-time  homebuyer  expenses of you or certain  family
     members.

No portion of your Roth IRA  distribution  qualifies as a capital gain. There is
also a separate  5-year  rule for the  recapture  of the 10% penalty tax that is
described  below in Section 6(b) and that  applies to any Roth IRA  distribution
made before age 59 1/2 if any conversion or rollover  contribution has been made
to any Roth IRA owned by the individual  within the 5 most recent taxable years,
even if this current  distribution from the Roth IRA is otherwise tax-free under
the rules described in this Subsection 5(b).

(C) WITHHOLDING.  If the  distribution  from your Roth IRA is subject to federal
income tax, unless you elect not to have withholding  apply,  federal income tax
will be withheld from your Roth IRA distributions.  If you receive distributions
under a  settlement  option,  tax will be  withheld  in the same manner as taxes
withheld on wages, calculated as if you were married and claim three withholding
allowances.  If you are  receiving any other type of  distribution,  tax will be
withheld in the amount of 10% of the amount of the distribution. If payments are
delivered to foreign countries, federal income tax will generally be withheld at
a 10% rate unless you certify to Transamerica Life Insurance and Annuity Company
that you are not a U.S. citizen residing abroad or a "tax avoidance  expatriate"
as defined in Code  Section  877.  Such  certification  may result in  mandatory
withholding of federal income taxes at a different rate.

6. PENALTY TAXES

(A) EXCESS  CONTRIBUTIONS.  If at the end of any taxable year your total regular
Roth IRA contributions,  other than rollovers, transfers or conversions,  exceed
the  maximum  allowable   contributions  for  that  year,  taking  into  account
Traditional IRA contributions, the excess contribution amount will be subject to
a nondeductible  6% excise penalty tax. Such penalty tax cannot exceed 6% of the
value of your Roth IRAs at the end of such year.  However,  if you  withdraw the
excess  contribution,  plus any  earnings on it,  before the due date for filing
your federal income tax return,  including  extensions,  for the taxable year in
which you made the  excess  contribution,  the excess  contribution  will not be
subject to the 6% penalty tax. The amount of the excess  contribution  withdrawn
will not be considered an early distribution, but the earnings withdrawn will be
taxable  income  to you  and may be  subject  to the 10%  penalty  tax on  early
distributions.

Alternatively,  excess  contributions  for one year may be  withdrawn in a later
year or may be carried forward as Roth IRA  contributions in a later year to the
extent  that  the  excess,   when   aggregated   with  your   regular  Roth  IRA
contributions,  if any,  for the  subsequent  year,  does not exceed the maximum
allowable  contribution  for that  year.  The 6% excise  tax will be  imposed on
excess  contributions  in each subsequent year they are neither  returned to you
nor applied as permissible regular Roth IRA contributions for such year.

(B) EARLY DISTRIBUTIONS.  Since the purpose of a Roth IRA is to accumulate funds
for  retirement,  your receipt or use of any portion of your Roth IRA before you
attain age 59 1/2 constitutes an early  distribution  subject to the 10% penalty
tax on the  earnings  in your Roth IRA.  This  penalty tax will not apply if the
distribution  occurs as a result  of your  death or  disability  or is part of a
series of  substantially  equal  payments made over your life  expectancy or the
joint life  expectancies  of you and your  beneficiary,  as determined  from IRS
tables in the income tax  regulations.  Also, the 10% penalty tax will not apply
if distributions  are used to pay for medical expenses in excess of 7.5% of your
AGI; or if distributions are used to pay for health insurance  premiums for you,
your spouse and/or your  dependents if you are an unemployed  individual  who is
receiving unemployment compensation under federal or state programs for at least
12 consecutive weeks.

The 10% penalty tax also will not apply to an early distribution made to pay for
certain  qualifying  first-time  homebuyer  expenses  for you or certain  family
members,  or for certain qualifying higher education expenses for you or certain
family members.  First-time  homebuyer  expenses must be paid within 120 days of
the  distribution  from the Roth IRA and  include  up to $10,000 of the costs of
acquiring,  constructing, or reconstructing a principle residence, including any
usual or  reasonable  settlement,  financing  or  other  closing  costs.  Higher
education  expenses  include  tuition,  fees,  books,  supplies,  and  equipment
required  for  enrollment,  attendance,  and room and board at a  post-secondary
educational institution.

Effective  January 1, 2000, the 10% penalty tax will not apply if  distributions
are made pursuant to an IRS levy to pay your outstanding tax liability.


There is also a separate  5-year  recapture  rule for the 10% penalty tax in the
case of a Roth IRA  distribution  made  before age 59 1/2 that is made  within 5
years after a conversion or rollover  contribution  from a Traditional IRA. This
recapture rule exists because such a prior Roth IRA contribution avoided the 10%
penalty tax when it was rolled over or converted from the Traditional IRA. Under
this 5-year  recapture  rule, any Roth IRA  distribution  made before age 59 1/2
that  is  attributable  to  any  conversion  or  rollover  contribution  from  a
Traditional IRA made within the previous 5 years to any of the individual's Roth
IRAs is generally  subject to the 10% penalty tax,  and its  exceptions,  to the
extent that such prior Roth IRA  contribution  was subject to ordinary  tax upon
the  conversion  or  rollover,  even if the Roth IRA  distribution  is otherwise
tax-free.

Under the  distribution  ordering  rules for a Roth IRA, all of an  individual's
Roth IRAs and  distributions  therefrom are treated as made:  first from regular
Roth IRA contributions;  then from conversion or rollover Roth IRA contributions
on a first-in,  first-out basis; and last from earnings.  However,  whenever any
Roth IRA  distribution  amount is  attributable  to any  conversion  or rollover
contribution made within the 5 most recent tax years, this distributed amount is
attributed first to the taxable portion of such prior contribution, for purposes
of determining the amount of this Roth IRA  distribution  that is subject to the
recapture  of the 10%  PENALTY  TAX,  UNLESS SOME  EXCEPTION  TO THE PENALTY TAX
APPLIES TO THE CURRENT ROTH IRA DISTRIBUTION,  SUCH AS AGE 59 1/2, DISABILITY OR
CERTAIN  HEALTH,  EDUCATION OR HOMEBUYER  EXPENSES,  AS DESCRIBED  ABOVE IN THIS
SUBSECTION 6(B).

(C) FAILURE TO SATISFY RMDS UPON DEATH. If the RMD rules described above in Part
II, Section 4(a) apply to the  beneficiary of your Roth IRA after your death and
if the amount distributed during a calendar year is less than the minimum amount
required to be distributed,  your  beneficiary  will be subject to a penalty tax
equal to 50% of the excess of the amount  required  to be  distributed  over the
amount actually distributed.

(D) POLICY LOANS AND PROHIBITED  TRANSACTIONS.  If you or any beneficiary engage
in any  prohibited  transaction,  such as any sale,  exchange  or leasing of any
property between you and the Roth IRA, or any interference  with the independent
status of the Roth IRA, the Roth IRA will lose its tax  exemption and be treated
as having been  distributed  to you.  The value of any earnings on your Roth IRA
contributions will be includable in your gross income; and if at the time of the
prohibited  transaction,  you are under age 591/2 you may also be subject to the
10% penalty tax on early  distributions,  as described above in Part II, Section
5(b).  If you borrow from or pledge your Roth IRA,  or your  benefits  under the
contract,  as a security for a loan, the portion borrowed or pledged as security
will cease to be  tax-qualified,  the value of that  portion  will be treated as
distributed  to you,  and you may be  subject  to the 10%  penalty  tax on early
distributions from a Roth IRA.

IRA PART III: OTHER INFORMATION

(1) FEDERAL ESTATE AND GIFT TAXES

Any amount in or distributed  from your  Traditional  and/or Roth IRAs upon your
death may be  subject  to federal  estate  tax,  although  certain  credits  and
deductions  may be  available.  The exercise or  non-exercise  of an option that
would pay a survivor an annuity at or after your death should not be  considered
a transfer for federal gift tax purposes.

(2) TAX REPORTING

You must report  contributions to, and distributions  from, your Traditional IRA
and  Roth  IRA,   including  the  year-end  aggregate  account  balance  of  all
Traditional  IRAs and Roth IRAs, on your federal  income tax return for the year
specifically on IRS Form 8606. For  Traditional  IRAs, you must designate on the
return  how  much of your  annual  contribution  is  deductible  and how much is
nondeductible. You need not file IRS Form 5329 with your income tax return for a
particular  year  unless for that year you are  subject to a penalty tax because
there  has been an  excess  contribution  to,  an early  distribution  from,  or
insufficient RMDs from your Traditional IRA or Roth IRA, as applicable.

(3) VESTING

Your  interest  in your  Traditional  IRA or Roth IRA is  nonforfeitable  at all
times.

(4) EXCLUSIVE BENEFIT

Your interest in your  Traditional IRA or Roth IRA is for the exclusive  benefit
of you and your beneficiaries.






(5) IRS PUBLICATION 590

Additional  information about your Traditional IRA or Roth IRA or about SEP-IRAs
and  SIMPLE-IRAs  can be  obtained  from any  district  office  of the IRS or by
calling  1-800-TAX-FORM  for a free  copy  of IRS  Publication  590,  Individual
Retirement Arrangements.


<PAGE>










Please  forward,   without  charge,  a  copy  of  the  Statement  of  Additional
Information  concerning the  Transamerica  Series(R) -  Transamerica  Classic(R)
Variable Annuity issued by Transamerica Life Insurance and Annuity Company to:

Please print or type and fill in all information:


- -------------------------------------------------------------------------
Name

- -------------------------------------------------------------------------
Address

- -------------------------------------------------------------------------
City/State/Zip

- -------------------------------------------------------------------------


Date: ________________________    Signed: ______________________________

Return to  Transamerica  Life  Insurance and Annuity  Company,  Annuity  Service
Center, 401 North Tryon Street, Suite 700, Charlotte, North Carolina 28202.


<PAGE>





                     STATEMENT OF ADDITIONAL INFORMATION FOR

                             TRANSAMERICA CLASSIC(R)
                                VARIABLE ANNUITY

                              SEPARATE ACCOUNT VA-6

                                    ISSUED BY
                 TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY


This statement of additional  information expands upon subjects discussed in the
May  1,  2000  prospectus  for  the   Transamerica   Classic   Variable  Annuity
("contract")   issued  by  Transamerica   Life  Insurance  and  Annuity  Company
("Transamerica")  through  Separate  Account VA-6. You may obtain a free copy of
the prospectus by writing to:  Transamerica  Life Insurance and Annuity Company,
401 North Tryon Street, Charlotte, NC 28202 or calling 877-717-8861.  Terms used
in the current prospectus for the contract are incorporated into this statement.


The contract will be issued as a certificate  under a group annuity  contract in
some states and as an  individual  annuity  contract in other  states.  The term
"contract"  as used  herein  refers  to both  the  individual  contract  and the
certificates issued under the group contract.



This Statement of Additional  Information is not a prospectus and should be read
only in conjunction with the prospectus for the contract and the portfolios.











                                Dated May 1, 2000




<PAGE>
<TABLE>
<CAPTION>


TABLE OF CONTENTS
                                                                                                         PAGE
<S>                                                                                                         <C>
THE CONTRACT ....................................................................................           3
NET INVESTMENT FACTOR ...........................................................................           3
VARIABLE PAYMENT OPTIONS.........................................................................           3
     Variable Annuity Units and Payments.........................................................           3
     Variable Annuity Unit Value.................................................................           3
     Transfers After the Annuity Date............................................................           4

GENERAL PROVISIONS...............................................................................           4
     Non-Participating...........................................................................           4
     Misstatement of Age or Sex..................................................................           4
     Proof of Existence and Age..................................................................           4
     Annuity Data................................................................................           4
     Assignment..................................................................................           4
     Annual Report...............................................................................           5
     Incontestability............................................................................           5
     Entire Contract.............................................................................           5
     Changes in the Contract.....................................................................           5
     Protection of Benefits......................................................................           5
     Delay of Payments...........................................................................           5
     Notices and Directions......................................................................           6
CALCULATION OF YIELDS AND TOTAL RETURNS .........................................................           6
     Money Market Sub-Account Yield Calculation..................................................           6
     Other Sub-Account Yield Calculations........................................................           7
     Standard Total Return Calculations..........................................................           7
     Adjusted Historical Portfolio Performance Data..............................................           7
     Other Performance Data......................................................................           7

HISTORICAL PERFORMANCE DATA......................................................................           8
     General Limitations.........................................................................           8
     Historical Performance Data.................................................................           8

DISTRIBUTION OF THE CONTRACT.....................................................................         18
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS...........................................................         18
STATE REGULATION.................................................................................         18
RECORDS AND REPORTS..............................................................................         18
FINANCIAL STATEMENTS.............................................................................         18
APPENDIX.........................................................................................         19


</TABLE>

<PAGE>


THE CONTRACT

The following pages provides additional information about the contract which may
be of interest to some owners.

NET INVESTMENT FACTOR

For any  sub-account of the variable  account,  the net investment  factor for a
valuation  period,  before the annuity  date,  is (a) divided by (b),  minus (c)
minus (d):

     Where (a) is:

     The net asset value per share held in the sub-account, as of the end of the
     valuation period; PLUS the per-share amount of any dividend or capital gain
     distributions  if the  "ex-dividend"  date occurs in the valuation  period;
     PLUS OR MINUS a per-share  charge or credit as we may determine,  as of the
     end of the valuation period, for taxes.

     Where (b) is:

     The net asset value per share held in the  sub-account as of the end of the
last prior valuation period.

     Where (c) is:

     The daily  mortality and expense risk charge of 0.00329%  (1.20%  annually)
     times the number of calendar days in the current valuation period.

     Where (d) is:

     The  daily  administrative  expense  charge,   currently  0.000411%  (0.15%
     annually)  times  the  number of  calendar  days in the  current  valuation
     period.  This charge may be increased,  but will not exceed 0.00096% (0.35%
     annually).

A valuation day is defined as any day that the New York Stock Exchange is open.

VARIABLE PAYMENT OPTIONS

The  variable  payment  option  provide for  payments  that  fluctuate in dollar
amount,   based  on  the  investment   performance   of  the  elected   variable
sub-account(s).

VARIABLE ANNUITY UNITS AND PAYMENTS

For the first monthly payment,  the number of variable annuity units credited in
each variable sub-account will be determined by dividing: (a) the product of the
portion of the value to be applied to the variable  sub-account and the variable
annuity  purchase  rate  specified  in the  contract;  BY (b) the  value  of one
variable annuity unit in that sub-account on the annuity date.

The amount of each subsequent  variable payment equals the product of the number
of  variable  annuity  units  in each  variable  sub-account  and  the  variable
sub-account's  variable  annuity  unit  value as of the  tenth  day of the month
before the payment due date. The amount of each payment may vary.

VARIABLE ANNUITY UNIT VALUE

The value of a variable annuity unit in a variable  sub-account on any valuation
day is  determined  as  described  below.  The  net  investment  factor  for the
valuation  period  (for  the  appropriate   payment  frequency)  just  ended  is
multiplied by the value of the variable  annuity unit for the sub-account on the
preceding  valuation  day. The net  investment  factor after the annuity date is
calculated in the same manner as before the annuity date and then  multiplied by
an interest factor.  The interest factor equals (.999893)n where n is the number
of days since the preceding  valuation day. This compensates for the 4% interest
assumption  built into the variable annuity purchase rates. We may offer assumed
interest rates other than 4%. The appropriate interest factor will be applied to
compensate for the assumed interest rate.

TRANSFERS AFTER THE ANNUITY DATE

After the  annuity  date,  you may  transfer  variable  annuity  units  from one
sub-account to another,  subject to certain limitations (See "Transfers" page 25
of the prospectus). The dollar amount of each subsequent monthly annuity payment
after the transfer must be determined  using the new number of variable  annuity
units  multiplied by the variable  sub-account's  variable annuity unit value on
the tenth day of the month  preceding  payment.  We reserve  the right to change
this day of the month.

The formula used to determine a transfer  after the annuity date can be found in
the Appendix to this Statement of Additional Information.

GENERAL PROVISIONS

NON-PARTICIPATING

The contract is  non-participating.  No  dividends  are payable and the contract
will not share in our profits or surplus earnings.

MISSTATEMENT OF AGE OR SEX

If the  age or sex of the  annuitant  or  any  other  measuring  life  has  been
misstated,  the settlement  option  payments under the contract will be whatever
the annuity  amount  applied on the annuity date would  purchase on the basis of
the correct age or sex of the  annuitant  and/or  other  measuring  life.  Where
required  by law,  rule  or  regulation,  we may  only  consider  the age of the
annuitant  and/or other measuring life. Any  overpayments or underpayments by us
as a result of any such  misstatement  may be  respectively  charged  against or
credited  to the  settlement  option  payment or  payments  to be made after the
correction so as to adjust for such overpayment or underpayment.

PROOF OF EXISTENCE AND AGE

Before  making any  payment  under the  contract,  we may  require  proof of the
existence  and/or  proof of the age of an owner and/or an annuitant or any other
measuring life, or any other  information  deemed  necessary in order to provide
benefits under the contract.

ANNUITY DATA

We will not be liable for obligations which depend on receiving information from
a payee or measuring  life until such  information is received in a satisfactory
form.

ASSIGNMENT

No  assignment  of a contract  will be binding on us unless  made in writing and
given to us at our Service  Center.  We are not  responsible for the adequacy of
any assignment. Your rights and the interest of any annuitant or non-irrevocable
beneficiary will be subject to the rights of any assignee of record.





ANNUAL REPORT

At least once each contract  year before the annuity  date,  you will be given a
report  of the  current  account  value  allocated  to each  sub-account  of the
variable  account and any general account option.  This report will also include
any other information  required by law or regulation.  After the annuity date, a
confirmation will be provided with every variable annuity payment.

INCONTESTABILITY

Each  contract  is  incontestable  from the  contract  effective  date except in
certain states where medical  questions are required on the  application for the
optional Living Benefits Rider.

ENTIRE CONTRACT

We have issued the contract in  consideration  and  acceptance of the payment of
the initial purchase  payment and certain required  information in an acceptable
form and manner or, where state law requires,  the application.  In those states
that require a written application, a copy of the application is attached to and
is part of the  contract  and along  with the  contract  constitutes  the entire
contract.

The group annuity  contract has been issued to a trust  organized under Missouri
law.  However,  the sole  purpose  of the  trust is to hold  the  group  annuity
contract.  You have all rights and  benefits  under the  individual  certificate
issued under the group contract.

CHANGES IN THE CONTRACT

Only  two  authorized  officers  of  Transamerica,  acting  together,  have  the
authority  to bind us or to make any change in the  individual  contract  or the
group contract or individual  certificates  thereunder and then only in writing.
We will not be bound by any promise or representation made by any other persons.

We may  change  or amend  the  individual  contract  or the  group  contract  or
individual  certificates thereunder if such change or amendment is necessary for
the  individual  contract  or the  group  contract  or  individual  certificates
thereunder to comply with any state or federal law, rule or regulation.

PROTECTION OF BENEFITS

To the extent permitted by law, no benefit  (including death benefits) under the
contract will be subject to any claim or process of law by any creditor.

DELAY OF PAYMENTS

Payment of any cash withdrawal,  lump sum death benefit,  or variable payment or
transfer  due from the  variable  account  will occur within seven days from the
date the election becomes effective, except that we may be permitted to postpone
such payment if: (1) the New York Stock  Exchange is closed for other than usual
weekends or holidays, or trading on the Exchange is otherwise restricted; or (2)
an  emergency  exists as  defined  by the  Securities  and  Exchange  Commission
(Commission),  or the Commission requires that trading be restricted; or (3) the
Commission permits a delay for the protection of owners.

In  addition,  while it is our  intention  to  process  all  transfers  from the
sub-accounts  immediately upon receipt of a transfer request,  we have the right
to delay effecting a transfer from a variable  sub-account for up to seven days.
We may delay  effecting  such a transfer if there is a delay of payment  from an
affected portfolio.  If this happens, then we will calculate the dollar value or
number of units involved in the transfer from a variable sub-account on or as of
the date we receive a transfer  request in an  acceptable  form and manner,  but
will not process the transfer to the transferee  sub-account  until a later date
during the seven-day delay period when the portfolio underlying the transferring
sub-account  obtains  liquidity to fund the transfer  request  through  sales of
portfolio  securities,   new  purchase  payments,   transfers  by  investors  or
otherwise. During this period, the amount transferred would not be invested in a
variable sub-account.
We may delay payment of any withdrawal  from ANY general  account  options for a
period  of not more  than six  months  after we  receive  the  request  for such
withdrawal.  If we delay  payment for more than 30 days, we will pay interest on
the withdrawal amount up to the date of payment.  (See "Cash  Withdrawals" 27 of
the prospectus.)

NOTICES AND DIRECTIONS

We will not be bound by any authorization,  direction,  election or notice which
is not in a form and manner acceptable to us and received at our Service Center.

Any written notice  requirement by us to you will be satisfied by our mailing of
any such  required  written  notice,  by  first-class  mail,  to your last known
address as shown on our records.

CALCULATION OF YIELDS AND TOTAL RETURNS

MONEY MARKET SUB-ACCOUNT YIELD CALCULATION

In accordance with  regulations  adopted by the  Commission,  we are required to
compute the money market sub-account's  current annualized yield for a seven-day
period  in a manner  which  does not take into  consideration  any  realized  or
unrealized  gains or  losses on  shares  of the  money  market  series or on its
portfolio  securities.  This current annualized yield is computed by determining
the net change (exclusive of realized gains and losses on the sale of securities
and unrealized  appreciation  and  depreciation)  in the value of a hypothetical
account  having a balance  of one unit of the money  market  sub-account  at the
beginning of such seven-day period, dividing such net change in account value by
the value of the account at the  beginning of the period to  determine  the base
period return and annualizing  this quotient on a 365-day basis.  The net change
in account  value  reflects  the  deductions  for the annual  account  fee,  the
mortality and expense risk charge and administrative  expense charges and income
and expenses accrued during the period.  Because of these deductions,  the yield
for the money market  sub-account of the variable account will be lower than the
yield for the money market series or any comparable substitute funding vehicle.

The  Commission  also  permits us to disclose the  effective  yield of the money
market  sub-account  for the same seven-day  period,  determined on a compounded
basis.  The effective yield is calculated by compounding the  unannualized  base
period  return by adding one to the base  period  return,  raising  the sum to a
power equal to 365 divided by 7, and subtracting one from the result.

The  yield  on  amounts  held in the  money  market  sub-account  normally  will
fluctuate on a daily basis.  Therefore,  the disclosed  yield for any given past
period is not an  indication  or  representation  of  future  yields or rates of
return.  The money market  sub-account's  actual yield is affected by changes in
interest rates on money market  securities,  average  portfolio  maturity of the
money market  series or  substitute  funding  vehicle,  the types and quality of
portfolio  securities  held by the money  market  series or  substitute  funding
vehicle, and operating expenses.  In addition,  the yield figures do not reflect
the  effect  of any  contingent  deferred  sales  load (of up to 6% of  purchase
payments) that may be applicable to a contract.

OTHER SUB-ACCOUNT YIELD CALCULATIONS

We may from time to time disclose the current annualized yield of one or more of
the  variable  sub-accounts  (except the money  market  sub-account)  for 30-day
periods. The annualized yield of a sub-account refers to the income generated by
the  sub-account  over  a  specified  30-day  period.   Because  this  yield  is
annualized,  the yield  generated by a  sub-account  during the 30-day period is
assumed to be generated  each 30-day  period.  The yield is computed by dividing
the net  investment  income per  variable  accumulation  unit earned  during the
period  by the price per unit on the last day of the  period,  according  to the
following formula:

         YIELD    =        2[{a-b + 1}6 -  1]
                             ----
                        cd

         Where:

a    =  net  investment  income  earned  during  the  period  by  the  portfolio
     attributable to the shares owned by the sub-account.
b    =  expenses   for  the   sub-account   accrued   for  the  period  (net  of
     reimbursements).
c    = the average  daily  number of  variable  accumulation  units  outstanding
     during the period.
d    = the maximum offering price per variable accumulation unit on the last day
     of the period.

Net investment income will be determined in accordance with rules established by
the  Commission.  Accrued  expenses  will  include all  recurring  fees that are
charged to all contracts.  The yield  calculations  do not reflect the effect of
any  contingent  deferred  sales  load that may be  applicable  to a  particular
contract.  Contingent  deferred sales loads range from 6% to 0% of the amount of
account value withdrawn  depending on the elapsed time since the receipt of each
purchase payment.


Because of the charges and deductions imposed by the variable account, the yield
for  the  sub-account  will be  lower  than  the  yield  for  the  corresponding
portfolio.  The yield on amounts held in the variable sub-accounts normally will
fluctuate over time. Therefore,  the disclosed yield for any given period is not
an  indication  or  representation  of  future  yields or rates of  return.  The
variable sub-account's actual yield will be affected by the types and quality of
portfolio securities held by the portfolio, and its operating expenses.


STANDARD TOTAL RETURN CALCULATIONS

We may from time to time also disclose  average  annual total returns for one or
more of the  sub-accounts  for various  periods of time.  Average  annual  total
return quotations are computed by finding the average annual compounded rates of
return over one, five and ten year periods that would equate the initial  amount
invested to the ending redeemable value, according to the following formula:

         P{1 + T}n = ERV

         Where:
         P =               a hypothetical initial payment of $1,000
         T =               average annual total return
         n =               number of years
         ERV               = ending  redeemable  value of a hypothetical  $1,000
                           payment  made at the  beginning  of the one,  five or
                           ten-year  period  at the  end of the  one,  five,  or
                           ten-year  period  (or  fractional   portion  of  such
                           period).

All recurring fees are recognized in the ending  redeemable  value. The standard
average  annual  total  return  calculations  will  reflect  the  effect  of any
contingent deferred sales load that may be applicable to a particular period.

ADJUSTED HISTORICAL PORTFOLIO PERFORMANCE DATA

We may also disclose "historical"  performance data for a portfolio, for periods
before  the  variable  sub-account   commenced   operations.   Such  performance
information will be calculated based on the performance of the portfolio and the
assumption  that the  sub-account was in existence for the same periods as those
indicated  for the  portfolio,  with a level of contract  charges  currently  in
effect.

This type of adjusted  historical  performance  data may be disclosed on both an
average annual total return and a cumulative  total return basis.  Moreover,  it
may be disclosed  assuming that the contract is not surrendered  (i.e.,  with no
deduction for the contingent deferred sales load) and assuming that the contract
is surrendered at the end of the applicable period (i.e., reflecting a deduction
for any applicable contingent deferred sales load).

OTHER PERFORMANCE DATA

We may from  time to time  also  disclose  average  annual  total  returns  in a
non-standard  format in  conjunction  with the  standard  described  above.  The
non-standard  format will be identical to the  standard  format  except that the
contingent deferred sales load percentage will be assumed to be 0%.

We may from time to time also disclose  cumulative  total returns in conjunction
with the  standard  format  described  above.  The  cumulative  returns  will be
calculated  using the following  formula  assuming that the contingent  deferred
sales load percentage will be 0%.

     CTR = {ERV/P}- 1

     Where:

CTR  = the cumulative total return net of sub-account  recurring charges for the
     period.

ERV  = ending redeemable value of a hypothetical $1,000 payment at the beginning
     of the one,  five,  or  ten-year  period  at the end of the one,  five,  or
     ten-year period (or fractional portion of the period).

P    = a hypothetical initial payment of $1,000.

All  non-standard  performance  data  will be  advertised  only if the  standard
performance data is also disclosed.

HISTORICAL PERFORMANCE DATA

GENERAL LIMITATIONS

THE FIGURES BELOW  REPRESENT PAST  PERFORMANCE  AND ARE NOT INDICATIVE OF FUTURE
PERFORMANCE.   The  figures  may  reflect  the  waiver  of  advisory   fees  and
reimbursement of other expenses which may not continue in the future.

Portfolio  information,  including historical daily net asset values and capital
gains and dividends distributions regarding each portfolio, has been provided by
that portfolio.  The adjusted historical sub-account performance data is derived
from the  data  provided  by the  portfolios.  We have no  reason  to doubt  the
accuracy of the figures  provided by the portfolios.  We have not verified these
figures.

HISTORICAL PERFORMANCE DATA

The  charts  below  show  historical  performance  data  for  the  sub-accounts,
including adjusted  historical  performance for the periods prior to the January
1,  1998  inception  of  the  sub-accounts,  based  on  the  performance  of the
corresponding  portfolios  since their  inception  date, with a level of charges
equal to those currently  assessed under the contract.  THESE FIGURES ARE NOT AN
INDICATION OF THE FUTURE PERFORMANCE OF THE SUB-ACCOUNTS.  The date next to each
sub-account  name  indicates  the  date  of  commencement  of  operation  of the
corresponding portfolio.

Notes:

1.   On September 16, 1994, an investment company which had commenced operations
     on August 1,  1988,  called  Quest for Value  Accumulation  Trust (the "Old
     Trust") was effectively  divided into two investment  funds - The Old Trust
     and the present OCC Accumulation  Trust (the "Present Trust") at which time
     the Present Trust commenced  operations.  The total net assets of the Small
     Cap Portfolio  immediately  after the transaction were  $139,812,573 in the
     Old Trust and  $8,129,274  in the Present  Trust.  For the period  prior to
     September 16, 1994, the performance  figures for the Small Cap Portfolio of
     the Present Trust reflect the performance of the Small Cap Portfolio of the
     Old Trust.

2.   The Growth Portfolio of the Transamerica  Variable Insurance Fund, Inc., is
     the successor to Separate  Account Fund C of  Transamerica  Occidental Life
     Insurance  Company,  a  management   investment  company  funding  variable
     annuities,  through a reorganization on November 1, 1996. Accordingly,  the
     performance  data  for  the  Transamerica  VIF  Growth  Portfolio  includes
     performance of its predecessor.

3.   On September 16, 1994, an investment company which had commenced operations
     on August 1,  1988,  called  Quest for Value  Accumulation  Trust (the "Old
     Trust") was effectively  divided into two investment  funds - The Old Trust
     and the present OCC Accumulation Trust (the "Present Trust") at the time of
     the transaction  there was $682,601,380 in the Old Trust and $51,345,102 in
     the  Present  Trust.  For the  period  prior to  September  16,  1994,  the
     performance  figures for the Managed Portfolio of the Present Trust reflect
     the performance of the Managed Portfolio of the Old Trust.

Historical Performance Data Charts

1.   Average Annual Total Returns - Assuming surrender but no optional Rider

2.   Average Annual Total Returns - Assuming surrender and Living Benefits Rider

3.   Average Annual Total Returns - Assuming no surrender or optional Rider

4.   Average Annual Total Returns - Assuming no surrender but reflecting  Living
     Benefits Rider


5.   Cumulative Total Returns - Assuming surrender but no optional Rider

6.   Cumulative Total Returns - Assuming surrender and Living Benefits Rider

7.   Cumulative Total Returns - Assuming no surrender or optional Rider

8.   Cumulative  Total  Returns - Assuming no surrender  but  reflecting  Living
     Benefits Rider





<PAGE>
<TABLE>
<CAPTION>



1. AVERAGE ANNUAL TOTAL RETURNS - Assuming  surrender but no optional Rider, for
periods  since  inception  of  the  portfolio,   including  adjusted  historical
performance,  for  each  sub-account  are  as  follows.  These  figures  include
mortality and expense charges of 1.20% per annum,  administrative expense charge
of 0.15% per annum, an account fee of $30 per annum adjusted for average account
size  and the  applicable  contingent  deferred  sales  load  (maximum  of 6% of
purchase payments) and do not reflect any fee deduction for the optional Rider.


- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------
                                                                                                        For the period
                                                                                                             from
            SUB-ACCOUNT                 For the        For the      For the 5-year                      commencement of
       (date of commencement             1-year     3-year period    period ending   For the 10-year       portfolio
          of operation of                period         ending         12/31/98       period ending      operations to
      corresponding portfolio)           ending        12/31/98                          12/31/98          12/31/98
                                        12/31/98
- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

<S>                                      <C>            <C>             <C>               <C>               <C>
Alger American Income &                  35.38%         34.29%          30.88%            17.25%            16.04%
Growth (11/15/88)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

Alliance VP Growth &                     4.71%          17.44%          21.88%              NA              13.84%
Income (1/14/91)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

Alliance VP Premier Growth               25.38%         35.18%          33.92%              NA              24.54%
(6/26/92)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

Dreyfus VIF Appreciation                 4.80%          20.25%          23.47%              NA              18.26%
(4/5/93)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

Dreyfus VIF Small Cap                    16.33%         8.80%           13.90%              NA              33.74%
(8/31/90)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

Janus Aspen Series Balanced              19.89%         24.93%          22.63%              NA              18.80%
(9/13/93)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

Janus Aspen Series Worldwide             57.09%         34.64%          31.50%              NA              27.79%
Growth (9/13/93)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

MFS VIT Emerging Growth                  69.19%         39.74%            NA                NA              34.20%
(7/24/95)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

MFS VIT Growth w/ Income                 0.10%          16.50%            NA                NA              18.94%
(10/9/95)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

MFS VIT Research                         17.22%         19.86%            NA                NA              20.70%
(7/26/95)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

MS UIF Emerging Markets                  86.91%         11.24             NA                NA               9.48%
Equity (10/1/96)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

MS UIF Fixed Income                      -8.11%           NA              NA                NA               2.47%
(1/2/97)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

MS UIF High Yield                        0.50%            NA              NA                NA               5.64%
(1/2/97)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

MS UIF International                     18.35%           NA              NA                NA              10.82%
Magnum (1/2/97)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

OCC Accumulation Trust                   -1.58%         8.46%           17.67%            14.96%            16.03%
Managed (8/1/88)(3)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

OCC Accumulation Trust                   -8.32%         0.12%            6.29%            9.54%              9.90%
Small Cap (8/1/88) (1)

- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------

PIMCO VIT StocksPLUS Growth &            13.06%           NA              NA                NA              21.03%
Income (1/2/98)

                                      ------------- --------------- ---------------- ----------------- ------------------

Transamerica VIF Growth                 30.78%         39.77%          39.35%            25.03%              NA
(2/26/69) (2)

- ------------------------------------ ------------------------------------------------------------------------------------

Transamerica VIF Money                  -1.95%           NA              NA                NA               0.87%
Market (1/2/98)

- ------------------------------------ ------------------------------------------------------------------------------------


2. AVERAGE  ANNUAL TOTAL RETURNS - Assuming  surrender and  reflecting  optional
Living Benefits Rider,  for periods since inception of the portfolio,  including
adjusted  historical  performance,  for each  sub-account are as follows.  These
figures include mortality and expense charges of 1.20% per annum, administrative
expense charge of 0.15% per annum,  an account fee of $30 per annum adjusted for
average account size, the applicable  contingent deferred sales load (maximum 6%
of purchase  payments) and the optional  Living  Benefits Rider fee of 0.05% per
annum.


- --------------------------------- --------------- -------------- --------------- --------------- ----------------------
          SUB-ACCOUNT                For the         For the        For the         For the       For the period from
    (date of commencement of      1-year period      3-year      5-year period      10-year         commencement of
          operation of                ending         period          ending      period ending   portfolio operations
    corresponding portfolio)         12/31/98        ending         12/31/98        12/31/98          to 12/31/98
                                    12/31/98
- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Alger American Income &               35.33%         34.24%          30.83%          17.20%             15.99%
Growth (11/15/88)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Alliance VP Growth &                  4.66%          17.39%          21.83%            NA               13.79%
Income (1/14/91)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Alliance VP Premier                   25.33%         35.13%          33.87%            NA               24.49%
Growth (6/26/92)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Dreyfus VIF Appreciation              4.75%          20.20%          23.42%            NA               18.21%
(4/5/93)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Dreyfus VIF Small Cap                 16.28%          8.75%          13.85%            NA               33.69%
(8/31/90)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Janus Aspen Series Balanced           19.84%         24.88%          22.58%            NA               18.75%
(9/13/93)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Janus Aspen Series                    57.04%         34.59%          31.45%            NA               27.74%
Worldwide Growth (9/13/93)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MFS VIT Emerging Growth               69.14%         39.69%            NA              NA               34.15%
(7/24/95)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MFS VIT Growth w/ Income              0.05%          16.45%            NA              NA               18.88%
(10/9/95)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MFS VIT Research                      17.17%         19.81%            NA              NA               20.65%
(7/26/95)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF Emerging                       86.86%         11.19%            NA              NA                9.43%
Markets Equity (10/1/96)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF Fixed Income                   -8.16%           NA              NA              NA                2.41%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF High Yield                     0.45%            NA              NA              NA                5.59%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF International                  18.30%           NA              NA              NA               10.77%
Magnum (1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

OCC Accumulation Trust                -1.63%          8.41%          17.62%          14.91%             15.98%
Managed (8/1/88)(3)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

OCC Accumulation Trust                -8.37%          0.07%          6.24%           9.49%               9.85%
Small Cap (8/1/88) (1)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

PIMCO StocksPLUS Growth               13.01%           NA              NA              NA               20.98%
and Income (1/2/98)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Transamerica VIF Growth               30.73%         39.72%          39.30%          24.98%               NA
(2/26/69) (2)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Transamerica VIF Money                -2.00%           NA              NA              NA                0.82%
Market (1/2/98)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------


3.  AVERAGE  ANNUAL TOTAL  RETURNS - Assuming no  surrender  or optional  Rider,
non-standard  average  annual total returns for periods  since  inception of the
portfolio,  including adjusted historical performance,  for each sub-account are
as follows.  These figures  include  mortality and expense  charges of 1.20% per
annum,  administrative  expense  charge of 0.15% per annum and an account fee of
$30 per  annum  adjusted  for  average  account  size,  but do not  reflect  any
applicable  contingent  deferred sales load (maximum of 6% of purchase payments)
and do not reflect any fee deduction for the optional Rider.


- --------------------------------- --------------- -------------- --------------- --------------- ----------------------
          SUB-ACCOUNT                For the         For the        For the         For the       For the period from
    (date of commencement of      1-year period      3-year      5-year period      10-year         commencement of
          operation of                ending         period          ending      period ending   portfolio operations
    corresponding portfolio)         12/31/98        ending         12/31/98        12/31/98          to 12/31/98
                                    12/31/98
- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Alger American Income &               40.48%         35.07%          31.11%          17.25%             16.04%
Growth (11/15/88)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Alliance VP Growth &                  9.81%          18.46%          22.19%            NA               13.84%
Income (1/14/91)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Alliance VP Premier                   30.48%         35.95%          34.13%            NA               24.54%
Growth (6/26/92)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Dreyfus VIF Appreciation              9.90%          21.23%          23.76%            NA               18.36%
(4/5/93)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Dreyfus VIF Small Cap                 21.43%          9.99%          14.30%            NA               33.74%
(8/31/90)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Janus Aspen Series Balanced           24.99%         25.83%          22.93%            NA               18.91%
(9/13/93)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Janus Aspen Series                    62.19%         35.41%          31.73%            NA               27.86%
Worldwide Growth (9/13/93)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MFS VIT Emerging Growth               74.29%         40.46%            NA              NA               34.47%
(7/24/95)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MFS VIT Growth w/ Income              5.20%          17.53%            NA              NA               19.39%
(10/9/95)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MFS VIT Research                      22.32%         20.84%            NA              NA               21.10%
(7/26/95)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF Emerging                       92.01%         12.37%            NA              NA               10.54%
Markets Equity (10/1/96)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF Fixed Income                   -3.01%           NA              NA              NA                3.80%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF High Yield                     5.60%            NA              NA              NA                6.90%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF International                  23.45%           NA              NA              NA               11.96%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

OCC Accumulation Trust                3.52%           9.65%          18.02%          14.96%             16.03%
Managed (8/1/88) (3)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

OCC Accumulation Trust                -3.22%          1.51%          6.82%           9.54%               9.90%
Small Cap (8/1/88) (1)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

PIMCO StocksPLUS Growth               18.16%           NA              NA              NA               23.12%
and Income (1/2/98)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Transamerica VIF Growth               35.88%         40.49%          39.53%          25.03%               NA
(2/26/69) (2)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Transamerica VIF Money                3.15%            NA              NA              NA                3.37%
Market (1/2/98)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------


3. AVERAGE ANNUAL TOTAL RETURNS - Assuming no surrender but reflecting  optional
Living  Benefits  Rider,  non-standard  average annual total returns for periods
since inception of the portfolio, including adjusted historical performance, for
each  sub-account are as follows.  These figures  include  mortality and expense
charges of 1.20% per  annum,  administrative  expense  charge of 0.15% per annum
and, an account fee of $30 per annum  adjusted for average  account size, but do
not  reflect  any  applicable  contingent  deferred  sales load  (maximum  6% of
purchase payments). They do reflect deduction of the fee for the optional Living
Benefits Rider fee of 0.05% per annum.


- --------------------------------- --------------- -------------- ---------------- -------------- ----------------------
          SUB-ACCOUNT                For the         For the     For the 5-year      For the      For the period from
    (date of commencement of      1-year period      3-year       period ending      10-year        commencement of
          operation of                ending         period         12/31/98         period      portfolio operations
    corresponding portfolio)         12/31/98        ending                          ending           to 12/31/98
                                                    12/31/98                        12/31/98
- --------------------------------- --------------- -------------- ---------------- -------------- ----------------------
- -----------------------------------------------------------------------------------------------------------------------

Alger American Income &              40.43%          35.02%          31.06%          17.20%             15.99%
Growth (11/15/88)

- -----------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                  9.76%          18.41%          22.14%            NA               13.79%
Income (1/14/91)

- -----------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth           30.43%          35.90%          34.08%            NA               24.49%
(6/26/92)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation              9.85%          21.18%          23.71%            NA               18.31%
(4/5/93)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                21.38%          9.94%           14.25%            NA               33.69%
(8/31/90)

- -----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced          24.94%          25.78%          22.88%            NA               18.86%
(9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide         62.14%          35.36%          31.68%            NA               27.81%
Growth (9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth              74.24%          40.41%            NA              NA               34.42%
(7/24/95)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income              5.15%          17.48%            NA              NA               19.34%
(10/9/95)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Research                     22.27%          20.79%            NA              NA               21.05%
(7/26/95)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets              91.96%          12.32%            NA              NA               10.49%
Equity (10/1/96)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                  -3.06%            NA              NA              NA               3.75%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                     5.55%            NA              NA              NA               6.85%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF International                 23.40%            NA              NA              NA               11.91%
Magnum (1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                3.47%          9.60%           17.97%          14.91%             15.98%
Managed (8/1/88) (3)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -3.27%          1.46%           6.77%           9.49%              9.85%
Small Cap (8/1/88) (1)


- -----------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &        18.11%            NA              NA              NA               23.07%
Income (1/2/98)

- -----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth              35.83%          40.44%          39.48%          24.98%               NA
(2/26/69) (2)

- -----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money                 NA              NA              NA              NA               3.32%
Market (1/2/98)

- -----------------------------------------------------------------------------------------------------------------------


5.  CUMULATIVE  TOTAL RETURNS - Assuming  surrender but no optional  Rider,  for
periods  since  inception  of  the  portfolio,   including  adjusted  historical
performance for each sub-account are as follows. These figures include mortality
and expenses charges of 1.20% per annum, administrative expenses charge of 0.15%
per annum, an account fee of $30 per annum adjusted for average account size and
the  applicable  contingent  deferred  sales  load  (maximum  of 6% of  purchase
payments) and do not reflect any fee deduction for the optional Rider.


- --------------------------------- --------------- -------------- ---------------- -------------- ----------------------
          SUB-ACCOUNT               For the 1-     For the 3-      For the 5-      For the 10-    For the period from
    (date of commencement of       year period     year period     year period     year period      commencement of
          operation of                ending         ending      ending 12/31/98     ending      portfolio operations
    corresponding portfolio)         12/31/98       12/31/98                        12/31/98          to 12/31/98
- --------------------------------- --------------- -------------- ---------------- -------------- ----------------------
- -----------------------------------------------------------------------------------------------------------------------

Alger American Income &              35.38%         142.18%         283.98%         391.13%            424.01%
Growth (11/15/88)

- -----------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                  4.71%          61.98%         168.99%            NA              219.75%
Income (1/14/91)

- -----------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth           25.38%         147.03%         330.72%            NA              420.95%
(6/26/92)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation              4.80%          73.90%         186.91%            NA              210.00%
(4/5/93)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                16.33%          28.80%          91.68%            NA              1412.05%
(8/31/90)

- -----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced          19.89%          95.00%         177.36%            NA              196.23%
(9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide         57.09%         144.06%         293.29%            NA              369.19%
Growth (9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth              69.19%         172.87%            NA              NA              269.54%
(7/24/95)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income              0.10%          58.11%            NA              NA              108.34%
(10/9/95)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Research                     17.22%          72.20%            NA              NA              130.52%
(7/26/95)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets              86.91%          37.65%           NA              NA                34.26%
Equity (10/1/96)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                  -8.11%            NA              NA              NA               7.57%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                     0.50%            NA              NA              NA               17.88%
(1/2/97)

                                 --------------------------------------------------------------------------------------

MS UIF International                 18.35%            NA              NA              NA               36.07%
Magnum (1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -1.58%          27.58%         125.59%         303.15%            446.79%
Managed (8/1/88) (3)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -8.32%          0.36%           35.68%         148.81%            194.05%
Small Cap (8/1/88) (1)

- -----------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &        13.06%            NA             NA              NA                46.49%
Income (1/2/98)

- -----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth              30.78%         173.07%         425.42%         833.22%              N/A
(2/26/69) (2)

- -----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money               -1.95%            NA              NA              NA               1.74%
Market (1/2/98)

- -----------------------------------------------------------------------------------------------------------------------




6.  CUMULATIVE  TOTAL RETURNS - Assuming  surrender and optional Living Benefits
Rider,  for  periods  since  inception  of  the  portfolio,  including  adjusted
historical  performance  for each  sub-account  are as  follows.  These  figures
include mortality and expense charges of 1.20% per annum, administrative expense
charge of 0.15% per annum,  an account fee of $30 per annum adjusted for average
account  size,  the  applicable  contingent  deferred  sales load (maximum 6% of
purchase  payments)  and the  optional  Living  Benefits  Rider fee of 0.05% per
annum.


- --------------------------------- --------------- -------------- --------------- -------------- ----------------------
          SUB-ACCOUNT               For the 1-       For the        For the         For the      For the period from
    (date of commencement of       year period       3-year      5-year period      10-year        commencement of
          operation of                ending         period          ending         period      portfolio operations
    corresponding portfolio)         12/31/98        ending         12/31/98        ending           to 12/31/98
                                                    12/31/98                       12/31/98
- --------------------------------- --------------- -------------- --------------- -------------- ----------------------
- ----------------------------------------------------------------------------------------------------------------------

Alger American Income &              35.33%         141.91%         283.24%        389.04%            421.50%
Growth (11/15/88)

- ----------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                  4.66%          61.76%         168.43%           NA              218.49%
Income (1/14/91)

- ----------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth           25.33%         146.76%         329.91%           NA              419.38%
(6/26/92)

- ----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation              4.75%          73.68%         186.32%           NA              209.11%
(4/5/93)

- ----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                16.28%          28.62%         91.25%            NA              1406.77%
(8/31/90)

- ----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced          19.84%          94.76%         176.79%           NA              195.44%
(9/13/93)

- ----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide         57.04%         143.79%         292.53%           NA              368.03%
Growth (9/13/93)

- ----------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth              69.14%         172.57%           NA              NA              268.93%
(7/24/95)

- ----------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income              0.05%          57.90%           NA              NA              107.97%
(10/9/95)

- ----------------------------------------------------------------------------------------------------------------------

MFS VIT Research                     17.17%          71.98%           NA              NA              130.09%
(7/26/95)

- ----------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets              86.86%          37.46%           NA              NA               34.06%
Equity (10/1/96)

- ----------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                  -8.16%            NA             NA              NA               7.41%
(1/2/97)

- ----------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                     0.45%            NA             NA              NA               17.71%
(1/2/97)

- ----------------------------------------------------------------------------------------------------------------------

MS UIF International                 18.30%            NA             NA              NA               35.88%
Magnum (1/2/97)

- ----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -1.63%          27.40%         125.10%        301.40%            444.10%
Managed (8/1/88) (3)

- ----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -8.37%          0.20%          35.35%         147.67%            192.53%
Small Cap (8/1/88) (1)

- ----------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &        13.01%            NA             NA              NA               46.36%
Income (1/2/98)

- ----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth              30.73%         172.77%         424.47%        829.49%               NA
(2/26/69) (2)

- ----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money               -2.00%            NA             NA              NA               1.64%
Market (1/2/98)

- ----------------------------------------------------------------------------------------------------------------------




7.  CUMULATIVE  TOTAL  RETURNS  -  Assuming  no  surrender  or  optional  Rider,
non-standard  cumulative  total  returns  for  periods  since  inception  of the
portfolio,  including adjusted historical performance,  for each sub-account are
as follow.  These figures  include  mortality  and expense  charges of 1.20% per
annum,  administrative  expense  charge of 0.15% per annum and an account fee of
$30  per  annum  adjusted  for  average  account  size  but do not  reflect  any
applicable  contingent  deferred sales load (maximum of 6% of purchase payments)
and do not reflect any fee deduction for the optional Rider.


- --------------------------------- --------------- -------------- ---------------- -------------- ----------------------
          SUB-ACCOUNT               For the 1-       For the     For the 5-year      For the      For the period from
    (date of commencement of       year period       3-year       period ending      10-year        commencement of
          operation of                ending         period         12/31/98         period      portfolio operations
    corresponding portfolio)         12/31/98        ending                          ending           to 12/31/98
                                                    12/31/98                        12/31/98
- --------------------------------- --------------- -------------- ---------------- -------------- ----------------------
- -----------------------------------------------------------------------------------------------------------------------

Alger American Income &              40.48%         146.43%         287.38%         391.13%            424.01%
Growth (11/15/88)

- -----------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                  9.81%          66.23%         172.39%            NA              219.75%
Income (1/14/91)

- -----------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth           30.48%         151.28%         334.12%            NA              420.95%
(6/26/92)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation              9.90%          78.15%         190.31%            NA              211.70%
(4/5/93)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                21.43%          33.05%          95.08%            NA              1412.05%
(8/31/90)

- -----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced          24.99%          99.25%         180.76%            NA              197.93%
(9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide         62.19%         148.31%         296.69%            NA              370.89%
Growth (9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth              74.29%         177.12%            NA              NA              272.94%
(7/24/95)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income              5.20%          62.36%            NA              NA              111.74%
(10/9/95)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Research                     22.32%          76.45%            NA              NA              133.92%
(7/26/95)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets              92.01%          41.90%            NA              NA               38.51%
Equity (10/1/96)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                  -3.01%            NA              NA              NA               11.82%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                     5.60%            NA              NA              NA               22.13%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF International                 23.45%            NA              NA              NA               40.32%
Magnum (1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                3.52%          31.83%         128.99%         303.15%            446.79%
Managed (8/1/88) (3)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -3.22%          4.61%           39.08%         148.81%            194.05%
Small Cap (8/1/88) (1)

- -----------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &        18.16%            NA              NA              NA               51.59%
Income (1/2/98)

- -----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth              35.88%         177.32%         428.82%         833.22%              N/A
(2/26/69) (2)

- -----------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money                 NA              NA              NA              NA               6.84%
Market (1/2/98)

- -----------------------------------------------------------------------------------------------------------------------



8.  CUMULATIVE  TOTAL  RETURNS - Assuming no surrender but  reflecting  optional
Living Benefits Rider,  non-standard  cumulative total returns for periods since
inception of the portfolio,  including adjusted historical performance, for each
sub-account are as follow.  These figures include  mortality and expense charges
of 1.20%  per  annum,  administrative  expense  charge of 0.15% per annum and an
account fee of $30 per annum  adjusted  for  average  account  size,  but do not
reflect any  applicable  contingent  deferred sales load (maximum 6% of purchase
payments).  They do  reflect  deductions  of the fee  for  the  optional  Living
Benefits Rider fee of 0.05% per annum.


- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------
          SUB-ACCOUNT                For the        For the     For the 5-year      For the      For the period from
    (date of commencement of         1-year         3-year       period ending      10-year        commencement of
          operation of            period ending     period         12/31/98         period      portfolio operations
    corresponding portfolio)        12/31/98        ending                          ending           to 12/31/98
                                                   12/31/98                        12/31/98
- --------------------------------- ---------------------------------------------- --------------------------------------

Alger American Income &               40.43%         146.16%        286.64%         389.04%             421.50%
Growth (11/25/88)

- --------------------------------- ---------------------------------------------- --------------------------------------

Alliance VP Growth &                  9.76%          66.01%         171.83%            NA               218.49%
Income (1/14/91)

- --------------------------------- ---------------------------------------------- --------------------------------------

Alliance VP Premier                   30.43%         151.01%        333.31%            NA               419.38%
Growth (6/26/92)

- --------------------------------- ---------------------------------------------- --------------------------------------

Dreyfus VIF Appreciation              9.85%          77.93%         189.72%            NA               210.81%
(4/5/93)

- --------------------------------- ---------------------------------------------- --------------------------------------

Dreyfus VIF Small Cap                 21.38%         32.87%          94.65%            NA              1406.77%
(8/31/90)

- --------------------------------- ---------------------------------------------- --------------------------------------

Janus Aspen Series Balanced           24.94%         99.01%         180.19%            NA               197.14%
(9/13/93)

- --------------------------------- ---------------------------------------------- --------------------------------------

Janus Aspen Series                    62.14%         148.04%        295.93%            NA               369.73%
Worldwide Growth (9/13/93)

- --------------------------------- ---------------------------------------------- --------------------------------------

MFS VIT Emerging Growth               74.24%         176.82%           NA              NA               272.33%
(7/24/95)

- --------------------------------- ---------------------------------------------- --------------------------------------

MFS VIT Growth w/ Income              5.15%          62.15%            NA              NA               111.37%
(10/9/95)

- --------------------------------- ---------------------------------------------- --------------------------------------

MFS VIT Research                      22.27%         76.23%            NA              NA               133.49%
(7/26/95)

                                  -------------- -------------- ---------------- -------------- ----------------------

MS UIF Emerging Markets Equity        91.96%         41.71%            NA              NA               38.31%
(10/1/96)

- --------------------------------- ---------------------------------------------- --------------------------------------

MS UIF Fixed Income                   -3.06%           NA              NA              NA               11.66%
(1/2/97)

- --------------------------------- ---------------------------------------------- --------------------------------------

MS UIF High Yield                     5.55%            NA              NA              NA               21.96%
(1/2/97)

- --------------------------------- ---------------------------------------------- --------------------------------------

MS UIF International                  23.40%           NA              NA              NA               40.13%
Magnum (1/2/97)

- --------------------------------- ---------------------------------------------- --------------------------------------

OCC Accumulation Trust                3.47%          31.65%         128.50%         301.40%             444.10%
Managed (8/1/88)

- --------------------------------- ---------------------------------------------- --------------------------------------

OCC Accumulation Trust                -3.27%          4.45%          38.75%         147.67%             192.53%
Small Cap (8/1/88)

- --------------------------------- ---------------------------------------------- --------------------------------------

PIMCO VIT StocksPLUS Growth &         18.11%           NA              NA              NA               51.46%
Income (1/2/98)

- --------------------------------- ---------------------------------------------- --------------------------------------

Transamerica VIF Growth               35.83%         177.02%        427.87%         829.49%               NA
(2/26/69)

- --------------------------------- ---------------------------------------------- --------------------------------------

Transamerica VIF Money                3.10%            NA              NA              NA                6.74%
(1/2/98)

- --------------------------------- ---------------------------------------------- --------------------------------------
</TABLE>


DISTRIBUTION OF THE CONTRACT

Transamerica  Securities Sales Corporation ("TSSC") is principal  underwriter of
the contracts under a Distribution  Agreement with  Transamerica.  TSSC may also
serve as principal underwriter and distributor of other contracts issued through
the variable  account and certain other separate  accounts of  Transamerica  and
affiliates  of  Transamerica.  TSSC is an indirect  wholly-owned  subsidiary  of
Transamerica  Corporation,  a subsidiary of AEGON N.V..  TSSC is registered with
the Commission as a broker-dealer and is a member of the National Association of
Securities  Dealers,  Inc.  ("NASD").  Transamerica  pays TSSC for acting as the
principal underwriter under a distribution agreement.

TSSC has entered  into sales  agreements  with other  broker-dealers  to solicit
applications  for  the  contracts  through  registered  representatives  who are
licensed to sell securities and variable  insurance  products.  These agreements
provide that  applications  for the  contracts  may be  solicited by  registered
representatives  of the  broker-dealers  appointed by  Transamerica  to sell its
variable  life  insurance  and  variable  annuities.  These  broker-dealers  are
registered  with the  Commission  and are  members of the NASD.  The  registered
representatives  are  authorized  under  applicable  state  regulations  to sell
variable life insurance and variable annuities.

Under the agreements,  applications for contracts will be sold by broker-dealers
which will receive compensation as described in the prospectus.

The  offering of the  contracts is expected to be  continuous  and TSSC does not
anticipate  discontinuing the offering of the contracts.  However, TSSC reserves
the right to discontinue the offering of the contracts.


During  fiscal  year  1999,  $14,695,209  in  commissions  were  paid to TSSC as
underwriter  of Separate  Accounts  VA-6 and VA-7;  no amounts were  retained by
TSSC.  Under the sales  agreements,  TSSC will pay  broker-dealers  compensation
based on a percentage of each purchase payment.  This percentage may be up to 6%
and  in  certain  situations   additional  amounts  for  marketing   allowances,
production  bonuses,  service fees,  sales awards and meetings,  and asset based
trailer commissions may be paid.


SAFEKEEPING OF VARIABLE ACCOUNT ASSETS

Title to assets of the variable account is held by  Transamerica.  The assets of
the  variable  account are kept  separate  and apart from  Transamerica  general
account  assets.  Records are  maintained of all purchases  and  redemptions  of
portfolio shares held by each of the sub-accounts.

STATE REGULATION

We are subject to the insurance laws and  regulations of all the states where we
are  licensed  to  operate.  The  availability  of certain  contract  rights and
provisions  depends on state approval and/or filing and review processes.  Where
required by state law or regulation, the contract will be modified accordingly.

RECORDS AND REPORTS

All records and accounts  relating to the variable account will be maintained by
us or by our Service Office. As presently required by the provisions of the 1940
Act  and  regulations  promulgated  thereunder  which  pertain  to the  variable
account,  reports  containing such information as may be required under the 1940
Act  or  by  other   applicable  law  or  regulation  will  be  sent  to  owners
semi-annually at their last known address of record.

FINANCIAL STATEMENTS


This Statement of Additional  Information  contains the financial  statements of
the variable account as of and for the period ended December 31, 1999.


The  financial  statements  for  Transamerica  included  in  this  statement  of
additional  information  should be considered  only as bearing on our ability to
meet our  obligations  under the  contracts.  They should not be  considered  as
bearing on the investment performance of the assets in the variable account.


<PAGE>


APPENDIX

         ACCUMULATION TRANSFER FORMULA

         Transfers  after the  annuity  date are  implemented  according  to the
following formulas:

          (1)  Determine the number of units to be transferred from the variable
               sub-account as follows: = AT/AUV1

         (2) Determine the number of variable  accumulation  units  remaining in
         such variable sub-account (after the transfer):
         = UNIT1 AT/AUV1

         (3)  Determine  the  number  of  variable  accumulation  units  in  the
         transferee variable sub-account (after the transfer):
         = UNIT2 + AT/AUV2

         (4) Subsequent variable  accumulation payments will reflect the changes
         in variable  accumulation units in each variable  sub-account as of the
         next variable accumulation payment's due date.

         Where:

         (AUV1)  is  the  variable  accumulation  unit  value  of  the  variable
         sub-account  that the  transfer is being made from as of the end of the
         valuation period in which the transfer request was received.

         (AUV2)  is  the  variable  accumulation  unit  value  of  the  variable
         sub-account  that the  transfer  is being  made to as of the end of the
         valuation period in which the transfer request was received.

         (UNIT1) is the number of variable  accumulation  units in the  variable
         sub-account that the transfer is being made from, before the transfer.

         (UNIT2) is the number of variable  accumulation  units in the  variable
         sub-account that the transfer is being made to, before the transfer.

         (AT)  is  the  dollar  amount  being   transferred  from  the  variable
sub-account.


<PAGE>
0





                          Audited Financial Statements

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                          Year ended December 31, 1999
                       with Report of Independent Auditors


<PAGE>


                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                          Audited Financial Statements


                          Year ended December 31, 1999



<TABLE>
<CAPTION>

                                                     CONTENTS

<S>                                                                                                    <C>
Report of Independent Auditors..........................................................................1

Audited Financial Statements

Statement of Assets and Liabilities.....................................................................2
Statement of Operations.................................................................................6
Statements of Changes in Net Assets....................................................................10
Notes to Financial Statements..........................................................................17
</TABLE>





<PAGE>



                                        1




                         Report of Independent Auditors


Unitholders of Separate Account VA-6 of
  Transamerica Life Insurance and Annuity Company
Board of Directors, Transamerica Life Insurance and
  Annuity Company

We have audited the accompanying statement of assets and liabilities of Separate
Account VA-6 of Transamerica  Life Insurance and Annuity  Company  (comprised of
the Alliance Premier Growth,  Alliance Growth and Income,  Oppenheimer  Managed,
Oppenheimer Small Cap,  Transamerica VIF Growth,  Transamerica VIF Money Market,
MFS  Research,  MFS Growth with Income,  MFS  Emerging  Growth,  Morgan  Stanley
International  Magnum,  Morgan Stanley Fixed Income,  Morgan Stanley High Yield,
Alger American  Income and Growth,  Janus Aspen  Worldwide  Growth,  Janus Aspen
Balanced,  Dreyfus  Capital  Appreciation,  Dreyfus  Small Cap,  Morgan  Stanley
Emerging  Markets Equity,  and PIMCO VIT StockPLUS  Sub-Accounts) as of December
31, 1999, the related  statement of operations for the year then ended,  and the
statements of changes in net assets for the year ended December 31, 1999 and for
the period from January 12, 1998  (commencement  of  operations) to December 31,
1998. The financial  statements are the  responsibility  of the Separate Account
VA-6's  management.  Our  responsibility  is to  express  an  opinion  on  these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the  amounts  and  disclosures  in  the  financial  statements.  Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence  with  fund  managers.  An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  each  of the  respective
sub-accounts comprising Separate Account VA-6 of Transamerica Life Insurance and
Annuity Company as of December 31, 1999, the results of their operations for the
year then ended, and the changes in their net assets for the year ended December
31, 1999 and for the period from January 12, 1998  (commencement  of operations)
to December 31, 1998 in conformity with accounting principles generally accepted
in the United States.


March 24, 2000


<PAGE>


                                        2

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Assets and Liabilities

                                December 31, 1999
<TABLE>
<CAPTION>


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------
ASSETS
<S>                               <C>               <C>              <C>               <C>              <C>
   Investments, at fair value     $   39,341,157    $   14,833,902   $    4,827,117    $      877,556   $   76,609,284
   Receivable for units sold                   -                 -                -                 -                -
   Due from Transamerica Life                  -                 -                -                 -                -
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Total assets                          39,341,157        14,833,902        4,827,117           877,556       76,609,284

LIABILITIES
   Payable for units redeemed             31,727            13,116           32,631                 -           49,789
   Due to Transamerica Life                  445             2,813                -                 4            2,827
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Total liabilities                         32,172            15,929           32,631                 4           52,616
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Net assets                        $   39,308,985    $   14,817,973   $    4,794,486    $      877,552   $   76,556,668
                                  ================= ================ ================= ================ =================

Accumulation units outstanding     2,081,825.689     1,135,587.446      439,082.233       101,045.650    3,988,508.416
                                  ================= ================ ================= ================ =================

Net asset value and redemption
   price per unit                 $    18.881977    $    13.048729   $    10.919335    $     8.684708   $    19.194310
                                  ================= ================ ================= ================ =================

Investment sub-account
   information:

Number of  mutual fund shares        972,587.330       680,766.500      110,586.880        38,967.880    2,878,965.970

Net asset value per share         $        40.45    $        21.79   $        43.65    $        22.52   $        26.61

Investment cost                   $   32,483,643    $   14,412,388   $    4,758,759    $      881,071   $   58,867,611



</TABLE>

See accompanying notes.


<PAGE>

<TABLE>
<CAPTION>









                                                                         MORGAN STANLEY
 TRANSAMERICA VIF                                                         INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
   MONEY MARKET                         MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
   SUB-ACCOUNT        MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

<S>                 <C>               <C>              <C>               <C>              <C>               <C>
$    8,731,360      $    5,952,512    $   12,256,210   $   17,514,557    $    2,487,390   $    6,512,282    $    6,148,760
         1,113                   -                 -            5,986                 -                -                 -
           231                   -                 -                -                 -                -                 -
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------
     8,732,704           5,952,512        12,256,210       17,520,543         2,487,390        6,512,282         6,148,760


        14,512              10,339             4,094                -            10,677                -             3,693
             -                  81                60              577                43               25                62
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------
        14,512              10,420             4,154              577            10,720               25             3,755
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

$    8,718,192      $    5,942,092    $   12,252,056   $   17,519,966    $    2,476,670   $    6,512,257    $    6,145,005
=================== ================= ================ ================= ================ ================= ================

 8,145,374.551         399,512.466       965,409.265      760,433.531       187,194.949      633,201.933       563,904.809
=================== ================= ================ ================= ================ ================= ================


$     1.070324      $    14.873358    $    12.691049   $    23.039444    $    13.230432   $    10.284645    $    10.897238
=================== ================= ================ ================= ================ ================= ================




 8,731,360.880         255,034.800       575,138.930      461,638.300       179,077.820      647,988.350       600,464.940

$         1.00      $        23.34    $        21.31   $        37.94    $        13.89   $        10.05    $        10.24

$    8,731,360      $    4,851,092    $   11,338,585   $   10,665,909    $    2,072,959   $    6,912,330    $    6,378,125

</TABLE>

<PAGE>


                                        4

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                 Statement of Assets and Liabilities (continued)

<TABLE>
<CAPTION>


                                   ALGER AMERICAN     JANUS ASPEN                       DREYFUS
                                     INCOME AND        WORLDWIDE      JANUS ASPEN       CAPITAL      DREYFUS SMALL
                                       GROWTH           GROWTH          BALANCED      APPRECIATION        CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT
                                  ----------------- ---------------- --------------- --------------- ---------------
ASSETS
<S>                               <C>               <C>              <C>             <C>             <C>
   Investments, at fair value     $   20,338,846    $   33,683,258   $   31,309,726  $   15,402,361  $    7,460,447
   Receivable for units sold                   -            55,068                -               -               -
   Due from Transamerica Life                  -                 -                -              26              14
                                  ----------------- ---------------- --------------- --------------- ---------------
Total assets                          20,338,846        33,738,326       31,309,726      15,402,387       7,460,461

LIABILITIES
   Payable for units redeemed              3,000                 -           78,716          83,955          24,986
   Due to Transamerica Life                  351               523              238               -               -
                                  ----------------- ---------------- --------------- --------------- ---------------
Total liabilities                          3,351               523           78,954          83,955          24,986
                                  ----------------- ---------------- --------------- --------------- ---------------

Net assets                        $   20,335,495    $   33,737,803   $   31,230,772  $   15,318,432  $    7,435,475
                                  ================= ================ =============== =============== ===============

Accumulation units outstanding     1,102,496.260     1,643,533.430    1,886,693.794   1,093,808.832     639,456.014
                                  ================= ================ =============== =============== ===============

Net asset value and redemption
   price per unit                 $    18.444956    $    20.527604   $    16.553175  $    14.004670  $    11.627813
                                  ================= ================ =============== =============== ===============

Investment sub-account
   information:

Number of  mutual fund shares      1,156,930.970       705,408.550    1,121,408.540     386,314.560     112,457.750

Net asset value per share         $        17.58    $        47.75   $        27.92  $        39.87  $        66.34

Investment cost                   $   15,231,104    $   23,118,222   $   27,022,049  $   14,117,537  $    6,308,492


</TABLE>

See accompanying notes.


<PAGE>


                                        5








      MORGAN
 STANLEY EMERGING       PIMCO
  MARKETS EQUITY    VIT STOCKPLUS
   SUB-ACCOUNT       SUB-ACCOUNT
- ------------------- ---------------

$      570,146      $      100,766
             -                   -
             -                   -
- ------------------- ---------------
       570,146             100,766


             -                   -
            43                   1
- ------------------- ---------------
            43                   1
- ------------------- ---------------

$      570,103      $      100,765
=================== ===============

    39,511.653           9,289.183
=================== ===============


$    14.428731      $    10.847563
=================== ===============





    40,988.240           7,431.190

$        13.91      $        13.56

$      535,334      $      101,391


<PAGE>


                                        6

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                             Statement of Operations

                          Year ended December 31, 1999
<TABLE>
<CAPTION>


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

<S>                               <C>               <C>              <C>               <C>              <C>
Investment income                 $     220,040     $     709,999    $     125,169     $       2,979    $           -

Expenses:
   Mortality and expense risk
     charge                             265,324           116,472           47,729             8,175          555,721
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net investment income (loss)            (45,284)          593,527           77,440            (5,196)        (555,721)

Net realized and unrealized gain (loss) on investments:
     Realized gain (loss) on
       investment transactions          653,810           (34,876)         (19,664)           (6,659)         941,408
     Unrealized appreciation
       (depreciation) of
       investments                    5,886,726            60,218           51,671            (3,670)      16,235,413
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Net gain (loss) on investments        6,540,536            25,342           32,007           (10,329)      17,176,821
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Increase (decrease) in assets
   resulting from operations      $   6,495,252     $     618,869    $     109,447     $     (15,525)   $  16,621,100
                                  ================= ================ ================= ================ =================
</TABLE>



See accompanying notes.


<PAGE>


                                        7




<TABLE>
<CAPTION>




                                                                         MORGAN STANLEY
 TRANSAMERICA VIF                                                         INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
   MONEY MARKET                         MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
   SUB-ACCOUNT        MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

<S>                 <C>               <C>              <C>               <C>              <C>               <C>
$     317,083       $      39,232     $      51,759    $           -     $      24,636    $     286,807     $     450,707



       93,869              48,842           113,577          106,543            21,918           61,987            58,545
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------
      223,214              (9,610)          (61,818)        (106,543)            2,718          224,820           392,162




            -              26,316            71,623          294,616             2,495           (6,961)          (15,780)


      (56,229)            937,760           548,180        6,261,699           414,271         (335,925)         (128,542)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

      (56,229)            964,076           619,803        6,556,315           416,766         (342,886)         (144,322)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------


$     166,985       $     954,466     $     557,985    $   6,449,772     $     419,484    $    (118,066)    $     247,840
=================== ================= ================ ================= ================ ================= ================

</TABLE>

<PAGE>


                                        8

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Operations (continued)

<TABLE>
<CAPTION>


                                   ALGER AMERICAN     JANUS ASPEN                       DREYFUS
                                     INCOME AND        WORLDWIDE      JANUS ASPEN       CAPITAL      DREYFUS SMALL
                                       GROWTH           GROWTH          BALANCED      APPRECIATION        CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT
                                  ----------------- ---------------- --------------- --------------- ---------------

<S>                               <C>               <C>              <C>             <C>             <C>
Investment income                 $     434,309     $      23,946    $     487,403   $     137,316   $      2,013

Expenses:
   Mortality and expense risk
     charge                             135,473           194,792          212,914         130,037         57,102
                                  ----------------- ---------------- --------------- --------------- ---------------
Net investment income (loss)            298,836          (170,846)         274,489           7,279        (55,089)


Net realized and unrealized gain (loss) on investments:
     Realized gain (loss) on
       investment transactions          217,501           444,522          294,348         133,316        (90,513)
     Unrealized appreciation
       (depreciation) of
       investments                    4,616,595        10,112,634        3,668,310         830,432      1,168,189
                                  ----------------- ---------------- --------------- --------------- ---------------

Net gain (loss) on investments        4,834,096        10,557,156        3,962,658         963,748      1,077,676
                                  ----------------- ---------------- --------------- --------------- ---------------

Increase (decrease) in net
   assets resulting from          $   5,132,932     $  10,386,310    $   4,237,147   $     971,027   $  1,022,587
   operations
                                  ================= ================ =============== =============== ===============

</TABLE>


See accompanying notes.


<PAGE>


                                        9








      MORGAN
 STANLEY EMERGING       PIMCO
  MARKETS EQUITY    VIT STOCKPLUS
   SUB-ACCOUNT       SUB-ACCOUNT
- ------------------- ---------------

$           -       $       7,215



          692                 165
- ------------------- ---------------
         (692)              7,050





       72,096                  13


       34,812                (624)
- ------------------- ---------------

      106,908                (611)
- ------------------- ---------------


$     106,216       $       6,439
=================== ===============



<PAGE>


                                       10

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Changes in Net Assets

                          Year ended December 31, 1999
<TABLE>
<CAPTION>


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Increase in net assets:
   Operations:
     Net investment income
<S>                               <C>               <C>              <C>               <C>              <C>
       (loss)                     $     (45,284)    $     593,527    $      77,440     $      (5,196)   $    (555,721)
     Realized gain (loss) on
       investment transactions          653,810           (34,876)         (19,664)           (6,659)         941,408
     Unrealized appreciation
       (depreciation) of
       investments                    5,886,726            60,218           51,671            (3,670)      16,235,413
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Increase (decrease) in net
   assets resulting from              6,495,252           618,869          109,447           (15,525)      16,621,100
   operations

Change from accumulation unit
   transactions                      26,628,545        10,167,044        2,585,748           463,610       39,818,814
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Total increase in net assets         33,123,797        10,785,913        2,695,195           448,085       56,439,914

Net assets at beginning of            6,185,188         4,032,060        2,099,291           429,467       20,116,754
period
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Net assets at end of period       $  39,308,985     $  14,817,973    $   4,794,486     $     877,552    $  76,556,668
                                  ================= ================ ================= ================ =================



See accompanying notes.


<PAGE>


                                       11








                                                                         MORGAN STANLEY
 TRANSAMERICA VIF                                                         INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
   MONEY MARKET                         MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
   SUB-ACCOUNT        MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------




$     223,214       $      (9,610)    $     (61,818)   $    (106,543)    $       2,718    $     224,820     $     392,162

            -              26,316            71,623          294,616             2,495           (6,961)          (15,780)


      (56,229)            937,760           548,180        6,261,699           414,271         (335,925)         (128,542)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------


      166,985             954,466           557,985        6,449,772           419,484         (118,066)          247,840


    4,269,998           3,148,890         7,560,891        7,129,722         1,044,422        3,882,462         3,083,329
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

    4,436,983           4,103,356         8,118,876       13,579,494         1,463,906        3,764,396         3,331,169

    4,281,209           1,838,736         4,133,180        3,940,472         1,012,764        2,747,861         2,813,836
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

$   8,718,192       $   5,942,092     $  12,252,056    $  17,519,966     $   2,476,670    $   6,512,257     $   6,145,005
=================== ================= ================ ================= ================ ================= ================


<PAGE>


                                       12

                                             Separate Account VA-6 of
                                  Transamerica Life Insurance and Annuity Company

                                  Statement of Changes in Net Assets (continued)



                                       ALGER
                                  AMERICAN INCOME     JANUS ASPEN                       DREYFUS
                                     AND GROWTH        WORLDWIDE      JANUS ASPEN       CAPITAL      DREYFUS SMALL
                                    SUB-ACCOUNT         GROWTH          BALANCED      APPRECIATION        CAP
                                                      SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT
                                  ----------------- ---------------- --------------- --------------- ---------------

Increase in net assets:
   Operations:
     Net investment income
       (loss)                     $     298,836     $    (170,846)   $     274,489   $       7,279   $     (55,089)
     Realized gain (loss) on
       investment  transactions         217,501           444,522          294,348         133,316         (90,513)
     Unrealized appreciation
       (depreciation) of
       investments                    4,616,595        10,112,634        3,668,310`        830,432       1,168,189
                                  ----------------- ---------------- --------------- --------------- ---------------

Increase (decrease) in net
   assets resulting from              5,132,932        10,386,310        4,237,147         971,027       1,022,587
   operations

Changes from accumulation unit
   transactions                      11,137,669        17,654,193       22,110,729       9,551,150       3,776,210
                                  ----------------- ---------------- --------------- --------------- ---------------

Total increase in net assets         16,270,601        28,040,503       26,347,876      10,522,177       4,798,797

Net assets at beginning of year       4,064,894         5,697,300        4,882,896       4,796,255       2,636,678
                                  ----------------- ---------------- --------------- --------------- ---------------

Net assets at end of year         $  20,335,495     $  33,737,803    $  31,230,772   $  15,318,432   $   7,435,475
                                  ================= ================ =============== =============== ===============



See accompanying notes.


<PAGE>



                                       13








      MORGAN
 STANLEY EMERGING        PIMCO
  MARKETS EQUITY          VIT
    SUB-ACCOUNT        STOCKPLUS
                      SUB-ACCOUNT
- -------------------- --------------




$        (692)       $       7,050

       72,096                   13


       34,812                 (624)
- -------------------- --------------


      106,216                6,439


      463,887               94,326
- -------------------- --------------

      570,103              100,765

            -                    -
- -------------------- --------------

$     570,103        $     100,765
==================== ==============

</TABLE>


<PAGE>


                                       14

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Changes in Net Assets
<TABLE>
<CAPTION>

 Period from January 12, 1998 (commencement of operations) to December 31, 1998


                                       ALLIANCE         ALLIANCE
                                    PREMIER GROWTH     GROWTH AND       OPPENHEIMER      OPPENHEIMER      TRANSAMERICA
                                      SUB-ACCOUNT        INCOME           MANAGED         SMALL CAP        VIF GROWTH
                                                       SUB-ACCOUNT      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase in net assets:
   Operations:
<S>                                   <C>              <C>              <C>              <C>               <C>
     Net investment income (loss)     $   (20,663)     $    93,130      $   (11,143)     $    (1,951)      $ 1,541,026
     Realized gain (loss) on
       investment transactions              9,374          (11,810)         (13,311)          (5,298)          224,895
     Unrealized appreciation
       (depreciation) of
       investments                        970,787          361,294           16,685              155         1,506,260
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase (decrease) in net assets
   resulting from operations              959,498          442,614           (7,769)          (7,094)        3,272,181

Change from accumulation unit
   transactions                         5,225,690        3,589,446        2,107,060          436,561        16,844,573
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Total increase in net assets            6,185,188        4,032,060        2,099,291          429,467        20,116,754

Net assets at beginning of period               -                -                -                -                 -
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Net assets at end of period           $ 6,185,188      $ 4,032,060      $ 2,099,291      $   429,467       $20,116,754
                                    ================ ================ ================ ================= ================


See accompanying notes.



<PAGE>


                                       16








                                                                         MORGAN STANLEY
   TRANSAMERICA                                                           INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
    VIF MONEY                           MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
MARKET SUB-ACCOUNT    MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACOUNT       SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------



  $    40,317         $    (5,457)      $   (19,027)     $   (13,376)      $      (493)     $   103,661       $   161,107

          270                (453)           (5,984)          (4,306)             (674)           1,296           (12,252)


       56,229             163,659           369,444          586,948               160          (64,122)         (100,822)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------


       96,816             157,749           344,433          569,266            (1,007)          40,835            48,033


    4,184,393           1,680,987         3,788,747        3,371,206         1,013,771        2,707,026         2,765,803
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

    4,281,209           1,838,736         4,133,180        3,940,472         1,012,764        2,747,861         2,813,836

            -                   -                 -                -                 -                -                 -
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

  $ 4,281,209         $ 1,838,736       $ 4,133,180      $ 3,940,472       $ 1,012,764      $ 2,747,861       $ 2,813,836
=================== ================= ================ ================= ================ ================= ================



<PAGE>


                                             Separate Account VA-6 of
                                  Transamerica Life Insurance and Annuity Company

                                  Statement of Changes in Net Assets (continued)

                  Period from January 12, 1998 (commencement of operations) to December 31, 1998

                                         ALGER
                                       AMERICAN        JANUS ASPEN                     DREYFUS CAPITAL
                                      INCOME AND        WORLDWIDE       JANUS ASPEN      APPRECIATION        DREYFUS
                                        GROWTH           GROWTH          BALANCED        SUB-ACCOUNT        SMALL CAP
                                      SUB-ACCOUNT      SUB-ACCOUNT      SUB-ACCOUNT                        SUB-ACCOUNT
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase in net assets:
   Operations:
     Net investment income (loss)     $    47,767      $    33,619      $    75,025      $     3,770       $    19,489
     Realized gain (loss) on
       investment transactions            (11,058)          (1,276)          16,321            6,062           (18,515)
     Unrealized appreciation
       (depreciation) of
       investments                        491,146          452,400          619,366          454,391           (16,234)
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase (decrease) in net assets
   resulting from operations              527,855          484,743          710,712          464,223           (15,260)

Change from accumulation unit
   transactions                         3,537,039        5,212,557        4,172,184        4,332,032         2,651,938
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Total increase in net assets            4,064,894        5,697,300        4,882,896        4,796,255         2,636,678

Net assets at beginning of period               -                -                -                -                 -
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Net assets at end of period           $ 4,064,894      $ 5,697,300      $ 4,882,896      $ 4,796,255       $ 2,636,678
                                    ================ ================ ================ ================= ================
</TABLE>

See accompanying notes.


<PAGE>


                              Separate Account VA-6
                 Transamerica Life Insurance and Annuity Company

                          Notes to Financial Statements

                                December 31, 1999

                                       19

1. ORGANIZATION

Separate  Account  VA-6 of  Transamerica  Life  Insurance  and  Annuity  Company
("Separate  Account") was established by Transamerica Life Insurance and Annuity
Company  ("Transamerica Life") as a separate account under the laws of the State
of North Carolina pursuant to June 11, 1996 resolutions of Transamerica's  Board
of  Directors.  The  Separate  Account is  registered  with the  Securities  and
Exchange  Commission ("the Commission") under the Investment Company Act of 1940
as a unit investment trust and is designed to provide annuity benefits  pursuant
to deferred  annuity  contracts  ("Contract")  issued by Transamerica  Life. The
Separate  Account  commenced  operations when initial  deposits were received on
January 12, 1998.

In  accordance  with the terms of the  Contract,  all payments  allocated to the
Separate  Account by contract  owners must be allocated to purchase units of any
or all of the Separate  Account's nineteen  sub-accounts,  each of which invests
exclusively in a specific  corresponding mutual fund portfolio.  The mutual fund
portfolios are: Alliance Premier Growth, Alliance Growth and Income, Oppenheimer
Managed,  Oppenheimer Small Cap, Transamerica VIF Growth, Transamerica VIF Money
Market,  MFS  Research,  MFS Growth with  Income,  MFS Emerging  Growth,  Morgan
Stanley  International  Magnum, Morgan Stanley Fixed Income, Morgan Stanley High
Yield,  Alger American Income and Growth,  Janus Aspen Worldwide  Growth,  Janus
Aspen Balanced, Dreyfus Capital Appreciation,  Dreyfus Small Cap, Morgan Stanley
Emerging  Markets  Equity and PIMCO VIT StockPLUS  (together  "the Funds").  The
Funds  are  open-end,  diversified  investment  companies  registered  under the
Investment Company Act of 1940.

2. SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements of the Separate Account have been prepared
in  accordance  with  accounting  principles  generally  accepted  in the United
States.  The  preparation of financial  statements  requires  management to make
estimates  and  assumptions  that  affect  amounts  reported  in  the  financial
statements and accompanying  notes.  Such estimates and assumptions could change
in the future as more  information  becomes known which could impact the amounts
reported  and  disclosed  herein.  The  accounting  principles  followed and the
methods of applying those principles are presented below:

INVESTMENT VALUATION

Investments  in Funds'  shares are carried at fair (net asset)  value.  Realized
investment  gains  or  losses  on  investments  are  determined  on  a  specific
identification  basis which approximates average cost.  Investment  transactions
are accounted for on the date the order to buy or sell is executed (trade date).


<PAGE>


                              Separate Account VA-6
                 Transamerica Life Insurance and Annuity Company

                    Notes to Financial Statements (continued)




2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENT INCOME

Investment  income consists of dividend income (both ordinary and capital gains)
and is  recognized  on the  ex-dividend  date.  All  distributions  received are
reinvested in the respective sub-accounts.

FEDERAL INCOME TAXES

Operations of the Separate Account are part of, and will be taxed with, those of
Transamerica  Life,  which is  taxed as a "life  insurance  company"  under  the
Internal  Revenue Code. Under current federal income tax law, income from assets
maintained in the Separate Account for the exclusive  benefit of participants is
generally not subject to federal income tax.

3. EXPENSES AND CHARGES

Mortality  and expense risk charges are deducted  form each  sub-account  of the
Separate  Account on a daily basis which is equal,  on an annual basis, to 1.20%
of the daily net asset value of the sub-account.  This amount can never increase
and is paid to  Transamerica  Life.  An  administrative  expense  charge is also
deducted by  Transamerica  Life from each  sub-account on a daily basis which is
equal,  on an  annual  basis,  to .15%  of the  daily  net  asset  value  of the
sub-account.  This  amount  may  change,  but it is  guaranteed  not to exceed a
maximum effective annual rate of .35%.

The  following  charges  are  deducted  form  a  contract  holder's  account  by
Transamerica Life and not directly from the Separate Account. An annual contract
fee is deducted  at the end of each  contract  year prior to the  annuity  date.
Currently, this charge is $30 (or 2% of the account value, if less). This charge
may change but is guaranteed not to exceed $60 (or 2% of the account  value,  if
less). After the annuity date this charge is referred to as the Annuity Fee. The
Annuity Fee is $30. Additionally, there is a $10 fee for each transfer in excess
of eighteen in each calendar year. In the event that a contract holder withdraws
all or a portion of the contract holder's account,  a contingent  deferred sales
load (CDSL) not  exceeding  6% of  premiums  may be applied to the amount of the
contract  value  withdrawn  to cover  certain  expenses  relating to the sale of
contracts.  The amount of the CDSL is based upon  elapsed time since the premium
was received and disappears  after the seventh year.  During 1999, CDSL amounted
to $77,064.



<PAGE>


                                       26


4. REMUNERATION

The separate  account pays no  remuneration  to  directors,  advisory  boards or
officers or such other  persons who may from time to time  perform  services for
the Separate Account.

5. ACCUMULATION UNITS
<TABLE>
<CAPTION>

The changes in accumulation units and amounts are as follows:


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Year ended December 31, 1999

Accumulation Units:
<S>                                 <C>                 <C>              <C>              <C>             <C>
   Units sold                       1,150,187.485       502,971.812      181,583.435      21,295.199      2,035,471.824
   Units redeemed                     (37,971.274)      (23,234.689)      (8,040.765)       (398.348)      (117,191.886)
   Units transferred                  541,961.340       316,310.256       66,371.581      32,251.631        645,387.055
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                        1,654,177.551       796,047.379      239,914.251      53,148.482      2,563,666.993
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                      15,247,050.345       174,333.788      384,297.790       328,467.480       50,344.669
   Units redeemed                    (724,530.551)       (9,184.776)     (22,640.100)       (9,356.530)      (4,834.347)
   Units transferred              (10,507,039.207)       83,050.548      260,907.051       143,108.648       47,129.299
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                        4,015,480.587       248,199.560      622,564.741       462,219.598       92,639.621
                                  ================= ================ ================= ================ =================

                                                                      ALGER AMERICAN
                                   MORGAN STANLEY   MORGAN STANLEY      INCOME AND       JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD          GROWTH          WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT         GROWTH           BALANCED
                                                                                         SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                         158,959.661       118,987.338      577,035.945       784,616.523    1,030,839.833
   Units redeemed                     (17,060.765)      (17,482.256)     (20,966.788)      (25,497.851)     (25,096.610)
   Units transferred                  232,066.572       189,528.970      236,678.161       434,072.458      512,022.250
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                          373,965.468       291,034.052      792,747.318     1,193,191.130    1,517,765.473
                                  ================= ================ ================= ================ =================


<PAGE>



5. ACCUMULATION UNITS (CONTINUED)

                                                                      MORGAN STANLEY
                                  DREYFUS CAPITAL                        EMERGING
                                    APPRECIATION        DREYFUS       MARKETS EQUITY      PIMCO VIT
                                    SUB-ACCOUNT        SMALL CAP       SUB-ACCOUNT        STOCKPLUS
                                                      SUB-ACCOUNT                        SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ----------------

Accumulation Units:
   Units sold                         489,603.950       259,178.342     11,571.407           3,424.049
   Units redeemed                     (18,096.200)       (6,736.271)        (0.117)             (0.822)
   Units transferred                  245,680.723       111,487.469     27,940.363           5,865.956
                                  ----------------- ---------------- ----------------- ----------------
Net increase                          717,188.473       363,929.540     39,511.653           9,289.183
                                  ================= ================ ================= ================


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Year ended December 31, 1999

Amounts:
   Sales                          $  18,515,436     $   6,423,910    $   1,957,070     $     185,756    $  31,614,899
   Redemptions                         (611,252)         (296,751)         (86,661)           (3,474)      (1,820,221)
   Transfers                          8,724,361         4,039,885          715,339           281,328       10,024,136
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $  26,628,545     $  10,167,044    $   2,585,748     $     463,610    $  39,818,814
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $  16,213,468     $   2,211,760    $   4,667,199     $   5,066,600    $     567,587
   Redemptions                         (770,454)         (116,526)        (274,958)         (144,324)         (54,502)
   Transfers                        (11,173,016)        1,053,656        3,168,650         2,207,446          531,337
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   4,269,998     $   3,148,890    $   7,560,891     $   7,129,722    $   1,044,422
                                  ================= ================ ================= ================ =================

                                   MORGAN STANLEY   MORGAN STANLEY    ALGER AMERICAN     JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD        INCOME AND        WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT         GROWTH           GROWTH           BALANCED
                                                                       SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $   1,650,696     $   1,260,598    $   8,107,041     $  11,609,013    $  15,017,222
   Redemptions                         (177,165)         (185,213)        (294,571)         (377,260)        (365,606)
   Transfers                          2,408,931         2,007,944        3,325,199         6,422,440        7,459,113
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   3,882,462     $   3,083,329    $  11,137,669     $  17,654,193    $  22,110,729
                                  ================= ================ ================= ================ =================


5. ACCUMULATION UNITS (CONTINUED)

                                                                      MORGAN STANLEY
                                  DREYFUS CAPITAL                        EMERGING
                                    APPRECIATION     DREYFUS SMALL    MARKETS EQUITY      PIMCO VIT
                                    SUB-ACCOUNT           CAP          SUB-ACCOUNT        STOCKPLUS
                                                      SUB-ACCOUNT                        SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ----------------

Amounts:
   Sales                          $   6,520,295     $   2,689,289    $     135,854     $      34,769
   Redemptions                         (240,995)          (69,896)              (1)               (8)
   Transfers                          3,271,850         1,156,817          328,034            59,565
                                  ----------------- ---------------- ----------------- ----------------
Net increase                      $   9,551,150     $   3,776,210    $     463,887     $      94,326
                                  ================= ================ ================= ================


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Period from January 12, 1998
to December 31, 1998
- ---------------------------------

Accumulation Units:
   Units sold                       405,514.499         322,509.748      189,242.536        44,756.495    1,548,611.269
   Units redeemed                    (3,888.691)         (1,520.939)        (777.337)         (147.621)     (95,167.336)
   Units transferred                 26,022.380          18,551.258       10,702.783         3,288.294      (28,602.510)
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                        427,648.138         339,540.067      199,167.982        47,897.168    1,424,841.423
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                     5,500,255.363         142,988.314      330,630.911       276,470.688       87,091.861
   Units redeemed                    (2,062.198)         (4,416.640)      (1,298.233)       (1,568.594)        (464.787)
   Units transferred              (1,368,299.201)        12,741.232       13,511.846        23,311.839        7,928.254
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      4,129,893.964         151,312.906      342,844.524       298,213.933       94,555.328
                                  ================= ================ ================= ================ =================

                                   MORGAN STANLEY   MORGAN STANLEY    ALGER AMERICAN     JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD        INCOME AND        WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT         GROWTH           GROWTH           BALANCED
                                                                       SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                         237,248.878       253,931.309      289,673.784       422,289.213      360,603.402
   Units redeemed                        (985.174)       (1,033.135)        (723.615)       (1,069.840)     (22,736.191)
   Units transferred                   23,062.761        19,972.583       20,798.773        29,122.927       31,061.110
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                          259,326.465       272,870.757      309,748.942       450,342.300      368,928.321
                                  ================= ================ ================= ================ =================


<PAGE>


5. ACCUMULATION UNITS (CONTINUED)

                                  DREYFUS CAPITAL       DREYFUS
                                    APPRECIATION       SMALL CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ----------------

Accumulation Units:
   Units sold                         368,198.962       272,098.659
   Units redeemed                      (2,294.029)         (326.488)
   Units transferred                   10,715.426         3,754.303
                                  ----------------- ----------------
Net increase                          376,620.359       275,526.474
                                  ================= ================


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Period from January 12, 1998
- --------------------------------
to December 31, 1998

Amounts:
   Sales                          $   4,954,418     $   3,411,999    $   2,002,455     $     407,942    $  18,309,974
   Redemptions                          (47,478)          (16,075)          (8,209)           (1,344)      (1,125,549)
   Transfers                            318,750           193,522          112,814            29,963         (339,852)
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   5,225,690     $   3,589,446    $   2,107,060     $     436,561    $  16,844,573
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $   5,573,456     $   1,588,416    $   3,653,939     $   3,126,319    $     933,831
   Redemptions                           (2,089)          (49,043)         (14,373)          (17,694)          (4,980)
   Transfers                         (1,386,974)          141,614          149,181           262,581           84,920
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   4,184,393     $   1,680,987    $   3,788,747     $   3,371,206    $   1,013,771
                                  ================= ================ ================= ================ =================

                                   MORGAN STANLEY   MORGAN STANLEY    ALGER AMERICAN     JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD        INCOME AND        WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT         GROWTH           GROWTH           BALANCED
                                                                       SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $   2,476,824     $   2,575,049    $   3,307,793     $   4,890,611    $   4,075,419
   Redemptions                          (10,286)          (10,477)          (8,233)          (12,394)        (256,882)
   Transfers                            240,488           201,231          237,479           334,340          353,647
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   2,707,026     $   2,765,803    $   3,537,039     $   5,212,557    $   4,172,184
                                  ================= ================ ================= ================ =================


<PAGE>



5. ACCUMULATION UNITS (CONTINUED)

                                  DREYFUS CAPITAL    DREYFUS SMALL
                                    APPRECIATION          CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ----------------

Amounts:
   Sales                          $   4,235,043     $   2,606,986
   Redemptions                          (26,372)           (3,125)
   Transfers                            123,361            48,077
                                  ----------------- ----------------
Net increase                      $   4,332,032     $   2,651,938
                                  ================= ================

6. INVESTMENT TRANSACTIONS

The aggregate  cost of purchases  and the  aggregate  proceeds from the sales of
investments during the year ended December 31, 1999 were:

                                    ALLIANCE
                                      ALLIANCE        GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                       GROWTH           INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Aggregate purchases                 $28,821,517       $11,615,805       $3,143,095          $494,133      $44,755,385
                                  ================= ================ ================= ================ =================

Aggregate proceeds from sales      $  2,512,727     $     965,845      $   469,055         $  35,580     $  5,686,255
                                  ================= ================ ================= ================ =================


                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Aggregate purchases                 $22,616,002        $3,408,425       $8,275,181       $8,068,588       $1,200,392
                                  ================= ================ ================= ================ =================

Aggregate proceeds from sales       $17,635,459       $   284,725      $   877,617       $1,068,135      $   152,421
                                  ================= ================ ================= ================ =================


<PAGE>


6. INVESTMENT TRANSACTIONS (CONTINUED)

                                                                      ALGER AMERICAN
                                   MORGAN STANLEY   MORGAN STANLEY      INCOME AND       JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD          GROWTH          WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT         GROWTH           BALANCED
                                                                                         SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------


Aggregate purchases                 $4,635,604        $3,916,870      $12,640,018       $19,398,096      $23,486,727
                                  ================= ================ ================= ================ =================

Aggregate proceeds from sales      $   559,981       $   517,230     $  1,228,203      $  2,001,697     $  1,348,530
                                  ================= ================ ================= ================ =================

                                                                      MORGAN STANLEY
                                  DREYFUS CAPITAL                        EMERGING
                                    APPRECIATION        DREYFUS       MARKETS EQUITY      PIMCO VIT
                                    SUB-ACCOUNT        SMALL CAP       SUB-ACCOUNT        STOCKPLUS
                                                      SUB-ACCOUNT                        SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ----------------


Aggregate purchases                $10,459,049        $4,549,809          $736,015          $101,552
                                  ================= ================ ================= ================

Aggregate proceeds from sales     $     862,852      $   729,394          $272,777       $       173
                                  ================= ================ ================= ================


</TABLE>



<PAGE>

<TABLE>
<CAPTION>


                 Transamerica Life Insurance and Annuity Company

                     Financial Statements - Statutory Basis

                  Years ended December 31, 1999, 1998 and 1997




                                    CONTENTS

<S>                                                                                                    <C>
Report of Independent Auditors..........................................................................1

Audited Financial Statements

Balance Sheets - Statutory Basis........................................................................3
Statements of Operations - Statutory Basis..............................................................5
Statements of Changes in Capital and Surplus - Statutory Basis..........................................6
Statements of Cash Flow - Statutory Basis...............................................................7
Notes to Financial Statements - Statutory Basis.........................................................9


Statutory Basis Financial Statement Schedules

Summary of Investments - Other Than Investments in Related Parties -
   Statutory Basis.....................................................................................33
Supplementary Insurance Information - Statutory Basis..................................................34
Reinsurance - Statutory Basis..........................................................................36

</TABLE>


<PAGE>



2






                         Report of Independent Auditors

The Board of Directors
Transamerica Life Insurance and Annuity Company

We have audited the accompanying  statutory-basis balance sheets of Transamerica
Life  Insurance  and Annuity  Company as of December 31, 1999 and 1998,  and the
related  statutory-basis  statements  of  operations,  changes  in  capital  and
surplus,  and cash flow for each of the three years in the period ended December
31, 1999. Our audits also included the  accompanying  statutory-basis  financial
schedules  required by Article 7 of Regulation S-X. These  financial  statements
and  schedules  are  the  responsibility  of  the  Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

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

In our opinion, because of the effects of the matters described in the preceding
paragraph,  the financial statements referred to above do not present fairly, in
conformity with accounting  principles  generally accepted in the United States,
the financial  position of  Transamerica  Life Insurance and Annuity  Company at
December 31, 1999 and 1998,  or the results of its  operations or its cash flows
for each of the three years in the period ended December 31, 1999.



<PAGE>


However,  in our opinion,  the  financial  statements  referred to above present
fairly, in all material  respects,  the financial  position of Transamerica Life
Insurance and Annuity  Company at December 31, 1999 and 1998, and the results of
its  operations  and its cash  flows for each of the three  years in the  period
ended December 31, 1999, in conformity with accounting  practices  prescribed or
permitted by the North Carolina  Department of Insurance.  Also, in our opinion,
the related financial  statement  schedules,  when considered in relation to the
basic  statutory-basis  financial statements taken as a whole, present fairly in
all material respects the information set forth therein.



March 31, 2000


<PAGE>



3
<TABLE>
<CAPTION>

                 Transamerica Life Insurance and Annuity Company

                        Balance Sheets - Statutory Basis

                                 (Dollars in thousands, except per share amounts)


                                                                                  DECEMBER 31
                                                                            1999              1998
                                                                     --------------------------------------
ADMITTED ASSETS Cash and invested assets:
<S>                                                                   <C>               <C>
   Bonds                                                              $     12,569,942  $     12,316,491
   Preferred stocks-unaffiliated                                               153,263           118,440
   Common stocks-unaffiliated                                                  198,562           108,401
   Common stock-subsidiaries                                                   120,319           112,957
   Mortgage loans on real estate                                               406,037           364,453
   Policy loans                                                                  9,508            10,036
   Cash and short-term investments                                             367,023           414,787
   Other investments                                                           221,601           136,610
                                                                     --------------------------------------
Total cash and invested assets                                              14,046,255        13,582,175

Accrued investment income                                                      202,664           172,788
Deferred and uncollected premiums                                                1,909             4,919

Commissions and expense allowances due                                           2,205             8,236

Other admitted assets                                                           14,014            21,936

Separate account assets                                                      6,118,265         4,575,184
                                                                     --------------------------------------
Total admitted assets                                                 $     20,385,312  $     18,365,238
                                                                     ======================================




<PAGE>


8








                                                                                  DECEMBER 31
                                                                            1999              1998
                                                                     --------------------------------------
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
   Reserves for future policy benefits                                $      9,221,606  $      8,084,356
   Premiums and other deposit funds                                          1,211,802         2,013,253
   Funding agreements                                                        2,670,635         2,355,990
   Other                                                                         1,824             2,278
   Accounts payable and other liabilities                                      139,395           285,876
   Asset valuation reserve                                                     214,753           177,794
   Interest maintenance reserve                                                 28,192            39,678
   Separate account liabilities                                              6,099,996         4,575,184
                                                                     --------------------------------------
Total liabilities                                                           19,588,203        17,534,409

Capital and surplus:
   Common Stock ($100 par value):
     Authorized shares - 50,000
     Issued and outstanding shares - 25,000 in 1999
       and 15,300 in 1998                                                        2,500             1,530
   Contributed surplus                                                         228,816           228,816
   Unassigned surplus                                                          565,793           600,483
                                                                     --------------------------------------
Total capital and surplus                                                      797,109           830,829
                                                                     --------------------------------------
Total liabilities and capital and surplus                              $    20,385,312   $    18,365,238
                                                                     ======================================

See accompanying notes.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                 Transamerica Life Insurance and Annuity Company

                   Statements of Operations - Statutory Basis

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                     1999             1998              1997
                                                              ------------------------------------------------------
Revenues:
<S>                                                             <C>               <C>              <C>
   Premiums and annuity considerations                          $      169,711    $      338,850   $      430,860
   Fund deposits                                                     5,793,132         4,053,557        2,122,178
   Net investment income                                             1,032,629         1,064,299        1,048,328
   Amortization of interest maintenance reserve                           (359)            1,178              (92)
   Other                                                               112,386            40,530           14,995
                                                              ------------------------------------------------------
                                                                     7,107,499         5,498,414        3,616,269

Benefits and expenses:
   Benefits paid or provided for:
     Annuity benefits                                                  406,862           390,039          378,915
     Surrender benefits and other withdrawals                        5,326,123         3,908,081        2,541,297
     Interest on policy or contract funds                              158,829           129,676          158,089
     Increase in reserves                                            1,137,250            68,165           88,915
     Decrease in liability for premium and other deposit funds
                                                                      (801,451)         (441,595)         (12,782)
     Other                                                               9,940            12,468            5,065
                                                              ------------------------------------------------------
                                                                     6,237,553         4,066,834        3,159,499
   Expenses:
     Commissions and expense allowances                                156,845            68,615           43,736
     Other operating expenses                                          110,399            94,956           85,177
     Net transfers to separate accounts                                502,778         1,103,788          173,890
                                                              ------------------------------------------------------
                                                                       770,022         1,267,359          302,803
                                                              ------------------------------------------------------
                                                                     7,007,575         5,334,193        3,462,302
                                                              ------------------------------------------------------
Gain from operations before dividends to policyholders,
   federal income tax expense and
   net realized capital gains (losses)                                  99,924           164,221          153,967
Dividends to policyholders                                                 257               215              121
                                                              ------------------------------------------------------
Gain from operations before federal income tax
   expense and net realized capital gains (losses)                      99,667           164,006          153,846
Federal income tax expense                                              38,559            61,553           50,161
                                                              ------------------------------------------------------
Gain from operations before net realized capital gains
   (losses)                                                             61,108           102,453          103,685

Net realized capital gains (losses)                                     (8,012)          106,488           31,659
                                                              ------------------------------------------------------
Net income                                                      $       53,096    $      208,941   $      135,344
                                                              ======================================================

See accompanying notes.


<PAGE>


                 Transamerica Life Insurance and Annuity Company

                          Statements of Changes in Capital and Surplus - Statutory Basis

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                    1999              1998             1997
                                                              -----------------------------------------------------

Capital and surplus at beginning of year                        $      830,829    $      675,268   $      568,693
Net income                                                              53,096           208,941          135,344
Increase (decrease) in net unrealized capital gains                      6,779            44,869           (2,199)
Increase in liability for reinsurance in
   unauthorized companies                                               (1,826)             (443)             (32)
(Increase) decrease in non-admitted assets                              (8,169)          (13,488)           1,779
Increase in asset valuation reserve                                    (36,959)          (22,992)          (7,992)
Dividends paid to parent                                               (50,000)          (50,000)         (40,000)
Increase in contributed surplus                                            970                 -           20,029
Other                                                                    2,389           (11,326)            (354)
                                                              ------------------------------------------------------
Capital and surplus at end of year                              $      797,109    $      830,829   $      675,268
                                                              ======================================================

See accompanying notes.



<PAGE>


                 Transamerica Life Insurance and Annuity Company

                    Statements of Cash Flow - Statutory Basis

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                     1999             1998              1997
                                                              ------------------------------------------------------
OPERATING ACTIVITIES
Premiums and annuity considerations                             $      172,721    $      336,451   $      428,243
Fund deposits                                                        5,793,132         4,054,271        2,116,788
Other income received                                                  131,708            30,701            4,876
Investment income received                                             965,065         1,062,909          993,082
Life claims paid                                                       (14,530)           (5,038)          (1,384)
Surrender benefits and other fund withdrawals paid                  (5,324,839)       (3,936,376)      (2,532,263)
Other benefits paid to policyholders                                  (570,325)         (525,826)        (539,918)
Commissions, other expenses and taxes paid                            (274,156)         (153,238)        (128,774)
Dividends paid to policyholders                                           (257)             (215)            (121)
Federal income taxes paid                                              (63,826)         (126,165)         (29,145)
Net transfer to separate accounts                                     (513,986)       (1,108,006)        (173,890)
Other expenses paid                                                     (3,425)          (11,288)          (2,058)
                                                              ------------------------------------------------------
Net cash provided by (used in) operating activities                    297,282          (381,820)         135,436

INVESTING ACTIVITIES
Proceeds from investments sold, matured or repaid:
   Bonds                                                             3,757,923         4,130,583        4,455,430
   Stocks                                                               89,662           415,807          140,896
   Mortgage loans                                                       68,866            68,866           53,186
   Other invested assets                                                     -             3,193            7,101
   Miscellaneous proceeds                                                5,463               234            9,691
                                                              ------------------------------------------------------
Total investment proceeds                                            3,921,914         4,618,683        4,666,304
Taxes paid on capital gains                                                  -                 -           12,861
                                                              ------------------------------------------------------
Net proceeds from sales, maturities, or repayments
   of investments                                                    3,921,914         4,618,683        4,653,443

Cost of investments acquired:
   Bonds                                                            (4,001,611)       (3,049,192)      (4,966,625)
   Stocks                                                             (197,512)         (349,174)        (137,079)
   Mortgage loans                                                      (63,520)          (55,835)         (23,785)
   Other invested assets                                                (1,272)           (9,601)          (1,173)
   Miscellaneous applications                                          (29,374)          (83,519)            (711)
                                                              ------------------------------------------------------
Total cost of investments acquired                                  (4,293,289)       (3,547,321)      (5,129,373)
Net decrease in policy loans                                               528               981            2,553
                                                              ------------------------------------------------------
Net cash (used in) provided by investing activities                   (370,847)        1,072,343         (473,377)


<PAGE>


                 Transamerica Life Insurance and Annuity Company

                               Statements of Cash Flow - Statutory Basis (continued)

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                     1999             1998              1997
                                                              ------------------------------------------------------

FINANCING ACTIVITIES Other cash provided:
   Capital surplus paid-in                                      $          970    $            -   $       20,029
   Other sources                                                       303,795           174,802          450,051
                                                              ------------------------------------------------------
Total other cash provided                                              304,765           174,802          470,080
                                                              ------------------------------------------------------

Other cash applied:
   Dividends paid to shareholders                                      (50,000)          (50,000)         (40,000)
   Other applications, net                                            (228,964)         (491,410)         (24,323)
                                                              ------------------------------------------------------
Total other cash applied                                              (278,964)         (541,410)         (64,323)
                                                              ------------------------------------------------------
Net cash provided by (used in) financing activities                     25,801          (366,608)         405,757

Net increase (decrease) in cash and short-term investments
                                                                       (47,764)          323,915           67,816

Cash and short-term investments at
   beginning of year                                                   414,787            90,872           23,056
                                                              ------------------------------------------------------
Cash and short-term investments at end of year                  $      367,023    $      414,787   $       90,872
                                                              ======================================================

See accompanying notes.

</TABLE>


<PAGE>



                 Transamerica Life Insurance and Annuity Company

                 Notes to Financial Statements - Statutory Basis

                                December 31, 1999


32

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Transamerica  Life  Insurance and Annuity  Company (the Company) is domiciled in
North  Carolina.  The  Company  is a wholly  owned  subsidiary  of  Transamerica
Occidental  Life Insurance  Company  (TOLIC),  which is an indirect wholly owned
subsidiary  of   Transamerica   Corporation.   The  Company  is  the  parent  of
Transamerica  Assurance  Company  (TAC),  a Missouri  domiciled  life  insurance
company,  and Gemini Investments,  Inc., an investment company acquired in 1998.
During 1999,  Transamerica  Corporation was merged with an indirect wholly owned
subsidiary  of AEGON N.V.,  a holding  company  organized  under the laws of the
Netherlands.

NATURE OF BUSINESS

The Company engages in providing life insurance,  pension and annuity  products,
structured  settlements and investment  products which are distributed through a
network of independent and  company-affiliated  agents and independent  brokers.
The Company's  customers  are primarily in the United States and are  relatively
evenly distributed in 49 states.

BASIS OF PRESENTATION

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

The  accompanying  financial  statements  have been prepared in conformity  with
statutory  accounting  practices  (SAP)  prescribed  or  permitted  by the North
Carolina Department of Insurance (the North Carolina Department),  which vary in
some respects from accounting principles generally accepted in the United States
(GAAP). The more significant variances from GAAP are as follows:

       The  accounts  and  operations  of the  Company's  subsidiaries  are  not
       consolidated  but are  included in  investments  in common  stocks at the
       statutory net carrying value.  Changes in the  subsidiaries' net carrying
       values are charged or credited directly to unassigned surplus.


<PAGE>


                 Transamerica Life Insurance and Annuity Company

           Notes to Financial Statements - Statutory Basis (continued)




1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

BASIS OF PRESENTATION (CONTINUED)

       Bonds,  where  permitted,  are  carried at  amortized  cost,  rather than
       segregating  the portfolio into  held-to-maturity  (reported at amortized
       cost),  available-for-sale (reported at fair value) and trading (reported
       at fair value) classifications.

       The costs of acquiring new and renewal business,  such as commissions and
       underwriting  and policy issue costs,  are expensed when incurred  rather
       than deferred and amortized over the terms of the related policies.

       Certain assets recognized under GAAP,  principally agents' debit balances
       and furniture and  equipment,  are  "non-admitted"  and excluded from the
       accompanying  financial  statements under SAP and are charged directly to
       unassigned surplus.

       Reserves for future policy  benefits  generally are  calculated  based on
       mortality and interest  assumptions that are statutorily  required rather
       than using estimated expected experience or actual account balances.  The
       policy liabilities are reported net, rather than gross, of ceded amounts.

       Revenues  for  investment-type  contracts  consist of the entire  premium
       received  and  benefits  represent  the  benefits  paid and the change in
       policy  reserves.  Under  GAAP,  premiums  received  in  excess of policy
       charges are not  recognized as revenue and benefits  represent the excess
       of benefits paid over the policy  account value and interest  credited to
       the account value.

       An Interest  Maintenance  Reserve (IMR) is provided  which defers certain
       realized capital gains and losses  attributable to changes in the general
       level of interest rates. Such deferred gains or losses are amortized into
       investment  income  over  the  remaining  period  to  maturity  based  on
       groupings of individual securities sold in five-year bands.

       An Asset Valuation Reserve (AVR) is provided which reclassifies a portion
       of surplus to liabilities. The AVR is calculated according to a specified
       formula  as   prescribed  by  the  National   Association   of  Insurance
       Commissioners  (NAIC) and is intended to stabilize the Company's  surplus
       against  possible  fluctuations  in the  market  values of bonds,  equity
       securities,  mortgage  loans,  real estate,  and other  invested  assets.
       Changes in the required  AVR balance are charged or credited  directly to
       unassigned surplus.


<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

BASIS OF PRESENTATION (CONTINUED)

       Deferred  federal income taxes are not provided for  differences  between
       the financial statement amounts and tax bases of assets and liabilities.

       Policyholders dividends are recognized when declared rather than over the
term of the related policies.

       A liability  for  reinsurance  balances has been  provided for  unsecured
       policy  reserves  ceded to reinsurers  unauthorized  by license to assume
       such business.  Changes to those amounts are credited or charged directly
       to  unassigned  surplus.  Under  GAAP,  an  allowance  or amounts  deemed
       uncollectible would be established through a charge to earnings.

Other significant accounting policies are as follows:

INVESTMENTS

Investments are shown on the following bases:

       Bonds - where  permitted,  at amortized  cost;  all others are carried at
       values  prescribed by the Securities  Valuation Office of the NAIC (SVO);
       premiums and  discounts  are  amortized  using the interest  method.  For
       loan-backed bonds, the interest method including anticipated  prepayments
       at the date of purchase is used.  Prepayment  assumptions for loan-backed
       bonds are estimated using broker dealer survey values.  The retrospective
       adjustment  method is used to value all  securities  except for  interest
       only securities which are valued using the prospective method.

       Preferred  stocks - where  permitted,  at cost; all others are carried at
fair value based on NAIC values.

       Common stocks - at fair value based on NAIC market values, except for the
       investment in subsidiaries which are at statutory net carrying value. The
       related  unrealized  capital  gains or losses are reported in  unassigned
       surplus without any adjustments for federal income taxes.



<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENTS (CONTINUED)

       Mortgage loans on real estate - at the aggregate unpaid balances.

       Policy loans - at the aggregate unpaid principal balances.

       Other  investments - consists of partnerships,  receivable for securities
       sold and derivatives  and are reported  primarily at the lower of cost or
       fair value. Derivative instruments are valued in accordance with the NAIC
       Accounting  Practices and  Procedures  manual and Purposes and Procedures
       manual  of the SVO.  All  derivative  instruments  are  used for  hedging
       purposes and valued on a basis consistent with the hedged item.

The Company uses interest rate swaps, caps and floors, options and certain other
derivatives as part of its overall  interest rate risk  management  strategy for
certain  life  insurance  and  annuity  products.   As  the  Company  only  uses
derivatives for hedging purposes,  the Company values all derivative instruments
on a consistent basis as the hedged item. Upon termination,  gains and losses on
those  instruments are included in the carrying values of the underlying  hedged
items  and are  amortized  over  the  remaining  lives  of the  hedged  items as
adjustments  to  investment  income  or  benefits  from the  hedged  items.  Any
unamortized  gains or losses are recognized when the underlying hedged items are
sold.

Interest   rate  swap   contracts   are  used  to  convert  the  interest   rate
characteristics (fixed or variable) of certain investments to match those of the
related  insurance  liabilities  that the investments  are  supporting.  The net
interest  effect of such swap  transactions  is  reported  as an  adjustment  of
interest income from the hedged items as incurred.

Interest rate caps and floors are used to limit the effects of changing interest
rates on yields of  variable  rate or  short-term  assets  or  liabilities.  The
initial cost of any such  agreement is amortized to net  investment  income over
the life of the agreement.  Periodic payments that are receivable as a result of
the agreements are accrued as an adjustment of interest  income or benefits from
the hedged item.



<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENTS (CONTINUED)

Gains  and  losses  on   disposal  of   investments   are   recognized   on  the
specific-identification  basis.  Changes in the statutory  fair values of stocks
and those bonds carried at NAIC statement  values,  rather than amortized  cost,
are reported as unrealized  gains or losses directly in unassigned  surplus and,
accordingly, have no effect on net income.

Short-term investments include investments with maturities of less than one year
at date of acquisition.  The Company had a net cash overdraft  balance of $0 and
$110 at December 31, 1999 and 1998, respectively.

SEPARATE ACCOUNTS

The Company administers segregated asset accounts for pension and other clients.
The assets of the separate  accounts are not subject to liabilities  arising out
of any other  business  the Company may conduct and are  reported at fair value.
Substantially  all investment risks associated with fair value changes are borne
by the clients.  The liabilities of these separate accounts  represent  reserves
established  to meet  withdrawal and future  benefit  payment  provisions of the
contracts.

POLICY RESERVES

Life and annuity  benefit  reserves are calculated  based upon published  tables
using such interest rate assumptions and valuation methods that will provide, in
the  aggregate,  reserves that meet the amounts  required by the North  Carolina
Department.  The Company waives deductions of deferred  fractional premiums upon
death of the insureds  and, for more recent  issues,  returns any portion of the
final premium beyond the date of death.

PREMIUM REVENUES

Premiums  from life  insurance  policies are  recognized as revenue when due and
premiums  from annuity  contracts are  recognized  when  received.  Accident and
health premiums are earned pro rata over the terms of the policies.


<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REINSURANCE

Reinsurance premiums, commissions, expense reimbursements,  and reserves related
to reinsured  business are accounted for on bases  consistent with those used in
accounting for the original policies and the terms of the reinsurance contracts.
Premiums  ceded and  recoverable  losses have been  reported  as a reduction  of
premium income and benefits, respectively.

RECLASSIFICATIONS

Certain  reclassifications  of 1997 and 1998  amounts  have been made to conform
with the 1999 presentation.

2. FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair values for bonds are based on market  values  prescribed  by the SVO rather
than on actual or estimated  market values.  For bonds without  available market
values,  amortized  costs are used as estimated fair values.  As of December 31,
1999 and 1998, the fair value of  investments  in bonds includes  $6,447 million
and $6,566 million, respectively, of bonds that were valued at amortized cost.

Fair  values  for  preferred  and  common  stocks  are  based on  market  values
prescribed by the SVO,  except for the investment in  subsidiaries  which are at
statutory net carrying value.

Fair values for  mortgage  loans on real estate and policy  loans are  estimated
using discounted cash flow calculations, based on interest rates currently being
offered for similar loans to borrowers with similar credit  ratings.  Loans with
similar characteristics are aggregated for calculation purposes.

Fair values for derivative  instruments are estimated using values obtained from
independent pricing services.



<PAGE>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

The carrying amounts of cash and short-term  investments and accrued  investment
income approximate their fair value.

Fair  values  for  liabilities  under  investment-type  contracts,  included  in
reserves for future  policy  benefits and premium and other deposit  funds,  are
estimated  using  discounted  cash flow  calculations,  based on interest  rates
currently  being offered by similar  contracts with  maturities  consistent with
those remaining for the contracts being valued.
<TABLE>
<CAPTION>

The carrying values and fair values of financial  instruments are as follows (in
thousands):

                                                                       DECEMBER 31
                                                          1999                             1998
                                            --------------------------------- --------------------------------
                                                CARRYING          FAIR            CARRYING         FAIR
                                                 VALUE           VALUE             VALUE           VALUE
                                            --------------------------------- --------------------------------
Financial assets:
<S>                                          <C>             <C>               <C>             <C>
   Bonds                                     $   12,569,942  $   12,503,313    $   12,316,491  $   12,802,540
   Preferred stocks                                 153,263         160,651           118,440         115,201
   Common stocks                                    318,881         318,881           221,358         221,358
   Mortgage loans on real estate                    406,037         390,020           364,453         395,310
   Policy loans                                       9,508           9,508            10,036          10,036
   Floors and caps                                   18,456          17,118            21,598          57,954
   Short-term investments                           367,023         367,023           414,787         414,787
   Cash on hand and on deposit                            -               -                 -               -
   Accrued investment income                        202,664         202,664           172,788         172,788

Financial liabilities (liabilities for investment-type contracts):
     Single and flexible premium
       deferred annuities                         5,107,350       4,852,274         3,819,956       3,657,037
     Single premium immediate annuities             582,921         553,705           307,956         325,366
     Guaranteed investment contracts              2,003,251       2,036,664         2,013,253       2,034,864
     Funding agreements                           2,670,635       2,642,116         2,355,990       2,347,701
     Other deposit contracts                      1,954,414       1,921,062         1,677,464       1,683,371

Off-balance sheet assets (liabilities): Swap designated as hedges that are in a:
     Receivable position                                  -         126,973                 -          16,420
     Payable position                                     -         (59,773)                -          (2,933)

</TABLE>

<PAGE>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

The Company enters into various interest-rate agreements in the normal course of
business primarily as a means of managing its interest rate exposure.

Interest rate swap agreements  generally  involve the periodic exchange of fixed
rate interest and floating rate interest payments by applying a specified market
index to the  underlying  contract or notional  amount,  without  exchanging the
underlying  notional  amounts.   Interest  rate  swap  agreements  are  intended
primarily for asset and liability  management.  The  differential  to be paid or
received on those interest rate swap agreements that are designated as hedges of
financial  assets  is  recorded  on an  accrual  basis  as a  component  of  net
investment  income.  The  differential  to be paid or received on those interest
rate swap agreements  that are designated as hedges of financial  liabilities is
recorded on an accrual basis as a component of benefits paid or provided.  While
the Company is not exposed to credit risk with respect to the  notional  amounts
of the interest rate swap agreements, the Company is subject to credit risk from
potential nonperformance of counterparties  throughout the contract periods. The
amounts  potentially  subject  to such  credit  risk are much  smaller  than the
notional  amounts.  The Company  controls  this  credit  risk by  entering  into
transactions  with  only  a  selected  number  of  high  quality   institutions,
establishing   credit  limits  and  maintaining   collateral  when  appropriate.
Generally,  the  Company is subject  to basis  risk when an  interest  rate swap
agreement is funded.  As of December 31, 1999,  there were no unfunded  interest
rate swap agreements.

Interest  rate floor and cap  agreements  generally  provide  for the receipt of
payments in the event the average interest rates during a settlement period fall
below  specified  levels  under  interest  rate floor  agreements  or rise above
specified levels under interest rate cap agreements. These agreements enable the
Company to  transfer,  modify,  or reduce its interest  rate risk and  generally
require up front  premium  payments.  The costs of  interest  rate floor and cap
agreements are amortized over the contractual periods and resulting amortization
expenses are included in net investment income.  The conditional  receipts under
these  agreements  are  recorded  on an  accrual  basis  as a  component  of net
investment  income if designated as hedges of financial assets or as a component
of benefits paid or provided if designated as hedges of financial liabilities.



<PAGE>
<TABLE>
<CAPTION>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

The  information  on  derivative   instruments  is  summarized  as  follows  (in
thousands):

                                                          AGGREGATE           WEIGHTED
                                                           NOTIONAL            AVERAGE            FAIR
                                                            AMOUNT           FIXED RATE          VALUE
                                                      -------------------------------------------------------

DECEMBER 31, 1999
Interest rate swap agreements  designated as hedges of financial  assets,  where
   the Company pays:
<S>                                                    <C>                     <C>         <C>
     Fixed rate interest                               $      2,063,339        6.02%       $        79,362
     Floating rate interest                                     240,569        6.09                   (271)
     Floating rate interest based on one
       index and receives floating rate
       interest based on another index                           40,000        5.88                    571
Interest rate swap agreements designated
   as hedges of financial liabilities, where
   the Company pays:
     Fixed rate interest                                         78,600        6.18                    818
     Floating rate interest                                   1,152,078        6.40                 (8,750)
     Floating rate interest based on one
       index and receives floating rate
       interest based on another index                          155,000        6.16                 (1,047)
Interest rate floor agreements                                  160,500           -                  9,462
Swaptions                                                     1,770,000        6.15                  9,270
Other                                                             4,866           -                  3,386


<PAGE>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

                                                            AGGREGATE         WEIGHTED
                                                            NOTIONAL          AVERAGE
                                                             AMOUNT          FIXED RATE       FAIR VALUE
                                                      -------------------------------------------------------
DECEMBER 31, 1998
Interest rate swap agreements  designated as hedges of financial  assets,  where
   the Company pays:
     Fixed rate interest                                $       320,535        5.56%        $      (83,692)
     Floating rate interest                                     451,729        4.09                 23,002
Interest rate swap  agreements  designated  as hedges of financial  liabilities,
   where the Company pays:
     Fixed rate interest                                         28,600        5.55                    177
     Floating rate interest                                   1,738,800        5.41                 13,310
Interest rate floor agreements                                  160,500           -                 16,675
Swaptions                                                     1,770,000        5.35                 38,728
Other                                                             4,866           -                  2,552
</TABLE>

Generally,  notional amounts indicate the volume of transactions and fair values
indicate the amounts subject to credit risk.

Financial  instruments which potentially subject the Company to concentration of
credit risk consist principally of temporary cash investments, fixed maturities,
mortgage loans on real estate and reinsurance  recoverables.  The Company places
its temporary cash investments with high credit quality financial  institutions.
Concentration of credit risk with respect to investments in fixed maturities and
mortgage  loans on real  estate  is  limited  due to the  large  number  of such
investments and their dispersion across many different industries and geographic
areas.  The  Company  places   reinsurance  with  only  highly  rated  insurance
companies. At December 31, 1999, the Company had no significant concentration of
credit risk.


<PAGE>


3. INVESTMENTS
<TABLE>
<CAPTION>

The carrying value and estimated  fair value of  investments in debt  securities
are summarized as follows (in thousands):

                                                               GROSS          GROSS
                                             CARRYING       UNREALIZED     UNREALIZED       ESTIMATED
                                               VALUE           GAINS         LOSSES         FAIR VALUE
                                         ------------------------------------------------------------------
DECEMBER 31, 1999
U.S. Treasury securities and obligations
   of U.S. government corporations and
<S>                                       <C>              <C>            <C>            <C>
   agencies                               $       216,181  $     13,246   $      1,538   $       227,889
Obligations of states and
   political subdivisions                          72,500            13            644            71,869
Foreign governments                                22,067         1,252              -            23,319
Corporate securities                            8,932,101       138,190        203,667         8,866,624
Public utilities                                1,472,771        17,160         28,776         1,461,155
Mortgage and other asset-
   backed securities                            1,854,322           234          2,099         1,852,457
                                         ------------------------------------------------------------------
                                          $    12,569,942  $    170,095   $    236,724   $    12,503,313
                                         ==================================================================

DECEMBER 31, 1998
U.S. Treasury securities and obligations
   of U.S. government corporations and
   agencies                               $       143,002  $     53,537   $         28   $       196,511
Obligations of states and
   political subdivisions                          84,827         5,223              -            90,050
Foreign governments                                22,060         4,963              -            27,023
Corporate securities                            8,720,653       360,172         32,266         9,048,559
Public utilities                                1,544,895        95,323            875         1,639,343
Mortgage and other asset-
   backed securities                            1,801,054             -              -         1,801,054
                                         ------------------------------------------------------------------
                                          $    12,316,491  $    519,218   $      33,169  $    12,802,540
                                         ==================================================================

</TABLE>

<PAGE>


3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>

The carrying  value and  estimated  fair value of bonds at December 31, 1999, by
contractual maturity, are as follows (in thousands):

                                                                   CARRYING         ESTIMATED
                                                                    VALUE          FAIR VALUE
                                                              ------------------------------------

Maturity:
<S>                                                             <C>               <C>
   Due in one year or less                                      $      362,958    $      360,091
   Due after one year through five years                             2,149,228         2,173,346
   Due after five years through ten years                            3,238,327         3,190,037
   Due after ten years                                               4,965,107         4,927,382
   Mortgage and other asset-backed securities                        1,854,322         1,852,457
                                                              ------------------------------------
                                                                $   12,569,942    $   12,503,313
                                                              ====================================
</TABLE>

Expected  maturities  may differ from  contractual  maturities  because  certain
borrowers have the right to call or prepay  obligations  with or without call or
prepayment penalties.
<TABLE>
<CAPTION>

The costs and fair values of preferred  stocks and common  stocks  (unaffiliated
companies) are as follows (in thousands):

                                                  GROSS             GROSS
                                                UNREALIZED        UNREALIZED          FAIR
                                 COST              GAIN              LOSS             VALUE
                           -----------------------------------------------------------------------

DECEMBER 31, 1999
<S>                         <C>              <C>               <C>               <C>
Preferred stocks            $       153,263  $        17,154   $         9,766   $       160,651
Common stocks                       111,756           94,441             7,635           198,562

DECEMBER 31, 1998
Preferred stocks            $       118,440  $         1,191   $         4,430   $       115,201
Common stocks                        43,468           66,240             1,307           108,401
</TABLE>



<PAGE>


3. INVESTMENTS (CONTINUED)

The maximum and minimum  lending rates for mortgage loans during 1999 were 8.95%
and 6.60%, respectively.  The maximum percentage of any one loan to the value of
security at the time of the loan,  exclusive of any purchase money or insured or
guaranteed mortgages,  was 80%. Fire insurance is carried in every case at least
equal to the excess of the loan over the maximum  loan which would be  permitted
by law on the land without the buildings.
<TABLE>
<CAPTION>

Net investment  income by major category of investments is summarized as follows
(in thousands):

                                                            YEAR ENDED DECEMBER 31
                                                    1999             1998              1997
                                             ------------------------------------------------------

<S>                                            <C>               <C>              <C>
Bonds                                          $      988,055    $    1,026,381   $    1,016,359
Stocks                                                 12,291             6,055            7,468
Mortgage loans on real estate                          30,246            32,769           33,681
Policy loans                                              300               336              432
Other                                                  11,444            11,677            2,720
                                             ------------------------------------------------------
                                                    1,042,336         1,077,218        1,060,660
Investment expense                                     (9,707)          (12,919)         (12,332)
                                             ------------------------------------------------------
                                               $    1,032,629    $    1,064,299   $    1,048,328
                                             ======================================================

The realized  capital gains and losses are reported net of federal  income taxes
and amounts transferred to IMR are as follows (in thousands):

                                                            YEAR ENDED DECEMBER 31
                                                    1999             1998              1997
                                             ------------------------------------------------------

Net gains (losses) on disposition of investments in:
     Bonds                                     $      (19,775)   $       10,901   $      (22,928)
     Stocks                                            (4,485)          166,345           47,181
     Other                                             (6,289)           (3,073)           1,525
                                             ------------------------------------------------------
                                                      (30,549)          174,173           25,778
Related income (taxes) recovery                        10,692           (60,960)          (9,022)
Transfer from (to) the IMR                             11,845            (6,725)          14,903
                                             ------------------------------------------------------
Net investment gains (losses)                  $       (8,012)   $      106,488   $       31,659
                                             ======================================================


<PAGE>


3. INVESTMENTS (CONTINUED)

Proceeds,  gross gains and gross losses from the  disposition  of  investment in
bonds and other information related to investments are summarized as follows (in
thousands):

                                                                YEAR ENDED DECEMBER 31
                                                       1999              1998             1997
                                                 -----------------------------------------------------
    Proceeds from disposition of investment in
      bonds                                       $     3,757,923  $     4,130,583   $     4,455,430
    Gross gains on disposition of investment in
      bonds                                                29,345           30,206            19,221
    Gross losses on disposition of investment in
      bonds                                                49,120           19,305            42,149

    Change in net unrealized gains (losses):
         Bonds                                            (10,822)            (513)                -
         Preferred stocks                                    (253)          (1,448)            5,514
         Common stocks                                     29,235           35,348            (8,213)
         Other                                            (11,381)          11,482               500
                                                 -----------------------------------------------------
                                                  $         6,779  $        44,869   $        (2,199)
                                                 =====================================================
</TABLE>

Common  stocks-subsidiaries  are carried at the statutory capital and surplus of
the  subsidiaries  of $120  million  (cost of $143  million)  in 1999,  and $112
million  (cost of $143  million) in 1998.  No dividends  were  received from the
subsidiaries in 1999, 1998 or 1997.

In 1998,  the Company  increased its  investment in  subsidiaries  by purchasing
Gemini Investments,  Inc. (Gemini) with a cost-basis of $63.6 million.  Gemini's
only activity is to hold certain investment securities.

4. REINSURANCE

The Company is involved in both the cession and assumption of  reinsurance  with
other companies,  including affiliated companies. Risks are reinsured with other
companies  to permit  the  recovery  of a portion of the  direct  losses.  These
reinsured risks are treated as though,  to the extent of the  reinsurance,  they
are risks for which the Company is not liable.


<PAGE>


4. REINSURANCE (CONTINUED)

Policy  liabilities  and  accruals are  reported in the  accompanying  financial
statements net of reinsurance  ceded.  The Company  remains liable to the extent
the reinsuring  companies do not meet their  obligations under these reinsurance
treaties.
<TABLE>
<CAPTION>

The following  summarizes  the effect of certain  reinsurance  transactions  (in
thousands):

                                                                                ASSUMED
                                                        CEDED TO                 FROM
                                             --------------------------------
                                  DIRECT        AFFILIATED    UNAFFILIATED    AFFILIATED         NET
                                  AMOUNT        COMPANIES       COMPANIES      COMPANIES       AMOUNT
                              -----------------------------------------------------------------------------
Year ended
   December 31, 1999:
<S>                             <C>            <C>             <C>            <C>            <C>
     Premium revenue            $     181,992  $         586   $      79,073  $    67,378    $   169,711
                              =============================================================================

At December 31, 1999:
   Life insurance in force      $      82,964  $      34,165   $           -  $         -    $    48,799
                              =============================================================================

Reserves for future policy
   benefits                     $   5,218,969  $       4,520   $      13,768 $  4,020,925    $ 9,221,606
Policy and contract claims
   payable                             18,201              -          17,385            -            816
                              -----------------------------------------------------------------------------
                                $   5,237,170  $       4,520   $      31,153  $ 4,020,925    $ 9,222,422
                              =============================================================================

Year ended
   December 31, 1998:
     Premium revenue            $     226,930  $         678   $      64,264  $   176,862    $   338,850
                              =============================================================================

At December 31, 1998:
   Life insurance in force      $      94,458  $      38,491   $           -  $        13    $    55,980
                              =============================================================================

Reserves for future policy
   benefits                     $   3,111,826  $       4,700   $      16,487 $  4,993,717    $ 8,084,356
Policy and contract claims
   payable                             21,673              -          19,265            -          2,408
                              -----------------------------------------------------------------------------
                                $   3,133,499  $       4,700   $      35,752  $ 4,993,717    $ 8,086,764
                              =============================================================================

Year ended
   December 31, 1997:
     Premium revenue            $     266,148  $         783   $      17,214  $   182,709    $   430,860
                              =============================================================================

At December 31, 1997:
   Life insurance in force      $     103,418  $      44,818   $           -  $        70    $    58,670
                              =============================================================================

Reserves for future policy
   benefits                     $   2,584,863  $       5,133   $       5,075 $  5,441,536    $ 8,016,191
Policy and contract claims
   payable                              4,350              -           4,248          767            869
                              -----------------------------------------------------------------------------
                                $   2,589,213  $       5,133   $       9,323  $ 5,442,303    $ 8,017,060
                              =============================================================================


<PAGE>


4. REINSURANCE (CONTINUED)

                                                                             ASSUMED
                                                           CEDED TO           FROM
                                          DIRECT            OTHER          AFFILIATED           NET
                                          AMOUNT          COMPANIES         COMPANIES          AMOUNT
                                     -----------------------------------------------------------------------

Year ended
   December 31, 1999:
     Benefits paid or provided         $      224,707   $       85,631    $      277,726   $      416,802
                                     =======================================================================

Year ended
   December 31, 1998:
     Benefits paid or provided         $      167,435   $       42,773    $      277,845   $      402,507
                                     =======================================================================

Year ended
   December 31, 1997:
     Benefits paid or provided         $      113,417   $        7,114    $      277,677   $      383,980
                                     =======================================================================
</TABLE>

5. INCOME TAXES

The Company's  taxable income or loss is included in the consolidated  return of
Transamerica  Corporation  for the  period  ended July 21,  1999.  The method of
allocation  between the companies for the period ended July 21, 1999, is subject
to written agreement  approved by the Board of Directors.  Tax payments are made
to, or refunds  received from,  Transamerica  Corporation in amounts which would
result from filing separate tax returns with federal taxing authorities,  except
that tax benefits  attributable  to operating  losses and other  carryovers  are
recognized   currently  since  utilization  of  these  benefits  is  assured  by
Transamerica  Corporation.  The  provision  does  not  purport  to  represent  a
proportionate share of the consolidated tax.

For the period  beginning July 22, 1999, the Company will join in a consolidated
tax return with  certain  life  affiliates:  TOLIC,  TAC and  Transamerica  Life
Insurance  Company of New York.  The method of allocation  between the companies
for the period beginning July 22, 1999, will be subject to written  agreement to
be approved by the Board of Directors.  It is  anticipated  that this  agreement
will require that tax payments are made to, or refunds are received from, TOLIC,
in amounts  which would  result from filing  separate  tax returns  with federal
taxing authorities.


<PAGE>


5. INCOME TAXES (CONTINUED)

Amounts  due to TOLIC for  federal  income  taxes  were $8.5  million  and $36.1
million  at  December  31,  1999 and 1998,  respectively,  and are  included  in
accounts payable and other liabilities in the accompanying balance sheets.
<TABLE>
<CAPTION>

Following is a reconciliation  of federal income taxes computed at the statutory
rate with the income tax  provision,  excluding  income tax expenses or benefits
related  to  net  realized  gains  or  losses  on  investment  transactions  (in
thousands):

                                                               YEAR ENDED DECEMBER 31
                                                      1999              1998              1997
                                                ------------------------------------------------------

<S>                                               <C>               <C>               <C>
Federal income taxes at statutory rate            $       34,883    $    57,402       $      53,846
Amortization of IMR                                          126           (412)                 32
Income not subject to tax                                 (1,535)        (1,094)             (1,382)
Other                                                      5,085          5,657              (2,335)
                                                ------------------------------------------------------
Provision for income taxes                        $       38,559    $    61,553       $      50,161
                                                ======================================================
</TABLE>

The  Company  records a deferred  tax asset for the tax effect of the  temporary
difference   that  arises  between   statutory  basis  and  tax  basis  deferred
acquisition  costs and policy  reserves.  The  resulting  deferred tax asset was
non-admitted  at  December  31,  1999  and  1998.  This  practice  differs  from
prescribed SAP and has been  permitted by the North Carolina  Department and has
no effect on capital and surplus.

Under the Life Insurance Company Income Tax Act of 1959, a portion of "gain from
operations" was not subject to current income taxation but was accumulated,  for
tax purposes,  in a memorandum  account  designated as  "policyholders'  surplus
account." The balance in this account was frozen at December 31, 1983,  pursuant
to the Life  Insurance Tax Act of 1984.  That amount would become subject to tax
when it exceeds a certain maximum or when cash dividends are paid therefrom. The
policyholders'  surplus account balance at December 31, 1999, was $20.3 million.
No income taxes have been provided on the  policyholders'  surplus account since
the conditions that would cause such taxes are remote.  Should the entire amount
in the policyholders'  surplus account become taxable,  the tax thereon computed
at current rates would amount to approximately $7.1 million.



<PAGE>


6. ANNUITY RESERVES AND DEPOSIT LIABILITIES

A portion  of the  Company's  policy  reserves  and other  policyholders'  funds
(including separate account liabilities) relates to liabilities established on a
variety of the Company's products that are not subject to significant  mortality
or morbidity risk;  however,  there may be certain  restrictions placed upon the
amount of funds that can be withdrawn without penalty. The amount of reserves on
these  products,  by  withdrawal  characteristics,  is summarized as follows (in
thousands):
<TABLE>
<CAPTION>

                                                                       DECEMBER 31
                                                           1999                            1998
                                              ------------------------------- -------------------------------
                                                    AMOUNT        PERCENT           AMOUNT        PERCENT
                                              ------------------------------- -------------------------------
  Subject to discretionary withdrawal - with adjustments:
<S>                                            <C>                     <C>     <C>                     <C>
       With market value adjustment            $      8,232,898        50%     $      7,585,914        52%
       At book value less surrender charge
                                                      2,191,632        14             1,260,466         9
                                              ------------------------------- -------------------------------
                                                     10,424,530        64             8,846,380        61
  Subject to discretionary withdrawal -
    without adjustment                                2,737,028        17             2,522,495        17
  Not subject to discretionary withdrawal
    provision                                         3,122,738        19             3,124,785        22
                                              -------------------             -------------------
                                                                -------------                   -------------
  Total annuity reserves and deposit
    liabilities                                      16,284,296       100%           14,493,660       100%
                                                                =============                   =============
  Less reinsurance                                            -                               -
                                              -------------------             -------------------
  Net annuity reserves and deposit liabilities
                                               $     16,284,296*              ==================
                                                                               $     14,493,660*

===================================================================================================================
</TABLE>

   * Includes  $5,876  million  and $4,407  million of  annuities  reserves  and
     deposit liabilities  reported in the separate account liability at December
     31, 1999 and 1998, respectively.



<PAGE>


7. CAPITAL AND SURPLUS

The  Company is  subject to the  requirements  of the NAIC  approved  Risk Based
Capital  (RBC)  rules  and at  December  31,  1999,  the  Company  met  the  RBC
requirement.

The amount of dividends  which can be paid by the Company without prior approval
of the North Carolina Department is subject to restrictions related to statutory
surplus  and gains  from  operations.  The  Company  could pay $99.9  million in
dividends in 2000 without prior approval.

8. PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS

Substantially all employees are covered by the  noncontributory  defined benefit
plans  sponsored by the Company and  Retirement  Plan for Salaried  Employees of
Transamerica  Corporation  and  Affiliates  in which the  Company  participates.
Pension  benefits are based on the  employee's  compensation  during the highest
paid 60 consecutive months during the 120 months before retirement.  The general
policy is to fund current  service costs  currently and prior service costs over
periods  ranging  from 10 to 30  years.  Assets  of  those  plans  are  invested
principally in publicly traded stocks and bonds. Pension costs incurred in 1999,
1998 and 1997 were not material.

The Company also participates in various  contributory  defined benefit programs
sponsored by  Transamerica  Corporation  that provide  medical and certain other
benefits.  The Company accounts for the costs of such benefit programs under the
accrual  method and amortizes its  transition  obligation for retirees and fully
eligible or vested employees over 20 years. Postretirement benefit costs charged
to income in 1999, 1998 and 1997 were not material.

9. ASSETS ON DEPOSIT

At December  31, 1999 and 1998,  $6.9  million and $7.0  million were on deposit
with public officials, in compliance with regulatory requirements.



<PAGE>


10. RELATED PARTY TRANSACTIONS

The Company has  various  transactions  with  Transamerica  Corporation  and its
affiliated  companies in the normal  course of  operations.  These  transactions
include the assumption and cession of reinsurance and the performance of certain
administrative and support services by an affiliated company.

Transactions  with  Transamerica  Corporation  and its  affiliates  also include
transactions  related to pension plans, a fixed maturity investment in a special
purpose  subsidiary  of  Transamerica  Corporation  ($233.3  in 1999 and  $233.3
million in 1998),  investments  in a money market fund managed by an  affiliated
company,  and rental of computer services.  Pension funds administered for these
companies  amounted to $1.8  billion,  $1.6 billion and $1.3 billion at December
31, 1999, 1998 and 1997, respectively.

11. LEASES

Rental  expense  for  equipment  and  properties  occupied by the  Company,  not
including occupancy of the Company's  buildings,  was $6.8 million in 1999, $4.9
million in 1998 and $2.7 million in 1997. Future minimum rental  commitments are
not significant.

12. LITIGATION

The Company is a defendant in various legal actions arising from its operations.
These  include legal actions  against one of its  subsidiaries  similar to those
faced by many other major life insurers  which allege  damages  related to sales
practices for universal  life policies sold between  January 1981 and June 1996.
In one such action, one of the subsidiaries and plaintiffs' counsel entered into
a settlement which was approved on June 26, 1997. The settlement required prompt
notification of affected policyholders.  Administrative and policy benefit costs
associated with the settlement are not material to the Company. Additional costs
related to the settlement are not currently determinable and are not expected to
be  material  and will be  incurred  over a period of years.  In the  opinion of
management,  any ultimate  liability  which might  result from other  litigation
would not have a  materially  adverse  effect on the  financial  position of the
Company or the results of its operations.



<PAGE>


13. SEPARATE ACCOUNTS

Separate  accounts  held by the  Company  represent  primarily  funds  which are
administered for pension plans. The assets consist primarily of fixed maturities
and equity  securities  and are carried at  estimated  fair  value.  The Company
provides  a minimum  guaranteed  return to  policyholders  of  certain  separate
accounts. Certain other separate accounts do not have any minimum guarantees and
substantially  all the investment risks associated with market value changes are
borne entirely by the policyholder.
<TABLE>
<CAPTION>

Information  regarding  the  separate  accounts of the Company as of and for the
year ended December 31, 1999, is as follows (in thousands):

                                                                               NON-
                                                                            GUARANTEED
                                                                             SEPARATE
                                                           INDEXED           ACCOUNTS           TOTAL
                                                      ------------------------------------------------------

<S>                                                    <C>               <C>               <C>
Premiums, deposits and other considerations            $       636,218   $     2,118,548   $     2,754,766
                                                      ======================================================

Reserves for separate accounts with assets at:
   Fair value                                          $     1,208,498   $     4,682,448   $     5,890,946
   Amortized cost                                                    -                 -                 -
   Other                                                        20,518           188,532           209,050
                                                      ------------------------------------------------------
Total                                                  $     1,229,016   $     4,870,980   $     6,099,996
                                                      ======================================================

Reserves for separate accounts by withdrawal characteristics:
     Subject to discretionary withdrawal (with
       adjustment):                                     $            -   $             -   $             -
         With market value adjustment
         At book value without market value
           adjustment and with current surrender
           charge of 5% or more                                      -                 -                 -
         At market value                                     1,208,498         4,682,448         5,890,946
         At book value without adjustment and with
           current surrender charges less than 5%
                                                                     -                 -                 -
                                                      ------------------------------------------------------
Subtotal                                                     1,208,498         4,682,448         5,890,946

Not subject to discretionary withdrawal                              -                 -                 -
   Other                                                        20,518           188,532           209,050
                                                      ======================================================
Total separate account liabilities                     $     1,229,016   $     4,870,980   $     6,099,996
                                                      ======================================================


<PAGE>


13. SEPARATE ACCOUNTS (CONTINUED)

A reconciliation of the amounts transferred to and from the separate accounts is
presented below (in thousands):

                                                            1999             1998            1997
                                                     ---------------------------------------------------

Transfers as reported  in the summary of  operations  of the  separate  accounts
  statement:
     Transfers to separate accounts                    $    2,764,696    $    2,484,100   $   720,601
     Transfers from separate accounts                       2,256,282         1,360,271       549,414
                                                     ---------------------------------------------------
Net transfers to separate accounts                            508,414         1,123,829       171,187

Reconciling adjustments:
   Deposit/withdrawals directly to separate accounts
                                                               (5,636)          (20,041)        2,703
                                                     ---------------------------------------------------
Transfers as reported in the statements
  of income                                            $      502,778    $    1,103,788   $   173,890
                                                     ===================================================
</TABLE>
<TABLE>
<CAPTION>

14.  DIRECT PREMIUM WRITTEN BY MANAGING GENERAL AGENTS/THIRD-PARTY ADMINISTRATORS

The Company has the following  direct premiums  written through managing general
agents (in thousands):
                                                                                              DIRECTED
                                   EXCLUSIVE             TYPES OF              AUTHORITY      WRITTEN
                                   CONTRACT          BUSINESS WRITTEN           GRANTED       PREMIUMS
                                 --------------------------------------------------------------------------

<S>                                <C>       <C>                                <C>       <C>
National Benefit Resources            No      Specific and aggregate excess
                                                 of loss insurance                 *        $     17,164

R.E. Moulton Insurance Agency,        No      Specific and aggregate excess
   Inc.                                          of loss insurance                 *              46,631

Intermediary Insurance Services,      No      Specific and aggregate excess
   Inc.                                          of loss insurance                 *              38,822


<PAGE>


14.  DIRECT PREMIUM WRITTEN BY MANAGING GENERAL AGENTS/THIRD-PARTY ADMINISTRATORS (CONTINUED)

                                                                                              DIRECTED
                                   EXCLUSIVE             TYPES OF              AUTHORITY      WRITTEN
                                   CONTRACT          BUSINESS WRITTEN           GRANTED       PREMIUMS
                                 --------------------------------------------------------------------------

Excess Reinsurance Underwriters       No      Specific and aggregate excess
   Agency, Inc.                                  of loss insurance                 *        $      1,753

Risk Assessment Strategies            No      Specific and aggregate excess
                                                 of loss insurance                 *               1,673

International Assurance of            No      Specific and aggregate excess
   Tennessee                                     of loss insurance                 *               6,981
</TABLE>

 *Premium  collection,  underwriting  and  commission/claim  payments  authority
granted.

15. NAIC CODIFICATION

In 1998, the NAIC adopted codified statutory accounting practices (Codification)
effective  January 1, 2001.  Codification  will likely  change,  to some extent,
prescribed  statutory  accounting  practices  and may  result in  changes to the
accounting  practices  that the  Company  uses to  prepare  its  statutory-basis
financial  statements.  Codification will require adoption by the various states
before it becomes the  prescribed  statutory  basis of accounting  for insurance
companies  domesticated  within those states.  Accordingly,  before Codification
becomes  effective  for the  Company,  the state of North  Carolina  must  adopt
Codification  as the prescribed  basis of accounting on which domestic  insurers
must report their statutory-basis results to the Insurance Department. The state
of North  Carolina  has stated  affirmatively  that it will  adopt  Codification
effective January 1, 2001.  Management  believes that the impact of Codification
will not be material to the Company's statutory-basis financial statements.

16. REGULATORY EXAMINATION

In 1996, the North Carolina  Department  performed an examination of the Company
for  the  four-year  period  ending  December  31,  1995.  The  results  of  the
examination were finalized on February 1, 1999, with no material adjustments.


<PAGE>


17. YEAR 2000 (UNAUDITED)

In prior years,  the Company  discussed  the nature and progress of its plans to
become Year 2000 ready.  In 1999,  the Company  completed  its  remediation  and
testing of systems.  As a result of those planning and  implementation  efforts,
the  Company   experienced  no  significant   disruptions  in  mission  critical
information technology and non-information technology systems and believes those
systems successfully  responded to the Year 2000 date change. The Company is not
aware of any material problems resulting from Year 2000 issues,  either with its
products,  its internal systems,  or the products and services of third parties.
The Company will continue to monitor its mission critical computer  applications
and those of its suppliers and vendors  throughout  the year 2000 to ensure that
any latent Year 2000 matters that may arise are addressed promptly.



<PAGE>













                                 Statutory Basis
                          Financial Statement Schedules


<PAGE>



33

                 Transamerica Life Insurance and Annuity Company

                            Summary of Investments -
           Other Than Investments in Related Parties - Statutory Basis

                             (Dollars in thousands)

                                December 31, 1999

<TABLE>
<CAPTION>

SCHEDULE I
                                                                                                 AMOUNT AT WHICH
                                                                                                   SHOWN IN THE
                                                                                   MARKET         BALANCE SHEET
TYPE OF INVESTMENT                                               COST(1)            VALUE
- --------------------------------------------------------------------------------------------------------------------

FIXED MATURITIES
Bonds:
   United States government and government agencies and
<S>                                                           <C>               <C>              <C>
     authorities                                              $       216,181   $       227,889  $        216,181
   States, municipalities and political subdivisions                   72,500            71,869            72,500
   Foreign governments                                                 22,067            23,319            22,067
   Public utilities                                                 1,472,771         1,461,155         1,472,771
   All other corporate bonds                                        8,932,101         8,866,624         8,932,101
   Mortgage and other asset-backed securities                       1,854,322         1,852,457         1,854,322
Redeemable preferred stock                                            150,164           155,235           148,463
                                                            --------------------------------------------------------
Total fixed maturities                                             12,720,106        12,658,548        12,718,405

EQUITY SECURITIES
Common stocks:
   Subsidiaries                                                       143,468           120,319           120,319
   Banks, trust and insurance                                          35,585            36,438            36,438
   Industrial, miscellaneous and all other                             76,171           162,124           162,124
   Nonredeemable preferred stock                                        4,800             5,416             4,800
                                                            --------------------------------------------------------
Total equity securities                                               260,024           324,297           323,681

Mortgage loans on real estate                                         406,037           390,020           406,037
Policy loans                                                            9,508             9,508             9,508
Other long-term investments                                           221,601           221,601           221,601
Cash and short-term investments                                       367,023           367,023           367,023
                                                            --------------------------------------------------------
Total investments                                             $    13,984,299   $    13,970,997  $     14,046,255
                                                            ========================================================
</TABLE>

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


<PAGE>



34

                 Transamerica Life Insurance and Annuity Company
<TABLE>
<CAPTION>

              Supplementary Insurance Information - Statutory Basis

                             (Dollars in thousands)


SCHEDULE III

                                                       FUTURE POLICY      POLICY AND
                                                        BENEFITS AND       CONTRACT      PREMIUM REVENUE
                                                          EXPENSES        LIABILITIES
- -----------------------------------------------------------------------------------------------------------

Year ended December 31, 1999
<S>                                                    <C>               <C>              <C>
Individual life                                        $       12,276    $       (1,316)  $        1,540
Group life and health                                           2,244             2,132           14,440
Annuity                                                     9,207,086                 -          153,731
                                                     ------------------------------------------------------
                                                            9,221,606               816          169,711

Year ended December 31, 1998
Individual life                                                11,998            (1,176)           1,880
Group life and health                                           2,828             3,583           11,506
Annuity                                                     8,069,530                 -          325,464
                                                     ------------------------------------------------------
                                                            8,084,356             2,407          338,850


Year ended December 31, 1997
Individual life                                                14,924                14            1,018
Group life and health                                           1,283               855            3,557
Annuity                                                     7,999,984                 -          426,285
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------
                                                       $    8,016,191    $          869   $      430,860
                                                     ======================================================

</TABLE>


<PAGE>



35

<TABLE>
<CAPTION>
                 Transamerica Life Insurance and Annuity Company

              Supplementary Insurance Information - Statutory Basis

                             (Dollars in thousands)


SCHEDULE III
                                                               BENEFITS, CLAIMS
                                              NET INVESTMENT      LOSSES AND      OTHER OPERATION
                                                 INCOME*      SETTLEMENT EXPENSES    EXPENSES*     PREMIUMS WRITTEN
- ---------------------------------------------------------------------------------------------------------------------

Year ended December 31, 1999
<S>                                           <C>               <C>                <C>               <C>
Individual life                               $        1,122    $          1,568   $          358    $        2,126
Group life and health                                    235              12,453           30,320            93,513
Annuity                                            1,031,272           6,223,532          739,344            86,353
                                            -------------------------------------------------------------------------
                                                   1,032,629           6,237,553          770,022           181,992

Year ended December 31, 1998
Individual life                                        1,294               1,883              764             2,558
Group life and health                                    204               9,286           23,862            75,770
Annuity                                            1,062,801           4,055,665        1,242,733           148,602
                                            -------------------------------------------------------------------------
                                                   1,064,299           4,066,834        1,267,359           226,930


Year ended December 31, 1997
Individual life                                          322               1,601              490             1,801
Group life and health                                    279               2,548            6,078            20,771
Annuity                                            1,047,727           3,155,350          296,235           243,576
                                            -------------------------------------------------------------------------
                                            -------------------------------------------------------------------------
                                              $    1,048,328    $      3,159,499   $      302,803    $      266,148
                                            =========================================================================
</TABLE>

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



<PAGE>

<TABLE>
<CAPTION>

                 Transamerica Life Insurance and Annuity Company

                          Reinsurance - Statutory Basis

                             (Dollars in thousands)

SCHEDULE IV
                                                                                 ASSUMED                             PERCENTAGE
                                                               CEDED TO            FROM                               OF AMOUNT
                                               GROSS            OTHER        OTHER COMPANIES          NET              ASSUMED
                                              AMOUNT          COMPANIES                             AMOUNT             TO NET
- -----------------------------------------------------------------------------------------------------------------------------------

Year ended December 31, 1999
<S>                                        <C>              <C>               <C>               <C>
Life insurance in force                    $       82,964   $       34,165    $            -    $       48,799                -
                                         ==========================================================================================


Premiums:
   Individual life                         $        2,126   $          586    $            -    $        1,540                -
   Individual health                                    -                -                 -                 -                -
   Group life and health                           93,513           79,073                 -            14,440                -
   Annuity                                         86,353                -            67,378           153,731               44%
                                         ------------------------------------------------------------------------------------------
                                           $      181,992   $       79,659    $       67,378    $      169,711               40%
                                         ==========================================================================================


Year ended December 31, 1998
Life insurance in force                    $       94,458   $       38,491    $           13    $       55,980                0%
                                         ==========================================================================================


Premiums:
   Individual life                         $        2,558   $          678    $            -    $        1,880                -
   Individual health                                    -                -                 -                 -                -
   Group life and health                           75,770           64,264                 -            11,506                -
   Annuity                                        148,602                -           176,862           325,464               54%
                                         ------------------------------------------------------------------------------------------
                                           $      226,930   $       64,942    $      176,862    $      338,850               52%
                                         ==========================================================================================

Year ended December 31, 1997
Life insurance in force                    $      103,418   $       44,818    $           70    $       58,670                0%
                                         ==========================================================================================


Premiums:
   Individual life                         $        1,801   $          783    $            -    $        1,018                -
   Individual health                                    -                -                 -                 -                -
   Group life and health                           20,771           17,214                 -             3,557                -
   Annuity                                        243,576                -           182,709           426,285               43%
                                         ------------------------------------------------------------------------------------------
                                           $      266,148   $       17,997    $      182,709    $      430,860               42%
                                         ==========================================================================================


</TABLE>
<PAGE>
                               PROSPECTUS FOR THE


                    TRANSAMERICA CATALYST(R) VARIABLE ANNUITY

                  A FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY

                                    ISSUED BY

                           TRANSAMERICA LIFE INSURANCE
                                       AND
                                 ANNUITY COMPANY

              OFFERING 19 SUB-ACCOUNTS WITHIN THE VARIABLE ACCOUNT
                       DESIGNATED AS SEPARATE ACCOUNT VA-6

                                 IN ADDITION TO:

                                 A FIXED ACCOUNT

                                                         &

                           A GUARANTEE PERIOD ACCOUNT
<TABLE>
<CAPTION>


<S>  <C>                                                    <C>
o        THIS PROSPECTUS CONTAINS                            PORTFOLIOS ASSOCIATED WITH SUB-ACCOUNTS
                                                             ---------------------------------------
     INFORMATION YOU SHOULD                                      ALGER AMERICAN INCOME & GROWTH
     KNOW BEFORE INVESTING.                                       ALLIANCE VP GROWTH AND INCOME
                                                                   ALLIANCE VP PREMIER GROWTH
PLEASE KEEP THIS PROSPECTUS                                         DREYFUS VIF APPRECIATION
     FOR FUTURE REFERENCE.                                            DREYFUS VIF SMALL CAP

                                                                   JANUS ASPEN SERIES BALANCED

o        YOU CAN OBTAIN MORE INFORMATION ABOUT                 JANUS ASPEN SERIES WORLDWIDE GROWTH
     THE CONTRACT BY REQUESTING A COPY OF THE                        MFS VIT EMERGING GROWTH
     STATEMENT OF ADDITIONAL INFORMATION ("SAI")                   MFS VIT GROWTH WITH INCOME
     DATED MAY 1, 2000. THE SAI IS AVAILABLE FREE                       MFS VIT RESEARCH
     BY WRITING TO TRANSAMERICA LIFE INSURANCE                   MS UIF EMERGING MARKETS EQUITY
     AND ANNUITY COMPANY,                                              MS UIF FIXED INCOME
     ANNUITY SERVICE CENTER,                                            MS UIF HIGH YIELD
     401 N. TRYON ST., SUITE 700,                                  MS UIF INTERNATIONAL MAGNUM
     CHARLOTTE, NC 28202 OR                                      OCC ACCUMULATION TRUST MANAGED
     BY CALLING 877-717-8861.                                   OCC ACCUMULATION TRUST SMALL CAP
                                                              PIMCO VIT STOCKSPLUS GROWTH & INCOME
     THE CURRENT SAI HAS BEEN FILED WITH THE                         TRANSAMERICA VIF GROWTH
SECURITIES AND EXCHANGE COMMISSION AND                            TRANSAMERICA VIF MONEY MARKET
     IS INCORPORATED BY REFERENCE INTO THIS
     PROSPECTUS. THE TABLE OF CONTENTS OF THE SAI
     IS INCLUDED AT THE END OF THIS PROSPECTUS.

o        THE SEC'S WEB SITE IS HTTP://WWW.SEC.GOV


o        TRANSAMERICA'S WEB SITE IS
           HTTP://WWW.TRANSAMERICA.COM
</TABLE>

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THIS INVESTMENT
OFFERING  OR  DETERMINED  THAT THIS  PROSPECTUS  IS ACCURATE  OR  COMPLETE.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


PLEASE NOTE THAT THE CONTRACT AND THE PORTFOLIOS ARE NOT BANK DEPOSITS,  ARE NOT
FEDERALLY  INSURED,  ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT  AGENCY, ARE NOT
GUARANTEED TO ACHIEVE  THEIR GOALS AND ARE SUBJECT TO RISKS,  INCLUDING THE LOSS
OF PURCHASE PAYMENTS.
                                   MAY 1, 2000


<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


<S>                                                                                                        <C>
Summary.....................................................................................................5
Transamerica Life Insurance and Annuity Company and the Variable Account...................................17
         Transamerica Life Insurance and Annuity Company...................................................17
         Published Ratings.................................................................................17
         Insurance Marketplace Standards Association.......................................................17
         The Variable Account..............................................................................17
The Portfolios.............................................................................................18
         Portfolios Not Publicly Available.................................................................22
         Addition, Deletion, or Substitution...............................................................22
The Contract...............................................................................................23
         Ownership.........................................................................................23
Purchase Payments..........................................................................................24
         Allocation of Purchase Payments...................................................................24
         Free Look Option..................................................................................24
         Investment Option Limit...........................................................................24
         How Credits are Applied...........................................................................24

Account Value..............................................................................................25
         How Variable Accumulation Units Are Valued........................................................26

Transfers..................................................................................................26
         Before the Annuity Date...........................................................................26
         Telephone Transfers...............................................................................27
         Other Restrictions................................................................................27
         Dollar Cost Averaging.............................................................................27
         Eligibility Requirement for Dollar Cost Averaging ................................................27
         Special Dollar Cost Averaging Option..............................................................28
         Automatic Asset Rebalancing.......................................................................28
         After the Annuity Date............................................................................28

Cash Withdrawals...........................................................................................28
         Systematic Withdrawal Option......................................................................29
         Automatic Payment Option (APO)....................................................................30

Death Benefit..............................................................................................30
         Guaranteed Minimum Death Benefit Rider............................................................31
         Ownership Changes.................................................................................31
         Payment of Death Benefit..........................................................................31
         Designation of Beneficiaries......................................................................32
         Death of Owner of Joint Owner Before the Annuity Date.............................................33
         If the Annuitant Dies Before the Annuity Date.....................................................33
         Death After the Annuity Date......................................................................33
         Survival Provision................................................................................33
Charges, Fees and Deductions...............................................................................33
         Contingent Deferred Sales Load/Surrender Charge...................................................33
         Free Withdrawals - Allowed Amount.................................................................33
         Free Withdrawals - Living Benefits Rider..........................................................34
         Other Free Withdrawals............................................................................34
         Administrative Charges............................................................................34
         Mortality and Expense Risk Charge.................................................................35
         Living Benefits Rider Fee.........................................................................35
         Guaranteed Minimum Death Benefit Rider Fee........................................................36
         Premium Tax Charges...............................................................................36
         Transfer Fee......................................................................................36
         Option and Service Fees...........................................................................36
         Taxes...............................................................................................36
         Portfolio Expenses................................................................................36
         Interest Adjustment...............................................................................36
         Sales in Special Situations.......................................................................36
DISTRIBUTION OF THE CONTRACT...............................................................................37
Settlement Option Payments.................................................................................37
         Annuity Date......................................................................................37
         Annuity Amount....................................................................................37
         Settlement Option Payments........................................................................38
         Election of Settlement Option Forms and Payment Options...........................................38
         Payment Options...................................................................................38
         Fixed Payment Option..............................................................................38
         Variable Payment Option...........................................................................38
         Settlement Option Forms...........................................................................38
Federal Tax Matters..........................................................................................40
         Introduction......................................................................................40
         Purchase Payments.................................................................................40
         Taxation of Annuities.............................................................................41
         Qualified Contracts...............................................................................6


3



42
         Contracts Purchased by Nonresident Aliens and Foreign Corporations................................44
         Taxation of Transamerica .........................................................................44
         Tax Status of the Contract........................................................................45
         Possible Changes in Taxation......................................................................46
         Other Tax Consequences............................................................................46
Performance Data...........................................................................................46
Legal Proceedings..........................................................................................47
Legal Matters..............................................................................................48
Accountants AND FINANCIAL STATEMENTS.......................................................................48
Voting Rights..............................................................................................48
Available Information......................................................................................48
Statement of Additional Information - Table of Contents....................................................49
Appendix A - The General Account Options...................................................................50
         The General Account Options.......................................................................50
         The Fixed Account ................................................................................50
         The Guarantee Period Account .....................................................................51
Appendix B.................................................................................................53
         Example of Variable Accumulation Unit Value Calculations..........................................53
         Example of Variable Annuity Unit Value Calculations...............................................53
         Example of Variable Annuity Payment Calculations..................................................53
APPENDIX C.................................................................................................54
         Condensed Financial Information...................................................................54
APPENDIX D.................................................................................................57
         Definitions.......................................................................................57
Appendix E.................................................................................................59
         Disclosure Statement for Individual Retirement Annuities..........................................59


</TABLE>

<PAGE>



                                       49
SUMMARY

This summary  provides you with a brief  overview of some of the more  important
aspects of the Transamerica Catalyst(R) Variable Annuity contract. The remainder
of the prospectus and the contract provide further details.

The  contract is a flexible  purchase  payment  deferred  annuity and it has two
phases,  the  accumulation  phase  and  the  annuitization   phase.  During  the
accumulation  phase,  your  earnings  accumulate  on a  tax-deferred  basis  for
individuals.  Tax deferral is not available for non-qualified contracts owned by
corporations and some trusts.

As long as the contract is in effect, you may make additional  purchase payments
before the annuity date and before any  owner's,  joint  owner's or  annuitant's
81st birthday,  transfer money among the investment options and withdraw some or
all of the account value.

On a future date you select,  the annuity date, the annuitization  phase begins.
During this phase, we apply the account value, after certain  adjustments,  to a
settlement  option that provides  periodic payments to you. The dollar amount of
the payments  will depend on the amount of the money  invested and earned during
the accumulation  phase,  and on other factors,  such as the annuitant's age and
sex and if variable payouts are elected.

If you or a joint owner dies during the accumulation  phase, we will pay a death
benefit to the  beneficiary  you  designate  in an amount at least  equal to the
account value.

SUB-ACCOUNT  VALUES WILL VARY  ACCORDING TO  INVESTMENT  EXPERIENCE.  Except for
amounts in the general account options, the account value will vary depending on
the investment  experience of each of the variable  sub-accounts you select. All
benefits and values  provided  under the contract,  when based on the investment
experience of the variable  account,  are variable and are not  guaranteed as to
dollar  amount.  Therefore,  before  the  annuity  date,  you  bear  the  entire
investment  risk  under the  contract  for  amounts  allocated  to the  variable
account.


There is no guaranteed or minimum cash surrender  value on amounts  allocated to
the  variable  account,  so the  proceeds of a surrender  could be less than the
amount invested.


WHAT IS THE CONTRACT'S OBJECTIVE?

We designed the contract to assist  individuals in long-term  financial planning
for retirement or other purposes. You may use the contract as:

a)       a non-qualified annuity;

b)       a qualified annuity as:

          o    a rollover or contributory individual retirement annuity, or IRA,
               under Sections 408(a) and 408(b) of the Internal Revenue Code, or
               Code;

          o    a  conversion,  rollover  or  contributory  Roth IRA  under  Code
               Section 408A;

          o    a  simplified  employee  pension  plan,  or  SEP/IRA,  under Code
               Section 408(k);

          o    a Rev. Rul. 90-24 transfer or rollover tax sheltered annuity,  or
               TSA,  under Code  Section  403(b),  with no  additional  purchase
               payments allowed; and

o        a qualified pension or profit sharing plan under Code Section 401.

Generally,  qualified  contracts  contain  restrictive  provisions  limiting the
timing and amount of purchase payments to, and distributions from, the qualified
contract.  Some qualified contracts may not be available in all states or in all
situations.

WHO SHOULD PURCHASE THE CONTRACT?

The contract is designed for people seeking long-term tax deferred  accumulation
of assets, generally for retirement or other long-term purposes, and for persons
who have maximized their use of other retirement savings methods, such as 401(k)
plans and  individual  retirement  accounts.  The  tax-deferred  feature is most
attractive to people in high federal and state tax brackets.  You should not buy
this  contract if you are looking for a short-term  investment  or if you cannot
take the risk of losing money that you put in.

There  are  various   additional  fees  and  charges  associated  with  variable
annuities.  You should  consider  whether the features  and  benefits  unique to
variable  annuities,  such as the opportunity for lifetime  income  payments,  a
guaranteed  death  benefit  and the  guaranteed  level of  certain  charges  are
appropriate for your needs. Because variable annuities also provide tax-deferral
outside of qualified plans, the tax deferral features of variable  annuities are
unnecessary when purchased to fund a qualified plan.

HOW MUCH CAN I INVEST AND HOW OFTEN?

To purchase a contract,  you must make an initial  purchase  payment of at least
$5,000 or, if for contributory  IRAs,  SEP/IRAs and Roth IRAs,  $2,000.  Once we
receive the initial purchase  payment,  we establish and maintain an account for
each contract.

You may also make  additional  purchase  payments  of at least  $200,  unless an
automatic purchase payment plan is selected. See PURCHASE PAYMENTS on page 23.

HOW CAN I ALLOCATE MY MONEY?

You may choose to allocate all or part of your purchase payments to:

          o    one or  more of the 19  variable  sub-accounts  described  in THE
               PORTFOLIOS on page 17; and/or

o        one or more of the guarantee period account options.

CAN I EXAMINE THE CONTRACT?

Yes.  As the owner,  you have the right to examine  the  contract  for a limited
period, or free look period. You

may cancel the contract  during this period by  delivering  or mailing a written
notice of  cancellation,  or sending a telegram to our Service Center.  You must
return  the  contract  before  midnight  of the tenth day after  receipt  of the
contract, or longer in some situations or if required by state law. Notice given
by mail and the return of the  contract  by mail will be  effective  on the date
received by us.  Unless  otherwise  required by law, we will refund the purchase
payments  allocated to any general account option,  minus any withdrawals,  plus
the variable  accumulated value as of the date your written notice to cancel and
your  contract are received by us. We will not include any credits in the amount
paid. See PURCHASE PAYMENTS on page 23.

WHAT CHARGES, EXPENSES AND FEES WILL
I INCUR?

The following table assists you in understanding  the various costs and expenses
that you will incur directly and indirectly.  The table reflects expenses of the
variable  account and the mutual fund portfolios,  as well as contract  expenses
and the fees for the optional riders.  The table assumes that the entire account
value is in the variable  account.  You should  consider the  information  below
together  with the  narrative  provided  under  the  heading  CHARGES,  FEES AND
DEDUCTIONS  on page 33 of this  prospectus,  and with the  prospectuses  for the
portfolios.  In addition to the expenses  listed below,  premium tax charges may
apply.



<PAGE>

                                  SALES LOAD(1)


         Sales Load Imposed on Purchase Payments            0%
         Maximum Contingent Deferred Sales Load(2)          6%


         RANGE OF CONTINGENT DEFERRED SALES LOAD OVER TIME:
                                                     CONTINGENT DEFERRED
         YEARS SINCE                                     SALES LOAD
         PURCHASE PAYMENT RECEIPT            as a percentage of purchase payment
         Less than 1 year                                    8%
         1 year but less than 2 years                        8%
         2 years but less than 3 years                       7%
         3 years but less than 4 years                       6%
         4 years but less than 5 years                       5%
         5 years but less than 6 years                       4%
         6 years but less 7 years                            3%
         7 or more years                                     0%


<PAGE>



                                         OTHER CONTRACT EXPENSES

         Transfer Fee, first 18 per contract year(3)             0
         Fees For Other Services and Options(4)                  0
         Annual Account Fee(5)                                   $30
         Living Benefits Rider Fee, if elected(6)                0.05%
         Guaranteed Minimum Death Benefit Rider, if elected(6)   0.20%


                                   VARIABLE ACCOUNT ANNUAL EXPENSES(7)
                                   -----------------------------------
                            as a percentage of the variable accumulated value
         Mortality and Expense Risk Charge                     1.20%
         Administrative Expense Charge(8)                      0.15%
         Total Variable Account Annual Expenses                1.35%

                               PORTFOLIO EXPENSES
   as a percentage of assets after fee waiver and/or expense reimbursement(9)


<TABLE>
<CAPTION>

                                                                                           TOTAL PORTFOLIO
                                                          MANAGEMENT          OTHER            ANNUAL
   PORTFOLIO                                                 FEES           EXPENSES          EXPENSES
   ---------                                                 ----           --------          --------
<S>                                                         <C>              <C>             <C>
   Alger American Income & Growth                           0.625%           0.075%          0.70%
   Alliance VP Growth & Income                              0.63%             0.08%             0.71%
   Alliance VP Premier Growth                               1.00%             0.05%             1.05%
   Dreyfus VIF Appreciation                                 0.75%             0.03%             0.78%
   Dreyfus VIF Small Cap                                    0.75%             0.03%             0.78%
   Janus Aspen Series Balanced(10)                          0.65%             0.02%             0.67%
   Janus Aspen Series Worldwide Growth(10)                  0.65%             0.05%             0.70%
   MFS VIT Emerging Growth                                  0.75%             0.09%             0.84%
   MFS VIT Growth with Income                               0.75%             0.13%             0.88%
   MFS VIT Research                                         0.75%            0.11%           0.86%
   MS UIF Emerging Markets Equity                           0.42%             1.37%             1.79%
   MS UIF Fixed Income                                      0.14%             0.56%             0.70%
   MS UIF High Yield                                        0.19%             0.61%             0.80%
   MS UIF International Magnum                              0.29%             0.87%             1.16%
   OCC Accumulation Trust Managed(11)                       0.77%             0.06%             0.83%
   OCC Accumulation Trust Small Cap                         0.80%             0.09%             0.89%
   PIMCO VIT StocksPLUS Growth & Income(12)                 0.40%             0.25%             0.65%
   Transamerica VIF Growth                                  0.70%             0.15%             0.85%

       Transamerica VIF Money Market                            0.00%            0.60%           0.60%
</TABLE>


The  portfolios  have  provided  us  with  expense  information   regarding  the
portfolios.  In  preparing  the  tables  above and below and the  examples  that
follow,  we have relied on the figures  provided by the  portfolios.  We have no
reason to doubt the accuracy of that information, but we have not verified those
figures. These figures are for the year ended December 31, 1999. Actual expenses
in future years may be higher or lower than these figures.


Notes to Fee Table:

1.   The contingent deferred sales load applies to each contract,  regardless of
     how the account  value is allocated  between the  variable  account and the
     general account options.


2.   A portion of the  purchase  payments may be withdrawn  each  contract  year
     without imposition of any contingent  deferred sales load. After a purchase
     payment has been in the contract for seven years,  it may be withdrawn free
     of any contingent deferred sales load. See CHARGES,  FEES AND DEDUCTIONS on
     page 33.


3. A transfer fee of $10 will be imposed for each  transfer in excess of 18 in a
contract year.

4.   We currently do not impose fees for any other services. However, we reserve
     the right to impose a fee for various services and options including dollar
     cost averaging, systematic withdrawals, automatic payouts, asset allocation
     and asset rebalancing.

5.   The current  account fee is $30, or 2% of the account  value,  if less, per
     contract  year.  This fee will be waived for account  values over  $50,000.
     This limit may be changed in the future. The fee may be changed, but it may
     not exceed $60, or 2% of the account value, if less.


6.   If you elect a rider,  we  deduct  the rider fee at the rate of 1/12 of the
     annual rate at the end of each contract month based on the account value at
     that time.


7.   The variable  account annual  expenses do not apply to the general  account
     options.

8.   The current annual administrative  expense charge of 0.15% may be increased
     to no more than 0.35%.


9.   From time to time, the  portfolios'  investment  advisers,  each in its own
     discretion,  may  voluntarily  waive  all or  part  of  their  fees  and/or
     voluntarily  assume certain portfolio  expenses.  The expenses shown in the
     Portfolio Expenses table are the expenses paid for 1999. The expenses shown
     in  that  table  reflect  a  portfolio's   adviser's  waivers  of  fees  or
     reimbursement  of expenses,  if  applicable.  It is  anticipated  that such
     waivers or  reimbursements  will continue for calendar  year 2000.  Without
     such  waivers  or  reimbursements,  the  annual  expenses  for 1999 for the
     following portfolios would have been, as a percentage of assets:

<TABLE>
<CAPTION>


                                                       MANAGEMENT         OTHER        TOTAL PORTFOLIO
                                                           FEE           EXPENSES      ANNUAL EXPENSE

<S>                                                       <C>             <C>               <C>
     MS UIF Emerging Markets Equity                       1.25%           1.37%             2.62%
     MS UIF Fixed Income                                  0.40%           0.56%             0.96%
     MS UIF High Yield                                    0.50%           0.61%             1.11%
     MS UIF International Magnum                          0.80%           0.87%             1.67%
     Transamerica VIF Growth                              0.75%           0.15%             0.90%
     ---------------------------------------------        0.35%           1.04%             1.39%
     Transamerica VIF Money Market
</TABLE>

10.  Expenses  are based upon  expenses  for the fiscal year ended  December 31,
     1999,  restated to reflect a reduction in the management  fee. All expenses
     are shown without the effect of expense offset arrangements.

11.  The  Adviser  is  contractually  obligated  to waive  that  portion  of the
     advisory  fee and assume any  necessary  expense to limit  total  operating
     expenses of the  portfolio  to 1.00% of average net assets (net of expenses
     offset) on an annual basis.

12.  PIMCO has contractually  agreed to reduce total annual portfolio  operating
     expenses to the extent these  expenses  would exceed 0.65% of average daily
     net assets due to the  payment of  organizational  expenses  and  Trustees'
     fees. Without such reductions, total operating expenses for the fiscal year
     ended December 31, 1999 were 0.65%. Under the Expense Limitation Agreement,
     PIMCO may recoup these waivers and  reimbursements  in future periods,  not
     exceeding three years, provided total expenses,  including such recoupment,
     do not exceed the annual expense  limit.  Fees expressed are restated as of
     April 1, 2000.

EXAMPLES


The  following  tables  show the  total  expenses  you  would  incur in  various
situations assuming the following assumptions:

o        a $1,000 investment;

o        a 3.25% credit is added to the investment;

o        a 5% annual return on assets; and

all amounts were allocated to the variable sub-account indicated.

These  examples show expenses for contracts  based on total  portfolio  expenses
after fee waivers and  reimbursements,  if  applicable,  for the  portfolios for
1999. There is no guarantee that any fee waivers or expense  reimbursements will
continue.  These  examples  assume an  average  account  value of  $40,000  and,
therefore,  a deduction  of 0.075% has been made to reflect the $30 account fee.
No transfer fees, optional rider fees or other option or service fees or premium
tax charges have been assessed.  Premium tax charges may apply.  See Premium Tax
Charges on page 36. For  annuitizations  before the first contract  anniversary,
and for  annuitizations  under a form that does not include life  contingencies,
the  contingent  deferred  sales  load may  apply.  The Year 1 column in expense
example 3 illustrates this occurrence.
<TABLE>
<CAPTION>

EXAMPLE 1: If you  surrender  the  contract  at the end of the  applicable  time
period:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

<S>                                                <C>            <C>             <C>             <C>
     Alger American Income & Growth                $94            $132            $163            $254
     Alliance VP Growth & Income                           $94        $132        $163        $255
     Alliance VP Premier Growth                            $98        $144        $181        $290
     Dreyfus VIF Appreciation                              $95        $134        $167        $262
     Dreyfus VIF Small Cap                                 $95        $134        $167        $262
     Janus Aspen Series Balanced                           $94        $131        $161        $250
     Janus Aspen Series Worldwide Growth                   $94        $132        $163        $254
     MFS VIT Emerging Growth                               $96        $136        $170        $268
     MFS VIT Growth with Income                            $96        $137        $172        $273
     MFS VIT Research                                      $96        $137        $171        $271
     MS UIF Emerging Markets Equity                       $105        $165        $219        $363
     MS UIF Fixed Income                                   $94        $132        $163        $254
     MS UIF High Yield                                     $95        $135        $168        $264
     MS UIF International Magnum                           $99        $146        $187        $301
     OCC Accumulation Trust Managed                        $96        $136        $170        $267
     OCC Accumulation Trust Small Cap                      $96        $138        $173        $274
     PIMCO VIT StocksPLUS Growth & Income                  $94        $130        $160        $248
     Transamerica VIF Growth                               $96        $136        $171        $270
     Transamerica VIF Money Market                 $93            $129            $158            $243

     --------------------------------------------------------------------------------------------------------







EXAMPLE 2: If you do not surrender and do not annuitize the contract:

                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth                $22             $69            $118            $254
     Alliance VP Growth & Income                   $22             $69            $118            $255
     Alliance VP Premier Growth                    $26             $80            $136            $290
     Dreyfus VIF Appreciation                      $23             $71            $122            $262
     Dreyfus VIF Small Cap                         $23             $71            $122            $262
     Janus Aspen Series Balanced                   $22             $68            $116            $250
     Janus Aspen Series Worldwide Growth           $22             $69            $118            $254
     MFS VIT Emerging Growth                               $24         $73        $125        $268
     MFS VIT Growth with Income                            $24         $74        $127        $273
     MFS VIT Research                                      $24         $74        $126        $271
     MS UIF Emerging Markets Equity                        $33        $102        $174        $363
     MS UIF Fixed Income                                   $22         $69        $118        $254
     MS UIF High Yield                                     $23         $72        $123        $264
     MS UIF International Magnum                           $27         $83        $142        $301
     OCC Accumulation Trust Managed                        $24         $73        $125        $267
     OCC Accumulation Trust Small Cap                      $24         $75        $128        $274
     PIMCO VIT StocksPLUS Growth & Income                  $22         $67        $115        $248
     Transamerica VIF Growth                               $24         $73        $126        $270
     Transamerica VIF Money Market                 $21             $66            $113            $243

     --------------------------------------------------------------------------------------------------------



EXAMPLE 3: If you elect to annuitize at the end of the applicable period under a
Settlement Option with life contingencies:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth                $94             $69            $118            $254
     Alliance VP Growth & Income                           $94         $69        $118        $255
     Alliance VP Premier Growth                            $98         $80        $136        $290
     Dreyfus VIF Appreciation                              $95         $71        $122        $262
     Dreyfus VIF Small Cap                                 $95         $71        $122        $262
     Janus Aspen Series Balanced                           $94         $68        $116        $250
     Janus Aspen Series Worldwide Growth                   $94         $69        $118        $254
     MFS VIT Emerging Growth                               $96         $73        $125        $268
     MFS VIT Growth with Income                            $96         $74        $127        $273
     MFS VIT Research                                      $96         $74        $126        $271
     MS UIF Emerging Markets Equity                       $105        $102        $174        $363
     MS UIF Fixed Income                                   $94         $69        $118        $254
     MS UIF High Yield                                     $95         $72        $123        $264
     MS UIF International Magnum                           $99         $83        $142        $301
     OCC Accumulation Trust Managed                        $96         $73        $125        $267
     OCC Accumulation Trust Small Cap                      $96         $75        $128        $274
     PIMCO VIT StocksPLUS Growth & Income                  $94         $67        $115        $248
     Transamerica VIF Growth                               $96         $73        $126        $270
     Transamerica VIF Money Market                 $93             $66            $113            $243

     --------------------------------------------------------------------------------------------------------




The  following  tables  show the  total  expenses  you  would  incur in  various
situations assuming the following assumptions:

o        a $1,000 investment;

o        a 3.25% credit is added to the investment;

o        a 5% annual return on assets;

o        all amounts were allocated to the variable sub-account indicated; and


o    you elected the optional Living Benefits Rider and Guaranteed Minimum Death
     Benefit Rider.


These  examples show expenses for contracts  based on total  portfolio  expenses
after fee waivers and  reimbursements,  if  applicable,  for the  portfolios for
1999. There is no guarantee that any fee waivers or expense  reimbursements will
continue.  These  examples  assume an  average  account  value of  $40,000  and,
therefore,  a deduction  of 0.075% has been made to reflect the $30 account fee.
Deductions of 0.05% has been made to reflect the optional  Living Benefits Rider
fee and of 0.20% has been made to reflect the optional  Guaranteed Minimum Death
Benefit  Rider fee. No transfer  fees or other option or service fees or premium
tax charges have been assessed.  Premium tax charges may apply.  See Premium Tax
Charges on page 36. For  annuitizations  before the first contract  anniversary,
and for  annuitizations  under a form that does not include life  contingencies,
the  contingent  deferred  sales  load may  apply.  The Year 1 column in expense
example 3 illustrates this occurrence.

EXAMPLE 4: If you  surrender  the  contract  at the end of the  applicable  time
period:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth                $97            $140            $176            $280
     Alliance VP Growth & Income                            $97         $140         $176          $281
     Alliance VP Premier Growth                            $100         $150         $194          $316
     Dreyfus VIF Appreciation                               $98         $142         $180          $288
     Dreyfus VIF Small Cap                                  $98         $142         $180          $288
     Janus Aspen Series Balanced                            $97         $139         $174          $277
     Janus Aspen Series Worldwide Growth                    $97         $140         $176          $280
     MFS VIT Emerging Growth                                $98         $144         $183          $294
     MFS VIT Growth with Income                             $99         $145         $185          $298
     MFS VIT Research                                       $98         $144         $184          $296
     MS UIF Emerging Markets Equity                        $108         $173         $231          $386
     MS UIF Fixed Income                                    $97         $140         $176          $280
     MS UIF High Yield                                      $98         $143         $181          $290
     MS UIF International Magnum                           $102         $154         $199          $326
     OCC Accumulation Trust Managed                         $98         $144         $183          $293
     OCC Accumulation Trust Small Cap                       $99         $145         $186          $299
     PIMCO VIT StocksPLUS Growth & Income                   $96         $138         $173          $275
     Transamerica VIF Growth                                $98         $144         $184          $295
     Transamerica VIF Money Market                 $96            $136            $171            $270

     --------------------------------------------------------------------------------------------------------







EXAMPLE 5: If you do not surrender and do not annuitize the contract:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth                $25             $77            $131            $280
     Alliance VP Growth & Income                            $25          $77         $131          $281
     Alliance VP Premier Growth                             $28          $87         $149          $316
     Dreyfus VIF Appreciation                               $26          $79         $135          $288
     Dreyfus VIF Small Cap                                  $26          $79         $135          $288
     Janus Aspen Series Balanced                            $25          $76         $129          $277
     Janus Aspen Series Worldwide Growth                    $25          $77         $131          $280
     MFS VIT Emerging Growth                                $26          $81         $138          $294
     MFS VIT Growth with Income                             $27          $82         $140          $298
     MFS VIT Research                                       $26          $81         $139          $296
     MS UIF Emerging Markets Equity                         $36         $110         $186          $386
     MS UIF Fixed Income                                    $25          $77         $131          $280
     MS UIF High Yield                                      $26          $80         $136          $290
     MS UIF International Magnum                            $30          $91         $154          $326
     OCC Accumulation Trust Managed                         $26          $81         $138          $293
     OCC Accumulation Trust Small Cap                       $27          $82         $141          $299
     PIMCO VIT StocksPLUS Growth & Income                   $24          $75         $128          $275
     Transamerica VIF Growth                                $26          $81         $139          $295
     Transamerica VIF Money Market                 $24             $73            $126            $270

     --------------------------------------------------------------------------------------------------------



EXAMPLE 6: If you elect to annuitize at the end of the applicable period under a
Settlement Option with life contingencies:


                                             ----------------------------------------------------------------
                                                 1 YEAR          3 YEARS         5 YEARS        10 YEARS
                                             ----------------------------------------------------------------
     ----------------------------------------

     Alger American Income & Growth                $97             $77            $131            $280
     Alliance VP Growth & Income                            $97          $77         $131          $281
     Alliance VP Premier Growth                            $100          $87         $149          $316
     Dreyfus VIF Appreciation                               $98          $79         $135          $288
     Dreyfus VIF Small Cap                                  $98          $79         $135          $288
     Janus Aspen Series Balanced                            $97          $76         $129          $277
     Janus Aspen Series Worldwide Growth                    $97          $77         $131          $280
     MFS VIT Emerging Growth                                $98          $81         $138          $294
     MFS VIT Growth with Income                             $99          $82         $140          $298
     MFS VIT Research                                       $98          $81         $139          $296
     MS UIF Emerging Markets Equity                        $108         $110         $186          $386
     MS UIF Fixed Income                                    $97          $77         $131          $280
     MS UIF High Yield                                      $98          $80         $136          $290
     MS UIF International Magnum                           $102          $91         $154          $326
     OCC Accumulation Trust Managed                         $98          $81         $138          $293
     OCC Accumulation Trust Small Cap                       $99          $82         $141          $299
     PIMCO VIT StocksPLUS Growth & Income                   $96          $75         $128          $275
     Transamerica VIF Growth                                $98          $81         $139          $295
     Transamerica VIF Money Market                 $96             $73            $126            $270

     --------------------------------------------------------------------------------------------------------

</TABLE>


These  examples  should  not be  considered  representations  of past or  future
expenses.  Actual expenses paid may be greater or less than those shown, subject
to the guarantees in the contract and any optional riders you elect. The assumed
5%  annual  rate of  return is  hypothetical  and  should  not be  considered  a
representation  of past or future annual  returns,  which may be greater or less
than this assumed rate.


<PAGE>


CONDENSED FINANCIAL INFORMATION


You will find condensed financial  information on each sub-account in APPENDIX C
on page 54.  You will  find the  audited  financial  statements  and  report  of
independent  auditors for the variable  account in the  Statement of  Additional
Information.

WHAT ARE MY INVESTMENT CHOICES?

The contract  gives you the  opportunity  to select from a number of  investment
options.  Investment  options include variable  sub-accounts and general account
options. Currently, you may not elect more than a total of 18 investment options
over the life of the contract.

VARIABLE SUB-ACCOUNT OPTIONS

The variable account is a separate  account,  designated  Separate Account VA-6,
that  is  subdivided  into  variable  sub-accounts.   Assets  of  each  variable
sub-account  are  invested in a specified  mutual fund  portfolio.  The variable
sub-accounts currently available for investment are:

Alger American Income & Growth Alliance VP Growth & Income*  Alliance VP Premier
Growth*  Dreyfus VIF  Appreciation*  Dreyfus  VIF Small Cap Janus  Aspen  Series
Balanced  Janus Aspen Series  Worldwide  Growth MFS VIT Emerging  Growth MFS VIT
Growth with Income MFS VIT Research MS UIF Emerging Markets Equity* MS UIF Fixed
Income* MS UIF High Yield* MS UIF International  Magnum* OCC Accumulation  Trust
Managed OCC  Accumulation  Trust Small Cap PIMCO VIT StocksPLUS  Growth & Income
Transamerica VIF Growth Portfolio Transamerica VIF Money Market


*Several  funds have changed their names,  These name changes have no reflection
on  the  investment  policies,  strategies,  management  or any  other  material
function of the funds. The Alliance VP Growth & Income  sub-account was formerly
known as the Alliance VPF Growth & Income  sub-account.  The Alliance VP Premier
Growth  sub-account  was  formerly  known as the  Alliance  VPF  Premier  Growth
sub-account.  The Dreyfus VIF Appreciation sub-account was formerly known as the
Dreyfus VIF Capital Appreciation sub-account. The MS UIF Emerging Markets Equity
sub-account  was  formerly  known  as  the  MSDW  UF  Emerging   Markets  Equity
sub-account.  The MS UIF Fixed Income sub-account was formerly known as the MSDW
UF Fixed  Income  sub-account.  The MS UIF High Yield  sub-account  was formerly
known as the MSDW UF High Yield  sub-account.  The MS UIF  International  Magnum
sub-account was formerly known as the MSDW UF International Magnum sub-account.

The portfolios pay their  investment  advisers and  administrators  certain fees
charged against the assets of each portfolio. The variable accumulated value, if
any, of a contract and the amount of any  variable  settlement  option  payments
will vary to reflect the investment  performance of the variable sub-accounts to
which  amounts  have  been  allocated.  Additionally,   applicable  charges  are
deducted.  For more information see CHARGES, FEES AND DEDUCTIONS on page 33, THE
PORTFOLIOS on page 17, and the accompanying portfolio prospectuses.

GENERAL ACCOUNT OPTIONS

There are two types of general account options:

o        the fixed account; and

o        the guarantee period account.

We credit  interest  on the  amounts in the fixed  account at a rate of not less
than 3%  annually.  We may  credit  interest  at a rate in  excess  of 3% at our
discretion  for any class.  Each interest rate will be guaranteed to be credited
for at least 12 months.

The other  general  account  option,  the  guarantee  period  account,  provides
specified rates of interest for specified terms, currently three, five and seven
years.  These rates are subject to interest  adjustments on early withdrawals or
transfers  which,  if applicable,  could reduce the interest  credited to the 3%
minimum rate.

The general  account  options  are not  available  in all  states.  Refer to the
contract for limitations.

CAN I MAKE TRANSFERS AMONG THE SUB-ACCOUNTS AND THE GENERAL ACCOUNT OPTIONS?

Before  the  annuity  date,  you  may  transfer   values  between  the  variable
sub-accounts  and the general account  options.  For transfers after the annuity
date, see After the Annuity Date on page 28.

Transfers out of the fixed account are  restricted to four per contract year and
to a limited  percentage of the fixed account value.  We may allow more frequent
transfers  under  certain  services  and  options,  for  example,   dollar  cost
averaging. Transfers out of a guarantee period before the end of the term may be
subject to an interest  adjustment which may reduce interest  credited to the 3%
minimum rate.

We currently impose a transfer fee of $10 for each transfer in excess of 18 made
during the same contract year.

WHAT IF I NEED MY MONEY?

You may  withdraw  all or part of the  cash  surrender  value on or  before  the
annuity date.  The cash  surrender  value of your contract is the account value,
less any account fee and interest  adjustment,  and less any contingent deferred
sales load and applicable premium tax charges. The account fee generally will be
deducted on a full  surrender  of a contract  if the account  value is then less
than $50,000.  We may delay payment of any withdrawal  from the general  account
options for up to six months.

Withdrawals  may be  taxable  and  subject  to  withholding  and a penalty  tax.
Withdrawals from qualified  contracts may be subject to severe restrictions and,
in certain circumstances, prohibited. See FEDERAL TAX MATTERS on page 40.

WHAT CHARGES WILL I INCUR ON A WITHDRAWAL?

We do not  deduct a sales  charge  when  purchase  payments  are made,  although
premium tax charges may be deducted.  However,  if any part of the account value
is  withdrawn,  we may deduct a  contingent  deferred  sales load,  or surrender
charge,  of up to  8%  of  purchase  payments.  See  Contingent  Deferred  Sales
Load/Surrender Charge on page 33.

We do not  assess  the  contingent  deferred  sales  load on  payment  of  death
benefits, on transfers within the contract, or on certain annuitizations.

In most states,  you may elect, for an extra charge, an optional Living Benefits
Rider.  It provides  that we will waive the  contingent  deferred  sales load in
certain circumstances.

Also,  beginning 30 days from the contract  effective date, or at the end of the
free look period if this ends later, you may withdraw any portion of the allowed
amount each contract year without  imposition of any  contingent  deferred sales
load/surrender charge.

Depending on state  availability,  for contracts issued on or after September 7,
1999, the allowed amount each contract year is equal to:

a)       during the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or

o    10% of the total purchase  payments  received as of the date of withdrawal;
     and

b)       after the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or

o        10% of purchase  payments  received less than seven  complete  contract
         years determined as of the last contract anniversary.

Withdrawals  will be made first from  earnings,  then from credits and last from
purchase  payments on a  first-in/first-out  basis.  The allowed amount may vary
depending on the state in which your contract is issued. If an allowed amount is
not  withdrawn  during  a  contract  year,  it does not  carry  over to the next
contract year.

Purchase  payments not  previously  withdrawn that have been held at least seven
full contract years and  accumulated  earnings not  previously  withdrawn may be
withdrawn without charge.

For contracts  issued before September 7, 1999, the allowed amount each contract
year is equal to 10% of:


a)   the total purchase payments received during the last seven years determined
     as of the last contract anniversary; minus

b)       any withdrawals during the present contract year.

Withdrawals  will be made first from purchase  payments on a  first-in/first-out
basis,  then from  earnings and last from credits.  The allowed  amount may vary
depending on the state in which your contract is issued.  If the allowed  amount
is not fully  withdrawn  or paid out during a contract  year,  it does not carry
over to the next contract year.

Purchase  payments held for seven full contract  years may be withdrawn  without
charge.

WHAT ARE THE OTHER CHARGES AND DEDUCTIONS?

We deduct:

o    a mortality and expense risk charge of 1.20%  annually of the assets in the
     variable account;

o    an  administrative  expense charge of 0.15%  annually of these assets.  The
     administrative  expense charge may change, but we guarantee it won't exceed
     a maximum effective annual rate of 0.35%; and

o    an account fee of currently  $30, or 2% of the account  value,  if less, at
     the end of each contract year and upon surrender.  This fee may change, but
     we  guarantee  that it won't exceed the lesser of $60, or 2% of the account
     value,  per contract year. If the account value is more than $50,000 on the
     last  business  day of a contract  year,  or as of the date the contract is
     surrendered, we will waive the account fee for that year.

After the annuity  date,  we will deduct the annual  annuity fee of $30 in equal
installments from each periodic payment under the variable payment option.

For each  transfer  in excess of 18 during a  contract  year,  we will  impose a
transfer fee of $10. See Transfer Fee on page 36.

We do not currently  deduct  charges for premium  taxes,  including  retaliatory
premium taxes,  except for  annuitizations.  But we could impose such charges in
some  jurisdictions.  Depending  on the  applicability  of such taxes,  we could
deduct the charges from purchase payments,  from amounts withdrawn,  and/or upon
annuitization. See Premium Tax Charges on page 36.

In addition,  amounts withdrawn or transferred out of a guarantee period account
before the end of its term may be subject to an interest adjustment.

LIVING  BENEFITS RIDER. If you elect the Living Benefits Rider, we will deduct a
fee of 1/12 of 0.05% of the account value at the end of each contract month. The
rate is 1/12 times 0.05% times the account  value.  The Living  Benefit Rider is
not available in all states,  or may be called a Waiver of  Contingent  Deferred
Sales Load Rider.

GUARANTEED  MINIMUM DEATH  BENEFIT.  If you elect the  Guaranteed  Minimum Death
Benefit,  or GMDB,  Rider,  we will deduct a fee of 1/12 of 0.20% of the account
value at the end of each  contract  month.  You may only elect this Rider before
the contract effective date. It cannot be reinstated if cancelled. It may not be
available in all states.

OTHER SERVICES OR OPTIONS

Currently,  we do not deduct fees for any other  services  or options  under the
contract.  However,  we reserve the right to impose fees to cover processing for
certain  services  and  options in the  future.  This may  include  dollar  cost
averaging,  systematic  withdrawals,  automatic  payouts,  asset  allocation and
automatic asset rebalancing.

HOW AND WHEN ARE SETTLEMENT OPTION
PAYMENTS MADE?

You may  select to  receive  settlement  option  payments  on a fixed  basis,  a
variable  basis  or a  combination  of a fixed  and  variable  basis.  You  have
flexibility  in choosing the annuity  date,  but it may  generally not be a date
later than an  annuitant's  85th  birthday  or the tenth  contract  anniversary,
whichever occurs last.  Certain qualified  contracts may have restrictions as to
the annuity date and the types of settlement options available.

Four settlement options are available under the contract:

1.       life annuity;

2.       life and contingent annuity;


3.       life annuity with period certain; or

4.       joint and survivor annuity.

WHAT HAPPENS IF I DIE BEFORE THE ANNUITY
DATE?

If an owner dies  before the  annuity  date,  the GMDB Rider is not  elected and
neither the owner nor the joint owner has attained age of 80, the death  benefit
will be the greater of:

a)       the account value reduced by credits less than 12 months old; or

b)   the sum of all purchase  payments,  less withdrawals  taken,  including any
     contingent deferred sales loads, and applicable premium tax charges.

If an owner dies  before the  annuity  date and after  either the owner's or the
joint  owner's 80th  birthday,  the death benefit will be the account value less
any credits less than 12 months old.

If the GMDB Rider is  elected,  and death  occurs  before the  annuity  date and
neither the owner nor the joint  owner has  attained  age 85, the death  benefit
will be the greatest of three amounts:

a)       the account value;

b)   the sum of all purchase  payments,  less withdrawals  taken,  including any
     contingent deferred sales loads, and premium tax charges; or

c)   the highest account value on any contract anniversary before the earlier of
     your or the joint owner's 85th birthday,  plus purchase payments made since
     that contract  anniversary,  less withdrawals taken since that anniversary,
     including any contingent  deferred sales loads, and applicable  premium tax
     charges.

If the GMDB  Rider is  elected,  and the owner or joint  owner  dies  before the
annuity  date and after the owner's or joint  owner's 85th  birthday,  the death
benefit will be the greater of two amounts:

a)       the account value; and

b)   the highest  account  value on any  contract  anniversary  before your or a
     joint owner's 85th  birthday,  plus  purchase  payments,  less  withdrawals
     taken,  including  any  contingent  deferred  sales loads,  and  applicable
     premium tax charges since that contract anniversary.

The death  benefit  will  generally  be paid within seven days of receipt of the
required  proof of death of an owner and election of the method of settlement or
as soon thereafter as we have sufficient  information to make the payment. If no
settlement method is elected,  the death benefit will be distributed within five
years after the owner's death. No contingent deferred sales load is imposed. The
death  benefit  may be paid as  either  a lump  sum or as a  settlement  option.
Amounts  in the  guarantee  period  account  will  not be  subject  to  interest
adjustments in calculating the death benefit.

If the owner is not a natural  person,  we will treat the annuitant as the owner
for purposes of the death benefit.

WHAT ARE THE FEDERAL INCOME TAX
CONSEQUENCES?

An owner who is a natural person  generally  should not be taxed on increases in
the account  value until a  distribution  under the contract  occurs.  A taxable
event would  occur,  for  example,  with a  withdrawal  or a  settlement  option
payment,  or as the  result of a pledge,  loan,  or  assignment  of a  contract.
Generally,  a portion, up to 100%, of any distribution or deemed distribution is
taxable as ordinary  income.  The taxable portion of  distributions is generally
subject  to income  tax  withholding  unless  the  recipient  elects  otherwise.
Withholding is mandatory for certain qualified contracts. In addition, a federal
penalty tax may apply to certain distributions.  See FEDERAL TAX MATTERS on page
40.

WHO DO I CONTACT IF I HAVE QUESTIONS?

We will answer your questions about procedures or the contract if you write to:

                     The Transamerica Annuity Service Center
                                 P.O. Box 31848
                            Charlotte, North Carolina
                                   28231-1848
                          Or call us at: 1-877-717-8861

NOTE: Effective June 5, 2000, you can write us at:

                                 P. O. Box 3181
                          Cedar Rapids, Iowa 52406-3183

All inquiries should include the contract number and the owner's name.

Please Note: The foregoing  summary is qualified in its entirety by the detailed
information in the remainder of this prospectus and in the  prospectuses for the
portfolios.  Please refer to this prospectus and the portfolio  prospectuses for
more  detailed  information.  For qualified  contracts,  the  requirements  of a
particular  retirement  plan, an endorsement to the contract,  or limitations or
penalties imposed by the Code or the Employee  Retirement Income Security Act of
1974, or ERISA, as amended, may impose additional limits or restrictions.  These
limits or restrictions may be on purchase payments, withdrawals,  distributions,
or benefits,  or on other  provisions of the contract.  This prospectus does not
describe such limitations or restrictions. See FEDERAL TAX MATTERS on page 40.

TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY AND THE VARIABLE ACCOUNT

TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY

Transamerica  Life Insurance and Annuity Company,  or  Transamerica,  is a stock
life insurance company incorporated under the laws of the State of California in
1966.  The  Company  moved  to North  Carolina  in  1994.  It is a  wholly-owned
subsidiary  of AEGON,  N.V.  and it is  principally  engaged in the sale of life
insurance and annuity  policies.  The address of Transamerica is 401 North Tryon
Street, Charlotte, North Carolina 28202.

PUBLISHED RATINGS

We may from time to time publish our ratings in advertisements, sales literature
and reports to owners. We receive ratings and other information from one or more
independent rating  organizations such as A.M. Best Company,  Standard & Poor's,
Moody's,  and Duff & Phelps.  The ratings reflect our financial  strength and/or
claims-paying  ability. These ratings should not be considered as bearing on the
investment performance or safety of the variable account. Ratings and investment
performance are unrelated. Each year the A.M. Best Company reviews the financial
status of thousands of insurers,  resulting in the assignment of Best's Ratings.
These ratings  reflect A.M.  Best's  current  opinion of the relative  financial
strength and operating  performance of an insurance company in comparison to the
norms of the life/health insurance industry.

In  addition,  our  claims-paying  ability  as  measured  by  Standard  & Poor's
Insurance  Ratings  Services,  Moody's,  or Duff & Phelps may be  referred to in
advertisements  or sales  literature or in reports to owners.  These ratings are
opinions  provided by the companies  named above.  These opinions  relate to how
well they have determined we are prepared, from a financial standpoint,  to meet
our insurance and annuity  obligations.  The terms of our obligations are stated
within the  general  account  options  of this  contract.  These  ratings do not
reflect the investment performance of the variable account or the degree of risk
associated with an investment in the variable account.

INSURANCE MARKETPLACE STANDARDS
ASSOCIATION

In recent  years,  the  insurance  industry has  recognized  the need to develop
specific  principles  and  practices to help  maintain the highest  standards of
marketplace  behavior and enhance  credibility with consumers.  As a result, the
industry established the Insurance Marketplace Standards Association, or IMSA.

As an IMSA member,  we agree to follow a set of  standards  in our  advertising,
sales and service for individual life insurance and annuity  products.  The IMSA
logo,  which  you  will  see  on  our  advertising  and  promotional  materials,
demonstrates that we take our commitment to ethical conduct seriously.

THE VARIABLE ACCOUNT

Separate Account VA-6 of Transamerica,  or the variable account, was established
by  Transamerica  as a  separate  account  under  the laws of the State of North
Carolina following June 11, 1996, resolutions adopted by Transamerica's Board of
Directors.  The variable  account is registered with the Securities and Exchange
Commission,  or the  Commission,  under the Investment  Company Act of 1940 as a
unit investment  trust. It meets the definition of a separate  account under the
federal  securities  laws.  However,  the  Commission  does  not  supervise  the
management or the investment practices or policies of the variable account.

We own the assets of the variable account, but they are held separately from our
other assets.  Section 58-7-95 of the North Carolina Insurance Law provides that
the assets of a separate account are not chargeable with liabilities incurred in
any other business operation of the insurance  company.  This is the case except
to the extent that assets in the separate  account exceed the reserves and other
liabilities of the separate account.

Income, gains and losses incurred on the assets in the variable account, whether
or not realized, are credited to or charged against the variable account without
regard  to  our  other  income,  gains  or  losses.  Therefore,  the  investment
performance  of the variable  account is entirely  independent of the investment
performance  of our  general  account  assets  or  any  other  separate  account
maintained by us.

The variable account currently has 19 variable sub-accounts  available under the
contract, each of which invests solely in a specific corresponding portfolio. At
our discretion, we may make changes to the variable sub-accounts.

THE PORTFOLIOS

Each of the variable sub-accounts offered under the contract invests exclusively
in one of the portfolios.  Descriptions of each portfolio's investment objective
follow.  The  management  fees  listed  below are  specified  in each  portfolio
adviser's contract before any fee waivers.

THE INCOME & GROWTH  PORTFOLIO OF THE ALGER  AMERICAN FUND seeks,  primarily,  a
high level of dividend income.  Capital appreciation is a secondary objective of
the portfolio. The portfolio invests in dividend paying equity securities,  such
as common or preferred stocks,  preferably those which the Manager believes also
offer opportunities for capital appreciation.

Adviser: Fred Alger Management, Inc.
Management Fee: 0.625%.

THE GROWTH AND INCOME PORTFOLIO OF THE ALLIANCE  VARIABLE  PRODUCTS SERIES FUND,
INC. seeks reasonable current income and reasonable opportunity for appreciation
through investments primarily in dividend-paying  common stocks of good quality.
Whenever the economic  outlook is  unfavorable  for  investment in common stock,
this  portfolio  may  invest  in  other  types  of  securities,  such as  bonds,
convertible  bonds,  preferred  stock  and  convertible  preferred  stocks.  The
portfolio  managers will purchase and sell portfolio  securities at times and in
amounts as  management  deems  advisable in light of market,  economic and other
conditions.
Adviser: Alliance Capital Management L.P.
Management Fee: 0.63%.

THE PREMIER GROWTH PORTFOLIO OF THE ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
seeks growth of capital by pursuing aggressive  investment policies.  Since this
portfolio's  investments  will be made based upon their  potential  for  capital
appreciation, current income will not be a high priority for this portfolio. The
portfolio  will  invest  mainly in  equity  securities,  such as common  stocks,
securities  convertible  into common stocks and rights and warrants to subscribe
for or purchase common stocks. Equity investments will be in a limited number of
large,  carefully  selected,  high-quality  U.S.  companies.  In  the  Adviser's
judgement,  the  companies  chosen  will be those  that are  likely  to  achieve
superior earnings growth.  Approximately 25 companies believed by the Adviser to
show  superior  potential  for  capital  appreciation  will  usually  constitute
approximately  70% of the  portfolio's net assets at any one time. The portfolio
thus  differs  from more typical  equity  mutual funds by investing  most of its
assets in a relatively small number of intensively  researched companies.  Under
normal  circumstances the portfolio will invest at least 85% of the value of its
total assets in the equity securities of U.S. companies.

Adviser: Alliance Capital Management L.P.
Management Fee: 1.00%.

THE  APPRECIATION  PORTFOLIO  OF THE  DREYFUS  VARIABLE  INVESTMENT  FUND  seeks
long-term  capital growth  consistent with the preservation of capital;  current
income is a secondary  goal.  To pursue these goals,  the  portfolio  invests in
common stocks focusing on "blue chip" companies with total market values of more
than $5 billion at the time or purchase.

Adviser: The Dreyfus Corporation.
Sub-Adviser: Fayez Sarofim & Co.
Management Fee: 0.75%.

THE SMALL  CAP  PORTFOLIO  OF THE  DREYFUS  VARIABLE  INVESTMENT  FUND  seeks to
maximize  capital  appreciation.  To pursue this goal,  the portfolio  generally
invests  at least 65% of its  assets in the  common  stock of U.S.  and  foreign
companies. The portfolio focuses on small-cap companies with total market values
of less than $1.5 billion.

Adviser: The Dreyfus Corporation.
Management Fee: 0.75%.

THE BALANCED  PORTFOLIO OF THE JANUS ASPEN SERIES seeks long-term capital growth
consistent  with  preservation  of capital and current  income.  Normally,  this
diversified  portfolio  invests  40-60%  of its  assets in  securities  selected
primarily for their growth potential. The balance of its holdings is invested in
securities  selected  primarily  for their  capacity  to generate  income.  Such
holdings  are likely to consist of bonds and  preferred  stocks.  Typically,  at
least 25% of this portfolio is made up of fixed-income securities.

Adviser: Janus Capital Corporation.
Management Fee: 0.65%.

THE WORLDWIDE  GROWTH PORTFOLIO OF THE JANUS ASPEN SERIES seeks long-term growth
of capital in a manner  consistent  with the  preservation  of capital.  It is a
diversified  portfolio that pursues its objective  primarily through investments
in common  stocks  of  foreign  and  domestic  issuers.  The  portfolio  has the
flexibility to invest on a worldwide basis in companies and other  organizations
of any size,  regardless  of  country of origin or place of  principal  business
activity. The portfolio normally invests in issuers from at least five different
countries,  including  the United  States.  The portfolio may at times invest in
fewer than five countries or even a single country.

Adviser: Janus Capital Corporation.
Management Fee: 0.65%.

THE EMERGING  GROWTH SERIES OF THE MFS VARIABLE  INSURANCE TRUST seeks long-term
growth of capital.  The series may invest up to 25% of its net assets in foreign
securities, including emerging market securities. Emerging markets are generally
defined as countries  in the initial  stages of their  industrialization  cycles
with low per capita income.

Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.

THE  GROWTH  WITH  INCOME  SERIES  OF THE MFS  VARIABLE  INSURANCE  TRUST  seeks
long-term  growth of capital and future  income  while  providing  more  current
dividend  income than is  normally  obtainable  from a portfolio  of only growth
stocks. The series invests, under normal market conditions,  at least 65% of its
total assets in common stock and related  securities,  such as preferred stocks,
convertible securities and depositary receipts for those securities.  The series
will also seek to provide income equal to approximated 90% of the dividend yield
on the  Standard  & Poor's  500  Composite  Index.  While the fund may invest in
companies  of any size,  the fund  generally  focuses on  companies  with larger
market capitalizations that the series' adviser believes have sustainable growth
prospects and attractive  valuations  based on current and expected  earnings or
cash flow. The series may invest in foreign securities through which it may have
exposure to foreign currencies.

Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.

THE RESEARCH SERIES OF THE MFS VARIABLE  INSURANCE TRUST seeks long-term  growth
of  capital  and  future  income.  The  series  invests,   under  normal  market
conditions,  at least 80% of its  total  assets in  common  stocks  and  related
securities,  such as preferred  stocks,  convertible  securities  and depositary
receipts. The series focuses on companies that the series' adviser believes have
favorable prospects for long-term growth, attractive valuations based on current
and  expected  earnings  or cash  flow,  dominant  or growing  market  share and
superior  management.  The  series  may  invest  in  foreign  equity  securities
(including  emerging  market  securities)  through which it may have exposure to
foreign currencies.

Adviser: Massachusetts Financial Services Company.
Management Fee: 0.75%.

MORGAN STANLEY UNIVERSAL  INSTITUTIONAL  FUNDS EMERGING MARKETS EQUITY PORTFOLIO
seeks long-term capital appreciation by investing primarily in equity securities
of issuers in emerging market  countries.  The Adviser seeks to maximize returns
by investing in  growth-oriented  equity  securities  in emerging  markets.  The
Adviser's   investment   approach  combines  top-down  country  allocation  with
bottom-up stock selection.  Investment  selection  criteria  include  attractive
growth  characteristics,  reasonable  valuations and  managements  with a strong
shareholder  value  orientation.  The Adviser  allocates the portfolio's  assets
among  emerging  markets  based  on  relative  economic,  political  and  social
fundamentals, stock valuations and investor sentiments.

Adviser:  Morgan Stanley Asset  Management*  Management  Fee: 1.25% of the first
$500 million;  1.20% of the next $500  million;  and 1.15% of the assets over $1
billion.

*On December 1, 1998,  Morgan Stanley Asset  Management Inc. changed its name to
Morgan Stanley Dean Witter Investment Management Inc., but

continues  to do business  in certain  instances  using the name Morgan  Stanley
Asset Management.

MORGAN  STANLEY  UNIVERSAL  INSTITUTIONAL  FUNDS FIXED  INCOME  PORTFOLIO  seeks
above-average  total  return  over a market  cycle  of  three  to five  years by
investing primarily in a diversified mix of dollar denominated  investment grade
fixed income securities,  particularly U.S.  Government,  corporate and mortgage
securities.  The Portfolio ordinarily will maintain an average weighted maturity
in  excess  of  five  years.  The  Portfolio  may  invest  opportunistically  in
non-dollar denominated securities and below investment grade securities.

Adviser:  Miller  Anderson & Sherrerd,  LLP.  Management Fee: 0.40% of the first
$500 million;  0.35% of the next $500  million;  and 0.30% of the assets over $1
billion.

MORGAN  STANLEY  UNIVERSAL   INSTITUTIONAL  FUNDS  HIGH  YIELD  PORTFOLIO  seeks
above-average  total  return  over a market  cycle  of  three  to five  years by
investing  primarily  in high yield  securities  (commonly  referred to as "junk
bonds").  The  Portfolio  also may  invest  in  investment  grade  fixed  income
securities,  including U.S. Government securities,  corporate bonds and mortgage
securities. The Portfolio may invest to a limited extent in foreign fixed income
securities, including emerging market securities.

Adviser:  Miller  Anderson & Sherrerd,  LLP.  Management Fee: 0.50% of the first
$500 million;  0.45% of the next $500  million;  and 0.40% of the assets over $1
billion.

MORGAN STANLEY  UNIVERSAL  INSTITUTIONAL  FUNDS  INTERNATIONAL  MAGNUM PORTFOLIO
seeks long-term capital appreciation by investing primarily in equity securities
of non-U.S.  issuers  domiciled in EAFE countries.  The Adviser seeks to achieve
superior  long-term  returns by creating a diversified  portfolio of undervalued
international  equity  securities.  To achieve  this goal,  the  Adviser  uses a
combination of strategic  geographic  asset  allocation and  fundamental,  value
oriented stock  selection.  The countries in which the portfolio will invest are
those  comprising the Morgan Stanley  Capital  International  EAFE Index,  which
includes Australia,  Japan, New Zealand,  most nations located in Western Europe
and the more  developed  countries  in Asia,  such as Hong  Kong and  Singapore.
Collectively,  we refer to these as the EAFE countries. The portfolio may invest
up to 5% of its total  assets in  securities  of issuers  domiciled  in non-EAFE
countries.  Under normal circumstances,  at least 65% of the total assets of the
portfolio  will be  invested in equity  securities  of issuers in at least three
different EAFE countries.

Adviser: Morgan Stanley Asset Management Management Fee: 0.80% of the first $500
million;  0.75% of the next  $500  million;  and  0.70%  of the  assets  over $1
billion.

THE MANAGED PORTFOLIO OF THE OCC ACCUMULATION TRUST seeks growth of capital over
time through  investment in a portfolio  consisting of common stocks,  bonds and
cash  equivalents,  the  percentages  of which will vary based on the  Adviser's
assessments of the relative  outlook for such  investments.  Debt securities are
expected to be  predominantly  investment  grade  intermediate to long term U.S.
Government  and corporate  debt.  The portfolio will also invest in high quality
short term money market and cash equivalent securities and may invest almost all
of its  assets  in such  securities  when  necessary  to  preserve  capital.  In
addition,  the  portfolio may also purchase  foreign  securities.  These foreign
securities  must be listed on a  domestic  or  foreign  securities  exchange  or
represented by American depositary receipts.

Adviser:  OpCap  Advisors.  Management  Fee: 0.80% of the first $400 million and
0.75% of the next $400 million and 0.70% of net assets over $800 million.

THE SMALL CAP PORTFOLIO OF THE OCC ACCUMULATION TRUST seeks capital appreciation
through  investments  in a  diversified  portfolio  of  stocks  issued  by small
companies.  It will consist of primarily of equity  securities of companies with
market capitalizations of under $1 billion. Under normal circumstances, at least
65% of the  portfolio's  assets  will be  invested  in  equity  securities.  The
majority of securities purchased by the portfolio will be traded on the New York
Stock Exchange,  the American Stock Exchange or in the over-the-counter  market.
The portfolio's  holdings may also include options,  warrants,  bonds, notes and
convertible  bonds.  In  addition,  the  portfolio  may  also  purchase  foreign
securities.  Foreign  securities  must  be  listed  on  a  domestic  or  foreign
securities exchange or be represented by American depositary receipts.

Adviser:  OpCap  Advisors.  Management  Fee: 0.80% of the first $400 million and
0.75% of the next $400 million and 0.70% of net assets over $800 million.

THE STOCKSPLUS GROWTH AND INCOME PORTFOLIO OF THE PIMCO VARIABLE INSURANCE TRUST
seeks to achieve a total return which  exceeds the total return  performance  of
the S&P 500. The Portfolio invests in common stocks, options,  futures,  options
on futures and swaps.  Under normal market  conditions,  the  Portfolio  invests
substantially all of its assets in S&P 500 derivatives, backed by a portfolio of
fixed income instruments.  The Portfolio uses S&P 500 derivatives in addition to
or in place of S&P 500 stocks to attempt to equal or exceed the  performance  of
the S&P 500. The Adviser  actively  manages the fixed income  assets held by the
Portfolio,  with a view to enhancing  the  Portfolio's  total return  investment
performance,  subject to an overall  portfolio  duration  which is normally  not
expected to exceed one year. The Portfolio may invest up to 10% of its assets in
high yield bonds rated B or higher by Moody's or S&P, or if unrated,  determined
by the Adviser to be comparable quality. The Portfolio may also invest up to 20%
of its assets in securities  denominated  in foreign  currencies  and may invest
beyond this limit in U.S. dollar denominated securities of foreign issuers.

Adviser: Pacific Investment Management Company.
Management Fee: 0.40%

THE GROWTH  PORTFOLIO OF THE  TRANSAMERICA  VARIABLE  INSURANCE FUND, INC. seeks
long-term capital growth. It invests at least 65% of its assets in a diversified
selection of equity  securities of domestic  growth  companies of any size.  The
manager uses a "bottom-up"  approach to investing and  constructs  the portfolio
one company at a time. The manager focuses on identifying  fundamental change in
its early stages and  investing in premier  companies.  In the  manager's  view,
characteristics  of  premier  companies  include  one or more of the  following:
share-holder-oriented  management;  dominance in market share;  cost  production
advantages;  leading brands;  self-financed growth; and attractive  reinvestment
opportunities.  The manager of the portfolio believes in long-term investing and
does not try to time the market.  However,  when in the  judgment of the manager
market conditions warrant,  the portfolio may, for temporary defensive purposes,
hold part or all of its assets in cash or cash equivalents.

Adviser: Transamerica Investment Management, LLC.
Sub-Adviser: Transamerica Investment Services, Inc.
Management Fee: 0.75%.

THE MONEY MARKET  PORTFOLIO OF THE  TRANSAMERICA  VARIABLE  INSURANCE FUND, INC.
seeks to maximize current income  consistent with liquidity and the preservation
of   principal.   The   portfolio   invests   primarily  in  high  quality  U.S.
dollar-denominated  money market  instruments  with  remaining  maturities of 13
months or less. These include:  obligations issued or guaranteed by the U.S. and
foreign  governments  and their agencies and  instrumentalities;  obligations of
U.S. and foreign  banks,  or their foreign  branches,  and U.S.  savings  banks;
short-term corporate  obligations,  including commercial paper, notes and bonds;
other short-term debt obligations with remaining maturities of 397 days or less;
and repurchase  agreements  involving any of the securities mentioned above. The
portfolio may also purchase  other  marketable,  non-convertible  corporate debt
securities  of  U.S.  issuers.  These  investments  include  bonds,  debentures,
floating rate obligations, and issues with optional maturities.

Adviser: Transamerica Investment Management, LLC.
Sub-Adviser: Transamerica Investment Services, Inc.
Management Fee: 0.35%.

Meeting  investment  objectives depends on various factors,  including,  but not
limited to, how well the portfolio  managers  anticipate  changing  economic and
market  conditions.  There is no  assurance  that any of these  portfolios  will
achieve their stated objectives.

An investment  in the contract is not a deposit or obligation  of, or guaranteed
or endorsed,  by any bank. Nor is the contract  federally insured by the Federal
Deposit Insurance  Corporation or any other government agency.  Investing in the
contract  involves  certain   investment  risks,   including  possible  loss  of
principal.

Since all of the  portfolios  are  available  to  registered  separate  accounts
offering  variable  annuity and variable  life products of  Transamerica  and to
other  insurance  companies  as  well,  there  is a  possibility  of a  material
conflict.  If such a conflict  arises  between  the  interests  of the  variable
account and one or more other separate accounts investing in the portfolios, the
affected insurance companies will take steps to resolve the matter.  These steps
may include  stopping their separate  accounts from investing in the portfolios.
See the portfolios' prospectuses for greater detail on this subject.

You can find  additional  information  concerning the investment  objectives and
policies of all of the portfolios and the investment  advisory services,  in the
current prospectuses for the portfolios which accompany this prospectus.
Carefully read the  prospectuses of the portfolios which interest you before you
make any decision  concerning how you will invest in, or transfer  monies among,
the variable sub-accounts.

We may receive payments from some or all of the portfolios or their advisers, in
varying  amounts.  These payments may be based on the amount of assets allocated
to the portfolios. The payments are for administrative or distribution services.

PORTFOLIOS NOT PUBLICLY AVAILABLE

The portfolios are open-end management  investment  companies,  or portfolios or
series of, open-end management  companies registered with the SEC under the 1940
Act, that are often referred to as mutual funds.  This SEC registration does not
involve  SEC  supervision  of the  investments  or  investment  policies  of the
portfolios. Shares of the portfolios are not offered to the public but solely to
the  insurance  company  separate  accounts and other  qualified  purchasers  as
limited by federal tax laws.  These  portfolios are not the same as mutual funds
that may have very similar names that are sold  directly to the public,  and the
performance of such publicly  available funds,  which have different  portfolios
and expenses,  should not be considered as an indication of the  performance  of
the  portfolios.  The assets of each portfolio are held separate from the assets
of the other  portfolios.  Each  portfolio  operates  as a  separate  investment
vehicle.  The income or losses of one portfolio have no effect on the investment
performance of another  portfolio.  The sub-accounts  reinvest  dividends and/or
capital  gains  distributions  received  from a portfolio in more shares of that
portfolio as retained assets.

ADDITION, DELETION, OR SUBSTITUTION

We do not control the portfolios.  For this reason, we cannot guarantee that any
of the variable sub-accounts offered under the contract or any of the portfolios
will always be available to you for investment purposes.

We  retain  the  right  to  make  changes  in the  variable  account  and in its
investments.

We reserve the right to eliminate the shares of any portfolio held by a variable
sub-account.  We may also substitute  shares of another  portfolio or of another
investment  company  for the  shares of any  portfolio.  We would do this if the
shares of the  portfolio are no longer  available  for  investment or if, in our
judgment,  investment in any  portfolio  would be  inappropriate  in view of the
purposes of the variable account.  To the extent required by the 1940 Act, if we
substitute  shares in a variable  sub-account  that you own, we will provide you
with advance notice.  We will also seek advance  permission from the Commission.
This does not prevent the variable  account from purchasing other securities for
other series or classes of variable annuity  contracts.  Nor does it prevent the
variable  account  from  effecting  an  exchange  between  series or  classes of
variable contracts on the basis of requests made by owners.

We reserve the right to create new variable sub-accounts for the contracts when,
in our sole discretion,  marketing,  tax, investment or other conditions warrant
that we do. Any new  variable  sub-accounts  will be made  available to existing
owners on a basis to be determined by us. Each additional  variable  sub-account
will purchase shares in a mutual fund portfolio or other investment  vehicle. We
may also eliminate one or more variable sub-accounts if, in our sole discretion,
marketing,  tax,  investment or other conditions  warrant that we do. So, in the
event any variable sub-account is eliminated,  we will notify owners and request
a re-allocation of the amounts invested in the eliminated variable sub-account.

In the event of any  substitution  or  change,  we may make the  changes  in the
contract  that we deem  necessary or  appropriate  to reflect  substitutions  or
changes.  Furthermore,  if we believe it to be in the best  interest  of persons
having voting rights under the contracts,  the variable  account may be operated
as a management  company under the 1940 Act or any other form  permitted by law.
It may also be de-registered under such Act in the event that registration is no
longer  required.  Finally,  it may  also be  combined  with  one or more  other
separate accounts.

THE CONTRACT

The  Transamerica  Catalyst(R)  contract  is subject to the  insurance  laws and
regulations  of  each  state  or  jurisdiction  in  which  it is  available  for
distribution.  There may be  differences  between  the  contract  issued and the
general   contract   description   contained  in  this  prospectus   because  of
requirements  of the state  where your  contract  is  issued.  Some of the state
specific differences are included in the prospectus, but the prospectus does NOT
include  references  to all  state  specific  differences.  All  state  specific
contract features will be described in your contract.

The contract is a flexible  purchase payment deferred variable annuity contract.
It is part of the Transamerica  Series(R) of variable insurance products.  Other
variable  contracts are also  available from us. The rights and benefits of this
contract are described below and in the contract. They will also be described in
the contract. We reserve the right to modify the contract if required by law. We
also  reserve  the right to give you,  the owner,  the benefit of any federal or
state  statute,  rule or  regulation.  The  obligations  under the  contract are
obligations of Transamerica.

The contracts are available on a non-qualified  basis and on a qualified  basis.
Contracts available on a qualified basis are as follows:

a)       rollover and regular IRAs under Code Sections 408(a) and 408(b);

b)   conversion, rollover and contributory Roth IRAs under Code Section 408A;

c)   SEP/IRAs that qualify for special  federal income tax treatment  under Code
     Section 408(k);

d)   rollover  Code  Section  403(b)   annuities,   including  Rev.  Rul.  90-24
     transfers, with no additional premiums; and

e)   qualified  pension and profit  sharing plans intended to qualify under Code
     Section 401.

Generally,  qualified contracts contain certain restrictive  provisions limiting
the timing and amount of  purchase  payments  to, and  distributions  from,  the
qualified contract.

OWNERSHIP

As the owner,  you are entitled to the rights granted by the contract.  If there
are joint owners,  the one designated as the primary owner will receive all mail
and any tax reporting information.

For non-qualified contracts, the owner is entitled to designate the annuitant(s)
and, if the owner is an individual,  as opposed to a trust, corporation or other
legal  entity,  the owner can change  the  annuitant(s)  at any time  before the
annuity date.  Any such change will be subject to our then current  underwriting
requirements.  We reserve the right to reject any change of annuitants which has
been made without our prior written consent.

If the owner of a non-qualified contract is not an individual,  the annuitant(s)
may not be  changed  once the  contract  is  issued.  Different  rules  apply to
qualified contracts.

For each contract, a different account will be established and values,  benefits
and charges will be  calculated  separately.  The various  administrative  rules
described below will apply separately to each contract, unless otherwise noted.

PURCHASE PAYMENTS

All purchase  payments can be paid to our Service  Center in a check  payable to
Transamerica.  We will  issue you a  confirmation  upon the  acceptance  of each
purchase payment.

The initial  purchase  payment must be at least $5,000 or, if for regular  IRAs,
SEP/IRAs and Roth IRAs, it must be for at least $2,000.

We will issue your contract and credit your initial purchase  payment  generally
within two  business  days after we receive  sufficient  information  to issue a
contract and the initial purchase payment.  For us to issue you a contract,  you
must provide  sufficient  information in a form acceptable to us. We reserve the
right to reject any  purchase  payment or request  for  issuance  of a contract.
Normally we will not issue  contracts with owners,  joint owners,  or annuitants
more than 80 years old. Nor will we normally accept purchase  payments after any
owner's,  (or  annuitant's  if  non-individual  owner),  81st  birthday.  In our
discretion we may waive these restrictions in appropriate cases.

If we cannot  credit the initial  purchase  payment  allocated  to the  variable
sub-account(s) within two days of receipt because the information is incomplete,
or for any other reason, we will contact you. We will explain the reason for the
delay and will refund the initial purchase payment within five business days. If
you consent to us retaining the initial purchase  payment,  we will credit it to
your account value as soon as the requirements are fulfilled.

Before the annuity date and before you, a joint owner or any  annuitant  reaches
age 81, you may make additional purchase payments at any time while the contract
is in effect. The minimum amount of each additional  purchase payment must be at
least $200 each, or at least $100 if made through an automatic  purchase payment
plan.  If you elect to use this option,  additional  purchase  payments  will be
automatically  deducted from your bank account and allocated to the contract. In
addition,  minimum allocation amounts apply. See Allocation of Purchase Payments
below.  Additional purchase payments are credited to the contract as of the date
we receive your payment.

Total purchase payments for any contract may not exceed  $1,000,000  without our
prior approval.

In no event may the sum of all  purchase  payments  for a  contract  during  any
taxable year exceed the limits imposed by any  applicable  federal or state law,
rules, or regulations.

ALLOCATION OF PURCHASE PAYMENTS

You specify how purchase payments will be allocated under the contract.  You may
allocate  purchase  payments among one or more of the variable  sub-accounts and
the  general   account  options  as  long  as  the  portions  are  whole  number
percentages.  In  addition,  there is a  minimum  allocation  of  $1,000 to each
guarantee  period.  We may waive this minimum  allocation  amount under  certain
options and circumstances.

Each purchase payment will be subject to the allocation percentages in effect at
the time of  receipt of such  purchase  payment.  You may change the  allocation
percentages for additional purchase payments at any time by submitting a request
for such change to our Service Center in a form and manner acceptable to us. Any
changes to the allocation  percentages are subject to the limitations above. Any
change  will take  effect  with the first  purchase  payment  we  receive  which
accompanies your request.  If we receive your request  separately,  all purchase
payments arriving after it will be subject to its terms. Your allocation choices
will continue in effect until you change them again.

FREE LOOK OPTION

If you exercise the free look option,  unless otherwise required by law, we will
refund:

a)   the purchase  payment  allocated to any general account  option,  minus any
     withdrawals; plus

b)   the  variable  accumulated  value as of the date we  receive  your  written
     notice to cancel and your contract.


In certain jurisdictions,  under certain conditions,  we are legally required to
return either:

a)       the purchase payments, minus any withdrawals; or

b)   the  greater of purchase  payments  minus any  withdrawals,  or the account
     value.

Credits will not be included I the amount paid. But this recapture of the credit
amount will never be more than the maximum contingent deferred sales load.

Your initial purchase  payment  allocated to the variable account may be held in
the money market  variable  sub-account  during the applicable  free look period
plus 5 days for delivery.  Any allocations you make to the money market variable
sub-account will automatically be transferred at the end of the free-look period
plus 5 days according to your original  allocation  instructions.  This transfer
will not count against the 18 transfers  allowed free of charge during the first
contract year.

INVESTMENT OPTION LIMIT

Currently,  you may not allocate monies to more than eighteen investment options
over the life of the contract.  Investment options include variable sub-accounts
and general account options. Each variable sub-account, each guarantee period of
the  guarantee  period  account,  and the fixed  account  that ever  received  a
transfer  or purchase  payment  allocation  counts as one towards  this total of
eighteen limit. We may waive this limit in the future.

For example, if you make an allocation to the money market variable  sub-account
and  later  transfer  all of  the  funds  out  of  this  money  market  variable
sub-account,  this would count as one option for the purposes of the limitation,
even if it held no value. If you transfer from a variable sub-account to another
variable  sub-account  and  later  back to the  first,  the  count  towards  the
limitation  would be two, not three. If you select a guarantee  period and renew
for the same term, the count will be one; but if you renew to a guarantee period
with a different term, the count will be two.

ABOUT THE CREDITS

We add a credit to your account value with each purchase payment received.  This
credit is funded from our general  account.  There is no specific charge for the
credit.  We use a portion of the mortality and expense risk fee,  administrative
charge and/or the  contingent  deferred  sales load to pay for the credit.  Each
credit is  allocated  to the  account  value at the same time as the  applicable
purchase  payment.  Credits  are applied to the  investment  options in the same
ratio as the applicable purchase payment.

Generally,  an annuity with purchase payment credits or premium enhancements may
have  higher   expenses  than  a  similar   annuity   without  such  credits  or
enhancements.  Over time, the higher charges could be more than the value of the
credits.  Accordingly,  you should always  consider the expenses  along with the
features and  enhancements to be sure any annuity meets your financial needs and
goals. In certain unusual  circumstances,  you could be worse off because of the
credits.  This is because the amount available as a death benefit or upon waiver
of the contingent  deferred sales load under the Living  Benefits Rider does not
include credits applied in the immediately  preceding 12 months,  and the amount
returned, if you exercise your right to cancel the contract during the free-look
period,  does not include any credits  applied.  Since we  recapture  the dollar
amount of the credits in these instances,  if the account value decreased during
this time, the percentage of the account value  recaptured  would be larger than
the original  credit  percentage.  However,  amounts of credits  recaptured will
never be more than the maximum contingent deferred sales load.

The credit is expressed and payable only as a percentage  of purchase  payments.
Currently the percentage is 3.25%. We may vary this percentage.

Examples. The following examples illustrate how a 3.25% credit works.

Suppose you invest $10,000 in a contract.  We  immediately  credit an additional
3.25%,  or $325,  so your account  value  begins at $10,325.  Assume that in six
months the account  value  increases  by 5%, so it is $10,841  (($10,325 x 0.05=
$516.25) + $10,325 = $10,841). At that point in time, the death benefit would be
$10,516  ($10,841  less the $325  credit).  Note that although the credit is not
included in the death benefit, the $16.25 of earnings on the credit is included.
The cash surrender  value would be $10,841 minus the  contingent  deferred sales
load of 8%, in addition to other applicable deductions.

Assume that at the end of twelve months,  the account value has increased by 10%
so it is $11,357.50 (($10,325 x .10=$1,032.50) + $10,325=$11,357.50).  The death
benefit at that time would be the full account value of $11,357.50  and the cash
surrender value would be $11,357.50 minus the contingent  deferred sales load of
8% and other applicable deductions.

A decrease in value works in a similar manner.  Again suppose you invest $10,000
and we credit a 3.25%, or $325,  credit,  and the account value decreases 10% in
six months, so your account value is $9292.50  ($10,325 minus  $1,032.50).  Your
death  benefit at that point in time  would be  $10,000,  since it is never less
than your purchase  payments,  less any partial  withdrawals  and premium taxes.
Your cash  surrender  value would be the account  value of  $9,292.50  minus the
contingent deferred sales load of 8% and other applicable deductions.

In the case of multiple purchase payments,  for purposes of the credit, the most
recent  purchase  payment is deemed to be  withdrawn  first.  Suppose you make a
$10,000  purchase  payment in January 2000 (getting a $325 credit) and a $20,000
purchase payment in June 2000 (getting a $650 credit).  If you die in March 2001
(more than 12 months after the January 2000 purchase  payment,  but less than 12
months  after the June 2000  purchase  payment),  the $650  credit  for the June
purchase  payment  has not vested  (since it is less than 12 months  old) so the
full $650 is deducted  in  calculating  the death  benefit.  However,  the death
benefit would include any earnings  attributable to that credit. The $325 credit
for the January  payment is over 12 months old so it (and any earnings on it) is
included in the death benefit.

ACCOUNT VALUE

Before the annuity date, the account value is equal to:

a)       the general account options accumulated value; plus

b)       the variable accumulated value.

The variable  accumulated  value is determined at the end of each valuation day.
To  determine  the variable  accumulated  value on a day that is not a valuation
day,  the  value as of the end of the  next  valuation  day  will be  used.  The
variable  accumulated  value is  expected  to change  from  valuation  period to
valuation  period,   reflecting  how  investments  within  selected   portfolios
performed.  The  variable  accumulated  value will also reflect  deductions  for
charges and fees. A valuation  period  begins at the close of the New York Stock
Exchange (generally 4:00 p.m. ET) on each valuation day and ends at the close of
the New York Stock  Exchange on the next  succeeding  valuation day. A valuation
day is each day that the New York Stock Exchange is open for regular business.

HOW VARIABLE ACCUMULATION UNITS ARE VALUED

Purchase  payments  allocated  to a variable  sub-account  are  credited  to the
variable  accumulated  value in the form of  variable  accumulation  units.  The
number of variable  accumulation units credited for each variable sub-account is
determined  by  dividing  the  purchase   payment   allocated  to  the  variable
sub-account  by  the  variable   accumulation   unit  value  for  that  variable
sub-account.  In the case of the initial purchase payment, variable accumulation
units for that payment will be credited to the variable accumulated value within
two valuation days of the later of the date our Service Center receives:

a)       sufficient information, in an acceptable manner and form; or

b)       the initial purchase payment.

In the case of any additional purchase payment,  variable accumulation units for
that payment will be credited at the end of the valuation period during which we
receive the payment. The value of a variable accumulation unit for each variable
sub-account is established at the end of each valuation period and is calculated
by multiplying the value of that unit at the end of the prior  valuation  period
by the variable  sub-account's  net investment  factor for the valuation period.
The value of a variable accumulation unit can go either up or down.

The net  investment  factor is used to determine the value of  accumulation  and
annuity unit values for the end of a valuation  period.  The applicable  formula
can be found in the Statement of  Additional  Information.  Transfers  involving
variable  sub-accounts  will  result in the  crediting  and/or  cancellation  of
variable  accumulation  units  having a total value  equal to the dollar  amount
being transferred to or from a particular  variable  sub-account.  The crediting
and  cancellation  of such units is made using the  variable  accumulation  unit
value of the applicable variable  sub-account as of the end of the valuation day
in which the transfer is effective.

TRANSFERS

BEFORE THE ANNUITY DATE

Before the  annuity  date,  you may  transfer  all or any portion of the account
value among the variable sub-accounts and the general account options. Transfers
are restricted into or out of the fixed account.

Transfers among the variable sub-accounts and the general account options may be
made by  submitting  a  request  to our  Service  Center  in a form  and  manner
acceptable to us. The transfer request must specify:

a)   the variable  sub-accounts  and/or the general  account  options from which
     your transfer is to be made;

b)       the amount of your transfer; and

c)   the variable  sub-accounts  and/or general  account  options to receive the
     transferred amount.

The minimum amount which you may transfer from the variable sub-accounts and the
general account options is $1,000. Transfers among the variable sub-accounts are
also subject to the terms and conditions imposed by the portfolios.

When a transfer is made from a guarantee  period before the end of its term, the
amount transferred may be subject to an interest  adjustment.  A transfer from a
guarantee period made within 30 days before the last day of its term will not be
subject to any interest adjustment.

We currently impose a transfer fee of $10 for each transfer in excess of 18 made
during the same contract year. We reserve the right to waive the transfer fee or
vary the number of  transfers  without  charge.  We may also choose not to count
transfers  under certain  options or services for purposes of the allowed number
without  charge.  See  Other  Restrictions  below  for  additional   limitations
regarding  transfers.  A transfer  generally  will be  effective on the date the
request for transfer is received by our Service Center.

If a transfer reduces the value in a variable sub-account or guarantee period or
in the fixed account to less than $1,000,  then we reserve the right to transfer
the remaining amount along with the amount requested to be transferred.  We will
do this  according to the transfer  instructions  provided by you. Under current
law, there will not be any tax liability for transfers within the contract.

TELEPHONE TRANSFERS

We will allow telephone transfers if you have provided proper  authorization for
such  transfers  in a form and  manner  acceptable  to us.  Withdrawals  are not
permitted by  telephone.  We will employ  reasonable  procedures to confirm that
instructions  communicated  by telephone are genuine.  We will not be liable for
any losses  due to  unauthorized  or  fraudulent  instructions  we believe to be
genuine.  The  procedures  we will follow for  telephone  transfers  may include
requiring  some form of personal  identification  before acting on  instructions
received by telephone, providing written confirmation of the transaction, and/or
tape recording the instructions given by telephone.

OTHER RESTRICTIONS

We  reserve  the right  without  prior  notice to modify,  restrict,  suspend or
eliminate the transfer privileges,  including telephone  transfers,  at any time
and for any reason. For example, restrictions may be necessary to protect owners
from adverse impacts on portfolio  management of large and/or numerous transfers
by market timers or others.  We have determined that the movement of significant
variable sub-account values from one variable sub-account to another may prevent
the underlying portfolio from taking advantage of investment opportunities. This
is likely to arise when the volume of  transfers is high,  since each  portfolio
must maintain a significant cash position in order to handle  redemptions.  Such
movement may also cause a substantial  increase in portfolio  transaction  costs
which must be  indirectly  borne by owners.  Therefore,  we reserve the right to
require that all transfer requests be made by the owner and not by a third party
holding a power of attorney.  We also require that each  transfer you request be
made by a separate  communication  to us. We also  reserve  the right to require
that each  transfer  request be submitted  in writing and be manually  signed by
owners. We may choose not to allow telephone or facsimile transfer requests.

DOLLAR COST AVERAGING

Before  the  annuity  date,  you  may  request  that  amounts  be  automatically
transferred on a monthly basis from a source  account.  The source  accounts are
currently the money market sub-account or the fixed account.  You can do this by
submitting a request to our Service  Center in a form and manner  acceptable  to
us.  Other  source  accounts  may be  available.  Call our  Service  Center  for
information regarding availability.

You may  only  dollar  cost  average  from one  source  account  at a time.  The
transfers  will begin when you request,  but no sooner than one week  following,
receipt  of such  request.  For new  variable  annuity  contracts,  dollar  cost
averaging transfers will not begin until the later of:

a)       30 days after the contract effective date; or

b)   the estimated end of the free look period which allows 5 days for delivery.

Transfers will continue for the number of consecutive  months which you selected
unless:

a)       you terminate the transfers;

b)   we  automatically  terminate the transfers  because there are  insufficient
     amounts in the source account; or

c)       for other reasons that are described in the election form.

You may request that monthly  transfers  be continued  for a specific  length of
time.  You can do this by  giving  notice  to our  Service  Center in a form and
manner acceptable to us within 30 days before the last monthly transfer.  If you
do not make a request to  continue  the  monthly  transfers,  this  option  will
terminate  automatically with the last transfer at the end of the length of time
you initially designated.

ELIGIBILITY REQUIREMENTS FOR DOLLAR COST AVERAGING

In order to be  eligible  for dollar  cost  averaging,  the value of your source
account must be at least $5,000.  This limit may be changed for new elections of
this  service.  Dollar cost  averaging  transfers  can not be made from a source
account from which  systematic  withdrawals or automatic  payouts are also being
made.

Currently,  we do not charge for the dollar  cost  averaging  option nor do they
count toward the number of transfers  allowed  without charge per contract year.
We may charge in the future for dollar cost averaging.

Dollar cost averaging  transfers may not be made to or from the guarantee period
account or to the fixed account.



Dollar  cost  averaging  may not be  elected  at the same time that the  special
Dollar Cost Averaging option or the automatic asset rebalancing is in effect.

SPECIAL DOLLAR COST AVERAGING OPTION

(May not be available in all states.  See contract for availability of the fixed
account options.)

Before the annuity date, you may elect to allocate entire  purchase  payments to
either the six or twelve  month  special  Dollar Cost  Averaging  account of the
fixed  account.  The  purchase  payment  will be  credited  with  interest  at a
guaranteed fixed rate.  Amounts will then be transferred from the special Dollar
Cost Averaging account to the variable  sub-accounts pro rata on a monthly basis
for six or twelve months (depending on the option you select) in the allocations
you  specify.  The four  transfers  per year limit does not apply to the special
Dollar Cost Averaging option.

Amounts  from  the  sub-accounts  and/or  general  account  options  may  not be
transferred into the special Dollar Cost Averaging accounts. In addition, if you
request a transfer (other than a Dollar Cost Averaging transfer) or a withdrawal
from a special  Dollar Cost  Averaging  account,  any amounts  remaining  in the
special  account will be transferred to the variable  sub-accounts  according to
your allocation instructions.  The special Dollar Cost Averaging option will end
and cannot be reelected.

AUTOMATIC ASSET REBALANCING

After purchase payments have been allocated among the variable sub-accounts, the
performance of each variable  sub-account may cause proportions of the values in
the  variable  sub-accounts  to vary from the  percentages  which you  initially
defined.  You may  instruct  us to  automatically  rebalance  the amounts in the
variable account by reallocating amounts among the variable sub-accounts, at the
time, and in the percentages,  specified in your instructions to us and accepted
by us. You may elect to have the rebalancing  done on an annual,  semi-annual or
quarterly  basis.  You may elect to have  amounts  allocated  among the variable
sub-accounts using whole percentages. The guaranteed period account and/or fixed
account cannot be rebalanced.

You may elect to establish,  change or terminate the automatic asset rebalancing
by submitting a request to our Service Center in a form and manner acceptable to
us. Automatic asset  rebalancing  currently will not count towards the number of
transfers without charge in a contract year. We reserve the right to discontinue
the automatic  asset  rebalancing  service at any time for any reason.  There is
currently no charge for the automatic asset rebalancing  service.  We may charge
for this service in the future, and may count the transfers toward those allowed
without charge.

Automatic asset rebalancing may not be elected at the same time that dollar cost
averaging is in effect.

AFTER THE ANNUITY DATE

If a variable  payment option is elected,  you may make transfers among variable
sub-accounts  after the annuity date by giving a written  request to our Service
Center, subject to the following provisions:

a)   you may not make any more than four  transfers  per contract year after the
     annuity date; and

b)   the minimum amount transferred from one variable  sub-account to another is
     the amount supporting a current $75 monthly payment.

Transfers among variable  sub-accounts  after the annuity date will be processed
based on the formula  outlined in the appendix in the  Statement  of  Additional
Information. No transfers are allowed into or out of the fixed account.

CASH WITHDRAWALS

If you own a  non-qualified  contract,  you may withdraw all or part of the cash
surrender  value at any time before the annuity date by giving a written request
to our Service Center. For qualified contracts, you should refer to the terms of
the particular retirement plan or arrangement for any additional  limitations or
restrictions, including prohibitions, on cash withdrawals.

The cash surrender  value is equal to the account  value,  minus any account fee
and interest adjustment, and less contingent deferred sales loads and applicable
premium tax charges.  A full surrender will result in a cash withdrawal  payment
equal to the cash  surrender  value at the end of the  valuation  period  during
which the election is  received.  It must be received  along with all  completed
forms  required at that time by us. No  surrenders  or  withdrawals  may be made
after the annuity date. Partial withdrawals must be at least $1,000.

In the case of a  partial  withdrawal,  you may  direct  our  Service  Center to
withdraw  amounts from specific  variable  sub-accounts  and/or from the general
account  options.  If you do not specify,  the withdrawal will be taken pro rata
from the account value.

A partial withdrawal request cannot be fulfilled if it would reduce your account
value to less than $2,000. In such instances, you will be notified.

We will generally process any withdrawal requests, including surrender requests,
as of the end of the valuation period during which the request and all completed
forms are received.  We will pay any cash withdrawal,  settlement option payment
or lump sum death  benefit  due from the  variable  account  and  process of any
transfers within seven days from the date we receive your request.  However,  we
may postpone such payment if:

o    the New York Stock  Exchange  is closed for other  than usual  weekends  or
     holidays, or trading on the Exchange is otherwise restricted;

o    an  emergency  exists  as  defined  by the  Commission,  or the  Commission
     requires that trading be restricted; or

o        the Commission permits a delay for the protection of owners.

The withdrawal request will be effective when we receive all required withdrawal
request forms.  Payments to you for any monies  derived from a purchase  payment
which you made by check may be delayed until your check has cleared your bank.

When you make a withdrawal  from a guarantee  period before the end of its term,
the amount you withdraw may be subject to an interest adjustment.

We may delay payment of any withdrawal  from the general  account options for up
to six months  after we receive  the request  for such  withdrawal.  If we delay
payment for more than 30 days, we will pay interest on the withdrawal  amount up
to the date of payment.

Since you assume the investment risk for all amounts in the variable account and
because certain  withdrawals are subject to a contingent deferred sales load and
other charges, the total amount paid upon surrender of your contract may be more
or less than the total purchase payments.

You may  elect,  under the  systematic  withdrawal  option or  automatic  payout
option,  but not both, to withdraw  certain amounts on a periodic basis from the
variable sub-accounts before the annuity date.

The tax  consequences  of a withdrawal or surrender are discussed  later in this
prospectus.

SYSTEMATIC WITHDRAWAL OPTION

Before the annuity date, you may elect to have  withdrawals  automatically  made
from one or more variable  sub-accounts on a monthly basis.  Other  distribution
modes may be permitted. The withdrawals will not begin until the later of:

a)       30 days after the contract effective date; or

b)       the end of the free look period.

Withdrawals will be from the variable sub-accounts and/or the general account in
the  percentage  allocations  that you  specify.  Unless you specify  otherwise,
withdrawals  will be pro rata based on account value. You cannot make systematic
withdrawals  from a  variable  sub-account  from  which  dollar  cost  averaging
transfers are being made. Likewise, systematic withdrawals cannot be used at the
same time that the automatic payout option is in effect.  If you take systematic
withdrawals from the general account,  applicable interest adjustments may apply
to withdrawals from the guarantee periods.

To be eligible for the systematic  withdrawal  option, the account value must be
at least $12,000 at the time of election. The minimum monthly amount that can be
withdrawn is $100.  Currently you can elect any amount over $100 to be withdrawn
systematically. You may also make partial withdrawals while receiving systematic
withdrawals.

If the total of all withdrawals (systematic, automatic or partial) in a contract
year exceed the allowed  amount to be  withdrawn  without  charge for that year,
your account value will be charged any  contingent  deferred sales load that may
apply.

The  withdrawals  will continue  indefinitely  unless you terminate them. If you
choose to terminate this option, you may not elect to use it again until the end
of the next 12 full months.

We  reserve  the  right to  impose  an  annual  fee of up to $25 for  processing
payments  under  this  option.  This fee,  which is  currently  waived,  will be
deducted in equal installments from each systematic withdrawal during a contract
year.

Systematic  withdrawals may be taxable and, before age 59 1/2,  subject to a 10%
federal tax penalty,  including that  withdrawals  and surrenders may be taxable
and, if taken before age 59 1/2, subject to the 10% federal tax penalty.

AUTOMATIC PAYOUT OPTION

Before the annuity date, for qualified  contracts  other than Roth IRAs, you may
elect the  automatic  payout  option,  or APO, to satisfy  minimum  distribution
requirements under the following sections of the Code:

o        401(a)(9);

o        403(b); and

o        408(b)(3).

For IRAs and  SEP/IRAs,  this  option may be elected no earlier  than six months
before the calendar year in which you attain age 70 1/2.  Payments may not begin
earlier than January of such calendar year.

For other  qualified  contracts,  APO can be elected no earlier  than six months
before the later of when you:

a)       attain age 70 1/2; or

b)       retire from employment.

Additionally, APO withdrawals may not begin before the later of:

a)       30 days after the contract effective date; or

b)       the end of the free look period.

APO may be elected in any  calendar  month,  but no later than the month of your
84th birthday.

OTHER AUTOMATIC PAYOUT OPTION INFORMATION. Withdrawals will be from the variable
sub-accounts  and/or the general  account you  designate  and in the  percentage
allocations you specify. If you do not indicate  otherwise,  withdrawals will be
pro  rata  from  account  value.  If you  take  a  withdrawal  from  a  variable
sub-account from which you have designated that dollar cost averaging  transfers
be made, then the dollar cost averaging  option will terminate.  The calculation
of the APO amount will reflect the total account value although the  withdrawals
are only from the  variable  sub-accounts.  This  calculation  and APO are based
solely on the value in this contract.  If you take APO from the general account,
applicable  interest  adjustments  may apply to  withdrawals  from the guarantee
periods.

To be eligible for this option, you must meet the following conditions:

a)   your account value must be at least $12,000 at the time at which you select
     this option; and

b)   the  annual  withdrawal  amount  is  the  larger  of the  required  minimum
     distribution under Code Sections 401(a)(9), 403(b) or 408(b)(3), or $500.

These conditions may change.  Currently,  withdrawals under this option are only
paid annually.

The withdrawals will continue  indefinitely  unless you terminate them. If there
are  insufficient  amounts in the variable  account to make a  withdrawal,  this
option will terminate. Once terminated, APO may not be elected again.

DEATH BENEFIT

If an owner dies before the annuity  date and the GMDB rider is not  elected,  a
death  benefit is payable.  If death occurs  before any owner's or joint owner's
80th birthday, the death benefit will be equal to the greatest of:

a)       the account value reduced by any credits less than 12 months old; or

b)   the sum of all purchase  payments made to the contract  minus  withdrawals,
     including any contingent  deferred sales loads, and applicable  premium tax
     charges.

If the owner or joint owner dies before the  annuity  date and after  either the
owner's or joint  owner's 80th  birthday,  the death benefit will be the account
value minus any credits less than 12 months old. For purposes of calculating the
death  benefit,  the account  value is  determined as of the date the benefit is
paid.

If the  owner is not a natural  person,  such as a trust,  corporation  or other
legal entity,  the annuitants  will be treated as the owners for purposes of the
death  benefit.  For  example,  if the owner is a trust that  allows a person or
persons  other than the  trustee to  exercise  the  ownership  rights  under the
contract, such a person or persons must be named as an annuitant.  Named parties
will be treated as the owner, or owners, so the death benefit will be determined
based on the age of the annuitant.

GUARANTEED MINIMUM DEATH BENEFIT RIDER

If the Guaranteed Minimum Death Benefit,  or GMDB, Rider is elected and if death
occurs  before the  annuity  date and before any owner's or joint  owner's  85th
birthday, the death benefit will be equal to the greatest of:

a)       the account value;

b)   the sum of all purchase  payments,  less withdrawals  taken,  including any
     contingent   deferred  sales  loads,   adjusted  as  described  below,  and
     applicable premium tax charges; and

c)   the highest account value on any contract anniversary before the earlier of
     the owner's or joint owner's 85th  birthday,  plus purchase  payments made,
     less  withdrawals  taken,  including any  contingent  deferred sales loads,
     adjusted as described below, and applicable  premium tax charges since that
     contract anniversary.

If death occurs before the annuity date and after either the deceased owner's or
joint owner's 85th birthday the death benefit will be equal to the greater of:

a)       the account value; and

b)   the highest account value on any contract anniversary before the earlier of
     the owner's or joint owner's 85th birthday  plus  purchase  payments  made,
     less  withdrawals  taken,  including any  contingent  deferred sales loads,
     adjusted as described below, and applicable  premium tax charges since that
     anniversary.

WITHDRAWAL  ADJUSTMENT.  Upon any  withdrawal,  the amount of the death  benefit
under the GMDB Rider will be reduced.  The amount of that  reduction will depend
upon whether the account value is more or less than the guaranteed minimum death
benefit on the date of withdrawal. If the account value is equal to or more than
the guaranteed  minimum death benefit,  the death benefit will be reduced by the
dollar  amount  of any  withdrawals.  If the  account  value  is less  than  the
guaranteed   minimum   death   benefit,   the  death  benefit  will  be  reduced
proportionately  to the  reduction in the account  value.  For  example,  if the
withdrawal  reduces the account value by 20% when the account value is less than
the guaranteed minimum death benefit,  then the guaranteed minimum death benefit
will also be reduced by 20%.

OWNERSHIP CHANGES

An ownership  change will be subject to our current  underwriting  rules and may
decrease the death  benefit.  However,  such  reduction  will never decrease the
death  benefit  below the account  value,  minus any credits less than 12 months
old.

PAYMENT OF DEATH BENEFIT

We will  generally  pay the death  benefit when we receive  proof of death of an
owner.  Once we receive this proof, and the beneficiary has selected a method of
settlement,  the death benefit  generally  will be paid within seven days, or as
soon thereafter as we have sufficient information to make the payment.

The death  benefit  will be  determined  as of the end of the  valuation  period
during which our Service Center receives:

a)       proof of death of the owner or joint owner; and

b)   the written notice of the  settlement  option elected by the person to whom
     the death benefit is payable.

If no  settlement  method  is  elected,  the  death  benefit  will be a lump sum
distributed  within five years after an owner's  death.  No contingent  deferred
sales load nor interest adjustment will apply.

Until the death  benefit is paid,  the account  value  allocated to the variable
account fluctuates with investment performance of the applicable portfolios. For
this reason, the amount of the death benefit depends on the account value at the
time the death benefit is paid, not at the time of death.

DESIGNATION OF BENEFICIARIES

You may select one or more beneficiaries by designating the person or persons to
receive the amounts  payable under the contract.  The persons you designate will
receive the percentage you establish if:


o        you die before the annuity date and there is no joint owner; or

o    you die after the annuity date and  settlement  option  payments have begun
     under a selected  settlement option that guarantees  payments for a certain
     period of time.

If a  beneficiary  dies  before the owner,  that  beneficiary's  interest in the
annuity will end upon his or her death.

A  beneficiary  may be  named  or  changed  at any  time  in a form  and  manner
acceptable  to us.  Any  change  made to an  irrevocable  beneficiary  must also
include the written consent of the beneficiary,  except as otherwise required by
law.

If more than one beneficiary is named, each named beneficiary will share equally
in any  benefits  or rights  granted by the  contract  unless the owner gives us
other instructions at the time the beneficiaries are named.

We may rely on any  affidavit  by any  responsible  person  in  determining  the
identity or non-existence of any beneficiary not identified by name.

DEATH OF OWNER OR JOINT OWNER BEFORE THE ANNUITY DATE

If the owner or joint owner dies before the annuity  date, we will pay the death
benefit  as  specified  in  this  section.  The  entire  death  benefit  must be
distributed  within five years after the owner's  death.  If the owner is not an
individual,  an  annuitant's  death will be treated as the death of the owner as
provided in Code Section 72 (s)(6).  The contract  will remain in force with the
annuitant's surviving spouse as the new annuitant, however, if:

o        the contract is owned by a trust; and

o    the  beneficiary is either the  annuitant's  surviving  spouse,  or a trust
     holding the contract solely for the benefit of such spouse.


The manner in which we will pay the death  benefit  depends on the status of the
persons involved in the contract. The death benefit will be payable to the first
person from the applicable list below:



If the owner is the annuitant:

o        the joint owner, if any; or

o        the beneficiary, if any

If the owner is not the annuitant:

o        the joint owner, if any; or

o        the beneficiary, if any; or

o        the annuitant; or

o        the joint annuitant; if any.

If the death benefit is payable to the owner's  surviving  spouse, or to a trust
for the sole benefit of such  surviving  spouse,  we will  continue the contract
with the owner's  spouse as the new annuitant  (if the owner was the  annuitant)
and the new owner (if applicable),  unless such spouse selects another option as
provided below.

If the death  benefit is payable to  someone  other than the  owner's  surviving
spouse,  we will pay the  death  benefit  in a lump sum  payment  to, or for the
benefit of, such person within five years after the owner's  death,  unless such
person or persons selects another option as provided below.

In lieu of the automatic form of death benefit  specified  above,  the person or
persons to whom the death benefit is payable may elect to receive it:

o        in a lump sum; or

o    as settlement  option payments,  provided the person making the election is
     an  individual.  Such payments must begin within one year after the owner's
     death  and must be in equal  amounts  over a period  of time not  extending
     beyond the individual's life or life expectancy.

Election of either option must be made no later than 60 days before the one-year
anniversary of the owner's death.  Otherwise,  the death benefit will be settled
under the appropriate automatic form of benefit specified above.

If the person to whom the death  benefit is payable dies before the entire death
benefit is paid,  we will pay the  remaining  death benefit in a lump sum to the
payee

named by such person or, if no payee was named, to such person's estate.

If the death benefit is payable to a non-individual, subject to the special rule
for a trust for the sole  benefit of a surviving  spouse,  we will pay the death
benefit in a lump sum within one year after the owner's death.

IF THE ANNUITANT DIES BEFORE THE ANNUITY DATE

If an owner and an annuitant are not the same  individual and the annuitant,  or
the last of joint  annuitants,  dies  before the  annuity  date,  the owner will
become the annuitant until a new annuitant is selected.

DEATH AFTER THE ANNUITY DATE

If an owner or the annuitant  dies after the annuity date,  any amounts  payable
will continue to be  distributed at least as rapidly as under the settlement and
payment option then in effect on the date of death.

Upon the owner's death after the annuity date,  any remaining  ownership  rights
granted  under the  contract  will pass to the person to whom the death  benefit
would have been paid if the owner had died before the annuity date, as specified
above.

SURVIVAL PROVISION

The interest of any person to whom the death  benefit is payable who dies at the
time of, or within 30 days after,  the death of the owner will also terminate if
no benefits  have been paid to such  beneficiary,  unless the owner had given us
written notice of some other arrangement.

CHARGES, FEES AND DEDUCTIONS

No deductions are currently made from purchase payments, although we reserve the
right to charge for any  applicable  premium tax  charges.  Therefore,  the full
amount of the  purchase  payments  are  invested in one or more of the  variable
sub-accounts and/or the general account options.

CONTINGENT DEFERRED SALES LOAD/
SURRENDER CHARGE

No deduction for sales  charges is made from purchase  payments at the time they
are made.  However, a contingent deferred sales load, or surrender charge, of up
to 6% of purchase payments may be imposed on certain  withdrawals or surrenders.
This charge is designed  to  partially  cover  certain  expenses  incurred by us
relating  to  the  sale  of  the  contract,   including   commissions   paid  to
salespersons, the costs of preparation of sales literature and other promotional
costs and acquisition expenses.

The contingent deferred sales load/surrender  charge percentage varies according
to the number of years  between  when a purchase  payment  was  credited  to the
contract  and  when the  withdrawal  is  made.  The  amount  of this  charge  is
determined by multiplying the amount  withdrawn that is subject to the charge by
the contingent deferred sales load percentage  according to the following table.
In no event  will the total  contingent  deferred  sales  load/surrender  charge
assessed against the contract exceed 8% of the total purchase payments.

                                 CONTINGENT DEFERRED
                                   SALES LOAD AS A
NUMBER OF YEARS                     PERCENTAGE OF
SINCE RECEIPT OF                  PURCHASE PAYMENT
                                  ----------------
PURCHASE PAYMENT
- ----------------
Less than 2 years                        8%
2 years but less than 3 years            7%
3 years but less than 4 years            6%
4 years but less than 5 years            5%
5 years but less than 6 years            4%
6 years but less than 7 years            3%
7 years or more                          0%

FREE WITHDRAWALS-ALLOWED AMOUNT

Beginning 30 days after the contract effective date, or the end of the free look
period,  if later,  you may make a withdrawal up to the allowed  amount  without
incurring a contingent deferred sales  load/surrender  charge each contract year
before the annuity date.

Depending on state  availability,  for contracts issued on or after September 7,
1999, the allowed amount each contract year is equal to:

a)       during the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or

o    10% of the total purchase  payments  received as of the date of withdrawal;
     and

b)   after the first contract year, the greater of:

o        accumulated earnings not previously withdrawn; or
o        10% of purchase  payments  received less than seven  complete  contract
         years determined as of the last contract anniversary.

Withdrawals  will be made first from  earnings,  then from credits and last from
purchase  payments on a  first-in/first-out  basis.  The allowed amount may vary
depending on the state in which your contract is issued. If an allowed amount is
not  withdrawn  during  a  contract  year,  it does not  carry  over to the next
contract year.

Purchase  payments not  previously  withdrawn that have been held at least seven
full contract years and  accumulated  earnings not  previously  withdrawn may be
withdrawn without charge.

For contracts  issued before September 7, 1999, the allowed amount each contract
year is equal to 10% of:

a)   the total purchase payments received during the last seven years determined
     as of the last contract anniversary; minus

b)       any withdrawals during the present contract year.

Withdrawals  will be made first from purchase  payments on a  first-in/first-out
basis,  then from  earnings and last from credits.  The allowed  amount may vary
depending on the state in which your contract is issued.  If the allowed  amount
is not fully  withdrawn  or paid out during a contract  year,  it does not carry
over to the next contract year.

Purchase  payments held for seven full contract  years may be withdrawn  without
charge.

FREE WITHDRAWALS - LIVING BENEFITS RIDER

When the contract is purchased,  you may also elect, in certain states, a Living
Benefits  Rider for an additional  fee. This rider  provides that the contingent
deferred sales load will be waived in any of the three following instances:

a)   if you or the joint owner  receive  extended  medical  care in a qualifying
     institution (as defined in the contract) for at least 60 consecutive  days,
     and the request for the  withdrawal  or  surrender,  together with proof of
     such extended  care,  is received at our Service  Center during the term of
     such  care,  or within 90 days  after the last day upon  which you or joint
     owner received such extended care; or
b)   if you or the joint owner  receive  medically  required  hospice or in-home
     care for at least 60  consecutive  days and such extended care is certified
     by a  qualified  medical  professional.  You may also be required to submit
     other evidence as required by us such as evidence of Medicare  eligibility;
     or

c)   if you or the joint owner are  diagnosed as  terminally  ill by a qualified
     medical  professional  after the  first  contract  year and are  reasonably
     expected to die within 12 months.

NEITHER A) NOR B) APPLY IF YOU OR THE JOINT OWNER ARE RECEIVING EXTENDED MEDICAL
CARE IN A  QUALIFYING  INSTITUTION  OR  RECEIVING  IN-HOME  CARE AT THE TIME THE
CONTRACT IS PURCHASED.

We reserve  the right to not  accept  purchase  payments  after you or the joint
owner have  qualified for any of these  waivers.  Any  withdrawals  on which the
contingent  deferred sales load is waived under this section will not reduce the
allowed  amount for the contract  year. Any credits less than 12 months old will
not be available for withdrawal under the rider.

OTHER FREE WITHDRAWALS

In addition, no contingent deferred sales load is assessed:

o    upon  annuitization  after the first  contract year to an option  involving
     life contingencies; or

o        upon payment of the death benefit before the annuity date.

Any applicable  contingent  deferred sales load will be deducted from the amount
requested  for  both  partial  withdrawals,   including  withdrawals  under  the
systematic  withdrawal option or the APO, and full surrenders,  unless you elect
to add the amount of the applicable  load to the amount  requested for a partial
withdrawal  to  cover  the  applicable   contingent  deferred  sales  load.  The
contingent  deferred  sales  load and any  premium  tax charge  applicable  to a
withdrawal  from the guarantee  period  account will be deducted from the amount
withdrawn after the interest  adjustment,  if any, is applied and before payment
is made.

ADMINISTRATIVE CHARGES

ACCOUNT FEE. At the end of each  contract  year and before the annuity  date, we
deduct an annual account fee as partial  compensation  for expenses  relating to
the issue and maintenance of the contract and the variable  account.  The annual
account  fee is equal  to the  lesser  of $30 or 2% of the  account  value.  The
account fee may be increased  upon 30 days  advance  written  notice,  but in no
event may it exceed $60, or 2% of the account value, if less, per contract year.
If the contract is surrendered, the account fee, unless waived, will be deducted
from a full surrender  before the  application of any contingent  deferred sales
load.  The account  fee will be  deducted on a pro rata basis,  based on values,
from the account value.  The fee  deductions  will be based on both the variable
sub-accounts  and the general account  options.  No interest  adjustment will be
assessed on any deduction  for the account fee taken from the  guarantee  period
account.  We will waive the account fee for a contract year if the account value
exceeds $50,000 on the last business day of that contract year or as of the date
you, as owner, surrender the contract.

ANNUITY FEE.  After the annuity date, we deduct an annual  annuity fee of $30 to
help cover  processing  costs.  This fee will be deducted in equal  amounts from
each  variable  payment  made  during the year.  This fee is $2.50 each month if
monthly payments are made. This fee will not be changed.  No annuity fee will be
deducted from fixed payments. This fee may be waived.

ADMINISTRATIVE   EXPENSE  CHARGE.  We  also  make  a  daily  deduction  for  the
administrative  expense charge from the variable account before the annuity date
at an  effective  current  annual rate of 0.15% of assets held in each  variable
sub-account to reimburse us for administrative  expenses. We have the ability in
most states to increase or decrease  this charge,  but the charge is  guaranteed
not to exceed  0.35%.  We will provide 30 days  written  notice of any change in
fees.  The  administrative  charges do not bear any  relationship  to the actual
administrative costs of a particular contract. The administrative expense charge
is reflected in the variable  accumulation  or variable  annuity unit values for
each variable sub-account.

MORTALITY AND EXPENSE RISK CHARGE

Before the annuity  date, we deduct a charge for bearing  certain  mortality and
expense risks under the contracts. This is a daily charge at an effective annual
rate of 1.20% of the assets in the  variable  account.  We  guarantee  that this
charge of 1.20% will never  increase.  The  mortality and expense risk charge is
reflected in the variable accumulation and variable annuity unit values for each
variable sub-account.

Variable  accumulated  values and variable  settlement  option  payments are not
affected by changes in actual mortality experience incurred by us. The mortality
risks assumed by us arise from our  contractual  obligations to make  settlement
option payments  determined in accordance with the settlement  option tables and
other provisions  contained in the contract and to pay death benefits before the
annuity date.

The  expense  risk  assumed  by us is the  risk  that  our  actual  expenses  in
administering  the  contracts  and the  variable  account will exceed the amount
recovered through the administrative expense charge, account fees, transfer fees
and any fees imposed for certain options and services.

If the mortality and expense risk charge is  insufficient  to cover actual costs
and  risks  assumed,  we will bear  these  losses.  If this  charge is more than
sufficient,  any excess  will accrue to us.  Currently,  we expect a profit from
this charge.

We  anticipate  that the  contingent  deferred  sales  load  will  not  generate
sufficient  funds to pay the cost of distributing  the contracts.  To the extent
that the contingent deferred sales load is insufficient to cover the actual cost
of contract distribution,  the deficiency will be met from our general corporate
assets which may include amounts, if any, derived from the mortality and expense
risk charge.

LIVING BENEFITS RIDER FEE

If you elect the Living  Benefits  Rider when the contract is  purchased,  a fee
will be deducted at the end of each contract month while the rider  continues in
force.  The fee each  month will be 1/12 of 0.05% of the  account  value at that
time.  The fee is deducted  from each variable  sub-account  on a pro rata basis
based on the value in each  variable  sub-account  through the  cancellation  of
variable  accumulation  units.  If there is  insufficient  variable  accumulated
value,  the fee will be deducted pro rata from the values in the general account
options.  Any interest adjustments will apply. We reserve the right to waive the
interest  adjustment  for deduction  from the guarantee  period account for this
rider fee.




GUARANTEED MINIMUM DEATH BENEFIT RIDER FEE

If you elect the  Guaranteed  Minimum  Death  Benefit,  or GMDB,  Rider when the
contract is purchased,  a fee will be deducted at the end of each contract month
while the rider continues in force in the amount of 1/12 of 0.20% of the account
value at that time.  The account  value is the sum of the  variable  accumulated
value and the general account options  accumulated  value. The GMDB Rider fee is
deducted  first from the variable  accumulated  value by taking a deduction from
each  variable  sub-account  pro  rata  based  on the  value  in  each  variable
sub-account through the cancellation of variable accumulation units. If there is
insufficient  variable  accumulated  value,  the  remainder  of the fee  will be
deducted pro rata from the values in the general account  options.  Any interest
adjustment  will  apply,  although  we reserve  the right to waive the  interest
adjustment.

PREMIUM TAX CHARGES

Currently  there is no charge  for  premium  taxes  except  upon  annuitization.
However,  we may be  required  to pay  premium or  retaliatory  taxes  currently
ranging from 0% to 5%. We reserve the right to deduct a charge for these premium
taxes from premium payments,  from amounts withdrawn, or from amounts applied on
the annuity date. In some  jurisdictions,  charges for both direct premium taxes
and retaliatory premium taxes may be imposed at the same or different times with
respect to the same purchase payment, depending upon applicable law.

TRANSFER FEE

We  currently  impose a fee for each  transfer  in  excess  of the first 18 in a
single  contract  year.  We will deduct the charge from the amount  transferred.
This  fee is $10  and  will  be  used to help  cover  our  costs  of  processing
transfers.  We  reserve  the right to waive  this fee or to not count  transfers
under  certain  options  and  services  as part of the number of allowed  annual
transfers without charge.

OPTION AND SERVICE FEES

We  reserve  the right to impose  reasonable  fees for  administrative  expenses
associated  with processing  certain  options and services.  These fees would be
deducted from each use of the option or service during a contract year.

TAXES

No charges are currently made for taxes. However, we reserve the right to deduct
charges in the future for federal, state, and local taxes or the economic burden
resulting  from  the  application  of any  tax  laws  that  we  determine  to be
attributable to the contracts.

PORTFOLIO EXPENSES

The value of the assets in the variable  account reflects the value of portfolio
shares and  therefore  the fees and expenses  paid by each  portfolio.  For more
information, see the portfolios' prospectuses.

INTEREST ADJUSTMENT

For a description of the interest adjustment applicable to early withdrawals and
transfers from the guaranteed period account,  see The General Account Options -
the Guarantee Period Account in APPENDIX A of this prospectus.

SALES IN SPECIAL SITUATIONS

We may sell the  contracts  in special  situations  that are expected to involve
reduced expenses for us. These instances may include sales:

o        in certain group arrangements, such as employee savings plans;

o    to current or former officers, directors and employees, and their families,
     of Transamerica and its affiliates;

o    to  officers,  directors,  and  employees,  and  their  families,  and  the
     portfolios' investment advisers and their affiliates; or

o    to officers, directors, employees and sales agents also known as registered
     representatives, and their families, and broker-dealers and other financial
     institutions that have sales agreements with us to sell the contracts.

In these situations:

a)       the contingent deferred sales load may be reduced or waived;

b)   the  mortality  and expense  risk charge or  administration  charges may be
     reduced  or  waived;  and/or c)  certain  amounts  may be  credited  to the
     contract  account value (for  examples,  amounts  related to commissions or
     sales compensation  otherwise payable to a broker-dealer may be credited to
     the contract account value.

These  reductions  in fees or  charges  or  credits  to  account  value will not
unfairly  discriminate  against any contract owner.  These reductions in fees or
charges  or credits to account  value may be  taxable  and  treated as  purchase
payments for purposes of income tax and any possible premium tax charge.

DISTRIBUTION OF THE CONTRACT

Transamerica  Securities Sales Corporation (TSSC), is the principal  underwriter
of the contracts under a Distribution Agreement with Transamerica. TSSC may also
serve as an underwriter and  distributor of other  contracts  issued through the
variable  account and  certain  other  separate  accounts  of  Transamerica  and
affiliates  of  Transamerica.  TSSC is an indirect  wholly-owned  subsidiary  of
Transamerica Corporation, a subsidiary of AEGON N.V. TSSC is registered with the
Commission as a  broker/dealer  and is a member of the National  Association  of
Securities Dealers, Inc. (NASD). Its principal offices are located at 1150 South
Olive  Street,  Los  Angeles,  California  90015.  TSSC  may  enter  into  sales
agreements with broker/dealers to solicit applications for the contracts through
registered  representatives  who are  licensed to sell  securities  and variable
insurance products.

Under the Sales Agreements, TSSC will pay broker-dealers compensation based on a
percentage  of each purchase  payment.  The  percentage  may be up to 4%, and in
certain  situations  additional  amounts for  marketing  allowances,  production
bonuses,  service  fees,  sales  awards and  meetings,  and asset based  trailer
commissions may be paid.

SETTLEMENT OPTION PAYMENTS

ANNUITY DATE

The  annuity  date is the date  that  the  annuitization  phase of the  contract
begins. On the annuity date, we will apply the annuity amount, defined below, to
provide  payments  under the settlement  option you select.  You also select the
annuity date which you may change the date from time to time by giving notice to
our Service Center in a form and manner  acceptable to us. Notice of each change
must be received by our Service Center at least 30 days before the  then-current
annuity  date.  The  annuity  date  cannot be  earlier  than the first  contract
anniversary except for certain qualified contracts.

The latest annuity date which may be elected is the later of:

a)   the first day of the calendar month immediately  preceding the month of the
     annuitant's or joint annuitants' 85th birthday; or

b)   the first  day of the month  coinciding  with or next  following  the tenth
     contract  anniversary,  but in no  event  later  than an  annuitant's  97th
     birthday.

The latest  allowed  annuity  date may vary in certain  jurisdictions,  or under
certain programs or circumstances.

The annuity date must be the first day of a calendar month. The first settlement
option payment will be on the first day of the month  immediately  following the
annuity  date.  Certain  qualified  contracts  may have  restrictions  as to the
annuity date and the types of settlement options available.

ANNUITY AMOUNT

The annuity amount is the account value,  minus any interest  adjustment,  minus
any applicable  contingent deferred sales load, and minus any applicable premium
tax charges. Any contingent deferred sales load will be waived if the settlement
option  payments  involve  life  contingencies  and  begin on or after the first
contract anniversary.

If the amount of the monthly  payment  from the  settlement  option you selected
would result in a monthly settlement option payment of less than $150, or if the
annuity  amount  is less  than  $5,000,  we  reserve  the  right to offer a less
frequent  mode of payment  or pay the cash  surrender  value in a cash  payment.
Monthly settlement option payments from the variable payment option will further
be subject to a minimum  monthly  payment of $75 from each variable  sub-account
from which such payments are made.

SETTLEMENT OPTION PAYMENTS

You may choose from the settlement  options below. We may consent to other plans
of payment  before the annuity  date.  For  settlement  options  involving  life
contingencies,  the actual age and/or sex of the annuitant, or a joint annuitant
will affect the amount of each  payment.  Sex-distinct  rates  generally are not
allowed under certain qualified contracts and in some jurisdictions.  We reserve
the right to ask for satisfactory  proof of the annuitant's or joint annuitant's
age.  We may  delay  settlement  option  payments  until  satisfactory  proof is
received. Since payments to older annuitants are expected to be fewer in number,
the amount of each annuity  payment shall be greater for older  annuitants  than
for younger annuitants.

You may choose from the two payment options  described  below.  The annuity date
and settlement options available for qualified  contracts may also be controlled
by endorsements, the retirement plan or applicable law.

ELECTION OF SETTLEMENT OPTION FORMS AND PAYMENT OPTIONS

Before the annuity date, and while the annuitant is living,  you may, by written
request,  change the settlement option or payment option. The request for change
must be received by our Service Center at least 30 days before the annuity date.

In the event that a settlement option form and payment option is not selected at
least 30 days before the annuity date, we will make  settlement  option payments
according to the 120 month  period  certain and life  settlement  option and the
applicable provisions of the contract.

PAYMENT OPTIONS

You may elect a fixed or a variable payment option, or a combination of both, in
25% increments of the annuity amount.

Unless specified  otherwise,  the annuity amount in the variable account will be
used to provide a variable  payment option and the amount in the general account
options  will be used to provide a fixed  payment  option.  In this  event,  the
initial allocation of variable annuity units for the variable  sub-accounts will
be in  proportion  to the  account  value in the  variable  sub-accounts  on the
annuity date.

FIXED PAYMENT OPTION

A fixed  payment  option  provides  for  payments  which  will  remain  constant
according  to the terms of the  settlement  option you  select.  If you select a
fixed  payment  option,  the portion of the annuity  amount used to provide that
payment  option  will  be   transferred   to  the  general   account  assets  of
Transamerica. The amount of payments will be established by the fixed settlement
option  which  you  select  and by the age and sex,  if  sex-distinct  rates are
allowed by law, of the annuitants.  Payment amounts will not reflect  investment
performance  after the annuity date. The fixed payment amounts are determined by
applying the fixed  settlement  option purchase rate,  which is specified in the
contract,  to the portion of the annuity amount  applied to the payment  option.
Payments  may vary  after the death of an  annuitant  under  some  options;  the
amounts of variances are fixed on the annuity date.

VARIABLE PAYMENT OPTION

A variable  payment  option  provides for payments  that vary in dollar  amount,
based on the investment performance of the selected variable  sub-accounts.  The
variable  settlement  option  purchase  rate tables in the  contract  reflect an
assumed,  but not  guaranteed,  annual interest rate of 5.35%. If the actual net
investment performance of the variable sub-accounts is less than 5.35%, then the
dollar amount of the actual payments will decrease. If the actual net investment
performance of the variable  sub-accounts is higher than 5.35%,  then the dollar
amount of the actual payments will increase.  If the net investment  performance
exactly  equals the 5.35% rate,  then the dollar  amount of the actual  payments
will remain constant. We may offer other assumed annual interest rates.

Variable payments will be based on the variable  sub-accounts you select, and on
the monies which you allocate among them.

For  further  details as to the  determination  of  variable  payments,  see the
Statement of Additional Information.

SETTLEMENT OPTION FORMS

As owner,  you may choose any of the settlement  option forms  described  below.
Subject  to our  approval,  you may  select any other  settlement  option  forms
offered by us in the future.

1.   Life  Annuity.  Payments  start on the first  day of the month  immediately
     following the annuity  date, if the annuitant is living.  Payments end with
     the  payment  due just  before  the  annuitant's  death.  There is no death
     benefit.  It is possible that no payment will be made if the annuitant dies
     after the  annuity  date but  before  the first  payment  is due;  only one
     payment  will be made if the  annuitant  dies before the second  payment is
     due, and so forth.

2.   Life and Contingent  Annuity.  Payments start on the first day of the month
     immediately  following  the  annuity  date,  if the  annuitant  is  living.
     Payments  will  continue  for as long as the  annuitant  lives.  After  the
     annuitant  dies,  payments will be made to the contingent  annuitant for as
     long as the contingent  annuitant lives.  The continued  payments can be in
     the same amount as the original payments, or in an amount equal to one-half
     or two-thirds  thereof.  Payments will end with the payment due just before
     the death of the contingent annuitant. There is no death benefit after both
     die. If the contingent  annuitant does not survive the annuitant,  payments
     will end with the payment due just before the death of the annuitant. It is
     possible  that no  payments  or very  few  payments  will be  made,  if the
     annuitant and contingent annuitant die shortly after the annuity date.

     The written request for this form must:

a)       name the contingent annuitant; and

b)       state the percentage of payments to be made after the annuitant dies.

     Once payments start under this settlement  option form, the person named as
     contingent  annuitant for purposes of being the measuring  life, may not be
     changed.  We  will  require  proof  of age for  the  annuitant  and for the
     contingent annuitant before payments start.

3.   Life Annuity With Period  Certain.  Payments  start on the first day of the
     month  immediately  following the annuity date, if the annuitant is living.
     Payments will be made for the longer of:

a)       the annuitant's life; or

b)       the period certain.

     The period certain may be 120, 180 or 240 months.

     If the  annuitant  dies  after all  payments  have been made for the period
     certain, payments will cease with the payment that is paid just before the

     annuitant dies. No death benefit will then be payable to the beneficiary.

     If the  annuitant  dies during the period  certain,  the rest of the period
     certain  payments  will be  made to the  beneficiary,  unless  you  provide
     otherwise.

     The written request for this form must:

a)       state the length of the period certain; and

b)       name the beneficiary.

4.   Joint and Survivor Annuity. Payments will be made starting on the first day
     of the month immediately  following the annuity date, if and for as long as
     the annuitant and joint annuitant are living.  After the annuitant or joint
     annuitant  dies,  payments  will  continue as long as the  survivor  lives.
     Payments  end with the payment  due just before the death of the  survivor.
     The continued  payments can be in the same amount as the original payments,
     or in an amount  equal to one-half or  two-thirds  thereof.  It is possible
     that no payments or very few payments  will be made under this  arrangement
     if the  annuitant  and joint  annuitant  both die shortly after the annuity
     date.

     The written request for this form must:

a)       name the joint annuitant; and

b)   state the percentage of continued payments to be made upon the first death.

     Once payments start under this settlement  option form, the person named as
     joint  annuitant,  for the purpose of being the measuring  life, may not be
     changed.  We will need proof of age for the annuitant  and joint  annuitant
     before payments start.

5.   Other Forms of Payment.  We can provide benefits under any other settlement
     option not  described in this section as long as we agree to these  options
     and they comply  with any  applicable  state or federal law or  regulation.
     Requests  for any other  settlement  option  must be made in writing to our
     Service Center at least 30 days before the annuity date.




After the annuity date:

a)   you will not be allowed to make any  changes in the  settlement  option and
     payment option;

b)   no additional purchase payments will be accepted under the contract; and

c)   no further  withdrawals  will be allowed for fixed  payment  options or for
     variable  payment options under which payments are being made based on life
     contingencies.

As the owner of a non-qualified contract, you may, at any time after the annuity
date,  write to us at our Service  Center to change the payee of benefits  being
provided  under the contract.  The effective date of change in payee will be the
later of:

a)       the date we receive the written request for such change; or

b)       the date specified by you.

As the owner of a  qualified  contract,  you may not  change  payees,  except as
permitted by the retirement plan, arrangement or federal law.

FEDERAL TAX MATTERS

INTRODUCTION

The following  discussion is a general description of federal tax considerations
for U.S.  persons  relating to the  contract  and is not intended as tax advice.
This discussion is not intended to address the tax  consequences  resulting from
all of the  situations  in which a person may be  entitled  to or may  receive a
distribution  under  the  contract.   If  you  are  concerned  about  these  tax
implications,  you should consult a competent tax adviser before  initiating any
transaction.  This  discussion  is based upon our  understanding  of the present
federal  income  tax  laws as they are  currently  interpreted  by the  Internal
Revenue Service,  or IRS. No  representation is made as to the likelihood of the
continuation  of  the  present  federal  income  tax  laws  or  of  the  current
interpretation  by the IRS.  Moreover,  no attempt has been made to consider any
applicable state or other tax laws. If a prospective owner is not a U.S. person,
see Contracts Purchased by Nonresident Aliens and Foreign Corporations below.

The contract may be purchased on a non-tax  qualified  basis, as a non-qualified
contract,  or  purchased  and used in  connection  with  plans  or  arrangements
qualifying  for  special  tax  treatment  as  a  qualified  contract.  Qualified
contracts are designed for use in connection with plans or arrangements entitled
to special income tax treatment under Code Sections 401,  403(b),  408 and 408A.
The  ultimate  effect  of  federal  income  taxes on the  amounts  held  under a
contract,  on settlement  option  payments,  and on the economic  benefit to the
owner, the annuitant, or the beneficiary may depend on:

o    the type of  retirement  plan or  arrangement  for  which the  contract  is
     purchased;

o        the tax and employment status of the individual concerned; or

o        our tax status.

In addition,  certain requirements must be satisfied when purchasing a qualified
contract  with  proceeds  from  a  tax  qualified   retirement   plan  or  other
arrangement.  Certain requirements must also be met when receiving distributions
from a  qualified  contract,  in  order  to  continue  receiving  favorable  tax
treatment.  Therefore,  purchasers of qualified  contracts should seek competent
legal  and tax  advice  regarding  the  suitability  of the  contract  for their
individual situation, the applicable requirements,  and the tax treatment of the
rights and benefits of the contract.  The  following  discussion is based on the
assumption  that the  contract  qualifies  as an annuity for federal  income tax
purposes  and that all purchase  payments  made to  qualified  contracts  are in
compliance with all requirements under the Code and the specific retirement plan
or arrangement.

PURCHASE PAYMENTS

At the time the initial purchase payment is paid, as prospective purchaser,  you
must specify whether you are purchasing a non-qualified  contract or a qualified
contract. If the initial purchase payment is derived from an exchange, transfer,
conversion  or surrender of another  annuity  contract,  we may require that the
prospective  purchaser  provide  information  regarding  the federal  income tax
status of the  previous  annuity  contract.  We require  that  persons  purchase
separate  contracts if they desire to invest  monies  qualifying  for  different
annuity tax treatment under the Code. Each such separate  contract  requires the
minimum initial  purchase  payment  previously  described.  Additional  purchase
payments under a contract must qualify for the same federal income tax treatment
as the  initial  purchase  payment  under the  contract.  We will not  accept an
additional purchase payment under a contract if the federal income tax treatment
of such purchase  payment would be different  from that of the initial  purchase
payment.

TAXATION OF ANNUITIES

IN GENERAL. Code Section 72 governs taxation of annuities in general. We believe
that an owner who is a natural person generally is not taxed on increases in the
value of a contract until distribution  occurs by withdrawing all or part of the
account value for example,  via withdrawals or settlement  option payments.  For
this  purpose,  the  assignment,  pledge,  or  agreement to assign or pledge any
portion of the  account  value,  and in the case of a  qualified  contract,  any
portion of an interest in the plan, generally will be treated as a distribution.
The taxable portion of a distribution is taxable as ordinary income.

The owner of any contract who is not a natural person  generally must include in
income any increase in the excess of the account value over the  "investment  in
the contract"  during the taxable year.  There are some  exceptions to this rule
and a prospective owner that is not a natural person should discuss these with a
competent tax adviser.

The  following  discussion  generally  applies to a contract  owned by a natural
person.

WITHDRAWALS.  For  non-qualified  contracts,   partial  withdrawals,   including
withdrawals  under the systematic  withdrawal  option,  are generally treated as
taxable  income to the extent  that the  account  value  immediately  before the
withdrawal  exceeds the  investment in the contract at that time. The investment
in the contract generally equals the amount of non-deductible  purchase payments
made.

For  withdrawals  from  qualified  contracts,  including  withdrawals  under the
systematic  withdrawal  option or the automatic payout option, a ratable portion
of  the  amount  received  is  taxable,  generally  based  on the  ratio  of the
investment in the contract to the  individual's  total accrued benefit under the
retirement plan or arrangement.  The investment in the contract generally equals
the  amount  of  non-deductible  purchase  payments  made by or on behalf of any
individual.  For certain qualified contracts, the investment in the contract can
be zero. Special tax rules applicable to certain distributions from qualified

contracts are discussed below, under Qualified Contracts.

If a partial  withdrawal  from the  guarantee  period  account  is subject to an
interest  adjustment,  the account value immediately  before the withdrawal will
not be altered to take into account the interest  adjustment.  As a result,  for
purposes of determining the taxable portion of a partial withdrawal, the account
value will be treated as including the amount deducted from the guarantee period
account due to the interest adjustment.

Full  surrenders  are  treated as taxable  income to the extent  that the amount
received exceeds the investment in the contract.

SETTLEMENT OPTION PAYMENTS.  Although the tax consequences may vary depending on
the settlement  option elected under the contract,  in general a ratable portion
of each payment that  represents  the amount by which the account  value exceeds
the  investment  in the  contract  will  be  taxed  based  on the  ratio  of the
investment in the contract to the total benefit payable. After the investment in
the contract is recovered,  the full amount of any additional  settlement option
payments is taxable.

For  variable  payments,  the  taxable  portion is  generally  determined  by an
equation that  establishes a specific  dollar amount of each payment that is not
taxed.  The dollar  amount is  determined  by  dividing  the  investment  in the
contract by the total number of expected periodic payments.  However, the entire
distribution  will be taxable once the recipient has recovered the dollar amount
of his or her investment in the contract.

For fixed  payments,  in general  there is no tax on the portion of each payment
which represents the same ratio that the investment in the contract bears to the
total  expected  value of the  payments  for the  term  selected.  However,  the
remainder of each settlement  option payment is taxable.  Once the investment in
the  contract  has been  fully  recovered,  the full  amount  of any  additional
settlement option payments is taxable.  If settlement option payments cease as a
result of an  annuitant's  death before full  recovery of the  investment in the
contract,  consult  a  competent  tax  adviser  regarding  deductibility  of the
unrecovered amount.

WITHHOLDING.   The  Code  requires  us  to  withhold  federal  income  tax  from
withdrawals.  However,  except for certain qualified contracts, an owner will be
entitled to elect, in writing,  not to have tax withholding  apply.  Withholding
applies to the portion of the  distribution  which is  includible  in income and
subject to federal income tax. The federal income tax  withholding  rate is 10%,
or 20% in the case of certain  qualified  plans,  of the  taxable  amount of the
distribution. Withholding applies only if the taxable amount of the distribution
is at least $200. Some states also require withholding for state income taxes.

The  withholding  rate  varies  according  to the type of  distribution  and the
owner's tax status.  Eligible rollover  distributions  from Section 401(a) plans
and Section  403(b) tax  sheltered  annuities  are subject to mandatory  federal
income tax withholding at the rate of 20%. An eligible rollover  distribution is
the taxable  portion of any  distribution  from such a plan,  except for certain
distributions  or settlement  option  payments made in a specified form. The 20%
mandatory  withholding does not apply,  however, for certain direct rollovers to
other plans or arrangements.

The  federal  income  tax  withholding  rate for a  distribution  that is not an
eligible rollover distribution is 10% of the taxable amount of the distribution.

If  distributions  are delivered to foreign  countries,  federal income tax will
generally  be withheld at a 10% rate unless you certify to us that you are not a
U.S.  citizen  residing abroad or a tax avoidance  expatriate as defined in Code
Section 877. Such  certification may result in mandatory  withholding of federal
income taxes at a different rate.

PENALTY TAX. A federal  income tax penalty equal to 10% of the amount treated as
taxable income may be imposed. In general,  however,  there is no penalty tax on
distributions:

a)       made on or after the date on which the owner attains age 59 1/2;

b)       made as a result of death or disability of the owner; or

c)   received in  substantially  equal periodic  payments as a life annuity or a
     joint and survivor annuity for the life(ves) or life expectancy(ies) of the
     owner and a designated beneficiary.

Other  exceptions to the tax penalty may apply to certain  distributions  from a
qualified contract.


TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from the contract
because of the death of an owner.  Generally  such amounts are includible in the
income of the recipient as follows:

a)   if  distributed  in a lump sum, they are taxed in the same manner as a full
     surrender as described above; or

b)   if distributed under a settlement option, they are taxed in the same manner
     as settlement option payments, as described above.

For these  purposes,  the  investment  in the  contract  is not  affected by the
owner's death. That is, the investment in the contract remains the amount of any
purchase payments paid which are not excluded from gross income.

TRANSFERS,   ASSIGNMENTS,  OR  EXCHANGES  OF  THE  CONTRACT.  For  non-qualified
contracts,  a  transfer  of  ownership  of a  contract,  the  designation  of an
annuitant,  payee,  or  other  beneficiary  who is not also  the  owner,  or the
exchange of a contract may result in certain tax  consequences to the owner that
are not discussed herein. An owner contemplating any such designation, transfer,
assignment,  or exchange  should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.  Qualified contracts may not be
assigned or transferred, except as permitted by the Code or ERISA.

MULTIPLE  CONTRACTS.  All deferred  non-qualified  contracts  that are issued by
Transamerica  or its  affiliates  to the same owner during any calendar year are
treated as one contract for purposes of  determining  the amount  includible  in
gross income under Code Section 72(e). In addition,  the Treasury Department has
specific  authority to issue  regulations  that prevent the avoidance of Section
72(e) through the serial  purchase of contracts or otherwise.  Congress has also
indicated  that  the  Treasury  Department  may  have  authority  to  treat  the
combination  purchase of an immediate  annuity  contract  and separate  deferred
annuity  contracts as a single annuity  contract under its general  authority to
prescribe rules that may be necessary to enforce the income tax laws.

QUALIFIED CONTRACTS

IN GENERAL.  The qualified  contracts are designed for use with several types of
retirement plans and arrangements.  The tax rules applicable to participants and
beneficiaries in retirement plans or arrangements  vary according to the type of
plan and the terms and  conditions  of the plan.  Special tax  treatment  may be
available  for certain types of  contributions  and  distributions.  Adverse tax
consequences  may  result  from  contributions  in excess of  specified  limits;
distributions  before age 59 1/2, subject to certain  exceptions;  distributions
that do not conform to specified  commencement and minimum  distribution  rules;
and in other specified circumstances.

We make no attempt to provide  more than  general  information  about use of the
contracts with the various types of retirement  plans.  Owners and  participants
under retirement plans, as well as annuitants and  beneficiaries,  are cautioned
that the rights of any person to any benefits under  qualified  contracts may be
subject to the terms and conditions of the plans  themselves,  regardless of the
terms and  conditions of the contract  (including  any  endorsements)  issued in
connection with such a plan.  Some retirement  plans are subject to distribution
and other  requirements  that are not incorporated in the  administration of the
contracts.  Owners are responsible for determining that  contributions and other
transactions with respect to the contracts satisfy applicable law. Purchasers of
contracts for use with any  retirement  plan should  consult their legal counsel
and tax adviser regarding the suitability of the contract.

For qualified plans under Section 401(a),  403(a) and 403(b),  the Code requires
that  distributions  generally  must begin no later than the later of April 1 of
the calendar year following the year in which the owner:

a)       reaches age 70 1/2; or

b)       retires and distribution must be made in a specified manner.

If  the  plan  participant  is a 5  percent  owner,  as  defined  in  the  Code,
distributions  generally  must begin no later than April 1 of the calendar  year
following the calendar year in which the participant reaches age 70 1/2.

For IRAs and SEP/IRAs  described in Section 408,  distributions  generally  must
begin no later  than the later of April 1 of the  calendar  year  following  the
calendar  year in which the owner or plan  participant  reaches age 70 1/2. Roth
IRAs under  Section  408A do not  require  distributions  at any time before the
owner's death.


QUALIFIED  PENSION  AND  PROFIT  SHARING  PLANS.  Code  Section  401(a)  permits
employers to establish  various types of retirement  plans for  employees.  Such
retirement  plans may permit the  purchase  of the  contract in order to provide
retirement savings under the plans. Adverse tax consequences to the plan, to the
participant or to both may result if this contract is assigned or transferred to
any  individual  as a means to provide  benefits  payments.  If you are buying a
contract for use with such plans, you should seek competent  advice.  Advice you
receive  should  address the  suitability of the proposed plan documents and the
contract to your specific needs.

INDIVIDUAL RETIREMENT ANNUITIES (IRA),  SIMPLIFIED EMPLOYEE PLANS (SEP) AND ROTH
IRAS.  The sale of a  contract  for use with any IRA may be  subject  to special
disclosure  requirements  of the IRS,  which are included in this  prospectus as
APPENDIX E - DISCLOSURE STATEMENT for Individual  Retirement  Annuities.  If you
purchase a contract for use with an IRA, you will be provided  with another copy
of the Disclosure Statement for Individual Retirement Annuities.

You will have the right to cancel your  purchase  within 7 days of  whichever is
earliest:

a)       the establishment of your IRA; or

b)       your purchase.

If you intend to make such a purchase,  you should seek  competent  advice as to
the suitability of the contract you are  considering  purchasing for use with an
IRA.

The contract is designed for use with traditional IRA rollovers and contributory
IRAs. A contributory IRA is a contract to which initial and subsequent  purchase
payments  are  subject to  limitations  imposed by the Code.  Code  Section  408
permits eligible  individuals to contribute to an individual  retirement program
known as an Individual  Retirement Annuity or Individual  Retirement Account, or
IRA.  Also,  distributions  from certain  other types of qualified  plans may be
rolled over on a tax-deferred basis into an IRA.

Earnings  in an IRA are not  taxed  until  distributed.  IRA  contributions  are
limited  each year to the lesser of $2,000 or 100% of the owner's  compensation,
including   earned   income  as  defined  in  Code  Section   401(c)(2).   These
contributions   may  be  deductible  in  whole  or  in  part  depending  on  the
individual's  adjusted  gross  income  and  whether  or not  the  individual  is
considered an active  participant  in a qualified  plan. The limit on the amount
contributed to an IRA does not apply to  distributions  from certain other types
of  qualified  plans that are rolled over on a  tax-deferred  basis into an IRA.
Amounts  in the IRA,  other  than  nondeductible  contributions,  are taxed when
distributed  from the  IRA.  Distributions  before  age 59 1/2,  unless  certain
exceptions apply, are subject to a 10% penalty tax.

Eligible  employers that meet specified criteria under Code Section 408(k) could
establish simplified employee pension plans, referred to as SEP/IRAs,  for their
employees using IRAs. Employer  contributions that may be made to such plans are
larger than the amounts  that may be  contributed  to regular  IRAs,  and may be
deductible  to the employer.  SEP/IRAs are subject to certain Code  requirements
regarding participation and amounts of contributions.

The contract may also be used for Roth IRA  conversions  and  contributory  Roth
IRAs.  A  contributory  Roth IRA is a contract to which  initial and  subsequent
purchase  payments are subject to limitations  imposed by the Code. Code Section
408A permits  eligible  individuals  to contribute  to an individual  retirement
program known as a Roth IRA, although  contributions are not tax deductible.  In
addition,  distributions  from a non-Roth  IRA may be converted to a Roth IRA. A
non-Roth IRA is an individual retirement account or annuity described in Section
408(a) or 408(b), other than a Roth IRA. Distributions from a Roth IRA generally
are not taxed, except that, once total distributions exceed contributions to the
Roth IRA, income tax and a 10% penalty tax may apply to distributions you take:

a)       before age 59 1/2, subject to certain exceptions; or

b)   during the five  taxable  years  starting  with the year in which you first
     contributed to a Roth IRA.

If you intend to purchase such a contract,  you should seek competent  advice as
to the suitability of the contract for use with Roth IRAs.

TAX  SHELTERED  ANNUITIES.  Under Code Section  403(b),  payments made by public
school  systems  and  certain  tax  exempt  organizations  to  purchase  annuity
contracts  for their  employees  are  excludable  from the gross  incomes of the
employees,  subject to  certain  limitations.  However,  these  payments  may be
subject to Social Security and Medicare (FICA) taxes.


Code Section  403(b)(11)  restricts the  distribution  under Code Section 403(b)
annuity contracts of:

a)       elective contributions made in years beginning after December 31, 1988;

b)       earnings on those contributions; and

c)   earnings in such years on amounts held as of the last year beginning before
     January 1, 1989.

Distribution  of  those  amounts  may only  occur  upon  death of the  employee,
attainment  of age 59 1/2,  separation  from service,  disability,  or financial
hardship. In addition,  income attributable to elective contributions may not be
distributed in the case of hardship.

Pre-1989 contributions and earnings through December 31, 1989 are not subject to
the restrictions  described  above.  However,  funds  transferred to a qualified
contract  from a Section  403(b)(7)  custodial  account  will be  subject to the
restrictions.

RESTRICTIONS  UNDER QUALIFIED  CONTRACTS.  There may be other  restrictions that
apply to the election, commencement, or distribution of benefits under qualified
contracts,  or under the terms of the plans under which contracts are issued.  A
qualified  contract will be amended as necessary to conform to the  requirements
of the Code.

CONTRACTS PURCHASED BY
NONRESIDENT ALIENS AND FOREIGN
CORPORATIONS

The discussion above provides general information  regarding U.S. federal income
tax consequences to annuity owners that are U.S. persons.  Taxable distributions
made to owners  who are not U.S.  persons  will  generally  be  subject  to U.S.
federal  income  tax  withholding  at a 30%  rate,  unless a lower  treaty  rate
applies.  In addition,  distributions  may be subject to state and/or  municipal
taxes and taxes that may be imposed by the  owner's  country of  citizenship  or
residence.  Prospective  foreign  owners are advised to consult with a qualified
tax adviser regarding U.S., state, and foreign taxation for any annuity contract
purchase.

TAXATION OF TRANSAMERICA

We are taxed as a life  insurance  company  under Part I of  Subchapter L of the
Code.  Since the variable  account is not an entity separate from  Transamerica,
and its operations form a part of Transamerica,  it will not be taxed separately
as a regulated  investment  company under  Subchapter M of the Code.  Investment
income and realized capital gains are automatically applied to increase reserves
under the contracts.  Under existing federal income tax law, we believe that the
variable  account  investment  income and realized net capital gains will not be
taxed to the extent  that such  income and gains are  applied  to  increase  the
reserves under the contracts.

Accordingly,  we do not  anticipate  that it will incur any  federal  income tax
liability attributable to the variable account and, therefore,  we do not intend
to make  provisions for any such taxes.  However,  if changes in the federal tax
laws or  interpretations  thereof  result in our being  taxed on income or gains
arising  from the  variable  account,  then we may impose a charge  against  the
variable  account (with respect to some or all  contracts) in order to set aside
provisions to pay such taxes.

TAX STATUS OF THE CONTRACT

DIVERSIFICATION   REQUIREMENTS.   Code   Section   817(h)   requires   that  for
non-qualified  contracts,  the  investments  of  the  portfolios  be  adequately
diversified in accordance  with Treasury  regulations in order for the contracts
to qualify as annuity  contracts  under  federal tax law. The variable  account,
through the portfolios,  intends to comply with the diversification requirements
prescribed  by  the  Treasury  in  Reg.  Sec.  1.817-5,  which  affect  how  the
portfolios' assets may be invested.

In certain circumstances, owners of variable annuity contracts may be considered
the  owners,  for federal  income tax  purposes,  of the assets of the  separate
accounts used to support their  contracts.  In those  circumstances,  income and
gains from the  separate  account  assets  would be  includible  in the variable
contract  owner's gross income.  The IRS has stated in published  rulings that a
variable  contract owner will be considered the owner of separate account assets
if the contract owner possesses  incidents of ownership in those assets, such as
the ability to exercise investment control over the assets.

The Treasury  Department has also announced,  in connection with the issuance of
regulations concerning  diversification,  that those regulations "do not provide
guidance  concerning  the  circumstances  in  which  investor  control  for  the
investments of a segregated asset account may cause the investor,  as the owner,
rather than the insurance  company,  to be treated as the owner of the assets in
the account." This announcement also stated that guidance would be issued by way
of regulations or rulings on the "extent to which policyholders may direct their
investments  to particular  sub-accounts  without being treated as owners of the
underlying assets."

The ownership rights under the contract are similar to, but different in certain
respects from,  those described by the IRS in rulings in which it was determined
that contract owners were not owners of separate  account  assets.  For example,
the owner has additional  flexibility in allocating premium payments and account
values. These differences could result in an owner being treated as the owner of
a pro rata portion of the assets of the variable account. In addition, We do not
know what  standards  will be set forth,  if any, in the  regulations or rulings
which the  Treasury  Department  has stated it expects  to issue.  We  therefore
reserve the right to modify the  contract as  necessary to attempt to prevent an
owner from being  considered  the owner of a pro rata share of the assets of the
variable account.

REQUIRED  DISTRIBUTIONS.  In order to be  treated  as an  annuity  contract  for
federal  income tax  purposes,  Code Section  72(s)  requires any  non-qualified
contract to provide that:

a)   if any owner  dies on or after the  annuity  date but  before  the time the
     entire interest in the contract has been distributed, the remaining portion
     of such  interest  will be  distributed  at least as  rapidly  as under the
     method of distribution being used as of the date of that owner's death; and

b)   if any owner dies  before the  annuity  date,  the entire  interest  in the
     contract  will be  distributed  within  five  years  after  the date of the
     owner's  death.  This  requirement  will be considered  satisfied as to any
     portion of the owner's interest,  which is payable to or for the benefit of
     a designated  beneficiary,  provided it is distributed over the life of the
     designated  beneficiary,  or over a period  not  extending  beyond the life
     expectancy  of that  beneficiary,  provided that such  distributions  begin
     within one year of the owner's death.

The owner's designated  beneficiary refers to a natural person designated by the
owner as a beneficiary. Upon the owner's death, ownership of the contract passes
to the designated  beneficiary and the mandatory  distribution rules above still
apply. However, if the owner's designated beneficiary is the surviving spouse of
the deceased owner,  the contract may be continued with the surviving  spouse as
the new owner, postponing application of such payout requirements.

The non-qualified contracts contain provisions which are intended to comply with
the  requirements  of Code Section 72(s),  although no regulations  interpreting
these  requirements have yet been issued. All provisions in the contract will be
interpreted to maintain this tax qualification.  We may make changes in order to
maintain this qualification or to conform the contract to any applicable changes
in the tax  qualification  requirements.  We will provide you with a copy of any
changes made to the contract.

POSSIBLE CHANGES IN TAXATION

Legislation  has been  proposed in the past that,  if enacted,  would  adversely
modify the federal  taxation of certain  insurance  and annuity  contracts.  For
example,  one proposal  would tax  transfers  among  investment  options and tax
exchanges  involving  variable  contracts.  A second  proposal  would reduce the
investment in the contract under cash value life  insurance and certain  annuity
contracts  by  certain  amounts,  thereby  increasing  the  amount of income for
purposes of computing  gain.  Although the likelihood of there being any changes
is  uncertain,  there is always the  possibility  that the tax  treatment of the
contracts could be changed by legislation or other means.  Moreover,  it is also
possible that any change could be  retroactive,  that is,  effective  before the
date of the change. You should consult a tax adviser with respect to legislative
developments and their effect on the contract.

OTHER TAX CONSEQUENCES

As noted above, the foregoing  discussion of the federal income tax consequences
is not  exhaustive  and special  rules are  provided  with  respect to other tax
situations  not discussed in this  prospectus.  Further,  the federal income tax
consequences  discussed herein reflect our  understanding of current law and the
law may change.  Federal  estate and gift tax  consequences  and state and local
estate,  inheritance,  and other tax  consequences  of  ownership  or receipt of
distributions under the contract depend on the individual  circumstances of each
owner or  recipient  of the  distribution.  A competent  tax  adviser  should be
consulted for further information.

PERFORMANCE DATA

From time to time, we may advertise  yields and average annual total returns for
the variable sub-accounts.  In addition, we may advertise the effective yield of
the money market variable sub-account. THESE FIGURES WILL BE BASED ON HISTORICAL
INFORMATION AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.

The yield of the money  market  variable  sub-account  refers to the  annualized
income generated by an investment in that variable  sub-account over a specified
seven-day period.  The yield is calculated by assuming that the income generated
for that  seven-day  period is generated  each  seven-day  period over a 52-week
period and is shown as a percentage of the  investment.  The effective  yield is
calculated similarly but, when annualized, the income earned by an investment in
that variable sub-account is assumed to be reinvested.  The effective yield will
be slightly  higher  than the yield  because of the  compounding  effect of this
assumed  reinvestment.  These money market yields will not reflect deductions of
fees for  optional  riders,  but will  reflect  the  credit  applicable  to each
purchase payment, unless otherwise noted.

The  yield of a  variable  sub-account,  other  than the money  market  variable
sub-account,  refers to the annualized  income generated by an investment in the
variable sub-account over a specified thirty-day period. The yield is calculated
by assuming that the income  generated by the investment  during that thirty-day
period is generated each  thirty-day  period over a  twelve-month  period and is
shown as a percentage  of the  investment.  These money  market  yields will not
reflect  deductions  of fees for  optional  riders,  but will reflect the credit
applicable to each purchase payment, unless otherwise noted.

The yield  calculations  do not  reflect the effect of any  contingent  deferred
sales load or premium taxes that may be applicable to a particular contract.  To
the  extent  that the  contingent  deferred  sales  load or  premium  taxes  are
applicable to a particular contract, the yield of that contract will be reduced.
For additional  information regarding yields and total returns,  please refer to
the Statement of Additional Information.

The  average  annual  total  return of a variable  sub-account  refers to return
quotations assuming an investment has been held in the variable  sub-account for
various  periods of time  including,  but not limited to, a period measured from
the date the variable sub-account began operations.  When a variable sub-account
has been in operation for 1, 5, and 10 years,  respectively,  the average annual
total return for these periods will be provided. The average annual total return
quotations  will  represent the average annual  compounded  rates of return that
would equate an initial  investment  of $1,000 to the  redemption  value of that
investment,  including the deduction of any applicable contingent deferred sales
load but excluding deduction of any premium taxes, as of the last day of each of
the periods for which total return quotations are provided.  These total returns
will not reflect  deductions of fees for optional  riders,  but will reflect the
credit applicable to each purchase payment, unless otherwise noted.

Performance   information  for  any  variable   sub-account  reflects  only  the
performance of a hypothetical contract under which account value is allocated to
a variable sub-account during a particular time period on which the calculations
are  based.  Performance  information  should  be  considered  in  light  of the
investment  objectives  and policies and  characteristics  of the  portfolios in
which the variable  sub-account  invests,  and the market  conditions during the
given time period,  and should not be considered as a representation of what may
be achieved in the future.  For a  description  of the methods used to determine
yield and total returns, see the Statement of Additional Information.

Reports and promotional literature may also contain other information including:

a)   the ranking of any variable  sub-account  derived from rankings of variable
     annuity separate  accounts or their  investment  products tracked by Lipper
     Analytical  Services,  Inc.,  VARDS,   IBC/Donoghue's  Money  Fund  Report,
     Financial Planning Magazine,  Money Magazine,  Bank Rate Monitor,  Standard
     and  Poor's  Indices,  Dow  Jones  Industrial  Average,  and  other  rating
     services,  companies,  publications,  or other  persons  who rank  separate
     accounts  or other  investment  products  on overall  performance  or other
     criteria; and

b)   the effect of tax deferred compounding on variable  sub-account  investment
     returns, or returns in general, which may be illustrated by graphs, charts,
     or  otherwise,  and which may include a  comparison,  at various  points in
     time,  of the  return  from an  investment  in a  contract,  or  returns in
     general, on a tax-deferred basis,  assuming one or more tax rates, with the
     return on a currently taxable basis. Other ranking services and indices may
     be used.

In our advertisements and sales literature,  we may discuss,  and may illustrate
by graphs, charts, or through other means of written communication:

o        the implications of longer life expectancy for retirement planning;

o        the tax and other consequences of long-term investment in the contract;

o        the effects of the contract's lifetime payout options; and

o    the  operation of certain  special  investment  features of the contract --
     such as the dollar cost averaging option.

We may explain and depict in charts,  or other graphics,  the effects of certain
investment strategies,  such as allocating purchase payments between the general
account  options  and a variable  sub-account.  We may also  discuss  the Social
Security system and its projected  payout levels and retirement plans generally,
using graphs, charts and other illustrations.

We may  from  time  to  time  also  disclose  average  annual  total  return  in
non-standard formats and cumulative non-annualized total return for the variable
sub-accounts.  The non-standard average annual total return and cumulative total
return  will  assume  that no  contingent  deferred  sales  load is  applicable.
Transamerica may from time to time also disclose yield,  standard total returns,
and non-standard total returns for any or all variable sub-accounts.

All  non-standard  performance  data  will  only be  disclosed  if the  standard
performance  data is also disclosed.  For additional  information  regarding the
calculation  of  other  performance  data,  please  refer  to the  Statement  of
Additional Information.

We may also advertise performance figures for the variable sub-accounts based on
the  performance  of a  portfolio  before the time the  variable  account  began
operations.

LEGAL PROCEEDINGS

There is no pending material legal proceeding  affecting the variable account or
the principal underwriter of the contracts.  Transamerica is involved in various
kinds of routine litigation which, in management's judgment, are not of material
importance to Transamerica's assets or to the variable account.

LEGAL MATTERS

The  organization of  Transamerica,  its authority to issue the contract and the
validity of the form of the contract  have been passed upon by James W. Dederer,
General Counsel and Secretary of Transamerica.

ACCOUNTANTS AND FINANCIAL
STATEMENTS

The  statutory-basis  financial  statements of Transamerica at December 31, 1999
and 1998, and for each of the three years in the period ended December 31, 1999,
and the financial  statements of Separate  Account VA-6 at December 31, 1999 and
for the periods then ended, appearing in the Statement of Additional Information
have been audited by Ernst & Young LLP,  Independent  Auditors,  as set forth in
their  reports  appearing  in  the  Statement  of  Additional  Information.  The
financial statements audited by Ernst & Young LLP have been included in reliance
upon such reports given upon the authority of such firm as experts in accounting
and auditing.

VOTING RIGHTS

To the extent  required by  applicable  law,  all  portfolio  shares held in the
variable   account  will  be  voted  by  Transamerica  at  regular  and  special
shareholder  meetings of the respective  portfolio.  The shares will be voted in
accordance with  instructions  received from persons having voting  interests in
the  corresponding  variable  sub-account.  If,  however,  the  1940  Act or any
regulation  thereunder  should  be  amended,  or if the  present  interpretation
thereof should change, or if Transamerica  determines that it is allowed to vote
all portfolio shares in its own right, Transamerica may elect to do so.

The person with the voting interest is the owner.  The number of votes which are
available  to  an  owner  will  be  calculated   separately  for  each  variable
sub-account. Before the annuity date, that number will be determined by applying
his or her percentage interest,  if any, in a particular variable sub-account to
the total number of votes attributable to that variable  sub-account.  The owner
holds a voting interest in each variable  sub-account to which the account value
is  allocated.  After  the  annuity  date,  the  number  of votes  decreases  as
settlement  option  payments  are  made  and as the  reserves  for the  contract
decrease.

The number of votes of a portfolio will be determined as of the date  coincident
with  the  date  established  by that  portfolio  for  determining  shareholders
eligible to vote at the meeting of the portfolios.  Voting  instructions will be
solicited  by written  communication  before  such  meeting in  accordance  with
procedures established by the respective portfolios.

Shares  for  which no  timely  instructions  are  received  and  shares  held by
Transamerica  for which  owners  have no  beneficial  interest  will be voted in
proportion  to the voting  instructions  which are received  with respect to all
contracts  participating  in the variable  sub-account.  Voting  instructions to
abstain on any item to be voted upon will be applied on a pro rata basis.

Each person or entity having a voting  interest in a variable  sub-account  will
receive proxy material,  reports and other material  relating to the appropriate
portfolio.

It should be noted that generally the  portfolios  are not required,  and do not
intend, to hold annual or other regular meetings of shareholders.

AVAILABLE INFORMATION

Transamerica has filed a registration statement with the Securities and Exchange
Commission  under  the  1933  Act  relating  to the  contract  offered  by  this
prospectus.  THIS  PROSPECTUS  HAS  BEEN  FILED  AS A PART  OF THE  REGISTRATION
STATEMENT  AND  DOES  NOT  CONTAIN  ALL  OF THE  INFORMATION  SET  FORTH  IN THE
REGISTRATION STATEMENT AND EXHIBITS thereto.

Reference is hereby made to such Registration Statement and exhibits for further
information  relating to Transamerica and the contract.  Statements contained in
this prospectus,  as to the content of the contract and other legal instruments,
are summaries. For a complete statement of the terms thereof,  reference is made
to the  instruments  filed  as  exhibits  to  the  Registration  Statement.  The
Registration  Statement and the exhibits  thereto may be inspected and copied at
the office of the Commission, located at 450 Fifth Street, N.W., Washington, D.C


<PAGE>




<TABLE>
<CAPTION>


STATEMENT OF ADDITIONAL INFORMATION

A Statement of Additional  Information is available  which contains more details
concerning the subjects discussed in this prospectus. The following is the Table
of Contents for that Statement:

TABLE OF CONTENTS                                                                             PAGE
<S>                                                                                                <C>
THE CONTRACT ....................................................................................  3
NET INVESTMENT FACTOR ...........................................................................  3
VARIABLE PAYMENT OPTIONS.........................................................................  3
Variable Annuity Units and Payments..............................................................  3
Variable Annuity Unit Value......................................................................  3
Transfers After the Annuity Date.................................................................  4
GENERAL PROVISIONS...............................................................................  4
         Non-Participating.......................................................................  4
         Misstatement of Age or Sex..............................................................  4
         Proof of Existence and Age..............................................................  4
         Annuity Data............................................................................  4
         Assignment..............................................................................  4
         Annual Report...........................................................................  5
         Incontestability........................................................................  5
         Entire Contract.........................................................................  5
         Changes in the Contract.................................................................  5
         Protection of Benefits..................................................................  5
         Delay of Payments.......................................................................  5
         Notices and Directions..................................................................  6
CALCULATION OF YIELDS AND TOTAL RETURNS .........................................................  6
         Money Market Sub-Account Yield Calculation..............................................  6
         Other Sub-Account Yield Calculations....................................................  6
         Standard Total Return Calculations......................................................  7
         Adjusted Historical Portfolio Performance Data..........................................  7
         Other Performance Data..................................................................  7
HISTORICAL PERFORMANCE DATA......................................................................  8
         General Limitations.....................................................................  8
         Historical Performance Data.............................................................  8
DISTRIBUTION OF THE CONTRACT..................................................................... 18
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS........................................................... 18
STATE REGULATION................................................................................. 18
RECORDS AND REPORTS.............................................................................. 18
FINANCIAL STATEMENTS............................................................................. 18
APPENDIX......................................................................................... 19


</TABLE>



<PAGE>





APPENDIX A

THE GENERAL ACCOUNT OPTIONS
(Not available in all states)

This prospectus is generally intended to serve as a disclosure document only for
the contract and the  variable  account.  For  complete  details  regarding  the
general account options, see the contract itself.

THE ACCOUNT VALUE  ALLOCATED TO THE GENERAL  ACCOUNT OPTIONS BECOMES PART OF THE
GENERAL  ACCOUNT  OF   TRANSAMERICA,   WHICH  SUPPORTS   INSURANCE  AND  ANNUITY
OBLIGATIONS.  BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE
GENERAL ACCOUNT HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933 (THE
"1933 ACT"),  NOR IS THE GENERAL  ACCOUNT  REGISTERED AS AN  INVESTMENT  COMPANY
UNDER THE 1940 ACT.

ACCORDINGLY, NEITHER OUR GENERAL ACCOUNT NOR ANY INTERESTS THEREIN ARE GENERALLY
SUBJECT  TO THE  PROVISIONS  OF THE 1933 ACT OR THE 1940  ACT,  AND WE HAVE BEEN
ADVISED  THAT THE  STAFF  OF THE  SECURITIES  AND  EXCHANGE  COMMISSION  HAS NOT
REVIEWED THE DISCLOSURES IN THIS PROSPECTUS  WHICH RELATE TO THE GENERAL ACCOUNT
OPTIONS.

The general account options are part of our general account. Our general account
consists of all our general assets, other than those in the variable account, or
in any other separate  account.  We have sole discretion to invest the assets of
our general account subject to applicable law.

The  allocation  or transfer of funds to the general  account  options  does not
entitle the owner to share in the investment performance of our general account.

There are two general  account  options:  the fixed  account  and the  guarantee
period  account,  as described  below.  These  options are not  available in all
states.

THE FIXED ACCOUNT

Currently,  we guarantee that we will credit interest at a rate of not less than
3% per year,  compounded  annually,  to amounts  allocated to the fixed  account
under the  contracts.  However,  we reserve the right to change the minimum rate
according to state  insurance law. We may credit interest at a rate in excess of
3% per year.






There is no specific formula for the  determination of excess interest  credits.
Some of the factors that we may consider in determining whether to credit excess
interest  to  amounts  allocated  to the fixed  account  and the  amount in that
account are:

o        general economic trends;

o        rates of return currently available;

o        returns anticipated on the company's investments;

o        regulatory and tax requirements; and

o        competitive factors.

ANY INTEREST  CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3%
PER YEAR WILL BE DETERMINED AT OUR SOLE  DISCRETION.  THE OWNER ASSUMES THE RISK
THAT  INTEREST  CREDITED  TO THE FIXED  ACCOUNT  ALLOCATIONS  MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.

Rates of interest  credited to the fixed account will be guaranteed for at least
twelve months and will vary according to the timing and class of the allocation,
transfer or renewal.  At any time after the end of the twelve month period for a
particular allocation, we may change the annual rate of interest for that class.
This new annual  rate of  interest  will  remain in effect  for at least  twelve
months.  New purchase  payments made to the contract  which are allocated to the
fixed account may receive different rates of interest.

These rates of interest may differ from those interest rates credited to amounts
transferred from the variable  sub-accounts or guarantee period account and from
those credited to amounts  remaining in the fixed account and receiving  renewal
rates.  These  rates of  interest  may also  differ  from rates for  allocations
applied under certain options and services we may be offering.

TRANSFERS

Each contract year, you may transfer a portion of the value of the fixed account
to  variable  sub-accounts  or to the  guarantee  period  accounts.  The maximum
percentage  that  may be  transferred  will be  declared  annually  by us.  This
percentage will be determined by us at our sole discretion, but will not be less
than 10% of the value of the fixed account on the preceding contract anniversary
and will be declared each year. Currently, this percentage is 25%.

You are limited to four transfers from the fixed account each contract year, and
the total of all such transfers cannot exceed the current maximum.  If we permit
dollar cost averaging from the fixed account to the variable  sub-accounts,  the
above restrictions are not applicable.

Generally,  transfers may not be made from any variable sub-account to the fixed
account for the six-month  period  following any transfer from the fixed account
to one or more of the variable sub-accounts.  Additionally, transfers may not be
made from the fixed account to:

a)       any guarantee period;

b)       the Transamerica VIF Money Market Sub-Account; or

c)   any variable  sub-account  identified  by  Transamerica  and investing in a
     portfolio of fixed income investments.

We reserve  the right to modify the  limitations  on  transfers  to and from the
fixed account and to defer transfers from the fixed account for up to six months
from the date of request.

SPECIAL DOLLAR COST AVERAGING OPTION

(May not be available in all states.  See contract for availability of the fixed
account options.)

Before the annuity date, you may elect to allocate entire  purchase  payments to
either the six or twelve  month  special  Dollar Cost  Averaging  account of the
fixed  account.  The  purchase  payment  will be  credited  with  interest  at a
guaranteed fixed rate.  Amounts will then be transferred from the special Dollar
Cost Averaging account to the variable  sub-accounts pro rata on a monthly basis
for six or twelve months (depending on the option you select) in the allocations
you  specify.  The four  transfers  per year limit does not apply to the special
Dollar Cost Averaging option.

Amounts  from  the  sub-accounts  and/or  general  account  options  may  not be
transferred into the special Dollar Cost Averaging accounts. In addition, if you
request a transfer (other than a Dollar Cost Averaging transfer) or a withdrawal
from a special  Dollar Cost  Averaging  account,  any amounts  remaining  in the
special  account will be transferred to the variable  sub-accounts  according to
your allocation instructions.  The special Dollar Cost Averaging option will end
and cannot be reelected.

THE GUARANTEE PERIOD ACCOUNT

The  guarantee  period  account  provides  guaranteed  fixed  rates of  interest
compounded  annually for specific  guarantee  periods.  Amounts allocated to the
guarantee  period  account will be credited with interest of no less than 3% per
year.  Amounts withdrawn from a guarantee period before the end of its guarantee
period will be subject to an interest adjustment, as explained below.

Each  guarantee  period  offers  a  specified   duration  with  a  corresponding
guaranteed  interest rate.  Currently we are offering three, five and seven year
guarantee periods but these may change at any time.

YOU BEAR THE RISK THAT, AFTER THE INITIAL  GUARANTEE  PERIOD, WE WILL NOT CREDIT
INTEREST IN EXCESS OF 3% PER YEAR TO AMOUNTS  ALLOCATED TO THE GUARANTEE  PERIOD
ACCOUNT.

Each amount  allocated  or  transferred  to the  guarantee  period  account will
establish a new guarantee period of a duration  selected by the owner from among
those then  being  offered by us.  Every  guarantee  period we offer will have a
duration of at least one year.  The  minimum  amount  that may be  allocated  or
transferred to a guarantee period is $1,000.  Purchase  payments  allocated to a
guarantee  period  will be  credited  on the date the payment is received at our
Service Center.  Any amount  transferred from another guarantee period or from a
variable sub-account to a guarantee period will establish a new guarantee period
as of the effective  date of the transfer.  The guarantee  period account and/or
the fixed account may not be available in all states.

GUARANTEE PERIOD

Each guarantee period will have its own guaranteed  interest rate and expiration
date. The guaranteed  interest rate applicable to a guarantee period will depend
on the date the guarantee period is established, the duration you choose and the
class of that guarantee  period. A guarantee period chosen may not extend beyond
the annuity date.
We reserve the right to limit the maximum  number of guarantee  periods that may
be in effect at any one time.

We will establish  effective annual rates of interest for each guarantee period.
The effective  annual rate of interest we establish for a guarantee  period will
remain in effect for the  duration of the  guarantee  period.  Interest  will be
credited to a guarantee  period based on its daily balance at a daily rate which
is  equivalent to the  guaranteed  interest  rate  applicable to that  guarantee
period for amounts held during the entire guarantee period.

Amounts  withdrawn or transferred  from a guarantee period before its expiration
date will be subject to an interest  adjustment as described  below. In no event
will the effective  annual rate of interest  applicable to a guarantee period be
less than 3% per year.

INTEREST ADJUSTMENT

If any amount is withdrawn or  transferred  from a guarantee  period  before its
expiration  date,  excluding  withdrawals  for the  purpose  of paying the death
benefit,  the amount  withdrawn  or  transferred  will be subject to an interest
adjustment.  The interest  adjustment reflects the impact that changing interest
rates have on the value of money invested at a fixed interest rate. The interest
adjustment is computed by multiplying the amount withdrawn or transferred by the
following factor:

[(1 + I) divided by (1 + J + 0.005)]N/12 -1 where:

     I   is the guaranteed interest rate in effect;

     J is the current  interest rate  available for a period equal to the number
     of years  remaining in the  guarantee  period at the time of  withdrawal or
     transfer; fractional years are rounded up to the next full year; and

N    is the  number  of  full  months  remaining  in the  term at the  time  the
     withdrawal or transfer request is processed

In general,  the  interest  adjustment  will  operate to decrease the value upon
withdrawal  or transfer  when the  guaranteed  interest  rate in effect for that
allocation  is  lower  than the  current  interest  rate,  as of the date of the
transaction, that would apply for a guarantee period equal to the number of full
years  remaining  in the  guarantee  period as of that  date.  For  purposes  of
determining the interest  adjustment,  if we do not offer a guarantee  period of
that duration, the applicable current interest rate will be determined by linear
interpolation between current interest rates for the two time periods closest to
the duration  remaining  that are available.  If the current  interest rate thus
determined plus 1/2 of one percent is greater than the guaranteed interest rate,
the interest  adjustment  will be negative and amount  withdrawn or  transferred
will be decreased.  However, the value will never be decreased below the initial
allocation  plus daily  interest at 3% interest per year.  There are no positive
interest adjustments.

EXPIRATION OF A GUARANTEE PERIOD

At least 45 days,  but not more than 60 days,  before the  expiration  date of a
guarantee  period,  we  will  notify  you as to  the  options  available  when a
guarantee period expires. You may elect one of the following:

a)   transfer the amount held in that guarantee period to a new guarantee period
     from among those being offered by us at such time; or

b)   transfer the amount held in that guaranteed  period to one or more variable
     sub-accounts or to another general account option then available.

We must receive your notice  electing one of these at our Service  Center by the
expiration date of the guarantee  period. If such election has not been received
by us at our  Service  Center,  the amount  held in that  guarantee  period will
remain in the  guaranteed  period  account.  A new guarantee  period of the same
duration as the expiring  guarantee  period, if offered,  will  automatically be
established  by us with a new  guaranteed  interest rate declared by us for that
guarantee  period.  The new guarantee period will start on the day following the
expiration date of the previous guarantee period.

If we are not currently  offering a guarantee period having the same duration as
the expiring  guarantee period, the new guarantee period will be the next longer
duration,  or if we are not offering a guarantee period longer than the duration
of the  expiring  guarantee  period,  the next  shorter  duration.  However,  no
guarantee period can extend beyond the annuity date.

If the amount  held in an  expiring  guarantee  period is less than  $1,000,  we
reserves  the  right to  transfer  such  amount  to the  money  market  variable
sub-account.


<PAGE>


APPENDIX B

EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATIONS

Suppose the net asset  value per share of a portfolio  at the end of the current
valuation period is $20.15;  at the end of the immediately  preceding  valuation
period it was $20.10;  the  valuation  period is one day;  and no  dividends  or
distributions  caused the  portfolio  to go  "ex-dividend"  during  the  current
valuation period. $20.15 divided by $20.10 is 1.002488.

Subtracting  the one day risk factor for  mortality  and expense risk charge and
the  administrative  expense  charge of  .00367%  (the daily  equivalent  of the
current  charge of 1.35% on an annual  basis) gives a net  investment  factor of
1.00245.

If the value of the variable  accumulation  unit for the  immediately  preceding
valuation period had been 15.500000,  the value for the current valuation period
would be 15.53798 (15.5 x 1.00245).

EXAMPLE OF VARIABLE ANNUITY UNIT VALUE CALCULATIONS

Suppose  the  circumstances  of the  first  example  exist,  and the  value of a
variable  annuity unit for the immediately  preceding  valuation period had been
13.500000.

If the first variable  annuity payment is determined by using an annuity payment
based on an  assumed  interest  rate of 4% per year,  the value of the  variable
annuity unit for the current  valuation period would be 13.53163 (13.5 x 1.00245
(the net investment factor) x 0.999893).

 0.999893 is the factor,  for a one day valuation  period,  that neutralizes the
assumed  rate of four  percent  (4%) per year  used to  establish  the  variable
annuity rates found in the contract.



EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATIONS

Suppose  that the  account is  currently  credited  with  3,200.000000  variable
accumulation units of a particular variable sub-account.

Also suppose that the variable  accumulation unit value and the variable annuity
unit value for the  particular  variable  sub-account  for the valuation  period
which ends  immediately  preceding  the first day of the month is 15.500000  and
13.500000  respectively,  and that  the  variable  annuity  rate for the age and
elected is $5.73 per $1,000.

Then the first variable annuity payment would be:

3,200 x 15.5 x 5.73 divided by 1,000 = $284.21,

and the number of variable annuity units credited for future payments would be:

284.21 divided by 13.5 = 21.052444.

For the second monthly payment,  suppose that the variable annuity unit value on
the 10th day of the second month is 13.565712.  Then the second variable annuity
payment would be

$285.59 (21.052444 x 13.565712).


<PAGE>


APPENDIX C

CONDENSED FINANCIAL INFORMATION

Certain of the following  condensed  financial  information  is derived from the
financial  statements  of the  variable  account.  You  should  read the data in
conjunction  with the financial  statements,  related notes, and other financial
information included in the Statement of Additional Information.

The following table sets forth certain  information  regarding the  sub-accounts
for the period from January 1, 1998,  the  inception  of the  variable  account,
through  December 31, 1999. The variable  account received its first deposits on
January 12, 1998.  The MDSW Emerging  Markets Equity  sub-account  and the PIMCO
StocksPLUS  Growth & Income  sub-account  commenced on  September  7, 1999.  The
variable  accumulation unit values and the number of variable accumulation units
outstanding for each sub-account for the periods shown are as follows:


<PAGE>

<TABLE>
<CAPTION>




                         PERIOD ENDING DECEMBER 31, 1999


                       Alger American       Alliance VP         Alliance VP        Dreyfus VIF         Dreyfus VIF
                       Income & Growth    Growth & Income     Premier Growth         Capital            Small Cap
                         Sub-Account        Sub-Account         Sub-Account        Appreciation        Sub-Account
                                                                                   Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
<S>                        <C>                 <C>                <C>                 <C>                 <C>
  Value at Beginning       $13.12              $11.88             $14.46              $12.73              $9.57
  of Period
Accumulation Unit
  Value at End of          $18.45              $13.05             $18.88              $14.01             $11.63
  Period
Number of
  Accumulation Units
  Outstanding at End    1,102,496.260      1,135,587.446       2,081,825.689      1,093,808.832        639,456.014
  of Period


                         Janus Aspen     Janus Aspen Series       MFS VIT            MFS VIT             MFS VIT
                       Series Balanced    Worldwide Growth    Emerging Growth   Growth with Income      Research
                         Sub-Account        Sub-Account         Sub-Account        Sub-Account         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $13.24              $12.65             $13.21              $12.06             $12.15
  of Period
Accumulation Unit
  Value at End of          $16.55              $20.53             $23.04              $12.69             $14.87
  Period
Number of
  Accumulation Units
  Outstanding at End    1,886,693.794      1,643,533.430        760,433.531        965,409.265         399,512.466
  of Period


                           MSDW UF            MSDW UF             MSDW UF            MSDW UF        OCC Accumulation
                       Emerging Mkts.       Fixed Income        High Yield         Int'l Magnum       Trust Managed
                           Equity           Sub-Account         Sub-Account        Sub-Account         Sub-Account
                         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.60             $10.31              $10.71             $10.54
  of Period
Accumulation Unit
  Value at End of          $14.43              $10.29             $10.90              $13.23             $10.92
  Period
Number of
  Accumulation Units
  Outstanding at End     39,511.653         633,201.933         563,904.809        187,194.949         439,082.233
  of Period
                      OCC Accumulation       PIMCO VIT         Transamerica        Transamerica
                       Trust Small Cap   StocksPlus Growth      VIF Growth       VIF Money Market
                         Sub-Account          & Income          Sub-Account        Sub-Account
                                            Sub-Account
                      ------------------ ------------------- ------------------ -------------------

Accumulation Unit
  Value at Beginning        $8.97              $10.00             $14.12              $1.41
  of Period
Accumulation Unit
  Value at End of           $8.68              $10.85             $19.19              $1.07
  Period
Number of
  Accumulation Units
  Outstanding at End     101,045.650         9,289.183         3,988,508.416      8,145,374.551
  of Period



                         PERIOD ENDING DECEMBER 31, 1998

                       Alger American       Alliance VP         Alliance VP        Dreyfus VIF         Dreyfus VIF
                       Income & Growth    Growth & Income     Premier Growth         Capital            Small Cap
                         Sub-Account        Sub-Account         Sub-Account        Appreciation        Sub-Account
                                                                                   Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.00             $10.00              $10.00             $10.00
  of Period
Accumulation Unit
  Value at End of          $13.12              $11.88             $14.46              $12.73              $9.57
  Period
Number of
  Accumulation Units     309,748.942        339,540.067         427,648.138        376,620.359         275,526.474
  Outstanding at End
  of Period

                         Janus Aspen        Janus Aspen           MFS VIT            MFS VIT             MFS VIT
                          Balanced        Worldwide Growth    Emerging Growth   Growth with Income      Research
                         Sub-Account        Sub-Account         Sub-Account        Sub-Account         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.00             $10.00              $10.00             $10.00
  of Period
Accumulation Unit
  Value at End of          $13.24              $12.65             $13.21              $12.06             $12.15
  Period
Number of
  Accumulation Units     368,928.321        450,342.300         298,213.933        342,844.524         151,312.906
  Outstanding at End
  of Period

                           MSDW UF            MSDW UF             MSDW UF        OCC Accumulation   OCC Accumulation
                        Fixed Income         High Yield        Int'l Magnum       Trust Managed      Trust Small Cap
                         Sub-Account        Sub-Account         Sub-Account        Sub-Account         Sub-Account
                      ------------------ ------------------- ------------------ ------------------- ------------------

Accumulation Unit
  Value at Beginning       $10.00              $10.00             $10.00              $10.00             $10.00
  of Period
Accumulation Unit
  Value at End of          $10.60              $10.31             $10.71              $10.54              $8.97
  Period
Number of
  Accumulation Units     259,236.465        272,870.757         94,555.328         199,167.982         47,897.168
  Outstanding at End
  of Period


                        Transamerica        Transamerica
                         VIF Growth       VIF Money Market
                         Sub-Account        Sub-Account
                      ------------------ -------------------

Accumulation Unit
  Value at Beginning       $10.00              $1.00
  of Period
Accumulation Unit
  Value at End of          $14.12              $1.41
  Period
Number of
  Accumulation Units    1,424,841.423      4,129,893.964
  Outstanding at End
  of Period

</TABLE>


<PAGE>




APPENDIX D

DEFINITIONS

ACCOUNT VALUE: The sum of the variable accumulated value and the general account
options accumulated value.

ANNUITY DATE: The date on which the annuitization phase of the contract begins.

CASH  SURRENDER  VALUE:  The amount we will pay to the owner if the  contract is
surrendered on or before the annuity date. The cash surrender value is equal to:
the  account  value;  LESS any  account  fee,  interest  adjustment,  contingent
deferred sales load, and premium tax charges.

CODE:  The  Internal  Revenue  Code of  1986,  as  amended,  and the  rules  and
regulations issued under it.

CONTINGENT  DEFERRED  SALES LOAD:  A charge  equal to a  percentage  of purchase
payments  withdrawn  from the  contract  that are less than seven years old. See
Contingent  Deferred  Sales  Load/Surrender  Charge on page 33 for the  specific
percentages.

CONTRACT ANNIVERSARY: The anniversary of the contract effective date each year.

CONTRACT  EFFECTIVE  DATE:  The  effective  date of the contract as shown in the
contract.

CONTRACT  YEAR: A 12-month  period  starting on the contract  effective date and
ending with the day before the contract  anniversary,  and each 12-month  period
thereafter.

FIXED  ACCOUNT:  An account  which credits a rate of interest for a period of at
least twelve months for each allocation or transfer.

GENERAL ACCOUNT: The assets of Transamerica that are not allocated to a separate
account.

GENERAL  ACCOUNT  OPTIONS:  The fixed account and the guarantee  period  account
offered by us to which the owner may allocate purchase payments and transfers.

GENERAL ACCOUNT OPTIONS ACCUMULATED VALUE: The total dollar value of all amounts
the owner allocates or transfers to any general account  options;  PLUS interest
credited;  LESS any amounts  withdrawn,  applicable fees or premium tax charges,
and/or transfers out to the variable account before the annuity date.

GUARANTEED  INTEREST  RATE:  The annual  effective  rate of interest after daily
compounding credited to a guarantee period.

GUARANTEE PERIOD: The number of years that a guaranteed rate of interest will be
credited to a guarantee period.

GUARANTEE PERIOD ACCOUNT: An account which credits a guaranteed rate of interest
for a specified guarantee period. There may be several guarantee periods offered
under the guarantee  period  account,  each with a different  guaranteed rate of
interest.

GUARANTEED  MINIMUM DEATH BENEFIT  RIDER:  Also called a GMDB Rider,  it must be
elected  before  the  contract  effective  date and  provides  for the  benefits
described on page 31 at the fee described on page 7. If cancelled,  it cannot be
reelected.

LIVING BENEFITS RIDER: Also called a "Waiver of Contingent  Deferred Sales Load"
rider in some contracts, it provides benefits described on page 32.

PORTFOLIO:  The investment  portfolio  underlying  each variable  sub-account in
which  we  will  invest  any  amounts  the  owner  allocates  to  that  variable
sub-account.

SERVICE  CENTER:  Transamerica's  Annuity  Service  Center,  at P.O.  Box 31848,
Charlotte, North Carolina 28231-1848, telephone 877-717-8861.  Effective June 5,
2000, our address will change to P.O. Box 3183, Cedar Rapids, Iowa 52406-3183.

STATUS,  QUALIFIED AND NON-QUALIFIED:  The contract has a qualified status if it
is issued in connection with a retirement plan or program. Otherwise, the status
is non-qualified.

SURRENDER CHARGE: See CONTINGENT DEFERRED SALES LOAD.

VALUATION  DAY: Any day the New York Stock  Exchange is open.  To determine  the
value of an asset on a day that is not a valuation day, we will use the value of
that asset as of the end of the next valuation day.

VALUATION PERIOD: The time interval between the closing, which is generally 4:00
p.m. Eastern Time of the New York Stock Exchange on consecutive valuation days.

VARIABLE  ACCOUNT:  Separate  Account VA-6, a separate  account  established and
maintained  by  Transamerica  for the  investment  of a  portion  of its  assets
pursuant to Section 58-7-95 of the North Carolina Insurance Code.

VARIABLE  ACCUMULATION  UNIT: A unit of measure  used to determine  the variable
accumulated value before the annuity date. The value of a variable  accumulation
unit varies with each variable sub-account.


VARIABLE ACCUMULATED VALUE: The total dollar value of all variable  accumulation
units under the contract before the annuity date.

VARIABLE  SUB-ACCOUNT(S):  One or more  divisions of the variable  account which
invests solely in shares of one of the underlying portfolios.


<PAGE>





APPENDIX E

TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY

DISCLOSURE STATEMENT
FOR INDIVIDUAL RETIREMENT ANNUITIES

The following  information  is being  provided to you, the owner,  in accordance
with the  requirements of the Internal  Revenue  Service (IRS).  This Disclosure
Statement  contains  information  about  opening and  maintaining  an Individual
Retirement  Account or Annuity (IRA),  and summarizes  some of the financial and
tax consequences of establishing an IRA.

Part I of this Disclosure  Statement  discusses  Traditional IRAs, while Part II
addresses Roth IRAs.  Because the tax consequences of the two categories of IRAs
differ  significantly,  it is important that you review the correct part of this
Disclosure  Statement  to learn  about  your  particular  IRA.  This  Disclosure
Statement does not discuss Education IRAs or SIMPLE-IRAs, except as necessary in
the context of discussing other types of IRAs.

Your  Transamerica Life Insurance and Annuity  Company's  Individual  Retirement
Annuity, also referred to as a Transamerica Life IRA Contract, has been approved
as to  form  by the  IRS.  In  addition,  we are  using  an IRA  and a Roth  IRA
Endorsement  based on the  IRS-approved  text.  Please  note  that IRS  approval
applies only to the form of the contract and does not represent a  determination
of the merits of such IRA contract.

It may be  necessary  for us to  amend  your  Transamerica  Life IRA or Roth IRA
Contract  in  order  for us to  obtain  or  maintain  IRS  approval  of its  tax
qualification.  In  addition,  laws and  regulations  adopted  in the future may
require  changes to your  contract in order to preserve its status as an IRA. We
will send you a copy of any such amendment.

No contribution to a Transamerica  Life IRA will be accepted under a SIMPLE plan
established by any employer pursuant to Internal Revenue Code Section 408(p). No
transfer or rollover of funds  attributable to contributions made by an employer
to your SIMPLE IRA under the employer's SIMPLE plan may be transferred or rolled
over to your  Transamerica Life IRA before the expiration of the two year period
beginning on the date you first  participated in the employer's  SIMPLE plan. In
addition, depending on the annuity contract you purchased, contributory IRAs may
or may not be available.

This Disclosure Statement includes the non-technical  explanation of some of the
changes  made by the Tax Reform Act of 1986  applicable  to IRAs and more recent
changes  made by the Small  Business  Job  Protection  Act of 1996,  the  Health
Insurance Portability and Accountability Act of 1996, the Tax Relief Act of 1997
and the IRS Restructuring and Reform Act of 1998.

The  information  provided  applies  to  contributions  made  and  distributions
received after  December 31, 1986,  and reflects the relevant  provisions of the
Code as in effect on January 1, 2000. This Disclosure  Statement is not intended
to constitute tax advice,  and you should consult a tax professional if you have
questions about your own circumstances.

REVOCATION OF YOUR IRA OR ROTH IRA

You have the  right to  revoke  your  Traditional  IRA or Roth IRA  issued by us
during  the  seven  calendar  day  period  following  its   establishment.   The
establishment  of your Traditional IRA or Roth IRA contract will be the contract
effective  date. This seven day calendar period may or may not coincide with the
free look period of your contract.

In order to  revoke  your  Traditional  IRA or Roth IRA,  you must  notify us in
writing and you must mail or deliver your revocation to us postage prepaid,  at:
401 North Tryon Street,  Charlotte,  NC 28202. The date of the postmark,  or the
date of  certification  or registration if sent by certified or registered mail,
will be considered your revocation  date. If you revoke your  Traditional IRA or
Roth IRA during the seven day period,  an amount  equal to your  premium will be
returned to you without any adjustment.

DEFINITIONS

CODE -  Internal  Revenue  Code of 1986,  as  amended,  and  regulations  issued
thereunder.

CONTRIBUTIONS - Purchase payments paid to your contract.


CONTRACT - The annuity policy, certificate or contract which you purchased.

COMPENSATION - For purposes of  determining  allowable  contributions,  the term
compensation   includes  all  earned   income,   including   net  earnings  from
self-employment  and alimony or separate  maintenance  payments received under a
decree of divorce or separate  maintenance  and includable in your gross income,
but does not include  deferred  compensation or any amount received as a pension
or annuity.

REGULAR CONTRIBUTIONS - IN GENERAL

As is more fully discussed  below,  for 1998 and later years,  the maximum total
amount that you may  contribute  for any tax year to your  regular IRAs and your
regular Roth IRAs combined is $2,000,  or if less,  your  compensation  for that
year.  Once you attain  age 70 1/2,  this limit is reduced to zero only for your
regular  IRAs,  not for  your  Roth  IRAs,  but the  separate  limit on Roth IRA
contributions  can be reduced to zero for taxpayers  with adjusted gross income,
or AGI, above certain  levels,  as described  below in Part II, Section 1. While
your Roth IRA contributions are never deductible, your regular IRA contributions
are fully deductible,  unless you, or your spouse,  is an active  participant in
some form of tax-qualified retirement plan for the tax year. In the latter case,
any  deductible  portion  of your  regular  IRA  contributions  for each year is
subject to the limits  that are  described  below in Part I,  Section 2, and any
remaining regular IRA contributions for that year must be reported to the IRS as
nondeductible IRA contributions, along with your Roth IRA contributions.

IRA PART I: TRADITIONAL IRAS

The rules that apply to a Traditional  Individual Retirement Account or Annuity,
which is referred  to in this  Disclosure  Statement  simply as an "IRA" or as a
"Traditional  IRA" and which  includes a regular  or Spousal  IRA and a rollover
IRA,  generally also apply to IRAs under  Simplified  Employee  Pension plans or
SEP-IRAs, unless specific rules for SEP-IRAs are stated.

1. CONTRIBUTIONS

(A) REGULAR IRA.  Regular IRA  contributions  must be in cash and are subject to
the limits described above.  Such  contributions are also subject to the minimum
amount under the  Transamerica  IRA contract.  In addition,  any of your regular
contributions  to an IRA for a tax  year  must be  made  by the  due  date,  not
including  extensions,  for your federal tax return for that tax year.  See also
Part II, Section 4 below about  recharacterizing  IRA and Roth IRA contributions
by such date.

 (B) SPOUSAL IRA. If you and your spouse file a joint federal  income tax return
for the taxable year and if your spouse's  compensation,  if any,  includable in
gross income for the year is less than the compensation includable in your gross
income for the year,  you and your spouse may each  establish  your own separate
regular  IRA,  and Roth IRA,  and may make  contributions  to such IRAs for your
spouse  that are not  limited by your  spouse's  lower  amount of  compensation.
Instead,  the limit for the total  contribution to spousal IRAs that can be made
by you or your spouse for the tax year is:

1.       $2,000; or

2.   if less,  the  total  combined  compensation  for both you and your  spouse
     reduced by any deductible IRA  contributions and any Roth IRA contributions
     for such year.

As with any regular IRA contributions,  those for your spouse cannot be made for
any tax year in which your spouse has attained age 70 1/2, must be in cash,  and
must be made by the due date, not including extensions,  for your federal income
tax return for that tax year.

(C) ROLLOVER IRA.  Rollover  contributions to a Traditional IRA are unlimited in
dollar   amount.   These  can  include   rollover   contributions   of  eligible
distributions  received by you from  another  Traditional  IRA or  tax-qualified
retirement plan.  Generally,  any distribution  from a tax-qualified  retirement
plans,  such as a pension or profit sharing plan, Code Section 401(k) plan, H.R.
10 or Keogh plan, or a Traditional  IRA can be rolled over to a Traditional  IRA
unless it is a  required  minimum  distribution  as  discussed  below in Part I,
Section  4(a) or it is part of a series of  payments to be paid to you over your
life,  life  expectancy or a period of at least 10 years.  In addition,  certain
hardship withdrawals and distributions of "after-tax" plan contributions,  i.e.,
amounts  which are not  subject to federal  income tax when  distributed  from a
tax-qualified retirement plan, are not eligible to be rolled over to an IRA.

If a distribution from a tax-qualified  plan or a Traditional IRA is paid to you
and you want to roll over all or part of the  eligible  distributed  amount to a
Transamerica  Life Traditional IRA, the rollover must be accomplished  within 60
days of the date you receive the amount to be rolled over. However, you may roll
over any amount from one Traditional IRA into another  Traditional IRA only once
in any 365-day period.

A timely  rollover of an eligible  distributed  amount that has been paid to you
directly will prevent its being taxable to you at the time of distribution; that
is, none of it will be  includable  in your gross income until you withdraw some
amount from your rollover IRA. However,  any such  distribution  directly to you
from a  tax-qualified  retirement  plan is generally  subject to a mandatory 20%
withholding tax.

By  contrast,  a  direct  transfer  from a  tax-qualified  retirement  plan to a
Traditional  IRA is  considered  a "direct"  rollover  and is not subject to any
mandatory  withholding  tax,  or other  federal  income  tax,  upon  the  direct
transfer.  If you elect to make such a "direct"  rollover  from a  tax-qualified
plan to a Transamerica  Life  Traditional  IRA, the  transferred  amount will be
deposited directly into your rollover IRA.

Strict limitations apply to rollovers,  and you should seek competent tax advice
in order to comply with all the rules governing rollovers.

(D) DIRECT  TRANSFERS FROM ANOTHER  TRADITIONAL  IRA. You may make an initial or
subsequent  contribution to your  Transamerica Life Traditional IRA by directing
the fiduciary or issuer of any of your  existing IRAs to make a direct  transfer
of all or part of such IRAs in cash to your  Transamerica  Life Traditional IRA.
Such a direct transfer  between  Traditional IRAs is not considered a rollover ,
e.g., for purposes of the 1-year waiting period or withholding.

(E) SIMPLIFIED  EMPLOYEE PENSION PLAN, OR SEP-IRA. If an IRA is established that
meets the  requirements of a SEP-IRA,  generally your employer may contribute an
amount not to exceed the lesser of 15% of your includable compensation ($160,000
for 1999, adjusted for inflation  thereafter) or $30,000,  even after you attain
age 70 1/2. The amount of such contribution is not includable in your income for
federal income tax purposes.  In the case of a SEP-IRA that has a  grandfathered
qualifying  form  of  salary  reduction,  referred  to  as a  SARSEP,  that  was
established  by an employer  before 1997,  generally any  employee,  including a
self-employed individual, who:

1.       has worked for the employer for 3 of the last 5 preceding tax years;

2.       is at least age 21; and

3.   has  received  from the  employer  compensation  of at  least  $400 for the
     current tax year, adjusted for inflation after 2000;

is eligible to make a before tax salary reduction contribution to the SARSEP for
the  current  tax year of up to  $10,500,  adjusted  for  inflation  after 2000,
subject to the overall limits for SEP-IRA contributions.

Your  employer is not  required to make a SEP-IRA  contribution  in any year nor
make the same percentage  contribution each year. But if contributions are made,
they  must be made to the  SEP-IRA  for all  eligible  employees  and  must  not
discriminate in favor of highly  compensated  employees.  If these rules are not
met, any SEP-IRA  contributions  by the employer  could be treated as taxable to
the employees and could result in adverse tax consequences to the  participating
employee.  For further  details about SARSEPs and SEP-IRAs,  e.g., for computing
contribution limits for self-employed  individuals,  see IRS Publication 590, as
indicated below.

(F) RESPONSIBILITY OF THE OWNER.  Contributions,  rollovers, or transfers to any
IRA must be made in accordance with the appropriate  sections of the Code. It is
your full and sole  responsibility  to determine  the tax  deductibility  of any
contribution  to  your  Traditional  IRA,  and to  make  such  contributions  in
accordance with the Code.  Transamerica does not provide tax advice, and assumes
no liability for the tax consequences of any  contribution to your  Transamerica
Life Traditional IRA.

2. DEDUCTIBILITY OF CONTRIBUTIONS FOR A REGULAR IRA

(A) GENERAL  RULES.  The  deductible  portion of the  contributions  made to the
regular IRAs for you, or your spouse,  for a tax year depends on whether you, or
your  spouse,  is an  "active  participant"  in  some  type  of a  tax-qualified
retirement plan for such year, as described in Section 2(b) immediately below.

If you and your spouse file a joint  return for a tax year and neither of you is
an active  participant for such year, then the permissible  contributions to the
regular IRAs for each of you are fully  deductible up to $2,000 each, i.e., your
combined deductible IRA contribution limit for the tax year could be $4,000.

Similarly,  if you are not married, or treated as such, for the tax year and you
are not an active  participant for such year, the permissible  contributions  to
your  regular  IRAs for the tax year are  fully  deductible  up to  $2,000.  For
instance,  if you and your spouse file separate returns for the tax year and you
did not live together at any time during such tax year,  then you are treated as
unmarried for such year, and if you were not an active  participant  for the tax
year,  then your deductible  limit for your regular IRA  contribution is $2,000,
even if your spouse was an active participant for such year.

If you are an active  participant  for the tax year,  then your $2,000  limit is
subject to a phase-out rule if your AGI for such year exceeds a Threshold Level,
depending on your tax filing status and the calendar year. If, however,  you are
not an active  participant for the tax year but your spouse is, then your $2,000
limit  is  subject  to the  phase-out  rule  only if your AGI  exceeds  a higher
Threshold Level. See Part I, Section 2(c), below.

(B)  ACTIVE  PARTICIPANT.  You  are an  "active  participant"  for a year if you
participate in some type of tax-qualified  retirement plan. For example,  if you
participate in a qualified pension or profit sharing plan,

a  Code  Section  401(k)  plan,   certain   government  plans,  a  tax-sheltered
arrangement  under Code  Section 403, a SIMPLE plan or a SEP-IRA  plan,  you are
considered  to be an  active  participant.  Your  Form W-2 for the  year  should
indicate your participation status.

(C) ADJUSTED GROSS INCOME,  OR AGI. If you are an active  participant,  you must
look at your  AGI for the  year,  or if you and  your  spouse  file a joint  tax
return,  you use  your  combined  AGI,  to  determine  whether  you  can  make a
deductible IRA contribution for that taxable year. The instructions for your tax
return will show you how to calculate  your AGI for this purpose.  If you are at
or below a certain AGI level,  called the Threshold Level, you are treated as if
you were not an active  participant  and you can make a deductible  contribution
under the same rules as a person who is not an active participant.

If you are an active  participant  for the tax year,  then your Threshold  Level
depends upon whether you are a married  taxpayer  filing a joint tax return,  an
unmarried  taxpayer,  or a married taxpayer filing a separate tax return. If you
are a married  taxpayer but file a separate tax return,  the Threshold  Level is
$0. If you are a married  taxpayer  filing a joint tax return,  or an  unmarried
taxpayer,  your  Threshold  Level  depends  upon the  taxable  year,  and can be
determined using the appropriate table below:


<PAGE>
<TABLE>
<CAPTION>



- -------------------------------------------------------------------------------------------------------------------

         MARRIED FILING JOINTLY                               UNMARRIED

         TAXABLE      THRESHOLD                               TAXABLE        THRESHOLD
         YEAR         LEVEL                                   YEAR           LEVEL

<S>      <C>          <C>                                     <C>             <C>
         1999         $51,000                                 1999            $31,000
         2000         $52,000                                 2000            $32,000
         2001         $53,000                                 2001            $33,000
         2002         $54,000                                 2002            $34,000
         2003         $60,000                                 2003            $40,000
         2004         $65,000                                 2004            $45,000
         2005         $70,000                                 2005 and
         2006         $75,000                                  thereafter     $50,000
         2007 and
              thereafter   $80,000
- -------------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>


If you are not an active  participant  for the tax year but your  spouse is, and
you are not treated as unmarried for filing purposes,  then your Threshold Level
is $150,000.

If your AGI is less than  $10,000  above your  Threshold  Level,  or $20,000 for
married  taxpayers  filing  jointly for the taxable  year  beginning on or after
January 1, 2007, you will still be able to make a deductible  contribution,  but
it will be  limited  in  amount.  The  amount  by which  your AGI  exceeds  your
Threshold  Level is called your Excess AGI. The Maximum  Allowable  Deduction is
$2,000, even for Spousal

IRAs. You can calculate your Deduction Limit as follows:

10,000 - Excess AGI  X                     Maximum Allowable   =  Deduction
      10,000                Deduction =       Limit

For taxable  years  beginning  on or after  January 1, 2007,  married  taxpayers
filing  jointly  should  substitute  20,000  for  10,000  in the  numerator  and
denominator of the above equation.

You must round up any computation of the Deduction Limit to the next highest $10
level,  that is, to the next highest number which ends in zero. For example,  if
the result is $1,525,  you must  round it up to $1,530.  If the final  result is
below $200 but above zero,  your Deduction  Limit is $200.  Your Deduction Limit
cannot in any event exceed 100% of your compensation.

3. NONDEDUCTIBLE CONTRIBUTIONS TO REGULAR IRAS

The amounts of your regular IRA  contributions  which are not deductible will be
nondeductible  contributions  to  such  IRAs.  You  may  also  choose  to make a
nondeductible  contribution to your regular IRA, even if you could have deducted
part or all of the contribution.  Interest or other earnings on your regular IRA
contributions,  whether from deductible or nondeductible contributions, will not
be taxed until taken out of your IRA and distributed to you.

If you make a  nondeductible  contribution to an IRA, you must report the amount
of the  nondeductible  contribution  to the IRS as a part of your tax return for
the year, e.g., on Form 8606.

4. DISTRIBUTIONS

(A) REQUIRED MINIMUM DISTRIBUTIONS,  OR RMD. Distributions from your Traditional
IRAs must be made or begin no later than April 1 of the calendar year  following
the calendar year in which you attain age 70 1/2, the required  beginning  date.
You may take RMDs from any Traditional  IRA you maintain,  but not from any Roth
IRA, as long as:

1.       distributions begin when required;

2.       distributions are made at least once a year; and

3.   the amount to be  distributed  is not less than the minimum  required under
     current federal tax law.

If you own more than one  Traditional  IRA, you can choose  whether to take your
RMD from one  Traditional  IRA or a  combination  of your  Traditional  IRAs.  A
distribution  may  be  made  at  once  in a  lump  sum,  as  qualifying  partial
withdrawals or as qualifying  settlement  option  payments.  Qualifying  partial
withdrawals   and  settlement   option   payments  must  be  made  in  equal  or
substantially equal amounts over:

1.       your life or the joint lives of you and your beneficiary; or

2.   a period not exceeding your life expectancy, as redetermined annually under
     IRS tables in the income tax  regulations,  or the joint life expectancy of
     you and your beneficiary,  as redetermined annually, if that beneficiary is
     your spouse.

Also,  special rules may apply if your designated  beneficiary,  other than your
spouse, is more than ten years younger than you.

If qualifying  settlement option payments start before the April 1 following the
year you  turn  age 70 1/2,  then the  annuity  date of such  settlement  option
payments will be treated as the required  beginning date for purposes of the RMD
provisions, above, and the death benefit provisions, below.

If you die before the entire interest in your Traditional IRAs is distributed to
you,  but after  your  required  beginning  date,  the entire  interest  in your
Traditional  IRAs must be distributed to your  beneficiaries at least as rapidly
as under the method in effect at your  death.  If you die before  your  required
beginning date and if you have a designated  beneficiary,  distributions to your
designated  beneficiary can be made in substantially equal installments over the
life or life expectancy of the designated beneficiary,  beginning by December 31
of the calendar  year that is one year after the year of your death.  Otherwise,
if you die before your required  beginning date and your surviving spouse is not
your designated  beneficiary,  distributions must be completed by December 31 of
the calendar year that is five years after the year of your death.

If your designated beneficiary is your surviving spouse, and you die before your
required   beginning   date,   your   surviving   spouse   can  become  the  new
owner/annuitant  and can continue the  Transamerica  Life Traditional IRA on the
same basis as before  your  death.  If your  surviving  spouse  does not wish to
continue  the  contract  as his or her IRA,  he or she may elect to receive  the
death benefit in the form of qualifying  settlement  option payments in order to
avoid the 5-year rule. Such payments must be made in substantially equal amounts
over  your  spouse's  life or a  period  not  extending  beyond  his or her life
expectancy.  Your  surviving  spouse must elect this option and begin  receiving
payments no later than the later of the following dates:

1.       December 31 of the year following the year you died; or

2.   December  31 of the year in which  you  would  have  reached  the  required
     beginning date if you had not died.

Either you or, if applicable, your beneficiary, is responsible for assuring that
the RMD is taken in a timely manner and that the correct amount is distributed.

(B)  TAXATION  OF  IRA  DISTRIBUTIONS.  Because  nondeductible  Traditional  IRA
contributions  are made using income which has already been taxed, that is, they
are  not  deductible   contributions,   the  portion  of  the   Traditional  IRA
distributions consisting of nondeductible  contributions will not be taxed again
when  received  by you.  If you make  any  nondeductible  contributions  to your
Traditional  IRAs,  each  distribution  from any of your  Traditional  IRAs will
consist of a nontaxable portion,  return of nondeductible  contributions,  and a
taxable portion, return of deductible contributions, if any, and earnings.

Thus, if you receive a distribution  from any of your  Traditional  IRAs and you
previously made deductible and nondeductible contributions to such IRAs, you may
not  take a  Traditional  IRA  distribution  which  is  entirely  tax-free.  The
following  formula  is  used  to  determine  the  nontaxable   portion  of  your
distributions for a taxable year.

    Remaining nondeductible contributions

    Divided by

   Year-end total adjusted Traditional IRA balances

    Multiplied by

    Total distributions
    for the year



    Equals:

    Nontaxable distributions
    for the year

To figure the year-end total adjusted  Traditional  IRA balance,  you must treat
all of your  Traditional  IRAs as a single  Traditional  IRA.  This includes all
regular IRAs, as well as SEP-IRAs,  SIMPLE IRAs and Rollover  IRAs, but not Roth
IRAs.  You  also add  back to your  year-end  total  Traditional  IRA  balances,
specifically the distributions taken during the year from your Traditional IRAs.
Please refer to IRS Publication  590,  Individual  Retirement  Arrangements  for
instructions,  including worksheets,  that can assist you in these calculations.
Transamerica  Life Insurance and Annuity  Company will report all  distributions
from your  Transamerica  Traditional  IRA to the IRS as fully taxable  income to
you.

Even if you withdraw all of the assets in your  Traditional  IRAs in a lump sum,
you  will  not be  entitled  to use any form of lump  sum  treatment  or  income
averaging  to reduce the  federal  income  tax on your  distribution.  Also,  no
portion  of  your  distribution  qualifies  as a  capital  gain.  Moreover,  any
distribution  made before you reach age 59 1/2,  may be subject to a 10% penalty
tax on early distributions, as indicated below.

(C) WITHHOLDING.  Unless you elect not to have withholding apply, federal income
tax will be withheld from your  Traditional  IRA  distributions.  If you receive
distributions under a settlement option, tax will be withheld in the same manner
as taxes  withheld on wages,  calculated  as if you were married and claim three
withholding allowances. If you are receiving any other type of distribution, tax
will be  withheld  in the amount of 10% of the  distribution.  If  payments  are
delivered to foreign  countries,  federal income, tax will generally be withheld
at a 10% rate unless you certify to Transamerica that you are not a U.S. citizen
residing  abroad or a tax  avoidance  expatriate as defined in Code Section 877.
Such  certification may result in mandatory  withholding of federal income taxes
at a different rate.

5. PENALTY TAXES

(A) EXCESS  CONTRIBUTIONS.  If at the end of any taxable year the total  regular
IRA  contributions  you made to your  Traditional IRAs and your Roth IRAs, other
than  rollovers  or  transfers,  exceed the  maximum  allowable  deductible  and
nondeductible  contributions for that year, the excess  contribution amount will
be subject to a  nondeductible  6% excise  penalty tax.  Such penalty tax cannot
exceed 6% of the value of your IRAs at the end of such year.

However,  if you  withdraw  the excess  contribution,  plus any  earnings on it,
before  the due date for  filing  your  federal  income  tax  return,  including
extensions, for the taxable year in which you made the excess contribution,  the
excess contribution will not be subject to the 6% penalty tax. The amount of the
excess contribution withdrawn will not be considered an early distribution,  nor
otherwise be  includible  in your gross income if you have not taken a deduction
for the excess amount.

However, the earnings withdrawn will be taxable income to you and may be subject
to  the  10%  penalty  tax  on  early   distributions.   Alternatively,   excess
contributions  for one year may be  withdrawn  in a later year or may be carried
forward as regular IRA  contributions  in the following  year to the extent that
the excess, when aggregated with your regular IRA contributions, if any, for the
subsequent  year,  does  not  exceed  the  maximum   allowable   deductible  and
nondeductible  amount for that year. The 6% excise tax will be imposed on excess
contributions  in each  subsequent  year they are  neither  returned  to you nor
applied as permissible regular IRA contributions for such year.

(B) EARLY DISTRIBUTIONS.  Since the purpose of an IRA is to accumulate funds for
retirement, your receipt or use of any portion of your IRA before you attain age
59 1/2 constitutes an early distribution subject to a 10% penalty tax unless the
distribution  occurs as a result  of your  death or  disability  or is part of a
series of  substantially  equal  payments made over your life  expectancy or the
joint life  expectancies  of you and your  beneficiary,  as determined  from IRS
tables in the income tax regulations.

Also,  the 10% penalty tax will not apply if  distributions  are used to pay for
medical expenses in excess of 7.5% of your AGI or if  distributions  are used to
pay for health insurance premiums for you, your spouse and/or your dependents if
you are an  unemployed  individual  who is receiving  unemployment  compensation
under  federal or state  programs  for at least 12  consecutive  weeks.  The 10%
penalty tax also will not apply to an early distribution made to pay for certain
qualifying  first-time  homebuyer expenses of you or certain family members,  or
for certain  qualifying  higher  education  expenses  for you or certain  family
members.

First-time  homebuyer  expenses must be paid within 120 days of the distribution
from the IRA and include up to $10,000 of the costs of acquiring,  constructing,
or  reconstructing  a principal  residence,  including  any usual or  reasonable
settlement,  financing or other closing costs. Higher education expenses include
tuition,   fees,  books,   supplies,  and  equipment  required  for  enrollment,
attendance, and room and board at a post-secondary educational institution.  The
amount  of an  early  distribution,  excluding  any  nondeductible  contribution
included  therein,  is includable in your gross income and may be subject to the
10% penalty tax unless you transfer it to another IRA as a  qualifying  rollover
contribution.

Effective  January 1, 2000, the 10% penalty tax will not apply if  distributions
are made pursuant to an IRS levy to pay your outstanding tax liability.

(C) FAILURE TO SATISFY RMD. If the RMD rules  described above in Part I, Section
4(a) apply to you and if the amount  distributed  during a calendar year is less
than the minimum  amount  required to be  distributed,  you will be subject to a
penalty tax equal to 50% of the excess of the amount  required to be distributed
over the amount actually distributed.

(D) POLICY LOANS AND PROHIBITED  TRANSACTIONS.  If you or any beneficiary engage
in any  prohibited  transaction,  such as any sale,  exchange  or leasing of any
property  between  you and the  Traditional  IRA, or any  interference  with the
independent  status of such IRA, the Traditional IRA will lose its tax exemption
and be  treated  as having  been  distributed  to you.  The value of the  entire
Traditional IRA,  excluding any  nondeductible  contributions  included therein,
will be includable in your gross income;  and, if at the time of the  prohibited
transaction you are under age 59 1/2, you may also be subject to the 10% penalty
tax on early distributions, as described above in Part I, Section 5(b).

If you borrow from or pledge your  Traditional  IRA, or your benefits  under the
contract,  as security for a loan,  the portion  borrowed or pledged as security
will cease to be  tax-qualified,  the value of that  portion  will be treated as
distributed  to you,  and you will  have to  include  the  value of the  portion
borrowed  or  pledged as  security  in your  income  that year for  federal  tax
purposes. You may also be subject to the 10% penalty tax on early distributions.

(E)  OVERSTATEMENT  OR  UNDERSTATEMENT  OF NONDEDUCTIBLE  CONTRIBUTIONS.  If you
overstate  your  nondeductible  Traditional  IRA  contributions  on your federal
income tax return,  without  reasonable cause, you may be subject to a reporting
penalty.  Such a penalty also  applies for failure to file any form  required by
the IRS to report nondeductible  contributions.  These penalties are in addition
to any ordinary income or penalty taxes,  interest,  and penalties for which you
may be liable if you underreport  income upon receiving a distribution from your
Traditional  IRA. See Part I,  Section 4(b) above for the tax  treatment of such
distributions.

IRA PART II: ROTH IRAS

1. CONTRIBUTIONS

(A) REGULAR  ROTH IRA. You may make  contributions  to a regular Roth IRA in any
amount up to the  contribution  limits  described in Part II,  Section 3, below.
Such contributions are also subject to the minimum amount under the Transamerica
Life Roth IRA contract. Such contribution must be in cash. Your contribution for
a tax year  must be made by the due date,  not  including  extensions,  for your
federal income tax return for that tax year.  Unlike  Traditional  IRAs, you may
continue making Roth IRA  contributions  after reaching age 70 1/2 to the extent
that your AGI does not exceed the levels described below.

(B) SPOUSAL  ROTH IRA. If you and your  spouse file a joint  federal  income tax
return  for  the  taxable  year  and if  your  spouse's  compensation,  if  any,
includable in gross income for the year is less than the compensation includable
in your gross income for the year,  you and your spouse may each  establish your
own  individual  Roth  IRA and may make  contributions  to  those  Roth  IRAs in
accordance  with the rules and limits for  contributions  contained in the Code,
which are described in Part II, Section 3, below. Such  contributions must be in
cash. Your contribution to a Spousal Roth IRA for a tax year must be made by the
due date, not including extensions,  for your federal income tax return for that
tax year.

(C) ROLLOVER ROTH IRA. You may make  contributions to a Rollover Roth IRA within
60 days after  receiving a  distribution  from an existing Roth IRA,  subject to
certain limitations discussed in Part II, Section 3, below.

(D) TRANSFER  ROTH IRA. You may make an initial or  subsequent  contribution  to
your  Transamerica  Life Roth IRA by  directing a fiduciary  or issuer of any of
your  existing  Roth IRAs to make a direct  transfer  of all or a portion of the
assets from such Roth IRAs to your Transamerica Life Roth IRA.

(E) CONVERSION  ROTH IRA. You may make  contributions  to a Conversion  Roth IRA
within 60 days of receiving a distribution  from an existing  Traditional IRA or
by instructing the fiduciary or issuer of any of your existing  Traditional IRAs
to  make a  direct  transfer  of all or a  portion  of the  assets  from  such a
Traditional  IRA  to  your  Transamerica  Life  Roth  IRA,  subject  to  certain
restrictions and subject to income tax on some or all of the converted  amounts.
If your AGI, not including the conversion  amount,  is greater than $100,000 for
the tax year,  or if you are married and you and your spouse file  separate  tax
returns,  you may not convert or transfer any amount from a Traditional IRA to a
Roth IRA.

(F)  RESPONSIBILITY  OF  THE  OWNER.  Contributions,   rollovers,  transfers  or
conversions  to a Roth  IRA  must be made in  accordance  with  the  appropriate
sections  of  the  Code.  It is  your  full  and  sole  responsibility  to  make
contributions  to your Roth IRA in accordance with the Code.  Transamerica  Life
Insurance  and Annuity  Company  does not  provide  tax  advice,  and assumes no
liability for the tax consequences of any contribution to your Roth IRA.

2. DEDUCTIBILITY OF CONTRIBUTIONS

Your Roth IRA  permits  only  nondeductible  after-tax  contributions.  However,
distributions  from your Roth IRA are  generally  not subject to federal  income
tax. See Part II, 4(b) below.  This is unlike a Traditional  IRA,  which permits
deductible  and  nondeductible  contributions,  but  which  provides  that  most
distributions are subject to federal income tax.

3. CONTRIBUTION LIMITS

Contributions  for each  taxable year to all  Traditional  and Roth IRAs may not
exceed the lesser of 100% of your  compensation or $2,000 for any calendar year,
subject  to AGI  phase-out  rules  described  below in Section  3(a).  Rollover,
transfer and  conversion  contributions,  if properly made, do not count towards
your maximum  annual  contribution  limit,  nor do employer  contributions  to a
SEP-IRA or SIMPLE IRA.

(A) REGULAR ROTH IRAS.  The maximum  amount you may contribute to a regular Roth
IRA will depend on the amount of your AGI for the  calendar  year.  Your maximum
$2,000  contribution  limit begins to phase out when your AGI reaches $95,000 as
unmarried or $150,000 when married  filing  jointly.  Under this phase out, your
maximum  regular Roth IRA  contributions  generally  will not be less than $200;
however, no contribution is allowed if your AGI exceeds $110,000 as unmarried or
$160,000 when married filing jointly. If you are married and you and your spouse
file separate tax returns, your maximum regular Roth IRA contribution phases out
between $0 and  $10,000.  If you are married but you and your spouse lived apart
for the entire taxable year and file separate  federal income tax returns,  your
maximum  contribution  is  calculated  as if you were not  married.  You  should
consult your tax adviser to determine your maximum contribution.

You may make  contributions  to a regular Roth IRA after age 70 1/2,  subject to
the phase-out  rules.  Regular Roth IRA  contributions  for a tax year should be
reported on your tax return for that year, specifically, on Form 8606.

(B) SPOUSAL ROTH IRAS. Contributions to your lower-earning spouse's Spousal Roth
IRA may not exceed the lesser of:

1.   100%  of  both  spouses'  combined  compensation  minus  any  Roth  IRA  or
     deductible  Traditional  IRA  contribution  for the spouse  with the higher
     compensation for the year; or

2.   $2,000,  as reduced by the phase-out rules described above for regular Roth
     IRAs.

A maximum of $4,000 may be contributed to both spouses' Roth IRAs. Contributions
can be divided  between the spouses' Roth IRAs as you and your spouse wish,  but
no more than $2,000 in regular  Roth IRA  contributions  can be  contributed  to
either individual's Roth IRA each year.

(C) ROLLOVER  ROTH IRAS.  There is no limit on the amounts that you may rollover
from one Roth IRA into another Roth IRA,  including your  Transamerica Life Roth
IRA. You may roll over a  distribution  from any single Roth IRA to another Roth
IRA only once in any 365-day period.

(D)  TRANSFER  ROTH  IRAS.  There is no limit on amounts  that you may  transfer
directly from one Roth IRA into another Roth IRA,  including  your  Transamerica
Life Roth  IRA.  Such a direct  transfer  does not  constitute  a  rollover  for
purposes of the 1-year waiting period.
(E) CONVERSION ROTH IRAS. There is no limit on amounts that you may convert from
your Traditional IRA into your Transamerica Life Roth IRA if you are eligible to
open a Conversion Roth IRA as described in Part II, Section 1(e),  above. In the
case of a conversion  from a SIMPLE-IRA,  the  conversion may only be done after
the  expiration of your 2-year  participation  period  described in Code Section
72(t)(6).  However,  the  distribution  proceeds from your  Traditional  IRA are
includable in your taxable  income to the extent that they represent a return of
deductible  contributions  and earnings on any  contributions.  The distribution
proceeds from your Traditional IRA are not subject to the 10% early distribution
penalty tax, described below, if the distribution proceeds are deposited to your
Roth IRA within 60 days.

You can also make  contributions  to a Roth IRA by instructing  the fiduciary or
issuer,  custodian or trustee of your existing  Traditional IRAs to transfer the
assets in your  Traditional  IRAs to the Roth IRA,  which can be a successor  to
your existing  Traditional  IRAs. The transfer will be treated as a distribution
from your  Traditional  IRAs, and that amount will be includable in your taxable
income to the extent that it represents a return of deductible contributions and
earnings  on any  contributions,  but  will  not be  subject  to the  10%  early
distribution penalty tax.

If you converted  from a Traditional  IRA to a Roth IRA during 1998,  the income
reportable upon distribution from the Traditional IRA may be reportable entirely
for 1998 or reportable ratably over four years beginning in 1998.

4. RECHARACTERIZATION OF IRA CONTRIBUTIONS

(A)  ELIGIBILITY.  By making a timely  transfer and election,  you generally can
treat a contribution  made to one type of IRA as made to a different type of IRA
for a taxable year.  For example,  if you make  contributions  to a Roth IRA and
later discover that you are not eligible to make Roth IRA contributions, you may
recharacterize  all  or a  portion  of the  contribution  as a  Traditional  IRA
contribution by the filing due date,  including  extensions,  for the applicable
tax year.

You may not recharacterize  amounts paid into a Traditional IRA that represented
tax-free rollovers or transfers, or employer contributions.

(B) ELECTION.  You may elect to recharacterize a contribution amount made to one
type of IRA by simply making a trustee-to-trustee  transfer of such amount, plus
net income  attributable to it, to a second type of IRA on or before the federal
income  tax due  date,  including  extensions,  for the tax year for  which  the
contribution was initially made. After the recharacterization has been made, you
may not revoke or modify the election.

(C)  TAXATION  OF A  RECHARACTERIZATION.  For  federal  income tax  purposes,  a
recharacterized  contribution  will be treated as having been contributed to the
transferee  IRA, rather than to the transferor IRA, on the same date and for the
same tax year that the  contribution was initially made to the transferor IRA. A
recharacterized transfer is not considered a rollover for purposes of the 1-year
waiting period.

The transfer of the contribution amount being  recharacterized  must include the
net income  attributable  to such  amount.  If such amount has  experienced  net
losses  as  of  the  time  of  the   recharacterization   transfer,  the  amount
transferred,  the original  contribution  amount less any losses, will generally
constitute  a transfer  of the entire  contribution  amount.  You must treat the
contribution  amount as made to the  transferee  IRA on your federal  income tax
return for the year to which the original contribution amount related.

For  reconversions  following  a  recharacterization,  see  Publication  590 and
Treasury Regulation Section 1.408A-5.

5. DISTRIBUTIONS

(A) REQUIRED MINIMUM  DISTRIBUTION,  OR RMD. Unlike a Traditional IRA, there are
no rules that  require that any  distribution  be made to you from your Roth IRA
during your lifetime.

If you die before the entire value of your Roth IRA is  distributed  to you, the
balance of your Roth IRA must be distributed by December 31 of the calendar year
that is  five  years  after  your  death.  However,  if you  die and you  have a
designated beneficiary,  your beneficiary may elect to take distributions in the
form  of  qualifying   settlement   option  payments  in   substantially   equal
installments  over the life or life  expectancy of the  designated  beneficiary,
beginning by December 31 of the calendar year that is one year after your death.

If your  beneficiary  is your  surviving  spouse,  he or she can  become the new
owner/annuitant  and can  continue  the  Transamerica  Life Roth IRA on the same
basis as before your death.  If your surviving  spouse does not wish to continue
the  Transamerica  Life Roth IRA as his or her Roth IRA,  he or she may elect to
receive the death benefit in the form of qualifying  settlement  option payments
in order to avoid the 5-year  distribution  requirement.  Such  payments must be
made in  substantially  equal  amounts over your  spouse's  life or a period not
extending  beyond his or her life  expectancy.  Your surviving spouse must elect
this  option  and  begin  receiving  payments  no later  than  the  later of the
following dates:

1.       December 31 of the year following the year you died; or

2.       December 31 of the year in which you would have reached age 70 1/2.

Your  beneficiary is responsible  for assuring that the RMD following your death
is taken in a timely manner and that the correct amount is distributed.

(B) TAXATION OF ROTH IRA DISTRIBUTIONS.  The amounts that you withdraw from your
Roth IRA are generally  tax-free.  For federal income tax purposes,  all of your
Roth IRAs are  aggregated and Roth IRA  distributions  are treated as made first
from Roth IRA  contributions  and second from earnings.  Distributions  that are
treated  as made from Roth IRA  contributions  are  treated  as made  first from
regular  Roth IRA  contributions,  which are always  tax-free,  and second  from
conversion or rollover Roth IRA contributions on a first-in,  first-out basis. A
distribution   allocable  to  a  particular  conversion  or  rollover  Roth  IRA
contribution  is treated as  consisting  first of the  portion,  if any,  of the
conversion contribution that was previously includible in gross income by reason
of the conversion.

In any  event,  since  the  purpose  of a Roth IRA is to  accumulate  funds  for
retirement,  your receipt or use of Roth IRA  earnings  before you attain age 59
1/2 , or within 5 years of your first  contribution to the Roth IRA, including a
contribution rolled over,  transferred or converted from a Traditional IRA, will
generally be treated as an early distribution  subject to regular income tax and
to the 10% penalty tax described below in Section 6(b).

No income tax will apply to earnings that are withdrawn before you attain age 59
1/2, but which are withdrawn five or more years after the first  contribution to
the Roth IRA, including a rollover or transfer contribution or conversion from a
Traditional IRA, where the withdrawal is made:
1.       upon your death or disability; or

2.   to pay qualified  first-time  homebuyer  expenses of you or certain  family
     members.

No portion of your Roth IRA  distribution  qualifies as a capital gain. There is
also a separate  5-year  rule for the  recapture  of the 10% penalty tax that is
described  below in Section 6(b) and that  applies to any Roth IRA  distribution
made before age 59 1/2 if any conversion or rollover  contribution has been made
to any Roth IRA owned by the individual  within the 5 most recent taxable years,
even if this current  distribution from the Roth IRA is otherwise tax-free under
the rules described in this Subsection 5(b).

(C) WITHHOLDING.  If the  distribution  from your Roth IRA is subject to federal
income tax, unless you elect not to have withholding  apply,  federal income tax
will be withheld from your Roth IRA distributions.  If you receive distributions
under a  settlement  option,  tax will be  withheld  in the same manner as taxes
withheld on wages, calculated as if you were married and claim three withholding
allowances.  If you are  receiving any other type of  distribution,  tax will be
withheld in the amount of 10% of the amount of the distribution. If payments are
delivered to foreign countries, federal income tax will generally be withheld at
a 10% rate unless you certify to Transamerica Life Insurance and Annuity Company
that you are not a U.S. citizen residing abroad or a "tax avoidance  expatriate"
as defined in Code  Section  877.  Such  certification  may result in  mandatory
withholding of federal income taxes at a different rate.

6. PENALTY TAXES

(A) EXCESS  CONTRIBUTIONS.  If at the end of any taxable year your total regular
Roth IRA contributions,  other than rollovers, transfers or conversions,  exceed
the  maximum  allowable   contributions  for  that  year,  taking  into  account
Traditional IRA contributions, the excess contribution amount will be subject to
a nondeductible  6% excise penalty tax. Such penalty tax cannot exceed 6% of the
value of your Roth IRAs at the end of such year.  However,  if you  withdraw the
excess  contribution,  plus any  earnings on it,  before the due date for filing
your federal income tax return,  including  extensions,  for the taxable year in
which you made the  excess  contribution,  the excess  contribution  will not be
subject to the 6% penalty tax. The amount of the excess  contribution  withdrawn
will not be considered an early distribution, but the earnings withdrawn will be
taxable  income  to you  and may be  subject  to the 10%  penalty  tax on  early
distributions.

Alternatively,  excess  contributions  for one year may be  withdrawn in a later
year or may be carried forward as Roth IRA  contributions in a later year to the
extent  that  the  excess,   when   aggregated   with  your   regular  Roth  IRA
contributions,  if any,  for the  subsequent  year,  does not exceed the maximum
allowable  contribution  for that  year.  The 6% excise  tax will be  imposed on
excess  contributions  in each subsequent year they are neither  returned to you
nor applied as permissible regular Roth IRA contributions for such year.

(B) EARLY DISTRIBUTIONS.  Since the purpose of a Roth IRA is to accumulate funds
for  retirement,  your receipt or use of any portion of your Roth IRA before you
attain age 59 1/2 constitutes an early  distribution  subject to the 10% penalty
tax on the  earnings  in your Roth IRA.  This  penalty tax will not apply if the
distribution  occurs as a result  of your  death or  disability  or is part of a
series of  substantially  equal  payments made over your life  expectancy or the
joint life  expectancies  of you and your  beneficiary,  as determined  from IRS
tables in the income tax  regulations.  Also, the 10% penalty tax will not apply
if distributions  are used to pay for medical expenses in excess of 7.5% of your
AGI; or if distributions are used to pay for health insurance  premiums for you,
your spouse and/or your  dependents if you are an unemployed  individual  who is
receiving unemployment compensation under federal or state programs for at least
12 consecutive weeks.

The 10% penalty tax also will not apply to an early distribution made to pay for
certain  qualifying  first-time  homebuyer  expenses  for you or certain  family
members,  or for certain qualifying higher education expenses for you or certain
family members.  First-time  homebuyer  expenses must be paid within 120 days of
the  distribution  from the Roth IRA and  include  up to $10,000 of the costs of
acquiring,  constructing, or reconstructing a principle residence, including any
usual or  reasonable  settlement,  financing  or  other  closing  costs.  Higher
education  expenses  include  tuition,  fees,  books,  supplies,  and  equipment
required  for  enrollment,  attendance,  and room and board at a  post-secondary
educational institution.

Effective  January 1, 2000, the 10% penalty tax will not apply if  distributions
are made pursuant to an IRS levy to pay your outstanding tax liability.


There is also a separate  5-year  recapture  rule for the 10% penalty tax in the
case of a Roth IRA  distribution  made  before age 59 1/2 that is made  within 5
years after a conversion or rollover  contribution  from a Traditional IRA. This
recapture rule exists because such a prior Roth IRA contribution avoided the 10%
penalty tax when it was rolled over or converted from the Traditional IRA. Under
this 5-year  recapture  rule, any Roth IRA  distribution  made before age 59 1/2
that  is  attributable  to  any  conversion  or  rollover  contribution  from  a
Traditional IRA made within the previous 5 years to any of the individual's Roth
IRAs is generally  subject to the 10% penalty tax,  and its  exceptions,  to the
extent that such prior Roth IRA  contribution  was subject to ordinary  tax upon
the  conversion  or  rollover,  even if the Roth IRA  distribution  is otherwise
tax-free.

Under the  distribution  ordering  rules for a Roth IRA, all of an  individual's
Roth IRAs and  distributions  therefrom are treated as made:  first from regular
Roth IRA contributions;  then from conversion or rollover Roth IRA contributions
on a first-in,  first-out basis; and last from earnings.  However,  whenever any
Roth IRA  distribution  amount is  attributable  to any  conversion  or rollover
contribution made within the 5 most recent tax years, this distributed amount is
attributed first to the taxable portion of such prior contribution, for purposes
of determining the amount of this Roth IRA  distribution  that is subject to the
recapture  of the 10%  PENALTY  TAX,  UNLESS SOME  EXCEPTION  TO THE PENALTY TAX
APPLIES TO THE CURRENT ROTH IRA DISTRIBUTION,  SUCH AS AGE 59 1/2, DISABILITY OR
CERTAIN  HEALTH,  EDUCATION OR HOMEBUYER  EXPENSES,  AS DESCRIBED  ABOVE IN THIS
SUBSECTION 6(B).

(C) FAILURE TO SATISFY RMDS UPON DEATH. If the RMD rules described above in Part
II, Section 4(a) apply to the  beneficiary of your Roth IRA after your death and
if the amount distributed during a calendar year is less than the minimum amount
required to be distributed,  your  beneficiary  will be subject to a penalty tax
equal to 50% of the excess of the amount  required  to be  distributed  over the
amount actually distributed.

(D) POLICY LOANS AND PROHIBITED  TRANSACTIONS.  If you or any beneficiary engage
in any  prohibited  transaction,  such as any sale,  exchange  or leasing of any
property between you and the Roth IRA, or any interference  with the independent
status of the Roth IRA, the Roth IRA will lose its tax  exemption and be treated
as having been  distributed  to you.  The value of any earnings on your Roth IRA
contributions will be includable in your gross income; and if at the time of the
prohibited  transaction,  you are under age 591/2 you may also be subject to the
10% penalty tax on early  distributions,  as described above in Part II, Section
5(b).  If you borrow from or pledge your Roth IRA,  or your  benefits  under the
contract,  as a security for a loan, the portion borrowed or pledged as security
will cease to be  tax-qualified,  the value of that  portion  will be treated as
distributed  to you,  and you may be  subject  to the 10%  penalty  tax on early
distributions from a Roth IRA.

IRA PART III: OTHER INFORMATION

(1) FEDERAL ESTATE AND GIFT TAXES

Any amount in or distributed  from your  Traditional  and/or Roth IRAs upon your
death may be  subject  to federal  estate  tax,  although  certain  credits  and
deductions  may be  available.  The exercise or  non-exercise  of an option that
would pay a survivor an annuity at or after your death should not be  considered
a transfer for federal gift tax purposes.

(2) TAX REPORTING

You must report  contributions to, and distributions  from, your Traditional IRA
and  Roth  IRA,   including  the  year-end  aggregate  account  balance  of  all
Traditional  IRAs and Roth IRAs, on your federal  income tax return for the year
specifically on IRS Form 8606. For  Traditional  IRAs, you must designate on the
return  how  much of your  annual  contribution  is  deductible  and how much is
nondeductible. You need not file IRS Form 5329 with your income tax return for a
particular  year  unless for that year you are  subject to a penalty tax because
there  has been an  excess  contribution  to,  an early  distribution  from,  or
insufficient RMDs from your Traditional IRA or Roth IRA, as applicable.

(3) VESTING

Your  interest  in your  Traditional  IRA or Roth IRA is  nonforfeitable  at all
times.

(4) EXCLUSIVE BENEFIT

Your interest in your  Traditional IRA or Roth IRA is for the exclusive  benefit
of you and your beneficiaries.






(5) IRS PUBLICATION 590

Additional  information about your Traditional IRA or Roth IRA or about SEP-IRAs
and  SIMPLE-IRAs  can be  obtained  from any  district  office  of the IRS or by
calling  1-800-TAX-FORM  for a free  copy  of IRS  Publication  590,  Individual
Retirement Arrangements.


<PAGE>






Please  forward,   without  charge,  a  copy  of  the  Statement  of  Additional
Information  concerning the  Transamerica  Series(R) - Transamerica  Catalyst(R)
Variable Annuity issued by Transamerica Life Insurance and Annuity Company to:

Please print or type and fill in all information:


- -------------------------------------------------------------------------
Name

- -------------------------------------------------------------------------
Address

- -------------------------------------------------------------------------
City/State/Zip

- -------------------------------------------------------------------------


Date: ________________________     Signed: ______________________________

Return to  Transamerica  Life  Insurance and Annuity  Company,  Annuity  Service
Center, 401 North Tryon Street, Suite 700, Charlotte, North Carolina 28202.


<PAGE>






                     STATEMENT OF ADDITIONAL INFORMATION FOR


                            TRANSAMERICA CATALYST(R)

                                VARIABLE ANNUITY

                              SEPARATE ACCOUNT VA-6

                                    ISSUED BY
                 TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY


This statement of additional  information expands upon subjects discussed in the
May  1,  2000  prospectus  for  the  Transamerica   Catalyst   Variable  Annuity
("contract")   issued  by  Transamerica   Life  Insurance  and  Annuity  Company
("Transamerica")  through  Separate  Account VA-6. You may obtain a free copy of
the prospectus by writing to:  Transamerica  Life Insurance and Annuity Company,
401 North Tryon Street, Charlotte, NC 28202 or calling 877-717-8861.  Terms used
in the current prospectus for the contract are incorporated into this statement.


The contract will be issued as a certificate  under a group annuity  contract in
some states and as an  individual  annuity  contract in other  states.  The term
"contract"  as used  herein  refers  to both  the  individual  contract  and the
certificates issued under the group contract.



     This Statement of Additional  Information is not a prospectus and should be
read  only  in  conjunction  with  the  prospectus  for  the  contract  and  the
portfolios.











                                Dated May 1, 2000




<PAGE>
<TABLE>
<CAPTION>


TABLE OF CONTENTS
                                                                                                         PAGE

<S>                                                                                                         <C>
THE CONTRACT ....................................................................................           3
NET INVESTMENT FACTOR ...........................................................................           3
VARIABLE PAYMENT OPTIONS.........................................................................           3
     Variable Annuity Units and Payments.........................................................           3
     Variable Annuity Unit Value.................................................................           3
     Transfers After the Annuity Date............................................................           4

GENERAL PROVISIONS.........................................................................................

  4
     Non-Participating...........................................................................           4
     Misstatement of Age or Sex..................................................................           4
     Proof of Existence and Age..................................................................           4
     Annuity Data..........................................................................................
  4
     Assignment..................................................................................           4
     Annual Report...............................................................................           5
     Incontestability............................................................................           5
     Entire Contract.............................................................................           5
     Changes in the Contract.....................................................................           5
     Protection of Benefits......................................................................           5
     Delay of Payments...........................................................................           5
     Notices and Directions......................................................................           6
CALCULATION OF YIELDS AND TOTAL RETURNS .........................................................           6
     Money Market Sub-Account Yield Calculation..................................................           6
     Other Sub-Account Yield Calculations........................................................           6
     Standard Total Return Calculations..........................................................           7
     Adjusted Historical Portfolio Performance Data..............................................           7
     Other Performance Data......................................................................           7
HISTORICAL PERFORMANCE DATA......................................................................           8
     General Limitations.........................................................................           8
     Historical Performance Data.................................................................           8

DISTRIBUTION OF THE CONTRACT.....................................................................         18
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS...........................................................         18
STATE REGULATION...........................................................................................

18
RECORDS AND REPORTS..............................................................................         18
FINANCIAL STATEMENTS.............................................................................         18
APPENDIX.........................................................................................         19


</TABLE>

<PAGE>


THE CONTRACT

The following pages provide additional  information about the contract which may
be of interest to some owners.

NET INVESTMENT FACTOR

For any  sub-account of the variable  account,  the net investment  factor for a
valuation  period,  before the annuity  date,  is (a) divided by (b),  minus (c)
minus (d):

     Where (a) is:

     The net asset value per share held in the sub-account, as of the end of the
     valuation period; PLUS the per-share amount of any dividend or capital gain
     distributions  if the  "ex-dividend"  date occurs in the valuation  period;
     PLUS OR MINUS a per-share  charge or credit as we may determine,  as of the
     end of the valuation period, for taxes.

     Where (b) is:

     The net asset value per share held in the  sub-account as of the end of the
last prior valuation period.

     Where (c) is:

     The daily  mortality and expense risk charge of 0.00329%  (1.20%  annually)
     times the number of calendar days in the current valuation period.

     Where (d) is:

     The  daily  administrative  expense  charge,   currently  0.000411%  (0.15%
     annually)  times  the  number of  calendar  days in the  current  valuation
     period.  This charge may be increased,  but will not exceed 0.00096% (0.35%
     annually).

A valuation day is defined as any day that the New York Stock Exchange is open.

VARIABLE PAYMENT OPTIONS

The  variable  payment  option  provide for  payments  that  fluctuate in dollar
amount,   based  on  the  investment   performance   of  the  elected   variable
sub-account(s).

VARIABLE ANNUITY UNITS AND PAYMENTS

For the first monthly payment,  the number of variable annuity units credited in
each variable sub-account will be determined by dividing: (a) the product of the
portion of the value to be applied to the variable  sub-account and the variable
annuity  purchase  rate  specified  in the  contract;  BY (b) the  value  of one
variable annuity unit in that sub-account on the annuity date.

The amount of each subsequent  variable payment equals the product of the number
of  variable  annuity  units  in each  variable  sub-account  and  the  variable
sub-account's  variable  annuity  unit  value as of the  tenth  day of the month
before the payment due date. The amount of each payment may vary.

VARIABLE ANNUITY UNIT VALUE

The value of a variable annuity unit in a variable  sub-account on any valuation
day is  determined  as  described  below.  The  net  investment  factor  for the
valuation  period  (for  the  appropriate   payment  frequency)  just  ended  is
multiplied by the value of the variable  annuity unit for the sub-account on the
preceding  valuation  day. The net  investment  factor after the annuity date is
calculated in the same manner as before the annuity date and then  multiplied by
an interest factor.  The interest factor equals (.999893)n where n is the number
of days since the preceding  valuation day. This compensates for the 4% interest
assumption  built into the variable annuity purchase rates. We may offer assumed
interest rates other than 4%. The appropriate interest factor will be applied to
compensate for the assumed interest rate.

TRANSFERS AFTER THE ANNUITY DATE

After the  annuity  date,  you may  transfer  variable  annuity  units  from one
sub-account to another,  subject to certain limitations (See "Transfers" page 26
of the prospectus). The dollar amount of each subsequent monthly annuity payment
after the transfer must be determined  using the new number of variable  annuity
units  multiplied by the variable  sub-account's  variable annuity unit value on
the tenth day of the month  preceding  payment.  We reserve  the right to change
this day of the month.

The formula used to determine a transfer  after the annuity date can be found in
the Appendix to this Statement of Additional Information.

GENERAL PROVISIONS

NON-PARTICIPATING

The contract is  non-participating.  No  dividends  are payable and the contract
will not share in our profits or surplus earnings.

MISSTATEMENT OF AGE OR SEX

If the  age or sex of the  annuitant  or  any  other  measuring  life  has  been
misstated,  the settlement  option  payments under the contract will be whatever
the annuity  amount  applied on the annuity date would  purchase on the basis of
the correct age or sex of the  annuitant  and/or  other  measuring  life.  Where
required  by law,  rule  or  regulation,  we may  only  consider  the age of the
annuitant  and/or other measuring life. Any  overpayments or underpayments by us
as a result of any such  misstatement  may be  respectively  charged  against or
credited  to the  settlement  option  payment or  payments  to be made after the
correction so as to adjust for such overpayment or underpayment.

PROOF OF EXISTENCE AND AGE

Before  making any  payment  under the  contract,  we may  require  proof of the
existence  and/or  proof of the age of an owner and/or an annuitant or any other
measuring life, or any other  information  deemed  necessary in order to provide
benefits under the contract.

ANNUITY DATA

We will not be liable for obligations which depend on receiving information from
a payee or measuring  life until such  information is received in a satisfactory
form.

ASSIGNMENT

No  assignment  of a contract  will be binding on us unless  made in writing and
given to us at our Service  Center.  We are not  responsible for the adequacy of
any assignment. Your rights and the interest of any annuitant or non-irrevocable
beneficiary will be subject to the rights of any assignee of record.





ANNUAL REPORT

At least once each contract  year before the annuity  date,  you will be given a
report  of the  current  account  value  allocated  to each  sub-account  of the
variable  account and any general account option.  This report will also include
any other information  required by law or regulation.  After the annuity date, a
confirmation will be provided with every variable annuity payment.

INCONTESTABILITY

Each  contract  is  incontestable  from the  contract  effective  date except in
certain states where medical  questions are required on the  application for the
optional Living Benefits Rider.

ENTIRE CONTRACT

We have issued the contract in  consideration  and  acceptance of the payment of
the initial purchase  payment and certain required  information in an acceptable
form and manner or, where state law requires,  the application.  In those states
that require a written application, a copy of the application is attached to and
is part of the  contract  and along  with the  contract  constitutes  the entire
contract.

The group annuity  contract has been issued to a trust  organized under Missouri
law.  However,  the sole  purpose  of the  trust is to hold  the  group  annuity
contract.  You have all rights and  benefits  under the  individual  certificate
issued under the group contract.

CHANGES IN THE CONTRACT

Only  two  authorized  officers  of  Transamerica,  acting  together,  have  the
authority  to bind us or to make any change in the  individual  contract  or the
group contract or individual  certificates  thereunder and then only in writing.
We will not be bound by any promise or representation made by any other persons.

We may  change  or amend  the  individual  contract  or the  group  contract  or
individual  certificates thereunder if such change or amendment is necessary for
the  individual  contract  or the  group  contract  or  individual  certificates
thereunder to comply with any state or federal law, rule or regulation.

PROTECTION OF BENEFITS

To the extent permitted by law, no benefit  (including death benefits) under the
contract will be subject to any claim or process of law by any creditor.

DELAY OF PAYMENTS

Payment of any cash withdrawal,  lump sum death benefit,  or variable payment or
transfer  due from the  variable  account  will occur within seven days from the
date the election becomes effective, except that we may be permitted to postpone
such payment if: (1) the New York Stock  Exchange is closed for other than usual
weekends or holidays, or trading on the Exchange is otherwise restricted; or (2)
an  emergency  exists as  defined  by the  Securities  and  Exchange  Commission
(Commission),  or the Commission requires that trading be restricted; or (3) the
Commission permits a delay for the protection of owners.

In  addition,  while it is our  intention  to  process  all  transfers  from the
sub-accounts  immediately upon receipt of a transfer request,  we have the right
to delay effecting a transfer from a variable  sub-account for up to seven days.
We may delay  effecting  such a transfer if there is a delay of payment  from an
affected portfolio.  If this happens, then we will calculate the dollar value or
number of units involved in the transfer from a variable sub-account on or as of
the date we receive a transfer  request in an  acceptable  form and manner,  but
will not process the transfer to the transferee  sub-account  until a later date
during the seven-day delay period when the portfolio underlying the transferring
sub-account  obtains  liquidity to fund the transfer  request  through  sales of
portfolio  securities,   new  purchase  payments,   transfers  by  investors  or
otherwise. During this period, the amount transferred would not be invested in a
variable sub-account.

We may delay payment of any withdrawal  from ANY general  account  options for a
period  of not more  than six  months  after we  receive  the  request  for such
withdrawal.  If we delay  payment for more than 30 days, we will pay interest on
the withdrawal amount up to the date of payment. (See "Cash Withdrawals" on page
28 of the prospectus.)


NOTICES AND DIRECTIONS

We will not be bound by any authorization,  direction,  election or notice which
is not in a form and manner acceptable to us and received at our Service Center.

Any written notice  requirement by us to you will be satisfied by our mailing of
any such  required  written  notice,  by  first-class  mail,  to your last known
address as shown on our records.

CALCULATION OF YIELDS AND TOTAL RETURNS

MONEY MARKET SUB-ACCOUNT YIELD CALCULATION

In accordance with  regulations  adopted by the  Commission,  we are required to
compute the money market sub-account's  current annualized yield for a seven-day
period  in a manner  which  does not take into  consideration  any  realized  or
unrealized  gains or  losses on  shares  of the  money  market  series or on its
portfolio  securities.  This current annualized yield is computed by determining
the net change (exclusive of realized gains and losses on the sale of securities
and unrealized  appreciation  and  depreciation)  in the value of a hypothetical
account  having a balance  of one unit of the money  market  sub-account  at the
beginning of such seven-day period, dividing such net change in account value by
the value of the account at the  beginning of the period to  determine  the base
period return and annualizing  this quotient on a 365-day basis.  The net change
in account  value  reflects  the  deductions  for the annual  account  fee,  the
mortality and expense risk charge and administrative  expense charges and income
and expenses accrued during the period.  Because of these deductions,  the yield
for the money market  sub-account of the variable account will be lower than the
yield for the money market series or any comparable substitute funding vehicle.

The  Commission  also  permits us to disclose the  effective  yield of the money
market  sub-account  for the same seven-day  period,  determined on a compounded
basis.  The effective yield is calculated by compounding the  unannualized  base
period  return by adding one to the base  period  return,  raising  the sum to a
power equal to 365 divided by 7, and subtracting one from the result.

The  yield  on  amounts  held in the  money  market  sub-account  normally  will
fluctuate on a daily basis.  Therefore,  the disclosed  yield for any given past
period is not an  indication  or  representation  of  future  yields or rates of
return.  The money market  sub-account's  actual yield is affected by changes in
interest rates on money market  securities,  average  portfolio  maturity of the
money market  series or  substitute  funding  vehicle,  the types and quality of
portfolio  securities  held by the money  market  series or  substitute  funding
vehicle, and operating expenses.  In addition,  the yield figures do not reflect
the  effect  of any  contingent  deferred  sales  load (of up to 8% of  purchase
payments) that may be applicable to a contract.

OTHER SUB-ACCOUNT YIELD CALCULATIONS

We may from time to time disclose the current annualized yield of one or more of
the  variable  sub-accounts  (except the money  market  sub-account)  for 30-day
periods. The annualized yield of a sub-account refers to the income generated by
the  sub-account  over  a  specified  30-day  period.   Because  this  yield  is
annualized,  the yield  generated by a  sub-account  during the 30-day period is
assumed to be generated  each 30-day  period.  The yield is computed by dividing
the net  investment  income per  variable  accumulation  unit earned  during the
period  by the price per unit on the last day of the  period,  according  to the
following formula:

         YIELD    =        2[{a-b + 1}6 -  1]
                             ----
                        cd

         Where:

a    =  net  investment  income  earned  during  the  period  by  the  portfolio
     attributable to the shares owned by the sub-account.

b    =  expenses   for  the   sub-account   accrued   for  the  period  (net  of
     reimbursements).

c    = the average  daily  number of  variable  accumulation  units  outstanding
     during the period.

d    = the maximum offering price per variable accumulation unit on the last day
     of the period.

Net investment income will be determined in accordance with rules established by
the  Commission.  Accrued  expenses  will  include all  recurring  fees that are
charged to all contracts.  The yield  calculations  do not reflect the effect of
any  contingent  deferred  sales  load that may be  applicable  to a  particular
contract.  Contingent  deferred sales loads range from 8% to 0% of the amount of
account value withdrawn  depending on the elapsed time since the receipt of each
purchase payment.


Because of the charges and deductions imposed by the variable account, the yield
for  the  sub-account  will be  lower  than  the  yield  for  the  corresponding
portfolio.  The yield on amounts held in the variable sub-accounts normally will
fluctuate over time. Therefore,  the disclosed yield for any given period is not
an  indication  or  representation  of  future  yields or rates of  return.  The
variable sub-account's actual yield will be affected by the types and quality of
portfolio securities held by the portfolio, and its operating expenses.


STANDARD TOTAL RETURN CALCULATIONS

We may from time to time also disclose  average  annual total returns for one or
more of the  sub-accounts  for various  periods of time.  Average  annual  total
return quotations are computed by finding the average annual compounded rates of
return over one, five and ten year periods that would equate the initial  amount
invested to the ending redeemable value, according to the following formula:

         P{1 + T}n = ERV

         Where:
         P =               a hypothetical initial payment of $1,000
         T =               average annual total return
         n =               number of years
         ERV               = ending  redeemable  value of a hypothetical  $1,000
                           payment  made at the  beginning  of the one,  five or
                           ten-year  period  at the  end of the  one,  five,  or
                           ten-year  period  (or  fractional   portion  of  such
                           period).

All recurring fees are recognized in the ending  redeemable  value. The standard
average  annual  total  return  calculations  will  reflect  the  effect  of any
contingent deferred sales load that may be applicable to a particular period.

ADJUSTED HISTORICAL PORTFOLIO PERFORMANCE DATA

We may also disclose "historical"  performance data for a portfolio, for periods
before  the  variable  sub-account   commenced   operations.   Such  performance
information will be calculated based on the performance of the portfolio and the
assumption  that the  sub-account was in existence for the same periods as those
indicated  for the  portfolio,  with a level of contract  charges  currently  in
effect.

This type of adjusted  historical  performance  data may be disclosed on both an
average annual total return and a cumulative  total return basis.  Moreover,  it
may be disclosed  assuming that the contract is not surrendered  (i.e.,  with no
deduction for the contingent deferred sales load) and assuming that the contract
is surrendered at the end of the applicable period (i.e., reflecting a deduction
for any applicable contingent deferred sales load).

OTHER PERFORMANCE DATA

We may from  time to time  also  disclose  average  annual  total  returns  in a
non-standard  format in  conjunction  with the  standard  described  above.  The
non-standard  format will be identical to the  standard  format  except that the
contingent deferred sales load percentage will be assumed to be 0%.

We may from time to time also disclose  cumulative  total returns in conjunction
with the  standard  format  described  above.  The  cumulative  returns  will be
calculated  using the following  formula  assuming that the contingent  deferred
sales load percentage will be 0%.


     CTR = {ERV/P}- 1


     Where:

CTR  = the cumulative total return net of sub-account  recurring charges for the
     period.

ERV  = ending redeemable value of a hypothetical $1,000 payment at the beginning
     of the one, five, or

ten-year period at the end of the one,  five, or ten-year  period (or fractional
     portion of the period).

P    = a hypothetical initial payment of $1,000.


All  non-standard  performance  data  will be  advertised  only if the  standard
performance data is also disclosed.

HISTORICAL PERFORMANCE DATA

GENERAL LIMITATIONS

THE FIGURES BELOW  REPRESENT PAST  PERFORMANCE  AND ARE NOT INDICATIVE OF FUTURE
PERFORMANCE.   The  figures  may  reflect  the  waiver  of  advisory   fees  and
reimbursement of other expenses which may not continue in the future.

Portfolio  information,  including historical daily net asset values and capital
gains and dividends distributions regarding each portfolio, has been provided by
that portfolio.  The adjusted historical sub-account performance data is derived
from the  data  provided  by the  portfolios.  We have no  reason  to doubt  the
accuracy of the figures  provided by the portfolios.  We have not verified these
figures.

HISTORICAL PERFORMANCE DATA

The  charts  below  show  historical  performance  data  for  the  sub-accounts,
including adjusted  historical  performance for the periods prior to the January
1,  1998  inception  of  the  sub-accounts,  based  on  the  performance  of the
corresponding  portfolios  since their  inception  date, with a level of charges
equal to those currently  assessed under the contract.  THESE FIGURES ARE NOT AN
INDICATION OF THE FUTURE PERFORMANCE OF THE SUB-ACCOUNTS.  The date next to each
sub-account  name  indicates  the  date  of  commencement  of  operation  of the
corresponding portfolio.

Notes:

1.   On September 16, 1994, an investment company which had commenced operations
     on August 1,  1988,  called  Quest for Value  Accumulation  Trust (the "Old
     Trust") was effectively  divided into two investment  funds - The Old Trust
     and the present OCC Accumulation  Trust (the "Present Trust") at which time
     the Present Trust commenced  operations.  The total net assets of the Small
     Cap Portfolio  immediately  after the transaction were  $139,812,573 in the
     Old Trust and  $8,129,274  in the Present  Trust.  For the period  prior to
     September 16, 1994, the performance  figures for the Small Cap Portfolio of
     the Present Trust reflect the performance of the Small Cap Portfolio of the
     Old Trust.

2.   The Growth Portfolio of the Transamerica  Variable Insurance Fund, Inc., is
     the successor to Separate  Account Fund C of  Transamerica  Occidental Life
     Insurance  Company,  a  management   investment  company  funding  variable
     annuities,  through a reorganization on November 1, 1996. Accordingly,  the
     performance  data  for  the  Transamerica  VIF  Growth  Portfolio  includes
     performance of its predecessor.

3.   On September 16, 1994, an investment company which had commenced operations
     on August 1,  1988,  called  Quest for Value  Accumulation  Trust (the "Old
     Trust") was effectively  divided into two investment  funds - The Old Trust
     and the present OCC Accumulation Trust (the "Present Trust") at the time of
     the transaction  there was $682,601,380 in the Old Trust and $51,345,102 in
     the  Present  Trust.  For the  period  prior to  September  16,  1994,  the
     performance  figures for the Managed Portfolio of the Present Trust reflect
     the performance of the Managed Portfolio of the Old Trust.

Historical Performance Data Charts

1.   Average Annual Total Returns - Assuming surrender but no optional Riders

2.   Average Annual Total Returns - Assuming surrender and Living Benefits Rider
     and Guaranteed Minimum Death Benefit Rider

3.   Average Annual Total Returns - Assuming no surrender or optional Riders

4.   Average Annual Total Returns - Assuming no surrender but reflecting  Living
     Benefits Rider and Guaranteed Minimum Death Benefit Rider


5.       Cumulative Total Returns - Assuming surrender but no optional Riders

6.   Cumulative Total Returns - Assuming surrender and Living Benefits Rider and
     Guaranteed Minimum Death Benefit Rider

7.       Cumulative Total Returns - Assuming no surrender or optional Riders

8.   Cumulative  Total  Returns - Assuming no surrender  but  reflecting  Living
     Benefits Rider and Guaranteed

         Minimum Death Benefit Rider




<PAGE>

<TABLE>
<CAPTION>


1. AVERAGE ANNUAL TOTAL RETURNS - Assuming surrender but no optional Riders, for
periods  since  inception  of  the  portfolio,   including  adjusted  historical
performance,  for  each  sub-account  are  as  follows.  These  figures  include
mortality and expense charges of 1.20% per annum,  administrative expense charge
of 0.15% per annum, an account fee of $30 per annum adjusted for average account
size  and the  applicable  contingent  deferred  sales  load  (maximum  of 8% of
purchase payments) and do not reflect any fee deduction for the optional Riders.
Any credit is not reflected in this calculation.


- ------------------------------------- ------------- --------------- ---------------- ----------------- ------------------
                                                                                                        For the period
                                                                                                             from
            SUB-ACCOUNT                 For the        For the      For the 5-year                      commencement of
       (date of commencement             1-year     3-year period    period ending   For the 10-year       portfolio
          of operation of                period         ending         12/31/98       period ending      operations to
      corresponding portfolio)           ending        12/31/98                          12/31/98          12/31/98
                                        12/31/98
- ------------------------------------ ------------------------------------------------------------------------------------

<S>                                     <C>            <C>             <C>               <C>               <C>
Alger American Income &                 37.85%         35.38%          31.65%            17.63%            16.37%
Growth (11/15/88)

- ------------------------------------ ------------------------------------------------------------------------------------

Alliance VP Growth &                    6.18%          18.25%          22.58%              NA              14.24%
Income (1/14/91)

- ------------------------------------ ------------------------------------------------------------------------------------

Alliance VP Premier Growth              27.52%         36.29%          34.72%              NA              25.07%
(6/26/92)

- ------------------------------------ ------------------------------------------------------------------------------------

Dreyfus VIF Appreciation                6.27%          21.11%          24.18%              NA              18.77%
(4/5/93)

- ------------------------------------ ------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                   18.18%         9.44%           14.51%              NA              34.20%
(8/31/90)

- ------------------------------------ ------------------------------------------------------------------------------------

Janus Aspen Series Balanced             21.86%         25.87%          23.34%              NA              19.34%
(9/13/93)

- ------------------------------------ ------------------------------------------------------------------------------------

Janus Aspen Series Worldwide            60.26%         35.74%          32.28%              NA              28.40%
Growth (9/13/93)

- ------------------------------------ ------------------------------------------------------------------------------------

MFS VIT Emerging Growth                 72.75%         40.92%            NA                NA              35.09%
(7/24/95)

- ------------------------------------ ------------------------------------------------------------------------------------

MFS VIT Growth w/ Income                1.42%          17.29%            NA                NA              19.71%
(10/9/95)

- ------------------------------------ ------------------------------------------------------------------------------------

MFS VIT Research                        19.10%         20.71%            NA                NA              21.46%
(7/26/95)

- ------------------------------------ ------------------------------------------------------------------------------------

MS UIF Emerging Markets                 91.06%         11.93%            NA                NA              10.32%
Equity (10/1/96)

- ------------------------------------ ------------------------------------------------------------------------------------

MS UIF Fixed Income                     -7.06%           NA              NA                NA               2.97%
(1/2/97)

- ------------------------------------ ------------------------------------------------------------------------------------

MS UIF High Yield                       1.84%            NA              NA                NA               6.21%
(1/2/97)

- ------------------------------------ ------------------------------------------------------------------------------------

MS UIF International                    20.26%           NA              NA                NA              11.50%
Magnum (1/2/97)

- ------------------------------------ ------------------------------------------------------------------------------------

OCC Accumulation Trust                  -0.31%         9.09%           18.32%            15.33%            16.36%
Managed (8/1/88)(3)

- ------------------------------------ ------------------------------------------------------------------------------------

OCC Accumulation Trust                  -7.27%         0.57%            6.82%            9.89%             10.21%
Small Cap (8/1/88) (1)

- ------------------------------------ ------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &           14.81%           NA              NA                NA              22.19%
Income (1/2/98)

                                      ------------- --------------- ---------------- ----------------- ------------------
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------

Transamerica VIF Growth                 33.09%         40.95%          40.19%            25.43%              NA
(2/26/69) (2)

                                      ------------- --------------- ---------------- ----------------- ------------------
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------

Transamerica VIF Money                  -0.69%           NA              NA                NA               1.55%
Market (1/2/98)

- ------------------------------------ ------------------------------------------------------------------------------------

2. AVERAGE  ANNUAL TOTAL RETURNS - Assuming  surrender and  reflecting  optional
Living  Benefits Rider and Guaranteed  Minimum Death Benefit Rider,  for periods
since inception of the portfolio, including adjusted historical performance, for
each  sub-account are as follows.  These figures  include  mortality and expense
charges of 1.20% per annum, administrative expense charge of 0.15% per annum, an
account fee of $30 per annum  adjusted for average  account size, the applicable
contingent deferred sales load (maximum 8% of purchase  payments),  the optional
Living Benefits Rider fee of 0.05% per annum and the optional Guaranteed Minimum
Death Benefit Rider fee of 0.20% per annum.  Any credit is not reflected in this
calculation.


- ------------------------------------------------------------------------------------------------------------------------

            SUB-ACCOUNT                For the        For the      For the 5-year   For the 10-year    For the period
(date of commencement of operation      1-year     3-year period    period ending    period ending          from
                of                      period         ending         12/31/98          12/31/98       commencement of
     corresponding portfolio)           ending        12/31/98                                            portfolio
                                       12/31/98                                                         operations to
                                                                                                          12/31/98

- ------------------------------------------------------------------------------------------------------------------------

Alger American Income &                 37.60%         35.13%          31.40%            17.38%            16.12%
Growth (11/15/88)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                    5.93%          17.99%          22.33%              NA              13.99%
Income (1/14/91)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Alliance VP Premier                   27.27%         36.04%          34.47%            NA               24.82%
Growth (6/26/92)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

Dreyfus VIF Appreciation              6.02%          20.86%          23.92%            NA               18.52%
(4/5/93)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                   17.93%         9.18%           14.26%              NA              33.95%
(8/31/90)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced             21.61%         25.62%          23.08%              NA              19.09%
(9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series                      60.01%         35.48%          32.03%              NA              28.15%
Worldwide Growth (9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth                 72.50%         40.66%            NA                NA              34.84%
(7/24/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income                1.17%          17.03%            NA                NA              19.45%
(10/9/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Research                        18.85%         20.45%            NA                NA              21.21%
(7/26/95)

                                     ------------- --------------- ---------------- ----------------- ------------------
- ------------------------------------------------------------------------------------------------------------------------

MS UIF Emerging                         90.81%         11.67%            NA                NA              10.06%
Markets Equity (10/1/96)

                                     ------------- --------------- ---------------- ----------------- ------------------
- ------------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                     -7.31%           NA              NA                NA               2.71%
(1/2/97)

                                     ------------- --------------- ---------------- ----------------- ------------------
- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF High Yield                     1.59%            NA              NA              NA                5.95%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------

MS UIF International                    20.01%           NA              NA                NA              11.24%
Magnum (1/2/97)

- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

OCC Accumulation Trust                -0.56%          8.83%          18.07%          15.08%             16.11%
Managed (8/1/88)(3)

- ------------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                  -7.52%         0.31%            6.57%            9.64%              9.96%
Small Cap (8/1/88) (1)

                                  --------------- -------------- --------------- --------------- ----------------------

PIMCO StocksPLUS Growth               14.56%           NA              NA              NA               21.94%
and Income (1/2/98)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------

Transamerica VIF Growth                 32.84%         40.70%          39.94%            25.18%              NA
(2/26/69) (2)

- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
                                  --------------- -------------- --------------- --------------- ----------------------

Transamerica VIF Money                  -0.94%           NA              NA                NA               1.29%
Market (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------


3.  AVERAGE  ANNUAL TOTAL  RETURNS - Assuming no  surrender or optional  Riders,
non-standard  average  annual total returns for periods  since  inception of the
portfolio,  including adjusted historical performance,  for each sub-account are
as follows.  These figures  include  mortality and expense  charges of 1.20% per
annum,  administrative  expense  charge of 0.15% per annum and an account fee of
$30 per  annum  adjusted  for  average  account  size,  but do not  reflect  any
applicable  contingent  deferred sales load (maximum of 8% of purchase payments)
and do not reflect any fee deduction for the optional Riders.  Any credit is not
reflected in this calculation.


- ------------------------------------------------------------------------------------------------------------------------

            SUB-ACCOUNT                For the        For the      For the 5-year   For the 10-year    For the period
(date of commencement of operation      1-year     3-year period    period ending    period ending          from
                of                      period         ending         12/31/98          12/31/98       commencement of
     corresponding portfolio)           ending        12/31/98                                            portfolio
                                       12/31/98                                                         operations to
                                                                                                          12/31/98

- ------------------------------------------------------------------------------------------------------------------------

Alger American Income &                 45.05%         36.52%          31.95%            17.63%            16.37%
Growth (11/15/88)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                    13.38%         19.73%          22.98%              NA              14.24%
Income (1/14/91)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Premier                     34.72%         37.41%          34.99%              NA              25.07%
Growth (6/26/92)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation                13.47%         22.53%          24.55%              NA              18.92%
(4/5/93)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                   25.38%         11.17%          15.03%              NA              34.20%
(8/31/90)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced             29.06%         27.18%          23.72%              NA              19.51%
(9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series                      67.46%         36.87%          32.58%              NA              28.51%
Worldwide Growth (9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth                 79.95%         41.97%            NA                NA              35.45%
(7/24/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income                8.62%          18.79%            NA                NA              20.30%
(10/9/95)

                                  --------------- -------------- --------------- --------------- ----------------------

MFS VIT Research                      26.30%         22.13%            NA              NA               21.98%
(7/26/95)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF Emerging                       98.26%         13.58%            NA              NA               11.63%
Markets Equity (10/1/96)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF Fixed Income                   0.14%            NA              NA              NA                4.91%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF High Yield                     9.04%            NA              NA              NA                8.04%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

MS UIF International                  27.46%           NA              NA              NA               13.17%
(1/2/97)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------

OCC Accumulation Trust                6.89%          10.82%          18.78%          15.33%             16.36%
Managed (8/1/88) (3)

- --------------------------------- --------------- -------------- --------------- --------------- ----------------------
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------

OCC Accumulation Trust                  0.07%          2.60%            7.51%            9.89%             10.21%
Small Cap (8/1/88) (1)

                                  --------------- -------------- --------------- --------------- ----------------------

PIMCO StocksPLUS Growth               22.01%           NA              NA              NA               25.11%
and Income (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth                 40.29%         42.00%          40.42%            25.43%              NA
(2/26/69) (2)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money                  6.51%            NA              NA                NA               5.04%
Market (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------


AVERAGE ANNUAL TOTAL RETURNS - Assuming no surrender but reflecting the optional
Living Benefits Rider and Guaranteed  Minimum Death Benefit Rider,  non-standard
average  annual total  returns for periods  since  inception  of the  portfolio,
including adjusted historical performance,  for each sub-account are as follows.
These  figures  include  mortality  and  expense  charges  of 1.20%  per  annum,
administrative  expense charge of 0.15% per annum and, an account fee of $30 per
annum  adjusted  for average  account  size,  but do not reflect any  applicable
contingent  deferred  sales load  (maximum  8% of  purchase  payments).  They do
reflect  deduction  of the fee for, the optional  Living  Benefits  Rider fee of
0.05% per annum and the optional  Guaranteed  Minimum Death Benefit Rider fee of
0.20% per annum. Any credit is not reflected in this calculation.


- ------------------------------------------------------------------------------------------------------------------------

            SUB-ACCOUNT                For the        For the      For the 5-year   For the 10-year    For the period
(date of commencement of operation      1-year     3-year period    period ending    period ending          from
                of                      period         ending         12/31/98          12/31/98       commencement of
     corresponding portfolio)           ending        12/31/98                                            portfolio
                                       12/31/98                                                         operations to
                                                                                                          12/31/98

- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

Alger American Income &                44.80%         36.27%           31.70%           17.38%             16.12%
Growth (11/15/88)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                   13.13%         19.48%           22.73%             NA               13.99%
Income (1/14/91)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth             34.47%         37.16%           34.74%             NA               24.82%
(6/26/92)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation             13.22%          22.28%          24.30%            NA               18.67%
(4/5/93)

- -----------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                25.13%          10.92%          14.78%            NA               33.95%
(8/31/90)

- -----------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced            28.81%         26.93%           23.47%             NA               19.26%
(9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide         67.21%          36.62%          32.33%            NA               28.26%
Growth (9/13/93)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth              79.70%          41.72%            NA              NA               35.20%
(7/24/95)

- -----------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income              8.37%          18.54%            NA              NA               20.05%
(10/9/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Research                       26.05%         21.88%             NA               NA               21.73%
(7/26/95)

- ------------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets                98.01%         13.33%             NA               NA               11.38%
Equity (10/1/96)

                                    ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                    -0.11%           NA               NA               NA               4.66%
(1/2/97)

                                    ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                       8.79%           NA               NA               NA               7.79%
(1/2/97)

                                    ------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------

MS UIF International                 27.21%            NA              NA              NA               12.92%
Magnum (1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                6.64%          10.57%          18.53%          15.08%             16.11%
Managed (8/1/88) (3)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -0.32%          2.35%           7.26%           9.64%              9.96%
Small Cap (8/1/88) (1)


- -----------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &        21.76%            NA              NA              NA               24.86%
Income (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth                40.04%         41.75%           40.17%           25.18%               NA
(2/26/69) (2)

- ------------------------------------------------------------------------------------------------------------------------
                                 --------------------------------------------------------------------------------------

Transamerica VIF Money                  6.26%           NA               NA               NA               4.79%
Market (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------

5. CUMULATIVE  TOTAL RETURNS - Assuming  surrender but no optional  Riders,  for
periods  since  inception  of  the  portfolio,   including  adjusted  historical
performance,  for  each  sub-account  are  as  follows.  These  figures  include
mortality  and  expenses  charges  of 1.20% per annum,  administrative  expenses
charge of 0.15% per annum,  an account fee of $30 per annum adjusted for average
account size and the applicable contingent deferred sales load (maximum of 8% of
purchase payments) and do not reflect any fee deduction for the optional Riders.
Any credit is not reflected in this calculation.


- ------------------------------------------------------------------------------------------------------------------------

            SUB-ACCOUNT               For the 1-     For the 3-      For the 5-       For the 10-      For the period
(date of commencement of operation   year period    year period      year period      year period           from
                of                      ending         ending      ending 12/31/98  ending 12/31/98    commencement of
     corresponding portfolio)          12/31/98       12/31/98                                            portfolio
                                                                                                        operations to
                                                                                                          12/31/98

- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

Alger American Income &                37.85%         149.04%         296.38%           407.10%           441.05%
Growth (11/15/88)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                    6.18%         66.23%          177.65%             NA              230.14%
Income (1/14/91)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth             27.52%         154.06%         344.64%             NA              437.89%
(6/26/92)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation                6.27%         78.55%          196.15%             NA              219.13%
(4/5/93)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                  18.18%         31.98%           97.82%             NA              1461.22%
(8/31/90)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced            21.86%         100.32%         186.29%             NA              204.92%
(9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide           60.26%         150.99%         305.99%             NA              383.51%
Growth (9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth                72.75%         180.73%            NA               NA              280.57%
(7/24/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income                1.42%         62.24%             NA               NA              114.13%
(10/9/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Research                       19.10%         76.78%             NA               NA              137.03%
(7/26/95)

- ------------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets                91.06%         41.11%             NA               NA               37.62%
Equity (10/1/96)

                                    ------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                  -7.06%            NA              NA              NA               9.16%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                     1.84%            NA              NA              NA               19.80%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF International                 20.26%            NA              NA              NA               38.58%
Magnum (1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -0.31%          30.71%         132.83%         316.26%            464.57%
Managed (8/1/88) (3)

- ------------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                 -7.27%          2.61%           40.00%           156.90%           203.62%
Small Cap (8/1/88) (1)

- ------------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &          14.81%           NA               NA               NA               49.32%
Income (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth                33.09%         180.94%         442.42%           863.57%             N/A
(2/26/69) (2)

                                 --------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money                 -0.69%           NA               NA               NA               3.12%
Market (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------



6.  CUMULATIVE  TOTAL  RETURNS -  Assuming  surrender  and the  optional  Living
Benefits  Rider and  Guaranteed  Minimum Death Benefit  Ride,r for periods since
inception of the portfolio,  including adjusted historical  performance for each
sub-account are as follows.  These figures include mortality and expense charges
of 1.20% per annum, administrative expense charge of 0.15% per annum, an account
fee of  $30  per  annum  adjusted  for  average  account  size,  the  applicable
contingent  deferred sales load (maximum 8% of purchase  payments,  the optional
Living Benefits Rider fee of 0.05% per annum and the optional Guaranteed Minimum
Death Benefit Rider fee of 0.20% per annum.  Any credit is not reflected in this
calculation.


- ------------------------------------------------------------------------------------------------------------------------

            SUB-ACCOUNT               For the 1-      For the      For the 5-year   For the 10-year    For the period
(date of commencement of operation   year period   3-year period    period ending    period ending          from
                of                      ending         ending         12/31/98          12/31/98       commencement of
     corresponding portfolio)          12/31/98       12/31/98                                            portfolio
                                                                                                        operations to
                                                                                                          12/31/98

- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

Alger American Income &                37.60%         147.65%         292.60%           396.42%           428.25%
Growth (11/15/88)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                    5.93%         65.16%          174.80%             NA              223.72%
Income (1/14/91)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth             27.27%         152.64%         340.50%             NA              429.86%
(6/26/92)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation                6.02%         77.42%          193.15%             NA              214.60%
(4/5/93)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                  17.93%         31.05%           95.64%             NA              1434.26%
(8/31/90)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced            21.61%         99.11%          183.38%             NA              200.88%
(9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide           60.01%         149.58%         302.14%             NA              377.57%
Growth (9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth                72.50%         179.22%            NA               NA              277.42%
(7/24/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income                1.17%         61.19%             NA               NA              112.21%
(10/9/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Research                       18.85%         75.67%             NA               NA              134.84%
(7/26/95)

- ------------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets                90.81%         40.15%             NA               NA               36.58%
Equity (10/1/96)

                                    ------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                  -7.31%            NA             NA              NA               8.34%
(1/2/97)

- ----------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                     1.59%            NA             NA              NA               18.93%
(1/2/97)

- ----------------------------------------------------------------------------------------------------------------------

MS UIF International                 20.01%            NA             NA              NA               37.62%
Magnum (1/2/97)

- ----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust               -0.56%          29.80%         130.35%        307.32%            450.860%
Managed (8/1/88) (3)

- ----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                 -7.52%          1.82%           38.34%           151.11%           195.843%
Small Cap (8/1/88) (1)

                                 -------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &          14.56%           NA               NA               NA               48.69%
Income (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth                32.84%         179.43%         437.57%           844.52%              NA
(2/26/69) (2)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money                 -0.94%           NA               NA               NA               2.59%
Market (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------


7.  CUMULATIVE  TOTAL  RETURNS -  Assuming  no  surrender  or  optional  Riders,
non-standard  cumulative  total  returns  for  periods  since  inception  of the
portfolio, including adjusted historical performance for each sub-account are as
follow.  These figures include mortality and expense charges of 1.20% per annum,
administrative  expense  charge of 0.15% per annum and an account fee of $30 per
annum  adjusted  for average  account  size but do not  reflect  any  applicable
contingent  deferred sales load (maximum of 8% of purchase  payments) and do not
reflect any fee deduction for the optional  Riders.  Any credit is not reflected
in this calculation.


- ------------------------------------------------------------------------------------------------------------------------

            SUB-ACCOUNT               For the 1-      For the      For the 5-year   For the 10-year    For the period
(date of commencement of operation   year period   3-year period    period ending    period ending          from
                of                      ending         ending         12/31/98          12/31/98       commencement of
     corresponding portfolio)          12/31/98       12/31/98                                            portfolio
                                                                                                        operations to
                                                                                                          12/31/98

- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------

Alger American Income &                45.05%         154.44%         299.98%           407.10%           441.05%
Growth (11/15/88)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                   13.38%         71.63%          181.25%             NA              230.14%
Income (1/14/91)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Premier Growth             34.72%         159.46%         348.24%             NA              437.89%
(6/26/92)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation               13.47%         83.95%          199.75%             NA              221.83%
(4/5/93)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                  25.38%         37.38%          101.42%             NA              1461.22%
(8/31/90)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced            29.06%         105.72%         189.89%             NA              207.62%
(9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Worldwide           67.46%         156.39%         309.59%             NA              386.21%
Growth (9/13/93)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Emerging Growth                79.95%         186.13%            NA               NA              285.07%
(7/24/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income                8.62%         67.64%             NA               NA              118.63%
(10/9/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Research                       26.30%         82.18%             NA               NA              141.53%
(7/26/95)

                                    ------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------

MS UIF Emerging Markets              98.26%          46.51%            NA              NA               43.02%
Equity (10/1/96)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF Fixed Income                   0.14%            NA              NA              NA               15.46%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF High Yield                     9.04%            NA              NA              NA               26.10%
(1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

MS UIF International                 27.46%            NA              NA              NA               44.88%
Magnum (1/2/97)

- -----------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                6.89%          36.11%         136.43%         316.26%            464.57%
Managed (8/1/88) (3)

- ------------------------------------------------------------------------------------------------------------------------

OCC Accumulation Trust                 -0.07%          8.01%           43.60%           156.90%           203.62%
Small Cap (8/1/88) (1)

- ------------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth &          22.01%           NA               NA               NA               56.52%
Income (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Growth                40.29%         186.34%         446.02%           863.57%             N/A
(2/26/69) (2)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money                  6.51%           NA               NA               NA               10.32%
Market (1/2/98)

- ------------------------------------------------------------------------------------------------------------------------



8. CUMULATIVE  TOTAL RETURNS - Assuming no surrender but reflecting the optional
Living Benefits Rider and Guaranteed  Minimum Death Benefit Rider,  non-standard
cumulative total returns for periods since inception of the portfolio, including
adjusted  historical  performance,  for each  sub-account  are as follow.  These
figures include mortality and expense charges of 1.20% per annum, administrative
expense  charge of 0.15% per annum and an account fee of $30 per annum  adjusted
for average account size, but do not reflect any applicable  contingent deferred
sales load (maximum 8% of purchase payments).  They do reflect deductions of the
fee for the  optional  Living  Benefits  Rider  fee of 0.05%  per  annum and the
optional  Guaranteed  Minimum Death  Benefit  Rider fee of 0.20% per annum.  Any
credit is not reflected in this calculation.


- ------------------------------------------------------------------------------------------------------------------------

            SUB-ACCOUNT                For the        For the      For the 5-year   For the 10-year    For the period
(date of commencement of operation      1-year     3-year period    period ending    period ending          from
                of                      period         ending         12/31/98          12/31/98       commencement of
     corresponding portfolio)           ending        12/31/98                                            portfolio
                                       12/31/98                                                         operations to
                                                                                                          12/31/98

- ------------------------------------------------------------------------------------------------------------------------

Alger American Income &                 44.80%        153.05%          296.20%          396.42%            428.25%
Growth (11/25/88)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Growth &                    13.13%         70.56%          178.40%             NA              223.72%
Income (1/14/91)

- ------------------------------------------------------------------------------------------------------------------------

Alliance VP Premier                     34.47%        158.041%         344.10%             NA              429.86%
Growth (6/26/92)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Appreciation                13.22%         82.82%          196.75%             NA              217.30%
(4/5/93)

- ------------------------------------------------------------------------------------------------------------------------

Dreyfus VIF Small Cap                   25.13%         36.45%          99.24%              NA             1434.26%
(8/31/90)

- ------------------------------------------------------------------------------------------------------------------------

Janus Aspen Series Balanced             28.81%        104.51%          186.98%             NA              203.58%
(9/13/93)

                                  -------------- -------------- ---------------- -------------- ----------------------
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------

Janus Aspen Series                      67.21%        154.98%          305.74%             NA              380.27%
Worldwide Growth (9/13/93)

                                  -------------- -------------- ---------------- -------------- ----------------------
- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------

MFS VIT Emerging Growth                 79.70%        184.62%            NA                NA              281.92%
(7/24/95)

- ------------------------------------------------------------------------------------------------------------------------

MFS VIT Growth w/ Income                8.37%          66.59%            NA                NA              116.71%
(10/9/95)

- ------------------------------------ ------------- --------------- ---------------- ----------------- ------------------
                                  --------------------------------------------------------------------------------------

MFS VIT Research                        26.05%         81.07%            NA                NA              139.34%
(7/26/95)

                                  --------------------------------------------------------------------------------------

MS UIF Emerging Markets Equity       98.01%         45.55%            NA              NA               41.98%
(10/1/96)

- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------

MS UIF Fixed Income                  -0.11%           NA              NA              NA               14.64%
(1/2/97)

- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------

MS UIF High Yield                     8.79%           NA              NA              NA               25.23%
(1/2/97)

- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------

MS UIF International                 27.21%           NA              NA              NA               43.92%
Magnum (1/2/97)

- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------

OCC Accumulation Trust                6.64%         35.30%          133.95%         307.32%            450.86%
Managed (8/1/88)

- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------

OCC Accumulation Trust               -0.32%          7.22%          41.94%          151.11%            195.84%
Small Cap (8/1/88)

- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------

PIMCO VIT StocksPLUS Growth &        21.76%           NA              NA              NA               55.89%
Income (1/2/98)

- --------------------------------- -------------- -------------- ---------------- -------------- ----------------------

Transamerica VIF Growth              40.04%         184.83%         441.71%         844.52%              NA
(2/26/69)

- ------------------------------------------------------------------------------------------------------------------------

Transamerica VIF Money                  6.26%            NA              NA                NA               9.79%
(1/2/98)

- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

DISTRIBUTION OF THE CONTRACT

Transamerica  Securities Sales Corporation ("TSSC") is principal  underwriter of
the contracts under a Distribution  Agreement with  Transamerica.  TSSC may also
serve as principal underwriter and distributor of other contracts issued through
the variable  account and certain other separate  accounts of  Transamerica  and
affiliates  of  Transamerica.  TSSC is an indirect  wholly-owned  subsidiary  of
Transamerica  Corporation,  a subsidiary of AEGON N.V..  TSSC is registered with
the Commission as a broker-dealer and is a member of the National Association of
Securities  Dealers,  Inc.  ("NASD").  Transamerica  pays TSSC for acting as the
principal underwriter under a distribution agreement.

TSSC has entered  into sales  agreements  with other  broker-dealers  to solicit
applications  for  the  contracts  through  registered  representatives  who are
licensed to sell securities and variable  insurance  products.  These agreements
provide that  applications  for the  contracts  may be  solicited by  registered
representatives  of the  broker-dealers  appointed by  Transamerica  to sell its
variable  life  insurance  and  variable  annuities.  These  broker-dealers  are
registered  with the  Commission  and are  members of the NASD.  The  registered
representatives  are  authorized  under  applicable  state  regulations  to sell
variable life insurance and variable annuities.

Under the agreements,  applications for contracts will be sold by broker-dealers
which will receive compensation as described in the prospectus.

The  offering of the  contracts is expected to be  continuous  and TSSC does not
anticipate  discontinuing the offering of the contracts.  However, TSSC reserves
the right to discontinue the offering of the contracts.


During  fiscal  year  1999,  $14,695,209  in  commissions  were  paid to TSSC as
underwriter  of Separate  Accounts  VA-6 and VA-7;  no amounts were  retained by
TSSC.  Under the sales  agreements,  TSSC will pay  broker-dealers  compensation
based on a percentage of each purchase payment.  This percentage may be up to 8%
and  in  certain  situations   additional  amounts  for  marketing   allowances,
production  bonuses,  service fees,  sales awards and meetings,  and asset based
trailer commissions may be paid.


SAFEKEEPING OF VARIABLE ACCOUNT ASSETS

Title to assets of the variable account is held by  Transamerica.  The assets of
the  variable  account are kept  separate  and apart from  Transamerica  general
account  assets.  Records are  maintained of all purchases  and  redemptions  of
portfolio shares held by each of the sub-accounts.

STATE REGULATION

We are subject to the insurance laws and  regulations of all the states where we
are  licensed  to  operate.  The  availability  of certain  contract  rights and
provisions  depends on state approval and/or filing and review processes.  Where
required by state law or regulation, the contract will be modified accordingly.

RECORDS AND REPORTS

All records and accounts  relating to the variable account will be maintained by
us or by our Service Office. As presently required by the provisions of the 1940
Act  and  regulations  promulgated  thereunder  which  pertain  to the  variable
account,  reports  containing such information as may be required under the 1940
Act  or  by  other   applicable  law  or  regulation  will  be  sent  to  owners
semi-annually at their last known address of record.

FINANCIAL STATEMENTS


This Statement of Additional  Information  contains the financial  statements of
the variable account as of and for the period ended December 31, 1999.


The  financial  statements  for  Transamerica  included  in  this  statement  of
additional  information  should be considered  only as bearing on our ability to
meet our  obligations  under the  contracts.  They should not be  considered  as
bearing on the investment performance of the assets in the variable account.


<PAGE>


APPENDIX

         ACCUMULATION TRANSFER FORMULA

         Transfers  after the  annuity  date are  implemented  according  to the
following formulas:

          (1)  Determine the number of units to be transferred from the variable
               sub-account as follows: = AT/AUV1

         (2) Determine the number of variable  accumulation  units  remaining in
         such variable sub-account (after the transfer):
         = UNIT1 AT/AUV1

         (3)  Determine  the  number  of  variable  accumulation  units  in  the
         transferee variable sub-account (after the transfer):
         = UNIT2 + AT/AUV2

         (4) Subsequent variable  accumulation payments will reflect the changes
         in variable  accumulation units in each variable  sub-account as of the
         next variable accumulation payment's due date.

         Where:

         (AUV1)  is  the  variable  accumulation  unit  value  of  the  variable
         sub-account  that the  transfer is being made from as of the end of the
         valuation period in which the transfer request was received.

         (AUV2)  is  the  variable  accumulation  unit  value  of  the  variable
         sub-account  that the  transfer  is being  made to as of the end of the
         valuation period in which the transfer request was received.

         (UNIT1) is the number of variable  accumulation  units in the  variable
         sub-account that the transfer is being made from, before the transfer.

         (UNIT2) is the number of variable  accumulation  units in the  variable
         sub-account that the transfer is being made to, before the transfer.

         (AT)  is  the  dollar  amount  being   transferred  from  the  variable
sub-account.


<PAGE>
0





                          Audited Financial Statements

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                          Year ended December 31, 1999
                       with Report of Independent Auditors


<PAGE>


                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                          Audited Financial Statements


                          Year ended December 31, 1999



<TABLE>
<CAPTION>

                                                     CONTENTS

<S>                                                                                                    <C>
Report of Independent Auditors..........................................................................1

Audited Financial Statements

Statement of Assets and Liabilities.....................................................................2
Statement of Operations.................................................................................6
Statements of Changes in Net Assets....................................................................10
Notes to Financial Statements..........................................................................17
</TABLE>





<PAGE>



                                        1




                         Report of Independent Auditors


Unitholders of Separate Account VA-6 of
  Transamerica Life Insurance and Annuity Company
Board of Directors, Transamerica Life Insurance and
  Annuity Company

We have audited the accompanying statement of assets and liabilities of Separate
Account VA-6 of Transamerica  Life Insurance and Annuity  Company  (comprised of
the Alliance Premier Growth,  Alliance Growth and Income,  Oppenheimer  Managed,
Oppenheimer Small Cap,  Transamerica VIF Growth,  Transamerica VIF Money Market,
MFS  Research,  MFS Growth with Income,  MFS  Emerging  Growth,  Morgan  Stanley
International  Magnum,  Morgan Stanley Fixed Income,  Morgan Stanley High Yield,
Alger American  Income and Growth,  Janus Aspen  Worldwide  Growth,  Janus Aspen
Balanced,  Dreyfus  Capital  Appreciation,  Dreyfus  Small Cap,  Morgan  Stanley
Emerging  Markets Equity,  and PIMCO VIT StockPLUS  Sub-Accounts) as of December
31, 1999, the related  statement of operations for the year then ended,  and the
statements of changes in net assets for the year ended December 31, 1999 and for
the period from January 12, 1998  (commencement  of  operations) to December 31,
1998. The financial  statements are the  responsibility  of the Separate Account
VA-6's  management.  Our  responsibility  is to  express  an  opinion  on  these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the  amounts  and  disclosures  in  the  financial  statements.  Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence  with  fund  managers.  An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  each  of the  respective
sub-accounts comprising Separate Account VA-6 of Transamerica Life Insurance and
Annuity Company as of December 31, 1999, the results of their operations for the
year then ended, and the changes in their net assets for the year ended December
31, 1999 and for the period from January 12, 1998  (commencement  of operations)
to December 31, 1998 in conformity with accounting principles generally accepted
in the United States.


March 24, 2000


<PAGE>


                                        2

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Assets and Liabilities

                                December 31, 1999
<TABLE>
<CAPTION>


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------
ASSETS
<S>                               <C>               <C>              <C>               <C>              <C>
   Investments, at fair value     $   39,341,157    $   14,833,902   $    4,827,117    $      877,556   $   76,609,284
   Receivable for units sold                   -                 -                -                 -                -
   Due from Transamerica Life                  -                 -                -                 -                -
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Total assets                          39,341,157        14,833,902        4,827,117           877,556       76,609,284

LIABILITIES
   Payable for units redeemed             31,727            13,116           32,631                 -           49,789
   Due to Transamerica Life                  445             2,813                -                 4            2,827
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Total liabilities                         32,172            15,929           32,631                 4           52,616
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Net assets                        $   39,308,985    $   14,817,973   $    4,794,486    $      877,552   $   76,556,668
                                  ================= ================ ================= ================ =================

Accumulation units outstanding     2,081,825.689     1,135,587.446      439,082.233       101,045.650    3,988,508.416
                                  ================= ================ ================= ================ =================

Net asset value and redemption
   price per unit                 $    18.881977    $    13.048729   $    10.919335    $     8.684708   $    19.194310
                                  ================= ================ ================= ================ =================

Investment sub-account
   information:

Number of  mutual fund shares        972,587.330       680,766.500      110,586.880        38,967.880    2,878,965.970

Net asset value per share         $        40.45    $        21.79   $        43.65    $        22.52   $        26.61

Investment cost                   $   32,483,643    $   14,412,388   $    4,758,759    $      881,071   $   58,867,611



</TABLE>

See accompanying notes.


<PAGE>

<TABLE>
<CAPTION>









                                                                         MORGAN STANLEY
 TRANSAMERICA VIF                                                         INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
   MONEY MARKET                         MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
   SUB-ACCOUNT        MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

<S>                 <C>               <C>              <C>               <C>              <C>               <C>
$    8,731,360      $    5,952,512    $   12,256,210   $   17,514,557    $    2,487,390   $    6,512,282    $    6,148,760
         1,113                   -                 -            5,986                 -                -                 -
           231                   -                 -                -                 -                -                 -
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------
     8,732,704           5,952,512        12,256,210       17,520,543         2,487,390        6,512,282         6,148,760


        14,512              10,339             4,094                -            10,677                -             3,693
             -                  81                60              577                43               25                62
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------
        14,512              10,420             4,154              577            10,720               25             3,755
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

$    8,718,192      $    5,942,092    $   12,252,056   $   17,519,966    $    2,476,670   $    6,512,257    $    6,145,005
=================== ================= ================ ================= ================ ================= ================

 8,145,374.551         399,512.466       965,409.265      760,433.531       187,194.949      633,201.933       563,904.809
=================== ================= ================ ================= ================ ================= ================


$     1.070324      $    14.873358    $    12.691049   $    23.039444    $    13.230432   $    10.284645    $    10.897238
=================== ================= ================ ================= ================ ================= ================




 8,731,360.880         255,034.800       575,138.930      461,638.300       179,077.820      647,988.350       600,464.940

$         1.00      $        23.34    $        21.31   $        37.94    $        13.89   $        10.05    $        10.24

$    8,731,360      $    4,851,092    $   11,338,585   $   10,665,909    $    2,072,959   $    6,912,330    $    6,378,125

</TABLE>

<PAGE>


                                        4

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                 Statement of Assets and Liabilities (continued)

<TABLE>
<CAPTION>


                                   ALGER AMERICAN     JANUS ASPEN                       DREYFUS
                                     INCOME AND        WORLDWIDE      JANUS ASPEN       CAPITAL      DREYFUS SMALL
                                       GROWTH           GROWTH          BALANCED      APPRECIATION        CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT
                                  ----------------- ---------------- --------------- --------------- ---------------
ASSETS
<S>                               <C>               <C>              <C>             <C>             <C>
   Investments, at fair value     $   20,338,846    $   33,683,258   $   31,309,726  $   15,402,361  $    7,460,447
   Receivable for units sold                   -            55,068                -               -               -
   Due from Transamerica Life                  -                 -                -              26              14
                                  ----------------- ---------------- --------------- --------------- ---------------
Total assets                          20,338,846        33,738,326       31,309,726      15,402,387       7,460,461

LIABILITIES
   Payable for units redeemed              3,000                 -           78,716          83,955          24,986
   Due to Transamerica Life                  351               523              238               -               -
                                  ----------------- ---------------- --------------- --------------- ---------------
Total liabilities                          3,351               523           78,954          83,955          24,986
                                  ----------------- ---------------- --------------- --------------- ---------------

Net assets                        $   20,335,495    $   33,737,803   $   31,230,772  $   15,318,432  $    7,435,475
                                  ================= ================ =============== =============== ===============

Accumulation units outstanding     1,102,496.260     1,643,533.430    1,886,693.794   1,093,808.832     639,456.014
                                  ================= ================ =============== =============== ===============

Net asset value and redemption
   price per unit                 $    18.444956    $    20.527604   $    16.553175  $    14.004670  $    11.627813
                                  ================= ================ =============== =============== ===============

Investment sub-account
   information:

Number of  mutual fund shares      1,156,930.970       705,408.550    1,121,408.540     386,314.560     112,457.750

Net asset value per share         $        17.58    $        47.75   $        27.92  $        39.87  $        66.34

Investment cost                   $   15,231,104    $   23,118,222   $   27,022,049  $   14,117,537  $    6,308,492


</TABLE>

See accompanying notes.


<PAGE>


                                        5








      MORGAN
 STANLEY EMERGING       PIMCO
  MARKETS EQUITY    VIT STOCKPLUS
   SUB-ACCOUNT       SUB-ACCOUNT
- ------------------- ---------------

$      570,146      $      100,766
             -                   -
             -                   -
- ------------------- ---------------
       570,146             100,766


             -                   -
            43                   1
- ------------------- ---------------
            43                   1
- ------------------- ---------------

$      570,103      $      100,765
=================== ===============

    39,511.653           9,289.183
=================== ===============


$    14.428731      $    10.847563
=================== ===============





    40,988.240           7,431.190

$        13.91      $        13.56

$      535,334      $      101,391


<PAGE>


                                        6

                                             Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                                              Statement of Operations

                                           Year ended December 31, 1999
<TABLE>
<CAPTION>


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

<S>                               <C>               <C>              <C>               <C>              <C>
Investment income                 $     220,040     $     709,999    $     125,169     $       2,979    $           -

Expenses:
   Mortality and expense risk
     charge                             265,324           116,472           47,729             8,175          555,721
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net investment income (loss)            (45,284)          593,527           77,440            (5,196)        (555,721)

Net realized and unrealized gain (loss) on investments:
     Realized gain (loss) on
       investment transactions          653,810           (34,876)         (19,664)           (6,659)         941,408
     Unrealized appreciation
       (depreciation) of
       investments                    5,886,726            60,218           51,671            (3,670)      16,235,413
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Net gain (loss) on investments        6,540,536            25,342           32,007           (10,329)      17,176,821
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Increase (decrease) in assets
   resulting from operations      $   6,495,252     $     618,869    $     109,447     $     (15,525)   $  16,621,100
                                  ================= ================ ================= ================ =================
</TABLE>



See accompanying notes.


<PAGE>


                                        7




<TABLE>
<CAPTION>




                                                                         MORGAN STANLEY
 TRANSAMERICA VIF                                                         INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
   MONEY MARKET                         MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
   SUB-ACCOUNT        MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

<S>                 <C>               <C>              <C>               <C>              <C>               <C>
$     317,083       $      39,232     $      51,759    $           -     $      24,636    $     286,807     $     450,707



       93,869              48,842           113,577          106,543            21,918           61,987            58,545
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------
      223,214              (9,610)          (61,818)        (106,543)            2,718          224,820           392,162




            -              26,316            71,623          294,616             2,495           (6,961)          (15,780)


      (56,229)            937,760           548,180        6,261,699           414,271         (335,925)         (128,542)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

      (56,229)            964,076           619,803        6,556,315           416,766         (342,886)         (144,322)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------


$     166,985       $     954,466     $     557,985    $   6,449,772     $     419,484    $    (118,066)    $     247,840
=================== ================= ================ ================= ================ ================= ================

</TABLE>

<PAGE>


                                        8

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Operations (continued)

<TABLE>
<CAPTION>


                                   ALGER AMERICAN     JANUS ASPEN                       DREYFUS
                                     INCOME AND        WORLDWIDE      JANUS ASPEN       CAPITAL      DREYFUS SMALL
                                       GROWTH           GROWTH          BALANCED      APPRECIATION        CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT
                                  ----------------- ---------------- --------------- --------------- ---------------

<S>                               <C>               <C>              <C>             <C>             <C>
Investment income                 $     434,309     $      23,946    $     487,403   $     137,316   $      2,013

Expenses:
   Mortality and expense risk
     charge                             135,473           194,792          212,914         130,037         57,102
                                  ----------------- ---------------- --------------- --------------- ---------------
Net investment income (loss)            298,836          (170,846)         274,489           7,279        (55,089)


Net realized and unrealized gain (loss) on investments:
     Realized gain (loss) on
       investment transactions          217,501           444,522          294,348         133,316        (90,513)
     Unrealized appreciation
       (depreciation) of
       investments                    4,616,595        10,112,634        3,668,310         830,432      1,168,189
                                  ----------------- ---------------- --------------- --------------- ---------------

Net gain (loss) on investments        4,834,096        10,557,156        3,962,658         963,748      1,077,676
                                  ----------------- ---------------- --------------- --------------- ---------------

Increase (decrease) in net
   assets resulting from          $   5,132,932     $  10,386,310    $   4,237,147   $     971,027   $  1,022,587
   operations
                                  ================= ================ =============== =============== ===============

</TABLE>


See accompanying notes.


<PAGE>


                                        9








      MORGAN
 STANLEY EMERGING       PIMCO
  MARKETS EQUITY    VIT STOCKPLUS
   SUB-ACCOUNT       SUB-ACCOUNT
- ------------------- ---------------

$           -       $       7,215



          692                 165
- ------------------- ---------------
         (692)              7,050





       72,096                  13


       34,812                (624)
- ------------------- ---------------

      106,908                (611)
- ------------------- ---------------


$     106,216       $       6,439
=================== ===============



<PAGE>


                                       10

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Changes in Net Assets

                          Year ended December 31, 1999
<TABLE>
<CAPTION>


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Increase in net assets:
   Operations:
     Net investment income
<S>                               <C>               <C>              <C>               <C>              <C>
       (loss)                     $     (45,284)    $     593,527    $      77,440     $      (5,196)   $    (555,721)
     Realized gain (loss) on
       investment transactions          653,810           (34,876)         (19,664)           (6,659)         941,408
     Unrealized appreciation
       (depreciation) of
       investments                    5,886,726            60,218           51,671            (3,670)      16,235,413
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Increase (decrease) in net
   assets resulting from              6,495,252           618,869          109,447           (15,525)      16,621,100
   operations

Change from accumulation unit
   transactions                      26,628,545        10,167,044        2,585,748           463,610       39,818,814
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Total increase in net assets         33,123,797        10,785,913        2,695,195           448,085       56,439,914

Net assets at beginning of            6,185,188         4,032,060        2,099,291           429,467       20,116,754
period
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Net assets at end of period       $  39,308,985     $  14,817,973    $   4,794,486     $     877,552    $  76,556,668
                                  ================= ================ ================= ================ =================



See accompanying notes.


<PAGE>


                                       11








                                                                         MORGAN STANLEY
 TRANSAMERICA VIF                                                         INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
   MONEY MARKET                         MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
   SUB-ACCOUNT        MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------




$     223,214       $      (9,610)    $     (61,818)   $    (106,543)    $       2,718    $     224,820     $     392,162

            -              26,316            71,623          294,616             2,495           (6,961)          (15,780)


      (56,229)            937,760           548,180        6,261,699           414,271         (335,925)         (128,542)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------


      166,985             954,466           557,985        6,449,772           419,484         (118,066)          247,840


    4,269,998           3,148,890         7,560,891        7,129,722         1,044,422        3,882,462         3,083,329
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

    4,436,983           4,103,356         8,118,876       13,579,494         1,463,906        3,764,396         3,331,169

    4,281,209           1,838,736         4,133,180        3,940,472         1,012,764        2,747,861         2,813,836
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

$   8,718,192       $   5,942,092     $  12,252,056    $  17,519,966     $   2,476,670    $   6,512,257     $   6,145,005
=================== ================= ================ ================= ================ ================= ================


<PAGE>


                                       12

                                             Separate Account VA-6 of
                                  Transamerica Life Insurance and Annuity Company

                                  Statement of Changes in Net Assets (continued)



                                       ALGER
                                  AMERICAN INCOME     JANUS ASPEN                       DREYFUS
                                     AND GROWTH        WORLDWIDE      JANUS ASPEN       CAPITAL      DREYFUS SMALL
                                    SUB-ACCOUNT         GROWTH          BALANCED      APPRECIATION        CAP
                                                      SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT     SUB-ACCOUNT
                                  ----------------- ---------------- --------------- --------------- ---------------

Increase in net assets:
   Operations:
     Net investment income
       (loss)                     $     298,836     $    (170,846)   $     274,489   $       7,279   $     (55,089)
     Realized gain (loss) on
       investment  transactions         217,501           444,522          294,348         133,316         (90,513)
     Unrealized appreciation
       (depreciation) of
       investments                    4,616,595        10,112,634        3,668,310`        830,432       1,168,189
                                  ----------------- ---------------- --------------- --------------- ---------------

Increase (decrease) in net
   assets resulting from              5,132,932        10,386,310        4,237,147         971,027       1,022,587
   operations

Changes from accumulation unit
   transactions                      11,137,669        17,654,193       22,110,729       9,551,150       3,776,210
                                  ----------------- ---------------- --------------- --------------- ---------------

Total increase in net assets         16,270,601        28,040,503       26,347,876      10,522,177       4,798,797

Net assets at beginning of year       4,064,894         5,697,300        4,882,896       4,796,255       2,636,678
                                  ----------------- ---------------- --------------- --------------- ---------------

Net assets at end of year         $  20,335,495     $  33,737,803    $  31,230,772   $  15,318,432   $   7,435,475
                                  ================= ================ =============== =============== ===============



See accompanying notes.


<PAGE>



                                       13








      MORGAN
 STANLEY EMERGING        PIMCO
  MARKETS EQUITY          VIT
    SUB-ACCOUNT        STOCKPLUS
                      SUB-ACCOUNT
- -------------------- --------------




$        (692)       $       7,050

       72,096                   13


       34,812                 (624)
- -------------------- --------------


      106,216                6,439


      463,887               94,326
- -------------------- --------------

      570,103              100,765

            -                    -
- -------------------- --------------

$     570,103        $     100,765
==================== ==============

</TABLE>


<PAGE>


                                       14

                            Separate Account VA-6 of
                 Transamerica Life Insurance and Annuity Company

                       Statement of Changes in Net Assets
<TABLE>
<CAPTION>

 Period from January 12, 1998 (commencement of operations) to December 31, 1998


                                       ALLIANCE         ALLIANCE
                                    PREMIER GROWTH     GROWTH AND       OPPENHEIMER      OPPENHEIMER      TRANSAMERICA
                                      SUB-ACCOUNT        INCOME           MANAGED         SMALL CAP        VIF GROWTH
                                                       SUB-ACCOUNT      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase in net assets:
   Operations:
<S>                                   <C>              <C>              <C>              <C>               <C>
     Net investment income (loss)     $   (20,663)     $    93,130      $   (11,143)     $    (1,951)      $ 1,541,026
     Realized gain (loss) on
       investment transactions              9,374          (11,810)         (13,311)          (5,298)          224,895
     Unrealized appreciation
       (depreciation) of
       investments                        970,787          361,294           16,685              155         1,506,260
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase (decrease) in net assets
   resulting from operations              959,498          442,614           (7,769)          (7,094)        3,272,181

Change from accumulation unit
   transactions                         5,225,690        3,589,446        2,107,060          436,561        16,844,573
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Total increase in net assets            6,185,188        4,032,060        2,099,291          429,467        20,116,754

Net assets at beginning of period               -                -                -                -                 -
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Net assets at end of period           $ 6,185,188      $ 4,032,060      $ 2,099,291      $   429,467       $20,116,754
                                    ================ ================ ================ ================= ================


See accompanying notes.



<PAGE>


                                       16








                                                                         MORGAN STANLEY
   TRANSAMERICA                                                           INTERNATIONAL    MORGAN STANLEY   MORGAN STANLEY
    VIF MONEY                           MFS GROWTH       MFS EMERGING        MAGNUM         FIXED INCOME      HIGH YIELD
MARKET SUB-ACCOUNT    MFS RESEARCH      WITH INCOME         GROWTH         SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                      SUB-ACCOUNT       SUB-ACOUNT       SUB-ACCOUNT
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------



  $    40,317         $    (5,457)      $   (19,027)     $   (13,376)      $      (493)     $   103,661       $   161,107

          270                (453)           (5,984)          (4,306)             (674)           1,296           (12,252)


       56,229             163,659           369,444          586,948               160          (64,122)         (100,822)
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------


       96,816             157,749           344,433          569,266            (1,007)          40,835            48,033


    4,184,393           1,680,987         3,788,747        3,371,206         1,013,771        2,707,026         2,765,803
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

    4,281,209           1,838,736         4,133,180        3,940,472         1,012,764        2,747,861         2,813,836

            -                   -                 -                -                 -                -                 -
- ------------------- ----------------- ---------------- ----------------- ---------------- ----------------- ----------------

  $ 4,281,209         $ 1,838,736       $ 4,133,180      $ 3,940,472       $ 1,012,764      $ 2,747,861       $ 2,813,836
=================== ================= ================ ================= ================ ================= ================



<PAGE>


                                             Separate Account VA-6 of
                                  Transamerica Life Insurance and Annuity Company

                                  Statement of Changes in Net Assets (continued)

                  Period from January 12, 1998 (commencement of operations) to December 31, 1998

                                         ALGER
                                       AMERICAN        JANUS ASPEN                     DREYFUS CAPITAL
                                      INCOME AND        WORLDWIDE       JANUS ASPEN      APPRECIATION        DREYFUS
                                        GROWTH           GROWTH          BALANCED        SUB-ACCOUNT        SMALL CAP
                                      SUB-ACCOUNT      SUB-ACCOUNT      SUB-ACCOUNT                        SUB-ACCOUNT
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase in net assets:
   Operations:
     Net investment income (loss)     $    47,767      $    33,619      $    75,025      $     3,770       $    19,489
     Realized gain (loss) on
       investment transactions            (11,058)          (1,276)          16,321            6,062           (18,515)
     Unrealized appreciation
       (depreciation) of
       investments                        491,146          452,400          619,366          454,391           (16,234)
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Increase (decrease) in net assets
   resulting from operations              527,855          484,743          710,712          464,223           (15,260)

Change from accumulation unit
   transactions                         3,537,039        5,212,557        4,172,184        4,332,032         2,651,938
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Total increase in net assets            4,064,894        5,697,300        4,882,896        4,796,255         2,636,678

Net assets at beginning of period               -                -                -                -                 -
                                    ---------------- ---------------- ---------------- ----------------- ----------------

Net assets at end of period           $ 4,064,894      $ 5,697,300      $ 4,882,896      $ 4,796,255       $ 2,636,678
                                    ================ ================ ================ ================= ================
</TABLE>

See accompanying notes.


<PAGE>


                              Separate Account VA-6
                 Transamerica Life Insurance and Annuity Company

                          Notes to Financial Statements

                                December 31, 1999

                                       19

1. ORGANIZATION

Separate  Account  VA-6 of  Transamerica  Life  Insurance  and  Annuity  Company
("Separate  Account") was established by Transamerica Life Insurance and Annuity
Company  ("Transamerica Life") as a separate account under the laws of the State
of North Carolina pursuant to June 11, 1996 resolutions of Transamerica's  Board
of  Directors.  The  Separate  Account is  registered  with the  Securities  and
Exchange  Commission ("the Commission") under the Investment Company Act of 1940
as a unit investment trust and is designed to provide annuity benefits  pursuant
to deferred  annuity  contracts  ("Contract")  issued by Transamerica  Life. The
Separate  Account  commenced  operations when initial  deposits were received on
January 12, 1998.

In  accordance  with the terms of the  Contract,  all payments  allocated to the
Separate  Account by contract  owners must be allocated to purchase units of any
or all of the Separate  Account's nineteen  sub-accounts,  each of which invests
exclusively in a specific  corresponding mutual fund portfolio.  The mutual fund
portfolios are: Alliance Premier Growth, Alliance Growth and Income, Oppenheimer
Managed,  Oppenheimer Small Cap, Transamerica VIF Growth, Transamerica VIF Money
Market,  MFS  Research,  MFS Growth with  Income,  MFS Emerging  Growth,  Morgan
Stanley  International  Magnum, Morgan Stanley Fixed Income, Morgan Stanley High
Yield,  Alger American Income and Growth,  Janus Aspen Worldwide  Growth,  Janus
Aspen Balanced, Dreyfus Capital Appreciation,  Dreyfus Small Cap, Morgan Stanley
Emerging  Markets  Equity and PIMCO VIT StockPLUS  (together  "the Funds").  The
Funds  are  open-end,  diversified  investment  companies  registered  under the
Investment Company Act of 1940.

2. SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements of the Separate Account have been prepared
in  accordance  with  accounting  principles  generally  accepted  in the United
States.  The  preparation of financial  statements  requires  management to make
estimates  and  assumptions  that  affect  amounts  reported  in  the  financial
statements and accompanying  notes.  Such estimates and assumptions could change
in the future as more  information  becomes known which could impact the amounts
reported  and  disclosed  herein.  The  accounting  principles  followed and the
methods of applying those principles are presented below:

INVESTMENT VALUATION

Investments  in Funds'  shares are carried at fair (net asset)  value.  Realized
investment  gains  or  losses  on  investments  are  determined  on  a  specific
identification  basis which approximates average cost.  Investment  transactions
are accounted for on the date the order to buy or sell is executed (trade date).


<PAGE>


                                               Separate Account VA-6
                 Transamerica Life Insurance and Annuity Company

                                     Notes to Financial Statements (continued)




2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENT INCOME

Investment  income consists of dividend income (both ordinary and capital gains)
and is  recognized  on the  ex-dividend  date.  All  distributions  received are
reinvested in the respective sub-accounts.

FEDERAL INCOME TAXES

Operations of the Separate Account are part of, and will be taxed with, those of
Transamerica  Life,  which is  taxed as a "life  insurance  company"  under  the
Internal  Revenue Code. Under current federal income tax law, income from assets
maintained in the Separate Account for the exclusive  benefit of participants is
generally not subject to federal income tax.

3. EXPENSES AND CHARGES

Mortality  and expense risk charges are deducted  form each  sub-account  of the
Separate  Account on a daily basis which is equal,  on an annual basis, to 1.20%
of the daily net asset value of the sub-account.  This amount can never increase
and is paid to  Transamerica  Life.  An  administrative  expense  charge is also
deducted by  Transamerica  Life from each  sub-account on a daily basis which is
equal,  on an  annual  basis,  to .15%  of the  daily  net  asset  value  of the
sub-account.  This  amount  may  change,  but it is  guaranteed  not to exceed a
maximum effective annual rate of .35%.

The  following  charges  are  deducted  form  a  contract  holder's  account  by
Transamerica Life and not directly from the Separate Account. An annual contract
fee is deducted  at the end of each  contract  year prior to the  annuity  date.
Currently, this charge is $30 (or 2% of the account value, if less). This charge
may change but is guaranteed not to exceed $60 (or 2% of the account  value,  if
less). After the annuity date this charge is referred to as the Annuity Fee. The
Annuity Fee is $30. Additionally, there is a $10 fee for each transfer in excess
of eighteen in each calendar year. In the event that a contract holder withdraws
all or a portion of the contract holder's account,  a contingent  deferred sales
load (CDSL) not  exceeding  6% of  premiums  may be applied to the amount of the
contract  value  withdrawn  to cover  certain  expenses  relating to the sale of
contracts.  The amount of the CDSL is based upon  elapsed time since the premium
was received and disappears  after the seventh year.  During 1999, CDSL amounted
to $77,064.



<PAGE>


                                       26


4. REMUNERATION

The separate  account pays no  remuneration  to  directors,  advisory  boards or
officers or such other  persons who may from time to time  perform  services for
the Separate Account.

5. ACCUMULATION UNITS
<TABLE>
<CAPTION>

The changes in accumulation units and amounts are as follows:


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Year ended December 31, 1999

Accumulation Units:
<S>                                 <C>                 <C>              <C>              <C>             <C>
   Units sold                       1,150,187.485       502,971.812      181,583.435      21,295.199      2,035,471.824
   Units redeemed                     (37,971.274)      (23,234.689)      (8,040.765)       (398.348)      (117,191.886)
   Units transferred                  541,961.340       316,310.256       66,371.581      32,251.631        645,387.055
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                        1,654,177.551       796,047.379      239,914.251      53,148.482      2,563,666.993
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                      15,247,050.345       174,333.788      384,297.790       328,467.480       50,344.669
   Units redeemed                    (724,530.551)       (9,184.776)     (22,640.100)       (9,356.530)      (4,834.347)
   Units transferred              (10,507,039.207)       83,050.548      260,907.051       143,108.648       47,129.299
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                        4,015,480.587       248,199.560      622,564.741       462,219.598       92,639.621
                                  ================= ================ ================= ================ =================

                                                                      ALGER AMERICAN
                                   MORGAN STANLEY   MORGAN STANLEY      INCOME AND       JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD          GROWTH          WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT         GROWTH           BALANCED
                                                                                         SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                         158,959.661       118,987.338      577,035.945       784,616.523    1,030,839.833
   Units redeemed                     (17,060.765)      (17,482.256)     (20,966.788)      (25,497.851)     (25,096.610)
   Units transferred                  232,066.572       189,528.970      236,678.161       434,072.458      512,022.250
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                          373,965.468       291,034.052      792,747.318     1,193,191.130    1,517,765.473
                                  ================= ================ ================= ================ =================


<PAGE>



5. ACCUMULATION UNITS (CONTINUED)

                                                                      MORGAN STANLEY
                                  DREYFUS CAPITAL                        EMERGING
                                    APPRECIATION        DREYFUS       MARKETS EQUITY      PIMCO VIT
                                    SUB-ACCOUNT        SMALL CAP       SUB-ACCOUNT        STOCKPLUS
                                                      SUB-ACCOUNT                        SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ----------------

Accumulation Units:
   Units sold                         489,603.950       259,178.342     11,571.407           3,424.049
   Units redeemed                     (18,096.200)       (6,736.271)        (0.117)             (0.822)
   Units transferred                  245,680.723       111,487.469     27,940.363           5,865.956
                                  ----------------- ---------------- ----------------- ----------------
Net increase                          717,188.473       363,929.540     39,511.653           9,289.183
                                  ================= ================ ================= ================


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Year ended December 31, 1999

Amounts:
   Sales                          $  18,515,436     $   6,423,910    $   1,957,070     $     185,756    $  31,614,899
   Redemptions                         (611,252)         (296,751)         (86,661)           (3,474)      (1,820,221)
   Transfers                          8,724,361         4,039,885          715,339           281,328       10,024,136
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $  26,628,545     $  10,167,044    $   2,585,748     $     463,610    $  39,818,814
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $  16,213,468     $   2,211,760    $   4,667,199     $   5,066,600    $     567,587
   Redemptions                         (770,454)         (116,526)        (274,958)         (144,324)         (54,502)
   Transfers                        (11,173,016)        1,053,656        3,168,650         2,207,446          531,337
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   4,269,998     $   3,148,890    $   7,560,891     $   7,129,722    $   1,044,422
                                  ================= ================ ================= ================ =================

                                   MORGAN STANLEY   MORGAN STANLEY    ALGER AMERICAN     JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD        INCOME AND        WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT         GROWTH           GROWTH           BALANCED
                                                                       SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $   1,650,696     $   1,260,598    $   8,107,041     $  11,609,013    $  15,017,222
   Redemptions                         (177,165)         (185,213)        (294,571)         (377,260)        (365,606)
   Transfers                          2,408,931         2,007,944        3,325,199         6,422,440        7,459,113
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   3,882,462     $   3,083,329    $  11,137,669     $  17,654,193    $  22,110,729
                                  ================= ================ ================= ================ =================


5. ACCUMULATION UNITS (CONTINUED)

                                                                      MORGAN STANLEY
                                  DREYFUS CAPITAL                        EMERGING
                                    APPRECIATION     DREYFUS SMALL    MARKETS EQUITY      PIMCO VIT
                                    SUB-ACCOUNT           CAP          SUB-ACCOUNT        STOCKPLUS
                                                      SUB-ACCOUNT                        SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ----------------

Amounts:
   Sales                          $   6,520,295     $   2,689,289    $     135,854     $      34,769
   Redemptions                         (240,995)          (69,896)              (1)               (8)
   Transfers                          3,271,850         1,156,817          328,034            59,565
                                  ----------------- ---------------- ----------------- ----------------
Net increase                      $   9,551,150     $   3,776,210    $     463,887     $      94,326
                                  ================= ================ ================= ================


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Period from January 12, 1998
to December 31, 1998
- ---------------------------------

Accumulation Units:
   Units sold                       405,514.499         322,509.748      189,242.536        44,756.495    1,548,611.269
   Units redeemed                    (3,888.691)         (1,520.939)        (777.337)         (147.621)     (95,167.336)
   Units transferred                 26,022.380          18,551.258       10,702.783         3,288.294      (28,602.510)
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                        427,648.138         339,540.067      199,167.982        47,897.168    1,424,841.423
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                     5,500,255.363         142,988.314      330,630.911       276,470.688       87,091.861
   Units redeemed                    (2,062.198)         (4,416.640)      (1,298.233)       (1,568.594)        (464.787)
   Units transferred              (1,368,299.201)        12,741.232       13,511.846        23,311.839        7,928.254
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      4,129,893.964         151,312.906      342,844.524       298,213.933       94,555.328
                                  ================= ================ ================= ================ =================

                                   MORGAN STANLEY   MORGAN STANLEY    ALGER AMERICAN     JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD        INCOME AND        WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT         GROWTH           GROWTH           BALANCED
                                                                       SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Accumulation Units:
   Units sold                         237,248.878       253,931.309      289,673.784       422,289.213      360,603.402
   Units redeemed                        (985.174)       (1,033.135)        (723.615)       (1,069.840)     (22,736.191)
   Units transferred                   23,062.761        19,972.583       20,798.773        29,122.927       31,061.110
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                          259,326.465       272,870.757      309,748.942       450,342.300      368,928.321
                                  ================= ================ ================= ================ =================


<PAGE>


5. ACCUMULATION UNITS (CONTINUED)

                                  DREYFUS CAPITAL       DREYFUS
                                    APPRECIATION       SMALL CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ----------------

Accumulation Units:
   Units sold                         368,198.962       272,098.659
   Units redeemed                      (2,294.029)         (326.488)
   Units transferred                   10,715.426         3,754.303
                                  ----------------- ----------------
Net increase                          376,620.359       275,526.474
                                  ================= ================


                                      ALLIANCE         ALLIANCE
                                   PREMIER GROWTH     GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                    SUB-ACCOUNT         INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                                      SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Period from January 12, 1998
- --------------------------------
to December 31, 1998

Amounts:
   Sales                          $   4,954,418     $   3,411,999    $   2,002,455     $     407,942    $  18,309,974
   Redemptions                          (47,478)          (16,075)          (8,209)           (1,344)      (1,125,549)
   Transfers                            318,750           193,522          112,814            29,963         (339,852)
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   5,225,690     $   3,589,446    $   2,107,060     $     436,561    $  16,844,573
                                  ================= ================ ================= ================ =================

                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $   5,573,456     $   1,588,416    $   3,653,939     $   3,126,319    $     933,831
   Redemptions                           (2,089)          (49,043)         (14,373)          (17,694)          (4,980)
   Transfers                         (1,386,974)          141,614          149,181           262,581           84,920
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   4,184,393     $   1,680,987    $   3,788,747     $   3,371,206    $   1,013,771
                                  ================= ================ ================= ================ =================

                                   MORGAN STANLEY   MORGAN STANLEY    ALGER AMERICAN     JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD        INCOME AND        WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT         GROWTH           GROWTH           BALANCED
                                                                       SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Amounts:
   Sales                          $   2,476,824     $   2,575,049    $   3,307,793     $   4,890,611    $   4,075,419
   Redemptions                          (10,286)          (10,477)          (8,233)          (12,394)        (256,882)
   Transfers                            240,488           201,231          237,479           334,340          353,647
                                  ----------------- ---------------- ----------------- ---------------- -----------------
Net increase                      $   2,707,026     $   2,765,803    $   3,537,039     $   5,212,557    $   4,172,184
                                  ================= ================ ================= ================ =================


<PAGE>



5. ACCUMULATION UNITS (CONTINUED)

                                  DREYFUS CAPITAL    DREYFUS SMALL
                                    APPRECIATION          CAP
                                    SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ----------------

Amounts:
   Sales                          $   4,235,043     $   2,606,986
   Redemptions                          (26,372)           (3,125)
   Transfers                            123,361            48,077
                                  ----------------- ----------------
Net increase                      $   4,332,032     $   2,651,938
                                  ================= ================

6. INVESTMENT TRANSACTIONS

The aggregate  cost of purchases  and the  aggregate  proceeds from the sales of
investments during the year ended December 31, 1999 were:

                                    ALLIANCE
                                      ALLIANCE        GROWTH AND       OPPENHEIMER       OPPENHEIMER      TRANSAMERICA
                                       GROWTH           INCOME           MANAGED          SMALL CAP        VIF GROWTH
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Aggregate purchases                 $28,821,517       $11,615,805       $3,143,095          $494,133      $44,755,385
                                  ================= ================ ================= ================ =================

Aggregate proceeds from sales      $  2,512,727     $     965,845      $   469,055         $  35,580     $  5,686,255
                                  ================= ================ ================= ================ =================


                                                                                                         MORGAN STANLEY
                                    TRANSAMERICA                                                         INTERNATIONAL
                                     VIF MONEY                       MFS GROWTH WITH    MFS EMERGING         MAGNUM
                                       MARKET        MFS RESEARCH         INCOME           GROWTH         SUB-ACCOUNT
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT       SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------

Aggregate purchases                 $22,616,002        $3,408,425       $8,275,181       $8,068,588       $1,200,392
                                  ================= ================ ================= ================ =================

Aggregate proceeds from sales       $17,635,459       $   284,725      $   877,617       $1,068,135      $   152,421
                                  ================= ================ ================= ================ =================


<PAGE>


6. INVESTMENT TRANSACTIONS (CONTINUED)

                                                                      ALGER AMERICAN
                                   MORGAN STANLEY   MORGAN STANLEY      INCOME AND       JANUS ASPEN
                                    FIXED INCOME      HIGH YIELD          GROWTH          WORLDWIDE       JANUS ASPEN
                                    SUB-ACCOUNT       SUB-ACCOUNT      SUB-ACCOUNT         GROWTH           BALANCED
                                                                                         SUB-ACCOUNT      SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ---------------- -----------------


Aggregate purchases                 $4,635,604        $3,916,870      $12,640,018       $19,398,096      $23,486,727
                                  ================= ================ ================= ================ =================

Aggregate proceeds from sales      $   559,981       $   517,230     $  1,228,203      $  2,001,697     $  1,348,530
                                  ================= ================ ================= ================ =================

                                                                      MORGAN STANLEY
                                  DREYFUS CAPITAL                        EMERGING
                                    APPRECIATION        DREYFUS       MARKETS EQUITY      PIMCO VIT
                                    SUB-ACCOUNT        SMALL CAP       SUB-ACCOUNT        STOCKPLUS
                                                      SUB-ACCOUNT                        SUB-ACCOUNT
                                  ----------------- ---------------- ----------------- ----------------


Aggregate purchases                $10,459,049        $4,549,809          $736,015          $101,552
                                  ================= ================ ================= ================

Aggregate proceeds from sales     $     862,852      $   729,394          $272,777       $       173
                                  ================= ================ ================= ================


</TABLE>
<PAGE>


<PAGE>

<TABLE>
<CAPTION>


                 Transamerica Life Insurance and Annuity Company

                     Financial Statements - Statutory Basis

                  Years ended December 31, 1999, 1998 and 1997




                                    CONTENTS

<S>                                                                                                    <C>
Report of Independent Auditors..........................................................................1

Audited Financial Statements

Balance Sheets - Statutory Basis........................................................................3
Statements of Operations - Statutory Basis..............................................................5
Statements of Changes in Capital and Surplus - Statutory Basis..........................................6
Statements of Cash Flow - Statutory Basis...............................................................7
Notes to Financial Statements - Statutory Basis.........................................................9


Statutory Basis Financial Statement Schedules

Summary of Investments - Other Than Investments in Related Parties -
   Statutory Basis.....................................................................................33
Supplementary Insurance Information - Statutory Basis..................................................34
Reinsurance - Statutory Basis..........................................................................36

</TABLE>


<PAGE>



2






                         Report of Independent Auditors

The Board of Directors
Transamerica Life Insurance and Annuity Company

We have audited the accompanying  statutory-basis balance sheets of Transamerica
Life  Insurance  and Annuity  Company as of December 31, 1999 and 1998,  and the
related  statutory-basis  statements  of  operations,  changes  in  capital  and
surplus,  and cash flow for each of the three years in the period ended December
31, 1999. Our audits also included the  accompanying  statutory-basis  financial
schedules  required by Article 7 of Regulation S-X. These  financial  statements
and  schedules  are  the  responsibility  of  the  Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

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

In our opinion, because of the effects of the matters described in the preceding
paragraph,  the financial statements referred to above do not present fairly, in
conformity with accounting  principles  generally accepted in the United States,
the financial  position of  Transamerica  Life Insurance and Annuity  Company at
December 31, 1999 and 1998,  or the results of its  operations or its cash flows
for each of the three years in the period ended December 31, 1999.



<PAGE>


However,  in our opinion,  the  financial  statements  referred to above present
fairly, in all material  respects,  the financial  position of Transamerica Life
Insurance and Annuity  Company at December 31, 1999 and 1998, and the results of
its  operations  and its cash  flows for each of the three  years in the  period
ended December 31, 1999, in conformity with accounting  practices  prescribed or
permitted by the North Carolina  Department of Insurance.  Also, in our opinion,
the related financial  statement  schedules,  when considered in relation to the
basic  statutory-basis  financial statements taken as a whole, present fairly in
all material respects the information set forth therein.



March 31, 2000


<PAGE>



3
<TABLE>
<CAPTION>

                 Transamerica Life Insurance and Annuity Company

                        Balance Sheets - Statutory Basis

                                 (Dollars in thousands, except per share amounts)


                                                                                  DECEMBER 31
                                                                            1999              1998
                                                                     --------------------------------------
ADMITTED ASSETS Cash and invested assets:
<S>                                                                   <C>               <C>
   Bonds                                                              $     12,569,942  $     12,316,491
   Preferred stocks-unaffiliated                                               153,263           118,440
   Common stocks-unaffiliated                                                  198,562           108,401
   Common stock-subsidiaries                                                   120,319           112,957
   Mortgage loans on real estate                                               406,037           364,453
   Policy loans                                                                  9,508            10,036
   Cash and short-term investments                                             367,023           414,787
   Other investments                                                           221,601           136,610
                                                                     --------------------------------------
Total cash and invested assets                                              14,046,255        13,582,175

Accrued investment income                                                      202,664           172,788
Deferred and uncollected premiums                                                1,909             4,919

Commissions and expense allowances due                                           2,205             8,236

Other admitted assets                                                           14,014            21,936

Separate account assets                                                      6,118,265         4,575,184
                                                                     --------------------------------------
Total admitted assets                                                 $     20,385,312  $     18,365,238
                                                                     ======================================




<PAGE>


8








                                                                                  DECEMBER 31
                                                                            1999              1998
                                                                     --------------------------------------
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
   Reserves for future policy benefits                                $      9,221,606  $      8,084,356
   Premiums and other deposit funds                                          1,211,802         2,013,253
   Funding agreements                                                        2,670,635         2,355,990
   Other                                                                         1,824             2,278
   Accounts payable and other liabilities                                      139,395           285,876
   Asset valuation reserve                                                     214,753           177,794
   Interest maintenance reserve                                                 28,192            39,678
   Separate account liabilities                                              6,099,996         4,575,184
                                                                     --------------------------------------
Total liabilities                                                           19,588,203        17,534,409

Capital and surplus:
   Common Stock ($100 par value):
     Authorized shares - 50,000
     Issued and outstanding shares - 25,000 in 1999
       and 15,300 in 1998                                                        2,500             1,530
   Contributed surplus                                                         228,816           228,816
   Unassigned surplus                                                          565,793           600,483
                                                                     --------------------------------------
Total capital and surplus                                                      797,109           830,829
                                                                     --------------------------------------
Total liabilities and capital and surplus                              $    20,385,312   $    18,365,238
                                                                     ======================================

See accompanying notes.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                 Transamerica Life Insurance and Annuity Company

                   Statements of Operations - Statutory Basis

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                     1999             1998              1997
                                                              ------------------------------------------------------
Revenues:
<S>                                                             <C>               <C>              <C>
   Premiums and annuity considerations                          $      169,711    $      338,850   $      430,860
   Fund deposits                                                     5,793,132         4,053,557        2,122,178
   Net investment income                                             1,032,629         1,064,299        1,048,328
   Amortization of interest maintenance reserve                           (359)            1,178              (92)
   Other                                                               112,386            40,530           14,995
                                                              ------------------------------------------------------
                                                                     7,107,499         5,498,414        3,616,269

Benefits and expenses:
   Benefits paid or provided for:
     Annuity benefits                                                  406,862           390,039          378,915
     Surrender benefits and other withdrawals                        5,326,123         3,908,081        2,541,297
     Interest on policy or contract funds                              158,829           129,676          158,089
     Increase in reserves                                            1,137,250            68,165           88,915
     Decrease in liability for premium and other deposit funds
                                                                      (801,451)         (441,595)         (12,782)
     Other                                                               9,940            12,468            5,065
                                                              ------------------------------------------------------
                                                                     6,237,553         4,066,834        3,159,499
   Expenses:
     Commissions and expense allowances                                156,845            68,615           43,736
     Other operating expenses                                          110,399            94,956           85,177
     Net transfers to separate accounts                                502,778         1,103,788          173,890
                                                              ------------------------------------------------------
                                                                       770,022         1,267,359          302,803
                                                              ------------------------------------------------------
                                                                     7,007,575         5,334,193        3,462,302
                                                              ------------------------------------------------------
Gain from operations before dividends to policyholders,
   federal income tax expense and
   net realized capital gains (losses)                                  99,924           164,221          153,967
Dividends to policyholders                                                 257               215              121
                                                              ------------------------------------------------------
Gain from operations before federal income tax
   expense and net realized capital gains (losses)                      99,667           164,006          153,846
Federal income tax expense                                              38,559            61,553           50,161
                                                              ------------------------------------------------------
Gain from operations before net realized capital gains
   (losses)                                                             61,108           102,453          103,685

Net realized capital gains (losses)                                     (8,012)          106,488           31,659
                                                              ------------------------------------------------------
Net income                                                      $       53,096    $      208,941   $      135,344
                                                              ======================================================

See accompanying notes.


<PAGE>


                 Transamerica Life Insurance and Annuity Company

                          Statements of Changes in Capital and Surplus - Statutory Basis

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                    1999              1998             1997
                                                              -----------------------------------------------------

Capital and surplus at beginning of year                        $      830,829    $      675,268   $      568,693
Net income                                                              53,096           208,941          135,344
Increase (decrease) in net unrealized capital gains                      6,779            44,869           (2,199)
Increase in liability for reinsurance in
   unauthorized companies                                               (1,826)             (443)             (32)
(Increase) decrease in non-admitted assets                              (8,169)          (13,488)           1,779
Increase in asset valuation reserve                                    (36,959)          (22,992)          (7,992)
Dividends paid to parent                                               (50,000)          (50,000)         (40,000)
Increase in contributed surplus                                            970                 -           20,029
Other                                                                    2,389           (11,326)            (354)
                                                              ------------------------------------------------------
Capital and surplus at end of year                              $      797,109    $      830,829   $      675,268
                                                              ======================================================

See accompanying notes.



<PAGE>


                 Transamerica Life Insurance and Annuity Company

                    Statements of Cash Flow - Statutory Basis

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                     1999             1998              1997
                                                              ------------------------------------------------------
OPERATING ACTIVITIES
Premiums and annuity considerations                             $      172,721    $      336,451   $      428,243
Fund deposits                                                        5,793,132         4,054,271        2,116,788
Other income received                                                  131,708            30,701            4,876
Investment income received                                             965,065         1,062,909          993,082
Life claims paid                                                       (14,530)           (5,038)          (1,384)
Surrender benefits and other fund withdrawals paid                  (5,324,839)       (3,936,376)      (2,532,263)
Other benefits paid to policyholders                                  (570,325)         (525,826)        (539,918)
Commissions, other expenses and taxes paid                            (274,156)         (153,238)        (128,774)
Dividends paid to policyholders                                           (257)             (215)            (121)
Federal income taxes paid                                              (63,826)         (126,165)         (29,145)
Net transfer to separate accounts                                     (513,986)       (1,108,006)        (173,890)
Other expenses paid                                                     (3,425)          (11,288)          (2,058)
                                                              ------------------------------------------------------
Net cash provided by (used in) operating activities                    297,282          (381,820)         135,436

INVESTING ACTIVITIES
Proceeds from investments sold, matured or repaid:
   Bonds                                                             3,757,923         4,130,583        4,455,430
   Stocks                                                               89,662           415,807          140,896
   Mortgage loans                                                       68,866            68,866           53,186
   Other invested assets                                                     -             3,193            7,101
   Miscellaneous proceeds                                                5,463               234            9,691
                                                              ------------------------------------------------------
Total investment proceeds                                            3,921,914         4,618,683        4,666,304
Taxes paid on capital gains                                                  -                 -           12,861
                                                              ------------------------------------------------------
Net proceeds from sales, maturities, or repayments
   of investments                                                    3,921,914         4,618,683        4,653,443

Cost of investments acquired:
   Bonds                                                            (4,001,611)       (3,049,192)      (4,966,625)
   Stocks                                                             (197,512)         (349,174)        (137,079)
   Mortgage loans                                                      (63,520)          (55,835)         (23,785)
   Other invested assets                                                (1,272)           (9,601)          (1,173)
   Miscellaneous applications                                          (29,374)          (83,519)            (711)
                                                              ------------------------------------------------------
Total cost of investments acquired                                  (4,293,289)       (3,547,321)      (5,129,373)
Net decrease in policy loans                                               528               981            2,553
                                                              ------------------------------------------------------
Net cash (used in) provided by investing activities                   (370,847)        1,072,343         (473,377)


<PAGE>


                 Transamerica Life Insurance and Annuity Company

                               Statements of Cash Flow - Statutory Basis (continued)

                             (Dollars in thousands)


                                                                             YEAR ENDED DECEMBER 31
                                                                     1999             1998              1997
                                                              ------------------------------------------------------

FINANCING ACTIVITIES Other cash provided:
   Capital surplus paid-in                                      $          970    $            -   $       20,029
   Other sources                                                       303,795           174,802          450,051
                                                              ------------------------------------------------------
Total other cash provided                                              304,765           174,802          470,080
                                                              ------------------------------------------------------

Other cash applied:
   Dividends paid to shareholders                                      (50,000)          (50,000)         (40,000)
   Other applications, net                                            (228,964)         (491,410)         (24,323)
                                                              ------------------------------------------------------
Total other cash applied                                              (278,964)         (541,410)         (64,323)
                                                              ------------------------------------------------------
Net cash provided by (used in) financing activities                     25,801          (366,608)         405,757

Net increase (decrease) in cash and short-term investments
                                                                       (47,764)          323,915           67,816

Cash and short-term investments at
   beginning of year                                                   414,787            90,872           23,056
                                                              ------------------------------------------------------
Cash and short-term investments at end of year                  $      367,023    $      414,787   $       90,872
                                                              ======================================================

See accompanying notes.

</TABLE>


<PAGE>



                 Transamerica Life Insurance and Annuity Company

                 Notes to Financial Statements - Statutory Basis

                                December 31, 1999


32

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Transamerica  Life  Insurance and Annuity  Company (the Company) is domiciled in
North  Carolina.  The  Company  is a wholly  owned  subsidiary  of  Transamerica
Occidental  Life Insurance  Company  (TOLIC),  which is an indirect wholly owned
subsidiary  of   Transamerica   Corporation.   The  Company  is  the  parent  of
Transamerica  Assurance  Company  (TAC),  a Missouri  domiciled  life  insurance
company,  and Gemini Investments,  Inc., an investment company acquired in 1998.
During 1999,  Transamerica  Corporation was merged with an indirect wholly owned
subsidiary  of AEGON N.V.,  a holding  company  organized  under the laws of the
Netherlands.

NATURE OF BUSINESS

The Company engages in providing life insurance,  pension and annuity  products,
structured  settlements and investment  products which are distributed through a
network of independent and  company-affiliated  agents and independent  brokers.
The Company's  customers  are primarily in the United States and are  relatively
evenly distributed in 49 states.

BASIS OF PRESENTATION

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

The  accompanying  financial  statements  have been prepared in conformity  with
statutory  accounting  practices  (SAP)  prescribed  or  permitted  by the North
Carolina Department of Insurance (the North Carolina Department),  which vary in
some respects from accounting principles generally accepted in the United States
(GAAP). The more significant variances from GAAP are as follows:

       The  accounts  and  operations  of the  Company's  subsidiaries  are  not
       consolidated  but are  included in  investments  in common  stocks at the
       statutory net carrying value.  Changes in the  subsidiaries' net carrying
       values are charged or credited directly to unassigned surplus.


<PAGE>


                 Transamerica Life Insurance and Annuity Company

           Notes to Financial Statements - Statutory Basis (continued)




1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

BASIS OF PRESENTATION (CONTINUED)

       Bonds,  where  permitted,  are  carried at  amortized  cost,  rather than
       segregating  the portfolio into  held-to-maturity  (reported at amortized
       cost),  available-for-sale (reported at fair value) and trading (reported
       at fair value) classifications.

       The costs of acquiring new and renewal business,  such as commissions and
       underwriting  and policy issue costs,  are expensed when incurred  rather
       than deferred and amortized over the terms of the related policies.

       Certain assets recognized under GAAP,  principally agents' debit balances
       and furniture and  equipment,  are  "non-admitted"  and excluded from the
       accompanying  financial  statements under SAP and are charged directly to
       unassigned surplus.

       Reserves for future policy  benefits  generally are  calculated  based on
       mortality and interest  assumptions that are statutorily  required rather
       than using estimated expected experience or actual account balances.  The
       policy liabilities are reported net, rather than gross, of ceded amounts.

       Revenues  for  investment-type  contracts  consist of the entire  premium
       received  and  benefits  represent  the  benefits  paid and the change in
       policy  reserves.  Under  GAAP,  premiums  received  in  excess of policy
       charges are not  recognized as revenue and benefits  represent the excess
       of benefits paid over the policy  account value and interest  credited to
       the account value.

       An Interest  Maintenance  Reserve (IMR) is provided  which defers certain
       realized capital gains and losses  attributable to changes in the general
       level of interest rates. Such deferred gains or losses are amortized into
       investment  income  over  the  remaining  period  to  maturity  based  on
       groupings of individual securities sold in five-year bands.

       An Asset Valuation Reserve (AVR) is provided which reclassifies a portion
       of surplus to liabilities. The AVR is calculated according to a specified
       formula  as   prescribed  by  the  National   Association   of  Insurance
       Commissioners  (NAIC) and is intended to stabilize the Company's  surplus
       against  possible  fluctuations  in the  market  values of bonds,  equity
       securities,  mortgage  loans,  real estate,  and other  invested  assets.
       Changes in the required  AVR balance are charged or credited  directly to
       unassigned surplus.


<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

BASIS OF PRESENTATION (CONTINUED)

       Deferred  federal income taxes are not provided for  differences  between
       the financial statement amounts and tax bases of assets and liabilities.

       Policyholders dividends are recognized when declared rather than over the
term of the related policies.

       A liability  for  reinsurance  balances has been  provided for  unsecured
       policy  reserves  ceded to reinsurers  unauthorized  by license to assume
       such business.  Changes to those amounts are credited or charged directly
       to  unassigned  surplus.  Under  GAAP,  an  allowance  or amounts  deemed
       uncollectible would be established through a charge to earnings.

Other significant accounting policies are as follows:

INVESTMENTS

Investments are shown on the following bases:

       Bonds - where  permitted,  at amortized  cost;  all others are carried at
       values  prescribed by the Securities  Valuation Office of the NAIC (SVO);
       premiums and  discounts  are  amortized  using the interest  method.  For
       loan-backed bonds, the interest method including anticipated  prepayments
       at the date of purchase is used.  Prepayment  assumptions for loan-backed
       bonds are estimated using broker dealer survey values.  The retrospective
       adjustment  method is used to value all  securities  except for  interest
       only securities which are valued using the prospective method.

       Preferred  stocks - where  permitted,  at cost; all others are carried at
fair value based on NAIC values.

       Common stocks - at fair value based on NAIC market values, except for the
       investment in subsidiaries which are at statutory net carrying value. The
       related  unrealized  capital  gains or losses are reported in  unassigned
       surplus without any adjustments for federal income taxes.



<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENTS (CONTINUED)

       Mortgage loans on real estate - at the aggregate unpaid balances.

       Policy loans - at the aggregate unpaid principal balances.

       Other  investments - consists of partnerships,  receivable for securities
       sold and derivatives  and are reported  primarily at the lower of cost or
       fair value. Derivative instruments are valued in accordance with the NAIC
       Accounting  Practices and  Procedures  manual and Purposes and Procedures
       manual  of the SVO.  All  derivative  instruments  are  used for  hedging
       purposes and valued on a basis consistent with the hedged item.

The Company uses interest rate swaps, caps and floors, options and certain other
derivatives as part of its overall  interest rate risk  management  strategy for
certain  life  insurance  and  annuity  products.   As  the  Company  only  uses
derivatives for hedging purposes,  the Company values all derivative instruments
on a consistent basis as the hedged item. Upon termination,  gains and losses on
those  instruments are included in the carrying values of the underlying  hedged
items  and are  amortized  over  the  remaining  lives  of the  hedged  items as
adjustments  to  investment  income  or  benefits  from the  hedged  items.  Any
unamortized  gains or losses are recognized when the underlying hedged items are
sold.

Interest   rate  swap   contracts   are  used  to  convert  the  interest   rate
characteristics (fixed or variable) of certain investments to match those of the
related  insurance  liabilities  that the investments  are  supporting.  The net
interest  effect of such swap  transactions  is  reported  as an  adjustment  of
interest income from the hedged items as incurred.

Interest rate caps and floors are used to limit the effects of changing interest
rates on yields of  variable  rate or  short-term  assets  or  liabilities.  The
initial cost of any such  agreement is amortized to net  investment  income over
the life of the agreement.  Periodic payments that are receivable as a result of
the agreements are accrued as an adjustment of interest  income or benefits from
the hedged item.



<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENTS (CONTINUED)

Gains  and  losses  on   disposal  of   investments   are   recognized   on  the
specific-identification  basis.  Changes in the statutory  fair values of stocks
and those bonds carried at NAIC statement  values,  rather than amortized  cost,
are reported as unrealized  gains or losses directly in unassigned  surplus and,
accordingly, have no effect on net income.

Short-term investments include investments with maturities of less than one year
at date of acquisition.  The Company had a net cash overdraft  balance of $0 and
$110 at December 31, 1999 and 1998, respectively.

SEPARATE ACCOUNTS

The Company administers segregated asset accounts for pension and other clients.
The assets of the separate  accounts are not subject to liabilities  arising out
of any other  business  the Company may conduct and are  reported at fair value.
Substantially  all investment risks associated with fair value changes are borne
by the clients.  The liabilities of these separate accounts  represent  reserves
established  to meet  withdrawal and future  benefit  payment  provisions of the
contracts.

POLICY RESERVES

Life and annuity  benefit  reserves are calculated  based upon published  tables
using such interest rate assumptions and valuation methods that will provide, in
the  aggregate,  reserves that meet the amounts  required by the North  Carolina
Department.  The Company waives deductions of deferred  fractional premiums upon
death of the insureds  and, for more recent  issues,  returns any portion of the
final premium beyond the date of death.

PREMIUM REVENUES

Premiums  from life  insurance  policies are  recognized as revenue when due and
premiums  from annuity  contracts are  recognized  when  received.  Accident and
health premiums are earned pro rata over the terms of the policies.


<PAGE>


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REINSURANCE

Reinsurance premiums, commissions, expense reimbursements,  and reserves related
to reinsured  business are accounted for on bases  consistent with those used in
accounting for the original policies and the terms of the reinsurance contracts.
Premiums  ceded and  recoverable  losses have been  reported  as a reduction  of
premium income and benefits, respectively.

RECLASSIFICATIONS

Certain  reclassifications  of 1997 and 1998  amounts  have been made to conform
with the 1999 presentation.

2. FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair values for bonds are based on market  values  prescribed  by the SVO rather
than on actual or estimated  market values.  For bonds without  available market
values,  amortized  costs are used as estimated fair values.  As of December 31,
1999 and 1998, the fair value of  investments  in bonds includes  $6,447 million
and $6,566 million, respectively, of bonds that were valued at amortized cost.

Fair  values  for  preferred  and  common  stocks  are  based on  market  values
prescribed by the SVO,  except for the investment in  subsidiaries  which are at
statutory net carrying value.

Fair values for  mortgage  loans on real estate and policy  loans are  estimated
using discounted cash flow calculations, based on interest rates currently being
offered for similar loans to borrowers with similar credit  ratings.  Loans with
similar characteristics are aggregated for calculation purposes.

Fair values for derivative  instruments are estimated using values obtained from
independent pricing services.



<PAGE>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

The carrying amounts of cash and short-term  investments and accrued  investment
income approximate their fair value.

Fair  values  for  liabilities  under  investment-type  contracts,  included  in
reserves for future  policy  benefits and premium and other deposit  funds,  are
estimated  using  discounted  cash flow  calculations,  based on interest  rates
currently  being offered by similar  contracts with  maturities  consistent with
those remaining for the contracts being valued.
<TABLE>
<CAPTION>

The carrying values and fair values of financial  instruments are as follows (in
thousands):

                                                                       DECEMBER 31
                                                          1999                             1998
                                            --------------------------------- --------------------------------
                                                CARRYING          FAIR            CARRYING         FAIR
                                                 VALUE           VALUE             VALUE           VALUE
                                            --------------------------------- --------------------------------
Financial assets:
<S>                                          <C>             <C>               <C>             <C>
   Bonds                                     $   12,569,942  $   12,503,313    $   12,316,491  $   12,802,540
   Preferred stocks                                 153,263         160,651           118,440         115,201
   Common stocks                                    318,881         318,881           221,358         221,358
   Mortgage loans on real estate                    406,037         390,020           364,453         395,310
   Policy loans                                       9,508           9,508            10,036          10,036
   Floors and caps                                   18,456          17,118            21,598          57,954
   Short-term investments                           367,023         367,023           414,787         414,787
   Cash on hand and on deposit                            -               -                 -               -
   Accrued investment income                        202,664         202,664           172,788         172,788

Financial liabilities (liabilities for investment-type contracts):
     Single and flexible premium
       deferred annuities                         5,107,350       4,852,274         3,819,956       3,657,037
     Single premium immediate annuities             582,921         553,705           307,956         325,366
     Guaranteed investment contracts              2,003,251       2,036,664         2,013,253       2,034,864
     Funding agreements                           2,670,635       2,642,116         2,355,990       2,347,701
     Other deposit contracts                      1,954,414       1,921,062         1,677,464       1,683,371

Off-balance sheet assets (liabilities): Swap designated as hedges that are in a:
     Receivable position                                  -         126,973                 -          16,420
     Payable position                                     -         (59,773)                -          (2,933)

</TABLE>

<PAGE>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

The Company enters into various interest-rate agreements in the normal course of
business primarily as a means of managing its interest rate exposure.

Interest rate swap agreements  generally  involve the periodic exchange of fixed
rate interest and floating rate interest payments by applying a specified market
index to the  underlying  contract or notional  amount,  without  exchanging the
underlying  notional  amounts.   Interest  rate  swap  agreements  are  intended
primarily for asset and liability  management.  The  differential  to be paid or
received on those interest rate swap agreements that are designated as hedges of
financial  assets  is  recorded  on an  accrual  basis  as a  component  of  net
investment  income.  The  differential  to be paid or received on those interest
rate swap agreements  that are designated as hedges of financial  liabilities is
recorded on an accrual basis as a component of benefits paid or provided.  While
the Company is not exposed to credit risk with respect to the  notional  amounts
of the interest rate swap agreements, the Company is subject to credit risk from
potential nonperformance of counterparties  throughout the contract periods. The
amounts  potentially  subject  to such  credit  risk are much  smaller  than the
notional  amounts.  The Company  controls  this  credit  risk by  entering  into
transactions  with  only  a  selected  number  of  high  quality   institutions,
establishing   credit  limits  and  maintaining   collateral  when  appropriate.
Generally,  the  Company is subject  to basis  risk when an  interest  rate swap
agreement is funded.  As of December 31, 1999,  there were no unfunded  interest
rate swap agreements.

Interest  rate floor and cap  agreements  generally  provide  for the receipt of
payments in the event the average interest rates during a settlement period fall
below  specified  levels  under  interest  rate floor  agreements  or rise above
specified levels under interest rate cap agreements. These agreements enable the
Company to  transfer,  modify,  or reduce its interest  rate risk and  generally
require up front  premium  payments.  The costs of  interest  rate floor and cap
agreements are amortized over the contractual periods and resulting amortization
expenses are included in net investment income.  The conditional  receipts under
these  agreements  are  recorded  on an  accrual  basis  as a  component  of net
investment  income if designated as hedges of financial assets or as a component
of benefits paid or provided if designated as hedges of financial liabilities.



<PAGE>
<TABLE>
<CAPTION>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

The  information  on  derivative   instruments  is  summarized  as  follows  (in
thousands):

                                                          AGGREGATE           WEIGHTED
                                                           NOTIONAL            AVERAGE            FAIR
                                                            AMOUNT           FIXED RATE          VALUE
                                                      -------------------------------------------------------

DECEMBER 31, 1999
Interest rate swap agreements  designated as hedges of financial  assets,  where
   the Company pays:
<S>                                                    <C>                     <C>         <C>
     Fixed rate interest                               $      2,063,339        6.02%       $        79,362
     Floating rate interest                                     240,569        6.09                   (271)
     Floating rate interest based on one
       index and receives floating rate
       interest based on another index                           40,000        5.88                    571
Interest rate swap agreements designated
   as hedges of financial liabilities, where
   the Company pays:
     Fixed rate interest                                         78,600        6.18                    818
     Floating rate interest                                   1,152,078        6.40                 (8,750)
     Floating rate interest based on one
       index and receives floating rate
       interest based on another index                          155,000        6.16                 (1,047)
Interest rate floor agreements                                  160,500           -                  9,462
Swaptions                                                     1,770,000        6.15                  9,270
Other                                                             4,866           -                  3,386


<PAGE>


2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

                                                            AGGREGATE         WEIGHTED
                                                            NOTIONAL          AVERAGE
                                                             AMOUNT          FIXED RATE       FAIR VALUE
                                                      -------------------------------------------------------
DECEMBER 31, 1998
Interest rate swap agreements  designated as hedges of financial  assets,  where
   the Company pays:
     Fixed rate interest                                $       320,535        5.56%        $      (83,692)
     Floating rate interest                                     451,729        4.09                 23,002
Interest rate swap  agreements  designated  as hedges of financial  liabilities,
   where the Company pays:
     Fixed rate interest                                         28,600        5.55                    177
     Floating rate interest                                   1,738,800        5.41                 13,310
Interest rate floor agreements                                  160,500           -                 16,675
Swaptions                                                     1,770,000        5.35                 38,728
Other                                                             4,866           -                  2,552
</TABLE>

Generally,  notional amounts indicate the volume of transactions and fair values
indicate the amounts subject to credit risk.

Financial  instruments which potentially subject the Company to concentration of
credit risk consist principally of temporary cash investments, fixed maturities,
mortgage loans on real estate and reinsurance  recoverables.  The Company places
its temporary cash investments with high credit quality financial  institutions.
Concentration of credit risk with respect to investments in fixed maturities and
mortgage  loans on real  estate  is  limited  due to the  large  number  of such
investments and their dispersion across many different industries and geographic
areas.  The  Company  places   reinsurance  with  only  highly  rated  insurance
companies. At December 31, 1999, the Company had no significant concentration of
credit risk.


<PAGE>


3. INVESTMENTS
<TABLE>
<CAPTION>

The carrying value and estimated  fair value of  investments in debt  securities
are summarized as follows (in thousands):

                                                               GROSS          GROSS
                                             CARRYING       UNREALIZED     UNREALIZED       ESTIMATED
                                               VALUE           GAINS         LOSSES         FAIR VALUE
                                         ------------------------------------------------------------------
DECEMBER 31, 1999
U.S. Treasury securities and obligations
   of U.S. government corporations and
<S>                                       <C>              <C>            <C>            <C>
   agencies                               $       216,181  $     13,246   $      1,538   $       227,889
Obligations of states and
   political subdivisions                          72,500            13            644            71,869
Foreign governments                                22,067         1,252              -            23,319
Corporate securities                            8,932,101       138,190        203,667         8,866,624
Public utilities                                1,472,771        17,160         28,776         1,461,155
Mortgage and other asset-
   backed securities                            1,854,322           234          2,099         1,852,457
                                         ------------------------------------------------------------------
                                          $    12,569,942  $    170,095   $    236,724   $    12,503,313
                                         ==================================================================

DECEMBER 31, 1998
U.S. Treasury securities and obligations
   of U.S. government corporations and
   agencies                               $       143,002  $     53,537   $         28   $       196,511
Obligations of states and
   political subdivisions                          84,827         5,223              -            90,050
Foreign governments                                22,060         4,963              -            27,023
Corporate securities                            8,720,653       360,172         32,266         9,048,559
Public utilities                                1,544,895        95,323            875         1,639,343
Mortgage and other asset-
   backed securities                            1,801,054             -              -         1,801,054
                                         ------------------------------------------------------------------
                                          $    12,316,491  $    519,218   $      33,169  $    12,802,540
                                         ==================================================================

</TABLE>

<PAGE>


3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>

The carrying  value and  estimated  fair value of bonds at December 31, 1999, by
contractual maturity, are as follows (in thousands):

                                                                   CARRYING         ESTIMATED
                                                                    VALUE          FAIR VALUE
                                                              ------------------------------------

Maturity:
<S>                                                             <C>               <C>
   Due in one year or less                                      $      362,958    $      360,091
   Due after one year through five years                             2,149,228         2,173,346
   Due after five years through ten years                            3,238,327         3,190,037
   Due after ten years                                               4,965,107         4,927,382
   Mortgage and other asset-backed securities                        1,854,322         1,852,457
                                                              ------------------------------------
                                                                $   12,569,942    $   12,503,313
                                                              ====================================
</TABLE>

Expected  maturities  may differ from  contractual  maturities  because  certain
borrowers have the right to call or prepay  obligations  with or without call or
prepayment penalties.
<TABLE>
<CAPTION>

The costs and fair values of preferred  stocks and common  stocks  (unaffiliated
companies) are as follows (in thousands):

                                                  GROSS             GROSS
                                                UNREALIZED        UNREALIZED          FAIR
                                 COST              GAIN              LOSS             VALUE
                           -----------------------------------------------------------------------

DECEMBER 31, 1999
<S>                         <C>              <C>               <C>               <C>
Preferred stocks            $       153,263  $        17,154   $         9,766   $       160,651
Common stocks                       111,756           94,441             7,635           198,562

DECEMBER 31, 1998
Preferred stocks            $       118,440  $         1,191   $         4,430   $       115,201
Common stocks                        43,468           66,240             1,307           108,401
</TABLE>



<PAGE>


3. INVESTMENTS (CONTINUED)

The maximum and minimum  lending rates for mortgage loans during 1999 were 8.95%
and 6.60%, respectively.  The maximum percentage of any one loan to the value of
security at the time of the loan,  exclusive of any purchase money or insured or
guaranteed mortgages,  was 80%. Fire insurance is carried in every case at least
equal to the excess of the loan over the maximum  loan which would be  permitted
by law on the land without the buildings.
<TABLE>
<CAPTION>

Net investment  income by major category of investments is summarized as follows
(in thousands):

                                                            YEAR ENDED DECEMBER 31
                                                    1999             1998              1997
                                             ------------------------------------------------------

<S>                                            <C>               <C>              <C>
Bonds                                          $      988,055    $    1,026,381   $    1,016,359
Stocks                                                 12,291             6,055            7,468
Mortgage loans on real estate                          30,246            32,769           33,681
Policy loans                                              300               336              432
Other                                                  11,444            11,677            2,720
                                             ------------------------------------------------------
                                                    1,042,336         1,077,218        1,060,660
Investment expense                                     (9,707)          (12,919)         (12,332)
                                             ------------------------------------------------------
                                               $    1,032,629    $    1,064,299   $    1,048,328
                                             ======================================================

The realized  capital gains and losses are reported net of federal  income taxes
and amounts transferred to IMR are as follows (in thousands):

                                                            YEAR ENDED DECEMBER 31
                                                    1999             1998              1997
                                             ------------------------------------------------------

Net gains (losses) on disposition of investments in:
     Bonds                                     $      (19,775)   $       10,901   $      (22,928)
     Stocks                                            (4,485)          166,345           47,181
     Other                                             (6,289)           (3,073)           1,525
                                             ------------------------------------------------------
                                                      (30,549)          174,173           25,778
Related income (taxes) recovery                        10,692           (60,960)          (9,022)
Transfer from (to) the IMR                             11,845            (6,725)          14,903
                                             ------------------------------------------------------
Net investment gains (losses)                  $       (8,012)   $      106,488   $       31,659
                                             ======================================================


<PAGE>


3. INVESTMENTS (CONTINUED)

Proceeds,  gross gains and gross losses from the  disposition  of  investment in
bonds and other information related to investments are summarized as follows (in
thousands):

                                                                YEAR ENDED DECEMBER 31
                                                       1999              1998             1997
                                                 -----------------------------------------------------
    Proceeds from disposition of investment in
      bonds                                       $     3,757,923  $     4,130,583   $     4,455,430
    Gross gains on disposition of investment in
      bonds                                                29,345           30,206            19,221
    Gross losses on disposition of investment in
      bonds                                                49,120           19,305            42,149

    Change in net unrealized gains (losses):
         Bonds                                            (10,822)            (513)                -
         Preferred stocks                                    (253)          (1,448)            5,514
         Common stocks                                     29,235           35,348            (8,213)
         Other                                            (11,381)          11,482               500
                                                 -----------------------------------------------------
                                                  $         6,779  $        44,869   $        (2,199)
                                                 =====================================================
</TABLE>

Common  stocks-subsidiaries  are carried at the statutory capital and surplus of
the  subsidiaries  of $120  million  (cost of $143  million)  in 1999,  and $112
million  (cost of $143  million) in 1998.  No dividends  were  received from the
subsidiaries in 1999, 1998 or 1997.

In 1998,  the Company  increased its  investment in  subsidiaries  by purchasing
Gemini Investments,  Inc. (Gemini) with a cost-basis of $63.6 million.  Gemini's
only activity is to hold certain investment securities.

4. REINSURANCE

The Company is involved in both the cession and assumption of  reinsurance  with
other companies,  including affiliated companies. Risks are reinsured with other
companies  to permit  the  recovery  of a portion of the  direct  losses.  These
reinsured risks are treated as though,  to the extent of the  reinsurance,  they
are risks for which the Company is not liable.


<PAGE>


4. REINSURANCE (CONTINUED)

Policy  liabilities  and  accruals are  reported in the  accompanying  financial
statements net of reinsurance  ceded.  The Company  remains liable to the extent
the reinsuring  companies do not meet their  obligations under these reinsurance
treaties.
<TABLE>
<CAPTION>

The following  summarizes  the effect of certain  reinsurance  transactions  (in
thousands):

                                                                                ASSUMED
                                                        CEDED TO                 FROM
                                             --------------------------------
                                  DIRECT        AFFILIATED    UNAFFILIATED    AFFILIATED         NET
                                  AMOUNT        COMPANIES       COMPANIES      COMPANIES       AMOUNT
                              -----------------------------------------------------------------------------
Year ended
   December 31, 1999:
<S>                             <C>            <C>             <C>            <C>            <C>
     Premium revenue            $     181,992  $         586   $      79,073  $    67,378    $   169,711
                              =============================================================================

At December 31, 1999:
   Life insurance in force      $      82,964  $      34,165   $           -  $         -    $    48,799
                              =============================================================================

Reserves for future policy
   benefits                     $   5,218,969  $       4,520   $      13,768 $  4,020,925    $ 9,221,606
Policy and contract claims
   payable                             18,201              -          17,385            -            816
                              -----------------------------------------------------------------------------
                                $   5,237,170  $       4,520   $      31,153  $ 4,020,925    $ 9,222,422
                              =============================================================================

Year ended
   December 31, 1998:
     Premium revenue            $     226,930  $         678   $      64,264  $   176,862    $   338,850
                              =============================================================================

At December 31, 1998:
   Life insurance in force      $      94,458  $      38,491   $           -  $        13    $    55,980
                              =============================================================================

Reserves for future policy
   benefits                     $   3,111,826  $       4,700   $      16,487 $  4,993,717    $ 8,084,356
Policy and contract claims
   payable                             21,673              -          19,265            -          2,408
                              -----------------------------------------------------------------------------
                                $   3,133,499  $       4,700   $      35,752  $ 4,993,717    $ 8,086,764
                              =============================================================================

Year ended
   December 31, 1997:
     Premium revenue            $     266,148  $         783   $      17,214  $   182,709    $   430,860
                              =============================================================================

At December 31, 1997:
   Life insurance in force      $     103,418  $      44,818   $           -  $        70    $    58,670
                              =============================================================================

Reserves for future policy
   benefits                     $   2,584,863  $       5,133   $       5,075 $  5,441,536    $ 8,016,191
Policy and contract claims
   payable                              4,350              -           4,248          767            869
                              -----------------------------------------------------------------------------
                                $   2,589,213  $       5,133   $       9,323  $ 5,442,303    $ 8,017,060
                              =============================================================================


<PAGE>


4. REINSURANCE (CONTINUED)

                                                                             ASSUMED
                                                           CEDED TO           FROM
                                          DIRECT            OTHER          AFFILIATED           NET
                                          AMOUNT          COMPANIES         COMPANIES          AMOUNT
                                     -----------------------------------------------------------------------

Year ended
   December 31, 1999:
     Benefits paid or provided         $      224,707   $       85,631    $      277,726   $      416,802
                                     =======================================================================

Year ended
   December 31, 1998:
     Benefits paid or provided         $      167,435   $       42,773    $      277,845   $      402,507
                                     =======================================================================

Year ended
   December 31, 1997:
     Benefits paid or provided         $      113,417   $        7,114    $      277,677   $      383,980
                                     =======================================================================
</TABLE>

5. INCOME TAXES

The Company's  taxable income or loss is included in the consolidated  return of
Transamerica  Corporation  for the  period  ended July 21,  1999.  The method of
allocation  between the companies for the period ended July 21, 1999, is subject
to written agreement  approved by the Board of Directors.  Tax payments are made
to, or refunds  received from,  Transamerica  Corporation in amounts which would
result from filing separate tax returns with federal taxing authorities,  except
that tax benefits  attributable  to operating  losses and other  carryovers  are
recognized   currently  since  utilization  of  these  benefits  is  assured  by
Transamerica  Corporation.  The  provision  does  not  purport  to  represent  a
proportionate share of the consolidated tax.

For the period  beginning July 22, 1999, the Company will join in a consolidated
tax return with  certain  life  affiliates:  TOLIC,  TAC and  Transamerica  Life
Insurance  Company of New York.  The method of allocation  between the companies
for the period beginning July 22, 1999, will be subject to written  agreement to
be approved by the Board of Directors.  It is  anticipated  that this  agreement
will require that tax payments are made to, or refunds are received from, TOLIC,
in amounts  which would  result from filing  separate  tax returns  with federal
taxing authorities.


<PAGE>


5. INCOME TAXES (CONTINUED)

Amounts  due to TOLIC for  federal  income  taxes  were $8.5  million  and $36.1
million  at  December  31,  1999 and 1998,  respectively,  and are  included  in
accounts payable and other liabilities in the accompanying balance sheets.
<TABLE>
<CAPTION>

Following is a reconciliation  of federal income taxes computed at the statutory
rate with the income tax  provision,  excluding  income tax expenses or benefits
related  to  net  realized  gains  or  losses  on  investment  transactions  (in
thousands):

                                                               YEAR ENDED DECEMBER 31
                                                      1999              1998              1997
                                                ------------------------------------------------------

<S>                                               <C>               <C>               <C>
Federal income taxes at statutory rate            $       34,883    $    57,402       $      53,846
Amortization of IMR                                          126           (412)                 32
Income not subject to tax                                 (1,535)        (1,094)             (1,382)
Other                                                      5,085          5,657              (2,335)
                                                ------------------------------------------------------
Provision for income taxes                        $       38,559    $    61,553       $      50,161
                                                ======================================================
</TABLE>

The  Company  records a deferred  tax asset for the tax effect of the  temporary
difference   that  arises  between   statutory  basis  and  tax  basis  deferred
acquisition  costs and policy  reserves.  The  resulting  deferred tax asset was
non-admitted  at  December  31,  1999  and  1998.  This  practice  differs  from
prescribed SAP and has been  permitted by the North Carolina  Department and has
no effect on capital and surplus.

Under the Life Insurance Company Income Tax Act of 1959, a portion of "gain from
operations" was not subject to current income taxation but was accumulated,  for
tax purposes,  in a memorandum  account  designated as  "policyholders'  surplus
account." The balance in this account was frozen at December 31, 1983,  pursuant
to the Life  Insurance Tax Act of 1984.  That amount would become subject to tax
when it exceeds a certain maximum or when cash dividends are paid therefrom. The
policyholders'  surplus account balance at December 31, 1999, was $20.3 million.
No income taxes have been provided on the  policyholders'  surplus account since
the conditions that would cause such taxes are remote.  Should the entire amount
in the policyholders'  surplus account become taxable,  the tax thereon computed
at current rates would amount to approximately $7.1 million.



<PAGE>


6. ANNUITY RESERVES AND DEPOSIT LIABILITIES

A portion  of the  Company's  policy  reserves  and other  policyholders'  funds
(including separate account liabilities) relates to liabilities established on a
variety of the Company's products that are not subject to significant  mortality
or morbidity risk;  however,  there may be certain  restrictions placed upon the
amount of funds that can be withdrawn without penalty. The amount of reserves on
these  products,  by  withdrawal  characteristics,  is summarized as follows (in
thousands):
<TABLE>
<CAPTION>

                                                                       DECEMBER 31
                                                           1999                            1998
                                              ------------------------------- -------------------------------
                                                    AMOUNT        PERCENT           AMOUNT        PERCENT
                                              ------------------------------- -------------------------------
  Subject to discretionary withdrawal - with adjustments:
<S>                                            <C>                     <C>     <C>                     <C>
       With market value adjustment            $      8,232,898        50%     $      7,585,914        52%
       At book value less surrender charge
                                                      2,191,632        14             1,260,466         9
                                              ------------------------------- -------------------------------
                                                     10,424,530        64             8,846,380        61
  Subject to discretionary withdrawal -
    without adjustment                                2,737,028        17             2,522,495        17
  Not subject to discretionary withdrawal
    provision                                         3,122,738        19             3,124,785        22
                                              -------------------             -------------------
                                                                -------------                   -------------
  Total annuity reserves and deposit
    liabilities                                      16,284,296       100%           14,493,660       100%
                                                                =============                   =============
  Less reinsurance                                            -                               -
                                              -------------------             -------------------
  Net annuity reserves and deposit liabilities
                                               $     16,284,296*              ==================
                                                                               $     14,493,660*

===================================================================================================================
</TABLE>

   * Includes  $5,876  million  and $4,407  million of  annuities  reserves  and
     deposit liabilities  reported in the separate account liability at December
     31, 1999 and 1998, respectively.



<PAGE>


7. CAPITAL AND SURPLUS

The  Company is  subject to the  requirements  of the NAIC  approved  Risk Based
Capital  (RBC)  rules  and at  December  31,  1999,  the  Company  met  the  RBC
requirement.

The amount of dividends  which can be paid by the Company without prior approval
of the North Carolina Department is subject to restrictions related to statutory
surplus  and gains  from  operations.  The  Company  could pay $99.9  million in
dividends in 2000 without prior approval.

8. PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS

Substantially all employees are covered by the  noncontributory  defined benefit
plans  sponsored by the Company and  Retirement  Plan for Salaried  Employees of
Transamerica  Corporation  and  Affiliates  in which the  Company  participates.
Pension  benefits are based on the  employee's  compensation  during the highest
paid 60 consecutive months during the 120 months before retirement.  The general
policy is to fund current  service costs  currently and prior service costs over
periods  ranging  from 10 to 30  years.  Assets  of  those  plans  are  invested
principally in publicly traded stocks and bonds. Pension costs incurred in 1999,
1998 and 1997 were not material.

The Company also participates in various  contributory  defined benefit programs
sponsored by  Transamerica  Corporation  that provide  medical and certain other
benefits.  The Company accounts for the costs of such benefit programs under the
accrual  method and amortizes its  transition  obligation for retirees and fully
eligible or vested employees over 20 years. Postretirement benefit costs charged
to income in 1999, 1998 and 1997 were not material.

9. ASSETS ON DEPOSIT

At December  31, 1999 and 1998,  $6.9  million and $7.0  million were on deposit
with public officials, in compliance with regulatory requirements.



<PAGE>


10. RELATED PARTY TRANSACTIONS

The Company has  various  transactions  with  Transamerica  Corporation  and its
affiliated  companies in the normal  course of  operations.  These  transactions
include the assumption and cession of reinsurance and the performance of certain
administrative and support services by an affiliated company.

Transactions  with  Transamerica  Corporation  and its  affiliates  also include
transactions  related to pension plans, a fixed maturity investment in a special
purpose  subsidiary  of  Transamerica  Corporation  ($233.3  in 1999 and  $233.3
million in 1998),  investments  in a money market fund managed by an  affiliated
company,  and rental of computer services.  Pension funds administered for these
companies  amounted to $1.8  billion,  $1.6 billion and $1.3 billion at December
31, 1999, 1998 and 1997, respectively.

11. LEASES

Rental  expense  for  equipment  and  properties  occupied by the  Company,  not
including occupancy of the Company's  buildings,  was $6.8 million in 1999, $4.9
million in 1998 and $2.7 million in 1997. Future minimum rental  commitments are
not significant.

12. LITIGATION

The Company is a defendant in various legal actions arising from its operations.
These  include legal actions  against one of its  subsidiaries  similar to those
faced by many other major life insurers  which allege  damages  related to sales
practices for universal  life policies sold between  January 1981 and June 1996.
In one such action, one of the subsidiaries and plaintiffs' counsel entered into
a settlement which was approved on June 26, 1997. The settlement required prompt
notification of affected policyholders.  Administrative and policy benefit costs
associated with the settlement are not material to the Company. Additional costs
related to the settlement are not currently determinable and are not expected to
be  material  and will be  incurred  over a period of years.  In the  opinion of
management,  any ultimate  liability  which might  result from other  litigation
would not have a  materially  adverse  effect on the  financial  position of the
Company or the results of its operations.



<PAGE>


13. SEPARATE ACCOUNTS

Separate  accounts  held by the  Company  represent  primarily  funds  which are
administered for pension plans. The assets consist primarily of fixed maturities
and equity  securities  and are carried at  estimated  fair  value.  The Company
provides  a minimum  guaranteed  return to  policyholders  of  certain  separate
accounts. Certain other separate accounts do not have any minimum guarantees and
substantially  all the investment risks associated with market value changes are
borne entirely by the policyholder.
<TABLE>
<CAPTION>

Information  regarding  the  separate  accounts of the Company as of and for the
year ended December 31, 1999, is as follows (in thousands):

                                                                               NON-
                                                                            GUARANTEED
                                                                             SEPARATE
                                                           INDEXED           ACCOUNTS           TOTAL
                                                      ------------------------------------------------------

<S>                                                    <C>               <C>               <C>
Premiums, deposits and other considerations            $       636,218   $     2,118,548   $     2,754,766
                                                      ======================================================

Reserves for separate accounts with assets at:
   Fair value                                          $     1,208,498   $     4,682,448   $     5,890,946
   Amortized cost                                                    -                 -                 -
   Other                                                        20,518           188,532           209,050
                                                      ------------------------------------------------------
Total                                                  $     1,229,016   $     4,870,980   $     6,099,996
                                                      ======================================================

Reserves for separate accounts by withdrawal characteristics:
     Subject to discretionary withdrawal (with
       adjustment):                                     $            -   $             -   $             -
         With market value adjustment
         At book value without market value
           adjustment and with current surrender
           charge of 5% or more                                      -                 -                 -
         At market value                                     1,208,498         4,682,448         5,890,946
         At book value without adjustment and with
           current surrender charges less than 5%
                                                                     -                 -                 -
                                                      ------------------------------------------------------
Subtotal                                                     1,208,498         4,682,448         5,890,946

Not subject to discretionary withdrawal                              -                 -                 -
   Other                                                        20,518           188,532           209,050
                                                      ======================================================
Total separate account liabilities                     $     1,229,016   $     4,870,980   $     6,099,996
                                                      ======================================================


<PAGE>


13. SEPARATE ACCOUNTS (CONTINUED)

A reconciliation of the amounts transferred to and from the separate accounts is
presented below (in thousands):

                                                            1999             1998            1997
                                                     ---------------------------------------------------

Transfers as reported  in the summary of  operations  of the  separate  accounts
  statement:
     Transfers to separate accounts                    $    2,764,696    $    2,484,100   $   720,601
     Transfers from separate accounts                       2,256,282         1,360,271       549,414
                                                     ---------------------------------------------------
Net transfers to separate accounts                            508,414         1,123,829       171,187

Reconciling adjustments:
   Deposit/withdrawals directly to separate accounts
                                                               (5,636)          (20,041)        2,703
                                                     ---------------------------------------------------
Transfers as reported in the statements
  of income                                            $      502,778    $    1,103,788   $   173,890
                                                     ===================================================
</TABLE>
<TABLE>
<CAPTION>

14.  DIRECT PREMIUM WRITTEN BY MANAGING GENERAL AGENTS/THIRD-PARTY ADMINISTRATORS

The Company has the following  direct premiums  written through managing general
agents (in thousands):
                                                                                              DIRECTED
                                   EXCLUSIVE             TYPES OF              AUTHORITY      WRITTEN
                                   CONTRACT          BUSINESS WRITTEN           GRANTED       PREMIUMS
                                 --------------------------------------------------------------------------

<S>                                <C>       <C>                                <C>       <C>
National Benefit Resources            No      Specific and aggregate excess
                                                 of loss insurance                 *        $     17,164

R.E. Moulton Insurance Agency,        No      Specific and aggregate excess
   Inc.                                          of loss insurance                 *              46,631

Intermediary Insurance Services,      No      Specific and aggregate excess
   Inc.                                          of loss insurance                 *              38,822


<PAGE>


14.  DIRECT PREMIUM WRITTEN BY MANAGING GENERAL AGENTS/THIRD-PARTY ADMINISTRATORS (CONTINUED)

                                                                                              DIRECTED
                                   EXCLUSIVE             TYPES OF              AUTHORITY      WRITTEN
                                   CONTRACT          BUSINESS WRITTEN           GRANTED       PREMIUMS
                                 --------------------------------------------------------------------------

Excess Reinsurance Underwriters       No      Specific and aggregate excess
   Agency, Inc.                                  of loss insurance                 *        $      1,753

Risk Assessment Strategies            No      Specific and aggregate excess
                                                 of loss insurance                 *               1,673

International Assurance of            No      Specific and aggregate excess
   Tennessee                                     of loss insurance                 *               6,981
</TABLE>

 *Premium  collection,  underwriting  and  commission/claim  payments  authority
granted.

15. NAIC CODIFICATION

In 1998, the NAIC adopted codified statutory accounting practices (Codification)
effective  January 1, 2001.  Codification  will likely  change,  to some extent,
prescribed  statutory  accounting  practices  and may  result in  changes to the
accounting  practices  that the  Company  uses to  prepare  its  statutory-basis
financial  statements.  Codification will require adoption by the various states
before it becomes the  prescribed  statutory  basis of accounting  for insurance
companies  domesticated  within those states.  Accordingly,  before Codification
becomes  effective  for the  Company,  the state of North  Carolina  must  adopt
Codification  as the prescribed  basis of accounting on which domestic  insurers
must report their statutory-basis results to the Insurance Department. The state
of North  Carolina  has stated  affirmatively  that it will  adopt  Codification
effective January 1, 2001.  Management  believes that the impact of Codification
will not be material to the Company's statutory-basis financial statements.

16. REGULATORY EXAMINATION

In 1996, the North Carolina  Department  performed an examination of the Company
for  the  four-year  period  ending  December  31,  1995.  The  results  of  the
examination were finalized on February 1, 1999, with no material adjustments.


<PAGE>


17. YEAR 2000 (UNAUDITED)

In prior years,  the Company  discussed  the nature and progress of its plans to
become Year 2000 ready.  In 1999,  the Company  completed  its  remediation  and
testing of systems.  As a result of those planning and  implementation  efforts,
the  Company   experienced  no  significant   disruptions  in  mission  critical
information technology and non-information technology systems and believes those
systems successfully  responded to the Year 2000 date change. The Company is not
aware of any material problems resulting from Year 2000 issues,  either with its
products,  its internal systems,  or the products and services of third parties.
The Company will continue to monitor its mission critical computer  applications
and those of its suppliers and vendors  throughout  the year 2000 to ensure that
any latent Year 2000 matters that may arise are addressed promptly.



<PAGE>













                                 Statutory Basis
                          Financial Statement Schedules


<PAGE>



33

                 Transamerica Life Insurance and Annuity Company

                            Summary of Investments -
           Other Than Investments in Related Parties - Statutory Basis

                             (Dollars in thousands)

                                December 31, 1999

<TABLE>
<CAPTION>

SCHEDULE I
                                                                                                 AMOUNT AT WHICH
                                                                                                   SHOWN IN THE
                                                                                   MARKET         BALANCE SHEET
TYPE OF INVESTMENT                                               COST(1)            VALUE
- --------------------------------------------------------------------------------------------------------------------

FIXED MATURITIES
Bonds:
   United States government and government agencies and
<S>                                                           <C>               <C>              <C>
     authorities                                              $       216,181   $       227,889  $        216,181
   States, municipalities and political subdivisions                   72,500            71,869            72,500
   Foreign governments                                                 22,067            23,319            22,067
   Public utilities                                                 1,472,771         1,461,155         1,472,771
   All other corporate bonds                                        8,932,101         8,866,624         8,932,101
   Mortgage and other asset-backed securities                       1,854,322         1,852,457         1,854,322
Redeemable preferred stock                                            150,164           155,235           148,463
                                                            --------------------------------------------------------
Total fixed maturities                                             12,720,106        12,658,548        12,718,405

EQUITY SECURITIES
Common stocks:
   Subsidiaries                                                       143,468           120,319           120,319
   Banks, trust and insurance                                          35,585            36,438            36,438
   Industrial, miscellaneous and all other                             76,171           162,124           162,124
   Nonredeemable preferred stock                                        4,800             5,416             4,800
                                                            --------------------------------------------------------
Total equity securities                                               260,024           324,297           323,681

Mortgage loans on real estate                                         406,037           390,020           406,037
Policy loans                                                            9,508             9,508             9,508
Other long-term investments                                           221,601           221,601           221,601
Cash and short-term investments                                       367,023           367,023           367,023
                                                            --------------------------------------------------------
Total investments                                             $    13,984,299   $    13,970,997  $     14,046,255
                                                            ========================================================
</TABLE>

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


<PAGE>



34

                 Transamerica Life Insurance and Annuity Company
<TABLE>
<CAPTION>

              Supplementary Insurance Information - Statutory Basis

                             (Dollars in thousands)


SCHEDULE III

                                                       FUTURE POLICY      POLICY AND
                                                        BENEFITS AND       CONTRACT      PREMIUM REVENUE
                                                          EXPENSES        LIABILITIES
- -----------------------------------------------------------------------------------------------------------

Year ended December 31, 1999
<S>                                                    <C>               <C>              <C>
Individual life                                        $       12,276    $       (1,316)  $        1,540
Group life and health                                           2,244             2,132           14,440
Annuity                                                     9,207,086                 -          153,731
                                                     ------------------------------------------------------
                                                            9,221,606               816          169,711

Year ended December 31, 1998
Individual life                                                11,998            (1,176)           1,880
Group life and health                                           2,828             3,583           11,506
Annuity                                                     8,069,530                 -          325,464
                                                     ------------------------------------------------------
                                                            8,084,356             2,407          338,850


Year ended December 31, 1997
Individual life                                                14,924                14            1,018
Group life and health                                           1,283               855            3,557
Annuity                                                     7,999,984                 -          426,285
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------
                                                       $    8,016,191    $          869   $      430,860
                                                     ======================================================

</TABLE>


<PAGE>



35

<TABLE>
<CAPTION>
                 Transamerica Life Insurance and Annuity Company

              Supplementary Insurance Information - Statutory Basis

                             (Dollars in thousands)


SCHEDULE III
                                                               BENEFITS, CLAIMS
                                              NET INVESTMENT      LOSSES AND      OTHER OPERATION
                                                 INCOME*      SETTLEMENT EXPENSES    EXPENSES*     PREMIUMS WRITTEN
- ---------------------------------------------------------------------------------------------------------------------

Year ended December 31, 1999
<S>                                           <C>               <C>                <C>               <C>
Individual life                               $        1,122    $          1,568   $          358    $        2,126
Group life and health                                    235              12,453           30,320            93,513
Annuity                                            1,031,272           6,223,532          739,344            86,353
                                            -------------------------------------------------------------------------
                                                   1,032,629           6,237,553          770,022           181,992

Year ended December 31, 1998
Individual life                                        1,294               1,883              764             2,558
Group life and health                                    204               9,286           23,862            75,770
Annuity                                            1,062,801           4,055,665        1,242,733           148,602
                                            -------------------------------------------------------------------------
                                                   1,064,299           4,066,834        1,267,359           226,930


Year ended December 31, 1997
Individual life                                          322               1,601              490             1,801
Group life and health                                    279               2,548            6,078            20,771
Annuity                                            1,047,727           3,155,350          296,235           243,576
                                            -------------------------------------------------------------------------
                                            -------------------------------------------------------------------------
                                              $    1,048,328    $      3,159,499   $      302,803    $      266,148
                                            =========================================================================
</TABLE>

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



<PAGE>

<TABLE>
<CAPTION>

                 Transamerica Life Insurance and Annuity Company

                          Reinsurance - Statutory Basis

                             (Dollars in thousands)

SCHEDULE IV
                                                                                 ASSUMED                             PERCENTAGE
                                                               CEDED TO            FROM                               OF AMOUNT
                                               GROSS            OTHER        OTHER COMPANIES          NET              ASSUMED
                                              AMOUNT          COMPANIES                             AMOUNT             TO NET
- ----------------------------------------------------------------------------------------------------------------------------------

Year ended December 31, 1999
<S>                                        <C>              <C>               <C>               <C>
Life insurance in force                    $       82,964   $       34,165    $            -    $       48,799                -
                                         =========================================================================================


Premiums:
   Individual life                         $        2,126   $          586    $            -    $        1,540                -
   Individual health                                    -                -                 -                 -                -
   Group life and health                           93,513           79,073                 -            14,440                -
   Annuity                                         86,353                -            67,378           153,731               44%
                                         -----------------------------------------------------------------------------------------
                                           $      181,992   $       79,659    $       67,378    $      169,711               40%
                                         =========================================================================================


Year ended December 31, 1998
Life insurance in force                    $       94,458   $       38,491    $           13    $       55,980                0%
                                         =========================================================================================


Premiums:
   Individual life                         $        2,558   $          678    $            -    $        1,880                -
   Individual health                                    -                -                 -                 -                -
   Group life and health                           75,770           64,264                 -            11,506                -
   Annuity                                        148,602                -           176,862           325,464               54%
                                         -----------------------------------------------------------------------------------------
                                           $      226,930   $       64,942    $      176,862    $      338,850               52%
                                         =========================================================================================

Year ended December 31, 1997
Life insurance in force                    $      103,418   $       44,818    $           70    $       58,670                0%
                                         =========================================================================================


Premiums:
   Individual life                         $        1,801   $          783    $            -    $        1,018                -
   Individual health                                    -                -                 -                 -                -
   Group life and health                           20,771           17,214                 -             3,557                -
   Annuity                                        243,576                -           182,709           426,285               43%
                                         -----------------------------------------------------------------------------------------
                                           $      266,148   $       17,997    $      182,709    $      430,860               42%
                                         =========================================================================================


</TABLE>
<PAGE>

1

                                OTHER INFORMATION

Item 24.  Financial Statements and Exhibits

     (a)  Financial Statements:

     All  required  financial  statements  are included in Parts A and B of this
Registration Statement.

     (b)  Exhibits:

(1)  Resolutions  of Board of  Directors  of  Transamerica  Life  Insurance  and
     Annuity  Company  (the  "Company")  authorizing  the  creation  of Separate
     Account VA-6 (the "Separate Account"). 1/

     (2) Not Applicable.

(3)  Form of Underwriting  Agreement  between the Company,  the Separate Account
     and Transamerica Securities Sales Corporation.2/

     (4) Forms of Flexible Premium Deferred Variable Annuity Contracts.
     A)   Form of Flexible Premium Deferred Variable Annuity Contract for
          Product A, Transamerica Classic Variable Annuity 3/ 8/ 9/
     B)Form of Flexible Premium Deferred Variable Annuity Contract for Product
          C, Transamerica Catalyst Variable Annuity 4/ 8/ 9/

     (5) Form of Application for Flexible Premium Variable Annuity. 2/ 9/

     (6) (a)   Articles of Incorporation of Transamerica Life Insurance and
                Annuity Company.1/

         (b)   By-Laws of Transamerica Life Insurance and Annuity Company.1/

     (7) Not Applicable.

     (8) Form of Participation Agreements.
          (a) re The Alger American Fund 3
          (b) re Alliance  Variable  Products Series Fund,  Inc.3 (c) re Dreyfus
          Variable  Investment  Fund  (d) re  Janus  Aspen  Series  3 (e) re MFS
          Variable Insurance Trust 3 (f) re Morgan Stanley Universal Funds, Inc.
          3 (g)  re  OCC  Accumulation  Trust  3 (h)  re  Transamerica  Variable
          Insurance Fund, Inc.2/
         (i) re PIMCO Variable Insurance Trust 9/

     (9) Opinion and Consent of Counsel.2/

     (10)      (a)  Consent of Counsel./ 4/ 5/6


                 (b)  Consent of Independent Auditors./6/ 7/ 10/


     (11)      No financial statements are omitted from Item 23.

     (12)      Not Applicable.

     (13)      Performance Data Calculations. 3/8

     (14)      Not Applicable.


     (15)      Powers of Attorney. 2/6/ 7/ 10/


- ----------------------------

1/ Incorporated by reference to the like numbered  exhibit to the initial filing
of the  Registration  Statement  of  Transamerica  Life  Insurance  and  Annuity
Company's  Separate  Account  VA-6 on Form N-4,  File No.  333-9745,  (August 8,
1996).

2/   Incorporated by reference to the like numbered exhibit to the Pre-Effective
     Amendment  No.  1  to  the  Registration  Statement  of  Transamerica  Life
     Insurance and Annuity Company's Separate Account VA-6 on Form N-4, File No.
     333-9745 (August 22, 1997).

3/   Incorporated   by   reference   to  the  like   numbered   exhibit  to  the
     Post-Effective   Amendment   No.  1  to  the   Registration   Statement  of
     Transamerica Life Insurance and Annuity Company's  Separate Account VA-6 on
     Form N-4, File No. 333-9745 (December 22, 1997).

4/   Incorporated   by   reference   to  the  like   numbered   exhibit  to  the
     Post-Effective   Amendment   No.  2  to  the   Registration   Statement  of
     Transamerica Life Insurance and Annuity Company's  Separate Account VA-6 on
     Form N-4, File No. 333-9745 (December 24, 1997).

5/ Incorporated by reference to the like-numbered  exhibit to the Post-Effective
Amendment No, 3 to the Registration Statement of Transamerica Life Insurance and
Annuity Company's  Separate Account VA-6 on Form N-4 File No. 333-9745 (February
25, 1998).

6/Incorporated by reference to the like-numbered  exhibit to the  Post-Effective
     Amendment  No.  4  to  the  Registration  Statement  of  Transamerica  Life
     Insurance and Annuity Company's  Separate Account VA-6 on Form N-4 File No.
     333-9745 (April 29, 1998).

7.   Incorporated   by   reference   to  the   like-numbered   exhibit   to  the
     Post-Effective   Amendment   No.  7  to  the   Registration   Statement  of
     Transamerica Life Insurance and Annuity Company's  Separate Account VA-6 on
     Form N-4 File No. 333-9745 (April 29, 1999).

8.   Incorporated   by   reference   to  the   like-numbered   exhibit   to  the
     Post-Effective   Amendment   No.  8  to  the   Registration   Statement  of
     Transamerica Life Insurance and Annuity Company's  Separate Account VA-6 on
     Form N-4 File No. 333-9745 (July 8, 1999)


9.   Incorporated   by   reference   to  the   like-numbered   exhibit   to  the
     Post-Effective   Amendment   No.  9  to  the   Registration   Statement  of
     Transamerica Life Insurance and Annuity Company's  Separate Account VA-6 on
     Form N-4 File No. 333-9745 (September 7, 1999). 10. Filed herewith.




<PAGE>



Items 25.  Directors and Officers of the Depositor.

The names of Directors and Executive  Officers of the Company,  their  positions
and offices with the Company,  and their other affiliations are as follows.  The
address of Directors  and  Executive  Officers is 1150 South Olive  Street,  Los
Angeles, California 90015-2211, unless indicated by asterisk(s).

List of Directors of Transamerica Life Insurance and Annuity Company

Patrick S. Baird*
Brenda K. Clancy*
James W. Dederer
George A. Foegele**
Douglas C. Kolsrud*
Richard N. Latzer
Karen O. MacDonald
Gary U. Rolle'
Paul E. Rutledge III***
Nooruddin S. Veerjee
Craig D. Vermie*

         *4333 Edgewood Road, NE, Cedar Rapids, Iowa 52499
         **300 Consilium Place, Scarborough, Ontario M1H362 Canada
         ***401 N. Tryon Street, Charlotte, North Carolina 28202-2108


List of Officers for Transamerica Life Insurance and Annuity Company
<TABLE>
<CAPTION>

<S>                                <C>
Paul E. Rutledge III                President - Reinsurance Division
Nooruddin S. Veerjee FSA            President

William R. Gernert                  Executive Vice President, Diversified Financial Products Division
John R. Kenney                      Executive Vice President, Agency Group
Larry N. Norman                     Executive Vice President, Financial Markets Division

James W. Dederer CLU                General Counsel and Secretary

Nicki Bair FSA                      Senior Vice President
Brenda Clancy                       Senior Vice President, Corporate
Roy Chong-Kit                       Senior Vice President and Chief Actuary
Douglas C. Kolsrud                  Senior Vice President, Investment Division
Karen MacDonald                     Senior Vice President and Corporate Actuary
Thomas O'Neill                      Senior Vice President
Ron F. Wagley, CLU                  Senior Vice President
William R. Wellnitz FSA             Senior Vice President and Actuary

Colin Funai                          Investment Officer
Heidi Y. Hu                          Investment Officer
Matthew W. Kuhns                     Investment Officer
Richard N. Latzer                    Investment Officer
Matthew A. Palmer                  Investment Officer
Thomas C. Pokorski                   Investment Officer
Gary U. Rolle' CFA                   Investment Officer
Jeffrey S. Van Harte                 Investment Officer
Paul Wintermute                      Investment Officer

Lawrence M. Agin FSA                Vice President & Associate Actuary
Lynn Allen                          Vice President, Diversified Financial Products Division
Clifford Angstman                  Vice President and Chief Actuary
Michael G. Ayers                    Vice President, Diversified Financial Products Division
John Bailey                         Vice President, Investment Division
Michael Barnhart                    Regional Vice President
James A. Beardsworth                Vice President-Accounting, Corporate
Cal Birkey                          Vice President, Financial Markets Division
David L. Blankenship                Vice President, Investment Division
Nancy Blozis                        Vice President and Controller
Jim Bowman                          Vice President
Rose Ann Bremser                    Vice President
Sandy Brown                         Vice President
Kirk Buese                          Vice President, Investment Division
Frank A. Camp                       Vice President & Division General Counsel, Financial Markets Division
Dave Carney                         Vice President, Investment Division
Steven C. Chamberlin                Vice President
Cindy L. Chanley                    Vice President, Financial Markets Division
Wonjoon Cho                         Vice President
Matt Coben                          Vice President
Ken Cochrane                        Vice President
Catherine Collinson                 Vice President
Bill Cook                           Vice President, Investment Division
Jane A. Coyne                       Vice President, Financial Markets Division
Glen Cunningham                    Vice President
Maureen DeWald                      Vice President & Assistant Secretary, Investment Division
John Dohmen                         Vice President
J. Peter Donlon                     Vice President
Mark E. Dunn                        Vice President, Investment Division
Steven Fenic                        Vice President
Karen Fleming                       Vice President, Investment Division
Roger Freeman                       Vice President, Financial Markets Division
Jerry Gable                         Vice President
Diana Geraci                        Vice President
Eric B. Goodman                     Vice President, Investment Division
Richard R. Greer                    Vice President, Financial Markets Division
David R. Halfpap                    Vice President, Investment Division
Paul Hankowitz MD                   Vice President & Chief Medical Director
Robert L. Hansen                    Vice President, Investment Division
Meheriar Hasan                              Vice President
Joy Heckendorf                      Vice President
Donna Heitzman                      Vice President, Investment Division
Paul Henry                          Vice President
Jo Ann B. Hepperman                 Vice President and Division General Counsel, Marketing Partnerships
Marsha Hicks                        Vice President & Assistant Secretary, Investment Division
Aruna Hobbs                         Vice President, Diversified Financial Products Division
David Hopewell                      Vice President, Investment Division
Frederick B. Howard                 Vice President, Investment Division
Suzette Hoyt                        Vice President and Assistant Secretary
Marvin A. Johnson                  Vice President
Carolyn M. Johnson                  Vice President, Marketing Partnerships
Ahmad Kamil                         Vice President & Associate Actuary
Michael Kappos                       President
Patrick Kelleher                    Vice President and Reinsurance Financial Officer
Jon D. Kettering                    Vice President, Investment Administration, Investment Division
Ken Kilbane                         Vice President
Larry M. Kirkland                  Vice President & Managing Actuary, Equity Group
Bill Kling                          Vice President, Financial Markets Division
Michael Lane                        Vice President, Financial Markets Division
Lisa Layman                         Vice President, Diversified Financial Products Division
Carl Macero                         Vice President and Chief Reinsurance Underwriter
Susan Mack                          Vice President and Associate General Counsel
James MacKinnon                     Vice President, Investment Division
Maureen McCarthy                    Vice President
Philip McHale                       Vice President and Chief Underwriter
Diane Meiners                       Vice President-Accounting, Corporate
Vic Modugno                         Vice President & Associate Actuary
Kate Modzelewski                    Vice President-Tax, Corporate
Daniel C. Mohwinkel                 Vice President, Financial Markets Division
Maureen E. Nielsen                  Vice President, Financial Markets Division
Thomas L. Nordstrom                 Vice President, Investment Division
Paul L. Norris FSA                  Vice President & Actuary
Ralph M. O'Brien                    Vice President, Investment Division
Mary T. Pech                        Vice President, Investment Division
Thomas E. Pierpan                   Vice President, Equity Group
Donald P. Radisich                  Vice President
Brian Rolland                       Vice President, Investment Division
Jeffrey L. Rosen                    Vice President, Diversified Financial Products Division
Lorne W. Schinbein                  Vice President & Managing Actuary, Equity Group
Lindsay Schmuacher                  Vice President, Investment Division
Gary H. Scott                       Vice President, Financial Markets Division
William N. Scott FLMI               Vice President
Clifford Sheets                     Vice President, Investment Division
Michael Simpson                     Vice President, Investment Division
Jon L. Skaggs                       Vice President, Investment Division
R. Michael Slaven                   Vice President & Assistant Secretary, Diversified Financial
                                                               Products Division
Robert A. Smedley                   Vice President, Investment Division
Michael S. Smith                    Vice President, Investment Division
Anne M. Spaes                       Vice President, Financial Markets Division
Christina Stiver                    Vice President
Bradley L. Stofferahn               Vice President, Investment Division
Karen Stout                         Vice President
James O. Strand                     Vice President
Alice Su                                    Vice President
Bill Tate                                   Vice President
Gregory Theobald                   Vice President & Assistant Secretary, Investment Division
Colleen Tobiason                    Vice President, Financial Markets Division
Barry Tobin                         Vice President
Emily Urbano                        Vice President
Colleen Vandermark                  Vice President
Craig D. Vermie                     Vice President & Counsel, Corporate
William A. Waldie                   Vice President, Financial Markets Division
Richard L. Weinstein FSA            Vice President & Associate Actuary
James Wilson                        Vice President
Timothy Weis                        Vice President
Ronald Wolfe                        Regional Vice President
Sally S. Yamada CPA, FLMI           Vice President & Treasurer
Ronald L. Ziegler                   Vice President & Actuary, Financial Markets Division

Sandra Bailey-Whichard              Second Vice President
Daniel J. Bohmfalk                  Second Vice President and Associate Actuary
Barry Buner                         Second Vice President
Reid A. Evers                       Second Vice President & Assistant General Counsel
David Fairhall FSA                  Second Vice President
 Toni Forge                         Second Vice President
Selma Fox                           Second Vice President
Thomas Freitas                      Second Vice President
Linda Goodwin M.D.                  Second Vice President and Reinsurance Medical Director
Andrew G. Kanelos                  Second Vice President
Catherine A. Lenton                 Second Vice President
Liwen Lien                          Second Vice President
Danny Mahoney                       Second Vice President
Clay Moye                           Second Vice President
Daniel A. Norwick                  Second Vice President
John O'Bryan                        Second Vice President, Corporate Tax
Paul W. Reisz                       Second Vice President
Beverly Rockecharlie                Second Vice President
Stacy Schultz                       Second Vice President
Frank Snyder                        Second Vice President
Donna J. Spalding                  Second Vice President, Financial Markets Division
Boning Tong                         Second Vice President and Associate Actuary
Tonya J. Vessels                    Second Vice President
Joan Ward                           Second Vice President

Kimberly A. Bivins                  Assistant Vice President, Diversified Financial Products Division
Erik Furnish                        Assistant Vice President, Diversified Financial Products Division
Jacqueline D. Griffin               Assistant Vice President, Diversified Financial Products Division
Thomas J. Hartlage                  Assistant Vice President, Diversified Financial Products Division
Priscilla I. Hechler                Assistant Vice President & Assistant Secretary, Equity Group
JoAnn Herndon                       Assistant Vice President, Financial Markets Division
Michael G. Herp                     Assistant Vice President, Diversified Financial Products Division
Richard C. Hicks                    Assistant Vice President & Assistant Secretary, Equity Group
Clifton Jenkins                     Assistant Vice President, Diversified Financial Products Division
Melanie Mabe                        Assistant Vice President, Diversified Financial Products Division
William R. Maurer                  Assistant Vice President, Financial Markets Division
Matthew Meaney                      Assistant Vice President, Diversified Financial Products Division
Lisa L. Patterson                   Assistant Vice President, Diversified Financial Products Division
Robert E. Payne                     Assistant Vice President, Financial Markets Division
Rhonda L. Pritchett                 Assistant Vice President, Diversified Financial Products Division
Darin Smith                         Assistant Vice President & Assistant Secretary, Financial Markets
                                                                        Division
Teresa L. Stolba                    Assistant Vice President, Financial Markets Division
Thomas E. Walsh                     Assistant Vice President, Diversified Financial Products Division
Harvey E. Willis                    Assistant Vice President, Diversified Financial Products Division

Jill A.H. Andersen                  Counsel, Corporate
Mary J. Clark                       Counsel, Corporate
Katherine A. Schulze                Counsel, Corporate
Emarie S. Payne                     Counsel, Corporate

Kamran Haghighi                     Tax Officer

Neva Curtis                         Assistant Secretary, Marketing Partnerships
John Donner                         Assistant Secretary, Investment Division
Gregory E. Miller-Breetz            Assistant Secretary, Financial Markets Division
Mary Schaefer                       Assistant Secretary, Financial Markets Division
Marie W. Schmitt                   Assistant Secretary, Marketing Partnerships
Kim A. Tursky                       Assistant Secretary
Susan Vivino                        Assistant Secretary

Clifton W. Flenniken III            Assistant Treasurer, Investment Division

James Wolfenden                     Statement Officer

James T. Bradley                    Product Compliance Officer, Marketing Partnerships

</TABLE>

Item 26.  Persons Controlled by or Under Common Control with the Depositor or
 Registrant

     Registrant is a separate account of Transamerica Life Insurance and Annuity
Company, is controlled by the Contract Owners, and is not controlled by or under
common control with any other person. The Depositor, Transamerica Life Insurance
and Annuity Company,  is wholly owned by Transamerica  Occidental Life Insurance
Company,  which  is  wholly  owned  by  Transamerica  Insurance  Corporation  of
California  (Transamerica-California).  Transamerica-California may be deemed to
be controlled by its parent, Transamerica Corporation.

     The  following  charts  indicate the persons  controlled by or under common
control with Transamerica Corporation and AEGON N.V.


                     TRANSAMERICA CORPORATION AND SUBSIDIARIES
                      WITH STATE OR COUNTRY OF INCORPORATION
Transamerica Corporation
  (Common Parent Corporation)
Inter-America Corporation
Transamerica Corporation (Oregon)
Transamerica LP Holdings Corporation
Transamerica Finance Corporation
Transamerica HomeFirst, Inc.                 (Common)
Transamerica HomeFirst, Inc.                 (Preferred)
TREIC Enterprises, Inc.
Transamerica CBO I, Inc.
Transamerica International Holdings, Inc.
Transamerica Financial Products, Inc.
Pyramid Insurance Company Ltd.              (Common)
Pyramid Insurance Company Ltd.              (Preferred)
RTI Holdings, Inc.  (dormant)
Transamerica Business Technologies Corporation
ARC Reinsurance Corporation
Transamerica Management, Inc.
Transamerica Intellitech, Inc.
Realist, Inc.
Transamerica Home Loan
Transamerica Lending Company
Transamerica Insurance Corporation of California
Arbor Life Insurance Company
Plaza Insurance Sales, Inc.
Transamerica International Insurance Services, Inc.
Transamerica Annuity Service Corporation
Transamerica Advisors, Inc.
Transamerica Securities Sales Corporation
Transamerica Products, Inc.
Transamerica Products I, Inc.
Transamerica Products II, Inc.
NEF Investment Company
Greenwich Potomac Holding Corporation
Transamerica Products IV, Inc.
Transamerica Service Company
Transamerica South Park Resources, Inc.
Transamerica Financial Resources Insurance Agency
   Of Alabama, Inc.
Transamerica Financial Resources Insurance Agency
  Of Massachusetts, Inc.
USA Administration Services, Inc.
Financial Resources Insurance Agency of Texas
Transamerica Financial Resources, Inc.
Gemini Investments, Inc.
Transamerica Senior Properties, Inc.
Transamerica Senior Living, Inc.
Transamerica Investment Services, Inc.
TA Leasing Holding Co., Inc.
Transamerica Leasing Inc.
Intermodal Equipment Inc.
Transamerica Distribution Services Inc.
Transamerica Transport Inc.
Transamerica Leasing Holdings Inc.
Transamerica Trailer Holdings I, Inc.
Transamerica Trailer Holdings II, Inc.
Transamerica Trailer Holdings III, Inc.
Trans Ocean Ltd.
Trans Ocean Container Finance Corp.
Trans Ocean Container Corp.
Trans Ocean Tank Services Corp.
SpaceWise, Inc.
Trans Ocean Regional Corporate Holdings
Trans Ocean Management Corp.
Greybox Logistics Services, Inc.
Transamerica Commercial Finance Corporation, I
Pacific Agency, Inc. (Indiana)
Transamerica Consumer Mortgage Receivables Corporation
Transamerica Mortgage Company
Transamerica Consumer Finance Holding Company
Metropolitan Mortgage Company
Easy Yes Mortgage, Inc. (Florida)  (dormant)
Easy Yes Mortgage, Inc. (Georgia)  (dormant)
First Florida Appraisal Services, Inc.  (dormant)
First Georgia Appraisal Services, Inc.  (dormant)
Freedom Tax Services, Inc.  (dormant)
J.J. & W. Advertising, Inc.  (dormant)
J.J. & W. Realty Services, Inc.  (dormant)
Liberty Mortgage Company of Fort Myers, Inc.  (dormant)
Metropolis Mortgage Company  (dormant)
Perfect Mortgage Company  (dormant)
TCF Asset Management Corporation
BWAC Twelve, Inc.
Transamerica Commercial Finance Corporation
BWAC International Corporation
BWAC Credit Corporation
BWAC Seventeen, Inc.
BWAC Twenty-One, Inc.
Transamerica GmbH, Inc.
Transamerica  Insurance  Finance  Corporation   Transamerica  Insurance  Finance
Corporation of California  Transamerica  Business  Credit  Corporation  (Common)
Transamerica  Business Credit  Corporation  (Preferred)  Transamerica  Insurance
Finance Company (Europe) Transamerica Inventory Finance Corporation Transamerica
Joint Ventures, Inc.
The Plain Company
Direct  Capital  Equity  Investments,  Inc.  Transamerica  Distribution  Finance
Corporation  Transamerica  Retail Financial  Services  Corporation  Transamerica
Vendor  Financial  Services  Corporation  TIFCO  Lending  Corporation  TA Air I,
Corporation  TA  Air  II,  Corporation  TA  Air  III,  Corporation  TA  Air  IV,
Corporation TBC I, Inc.
TBC II, Inc.
TBC III, Inc.
Transamerica Accounts Holding Corporation
TBC IV, Inc.
TBC V, Inc.
TA Air East, Corporation
TBC Tax I, Inc.
TBC Tax II, Inc.
TBC Tax III, Inc. TBC Tax IV, Inc. TBC Tax V, Inc. TBC Tax VI, Inc. TBC Tax VII,
Inc. TBC Tax VIII, Inc. TBC Tax IX, Inc.
Bay Capital Corporation
Gulf Capital Corporation
Coast Funding Corporation
Inventory Funding Trust  (Delaware Trust, 1997 Form 8832)
 Transamerica Bank N.A.
TBCC Funding  Trust I (Delaware  Trust,  1998 Form 8832) TBCC  Funding  Trust II
(Delaware Trust, 1998 Form 8832) TA Air V, Corporation TA Air VI, Corporation TA
Air VII, Corporation TA Air VIII,  Corporation  Transamerica Equipment Financial
Services Corporation
 Transamerica Mezzanine Financing, Inc.
Transamerica Small Business Services, Inc.
Transamerica Distribution Finance - Overseas, Inc.
TA Marine I, Inc.
TA Marine II, Inc. TA Air IX, Corporation TA Air X, Corporation TBC VI, Inc.
Emergent  Business  Capital  Holdings,  Inc. TA Air XI Corporation  Transamerica
Business  Advisory Group, Inc. TA Air XII Corporation TA Air XIII Corporation TA
Air XIV Corporation TA Air XV Corporation  Transamerica  Realty  Services,  Inc.
Pyramid  Investment  Corporation The Gilwell Company Bankers Mortgage Company of
California   Transamerica  Minerals  Company  Transamerica  Oakmont  Corporation
Ventana Inn, Inc.
Transamerica Affordable Housing, Inc.
Transamerica Occidental Life Insurance Company
Transamerica Life Insurance & Annuity Company
Transamerica Assurance Company
Transamerica Life Insurance Company of New York
Transamerica Pacific Insurance Company, Ltd.
Transamerica International Re (Bermuda) Ltd.
Transamerica International Re (Bermuda) Ltd.

                     *Designates INACTIVE COMPANIES
                 A Division of Transamerica Corporation
      Limited Partner; Transamerica Corporation is General Partner

VERENGING AEGON - Netherlands Membership Association
AEGON N.V. - Netherlands corporation  (51.16%)
    Transamerica Corporation and subsidiaries (100%) (DE) AEGON Nederland N.V. -
    Netherlands  corporation  (100%)  AEGON  NEVAK  HOLDING  B.V. -  Netherlands
    corporation (100%) GRONINGER  FINANCIERINGEN B.V. - Netherlands  corporation
    (100%) AEGON INTERNATIONAL N.V. - Netherlands corporation (100%)
       Voting Trust - (Trustees - K.J. Storm, Donald J. Shepard, H.B. Van Wijk,
                Dennis Hersch)(DE)
       AEGON U.S. Holding Corporation (DE) (100%)
                               Short Hills Management  Company (NJ) (100%) CORPA
                               Reinsurance  Company (NY) (100%) AEGON Management
                               Company (IN) (100%) RCC North  America Inc.  (DE)
                               (100%)

       AEGON USA, Inc. - holding co.  (IA) (100%)
                               AEGON Funding Corp. (DE) (100%)
                               First  AUSA Life  Insurance  Company -  insurance
             holding  co.  (MD)  (100%)  AUSA Life  Insurance  Company,  Inc.  -
             insurance (NY) (82.33%) Life Investors Insurance Company of America
             - insurance (IA) (100%)
               Bankers United Life Assurance Company - insurance  (IA) (100%)
               Great American Insurance Agency, Inc. (IA) (100%)
               Life Investors Alliance, LLC (DE) (100%)
             PFL Life Insurance  Company - insurance (IA) (100%) AEGON Financial
               Services Group, Inc. (MN) (100%) AEGON Assignment  Corporation of
               Kentucky (KY) (100%) AEGON Assignment Corporation (IL) (100%)
             Southwest  Equity Life  Insurance  Company -  insurance  (AZ) (100%
             Voting  Common) Iowa  Fidelity Life  Insurance  Company - insurance
             (AZ) (100% Voting  Common)  Western  Reserve Life  Assurance Co. of
             Ohio - insurance  (OH)  (100%) WRL  Investment  Management,  Inc. -
             investment  adviser  (FL) (100%) WRL  Investment  Services,  Inc. -
             transfer agent  (FL)(100%) WRL Series Fund, Inc. - mutual fund (MD)
             ISI  Insurance  Agency,  Inc.  and  subsidiaries  (CA) (100%) AEGON
             Equity Group, Inc. (FL) (100%) Monumental  General Casualty Company
             - insurance (MD) (100%) United Financial  Services,  Inc. - general
             agency (MD)  (100%)  Bankers  Financial  Life  Insurance  Company -
             insurance (AZ) The Whitestone  Corporation - insurance  agency (MD)
             (100%) Cadet Holding Corp. - holding company (IA) (100%) Monumental
             General Life Insurance Company of Puerto Rico (PR) (51%)

                           AUSA Holding Company - holding company (MD) (100%)
             Monumental General Insurance Group, Inc. - holding company
                      (MD) (100%)
             Monumental General Administrators, Inc. (MD) (100%)
               Executive Management and Consultant Services, Inc. - consulting
                    services (MD)(100%)
             Trip Mate Insurance Agency, Inc. (KS) (100%)
             Monumental General Mass Marketing, Inc. - marketing (MD) (100%)
             AUSA Financial Markets, Inc. - marketing  (IA) (100%)
             Endeavor Group (CA) (100%)
             Endeavor Management Company (CA) (100%)
             Universal  Benefits  Corporation - third party  administrator  (IA)
             (100%) Investors Warranty of America, Inc. - provider of automobile
             extended maintenance
               contracts (IA) (100%)
             Massachusetts Fidelity Trust Company - trust company  (IA) (100%)
             Money Services, Inc. - financial counseling for employees and
                    agents of affiliated companies  (DE) (100%)
             ORBA Insurance Services, Inc. (CA) (10.56%)
             Zahorik Company, Inc. - broker-dealer  (CA) (100%)
                              ZCI, Inc. (AL) (100%)
             Long, Miller & Associates, L.L.C. (CA) (33-1/3%)
             AEGON Asset Management Services, Inc. (DE) (100%)
             InterSecurities, Inc. - broker-dealer  (DE) (100%)
                Associated Mariner Financial Group, Inc. - holding company
                          (MI) (100%)
                    Mariner Financial Services, Inc. - broker/dealer
                         (MI) (100%)
                    Associated Mariner Agency of Hawaii, Inc. - insurance
                          agency (MI) (100%)
                    Associated Mariner Agency of New Mexico, Inc. (MI) (100%)
             Idex Investor Services, Inc. - shareholder services  (FL) (100%)
             Idex Management, Inc. - investment adviser  (DE) (100%)
             IDEX Mutual Funds - mutual fund (MA)
             Diversified Investment Advisors, Inc. - investment adviser (DE)
                         (100%)
                Diversified Investors Securities Corporation - broker-dealer
                      (DE) (100%)
             AEGON USA Securities, Inc. - broker-dealer  (IA) (100%)
                AEGON USA Managed Portfolios, Inc. - mutual fund  (MD)
             Creditor Resources, Inc. - credit insurance  (MI) (100%)
                CRC Creditor Resources Canadian Dealer Network Inc. - insurance
                     agency (Canada)  (100%)
                Weiner Agency, Inc. (MD) (100%)
             AEGON USA Investment Management, Inc. - investment adviser
                          (IA) (100%)
             AEGON USA Realty Advisors, Inc. - real estate investment services
                     (IA) (100%)
                QSC Holding, Inc. (DE) (100%)
                Landauer Realty Advisors, Inc. - real estate counseling
                     (IA) (100%)
                Landauer Associates, Inc. - real estate counseling
                    (DE) (100%)
                Landauer Realty Associates, Inc. (TX) (100%)
                Realty Information Systems, Inc. - information systems for real
                     estate investment  management  (IA) (100%)
                USP Real Estate  Investment Trust - real estate investment trust
(IA) RCC Properties Limited Partnership (IA)



Item 27.  Number of Contractowners
As of2-29-00:

     Product A (Classic)   Non-qualified:1525         Qualified:  1338
     Product C (Catalyst)  Non-qualified:1585         Qualified:  1974


Item 28.  Indemnification

Transamerica  Life  Insurance and Annuity  Company's  Articles of  Incorporation
provide in Article VIII as follows:

     To the full  extent  from time to time  permitted  by law, no person who is
serving or who has served as a director of the  Corporation  shall be personally
liable in any action  for  monetary  damages  for breach of his or her duty as a
director,  whether such action is brought by or in the right of the  corporation
or otherwise.  Neither the amendment or repeal of this Article nor  inconsistent
with this Article,  shall  eliminate or reduce the  protection  afforded by this
Article to a  director  of the  Corporation  with  respect  to any matter  which
occurred, or any cause of action, suit or claim which but for this Article would
have accrued or arising prior to such amendment, repeal or adoption.

     Insofar as  indemnification  for liability arising under the Securities Act
of 1933 may be permitted to directors,  officers and  controlling  person of the
registrant pursuant to the foregoing  provisions,  or otherwise,  the registrant
has been advised that in the opinion of the Commission such  indemnification  is
against  public  policy  as  expressed  in  the  1933  Act  and  is,  therefore,
unenforceable.  In the  event  that a claim  for  indemnification  against  such
liability (other than the payment by the registrant of expenses incurred or paid
by  the  director,  officer  or  controlling  person  of the  registrant  in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy  as  expressed  in the  1933  Act  and  will  be  governed  by the  final
adjudication of such issue.

     The  directors  and officers of  Transamerica  Life  Insurance  and Annuity
Company are covered  under a Directors  and  Officers  liability  program  which
includes  direct  coverage to directors and officers  (Coverage A) and corporate
reimbursement  (Coverage B) to reimburse the Company for  indemnification of its
directors and officers.  Such  directors and officers are  indemnified  for loss
arising from any covered claim by reason of any Wrongful Act in their capacities
as directors or officers. In general, the term "loss" means any amount which the
insureds are legally obligated to pay for a claim for Wrongful Acts. In general,
the term "Wrongful Acts" means any breach of duty, neglect, error, misstatement,
misleading statement or omission caused, committed or attempted by a director or
officer while acting  individually  or  collectively  in their capacity as such,
claimed against them solely by reason of their being directors and officers. The
limit  of  liability  under  the  program  is  $95,000,000  for  Coverage  A and
$80,000,000 for Coverage B for the period 11/15/98 to 11/15/2000.  Coverage B is
subject to a self insured retention of $15,000,000. The primary policy under the
program is with CNA Lloyds, Gulf, Chubb and Travelers.

Item 29.  Principal Underwriter

(a) Transamerica  Securities Sales Corporation,  the principal  underwriter,  is
also the underwriter for: Transamerica  Investors,  Inc.;  Transamerica Variable
Insurance Fund, Inc.;  Transamerica Occidental Life Insurance Company's Separate
Accounts:  VA-2L; VA-2NL;  VUL-1; VUL-2; and VL; Transamerica Life Insurance and
Annuity  Company's  Separate Accounts VA-1; VA-6 and VA-7; and Transamerica Life
Insurance Company of New York VA-2LNY; VA-2NLNY; VA-5NLNY; and VA-6NY

The  Underwriter  is  wholly-owned  by  Transamerica  Insurance  Corporation  of
California, a wholly-owned subsidiary of Transamerica Corporation,  a subsidiary
of AEGON, N.V.

     (b) The following table furnishes information with respect to each director
and officer of the principal  Underwriter currently  distributing  securities of
the registrant:

Nooruddin Veerjee Director and Chairman
Nicki Bair                 Director and President
Sandy Brown                Director, Senior Vice President and Treasurer
Roy Chong-Kit              Director
George Chuang              Vice President and Chief Financial Officer
Chris Shaw                 Vice President and Compliance Officer



(c) The following  table lists the amounts of commissions  paid to the principal
underwriter during the last fiscal year.
<TABLE>
<CAPTION>

Name of
Principal                   Net Underwriting            Compensation on         Brokerage
Underwriter              Discounts & Commission            Redemption         Commissions           Compensation


TSSC:
<S>                        <C>                       <C>               <C>                          <C>
Classic                    0                         0                 $5,819,590.34                     0
Catalyst                   0                         0                 $6,538,000.60                     0

</TABLE>

Item 30.  Location of Accounts and Records

     Physical possession of each account, book, or other document required to be
maintained  is  kept  at the  Company's  offices  at  401  North  Tryon  Street,
Charlotte, North Carolina 28202.

Item 31.  Management Services

     Not applicable.

Item 32.  Undertakings

     (a) The registrant undertakes that it will file a post-effective  amendment
to this registration  statement as frequently as is necessary to ensure that the
audited financial  statements in the registration  statement are never more than
16 months  old for as long as  purchase  payments  under the  contracts  offered
herein are being accepted.


     (b)  Registrant  hereby  undertakes  to  include  either (1) as part of any
application to purchase a Contract  offered by the  prospectus,  a space that an
applicant can check to request a Statement of Additional  Information,  or (2) a
post  card or  similar  written  communication  affixed  to or  included  in the
prospectus  that the  applicant can remove to send for a Statement of Additional
Information;

     (c)  Registrant  hereby  undertakes  to deliver any Statement of Additional
Information  and any financial  statements  required to be made available  under
Form N-4 promptly upon written or oral request.

    (d)  Transamerica  hereby  represents that the fees and the charges deducted
         under the Contracts,  in the  aggregate,  are reasonable in relation to
         the services  rendered,  the expenses expected to be incurred,  and the
         risks assumed by Transamerica.

<PAGE>


<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of the Securities Act of 1933,  Transamerica  Life
Insurance and Annuity Company certifies that this  Post-Effective  Amendment No.
10 to the Registration Statement meets all of the requirements for effectiveness
pursuant to Rule  485(b)  under the  Securities  Act of 1933 and has duly caused
this Post-Effective  Amendment No. 10 to the Registration Statement to be signed
on its behalf by the undersigned in the City of Los Angeles, State of California
on this 27th day of April, 2000.


                            SEPARATE ACCOUNT VA-6 OF
                           TRANSAMERICA LIFE INSURANCE
                               AND ANNUITY COMPANY
                                  (REGISTRANT)

                           TRANSAMERICA LIFE INSURANCE
                               AND ANNUITY COMPANY
                                   (DEPOSITOR)




                 -----------------------------------------------
                               David M. Goldstein
                                 Vice President


As required by the Securities Act of 1933, this Registration  Statement has been
signed  below  on April  27,  2000 by the  following  persons  or by their  duly
appointed attorney-in-fact in the capacities specified:



<TABLE>
<CAPTION>


Signatures                          Titles                                      Date
<S>                                <C>                                    <C>
______________________
Nooruddin S. Veerjee*               President and Director                 April 27, 2000

______________________              Director                               April 27, 2000
Patrick S. Baird*

______________________              Director and Senior Vice President     April 27, 2000
Brenda K. Clancy*

______________________              Director, General Counsel              April 27, 2000
James W. Dederer*                   and Secretary

______________________              Director                               April 27, 2000
George A. Foegele*

______________________              Director and Senior Vice President     April 27, 2000
Douglas C. Kolsrud*

______________________              Director and Investment Officer        April 27, 2000
Richard N. Latzer*

______________________              Director and Acting Chief              April 27, 2000
Karen O. MacDonald*                 Financial Officer

______________________              Director and Investment Officer        April 27, 2000
Gary U. Rolle'*

______________________              Director and President -               April 27, 2000
Paul E. Rutledge III*                   Reinsurance Division

______________________              Director, Vice President and Counsel   April 27, 2000
Craig D. Vermie*

_____________________________________       On April  27, 2000 as Attorney-in-Fact pursuant to
*By: David M. Goldstein                     powers of attorney filed herewith.


</TABLE>



<PAGE>

                         CONSENT Of INDEPENDENT AUDITORS




We  consent to the  reference  to our firm under the  caption  "Accountants  and
Financial  Statements" in  Post-Effective  Amendment No. 10 under the Securities
Act of 1933 and Post-Effective Amendment No. 11 under the Investment Company Act
of 1940 to the  Registration  Statement (Form N-4 No.  333-9745) and the related
Prospectus and Statement of Additional  Information of Separate  Account VA-6 of
Transamerica  Life  Insurance  and Annuity  Company and to the use of our report
dated March 31, 2000 with respect to the statutory-basis financial statements of
Transamerica  Life Insurance and Annuity  Company and our report dated March 24,
2000 with respect to the  financial  statements of Separate  Account VA-6,  both
included in the Statement of Additional Information.


    Los Angeles, California
     April 24, 2000

<PAGE>

                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                                Patrick S. Baird



<PAGE>


                                Power of Attorney

         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  her true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for her and on her behalf and in her name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and her or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set her hand, this
______ day of March, 2000.


                         ------------------------------
                                Brenda K. Clancy


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                                James W. Dederer


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                                George A. Foegele


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                               Douglas C. Kolsrud


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                                Richard N. Latzer


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned   Director  and  Acting  Chief  Financial  Officer  of
Transamerica  Life Insurance and Annuity Company,  a North Carolina  corporation
(the  "Company"),  hereby  constitutes  and  appoints  Frank A.  Camp,  James W.
Dederer,  David M. Goldstein,  Priscilla I. Hechler,  William M. Hurst, Larry N.
Norman, Thomas E. Pierpan, Stephen E. Price, Colleen Tobiason, Ronald L. Ziegler
and each of them (with full  power to each of them to act  alone),  her true and
lawful  attorney-in-fact and agent, with full power of substitution to each, for
her and on her behalf and in her name,  place and stead, to execute and file any
of  the  documents  referred  to  below  relating  to  registrations  under  the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance and annuity policies:  registration statements on any form
or forms under the Securities  Act of 1933 and under the Investment  Company Act
of 1940, and any and all amendments and supplements  thereto,  with all exhibits
and all instruments  necessary or appropriate in connection  therewith,  each of
said  attorneys-in-fact  and agents and her or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned  each and
every act and thing requisite and necessary or appropriate  with respect thereto
to be done in and about the premises in order to  effectuate  the same, as fully
to all intents  and  purposes  as the  undersigned  might or could do in person,
hereby ratifying and confirming all that said  attorneys-in-fact  and agents, or
any of them, may do or cause to be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set her hand, this
______ day of March, 2000.


                         ------------------------------
                               Karen O. MacDonald


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                                 Gary U. Rolle'


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                              Paul E. Rutledge III


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director  and  President  of the  Insurance  Products
Division of Transamerica  Life Insurance and Annuity  Company,  a North Carolina
corporation  (the  "Company"),  hereby  constitutes  and appoints Frank A. Camp,
James W. Dederer,  David M. Goldstein,  Priscilla I. Hechler,  William M. Hurst,
Larry N. Norman, Thomas E. Pierpan,  Stephen E. Price, Colleen Tobiason,  Ronald
L. Ziegler and each of them (with full power to each of them to act alone),  his
true and lawful  attorney-in-fact  and agent, with full power of substitution to
each, for him and on his behalf and in his name, place and stead, to execute and
file any of the documents referred to below relating to registrations  under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance and annuity policies:  registration statements on any form
or forms under the Securities  Act of 1933 and under the Investment  Company Act
of 1940, and any and all amendments and supplements  thereto,  with all exhibits
and all instruments  necessary or appropriate in connection  therewith,  each of
said  attorneys-in-fact  and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned  each and
every act and thing requisite and necessary or appropriate  with respect thereto
to be done in and about the premises in order to  effectuate  the same, as fully
to all intents  and  purposes  as the  undersigned  might or could do in person,
hereby ratifying and confirming all that said  attorneys-in-fact  and agents, or
any of them, may do or cause to be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                                Nooruddin Veerjee


<PAGE>


                                POWER OF ATTORNEY


         The  undersigned  Director of  Transamerica  Life Insurance and Annuity
Company,  a North Carolina  corporation (the "Company"),  hereby constitutes and
appoints  Frank A. Camp,  James W.  Dederer,  David M.  Goldstein,  Priscilla I.
Hechler, William M. Hurst, Larry N. Norman, Thomas E. Pierpan, Stephen E. Price,
Colleen Tobiason, Ronald L. Ziegler and each of them (with full power to each of
them to act alone),  his true and lawful  attorney-in-fact  and agent, with full
power of substitution to each, for him and on his behalf and in his name,  place
and stead,  to execute and file any of the documents  referred to below relating
to  registrations  under the  Securities  Act of 1933 and  under the  Investment
Company Act of 1940 with  respect to any life  insurance  and annuity  policies:
registration  statements on any form or forms under the  Securities  Act of 1933
and under the  Investment  Company Act of 1940,  and any and all  amendments and
supplements  thereto,  with  all  exhibits  and  all  instruments  necessary  or
appropriate in connection therewith,  each of said  attorneys-in-fact and agents
and his or their  substitutes  being empowered to act with or without the others
or other,  and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary  or  appropriate  with  respect  thereto  to be done in and  about the
premises in order to  effectuate  the same, as fully to all intents and purposes
as the undersigned might or could do in person,  hereby ratifying and confirming
all that said  attorneys-in-fact  and agents, or any of them, may do or cause to
be done by virtue thereof.

         IN WITNESS  WHEREOF,  the  undersigned  has hereunto set his hand, this
______ day of March, 2000.


                         ------------------------------
                                 Craig D. Vermie




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