VARIABLE ANNUITY ACCT C OF AETNA LIFE INSURANCE & ANNUITY CO, 485APOS, 1996-02-20

VARIABLE ANNUITY ACCT C OF AETNA LIFE INSURANCE & ANNUITY CO
485APOS, 1996-02-20

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<PAGE>

As filed with the Securities and Exchange Registration No. 33-75964*
Commission on February 20, 1996 Registration No. 811-2513
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4
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Post-Effective Amendment No. 5 To
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

and Amendment To

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Variable Annuity Account C of Aetna Life Insurance and Annuity Company
(EXACT NAME OF REGISTRANT)

Aetna Life Insurance and Annuity Company
(NAME OF DEPOSITOR)

151 Farmington Avenue, RE4C, Hartford, Connecticut 06156
(Address of Depositor's Principal Executive Offices) (Zip Code)

Depositor's Telephone Number, including Area Code: (860) 273-7834

Susan E. Bryant, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4C, Hartford, Connecticut 06156
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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It is proposed that this filing will become effective:

/X/ on May 1, 1996 pursuant to paragraph (a)(1) of Rule 485

*Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has
included a combined prospectus under this Registration Statement which
includes all the information which would currently be required in
prospectuses relating to the securities covered by the following earlier
Registration Statements: 33-75958; 33-75960; and 33-75994.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
Registrant has registered an indefinite number of securities under the
Securities Act of 1933. Registrant expects to file a Rule 24f-2 Notice
for the fiscal year ended December 31, 1995 on or before February 29,
1996.

<PAGE>

VARIABLE ANNUITY ACCOUNT C
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
FORM N-4
ITEM NO. PART A (PROSPECTUS) LOCATION
- -------- ------------------- --------
<C> <S> <C>
1 Cover Page . . . . . . . . . . . . . . . . . . . Cover Page

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

3 Synopsis or Highlights . . . . . . . . . . . . . Prospectus Summary; Fee Table

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

5 General Description of Registrant, Depositor,
and Portfolio Companies. . . . . . . . . . . . . The Company; Variable Annuity
Account C; The Funds

6 Deductions and Expenses. . . . . . . . . . . . . Charges and Deductions;
Distribution

7 General Description of Variable Annuity
Contracts. . . . . . . . . . . . . . . . . . . . Purchase; Miscellaneous

8 Annuity Period . . . . . . . . . . . . . . . . . Annuity Period

9 Death Benefit. . . . . . . . . . . . . . . . . . Death Benefit During
Accumulation Period; Death
Benefit Payable During the
Annuity Period

10 Purchases and Contract Value . . . . . . . . . . Purchase; Contract Valuation

11 Redemptions. . . . . . . . . . . . . . . . . . . Right to Cancel; Withdrawals

12 Taxes. . . . . . . . . . . . . . . . . . . . . . Tax Status

13 Legal Proceedings. . . . . . . . . . . . . . . . Miscellaneous - Legal Matters
and Proceedings

14 Table of Contents of the Statement of
Additional Information . . . . . . . . . . . . . Contents of the Statement of
Additional Information
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
FORM N-4
ITEM NO. PART B (STATEMENT OF ADDITIONAL INFORMATION) LOCATION
- -------- -------------------------------------------- --------
<C> <S> <C>
15 Cover Page . . . . . . . . . . . . . . . . . . . Cover page

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

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

18 Services . . . . . . . . . . . . . . . . . . . . General Information and
History; Independent Auditors

19 Purchase of Securities Being Offered . . . . . . Offering and Purchase of
Contracts

20 Underwriters . . . . . . . . . . . . . . . . . . Offering and Purchase of
Contracts

21 Calculation of Performance Data. . . . . . . . . Performance Data; Average
Annual Total Return Quotations

22 Annuity Payments . . . . . . . . . . . . . . . . Annuity Payments

23 Financial Statements . . . . . . . . . . . . . . Financial Statements
</TABLE>

PART C (OTHER INFORMATION)

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.

<PAGE>
PROSPECTUS
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- --------------------------------------------------------------------------------

This Prospectus describes group and individual deferred variable annuity
contracts ("Contracts") issued by Aetna Life Insurance and Annuity Company (the
"Company"). The Contracts are available for public school systems and certain
tax-exempt (Section 501(c)(3)) organizations for their employees under Section
403(b) of the Internal Revenue Code of 1986 as amended ("Code"), and for
qualified defined contribution plans under Section 401(a) of the Code. (See
"Purchase.")

The Contracts provide that contributions may be allocated to one or more of the
Credited Interest Options or to one or more of the Subaccounts of Variable
Annuity Account C, a separate account of the Company. The Subaccounts invest
directly in shares of the following Funds:

- Aetna Variable Fund - Fidelity VIP Overseas Portfolio
- Aetna Income Shares - Franklin Government Securities
- Aetna Variable Encore Fund Trust
- Aetna Investment Advisers Fund, - Janus Aspen Aggressive Growth
Inc. Portfolio
- Aetna Ascent Variable Portfolio - Janus Aspen Balanced Portfolio
- Aetna Crossroads Variable Portfolio - Janus Aspen Flexible Income
- Aetna Legacy Variable Portfolio Portfolio
- Alger American Growth Portfolio - Janus Aspen Growth Portfolio
- Alger American Small Cap Portfolio - Janus Aspen Short-Term Bond
- Calvert Responsibly Invested Portfolio
Balanced Portfolio - Janus Aspen Worldwide Growth
- Fidelity VIP II Contrafund Portfolio
Portfolio - Lexington Natural Resources Trust
- Fidelity VIP Equity-Income - Neuberger & Berman Growth Portfolio
Portfolio - Scudder International Portfolio
- Fidelity VIP Growth Portfolio - TCI Growth (a Twentieth Century
fund)

The Credited Interest Options currently available under the Contract are the
Guaranteed Accumulation Account, the Fixed Account and the Fixed Plus Account.
Except as specifically mentioned, this Prospectus describes only investments
through the Separate Account. A brief description of each of the Credited
Interest Options is contained in Appendices to this Prospectus. Additional
information concerning the Guaranteed Accumulation Account is contained in a
separate prospectus.

The availability of the Funds and the Credited Interest Options is subject to
applicable regulatory authorization. Not all Funds or Credited Interest Options
may be available in all jurisdictions, under all Contracts or in all Plans.
Please check with your employer to determine option availability. (See
"Investment Options.")

This Prospectus provides investors with the information that they should know
about the Separate Account before investing in the Contract. Additional
information about the Separate Account is contained in a Statement of Additional
Information ("SAI") which is available at no charge. The SAI has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
The Table of Contents for the SAI is printed on page 19 of this Prospectus. An
SAI may be obtained by indicating the request on the Enrollment Materials or on
the prospectus receipt contained in this Prospectus, or by calling the number
listed under the "Inquiries" section of the Prospectus Summary.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE FUNDS AND THE GUARANTEED ACCUMULATION ACCOUNT. ALL PROSPECTUSES SHOULD BE
READ AND RETAINED FOR FUTURE REFERENCE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION ARE DATED MAY 1,
1996.
<PAGE>
TABLE OF CONTENTS
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- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
DEFINITIONS.......................................................................... DEFINITIONS - 1
PROSPECTUS SUMMARY................................................................... SUMMARY - 1
FEE TABLE............................................................................ FEE TABLE - 1
CONDENSED FINANCIAL INFORMATION...................................................... AUV HISTORY - 1
THE COMPANY.......................................................................... 1
VARIABLE ANNUITY ACCOUNT C........................................................... 1
INVESTMENT OPTIONS................................................................... 1
The Funds........................................................................ 1
Credited Interest Options........................................................ 4
PURCHASE............................................................................. 4
Contract Availability............................................................ 4
Purchasing Interests in the Contract............................................. 4
Purchase Payments................................................................ 4
Transfer Credits................................................................. 5
Right to Cancel.................................................................. 5
CHARGES AND DEDUCTIONS............................................................... 5
Daily Deductions from the Separate Account....................................... 5
Maintenance Fee.................................................................. 5
Deferred Sales Charge............................................................ 6
Fund Expenses.................................................................... 8
Premium and Other Taxes.......................................................... 8
CONTRACT VALUATION................................................................... 8
Account Value.................................................................... 8
Accumulation Units............................................................... 8
Net Investment Factor............................................................ 8
TRANSFERS............................................................................ 8
Dollar Cost Averaging Program.................................................... 9
WITHDRAWALS.......................................................................... 9
Reinvestment Privilege........................................................... 10
CONTRACT LOANS....................................................................... 10
ADDITIONAL WITHDRAWAL OPTIONS........................................................ 10
DEATH BENEFIT DURING ACCUMULATION PERIOD............................................. 11
ANNUITY PERIOD....................................................................... 11
Annuity Period Elections......................................................... 11
Annuity Options.................................................................. 12
Annuity Payments................................................................. 13
Charges Deducted During the Annuity Period....................................... 13
Death Benefit Payable During Annuity Period...................................... 13
TAX STATUS........................................................................... 14
Introduction..................................................................... 14
Taxation of the Company.......................................................... 14
Contracts Used with Certain Retirement Plans..................................... 14
</TABLE>
<PAGE>
<TABLE>
<S> <C>
MISCELLANEOUS........................................................................ 16
Distribution..................................................................... 16
Delay or Suspension of Payments.................................................. 17
Performance Reporting............................................................ 17
Voting Rights.................................................................... 17
Changes in Beneficiary Designations.............................................. 17
Modification of the Contract..................................................... 18
Legal Matters and Proceedings.................................................... 18
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION.................................. 18
APPENDIX I--GUARANTEED ACCUMULATION ACCOUNT.......................................... 20
APPENDIX II--THE FIXED ACCOUNT....................................................... 21
APPENDIX III--THE FIXED PLUS ACCOUNT................................................. 22
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. THE COMPANY DOES NOT AUTHORIZE ANY
PERSON TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE
OFFERING CONTAINED IN THIS PROSPECTUS EXCEPT AS OTHERWISE CONTAINED HEREIN.
<PAGE>
DEFINITIONS
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- --------------------------------------------------------------------------------

The following terms are defined as they are used in this Prospectus:

ACCOUNT: A record which identifies contract values accumulated on behalf of each
Participant during the Accumulation Period. One or more Accounts may be
established for each Participant.

ACCOUNT VALUE: The total dollar value of amounts held in an Account as of each
Valuation Date during the Accumulation Period.

ACCOUNT YEAR: A period of twelve months measured from the date on which an
Account is established (the effective date) or from an anniversary of such
effective date.

ACCUMULATION PERIOD: The period during which Purchase Payment(s) credited to an
Account are invested to fund future annuity payments.

ACCUMULATION UNIT: A measure of the value of each Subaccount before annuity
payments begin.

ANNUITANT: The person on whose life or life expectancy the annuity payments are
based.

ANNUITY: A series of payments for life, a definite period or a combination of
the two.

ANNUITY DATE: The date on which annuity payments begin.

ANNUITY PERIOD: The period during which annuity payments are made.

ANNUITY UNIT: A measure of the value of each Subaccount selected during the
Annuity Period.

BENEFICIARY(IES): The person or persons identified in the Enrollment Materials
who are to receive any death benefit proceeds payable under the Contract.

CODE: Internal Revenue Code of 1986, as amended.

COMPANY (WE, US): Aetna Life Insurance and Annuity Company.

CONTRACT: The group and individual deferred, variable annuity contracts offered
by this Prospectus.

CONTRACT HOLDER: The person or entity to whom the Contract is issued. The
Contract Holder of a group Contract is usually the employer; the Contract Holder
of an individual Contract is the Participant.

CREDITED INTEREST OPTIONS: The fixed interest options under the Contract. The
Credited Interest Options currently consist of the Guaranteed Accumulation
Account, the Fixed Account and the Fixed Plus Account, each of which is
described in an Appendix to this Prospectus. Amounts allocated to the Credited
Interest Options are included in the Account Value.

ENROLLMENT MATERIALS: An application for an individual contract or an enrollment
form for participation under a group contract.

FUND(S): An open-end registered management investment company whose shares are
purchased by the Separate Account to fund the benefits provided by the Contract.

HOME OFFICE: The Company's principal executive offices located at 151 Farmington
Avenue, Hartford, Connecticut 06156.

PARTICIPANT (YOU): A person participating in a Plan maintained by an eligible
organization.

PLAN(S): Tax-deferred annuity plans established under Section 403(b) of the Code
for employees of public school systems and certain tax-exempt organizations
(Section 501(c)(3) organizations), and defined contribution plans established
under Section 401(a) of the Code.

- --------------------------------------------------------------------------------
DEFINITIONS - 1
<PAGE>
PURCHASE PAYMENT(S): The gross payment(s) made to the Company under a Contract.

PURCHASE PAYMENT PERIODS: For "Installment Purchase Payment Accounts," the
period of time for completion of the agreed upon annual number and amount of
Purchase Payments. For example, if it is determined that the Purchase Payment
Period will consist of 12 payments per year and only 11 payments are made, the
Purchase Payment Period is not completed until the twelfth Purchase Payment is
made.

SEPARATE ACCOUNT: Variable Annuity Account C, a separate account established by
the Company for the purpose of funding variable annuity contracts issued by the
Company.

SUBACCOUNT(S): The portion of the assets of the Separate Account that is
allocated to a particular Fund. Each Subaccount invests in the shares of only
one corresponding Fund.

VALUATION DATE: The date and time at which the value of the Subaccount is
calculated. Currently, this calculation occurs at the close of business of the
New York Stock Exchange on any normal business day, Monday through Friday, that
the New York Stock Exchange is open.

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DEFINITIONS - 2
<PAGE>
PROSPECTUS SUMMARY
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- --------------------------------------------------------------------------------

CONTRACTS OFFERED

The Contracts described in this Prospectus are group and individual deferred
variable annuity contracts issued by Aetna Life Insurance and Annuity Company
(the "Company"). The purpose of the Contract is to accumulate values and to
provide benefits upon retirement. The Contracts are available for public school
systems and certain tax exempt (Section 501(c)(3)) organizations for their
employees under Section 403(b) of the Code, and for qualified defined
contribution plans under Section 401(a) of the Code.

CONTRACT PURCHASE

The Contract may be purchased by eligible organizations on behalf of a group
made up of their employees. The individual contracts may be purchased by
individuals under Plans that permit such purchase. Eligible employees may
participate in the Contract by completing the Enrollment Materials and
submitting them to the Company. Purchase Payments can be applied to the Contract
either through a lump-sum transfer from a pre-existing plan or through periodic
salary reductions or employer contributions. (See "Purchase.")

FREE LOOK PERIOD

Participation under the Contract may be cancelled within 10 days after you
receive the Contract or other document evidencing your interest in the Contract
(or longer if required by state law) by returning it to the Company along with a
written notice of cancellation. Unless state law requires otherwise, the amount
you will receive upon cancellation will reflect the investment performance of
the Subaccounts into which your Purchase Payments were deposited. In some cases
this may be more or less than the amount of your Purchase Payments. (See
"Purchase--Right to Cancel.")

INVESTMENT OPTIONS

The Company has established Variable Annuity Account C, a registered unit
investment trust, for the purpose of funding the variable portion of the
Contracts. The Separate Account is divided into subaccounts which invest
directly in shares of the Funds described herein, as designated by the
Participant. The Contract allows investment in any or all of the Subaccounts, as
well as in the Credited Interest Options described below. For a complete list of
the Funds available under the Contracts, and a description of the investment
objectives of each of the Funds and their investment advisers, see "Investment
Options--The Funds" in this Prospectus, as well as the prospectuses for each of
the Funds.

The Contract also provides for investment in Credited Interest Options which
allow you to earn fixed rates of interest. The fixed options available under the
Contract are the Guaranteed Accumulation Account ("GAA"), the Fixed Account, and
the Fixed Plus Account. (See the Appendices to this Prospectus.)

CHARGES AND DEDUCTIONS

Certain charges are associated with these Contracts. These charges include
daily deductions from the Separate Account (the mortality and expense risk
charges and an administrative charge), as well as any annual maintenance fee and
premium and other taxes. The Funds also incur certain fees and expenses which
are deducted directly from the Funds. A deferred sales charge may apply upon a
full or partial withdrawal of the Account Value. (See the Fee Table and "Charges
and Deductions.")

TRANSFERS

Prior to the Annuity Date, and subject to certain limitations, Account
Values may be transferred among the Subaccounts and the Credited Interest
Options without charge. Transfers can be requested in writing or by telephone in
accordance with the Company's transfer procedures. (See the Appendices for a
full description of the restrictions applicable to transfers from the Credited
Interest Options.) (See "Transfers.")

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SUMMARY - 1
<PAGE>
WITHDRAWALS

All or a part of the Account Value may be withdrawn prior to the Annuity
Date by properly completing a disbursement form and sending it to the Company.
Limitations apply to withdrawals from the Fixed Plus Account. Certain charges
may be assessed upon withdrawal. The withdrawal may also be subject to income
tax and a federal tax penalty. The Code restricts full and partial withdrawals
in some circumstances. (See "Withdrawals.")

The Contract also offers certain Additional Withdrawal Options during the
Accumulation Period to persons meeting certain criteria. Additional Withdrawal
Options are not available in all states and may not be suitable in every
situation. (See "Additional Withdrawal Options.")

LOANS

Participants under Section 403(b) Plans may request a loan from their
Account Value at any time during the Accumulation Period. Loans are not
available from Contracts issued under Section 401(a) Plans. (See "Contract
Loans.")

DEATH BENEFIT

A death benefit is payable if the Participant dies before the Annuity Date.
Death benefit proceeds will be paid to the Beneficiary in an amount equal to the
Account Value. Until the election of a method of payment, the Account Value will
remain invested under the Contract. The beneficiary may elect to receive the
proceeds in a lump sum or under any of the payment options available under the
Contract. However, the Code requires that distributions begin within a certain
time period. (See "Death Benefit During Accumulation Period.")

After Annuity Payments have commenced, a death benefit may be payable to the
Beneficiary depending upon the terms of the Contract and the Annuity Option
selected. (See "Death Benefit Payable During the Annuity Period.")

THE ANNUITY PERIOD

On the Annuity Date, you may elect to begin receiving Annuity Payments which
may be made on either a fixed, variable or combination fixed and variable basis.
If a variable payout is selected, the payments will vary with the investment
performance of the Subaccount(s) selected. The Company reserves the right to
limit the number of Subaccounts that may be available during the Annuity Period.
(See "Annuity Period.")

TAXES

Contributions and earnings are not generally taxed until you or your
beneficiary(ies) actually receive a distribution from the Contract. A 10%
federal tax penalty and a 20% withholding for income tax may be imposed on
certain withdrawals. (See "Tax Status.")

INQUIRIES

Questions, inquiries or requests for additional information can be directed
to your agent or local representative, or you may contact the Company as
follows:

<TABLE>
<S> <C>
- Write to: Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156-1277
Attention: Customer Service

(For AetnaPlus Contracts)

- Call Customer Service: 1-800-525-4225 (for automated transfers or changes
in the allocation of
Account Values, call: 1-800-262-3862)

(For Multiple Option Contracts)

- Call Customer Service: 1-800-677-4636 (for automated transfers or changes
in the allocation of
Account Values, call: 1-800-262-3862)
</TABLE>

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SUMMARY - 2
<PAGE>
FEE TABLE
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- --------------------------------------------------------------------------------

This Fee Table describes the various charges and expenses associated with the
Contract during the Accumulation Period. For amounts deducted during the Annuity
Period, see "Charges Deducted During the Annuity Period." No sales charge is
paid upon purchase of the Contract. All costs that are borne directly or
indirectly under the Subaccounts and Funds are shown below. Some expenses may
vary as explained under "Charges and Deductions." Charges shown do not include
premium taxes that may be applicable. For more information regarding fees and
expenses paid out of the assets of a particular Fund, see the Fund's prospectus.

DIRECT CHARGES. These charges are deducted directly from the Account Value. They
include:

DEFERRED SALES CHARGE. The deferred sales charge is deducted as a
percentage of the amount withdrawn. The total amount deducted for the
deferred sales charge will not exceed 8.5% of the total Purchase Payments
applied to the Account. The amount of the deferred sales charge is
calculated as follows:
<TABLE>
<S> <C>
INSTALLMENT PURCHASE PAYMENT ACCOUNTS

<CAPTION>
DEFERRED
SALES
PURCHASE PAYMENT CHARGE
PERIODS COMPLETED DEDUCTION
- ---------------------------------------- ---------
<S> <C>
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more but less than 10 2%
more than 10 0%

SINGLE PURCHASE PAYMENT ACCOUNTS
<CAPTION>
DEFERRED
SALES
ACCOUNT YEARS CHARGE
COMPLETED DEDUCTION
- ---------------------------------------- ---------
<S> <C>
Less than 5 5%
5 or more but less than 6 4%
6 or more but less than 7 3%
7 or more but less than 8 2%
8 or more but less than 9 1%
9 or more 0%
</TABLE>

<TABLE>
<S> <C>
ANNUAL CONTRACT MAINTENANCE FEE Installment Purchase Payment Accounts..................... $ 20.00
Single Purchase Payment Accounts............................ $ 0.00
The maintenance fee will generally be deducted annually from each Account during the
Accumulation Period. The amount of the maintenance fee may be reduced or eliminated for
group contracts. The amount shown is the MAXIMUM maintenance fee that can be deducted
under the Contract.
</TABLE>

INDIRECT CHARGES. Each Subaccount pays these expenses out of its assets. The
charges are reflected in the Subaccount's daily Accumulation Unit Value and are
not charged directly to an Account. They include:

<TABLE>
<S> <C>
MORTALITY AND EXPENSE RISK FEES........................................................... 1.25%

ADMINISTRATIVE EXPENSE CHARGE............................................................. 0.00%
We currently do not impose an Administrative Expense Charge. However, we reserve the right
to deduct a daily charge from the Subaccounts, equivalent on an annual basis to not more
than 0.25%.
---------
TOTAL SEPARATE ACCOUNT CHARGES............................................................ 1.25%
</TABLE>

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FEE TABLE - 1
<PAGE>
ANNUAL EXPENSES OF THE FUNDS

The following table illustrates the advisory fees and other expenses applicable
to the Funds. Except as noted, these figures are a percentage of each Fund's
average net assets and are based on figures for the year ended December 31,
1995. A Fund's "Other Expenses" include operating costs of the Fund. These
expenses are reflected in the Fund's net asset value and are not deducted from
the Account Value under the Contract.

<TABLE>
<CAPTION>
INVESTMENT
ADVISORY
FEES(1) OTHER EXPENSES TOTAL FUND
(AFTER EXPENSE (AFTER EXPENSE ANNUAL
REIMBURSEMENT) REIMBURSEMENT) EXPENSES
-------------- -------------- -----------
<S> <C> <C> <C>
Aetna Variable Fund
Aetna Income Shares
Aetna Variable Encore Fund
Aetna Investment Advisers Fund, Inc.
Aetna Ascent Variable Portfolio(2)
Aetna Crossroads Variable Portfolio(2)
Aetna Legacy Variable Portfolio(2)
Alger American Growth Portfolio
Alger American Small Cap Portfolio
Calvert Responsibly Invested Balanced
Portfolio
Fidelity VIP II Contrafund
Portfolio(2)
Fidelity VIP Equity-Income
Portfolio(3)
Fidelity VIP Growth Portfolio(3)
Fidelity VIP Overseas Portfolio
Franklin Government Securities Trust
Janus Aspen Aggressive Growth
Portfolio(4)
Janus Aspen Balanced Portfolio(4)
Janus Aspen Flexible Income
Portfolio(4)
Janus Aspen Growth Portfolio(4)
Janus Aspen Short-Term Bond
Portfolio(4)
Janus Aspen Worldwide Growth
Portfolio(4)
Lexington Natural Resources Trust
Neuberger & Berman Growth Portfolio
Scudder International Portfolio
TCI Growth(5)
</TABLE>

- --------------------------
(1) Certain of the unaffiliated Fund advisers reimburse the Company for
administrative costs incurred in connection with administering the Funds as
variable funding options under the Contract. These reimbursements are paid
out of the investment advisory fees and are not charged to investors.
(2) This Fund has only limited operating history; therefore the expenses are
estimated for the current fiscal year.
(3) A portion of the brokerage commissions the Fund paid was used to reduce its
expenses. Without this reduction, total operating expenses would have been
% for the Equity-Income Portfolio and % for the Growth Portfolio.
(4) The expense figures shown are net of certain expense waivers from Janus
Capital Corporation. Without such waivers, Investment Advisory Fees, Other
Expenses and Total Mutual Fund Annual Expenses for the Portfolios for the
fiscal year ended December 31, 1995 would have been: %, %, and %,
respectively, for Janus Aspen Aggressive Growth Portfolio; %, %, and
%, respectively, for Janus Aspen Balanced Portfolio; %, %, and
%, respectively, for Janus Aspen Flexible Income Portfolio; %, %
and %, respectively, for Janus Aspen Growth Portfolio; %, % and
%, respectively, for Janus Aspen Short-Term Bond Portfolio; and %,
% and %, respectively, for Janus Aspen Worldwide Growth Portfolio.
(5) The Portfolio's investment adviser pays all expenses of the Portfolio except
brokerage commissions, taxes, interest, fees and expenses of the
non-interested directors (including counsel fees) and extraordinary
expenses.

- --------------------------------------------------------------------------------
FEE TABLE - 2
<PAGE>
HYPOTHETICAL ILLUSTRATION (EXAMPLE)

THIS EXAMPLE IS PURELY HYPOTHETICAL. IT SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR EXPECTED RETURN. ACTUAL EXPENSES
AND/OR RETURN MAY BE MORE OR LESS THAN THOSE SHOWN BELOW.

The following Examples illustrate the expenses that would have been paid
assuming a $1,000 investment in the Contract and a 5% return on assets. For the
purposes of these Examples, the maximum maintenance fee of $20.00 that can be
deducted under the Contract has been converted to a percentage of assets equal
to %.

<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
------------------------------------- -------------------------------------

IF YOU WITHDRAW YOUR ENTIRE ACCOUNT IF YOU DO NOT WITHDRAW YOUR ACCOUNT
VALUE AT THE END OF THE PERIODS VALUE, OR IF YOU ANNUITIZE AT THE END
SHOWN, YOU WOULD PAY THE FOLLOWING OF THE PERIODS SHOWN, YOU WOULD PAY
EXPENSES, INCLUDING ANY APPLICABLE THE FOLLOWING EXPENSES (NO DEFERRED
DEFERRED SALES CHARGE: SALES CHARGE IS REFLECTED):*
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund
Aetna Income Shares
Aetna Variable Encore Fund
Aetna Investment Advisers Fund, Inc.
Aetna Ascent Variable Portfolio
Aetna Crossroads Variable Portfolio
Aetna Legacy Variable Portfolio
Alger American Growth Portfolio
Alger American Small Cap Portfolio
Calvert Responsibly Invested Balanced
Portfolio
Fidelity VIP II Contrafund Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP Overseas Portfolio
Franklin Government Securities Trust
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Flexible Income Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Short-Term Bond Portfolio
Janus Aspen Worldwide Growth Portfolio
Lexington Natural Resources Trust
Neuberger & Berman Growth Portfolio
Scudder International Portfolio
TCI Growth
</TABLE>

- --------------------------
* This Example would not apply if a nonlifetime variable annuity option is
selected, and a lump sum settlement is requested within three years after
annuity payments start since the lump sum payment will be treated as a
withdrawal during the Accumulation Period and will be subject to any deferred
sales charge that would then apply. (Refer to Example A.)

- --------------------------------------------------------------------------------
FEE TABLE - 3
<PAGE>
CONDENSED FINANCIAL INFORMATION
AETNAPLUS CONTRACTS
(SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE CONDENSED FINANCIAL INFORMATION PRESENTED BELOW FOR EACH OF THE YEARS IN THE
TEN-YEAR PERIOD ENDED DECEMBER 31, 1995 (AS APPLICABLE), IS DERIVED FROM THE
FINANCIAL STATEMENTS OF THE SEPARATE ACCOUNT, WHICH FINANCIAL STATEMENTS HAVE
BEEN AUDITED BY KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS. THE FINANCIAL
STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE INDEPENDENT
AUDITORS' REPORT THEREON, ARE INCLUDED IN THE STATEMENT OF ADDITIONAL
INFORMATION.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---------- ------------- ------------- ---------- -----------

<S> <C> <C> <C> <C> <C>
AETNA VARIABLE FUND
Value at beginning of period $11.020 $10.454 $97.165 $77.845
Value at end of period $10.778 $11.020 $10.454(2) $97.165
Increase (decrease) in value of
accumulation unit(1) (2.20)% 5.41% (2) 24.82%
Number of accumulation units outstanding
at end of period 114,733,035 44,166,470 21,250 20,948,226

AETNA INCOME SHARES
Value at beginning of period $10.905 $10.068 $36.789 $31.192
Value at end of period $10.360 $10.905 $10.068(3) $36.789
Increase (decrease) in value of
accumulation unit(1) (5.00)% 8.31% (3) 17.94%
Number of accumulation units outstanding
at end of period 11,713,354 4,084,142 3,870 7,844,412

AETNA VARIABLE ENCORE FUND
Value at beginning of period $10.241 $10.048 $33.812 $32.138
Value at end of period $10.528 $10.241 $10.048(4) $33.812
Increase (decrease) in value of
accumulation unit(1) 2.80% 1.92% (4) 5.21%
Number of accumulation units outstanding
at end of period 7,673,528 2,766,044 825 8,430,082

AETNA INVESTMENT ADVISERS
FUND, INC.
Value at beginning of period $11.057 $10.189 $12.736 $10.896
Value at end of period $10.868 $11.057 $10.189(6) $12.736
Increase (decrease) in value of
accumulation unit(1) (1.71)% 8.52% (6) 16.89%
Number of accumulation units outstanding
at end of period 23,139,604 11,368,365 11,508 22,898,099

ALGER AMERICAN SMALL CAP
PORTFOLIO
Value at beginning of period $9.959 $10.000(7)
Value at end of period $9.437 $ 9.959
Increase (decrease) in value of
accumulation unit(1) (5.24)% (0.41)%
Number of accumulation units outstanding
at end of period 6,339,407 781,836

CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO*
Value at beginning of period $11.036 $10.278 $10.000(8)
Value at end of period $10.554 $11.036 $10.278
Increase (decrease) in value of
accumulation unit(1) (4.37)% 7.37% 2.78%
Number of accumulation units outstanding
at end of period 521,141 144,168 2,556

FRANKLIN GOVERNMENT SECURITIES
TRUST
Value at beginning of period $10.642 $10.008 $10.000(8)
Value at end of period $10.119 $10.642 $10.008
Increase (decrease) in value of
accumulation unit(1) (4.91)% 6.33% 0.08%
Number of accumulation units outstanding
at end of period 325,365 167,137 5,559

<CAPTION>
1990 1989 1988 1987 1986
----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
AETNA VARIABLE FUND
Value at beginning of period $76.311 $59.871 $52.885 $50.760 $43.205
Value at end of period $77.845 $76.311 $59.871 $52.885 $50.760
Increase (decrease) in value of
accumulation unit(1) 2.01% 27.46% 13.21% 4.19% 17.49%
Number of accumulation units outstanding
at end of period 18,362,906 17,142,820 16,455,396 16,497,406 16,578,251
AETNA INCOME SHARES
Value at beginning of period $28.943 $25.574 $24.061 $23.308 $20.703
Value at end of period $31.192 $28.943 $25.574 $24.061 $23.308
Increase (decrease) in value of
accumulation unit(1) 7.77% 13.17% 6.29% 3.23% 12.58%
Number of accumulation units outstanding
at end of period 6,984,793 6,202,834 5,955,293 5,372,271 6,188,470
AETNA VARIABLE ENCORE FUND
Value at beginning of period $30.012 $27.783 $26.171 $24.812 $23.504
Value at end of period $32.138 $30.012 $27.783 $26.171 $24.812
Increase (decrease) in value of
accumulation unit(1) 7.08% 8.02% 6.16% 5.48% 5.57%
Number of accumulation units outstanding
at end of period 10,220,110 8,286,033 8,154,644 7,326,151 6,692,947
AETNA INVESTMENT ADVISERS
FUND, INC.
Value at beginning of period $10.437 $10.000(5)
Value at end of period $10.896 $10.437
Increase (decrease) in value of
accumulation unit(1) 4.40% 4.37%
Number of accumulation units outstanding
at end of period 17,078,985 9,535,986
ALGER AMERICAN SMALL CAP
PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units outstanding
at end of period
CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO*
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units outstanding
at end of period
FRANKLIN GOVERNMENT SECURITIES
TRUST
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units outstanding
at end of period
</TABLE>

- --------------------------------------------------------------------------------
AUV HISTORY - 1
<PAGE>
CONDENSED FINANCIAL INFORMATION (CONTINUED)
AETNAPLUS CONTRACTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1995 1994 1993 1992
--------- ------------- ------------ ------------

<S> <C> <C> <C> <C>
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
Value at beginning of period $10.000(9)
Value at end of period $10.581
Increase (decrease) in value of
accumulation unit(1) 5.81%
Number of accumulation units outstanding
at end of period 753,862

JANUS ASPEN FLEXIBLE INCOME PORTFOLIO
Value at beginning of period $10.000(9)
Value at end of period $ 9.873
Increase (decrease) in value of
accumulation unit(1) (1.27)%
Number of accumulation units outstanding
at end of period 28,543

LEXINGTON NATURAL RESOURCES TRUST
Value at beginning of period $10.877 $ 9.832 $10.000(8)
Value at end of period $10.154 $10.877 $ 9.832
Increase (decrease) in value of
accumulation unit(1) (6.65)% 10.63% (1.68)%
Number of accumulation units outstanding
at end of period 703,676 135,614 561

NEUBERGER & BERMAN GROWTH PORTFOLIO
Value at beginning of period $11.747 $10.864 $10.000(8)
Value at end of period $11.026 $11.747 $10.864
Increase (decrease) in value of
accumulation unit(1) (6.14)% 8.13% 8.64%
Number of accumulation units outstanding
at end of period 1,865,104 546,559 10,645

SCUDDER INTERNATIONAL PORTFOLIO
Value at beginning of period $12.957 $ 9.578 $10.000(8)
Value at end of period $12.687 $12.957 $ 9.578
Increase (decrease) in value of
accumulation unit(1) (2.08)% 35.28% (4.22)%
Number of accumulation units outstanding
at end of period 6,558,946 1,020,233 5,232

TCI GROWTH
Value at beginning of period $12.069 $10.692 $10.000(8)
Value at end of period $11.781 $12.069 $10.692
Increase (decrease) in value of
accumulation unit(1) (2.39)% 12.88% 6.92%
Number of accumulation units outstanding
at end of period 12,853,828 3,667,821 2,254
</TABLE>

(1) The above figures are calculated by subtracting the beginning Accumulation
Unit value from the ending Accumulation Unit value during a calendar year,
and dividing the result by the beginning Accumulation Unit value. These
figures do not reflect the deferred sales charges or the fixed dollar annual
maintenance fee, if any. Inclusion of these charges would reduce the
investment results shown.

(2) The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon
the commencement of a new administrative system. Immediately prior to that
date, the Accumulation Unit value of the Fund was $97.817. On the date of
conversion, additional units were issued so that account values were not
changed as a result of the conversion. The percentage change in the
Accumulation Unit value from the beginning of the year to the date of
conversion was 0.67%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 4.54%.

(3) The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon
the commencement of a new administrative system. Immediately prior to that
date, the Accumulation Unit value of the Fund was $38.521. On the date of
conversion, additional units were issued so that account values were not
changed as a result of the conversion. The percentage change in the
Accumulation Unit value from the beginning of the year to the date of
conversion was 4.70%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 0.68%.

(4) The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon
the commencement of a new administrative system. Immediately prior to that
date, the Accumulation Unit value of the Fund was $34.397. On the date of
conversion, additional units were issued so that account values were not
changed as a result of the conversion. The percentage change in the
Accumulation Unit value from the beginning of the year to the date of
conversion was 1.73%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 0.48%.

(5) The initial Accumulation Unit value was established at $10.000 on June 23,
1989, the date on which the Fund commenced operations.
(6) The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon
the commencement of a new administrative system. Immediately prior to that
date, the Accumulation Unit value of the Fund was $13.118. On the date of
conversion, additional units were issued so that account values were not
changed as a result of the conversion. The percentage change in the
Accumulation Unit value from the beginning of the year to the date of
conversion was 2.99%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 1.89%.

(7) The initial Accumulation Unit value was established at $10.000 on September
17, 1993, the date on which the Portfolio became available under the
Contract.

(8) The initial Accumulation Unit value was established at $10.000 on August 21,
1992, the date on which the Fund/Portfolio became available under the
Contract.

(9) The initial Accumulation Unit value was established at $10.000 during
October 1994, when the funds were first received in this option.

* Formerly Calvert Socially Responsible Series.

- --------------------------------------------------------------------------------
AUV HISTORY - 2
<PAGE>
CONDENSED FINANCIAL INFORMATION
MULTIPLE OPTION CONTRACTS
(SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
AETNA VARIABLE FUND
Value at beginning of period $107.925 $102.383 $ 97.165 $77.845
Value at end of period $105.558 $107.925 $102.383 $97.165
Increase (decrease) in value of
accumulation unit(1) (2.19)% 5.41% 5.37% 24.82%
Number of accumulation units outstanding
at end of period 13,966,072 21,148,863 24,201,565 20,948,226

AETNA INCOME SHARES
Value at beginning of period $42.283 $39.038 $36.789 $31.192
Value at end of period $40.173 $42.283 $39.038 $36.789
Increase (decrease) in value of
accumulation unit(1) (4.99)% 8.31% 6.11% 17.94%
Number of accumulation units outstanding
at end of period 5,108,720 8,210,666 8,507,292 7,844,412

AETNA VARIABLE ENCORE FUND
Value at beginning of period $35.282 $34.619 $33.812 $32.138
Value at end of period $36.271 $35.282 $34.619 $33.812
Increase (decrease) in value of
accumulation unit(1) 2.80% 1.92% 2.39% 5.21%
Number of accumulation units outstanding
at end of period 3,679,802 5,086,515 7,534,662 8,430,082

AETNA INVESTMENT ADVISERS
FUND, INC.
Value at beginning of period $14.519 $13.379 $12.736 $10.896
Value at end of period $14.270 $14.519 $13.379 $12.736
Increase (decrease) in value of
accumulation unit(1) (1.71)% 8.52% 5.05% 16.89%
Number of accumulation units outstanding
at end of period 21,990,186 30,784,750 34,802,433 22,898,099

ALGER AMERICAN SMALL CAP
PORTFOLIO
Value at beginning of period $10.072 $10.000(3)
Value at end of period $ 9.513 $10.072
Increase (decrease) in value of
accumulation unit(1) (5.55)% 0.72%
Number of accumulation units outstanding
at end of period 665,518 51,327

CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO*
Value at beginning of period $14.640 $13.726 $12.913 $11.233
Value at end of period $13.990 $14.640 $13.726 $12.913
Increase (decrease) in value of
accumulation unit(1) (4.44)% 6.66% 6.30% 14.96%
Number of accumulation units outstanding
at end of period 743,464 705,415 503,006 355,851

FRANKLIN GOVERNMENT
SECURITIES TRUST
Value at beginning of period $14.929 $14.050 $13.219 $11.545
Value at end of period $14.190 $14.929 $14.050 $13.219
Increase (decrease) in value of
accumulation unit(1) (4.95)% 6.26% 6.29% 14.50%
Number of accumulation units outstanding
at end of period 804,457 960,629 810,155 627,552

<CAPTION>
1990 1989 1988 1987 1986
----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
AETNA VARIABLE FUND
Value at beginning of period $76.311 $59.871 $52.885 $50.760 $43.205
Value at end of period $77.845 $76.311 $59.871 $52.885 $50.760
Increase (decrease) in value of
accumulation unit(1) 2.01% 27.46% 13.21% 4.19% 17.49%
Number of accumulation units outstanding
at end of period 18,362,906 17,142,820 16,455,396 16,497,406 16,578,251
AETNA INCOME SHARES
Value at beginning of period $28.943 $25.574 $24.061 $23.308 $20.703
Value at end of period $31.192 $28.943 $25.574 $24.061 $23.308
Increase (decrease) in value of
accumulation unit(1) 7.77% 13.17% 6.29% 3.23% 12.58%
Number of accumulation units outstanding
at end of period 6,984,793 6,202,834 5,955,293 5,372,271 6,188,470
AETNA VARIABLE ENCORE FUND
Value at beginning of period $30.012 $27.783 $26.171 $24.812 $23.504
Value at end of period $32.138 $30.012 $27.783 $26.171 $24.812
Increase (decrease) in value of
accumulation unit(1) 7.08% 8.02% 6.16% 5.48% 5.57%
Number of accumulation units outstanding
at end of period 10,220,110 8,286,033 8,154,644 7,326,151 6,692,947
AETNA INVESTMENT ADVISERS
FUND, INC.
Value at beginning of period $10.437 $10.000(2)
Value at end of period $10.896 $10.437
Increase (decrease) in value of
accumulation unit(1) 4.40% 4.37%
Number of accumulation units outstanding
at end of period 17,078,985 9,535,986
ALGER AMERICAN SMALL CAP
PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units outstanding
at end of period
CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO*
Value at beginning of period $10.568 $10.000(4)
Value at end of period $11.233 $10.568
Increase (decrease) in value of
accumulation unit(1) 6.29% 5.68%
Number of accumulation units outstanding
at end of period 148,576 20,710
FRANKLIN GOVERNMENT
SECURITIES TRUST
Value at beginning of period $10.581 $10.000(5)
Value at end of period $11.545 $10.581
Increase (decrease) in value of
accumulation unit(1) 9.11% 5.81%
Number of accumulation units outstanding
at end of period 178,761 25,258
</TABLE>

- --------------------------------------------------------------------------------
AUV HISTORY - 1
<PAGE>
CONDENSED FINANCIAL INFORMATION (CONTINUED)
MULTIPLE OPTION CONTRACTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990 1989
--------- ------------ ---------- ----------- ----------- --------- ----------

<S> <C> <C> <C> <C> <C> <C> <C>
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
Value at beginning of period $10.000(6)
Value at end of period $12.169
Increase (decrease) in value of
accumulation unit(1) 21.69%
Number of accumulation units
outstanding at end of period 393,553

JANUS ASPEN FLEXIBLE INCOME PORTFOLIO
Value at beginning of period $10.000(7)
Value at end of period $ 9.911
Increase (decrease) in value of
accumulation unit(1) (0.89)%
Number of accumulation units
outstanding at end of period 1,555

LEXINGTON NATURAL RESOURCES TRUST
Value at beginning of period $10.071 $ 9.193 $9.018 $9.608 $11.441 $10.000(4)
Value at end of period $ 9.412 $10.071 $9.193 $ 9.018 $ 9.608 $11.441
Increase (decrease) in value of
accumulation unit(1) (6.54)% 9.55% 1.94% (6.14)% (16.02)% 14.41%
Number of accumulation units
outstanding at end of period 533,016 341,771 198,338 144,139 75,052 11,481

NEUBERGER & BERMAN GROWTH PORTFOLIO
Value at beginning of period $14.278 $13.536 $12.511 $ 9.769 $10.772 $10.000(4)
Value at end of period $13.398 $14.278 $13.536 $12.511 $ 9.769 $10.772
Increase (decrease) in value of
accumulation unit(1) (6.16)% 5.48% 8.19% 28.07% (9.31)% 7.72%
Number of accumulation units
outstanding at end of period 2,107,525 1,927,674 1,346,898 971,985 482,220 68,885

SCUDDER INTERNATIONAL PORTFOLIO**
Value at beginning of period $13.508 $ 9.922 $10.239** $ 9.256 $10.306 $10.000(8)
Value at end of period $13.227 $13.508 $ 9.922 $10.239 $ 9.256 $10.306
Increase (decrease) in value of
accumulation unit(1) (2.08)% 36.14% (3.10)% 10.62% (10.19)% 3.06%
Number of accumulation units
outstanding at end of period 4,240,412 2,371,037 1,161,007 779,667 317,829 32,906

TCI GROWTH
Value at beginning of period $11.443 $10.495 $10.000(9)
Value at end of period $11.172 $11.443 $10.495
Increase (decrease) in value of
accumulation unit(1) (2.37)% 9.03% 4.95%
Number of accumulation units
outstanding at end of period 1,608,362 1,016,894 232,832
</TABLE>

(2) The initial Accumulation Unit value was established at $10.000 on June 23,
1989, the date on which the Fund commenced operations.

(3) The initial Accumulation Unit value was established at $10.000 on September
17, 1993, the date on which the Portfolio became available under the
Contract.

(4) The initial Accumulation Unit value was established at $10.000 on May 31,
1989, the date on which the Fund/Portfolio became available under the
Contract.

(5) The initial Accumulation Unit value was established at $10.000 on June 7,
1989, the date on which the Fund became available under the Contract.

(6) The initial Accumulation Unit value was established at $10.000 during June
1994, when funds were first received in this option.

(7) The initial Accumulation Unit value was established at $10.000 during
November 1994, when funds were first received in this option.

(8) The initial Accumulation Unit value was established at $10.000 on July 5,
1989, the date on which the Portfolio became available under the Contract.

(9) The initial Accumulation Unit value was established at $10.000 on September
21, 1992, the date on which the Portfolio became available under the
Contract.

* Formerly Calvert Socially Responsible Series.

** Formerly T. Rowe Price International Equity Fund. On April 27, 1992, the
Fund's assets were liquidated and merged into Scudder Variable Life
Investment Fund -- Managed International Portfolio. The Accumulation Unit
Value following the merger was $10.051.

- --------------------------------------------------------------------------------
AUV HISTORY - 2
<PAGE>
THE COMPANY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Aetna Life Insurance and Annuity Company (the "Company") is the issuer of
the Contract, and as such, it is responsible for providing the insurance and
annuity benefits under the Contract. The Company is a stock life insurance
company organized under the insurance laws of the State of Connecticut in 1976.
Through a merger, it succeeded to the business of Aetna Variable Annuity Life
Insurance Company (formerly Participating Annuity Life Insurance Company, an
Arkansas life insurance company organized in 1954). The Company is engaged in
the business of issuing life insurance policies and variable annuity contracts
in all states of the United States. The Company's principal executive offices
are located at 151 Farmington Avenue, Hartford, Connecticut 06156.

The Company is a wholly owned subsidiary of Aetna Retirement Services, Inc.,
which is in turn a wholly owned subsidiary of Aetna Life and Casualty Company, a
diversified financial services company.

VARIABLE ANNUITY ACCOUNT C
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Company established Variable Annuity Account C (the "Separate Account")
in 1976 as a segregated asset account for the purpose of funding its variable
annuity contracts. The Separate Account is registered as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"), and meets the
definition of "separate account" under the federal securities laws. The Separate
Account is divided into "subaccounts" which do not invest directly in stocks,
bonds or other investments. Instead, each Subaccount buys and sells shares of a
corresponding Fund.

Although the Company holds title to the assets of the Separate Account, such
assets are not chargeable with liabilities of any other business conducted by
the Company. Income, gains or losses of the Separate Account are credited to or
charged against the assets of the Separate Account without regard to other
income, gains or losses of the Company. All obligations arising under the
Contracts are general corporate obligations of the Company.

INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE FUNDS

Purchase Payments may be allocated to one or more of the Subaccounts as
designated on the Enrollment Materials. In turn, the Subaccounts invest in the
corresponding Funds at net asset value.

Under group Contracts, the Contract Holder may decide to offer only a select
number of Funds under its Plan, or it may decide to substitute shares of one
Fund for shares of another Fund currently held by the Separate Account. The
availability of Funds may be subject to regulatory authorization. In addition,
the Company may add or withdraw Funds, as permitted by applicable law. Not all
Funds may be available in all jurisdictions, under all Contracts, or in all
Plans.

The investment results of the Funds described below are likely to differ
significantly and there is no assurance that any of the Funds will achieve their
respective investment objectives. Except where otherwise noted, all of the Funds
are diversified, as defined in the 1940 Act.

- -AETNA VARIABLE FUND seeks to maximize total return through investments in a
diversified portfolio of common stocks and securities convertible into common
stock.(1)

- -AETNA INCOME SHARES seeks to maximize total return, consistent with reasonable
risk, through investments in a diversified portfolio consisting primarily of
debt securities.(1)

- -AETNA VARIABLE ENCORE FUND seeks to provide high current return, consistent
with preservation of capital and liquidity, through investment in high-quality
money market instruments. An investment in the Fund is neither insured nor
guaranteed by the U.S. Government.(1)

- --------------------------------------------------------------------------------
1
<PAGE>
- -AETNA INVESTMENT ADVISERS FUND, INC. is a managed fund which seeks to maximize
investment return consistent with reasonable safety of principal by investing
in one or more of the following asset classes: stocks, bonds and cash
equivalents based on the Company's judgment of which of those sectors or mix
thereof offers the best investment prospects.(1)

- -AETNA GENERATION PORTFOLIOS, INC.--AETNA ASCENT VARIABLE PORTFOLIO seeks to
provide capital appreciation by allocating its investments among equities and
fixed income securities. The Portfolio is managed for investors who generally
have an investment horizon exceeding 15 years, and who have a high level of
risk tolerance.(1)

- -AETNA GENERATION PORTFOLIOS, INC.--AETNA CROSSROADS VARIABLE PORTFOLIO seeks to
provide total return (i.e., income and capital appreciation, both realized and
unrealized) by allocating its investments among equities and fixed income
securities. The Portfolio is managed for investors who generally have an
investment horizon exceeding 10 years and who have a moderate level of risk
tolerance.(1)

- -AETNA GENERATION PORTFOLIOS, INC.--AETNA LEGACY VARIABLE PORTFOLIO seeks to
provide total return consistent with preservation of capital by allocating its
investments among equities and fixed income securities. The Portfolio is
managed for investors who generally have an investment horizon exceeding five
years and who have a low level of risk tolerance.(1)

- -ALGER AMERICAN FUND--ALGER AMERICAN GROWTH PORTFOLIO seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of
equity securities. The Portfolio primarily invests in equity securities which
have a market capitalization of $1 billion or greater.(2)

- -ALGER AMERICAN FUND--ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO seeks
capital return through investment in common stock of smaller companies offering
the potential for significant price gain. The Portfolio invests at least 65% of
its net assets in equity securities of companies that have total market
capitalization of less than $1 billion at the time of purchase.(2)

- -CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO is a nondiversified portfolio
that seeks growth of capital through investment in enterprises that make a
significant contribution to society through their products and services and
through the way they do business.(3)

- -FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II--CONTRAFUND PORTFOLIO
seeks maximum total return over the long term by investing in securities of
companies that are undervalued or out-of-favor.(4)

- -FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND--EQUITY-INCOME PORTFOLIO
seeks reasonable income by investing primarily in income-producing equity
securities. In selecting investments, the Fund also considers the potential for
capital appreciation.(4)

- -FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND--GROWTH PORTFOLIO seeks
capital appreciation by investing mainly in common stocks, although its
investments are not restricted to any one type of security.(4)

- -FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND--OVERSEAS PORTFOLIO seeks
long-term growth by investing mainly in foreign securities (at least 65% of the
Fund's total assets in securities of issuers from at least three countries
outside of North America).(4)

- -FRANKLIN GOVERNMENT SECURITIES TRUST seeks income through investments in
obligations of the U.S. Government or its agencies or instrumentalities,
primarily GNMA obligations.(5)

- -JANUS ASPEN SERIES--AGGRESSIVE GROWTH PORTFOLIO is a nondiversified portfolio
that seeks long-term growth of capital in a manner consistent with the
preservation of capital. The Portfolio pursues its investment objective by
normally investing at least 50% of its equity assets in securities issued by
medium-sized companies. Medium-sized companies are those whose market
capitalizations fall within the range of companies in the S&P MidCap 400 Index,
which as of included companies with capitalizations of between
approximately and , but which is expected to change on a regular
basis.(6)

- -JANUS ASPEN SERIES--BALANCED PORTFOLIO seeks long-term capital growth,
consistent with preservation of capital and balanced by current income. The
Portfolio pursues its investment objective by investing 40%-60% of its assets
in equity securities selected primarily for their growth potential and 40%-60%
of its assets in fixed-income securities.(6)

- --------------------------------------------------------------------------------
2
<PAGE>
- -JANUS ASPEN SERIES--FLEXIBLE INCOME PORTFOLIO seeks to obtain maximum total
return, consistent with preservation of capital from a combination of current
income and capital appreciation. The Portfolio invests in all types of income
producing securities and may have substantial holdings of debt securities rated
below investment grade (e.g., junk bonds).(6)

- -JANUS ASPEN SERIES--GROWTH PORTFOLIO seeks long-term growth of capital in a
manner consistent with the preservation of capital. The Portfolio pursues its
investment objective by investing in common stocks of companies of any size.(6)

- -JANUS ASPEN SERIES--SHORT-TERM BOND PORTFOLIO seeks as high a level of current
income as is consistent with preservation of capital by investing primarily in
short-and intermediate-term fixed income securities.(6)

- -JANUS ASPEN SERIES--WORLDWIDE GROWTH PORTFOLIO seeks long-term growth of
capital in a manner consistent with preservation of capital. The Portfolio
pursues its investment objective primarily through investments in common stocks
of foreign and domestic issuers.(6)

- -LEXINGTON NATURAL RESOURCES TRUST is a NONDIVERSIFIED portfolio that seeks
long-term growth of capital through investment primarily in common stocks of
companies which own or develop natural resources and other basic commodities or
supply goods and services to such companies.(7)

- -NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST-- GROWTH PORTFOLIO seeks capital
appreciation without regard to income. The Portfolio pursues its investment
objective by investing in common stocks, often of companies that may be
temporarily out of favor in the market.(8)

- -SCUDDER VARIABLE LIFE INVESTMENT FUND-- INTERNATIONAL PORTFOLIO seeks long-term
growth of capital primarily through diversified holdings of marketable foreign
equity investments.(9)

- -TCI PORTFOLIOS, INC.--TCI GROWTH (A TWENTIETH CENTURY FUND) seeks capital
growth. The Fund seeks to achieve its objective by investing in common stocks
(including securities convertible into common stocks) and other securities that
meet certain fundamental and technical standards of selection and, in the
opinion of the Fund's investment manager, have better than average potential
for appreciation.(10)

Investment Advisers for each of the Funds:
(1) Aetna Life Insurance and Annuity Company
(2) Fred Alger Management, Inc.
(3) Calvert Asset Management Company, Inc.
(4) Fidelity Management & Research Company
(5) Franklin Advisers, Inc.
(6) Janus Capital Corporation
(7) Lexington Management Corporation (adviser); Market Systems Research
Advisors, Inc. (subadviser)
(8) Neuberger & Berman Management Incorporated
(9) Scudder, Stevens & Clark, Inc.
(10) Investors Research Corporation

RISKS ASSOCIATED WITH INVESTMENT IN THE FUNDS. Some of the Funds may use
instruments known as derivatives as part of their investment strategies. The use
of certain derivatives may involve high risk of volatility to a Fund, and the
use of leverage in connection with such derivatives can also increase risk of
losses. Some of the Funds may also invest in foreign or international securities
which involve greater risks than U.S. investments.

More comprehensive information, including a discussion of potential risks,
is found in the respective Fund prospectuses which accompany this Prospectus.
You should read the Fund prospectuses and consider carefully, and on a
continuing basis, which Fund or combination of Funds is best suited to your
long-term investment objectives.

CONFLICTS OF INTEREST (MIXED AND SHARED FUNDING). Shares of the Funds are
sold to each of the Subaccounts for funding the variable annuity contracts
issued by the Company. Shares of the Funds may also be sold to other insurance
companies for the same purpose. This is referred to as "shared funding." Shares
of the Funds may also be used for funding variable life insurance contracts
issued by the Company or by third parties. This is referred to as "mixed
funding."

Because the Funds available under the Contract are sold to fund variable
annuity contracts and variable life insurance policies issued by us or by other
companies, certain conflicts of interest could arise. If a conflict of interest
were to occur, one of the separate accounts might withdraw its investment in a
Fund, which might force that Fund to sell portfolio securities at
disadvantageous prices, causing its per share value to decrease. Each Fund's
Board of Directors or Trustees has agreed to monitor events in order to identify
any material irreconcilable conflicts which might arise and to determine what
action, if any, should be taken to address such conflict.

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3
<PAGE>
CREDITED INTEREST OPTIONS

Purchase Payments may be allocated to one or more of the Credited Interest
Options available under the Contract, as described below. Under group Contracts,
the Contract Holder may elect not to offer all Credited Interest Options under
its Plan.

- - The Guaranteed Accumulation Account (GAA) is a credited interest option
through which we guarantee stipulated rates of interest for stated periods of
time. Amounts must remain in the GAA for the full guaranteed term to received
the quoted interest rates, or a market value adjustment (which may be positive
or negative) will be applied. (See Appendix I.)

- - The Fixed Account is a part of the Company's general account. The Fixed
Account guarantees a minimum interest rate, as specified in the Contract. The
Company may credit higher interest rates from time to time. Transfers from the
Fixed Account are limited. (See Appendix II.)

- - The Fixed Plus Account is also a part of the Company's general account and
guarantees a minimum interest rate, as specified in the Contract. The Company
may credit higher interest rates in its discretion. Withdrawals and transfers
from the Fixed Plus Account are limited. (See Appendix III.)

PURCHASE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

CONTRACT AVAILABILITY

The Contracts are designed to fund Plans adopted by (1) public school
systems and certain tax-exempt (Section 501(c)(3)) organizations for their
employees under Section 403(b) of the Code, and (2) qualified defined
contribution plans under Section 401(a) of the Code. The Contract Holder must
notify the Company of the applicability of Title I of the Employee Retirement
Income Security Act of 1974 ("ERISA"), as amended by subsequent law, including
the Retirement Equity Act of 1984, to the Plan.

Eligible participants in the Plan seeking to invest and accumulate money for
retirement can purchase individual interests in group Contracts, or under some
Plans, they may purchase individual Contracts. The group Contract is generally
owned by the employer or association, and individual accounts are established
for each Participant. An individual Contract will be owned by the Participant
under Plans that permit such purchase. In both cases, a Participant's interest
in the Contract is known as his or her "Account."

For group Contracts issued in connection with Section 403(b) Plans, the
employer has no right, title or interest in the amounts held under the Contract
or in the Account; Participants make all elections under the Contract. For group
Contracts issued in connection with Section 401(a) Plans, the Participant has
such rights as are set forth in the Plan. Under individual Contracts,
Participants have all contract rights.

PURCHASING INTERESTS IN THE CONTRACT

Eligible organizations may acquire a group Contract by submitting the
appropriate forms to the Company. Once we approve the forms, a group Contract is
issued to the employer or association as the group Contract Holder. Participants
may purchase interests in a group Contract by submitting an enrollment form to
the Company. For Plans that allow Participants to purchase an individual
contract, Participants will submit an individual application to the Company. The
enrollment forms and individual application are collectively referred to in this
Prospectus as the "Enrollment Materials."

The Company must accept or reject the Enrollment Materials within two
business days of receipt. If the Enrollment Materials are incomplete, the
Company may hold any forms and accompanying Purchase Payments for five days.
Purchase Payments may be held for longer periods only with the consent of the
Contract Holder or Participant, pending acceptance of the Enrollment Materials.
Initial payments held for longer than the five business days will be deposited
in the Aetna Variable Encore Fund Subaccount until the forms are completed.

PURCHASE PAYMENTS

Generally, two types of Purchase Payments may be made under the Contract,
and depending upon which type of payment is made, different Accounts may be
established for each payment type. Continuing, periodic payments will be placed
in "Installment Purchase Payment Accounts." Lump-sum transfers of amounts
accumulated under a pre-existing plan may be placed in "Single Purchase Payment
Accounts" in accordance with

- --------------------------------------------------------------------------------
4
<PAGE>
the Company's procedures and minimums in effect at the time of purchase. The
Code imposes a maximum limit on annual Purchase Payments which may be excluded
from a Participant's gross income. (See "Tax Status.")

ALLOCATION OF PURCHASE PAYMENTS. Purchase Payments will initially be
allocated to the Subaccounts or Credited Interest Options as specified by the
Participant on the Enrollment Materials. Changes in such allocation may be made
in writing or by telephone transfer. Allocations must be in whole percentages,
and there may be limitations on the number of investment options that can be
selected during the Accumulation Period. (See "Transfers.")

TRANSFER CREDITS

The Company may provide a transfer credit on "transferred assets," subject
to certain conditions and state approvals. Transferred assets are the value of
contributions made on your behalf under this Plan or a prior plan before such
amounts are applied to this Contract. The transfer credit will equal a
percentage of the transferred assets applied to the Contract that remain in the
Contract after a specified period of time. Once a transfer credit is applied to
your Contract, all provisions of the Contract apply. This benefit is provided on
a nondiscriminatory basis. If a transfer credit is due under the Contract, you
will be provided with additional information specific to the Contract.

RIGHT TO CANCEL

Participation under the Contract may be canceled without penalty by
returning it (or other document evidencing your interest) to the Company with a
written notice of your intent to cancel. In most states, you have ten days to
exercise this right; some states allow you a longer free-look period. When we
receive your request for cancellation, we will return your Account Value, unless
the laws of the state in which the Contract was issued require that we return
the initial Purchase Payment (if greater than the Account Value). In states that
do not require a return of Purchase Payments, you bear the entire investment
risk for amounts allocated among the Subaccounts during the free look period.
Account Values will be determined as of the next Valuation Date following our
receipt of your request for cancellation at our Home Office.

CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

DAILY DEDUCTIONS FROM THE SEPARATE ACCOUNT

MORTALITY AND EXPENSE RISK CHARGE. The Company makes a daily deduction from
each of the Subaccounts for the mortality and expense risk charge. The Charge is
equal, on an annual basis, to 1.25% of the daily net assets of the Subaccounts
and compensates the Company for the assumption of the mortality and expense
risks under the Contract. The mortality risks are those assumed for our promise
to make lifetime payments according to annuity rates specified in the Contract.
The expense risk is the risk that the actual expenses for costs incurred under
the Contract will exceed the maximum costs that can be charged under the
Contract.

If the amount deducted for mortality and expense risks is not sufficient to
cover the mortality costs and expense shortfalls, the loss is borne by the
Company. If the deduction is more than sufficient, the excess may be used to
recover distribution expenses relating to the Contracts and as a source of
profit to the Company. The Company expects to make a profit from the mortality
and expense risk charge.

ADMINISTRATIVE EXPENSE CHARGE. The Company reserves the right to make a
deduction from each of the Subaccounts for an administrative expense charge. The
administrative expense charge compensates the Company for administrative
expenses that exceed revenues from the maintenance fee described below. The
charge is set at a level which does not exceed the average expected cost of the
administrative services to be provided while the Contract is in force. The
Company does not expect to make a profit from this charge.

Under the Contract, the amount of the administrative charge may be of an
amount equal, on an annual basis, to a maximum of 0.25% of the daily net assets
of the Subaccounts. There is currently no administrative expense charge during
the Accumulation Period or Annuity Period. Once an Annuity Option is elected,
the charge will be established and will be effective during the entire Annuity
Period.

MAINTENANCE FEE

During the Accumulation Period, the Company will deduct an annual
maintenance fee from each Installment

- --------------------------------------------------------------------------------
5
<PAGE>
Purchase Payment Account on its anniversary date. The maintenance fee is to
reimburse the Company for some of its administrative expenses relating to the
establishment and maintenance of the Accounts.

The maximum maintenance fee that can be deducted under the Contract is $20.
However, under group Contracts the maintenance fee may be reduced or eliminated
depending upon certain criteria described below. The maintenance fee will be
deducted on a pro rata basis from each Subaccount in which you have an interest.
If the Account Value is withdrawn, the full maintenance fee will be deducted at
the time of withdrawal.

REDUCTION OR ELIMINATION OF THE MAINTENANCE FEE. Under group Contracts, the
annual maintenance fee may be reduced or eliminated under various conditions as
agreed to by us and by the Contract Holder in writing. Any reduction or
elimination of the annual maintenance fee will reflect differences in
administrative costs and services after taking into consideration factors such
as the following:

- - the size, characteristics, and nature of the group to which a Contract is
issued;

- - the level of our anticipated expenses in administering the Contract, such as
billing for Purchase Payments, producing periodic reports, providing for the
direct payment of Contract charges rather than having them deducted from
Account Values, and any other factors pertaining to the level and expense of
administrative services which will be provided under the Contract.

Any reduction or elimination of maintenance fees will not be unfairly
discriminatory against any person. We will make any reduction in annual
maintenance fees according to our own rules in effect at the time an application
for a Contract is approved. We reserve the right to change these rules from time
to time.

DEFERRED SALES CHARGE

Withdrawals of all or a portion of the Account Value may be subject to a
deferred sales charge. The deferred sales charge is a percentage of the amounts
withdrawn from the Subaccounts, the Fixed Account and the Guaranteed
Accumulation Account. No deferred sales charge is deducted from amounts
withdrawn from the Fixed Plus Account.

For Installment Purchase Payment Accounts, the deferred sales charge is
based on the number of completed Purchase Payment Periods. For Single Purchase
Payment Accounts, it is based on the number of Contract Years that have elapsed
since the Purchase Payments were made. The amount of the deferred sales charge
is determined in accordance with the schedule set forth in the following tables:
<TABLE>
<S> <C>
INSTALLMENT PURCHASE PAYMENT ACCOUNTS:

SINGLE PURCHASE PAYMENT ACCOUNTS:
<CAPTION>
DEFERRED
SALES
ACCOUNT YEARS CHARGE
COMPLETED DEDUCTION
- ---------------------------------------- ---------
<S> <C>
Less than 5 5%
5 or more but less than 6 4%
6 or more but less than 7 3%
7 or more but less than 8 2%
8 or more but less than 9 1%
9 or more 0%
</TABLE>

* The following deferred sales charge schedule applies for withdrawals from the
Guaranteed Accumulation Account for group master Contracts issued after July
29, 1993 in the State of New York and is based on the number of completed
Purchase Payment Periods for Installment Purchase Payment Accounts or Account
Years for Single Purchase Payment Accounts:

DEFERRED
COMPLETED PURCHASE SALES
PAYMENT PERIODS CHARGE
OR ACCOUNT YEARS DEDUCTION
- ---------------------------------------- ---------
<S> <C>
1, 2 or 3 5%
4 4%
5 3%
6 2%
7 1%
8 0%
</TABLE>

Generally, if you transfer the total account value under another similar
annuity contract issued by the Company to an Account under this Contract, the
effective

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6
<PAGE>
date of the new Account will be the same effective date as your former contract
for the purpose of calculating the applicable deferred sales charge under this
Contract.

A deferred sales charge will not be deducted from any portion of the Account
Value if the withdrawal is:

- - applied to provide Annuity benefits;

- - taken on or after the tenth anniversary of the effective date of the Account;

- - paid due to your death before Annuity payments begin;

- - made due to the election of an Additional Withdrawal Option (see "Additional
Withdrawal Options");

- - paid where the Account Value is $3,500 or less and no amount has been
withdrawn, taken as a loan, or used to purchase Annuity benefits during the
prior 12 months; or

- - taken from an installment Purchase Payment Account by a Participant who is at
least age 59 1/2 and who has completed nine Purchase Payment Periods.

Where the Company is the exclusive variable annuity provider for a Plan, and
the Plan also offers a 403(b)(7) custodial arrangement providing retail mutual
funds with only one fund family and the Company or one of its affiliates is the
recordkeeper, the deferred sales charge will also be waived due to:

- - the Participant's separation from service with the employer;

- - the Participant's financial hardship, as specified in the Code; or

- - a transfer to a 403(b)(7) option under the custodial arrangement described
above.

The deduction for the deferred sales charge will not exceed 8.5% of the
total Purchase Payments actually made to the Account. The Company does not
anticipate that the deferred sales charge will cover all sales and
administrative expenses which it incurs in connection with the Contract. The
difference will be covered by the general assets of the Company which are
attributable, in part, to mortality and expense risk charges under the Contract
described above.

FREE WITHDRAWALS. For Participants between the ages of 59 1/2 and 70 1/2,
up to 10% of the current Account Value may be withdrawn during each calendar
year without imposition of a Deferred Sales Charge. The free withdrawal applies
only to the first partial withdrawal in each calendar year. The 10% amount will
be based on the Account Value calculated on the Valuation Date next following
our receipt of your request for withdrawal. Any outstanding contract loans are
excluded from the Account Value when calculating the 10% free withdrawal amount.
This provision does not apply to a full withdrawal of the Account, or to partial
withdrawals due to a default on a contract loan (see "Contract Loans"). This
provision may not be exercised if SWO is elected. (See "Additional Withdrawal
Options.")

REDUCTION OR ELIMINATION OF THE DEFERRED SALES CHARGE. For a particular
plan, we may reduce, waive or eliminate the deferred sales charge. Any
reduction, waiver or elimination of such charges will reflect differences or
expected differences in the amounts of unrecovered distribution costs or
services of the types that the charge is intended to defray. When considering
whether to reduce or eliminate such charges or to grant such a waiver, we will
take into account factors which may include the following:

- - the number of participants under the Plan;

- - the expected level of assets or cash flow under the Plan;

- - the level of agent involvement in sales activities;

- - the level of our sales-related expenses;

- - the specific distribution provisions under the Plan;

- - the Plan's purchase of one or more other variable annuity contracts from us
and the features of those contracts;

- - the level of employer involvement in determining eligibility for distributions
under the Contract; and

- - our assessment of financial risk to the Company relating to surrenders.

Any reduction, waiver or elimination of deferred sales charges will not be
unfairly discriminatory against any person.

We may also negotiate provisions regarding the deferred sales charge with
respect to Contracts issued to certain employer groups or associations which
have negotiated on behalf of its employees. All variations in, or elimination
of, provisions regarding the deferred sales charge resulting from such
negotiations will be offered uniformly to all employees within the group. For
specific information on fees applicable to your Account, please call the number
listed under the "Inquiries" section.

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7
<PAGE>
We will make any reduction in deferred sales charge according to our own
rules in effect at the time an application for a Contract is approved. We
reserve the right to change these rules from time to time.

FUND EXPENSES

Each Fund incurs certain expenses which are paid out of its net assets.
These expenses include, among other things, the investment advisory or
"management" fee. The expenses of the Funds are set forth in the Fee Table in
this Prospectus and described more fully in the accompanying Fund prospectuses.

PREMIUM AND OTHER TAXES

Several states and municipalities impose a premium tax on Annuities. These
taxes currently range from 0% to 4%. The Company reserves the right to deduct
premium tax against Purchase Payments or Account Values at any time, but no
earlier than when we have a tax liability under state law. The Company's current
practice is to deduct for premium taxes at the time of complete withdrawal or
annuitization. In addition to the premium tax, the Company reserves the right to
assess a charge for any state or federal taxes due against the Contract or the
Separate Account assets. (See "Tax Status.")

CONTRACT VALUATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

ACCOUNT VALUE

Until the Annuity Date, the Account Value is the total dollar value of
amounts held in your Account as of any Valuation Date. The Account Value at any
given time is based on the value of the units held in each Subaccount, plus the
value of amounts held in any of the Credited Interest Options.

ACCUMULATION UNITS

The value of your interests in a Subaccount is expressed as the number of
"Accumulation Units" that you hold multiplied by an "Accumulation Unit Value"
(or "AUV") for each unit. The AUV on any Valuation Date is determined by
multiplying the value on the immediately preceding Valuation Date by the net
investment factor of that Subaccount for the period between the immediately
preceding Valuation Date and the current Valuation Date. (See "Net Investment
Factor" below.) The Accumulation Unit Value will be affected by the investment
performance, expenses and charges of the applicable Fund and is reduced each day
by a percentage that accounts for the daily assessment of mortality and expense
risk charges and the administrative charge (if any).

Initial Purchase Payments will be credited to your Account as described
under "Purchasing Interests in the Contract." Each subsequent Purchase Payment
(or amount transferred) will be credited to your Account at the AUV computed on
the next Valuation Date following our receipt of your payment or transfer
request. The value of an Accumulation Unit may increase or decrease.

NET INVESTMENT FACTOR

The net investment factor is used to measure the investment performance of a
Subaccount from one Valuation Date to the next. The net investment factor for a
Subaccount for any valuation period is equal to the sum of 1.0000 plus the net
investment rate. The net investment rate equals:

(a) the net assets of the Fund held by the Subaccount on the current
Valuation Date, minus

(b) the net assets of the Fund held by the Subaccount on the preceding
Valuation Date, plus or minus

(d) the AUV of the Subaccount on the preceding Valuation Date, minus

(e) a daily charge at the annual effective rate of 1.25% for mortality and
expense risks and up to 0.25% as an administrative expense charge
(currently 0%).

The net investment rate may be either positive or negative.

TRANSFERS
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- --------------------------------------------------------------------------------

At any time prior to the Annuity Date, you can transfer amounts held under
your Contract from one Subaccount to another. Transfers between the Credited
Interest Options and the Subaccounts are subject to certain restrictions. (See
Appendices I, II and III.) A request for transfer can be made either in writing
or by

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8
<PAGE>
telephone. The telephone transfer privilege is available automatically; no
special election is necessary. All transfers must be in accordance with the
terms of the Contract and your Plan, as applicable.

The Company currently allows unlimited transfers of accumulated amounts to
available investment options without charge, provided that the transfer amount
is not less than $500. However, the total number of investment options that you
may select during the Accumulation Period may be limited, as set forth on your
Enrollment Materials. Any transfer will be based on the Accumulation Unit Value
next determined after the Company receives a valid transfer request at its Home
Office. Transfers are currently not available during the Annuity Period;
however, they may be available under some annuity options beginning later in
1996. (See "Annuity Period-- Annuity Options.")

DOLLAR COST AVERAGING PROGRAM

You may establish automated transfers of Account Values on a monthly or
quarterly basis through the Company's Dollar Cost Averaging Program, if
available under your Plan. Dollar Cost Averaging is a system for investing a
fixed amount of money at regular intervals over a period of time. Dollar Cost
Averaging does not ensure a profit nor guarantee against loss in a declining
market. You should consider your financial ability to continue purchases through
periods of low price levels. Please refer to the "Inquiries" section of the
Prospectus Summary which describes how you can obtain further information.

WITHDRAWALS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

All or a portion of the Account Value may be withdrawn at any time during
the Accumulation Period subject to limitations on withdrawals from the Fixed
Plus Account and to the withdrawal restrictions under Section 403(b) Contracts
described below. To request a withdrawal, you must properly complete a
disbursement form and send it to our Home Office. Payments for withdrawal
requests will be made in accordance with SEC requirements, but normally not
later than seven calendar days following our receipt of a disbursement form.

Withdrawals may be requested as in one of the following forms:

- -FULL WITHDRAWAL OF AN ACCOUNT: The amount paid upon a full withdrawal will be
the Account Value allocated to the Subaccounts, the Guaranteed Accumulation
Account (plus or minus a market value adjustment) (see Appendix I), and the
Fixed Account, minus any applicable deferred sales charge and maintenance fee
due, plus the amount available for withdrawal from the Fixed Plus Account (see
Appendix III).

- -PARTIAL WITHDRAWALS (PERCENTAGE): The amount paid will be the percentage of the
Account Value requested minus any applicable deferred sales charge; however,
amounts available for withdrawal from the Fixed Plus Account is limited (see
Appendix III).

- -PARTIAL WITHDRAWAL (SPECIFIED DOLLAR AMOUNT): The amount paid will be the
dollar amount requested. However, the amount withdrawn from the Account will
equal the amount requested plus any applicable deferred sales charge. The
amount available for withdrawal from the Fixed Plus Account is limited (see
Appendix III).

For any partial withdrawal, the value of the Accumulation Units canceled
will be withdrawn proportionately from the Subaccounts or Credited Interest
Options in which your Purchase Payments are allocated, unless you request
otherwise in writing. All amounts paid will be based on Account Values as of the
next Valuation Date after we receive a request for withdrawal at our Home
Office, or on such later date as the disbursement form may specify. A 20%
federal income tax may be withheld from amounts paid directly to you. (See "Tax
Status--Contracts Used with Certain Retirement Plans.")

WITHDRAWAL RESTRICTIONS FROM 403(B) PLANS. Under Section 403(b) Contracts, a
withdrawal of salary reduction contributions and earnings on such contributions
is generally prohibited prior to the Participant's death, disability, attainment
of age 59 1/2, separation from service or financial hardship. (See "Tax
Status.")

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9
<PAGE>
RESTRICTIONS ON WITHDRAWALS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM. A
Participant in the Texas Optional Retirement Program may not elect to receive
any form of distribution from the Contract before retirement, except upon
becoming totally disabled or terminating employment with the Texas public
institutions of higher learning. These restrictions limit the conditions under
which a Participant may exercise the right to a full or partial withdrawal of
Account Values, and the right to advance the date on which Annuity payments are
to begin. The Company may require verification of eligibility from the employer
prior to any distributions from the Contract. These restrictions are imposed by
reason of an opinion of the Texas Attorney General interpreting applicable Texas
law.

RESTRICTIONS ON WITHDRAWALS UNDER THE BALL STATE UNIVERSITY
PLAN. Withdrawals are not permitted to Participants under the Ball State
University 403(b) Plan unless the Participant's employment is terminated with
Ball State University due to the Participant's death, retirement or separation
from service. The Company reserves the right to require satisfactory
documentation that the Participant is no longer providing service to Ball State
University before a withdrawal request will be considered in good order.

REINVESTMENT PRIVILEGE

You may elect to reinvest all or a portion of the proceeds received from a
full withdrawal of your Account within 30 days after such withdrawal has been
made. Accumulation Units will be credited to the Account for the amount
reinvested, as well as any applicable maintenance fee and any appropriate
portion of any deferred sales charge imposed at the time of withdrawal. Any
maintenance fee which falls due after the withdrawal and before the reinvestment
will be deducted from the amounts reinvested. Reinvested amounts will be
reallocated to the applicable investment options in the same proportion as they
were allocated at the time of withdrawal. Accumulation Units will be credited to
your Account based on the Accumulation Unit Value next computed following our
receipt of your request along with the amount to be reinvested. See Appendix I
for a discussion of amounts withdrawn from GAA and then reinvested. The
reinvestment privilege may be used only once. If you are contemplating
reinvestment, you should seek competent advice regarding the tax consequences
associated with such a transaction.

CONTRACT LOANS
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During the Accumulation Period, Participants in 403(b) Plans may request a
loan from their Account Value, if allowed by their Plan. Loans can only be taken
from those Account Values held in the Subaccounts or from those Credited
Interest Options that allow loans. (See Appendices I, II and III.) A loan may be
obtained by reviewing and reading the terms of the loan agreement, properly
completing a loan request form and submitting it to the Company's Home Office.
Loans are not available from Contracts issued to 401(a) Plans.

ADDITIONAL WITHDRAWAL OPTIONS
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The Company offers certain withdrawal options under the Contract that are
not considered annuity options ("Additional Withdrawal Options"). To exercise
these options, your Account Value must meet the minimum dollar amounts and age
criteria applicable to that option.

The Additional Withdrawal Options currently available under the Contract
include the following:

- -SWO--SYSTEMATIC WITHDRAWAL OPTION. SWO is a series of partial withdrawals from
your Account based on a payment method you select. It is designed for those who
want a periodic income while retaining investment flexibility for amounts
accumulated under a Contract. (This option may not be elected if you have an
outstanding contract loan.)

- -ECO--ESTATE CONSERVATION OPTION. ECO offers the same investment flexibility as
SWO but is designed for those who want to receive only the minimum distribution
that the Code requires each year. Under ECO, the Company calculates the minimum

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distribution amount required by law at age 70 1/2 (or retirement, if later, for
governmental plans), and pays you that amount once a year. (See "Tax Status.")

Other Additional Withdrawal Options may be added from time to time.
Additional information relating to any of the Additional Withdrawal Options may
be obtained from your local representative or from the Company at its Home
Office.

If you select one of the Additional Withdrawal Options, you will retain all
of the rights and flexibility permitted under the Contract during the
Accumulation Period. Your Account Value will continue to be subject to the
charges and deductions described in this Prospectus.

Once you elect an Additional Withdrawal Option, you may revoke it any time
by submitting a written request to our Home Office. Once an option is revoked,
it may not be elected again, nor may any other Additional Withdrawal Options be
elected unless permitted by the Code. The Company reserves the right to
discontinue the availability of one or all of these Additional Withdrawal
Options at any time, and/or to change the terms of future elections.

DEATH BENEFIT DURING ACCUMULATION PERIOD
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The Contract provides that a death benefit is payable to the
Beneficiary(ies) upon the death of the Participant before the Annuity Date. The
amount of the death benefit will be equal to the Account Value. Death benefit
proceeds may be paid to the Beneficiary:

- - in a lump sum;

- - in accordance with any of the Annuity Options available under the Contract; or

- - under any Additional Withdrawal Options available under the Contract (if the
Beneficiary is your spouse).

The Beneficiary may instead elect one of the following two options; however,
the Code limits how long the death benefit proceeds may be left in these options
(see below):

- - to leave the Account Value invested in the Contract; or

- - to leave the Account Value on deposit in the Company's general account, and to
receive monthly, quarterly, semi-annual or annual interest payments at the
interest rate then being credited on such deposits. The balance on deposit can
be withdrawn at any time or applied to an Annuity Option.

When paying the Beneficiary, we will determine the Account Value on the
Valuation Date following the date on which we receive proof of death acceptable
to the Company. Interest, if any, will be paid from the date of death at a rate
no less than required by law. We will mail payment to the Beneficiary within
seven days after we receive proof of death.

The Code requires that distribution of death proceeds begin within a certain
period of time. Generally, either payments must begin by December 31 of the year
following the year of your death, or the entire value of your benefits must be
distributed by December 31 of the fifth year following the year of your death.
If your Beneficiary is your spouse, he or she is not required to begin
distributions until the year you would have attained age 70 1/2. In no event may
payments extend beyond the life expectancy of the Beneficiary or any period
certain greater than the Beneficiary's life expectancy. If no elections are
made, no distributions will be made. Failure to commence distributions within
the above time periods can result in tax penalties. Regardless of the method of
payment, death benefit proceeds will generally be taxed to the Beneficiary in
the same manner as if you had received those payments. (See "Tax Status.")

ANNUITY PERIOD
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ANNUITY PERIOD ELECTIONS

The Code generally requires that minimum annual distributions of the Account
Value must begin by April 1st of the calendar year following the calendar year
in which a Participant attains age 70 1/2. In addition, distributions must be in
a form and amount sufficient to satisfy the Code requirements. These
requirements may be satisfied by the election of certain Annuity Options or
Additional Withdrawal Options. (See "Tax Status.")

At least 30 days prior to the Annuity Date, you must notify us in writing of
the following:

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- - the date on which you would like to start receiving annuity payments;

- - the Annuity Option under which you want your payments to be calculated and
paid;

- - whether the payments are to be made monthly, quarterly, semi-annually or
annually; and

- - the investment option(s) used to provide annuity payments (i.e., a fixed
annuity using the general account or any of the Subaccounts available at the
time of annuitization). As of the date of this Prospectus, Aetna Variable
Fund, Aetna Income Shares and Aetna Investment Advisers Fund, Inc. are the
only Subaccounts available; however, additional Subaccounts may be available
under some Annuity Options in the future. (See "Annuity Options" below.)

Annuity Payments will not begin until you have selected an Annuity Option.
Until a date and option are elected, the Account will continue in the
Accumulation Period. If your Plan is subject to ERISA, you must also submit the
appropriate joint and survivor annuity waiver and spousal consent form(s) to us.
Once Annuity Payments begin, the Annuity Option may not be changed, nor may
transfers currently be made among the investment option(s) selected. (See
"Annuity Options" below for more information about transfers during the Annuity
Period.)

ANNUITY OPTIONS

You may choose one of the following Annuity Options:

LIFETIME ANNUITY OPTIONS:

- -OPTION 1--Life Annuity--An annuity with payments ending on the Annuitant's
death.

- -OPTION 2--Life Annuity with Guaranteed Payments--
An annuity with payments guaranteed for 5, 10, 15 or 20 years, or such other
periods as the Company may offer at the time of annuitization.

- -OPTION 3--Life Income based Upon Lives of Two Payees--An annuity will be paid
during the lives of the Annuitant and a second Annuitant, with 100%, 66 2/3% or
50% of the payment to continue after the first death, or 100% of the payment to
continue at the death of the second Annuitant and 50% of the payment to
continue at the death of the Annuitant.

- -OPTION 4--Life Income based Upon the Lives of Two Payees--An annuity with
payments for a minimum of 120 months, with 100% of the payment to continue
after the first death.

If Option 1 or 3 is elected, it is possible that only one Annuity Payment
will be made if the Annuitant under Option 1, or the surviving Annuitant under
Option 3, should die prior to the due date of the second Annuity Payment. Once
lifetime Annuity payments begin, the Annuitant cannot elect to receive a
lump-sum settlement.

NONLIFETIME ANNUITY OPTIONS:

- -OPTION 1--PAYMENTS FOR A SPECIFIED PERIOD-- payments will continue for a
specified period of time, as provided for under your Contract.

Under the nonlifetime option, the type of annuity (fixed or variable) and
the number of years that may be selected are determined by the investment
options used prior to annuitization. For amounts held in the Fixed Plus Account,
the annuity must be paid on a fixed basis and payments may be made for 5-30
years. For amounts held in the Subaccounts, the Guaranteed Accumulation Account
or the Fixed Account, an annuity may be selected on a fixed or variable basis
and payments may be made for 3-30 years. If this option is elected on a variable
basis, the Annuitant may request at any time during the payment period that the
present value of all or any portion of the remaining variable payments be paid
in one sum. However, any lump-sum elected before three years of payments have
been completed will be treated as a withdrawal during the Accumulation Period
and any applicable deferred sales charge will be assessed. (See "Charges and
Deductions--Deferred Sales Charge.") The nonlifetime option is not available on
a variable basis under a Contract which provides for immediate Annuity benefits.

We may also offer additional Annuity Options under your Contract from time
to time. Beginning in May 1996, the Company expects to offer additional Annuity
Options and enhanced versions of the Annuity Options listed above. These
additional Annuity Options and enhanced versions of the existing options will
have additional Subaccounts available and will allow transfers between
Subaccounts during the Annuity Period. (Additional Subaccounts and transfer
capability are expected during the second half of 1996.) Such additional or
enhanced options will be made available by an endorsement to the Contract, which
will include the guaranteed annuity

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12
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payout rates and other terms applicable to such options. (Depending on which
guaranteed payout rates apply to the existing options, the guaranteed payout
rates for the new and enhanced options will be the same or lower.) Please refer
to the Contract, or call the number listed in the "Inquiries" section of the
Prospectus Summary, to determine which options are available and the terms of
such options. It is not expected that these additional or enhanced options will
be made available to those who have already commenced receiving Annuity
Payments.

ANNUITY PAYMENTS

DATE PAYOUTS START. When payments start, the age of the Annuitant plus the
number of years for which payments are guaranteed must not exceed 95. Annuity
payments may not extend beyond (a) the life of the Annuitant, (b) the joint
lives of the Annuitant and beneficiary, (c) a period certain greater than the
Annuitant's life expectancy, or (d) a period certain greater than the joint life
expectancies of the Annuitant and beneficiary.

AMOUNT OF EACH ANNUITY PAYMENT. The amount of each payment depends on the
size of your Account Value, how you allocate it between fixed and variable
payouts, and the annuity option chosen. No election may be made that would
result in a first Annuity payment of less than $20 or total yearly payments of
less than $100. If your Account Value on the Annuity Date is insufficient to
elect an option for the minimum amount specified, a lump-sum payment must be
elected.

If Annuity Payments are to be made on a variable basis, the first and
subsequent payments will vary depending on the assumed net investment rate
selected (3 1/2% or 5% per annum). Selection of a 5% rate causes a higher first
payment, but Annuity Payments will increase thereafter only to the extent that
the net investment rate exceeds 5% on an annualized basis. Annuity Payments
would decline if the rate were below 5%. Use of the 3 1/2% assumed rate causes a
lower first payment, but subsequent payments would increase more rapidly or
decline more slowly as changes occur in the net investment rate. (See the
Statement of Additional Information for further discussion on the impact of
selecting an assumed net investment rate.)

CHARGES DEDUCTED DURING THE ANNUITY PERIOD

We make a daily deduction for mortality and expense risks from any amounts
held on a variable basis. Therefore, electing the nonlifetime option on a
variable basis will result in a deduction being made even though we assume no
mortality risk. We may also deduct a daily administrative charge from amounts
held under the variable options. (See "Charges and Deductions.")

DEATH BENEFIT PAYABLE DURING THE
ANNUITY PERIOD

If an Annuitant dies after Annuity Payments have begun, any death benefit
payable will depend on the terms of the Contract and the Annuity Option
selected. If Option 1 or Option 3 was elected, Annuity Payments will cease on
the death of the Annuitant under Option 1 or the death of the surviving
Annuitant under Option 3.

If Lifetime Option 2 or Option 4 was elected and the death of the Annuitant
under Option 2, or the surviving Annuitant under Option 4, occurs prior to the
end of the guaranteed minimum payment period, we will pay to the beneficiary in
a lump sum, unless otherwise requested, the present value of the guaranteed
annuity payments remaining.

If the nonlifetime option was elected, and the Annuitant dies before all
payments are made, the value of any remaining payments may be paid in a lump-sum
to the beneficiary (unless otherwise requested), and no deferred sales charge
will be imposed.

If the Annuitant dies after Annuity payments have begun and if there is a
death benefit payable under the Annuity option elected, the remaining value must
be distributed to the beneficiary at least as rapidly as under the original
method of distribution.

Any lump-sum payment paid under the applicable lifetime or nonlifetime
Annuity options will be made within seven calendar days after proof of death
acceptable to us, and a request for payment are received at our Home Office. The
value of any death benefit proceeds will be determined as of the next Valuation
Date after we receive acceptable proof of death and a request for payment. Under
Options 2 and 4, such value will be reduced by any payments made after the date
of death.

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TAX STATUS
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INTRODUCTION

The following provides a general discussion and is not intended as tax
advice. This discussion reflects the Company's understanding of current federal
income tax law. Such laws may change in the future, and it is possible that any
change could be retroactive (i.e., effective prior to the date of the change).
The Company makes no guarantee regarding the tax treatment of any contract or
transaction involving a Contract. The ultimate effect of federal income taxes on
the amounts held under a Contract, on Annuity Payments, and on the economic
benefit to the Contract Holder, Participant or Beneficiary may depend upon the
tax status of the individual concerned. Any person concerned about these tax
implications should consult a competent tax adviser before initiating any
transaction.

TAXATION OF THE COMPANY

The Company is taxed as a life insurance company under the Code. Since the
Separate Account is not an entity separate from the Company, it will not be
taxed separately as a "regulated investment company" under the Code. Investment
income and realized capital gains are automatically applied to increase reserves
under the Contracts. Under existing federal income tax law, the Company believes
that the Separate 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, the Company does not anticipate that it will incur any federal
income tax liability attributable to the Separate Account and, therefore, the
Company does not intend to make provisions for any such taxes. However, if
changes in the federal tax laws or interpretation thereof result in the Company
being taxed on income or gains attributable to the Separate Account, then the
Company may impose a charge against the Separate Account (with respect to some
or all Contracts) in order to set aside provisions to pay such taxes.

CONTRACTS USED WITH CERTAIN
RETIREMENT PLANS

IN GENERAL. The Contract is designed for use with Section 403(b) plans and
Section 401(a) plans. The tax rules applicable to retirement plans vary
according to the type of plan and the terms and conditions of the plan.

The Company makes no attempt to provide more than general information about
use of the Contracts with the various types of retirement plans. Participants as
well as beneficiaries are cautioned that the rights of any person to any
benefits under the Contracts may be subject to the terms and conditions of the
plans themselves, in addition to the terms and conditions of the Contracts
issued in connection with such plans. Some retirement plans are subject to
limitations on distribution and other requirements that are not incorporated in
the Contracts. Purchasers are responsible for determining that contributions,
distributions and other transactions with respect to the Contracts satisfy
applicable laws, and should consult their legal counsel and tax adviser
regarding the suitability of the Contract.

MINIMUM DISTRIBUTION REQUIREMENTS. The Code has required distribution rules
for Section 403(b) and 401(a) Plans. Under 403(b) Plans, distributions of
amounts held as of December 31, 1986 must generally begin by the end of the
calendar year in which you attain age 75 (or retire, if later, for governmental
or church plans). However, special rules require that some or all of that
balance be distributed earlier if any distributions are taken in excess of the
minimum required amount. Distributions under 401(a) Plans, and distributions
attributable to contributions under Section 403(b) Plans on or after January 1,
1987 (including any earnings on the entire Account Value after that date), must
generally begin by April 1 of the calendar year following the calendar year in
which you attain age 70 1/2. For governmental or church plans, distributions
must begin by April 1 of the calendar year following the year you attain age
70 1/2 or retire, whichever occurs later.

In general, annuity payments must be distributed over your life or the joint
lives of you and your beneficiary, or over a period not greater than your life
expectancy or the joint life expectancies of you and your beneficiary.

If you die after the required minimum distribution has commenced,
distributions to your beneficiary must be made at least as rapidly as under the
method of distribution in effect at the time of your death. However, if the
minimum required distribution is calculated each year based on you single life
expectancy or the joint life expectancies of you and your beneficiary, the
regulations for Code Section 401(a)(9) provide specific rules for

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calculating the minimum required distributions at your death. For example, if
you have elected ECO with the calculation based on your single life expectancy,
and the life expectancy is recalculated each year, your recalculated life
expectancy becomes zero in the calendar year following your death and the entire
remaining interest must be distributed to your beneficiary by December 31 of the
year following your death. However, a spousal beneficiary has certain rollover
rights which can only be exercised in the year of your death. The rules are
complex and you should consult your tax adviser before electing the method of
calculation to satisfy the minimum distribution requirements.

If you die before the required minimum distribution has commenced, your
entire interest must be distributed by December 31 of the calendar year
containing the fifth anniversary of the date of your death. Alternatively,
payments may be made over the life of the beneficiary or over a period not
extending beyond the life expectancy of the beneficiary provided the
distribution begins by December 31 of the calendar year following the calendar
year of your death, or December 31 of the calendar year in which you would have
attained age 70 1/2.

If you fail to receive the minimum required distribution for any tax year, a
50% excise tax is imposed on the required amount that was not distributed.

TAXATION OF DISTRIBUTIONS. All distributions will be taxed as they are
received unless you made a rollover contribution of the distribution to another
plan of the same type or to an individual retirement annuity/account ("IRA") in
accordance with the Code, or unless you have made after-tax contributions to the
plan, which are not taxed upon distribution. The Code has specific rules that
apply, depending on the type of distribution received, if after-tax
contributions were made.

In general, payments received by your beneficiaries after your death are
taxed in the same manner as if you had received those payments, except that a
limited death benefit exclusion may apply.

Pension and annuity distributions generally are subject to withholding for
the recipient's federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients may be provided
the opportunity to elect not to have tax withheld from distributions; however,
certain distributions from annuities are subject to mandatory federal income tax
withholding. We will report to the IRS the taxable portion of all distributions.

The Code imposes a 10% penalty tax on the taxable portion of any
distribution unless made when (a) you have attained age 59 1/2, (b) you have
become disabled, (c) you have died, (d) you have separated from service with the
plan sponsor at or after age 55, (e) the distribution amount is rolled over into
another plan of the same type in accordance with the terms of the Code, or (f)
the distribution amount is made in substantially equal periodic payments (at
least annually) over your life or life expectancy or the joint lives or joint
life expectancies of you and your plan beneficiary, provided you have separated
from service with the plan sponsor. In addition, the penalty tax does not apply
for the amount of a distribution equal to unreimbursed medical expenses incurred
by you that qualify for deduction as specified in the Code. The Code may impose
other penalty taxes in other circumstances.

SECTION 403(B) PLANS. Under Section 403(b), contributions made by public
school systems and Section 501(c)(3) tax exempt organizations to purchase
annuity contracts for their employees are generally excludable from the gross
income of the employee.

In order to be excludable from taxable income, total annual contributions
made by you and your employer cannot exceed either of two limits set by the
Code. The first limit, under Section 415, is generally the lesser of 25% of your
includible compensation or $30,000. The second limit, which is the exclusion
allowance under Section 403(b), is usually calculated according to a formula
that takes into account your length of employment and any pretax contributions
to certain other retirement plans. These two limits apply to your contributions
as well as to any contributions made by your employer on your behalf. There is
an additional limit that specifically limits your salary reduction contributions
to generally no more than $9,500 annually (subject to indexing); your own limit
may be higher or lower, depending on certain conditions. In addition Purchase
Payments will be excluded from a Participant's gross income only if the Plan
meets certain non-discrimination requirements.

Section 403(b)(11) restricts the distribution under Section 403(b) contracts
of: (1) salary reduction contributions made after December 31, 1988; (2)
earnings on those contributions; and (3) earnings during such

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period on amounts held as of December 31, 1988. 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 salary reduction contributions may not be distributed in the
case of hardship.

If, pursuant to Revenue Ruling 90-24, the Company agrees to accept, under
any of the Contracts covered by this Prospectus, amounts transferred from a Code
Section 403(b)(7) custodial account, such amounts will be subject to the
withdrawal restrictions set forth in Code Section 403(b)(7)(A)(ii).

Generally, no amounts accumulated under the Contract will be taxable prior
to the time of actual distribution. However, the IRS has stated in published
rulings that a variable contract owner, including participants under Section
403(b) Plans, will be considered the owner of separate account assets if the
contract owner possesses incidents of investment control over the assets. In
these circumstances, income and gains from the separate account assets would be
currently includible in the variable contract owner's gross income. The Treasury
announced that guidance would be issued in the future regarding the extent to
which owners could direct their investments among Subaccounts without being
treated as owners of the underlying assets of the Separate Account. It is
possible that the Treasury's position, when announced, may adversely affect the
tax treatment of existing contracts. The Company therefore reserves the right to
modify the Contract as necessary to attempt to prevent the Contract owner from
being considered the federal tax owner of the assets of the Separate Account.

SECTION 401(A) PLANS. Section 401(a) permits corporate employers to
establish various types of retirement plans for employees, and permits self-
employed individuals to establish various types of retirement plans for
themselves and for their employees. These retirement plans may permit the
purchase of the Contracts to accumulate 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 except to a
participant as a means to provide benefit payments.

The Code imposes a maximum limit on annual Purchase Payments that may be
excluded from a Participant's gross income. Such limit must be calculated under
the Plan by the employer in accordance with Section 415 of the Code. This limit
is generally the lesser of 25% of your compensation or $30,000. In addition,
Purchase Payments will be excluded from a Participant's gross income only if the
401(a) Plan meets certain nondiscrimination requirements.

MISCELLANEOUS
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DISTRIBUTION

The Company will serve as the Principal Underwriter for the securities sold
by this Prospectus. The Company is registered as a broker-dealer with the
Securities and Exchange Commission and is a member of the National Association
of Securities Dealers, Inc. (NASD). As Underwriter, the Company will contract
with one or more registered broker-dealers ("Distributors"), including at least
one affiliate of the Company, to offer and sell the Contracts. All persons
offering and selling the Contracts must be registered representatives of the
Distributors and must also be licensed as insurance agents to sell variable
annuity contracts. These registered representatives may also provide services to
Participants in connection with establishing their Accounts under the Contract.

PAYMENT OF COMMISSIONS. Persons offering and selling the Contracts may
receive commissions in connection with the sale of the Contracts. The maximum
percentage amount that the Company will ever pay as commission with respect to
any given Purchase Payment is with respect to those made during the first year
of Purchase Payments under an Account. The percentage amount will range from 1%
to 7% of those Purchase Payments. The Company may also pay renewal commissions
on Purchase Payments made after the first year and, under group Contracts,
asset-based service fees. The average of all payments made by the Company is
estimated to equal approximately 3% of the total Purchase Payments made over the
life of an average Contract. The Company may also reimburse the Distributor for
certain expenses. The name of the Distributor and the registered representative
responsible for your Account are set forth in your enrollment materials.
Commissions and sales

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related expenses are paid by the Company and are not deducted from Purchase
Payments. See "Charges and Deductions--Deferred Sales Charge."

THIRD PARTY COMPENSATION ARRANGEMENTS. Occasionally, we may pay commissions
and fees to Distributors which are affiliated or associated with the Contract
Holder or the Participants. We may also enter into agreements with some entities
associated with the Contract Holder or Participants in which we would agree to
pay the entity for certain services in connection with administering the
Contracts. In both these circumstances there may be an understanding that the
Distributor or entity would endorse the Company as a provider of the Contract.
You will be notified if you are purchasing a Contract that is subject to these
arrangements.

DELAY OR SUSPENSION OF PAYMENTS

The Company reserves the right to suspend or postpone the date of payment
for any benefit or values (a) on any Valuation Date on which the New York Stock
Exchange ("Exchange") is closed (other than customary weekend and holiday
closings) or when trading on the Exchange is restricted; (b) when an emergency
exists, as determined by the SEC, so that disposal of securities held in the
Subaccounts is not reasonably practicable or is not reasonably practicable for
the value of the Subaccount's assets; or (c) during such other periods as the
SEC may by order permit for the protection of investors. The conditions under
which restricted trading or an emergency exists shall be determined by the rules
and regulations of the SEC.

PERFORMANCE REPORTING

From time to time, the Company may advertise different types of historical
performance for the Subaccounts of the Separate Account. The Company may
advertise the "standardized average annual total returns" of the Subaccounts,
calculated in a manner prescribed by the SEC, as well as the "non-standardized
returns." "Standardized average annual total returns" are computed according to
a formula in which a hypothetical investment of $1,000 is applied to the
Subaccount and then related to the ending redeemable values over the most recent
one, five and ten-year periods (or since inception, if less than ten years).
Standardized returns will reflect the reduction of all recurring charges during
each period (e.g., mortality and expense risk charges, annual maintenance fees,
administrative expense charge (if any) and any applicable deferred sales
charge). "Non-standardized returns" will be calculated in a similar manner,
except that non-standardized figures will not reflect the deduction of any
applicable deferred sales charge (which would decrease the level of performance
shown if reflected in these calculations). The non-standardized figures may also
include monthly, quarterly, year-to-date or three-year periods.

The Company may also advertise certain ratings, rankings or other
information related to the Company, the Subaccounts or the Funds. Further
details regarding performance reporting and advertising are described in the
Statement of Additional Information.

VOTING RIGHTS

In accordance with the Company's view of present applicable law, it will
vote the shares of each of the Funds held by the Separate Account at regular and
special meetings of Fund shareholders in accordance with instructions received
from persons having a voting interest in the Separate Account. Participants and
Annuitants have a fully vested (100%) interest in the benefits provided under
the Contract and may instruct the Contract Holder how to direct the Company to
cast the votes for the portion of the Account Value or valuation reserve
attributable to their Accounts. The Company will vote shares for which it has
not received instructions in the same proportion as it votes shares for which it
has received instructions.

Each person having a voting interest in the Separate Account will receive
periodic reports relating to the Fund(s) in which he or she has an interest, as
well as any proxy materials and a form on which to give voting instructions.
Voting instructions will be solicited by written communication at least 14 days
before such meeting. The number of votes to which each person may give direction
will be determined as of the record date set by the Fund.

The number of votes each Contract Holder or Participant, as applicable, may
cast during the Accumulation Period is equal to the portion of the Account Value
to that Fund, divided by the net asset value of one share of that Fund. During
the Annuity Period, the number of votes is equal to the valuation reserve
applicable to the portion of the Contract attributable to that Fund, divided by
the net asset value of one share of that Fund. In determining the number of
votes, fractional votes will be recognized.

CHANGES IN BENEFICIARY DESIGNATIONS

The designated Beneficiary may be changed at any time prior to the Annuity
Date, subject to limitations

- --------------------------------------------------------------------------------
17
<PAGE>
contained in the Code and other applicable laws. Such change will not become
effective until written notice of the change is received by the Company.

MODIFICATION OF THE CONTRACT

The Company may change the Contract as required by federal or state law. In
addition, the Company may, upon 30 days written notice to the Contract Holder,
make other changes to group Contracts that would apply only to individuals who
become Participants under that Contract after the effective date of such
changes. If the Contract Holder does not agree to a change, no new Participants
will be covered under the Contract. Certain changes will require the approval of
appropriate state or federal regulatory authorities.

LEGAL MATTERS AND PROCEEDINGS

The Company knows of no material legal proceedings pending to which the
Separate Account or the Company is a party or which would materially affect the
Separate Account. The validity of the securities offered by this Prospectus has
been passed upon by Susan E. Bryant, Esq., Counsel to the Company.

- --------------------------------------------------------------------------------
18
<PAGE>
OREGON EDUCATION ASSOCIATION CHOICE PERSONAL BENEFIT TRUST ("OEA TRUST") AND THE
COMPANY'S AGREEMENT

Under a 1985 agreement, the Oregon Education Association ("OEA") Choice
Personal Benefit Trust ("OEA Trust") endorsed exclusively the Company's variable
annuity for sale to its members as a variable tax deferred annuity and agreed to
provide administrative assistance to the Company to facilitate OEA members'
access to the variable annuity. The Company and OEA Trust recently entered into
an agreement that continues OEA Trust's exclusive endorsement of the Company's
variable annuity and its agreement to provide administrative assistance to the
Company. OEA Trust assists the Company by providing administrative services to
the Company, such as office space and secretarial/clerical support. In addition,
through an OEA Trust employee who is a registered representative of the Company.
OEA Trust assists the Company by advertising the Company's annuity in OEA's
newsletter, facilitating and coordinating meetings and workshops at which the
Company's registered representatives present the annuity to OEA members, and
acting as the liaison between the Company and OEA members. The Company
compensates OEA Trust to help it defray the costs incurred in providing the
administrative and other support. The Company also reimburses OEA Trust for
out-of-pocket travel and meeting expenses of an OEA Trust employee who is also a
registered representative of the Company. During 1996, the Company will
compensate OEA Trust no more than $ . OEA Trust receives no commissions
or other transaction-based compensation from the sale of the Company's endorsed
variable annuity.

CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Statement of Additional Information contains more specific information
on the Separate Account and the Contract, as well as the financial statements of
the Separate Account and the Company. A list of the contents of the SAI is set
forth below:

<TABLE>
<S> <C>
General Information and History
Variable Annuity Account C
Offering and Purchase of Contracts
Performance Data
General
Average Annual Total Return Quotations
Annuity Payments
Sales Material and Advertising
Independent Auditors
Financial Statements of the Separate Account
Financial Statements of the Company
</TABLE>

- --------------------------------------------------------------------------------
19
<PAGE>
APPENDIX I
GUARANTEED ACCUMULATION ACCOUNT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE GUARANTEED ACCUMULATION ACCOUNT ("GAA") IS A CREDITED INTEREST OPTION
AVAILABLE DURING THE ACCUMULATION PERIOD UNDER THE CONTRACTS DISCUSSED IN THIS
PROSPECTUS. AMOUNTS ALLOCATED TO GAA ARE HELD IN A NONINSULATED, NONUNITIZED
SEPARATE ACCOUNT. THIS APPENDIX IS A SUMMARY OF GAA AND IS NOT INTENDED TO
REPLACE THE GAA PROSPECTUS. YOU SHOULD READ THE ACCOMPANYING GAA PROSPECTUS
CAREFULLY BEFORE INVESTING.

GAA is a Credited Interest Option in which we guarantee stipulated rates of
interest for stated periods of time on amounts directed to GAA, as specified in
the Contract. The interest rate stipulated is an annual effective yield; that
is, it reflects a full year's interest. Interest is credited daily at a rate
that will provide the guaranteed annual effective yield for one year. This
option guarantees the minimum interest rate specified in the Contract.

During a specified period of time, amounts may be applied to any or all
available Guaranteed Terms within the Short-Term and Long-Term classifications.
Short-Term GAA has Guaranteed Terms from one to three years, and Long-Term GAA
has Guaranteed Terms from three to ten years.

Purchase Payments must remain in GAA for the full Guaranteed Term to receive
the quoted interest rates. Withdrawals or transfers from a Guaranteed Term
before the end of that Guaranteed Term may be subject to a market value
adjustment ("MVA"). An MVA reflects the change in the value of the investments
due to changes in interest rates since the date of deposit. When interest rates
increase after the date of deposit, the value of the investment decreases and
the MVA is negative. Conversely, when interest rates decrease after the date of
deposit, the value of the investment increases, and the MVA is positive. It is
possible that a negative MVA could result in the Participant receiving an amount
which is less than the amount paid into GAA.

As a Guaranteed Term matures, assets accumulating under GAA may be (a)
transferred to a new Guaranteed Term, (b) transferred to other available
investment options, or (c) withdrawn. Amounts withdrawn may be subject to a
deferred sales charge and/or federal tax penalties or mandatory income tax
withholding.

By notifying us at least 30 days prior to the Annuity Date, you may elect a
variable annuity and have amounts that have been accumulating under GAA
transferred to one or more of the Subaccounts available during the Annuity
Period. GAA cannot be used as an investment option during the Annuity Period.

MORTALITY AND EXPENSE RISK CHARGES

We make no deductions from the credited interest rate for mortality and
expense risks; these risks are considered in determining the credited rate.

TRANSFERS

Amounts applied to a Guaranteed Term during a deposit period may not be
transferred to any other funding option or to another Guaranteed Term during
that deposit period or for 90 days after the close of that deposit period.
Transfers are permitted from Guaranteed Terms of one classification to available
Guaranteed Terms of another classification. We will apply an MVA to transfers
made before the end of a Guaranteed Term, unless such transfer is due to the
maturity of the Guaranteed Term.

CONTRACT LOANS

Loans may not be made against amounts held in GAA, although such value is
included in determining the Account Value against which a loan may be made.

REINVESTMENT PRIVILEGE

If amounts are withdrawn from GAA and reinvested, they will be applied to
the current deposit period. Amounts are proportionately reinvested to the
Classifications in the same manner as they were allocated before the withdrawal.
Any negative MVA amount applied to a withdrawal is not included in the
reinvestment.

- --------------------------------------------------------------------------------
20
<PAGE>
APPENDIX II
FIXED ACCOUNT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE FOLLOWING SUMMARIZES MATERIAL INFORMATION CONCERNING THE FIXED ACCOUNT.
AMOUNTS ALLOCATED TO THE FIXED ACCOUNT ARE HELD IN THE COMPANY'S GENERAL ACCOUNT
THAT SUPPORTS GENERAL INSURANCE AND ANNUITY OBLIGATIONS. INTERESTS IN THE FIXED
ACCOUNT HAVE NOT BEEN REGISTERED WITH THE SEC IN RELIANCE ON EXEMPTIONS UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. DISCLOSURE IN THE PROSPECTUS REGARDING
THE FIXED ACCOUNT, MAY, HOWEVER, BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND
COMPLETENESS OF SUCH STATEMENTS. DISCLOSURE IN THIS APPENDIX REGARDING THE FIXED
ACCOUNT HAS NOT BEEN REVIEWED BY THE SEC.

The Fixed Account guarantees the minimum interest rate specified in the
Contract. The Company may credit a higher interest rate from time to time. The
current rate is subject to change at any time, but will never fall below the
guaranteed minimum. The Company's determination of interest rates reflects the
investment income earned on invested assets and the amortization of any capital
gains and/or losses realized on the sale of invested assets. Under the Fixed
Account, the Company assumes the risk of investment gain or loss by guaranteeing
Account Values and promising a minimum interest rate and Annuity Payment. The
Fixed Account is available under Installment Purchase Payment contracts only.

Amounts applied to the Fixed Account will earn the interest rate in effect
when actually applied to the Fixed Account.

The Fixed Account will reflect a compound interest rate credited by us. The
interest rate quoted is an annual effective yield. We make no deductions from
the credited interest rate for mortality and expense risks; these risks are
considered in determining the credited interest rate.

Under certain emergency conditions, we may defer payment of a Fixed Account
withdrawal value (a) for a period of up to six months, or (b) as provided by
federal law.

If a withdrawal is made from the Fixed Account, a deferred sales charge may
apply. (See "Charges and Deductions-- Deferred Sales Charge.")

TRANSFERS AMONG INVESTMENT OPTIONS

Transfers from the Fixed Account to any other available investment
options(s) are allowed in each calendar year during the Accumulation Period. The
amount which may be transferred may vary at our discretion; however, it will
never be less than 10% of the amount held under the Fixed Account. Transfers to
the Fixed Plus Account (if available under the Contract) will be permitted
without regard to this limitation. By notifying us at our Home Office at least
30 days before Annuity payments begin, you may elect to have amounts which have
been accumulating under the Fixed Account transferred to one or more of the
Subaccounts available during the Annuity Period to provide variable Annuity
Payments.

CONTRACT LOANS

Loans may be made from Account Values held in the Fixed Account.

- --------------------------------------------------------------------------------
21
<PAGE>
APPENDIX III
FIXED PLUS ACCOUNT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE FOLLOWING SUMMARIZES MATERIAL INFORMATION CONCERNING THE FIXED PLUS ACCOUNT.
AMOUNTS ALLOCATED TO THE FIXED PLUS ACCOUNT ARE HELD IN THE COMPANY'S GENERAL
ACCOUNT THAT SUPPORTS GENERAL INSURANCE AND ANNUITY OBLIGATIONS. INTERESTS IN
THE FIXED PLUS ACCOUNT HAVE NOT BEEN REGISTERED WITH THE SEC IN RELIANCE ON
EXEMPTIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED. DISCLOSURE IN THE
PROSPECTUS REGARDING THE FIXED PLUS ACCOUNT, MAY, HOWEVER, BE SUBJECT TO CERTAIN
GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE
ACCURACY AND COMPLETENESS OF SUCH STATEMENTS. DISCLOSURE IN THIS APPENDIX
REGARDING THE FIXED PLUS ACCOUNT HAS NOT BEEN REVIEWED BY THE SEC.

The Fixed Plus Account guarantees the minimum Fixed Plus interest rate
specified in the Contract. The Company may credit a higher interest rate from
time to time. The current rate is subject to change at any time, but will never
fall below the guaranteed minimum. The Company's determination of interest rates
reflects the investment income earned on invested assets and the amortization of
any capital gains and/or losses realized on the sale of invested assets. Under
the Fixed Plus Account, the Company assumes the risk of investment gain or loss
by guaranteeing Account Values and promising a minimum interest rate and Annuity
Payment.

The Fixed Plus Account will reflect a compound interest rate credited by us.
The interest rate quoted is an annual effective yield. Amounts applied to the
Fixed Plus Account will earn the Fixed Plus interest rate in effect when
actually applied to the Fixed Plus Account. We make no deductions from the
credited interest rate for mortality and expense risks; these risks are
considered in determining the credited rate.

Beginning on the tenth Account Year, we will credit amounts held in the
Fixed Plus Account with an interest rate that is at least 0.25% higher than the
then-declared interest rate for the Fixed Plus Accounts for Accounts that have
not reached their tenth anniversary.

FIXED PLUS ACCOUNT WITHDRAWALS

The amount eligible for partial withdrawal is 20% of the amount held in the
Fixed Plus Account on the day the Company receives a written request at its Home
Office. This 20% amount will be reduced by any Fixed Plus Account withdrawals,
transfers, loan or annuitizations made in the prior 12 months. In calculating
the 20% limit, we reserve the right to include payments made due to the election
of an Additional Withdrawal Option.

The 20% limit is waived if the partial withdrawal is due to annuitization or
death. The waiver upon death will only be exercised once and must occur within
six months after the Participant's date of death. Any such surrender or
annuitization must also be made pro rata from all Subaccounts and Credited
Interest Options available under the Contract.

If a full withdrawal is requested, we will pay any amounts held in the Fixed
Plus Account, with interest, in five annual payments that will be equal to:

1. One-fifth of the Fixed Plus Account Value on the day the request is
received, reduced by any Fixed Plus Account withdrawals, transfers, loans
or annuitizations made during the prior 12 months;
2. One-fourth of the remaining Fixed Plus Account Value 12 months later;
3. One-third of the remaining Fixed Plus Account Value 12 months later;
4. One-half of the remaining Fixed Plus Account Value 12 months later; and
5. The balance of the Fixed Plus Account Value 12 months later.

Once we receive a request for a full withdrawal, no further withdrawals,
loans or transfers will be permitted from the Fixed Plus Account. A full
withdrawal from the Fixed Plus Account may be cancelled at any time before the
end of the five-payment period. We will waive the Fixed Plus Account full
withdrawal provision if a full withdrawal is made due to

- --------------------------------------------------------------------------------
22
<PAGE>
(a) the Participant's death before the Annuity Date; (b) the election of an
Annuity option; or (c) if the Fixed Plus Account value is $3,500 or less and no
withdrawals, transfers, loan or annuitizations have been made from the Account
within the prior 12 months.

TRANSFERS AMONG INVESTMENT OPTIONS

The amount eligible for transfer from the Fixed Plus Account is 20% of the
amount held in the Fixed Plus Account on the day we receive a written request at
our Home Office. This 20% amount will be reduced by any Fixed Plus Account
withdrawals, transfers, loans or annuitizations made during the prior 12 months.
In calculating the 20% limit, we reserve the right to include payments made due
to the election of any of the Additional Withdrawal Options. The 20% limit on
transfers will be waived when the value in the Fixed Plus Account is $1,000 or
less.

By notifying us at our Home Office at least 30 days before the Annuity Date,
you may elect to have amounts which have been accumulating under the Fixed Plus
Account transferred to one or more of the Subaccounts available during the
Annuity Period to provide lifetime variable Annuity Payments.

SWO

The Systematic Withdrawal Option may not be elected if you have requested a
Fixed Plus Account transfer or withdrawal within the prior 12 month period.

CONTRACT LOANS

Loans may be made from Account Values held in the Fixed Plus Account. See
the loan agreement for a description of the amount available and the
consequences upon loan default if more than 20% of the Fixed Plus Account Value
is used for a loan.

- --------------------------------------------------------------------------------
23
<PAGE>
FOR MASTER APPLICATIONS ONLY

I HEREBY ACKNOWLEDGE RECEIPT OF AN ACCOUNT C GROUP DEFERRED VARIABLE ANNUITY
PROSPECTUS DATED MAY 1, 1996 FOR SECTION 403(B) TAX-DEFERRED ANNUITY PLANS, AS
WELL AS ALL CURRENT PROSPECTUSES PERTAINING TO THE VARIABLE INVESTMENT OPTIONS
AVAILABLE UNDER THE CONTRACTS.

- ---- PLEASE SEND AN ACCOUNT C STATEMENT OF ADDITIONAL INFORMATION (FORM NO.
75964(S)) DATED MAY 1, 1996.

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

CONTRACT HOLDER'S SIGNATURE

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

DATE

75964-2 (5/96)

- --------------------------------------------------------------------------------
<PAGE>

VARIABLE ANNUITY ACCOUNT C
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY

STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1996

AetnaPlus Contracts and Multiple Option Contracts
Group and Individual Variable Annuity Contracts
Available under Section 403(b) and 401(a)

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the current prospectus for Variable Annuity Account C (the
"Separate Account") dated May 1, 1996.

A free prospectus is available upon request from the local Aetna Life Insurance
and Annuity Company office or by writing to or calling:

Aetna Life Insurance and Annuity Company
Customer Service
151 Farmington Avenue
Hartford, Connecticut 06156
1-800-525-4225

Read the prospectus before you invest. Terms used in this Statement of
Additional Information shall have the same meaning as in the Prospectus.

TABLE OF CONTENTS

PAGE

General Information and History. . . . . . . . . . . . 1
Variable Annuity Account C . . . . . . . . . . . . . . 1
Offering and Purchase of Contracts . . . . . . . . . . 2
Performance Data . . . . . . . . . . . . . . . . . . . 2
General . . . . . . . . . . . . . . . . . . . . . . 2
Average Annual Total Return Quotations. . . . . . . 3
Annuity Payments . . . . . . . . . . . . . . . . . . . 12
Sales Material and Advertising . . . . . . . . . . . . 13
Independent Auditors . . . . . . . . . . . . . . . . . 13
Financial Statements of the Separate Account . . . . .
Financial Statements of Aetna Life Insurance
and Annuity Company . . . . . . . . . . . . . . . . S-1

<PAGE>

GENERAL INFORMATION AND HISTORY

Aetna Life Insurance and Annuity Company (the "Company") is a stock life
insurance company which was organized under the insurance laws of the State
of Connecticut in 1976. Through a merger, it succeeded to the business of
Aetna Variable Annuity Life Insurance Company (formerly Participating Annuity
Life Insurance Company organized in 1954). As of December 31, 1995, the
Company managed over $___ billion of assets, and as of December 31, 1994, it
ranked among the top 2% of all U.S. life insurance companies by size. The
Company is a wholly owned subsidiary of Aetna Retirement Services, Inc.,
which is in turn a wholly owned subsidiary of Aetna Life and Casualty
Company. The Company is engaged in the business of issuing life insurance
policies and annuity contracts in all states of the United States. The
Company's Home Office is located at 151 Farmington Avenue, Hartford,
Connecticut 06156.

In addition to serving as the principal underwriter and the depositor for the
Separate Account, the Company is also a registered investment adviser under the
Investment Advisers Act of 1940, and a registered broker-dealer under the
Securities Exchange Act of 1934. The Company provides investment advice to
several of the registered management investment companies offered as variable
investment options under the Contracts funded by the Separate Account (see
"Variable Annuity Account C" below).

Other than the mortality and expense risk charges and administrative expense
charge described in the prospectus, all expenses incurred in the operations of
the Separate Account are borne by the Company. See "Charges and Deductions" in
the prospectus. The Company receives reimbursement for certain administrative
costs from some unaffiliated sponsors of the Funds used as funding options under
the Contract. These fees generally range up to 0.25%.

The assets of the Separate Account are held by the Company. The Separate
Account has no custodian. However, the Funds in whose shares the assets of the
Separate Account are invested each have custodians, as discussed in their
respective prospectuses.

VARIABLE ANNUITY ACCOUNT C

Variable Annuity Account C (the "Separate Account") is a separate account
established by the Company for the purpose of funding variable annuity contracts
issued by the Company. The Separate Account is registered with the Securities
and Exchange Commission as a unit investment trust under the Investment Company
Act of 1940, as amended. The assets of each of the Subaccounts of the Separate
Account will be invested exclusively in shares of the mutual funds described in
the Prospectus. Purchase Payments made under the Contract may be allocated to
one or more of the Subaccounts. The Company may make additions to or deletions
from available investment options as permitted by law. The availability of the
Funds is subject to applicable regulatory authorization. Not all Funds are
available in all jurisdictions, under all Contracts, or under all Plans. The
Funds currently available under the Contract are as follows:

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Aetna Variable Fund Fidelity VIP Overseas Portfolio
Aetna Income Shares Franklin Government Securities Trust
Aetna Variable Encore Fund Janus Aspen Aggressive Growth Portfolio
Aetna Investment Advisers Fund, Inc. Janus Aspen Balanced Portfolio
Aetna Ascent Variable Portfolio Janus Aspen Flexible Income Portfolio
Aetna Crossroads Variable Portfolio Janus Aspen Growth Portfolio
Aetna Legacy Variable Portfolio Janus Aspen Short-Term Bond Portfolio
Alger American Growth Portfolio Janus Aspen Worldwide Growth Portfolio
Alger American Small Cap Portfolio Lexington Natural Resources Trust
Calvert Responsibly Invested Balanced Portfolio Neuberger & Berman Growth Portfolio
Fidelity VIP II Contrafund Portfolio Scudder International Portfolio
Fidelity VIP Equity-Income Portfolio TCI Growth
Fidelity VIP Growth Portfolio
</TABLE>

Complete descriptions of each of the Funds, including their investment
objectives, policies, risks and fees and expenses, are contained in the
prospectuses and statements of additional information for each of the Funds.

OFFERING AND PURCHASE OF CONTRACTS

The Company is both the Depositor and the principal underwriter for the
securities sold by the prospectus. The Company offers the Contracts through
life insurance agents licensed to sell variable annuities who are registered
representatives of the Company or of other registered broker-dealers who have
sales agreements with the Company. The offering of the Contracts is continuous.
A description of the manner in which Contracts are purchased may be found in the
prospectus under the sections titled "Purchase" and "Account Values."

PERFORMANCE DATA

GENERAL

From time to time, the Company may advertise different types of historical
performance for the Subaccounts of the Separate Account available under the
Contracts issued by the Company in connection with Plans described in the
Prospectus. The Company may advertise the "standardized average annual total
returns," calculated in a manner prescribed by the Securities and Exchange
Commission (the "standardized return"), as well as "non-standardized returns,"
both of which are described below.

The standardized and non-standardized total return figures are computed
according to a formula in which a hypothetical initial Purchase Payment of
$1,000 is applied to the various Subaccounts under the Contract, and then
related to the ending redeemable values over one, three, five and ten year
periods (or fractional periods thereof). The standardized figures reflect the
deduction of all recurring charges during each period (e.g., mortality and
expense risk charges, maintenance fees, administrative charges, and deferred
sales charges). These charges will be deducted on a pro rata basis in the case
of fractional periods. The maintenance fee is converted to a percentage of
assets based on the average account size under the Contracts described in the
Prospectus.

The non-standardized figures will be calculated in a similar manner, except that
they will not reflect the deduction of any applicable deferred sales charge
(which would decrease the level of performance shown if reflected in these
calculations). The non-standardized figures may also include monthly,
quarterly, year-to-date and three year periods.

<PAGE>

If a Fund was in existence prior to the date it became available under the
Contract, standardized and non-standardized total returns may include periods
prior to the date on which such Fund became available under the Contract. These
figures are calculated by adjusting the actual returns of the Fund to reflect
the charges that would have been assessed under the Contract had that Fund been
available under the Contract during that period.

Investment results of the Funds will fluctuate over time, and any presentation
of the Subaccounts' total return quotations for any prior period should not be
considered as a representation of how the Subaccounts will perform in any future
period. Additionally, the Account Value upon redemption may be more or less
than your original cost.

AVERAGE ANNUAL TOTAL RETURN QUOTATIONS - STANDARDIZED AND NON-STANDARDIZED

There are two sets of total return quotations shown below: one for AetnaPlus
Contracts and one for Multiple Option Contracts (as identified on the cover of
your Prospectus). The contract features and charges under these types of
contracts are identical; however, they are administered on two different
administrative systems. Due to differences in the way the two systems
administered payments prior to mid-1994, performance for the Subaccounts under
the two systems for those periods differs.

Additionally, each set of tables shown below represents the variations in
contract payment type and in the maintenance fees assessed under different
plans. Table A reflects the average annual standardized and non-standardized
total return quotation figures for the periods ended December 31, 1995 for the
Subaccounts under Single Payment Accounts issued by the Company. Tables B, C
and D reflect the average annual standardized and non-standardized total return
quotation figures for the periods ended December 31, 1995 for the Subaccounts
under Installment Payment Accounts with a $20 annual maintenance fee, a $15
annual maintenance fee, and a $7.50 annual maintenance fee, respectively. In
both sets of tables, for those Subaccounts where results are not available for
the full calendar period indicated, the percentage shown is an average annual
return since inception (denoted with an *).

AETNA PLUS CONTRACTS
TABLE A

SINGLE PAYMENT ACCOUNT FUND
($0 MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED INCEPTION
DATE
- --------------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested
Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86
</TABLE>

<PAGE>

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

AETNA PLUS CONTRACTS
TABLE B

INSTALLMENT PAYMENT ACCOUNT FUND
($20 ANNUAL MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED INCEPTION
DATE
- --------------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested
Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86

Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

AETNA PLUS CONTRACTS
TABLE C

<TABLE>
<CAPTION>
INSTALLMENT PAYMENT ACCOUNT FUND
($15 ANNUAL MAINTENANCE FEE) STANDARDIZED NON-STANDARIZED INCEPTION
DATE
- ---------------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested
Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86

Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

AETNA PLUS CONTRACTS
TABLE D

INSTALLMENT PAYMENT ACCOUNT FUND
($7.50 ANNUAL MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED INCEPTION
DATE
- --------------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested
Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86

Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

MULTIPLE OPTION CONTRACTS
TABLE A

SINGLE PAYMENT ACCOUNT: FUND
($0 MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED INCEPTION
DATE
- -----------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86

Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

MULTIPLE OPTION CONTRACTS
TABLE B

INSTALLMENT PAYMENT ACCOUNT FUND
($20 ANNUAL MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED INCEPTION
DATE
- -----------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86

Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
MULTIPLE OPTION CONTRACTS
TABLE C

INSTALLMENT PAYMENT ACCOUNT FUND
($15 ANNUAL MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED INCEPTION
DATE
- -----------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86

Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
MULTIPLE OPTION CONTRACTS
TABLE D

INSTALLMENT PAYMENT ACCOUNT FUND
($7.50 ANNUAL MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED INCEPTION
DATE
- -----------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund 04/30/75

Aetna Income Shares 06/01/78

Aetna Variable Encore Fund 09/01/75

Aetna Investment Advisers Fund, Inc. 06/23/89

Alger American Growth Portfolio 01/08/89

Alger American Small Cap Portfolio 09/21/88

Calvert Responsibly Invested Balanced Portfolio 09/30/86

Fidelity Equity-Income Portfolio 10/22/86

Fidelity Growth Portfolio 11/07/86

Fidelity Overseas Portfolio 02/13/87

Franklin Government Securities Trust 05/30/89

Janus Aspen Aggressive Growth Portfolio 09/13/93

Janus Aspen Balanced Portfolio 09/13/93

Janus Aspen Flexible Income Portfolio 09/13/93

Janus Aspen Growth Portfolio 09/13/93

Janus Aspen Short-Term Bond Portfolio 09/13/93

Janus Aspen Worldwide Growth Portfolio 09/13/93

Lexington Natural Resources Trust 05/31/89

Neuberger & Berman Growth Portfolio 12/31/85

Scudder International Portfolio 04/30/87

TCI Growth 11/20/87
</TABLE>

<PAGE>

ANNUITY PAYMENTS

When Annuity payments are to begin, the value of the Account is determined using
Accumulation Unit values as of the tenth Valuation Period before the first
Annuity payment is due. Such value (less any applicable premium tax) is applied
to provide an Annuity in accordance with the Annuity and investment options
elected.

The Annuity option tables found in the Contract show, for each form of Annuity,
the amount of the first Annuity payment for each $1,000 of value applied.
Thereafter, variable Annuity payments fluctuate as the Annuity Unit value(s)
fluctuates with the investment experience of the selected investment option(s).
The first payment and subsequent payments also vary depending on the assumed net
investment rate selected (3.5% or 5% per annum). Selection of a 5% rate causes a
higher first payment, but Annuity payments will increase thereafter only to the
extent that the net investment rate increases by more than 5% on an annual
basis. Annuity payments would decline if the rate failed to increase by 5%. Use
of the 3.5% assumed rate causes a lower first payment, but subsequent payments
would increase more rapidly or decline more slowly as changes occur in the net
investment rate.

When the Annuity Period begins, the Annuitant is credited with a fixed number of
Annuity Units (which does not change thereafter) in each of the designated
investment options. This number is calculated by dividing (a) by (b), where (a)
is the amount of the first Annuity payment based on a particular investment
option, and (b) is the then current Annuity Unit value for that investment
option. As noted, Annuity Unit values fluctuate from one Valuation Period to the
next; such fluctuations reflect changes in the net investment factor for the
appropriate Fund(s) (with a ten Valuation Period lag which gives the Company
time to process Annuity payments) and a mathematical adjustment which offsets
the assumed net investment rate of 3.5% or 5% per annum.

The operation of all these factors can be illustrated by the following
hypothetical example. These procedures will be performed separately for the
investment options selected during the Annuity Period.

EXAMPLE:
Assume that, at the date Annuity payments are to begin, there are 3,000
Accumulation Units credited under a particular Account and that the value of an
Accumulation Unit for the tenth Valuation Period prior to retirement was
$13.650000. This produces a total value of $40,950.

Assume also that no premium tax is payable and that the Annuity table in the
Contract provides, for the option elected, a first monthly variable Annuity
payment of $6.68 per $1000 of value applied; the Annuitant's first monthly
payment would thus be 40.950 multiplied by $6.68, or $273.55.

Assume then that the value of an Annuity Unit for the Valuation Period in which
the first payment was due was $13.400000. When this value is divided into the
first monthly payment, the number of Annuity Units is determined to be 20.414.
The value of this number of Annuity Units will be paid in each subsequent month.

If the net investment factor with respect to the appropriate Fund is 1.0015000
as of the tenth Valuation Period preceding the due date of the second monthly
payment, multiplying this factor by .9999058* (to neutralize the assumed net
investment rate of 3.5% per annum built into the number of Annuity Units
determined above) produces a result of 1.0014057. This is then multiplied by the
Annuity Unit value for

<PAGE>

the prior Valuation Period (assume such value to be $13.504376) to produce an
Annuity Unit value of $13.523359 for the Valuation Period in which the second
payment is due.

The second monthly payment is then determined by multiplying the number of
Annuity Units by the current Annuity Unit value, or 20.414 times $13.523359,
which produces a payment of $276.07.

*If an assumed net investment rate of 5% is elected, the appropriate factor to
neutralize such assumed rate would be .9998663.

SALES MATERIAL AND ADVERTISING

The Company may include hypothetical illustrations in its sales literature that
explain the mathematical principles of dollar cost averaging, compounded
interest, tax deferred accumulation, and the mechanics of variable annuity
contracts. The Company may also discuss the difference between variable annuity
contracts and other types of savings or investment products, including, but not
limited to, personal savings accounts and Certificates of Deposit.

We may distribute sales literature that compares the percentage change in
Accumulation Unit values for any of the Funds to established market indexes such
as the Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average or
to the percentage change in values of other management investment companies that
have investment objectives similar to the Fund being compared.

We may publish in advertisements and reports, the ratings and other information
assigned to us by one or more independent rating organizations such as A.M. Best
Company, Duff & Phelps, Standard & Poor's Corporation and Moody's Investors
Services, Inc. The purpose of the ratings is to reflect our financial strength
and/or claims-paying ability. We may also quote ranking services such as
Morningstar's Variable Annuity/Life Performance Report and Lipper's Variable
Insurance Products Performance Analysis Service (VIPPAS), which rank variable
annuity or life Subaccounts or their underlying funds by performance and/or
investment objective. From time to time, we will quote articles from newspapers
and magazines or other publications or reports, including, but not limited to
The Wall Street Journal, Money magazine, USA Today and The VARDS Report.

The Company may provide in advertising, sales literature, periodic publications
or other materials information on various topics of interest to current and
prospective Contract Holders or Participants. These topics may include the
relationship between sectors of the economy and the economy as a whole and its
effect on various securities markets, investment strategies and techniques (such
as value investing, market timing, dollar cost averaging, asset allocation,
constant ratio transfer and account rebalancing), the advantages and
disadvantages of investing in tax-deferred and taxable investments, customer
profiles and hypothetical purchase and investment scenarios, financial
management and tax and retirement planning, and investment alternatives to
certificates of deposit and other financial instruments, including comparison
between the Contracts and the characteristics of and market for such financial
instruments.

INDEPENDENT AUDITORS

KPMG Peat Marwick LLP, CityPlace II, Hartford, Connecticut 06103-4103, are the
independent auditors for the Separate Account and for the Company. The services
provided to the Separate Account include primarily the examination of the
Separate Account's financial statements and the review of filings made with the
SEC.

<PAGE>

FINANCIAL STATEMENTS

VARIABLE ANNUITY ACCOUNT C

INDEX

Independent Auditors' Report . . . . . . . . . . . . . S-2
Statement of Assets and Liabilities. . . . . . . . . . S-3
Statement of Operations. . . . . . . . . . . . . . . . S-4
Statements of Changes in Net Assets. . . . . . . . . . S-5
Notes to Financial Statements . . . . . . . . . . . . S-6

S-1

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

VARIABLE ANNUITY ACCOUNT C

VARIABLE ANNUITY CONTRACTS

ISSUED BY

AETNA LIFE INSURANCE AND ANNUITY COMPANY

FORM NO. 75964(S)
<PAGE>

VARIABLE ANNUITY ACCOUNT C
PART C - OTHER INFORMATION

<TABLE>
<C> <S>
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:*
(1) Included in Part A:
Condensed Financial Information
(2) Included in Part B:
Financial Statements of Variable Annuity Account C:
- Independent Auditors' Report
- Statement of Assets and Liabilities as of December 31, 1995
- Statement of Operations for the year ended December 31, 1995
- Statements of Changes in Net Assets for the years ended
December 31, 1995 and 1994
- Notes to Financial Statements
Financial Statements of the Depositor:
- Independent Auditors' Report
- Consolidated Statements of Income for the years ended December 31, 1995, 1994 and 1993
- Consolidated Balance Sheets as of December 31, 1995 and 1994
- Consolidated Statements of Changes in Shareholder's Equity for the years ended December
31, 1995, 1994 and 1993
- Consolidated Statements of Cash Flows for the years ended December 31, 1995, 1994 and
1993
- Notes to Consolidated Financial Statements

(b) Exhibits
(1) Resolution of the Board of Directors of Aetna Life Insurance and Annuity Company
establishing Variable Annuity Account C(1)
(2) Not applicable
(3.1) Form of Broker-Dealer Agreement(2)
(3.2) Alternative Form of Wholesaling Agreement and related Selling Agreement(2)
(4.1) Form of Variable Annuity Contract (G-CDA-HF)(3)
(4.2) Form of Variable Annuity Contract (IA-CDA-IA)(4)
(4.3) Form of Variable Annuity Contract (G-CDA-HD)(5)
(4.4) Form of Variable Annuity Contract (IA-CDA-HD)*
(5.2) Form of Variable Annuity Contract Application (710.00.16H)(4)
(6) Certification of Incorporation and By-Laws of Depositor(6)
(7) Not applicable
(8.1) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Alger
American Fund and Fred Alger Management, Inc. dated
September 1, 1993(2)
</TABLE>

<C> <S>
(8.2) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Calvert
Asset Management Company (Calvert Responsibility Invested Balanced Portfolio formerly
Calvert Socially Responsible Series) dated March 13, 1989 and amended December 27, 1993(7)
(8.3) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Fidelity
Distributors Corporation dated February 1, 1994 (Variable Insurance Products Fund)(8)
(8.4) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Fidelity
Distributors Corporation dated February 1, 1994 (Variable Insurance Products Fund II)(8)
(8.5) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Franklin
Advisers, Inc. dated January 31, 1989(9)
(8.6) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Janus
Aspen Series dated April 19, 1994 and amended June 15, 1994(11)
(8.7) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and
Lexington Management Corporation regarding Natural Resources Trust dated December 1, 1988
and amended February 11, 1991(7)
(8.8) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Advisers
Management Trust (now Neuberger & Berman Advisers Management Trust) dated April 14, 1989(2)
(8.9) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Scudder
Variable Life Investment Fund dated April 27, 1992 and amended February 19, 1993 and
August 13, 1993(11)
(8.10) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Investors
Research Corporation and TCI Portfolios, Inc. dated
July 29, 1992 and amended December 22, 1992 and June 1, 1994(11)
(9) Opinion of Counsel*
(10.1) Consent of Independent Auditors*
(10.2) Consent of Counsel*
(11) Not applicable
(12) Not applicable
(13) Computation of Performance Data*
(14) Financial Data Schedule*
(15.1) Powers of Attorney(12)
(15.2) Authorization for Signatures(13)
</TABLE>

* To be filed by amendment.
1. Incorporated by reference to Registration Statement on Form N-4 (File No.
2-52449) filed on February 28, 1986.
2. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-75996) filed on April 21, 1994.

<PAGE>

3. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-75964) filed on February 24, 1995.
4. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-75958) filed on April 28, 1995.
5. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-75960) filed on April 28, 1995.
6. Incorporated by reference to Post-Effective Amendment No. 58 to Registration
Statement on Form N-4 (File No. 2-52449) filed on February 28, 1994.
7. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form N-4 (File No. 33-75978) filed on March 24, 1995.
8. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-75978) filed on April 25, 1994.
9. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-75990) filed on April 25, 1994.
10. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form N-4 (File No. 33-75960) filed on August 9, 1994.
11. Incorporated by reference to Registration Statement on Form N-4 (File No.
33-88720) filed on January 20, 1995.
12. The Power of Attorney for David E. Bushong, Acting Chief Financial Officer,
is incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form N-4 (File No. 33-87932), as filed
electronically, on September 18, 1995. The Powers of Attorney for all
other signatories are incorporated by reference to Post-Effective Amendment
No. 5 to Registration Statement on Form N-4 (File No. 33-75982), as filed
electronically, on February 20, 1996.
13. Incorporated by Reference to Post-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-91846) electronically filed on August 16,
1995.

<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS* POSITIONS AND OFFICES WITH DEPOSITOR
- ----------------- ------------------------------------
<S> <C>
Daniel P. Kearney Director and President

Timothy A. Holt Director

Christopher J. Burns Director and Senior Vice President

Laura R. Estes Director and Senior Vice President

Gail P. Johnson Director and Vice President

John Y. Kim Director and Senior Vice President

Shaun P. Mathews Director and Senior Vice President

Glen Salow Director and Vice President

Creed R. Terry Director and Vice President

James C. Hamilton Vice President and Treasurer

David E. Bushong Acting Chief Financial Officer

Eugene M. Trovato Vice President, Chief Accounting Officer and
Corporate Controller

Zoe Baird Senior Vice President and General Counsel

Susan E. Schechter Corporate Secretary and Counsel
</TABLE>

* The principal business address of all directors and officers listed is 151
Farmington Avenue, Hartford, Connecticut 06156.

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT

Incorporated herein by reference to Item 26 of Post Effective
Amendment No. 5 to Registration Statement on Form N-4 (File No. 33-75982)
as filed electronically on February 20, 1996.

<PAGE>
ITEM 27. NUMBER OF CONTRACT OWNERS

As of December 31, 1995, there were 577,320 individuals holding interests
in variable annuity contracts funded through Account C.

ITEM 28. INDEMNIFICATION

Reference is hereby made to Section 33-320a of the Connecticut General
Statutes ("C.G.S.") regarding indemnification of directors and officers of
Connecticut corporations. The statute provides in general that Connecticut
corporations shall indemnify their officers, directors, employees, agents,
and certain other defined individuals against judgments, fines, penalties,
amounts paid in settlement and reasonable expenses actually incurred in
connection with proceedings against the corporation. The corporation's
obligation to provide such indemnification does not apply unless (1) the
individual is successful on the merits in the defense of any such proceeding;
or (2) a determination is made (by a majority of the board of directors not a
party to the proceeding by written consent; by independent legal counsel
selected by a majority of the directors not involved in the proceeding; or by
a majority of the shareholders not involved in the proceeding) that the
individual acted in good faith and in the best interests of the corporation;
or (3) the court, upon application by the individual, determines in view of
all the circumstances that such person is reasonably entitled to be
indemnified.

C.G.S. Section 33-320a provides an exclusive remedy: a Connecticut
corporation cannot indemnify a director or officer to an extent either
greater or less than that authorized by the statute, e.g., pursuant to its
certificate of incorporation, bylaws, or any separate contractual
arrangement. However, the statute does specifically authorize a corporation
to procure indemnification insurance to provide greater indemnification
rights. The premiums for such insurance may be shared with the insured
individuals on an agreed basis.

Consistent with the statute, Aetna Life and Casualty Company has procured
insurance from Lloyd's of London and several major United States excess
insurers for its directors and officers and the directors and officers of its
subsidiaries, including the Depositor, which supplements the indemnification
rights provided by C.G.S. Section 33-320a to the extent such coverage does
not violate public policy.

ITEM 29. PRINCIPAL UNDERWRITER

(a) In addition to serving as the principal underwriter for the
Registrant, Aetna Life Insurance and Annuity Company (ALIAC) also
acts as the principal underwriter for Variable Life Account B and
Variable Annuity Accounts B and G (separate accounts of ALIAC
registered as unit investment trusts), and Variable Annuity Account I
(a separate account of Aetna Insurance Company of America registered
as a unit investment trust). Additionally, ALIAC is the investment
adviser for Aetna Variable Fund, Aetna Income Shares, Aetna Variable
Encore Fund, Aetna Investment Advisers Fund, Inc., Aetna GET

<PAGE>

Fund, Aetna Series Fund, Inc. and Aetna Generation Portfolios, Inc.
ALIAC is also the depositor of Variable Life Account B and Variable
Annuity Accounts B and G.

(b) See Item 25 regarding the Depositor.

<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)

NAME OF NET UNDERWRITING COMPENSATION
PRINCIPAL DISCOUNTS AND ON REDEMPTION BROKERAGE
UNDERWRITER COMMISSIONS OR ANNUITIZATION COMMISSIONS COMPENSATION*
- ----------- ---------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C>
Aetna Life $ ** $ **
Insurance and
Annuity Company
</TABLE>

* Compensation shown in column 5 includes deductions for mortality and
expense risk guarantees and contract charges assessed to cover costs
incurred in the sales and administration of the contracts issued under
Account C.

** To be updated by amendment.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All records concerning contract owners of Variable Annuity Account C are
located at the home office of the Depositor as follows:

Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156

ITEM 31. MANAGEMENT SERVICES

Not applicable

ITEM 32. UNDERTAKINGS

Registrant hereby undertakes:

(a) to file a post-effective amendment to this registration statement on Form
N-4 as frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than sixteen
months old for as long as payments under the variable annuity contracts
may be accepted;

<PAGE>

(b) to include as part of any application to purchase a contract
offered by a prospectus which is part of this registration statement
on Form N-4, a space that an applicant can check to request a
Statement of Additional Information; and

(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this Form
N-4 promptly upon written or oral request.

(d) The Company hereby represents that it is relying upon and
complies with the provisions of Paragraphs (1) through (4) of the SEC
Staff's No-Action Letter dated November 22, 1988 with respect to
language concerning withdrawal restrictions applicable to plans
established pursuant to Section 403(b) of the Internal Revenue Code.
See American Counsel of Life Insurance; SEC No-Action Letter,
[1989 Transfer Binder] Fed. SEC. L. Rep. (CCH) PARA 78,904 at 78,523
(November 22, 1988).

(e) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

<PAGE>

SIGNATURES

As required by the Securities Act of 1933, as amended, and the Investment
Company Act of 1940, the Registrant, Variable Annuity Account C of Aetna Life
Insurance and Annuity Company, has duly caused this Post-Effective Amendment
No. 5 to its Registration Statement on Form N-4 (File No. 33-75964) to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Hartford, State of Connecticut, on the 20th day of February, 1996.

VARIABLE ANNUITY ACCOUNT C OF AETNA
LIFE INSURANCE AND ANNUITY COMPANY
(REGISTRANT)

By: AETNA LIFE INSURANCE AND ANNUITY
COMPANY
(DEPOSITOR)

By: Daniel P. Kearney*
----------------------------------------------
Daniel P. Kearney
President

As required by the Securities Act of 1933, as amended, this Post-Effective
Amendment No. 5 to the Registration Statement on Form N-4 (File No. 33-75964)
has been signed by the following persons in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
Daniel P. Kearney* Director and President )
- ------------------------------- )
Daniel P. Kearney (principal executive officer) )
)
Timothy A. Holt* Director ) February
- ------------------------------- ) 20, 1996
Timothy A. Holt )
)
David E. Bushong* Acting Chief Financial Officer )
- ------------------------------- )
David E. Bushong )
)
Eugene M. Trovato* Vice President, Chief Accounting Officer and )
- ------------------------------- )
Eugene M. Trovato Corporate Controller )
)
Christopher J. Burns* Director )
- ------------------------------- )
Christopher J. Burns )
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C>
Laura R. Estes* Director )
- ------------------------------- )
Laura R. Estes )
)
Gail P. Johnson* Director )
- ------------------------------- )
Gail P. Johnson )
)
John Y. Kim* Director )
- ------------------------------- )
John Y. Kim )
)
Shaun P. Mathews* Director )
- ------------------------------- )
Shaun P. Mathews )
)
Glen Salow* Director )
- ------------------------------- )
Glen Salow )
)
Creed R. Terry* Director )
- ------------------------------- )
Creed R. Terry )

By: /s/ Julie E. Rockmore
--------------------------
Julie E. Rockmore
*Attorney-in-Fact

</TABLE>

<PAGE>

VARIABLE ANNUITY ACCOUNT C
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE
- ----------- ------- ----
<C> <S> <C>
99-B.1 Resolution of the Board of Directors of Aetna Life Insurance and *
Annuity Company establishing Variable Annuity Account C

99-B.3.1 Form of Broker-Dealer Agreement *

99-B.3.2 Alternative Form of Wholesaling Agreement and related Selling *
Agreement

99-B.4.1 Form of Variable Annuity Contract (G-CDA-HF) *

99-B.4.2 Form of Variable Annuity Contract (IA-CDA-IA) *

99-B.4.3 Form of Variable Annuity Contract (G-CDA-HD) *

99-B.4.4 Form of Variable Annuity Contract (IA-CDA-HD) *

99-B.5 Form of Variable Annuity Contract Application *

99-B.6 Certification of Incorporation and By-Laws of Depositor *

99-B.8.1 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company, Alger American Fund and Fred Alger
Management, Inc. dated September 1, 1993

99-B.8.2 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Calvert Asset Management Company
(Calvert Responsibility Invested Balanced Portfolio formerly
Calvert Socially Responsible Series) dated March 13, 1989 and
amended December 27, 1993

99-B.8.3 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Fidelity Distributors Corporation dated
February 1, 1994 (Variable Insurance Products Fund)

99-B.8.4 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Fidelity Distributors Corporation dated
February 1, 1994 (Variable Insurance Products Fund II)
</TABLE>

*Incorporated by reference

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE
- ----------- ------- ----
<C> <S> <C>
99-B.8.5 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Franklin Advisers, Inc. dated January 31,
1989

99-B.8.6 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Janus Aspen Series dated April 19, 1994 and
amended June 15, 1994

99-B.8.7 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Lexington Management Corporation
regarding Natural Resources Trust dated December 1, 1988 and
amended February 11, 1991

99-B.8.8 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Advisers Management Trust (now Neuberger
& Berman Advisers Management Trust) dated April 14, 1989

99-B.8.9 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company and Scudder Variable Life Investment Fund dated
April 27, 1992 and amended February 19, 1993 and August 13, 1993

99-B.8.10 Fund Participation Agreement between Aetna Life Insurance and *
Annuity Company, Investors Research Corporation and TCI
Portfolios, Inc. dated July 29, 1992 and amended December 22, 1992
and June 1, 1994

99-B.9 Opinion of Counsel **

99-B.10.1 Consent of Independent Auditors **

99-B.10.2 Consent of Counsel **

99-B.13 Computation of Performance Data **

99-B.15.1 Powers of Attorney *

99-B.15.2 Authorization for Signatures *

27 Financial Data Schedule *
</TABLE>

*Incorporated by reference
**To be filed by amendment