VARIABLE ANNUITY ACCT C OF AETNA LIFE INSURANCE & ANNUITY CO, 497, 1999-05-05

VARIABLE ANNUITY ACCT C OF AETNA LIFE INSURANCE & ANNUITY CO
497, 1999-05-05

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Prospectus - May 3, 1999
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[START SIDEBAR]

The Funds

Aetna Ascent VP

Aetna Balanced VP, Inc.

Aetna Income Shares d/b/a Aetna
Bond VP

Aetna Crossroads VP

Aetna Variable Fund d/b/a Aetna
Growth and Income VP

Aetna Index Plus Bond VP

Aetna Index Plus Large Cap VP

Aetna Index Plus Mid Cap VP

Aetna Index Plus Small Cap VP

Aetna Legacy VP

Aetna Variable Encore Fund d/b/a
Aetna Money Market VP

Aetna Value Opportunity VP

Calvert Social Balanced Portfolio

Fidelity Variable Insurance Products
Fund (VIP) Equity-Income Portfolio

Fidelity Variable Insurance Products
Fund (VIP) High Income Portfolio

Fidelity Variable Insurance Products
Fund II (VIP II) Asset Manager
Portfolio

Fidelity Variable Insurance Products
Fund II (VIP II) Contrafund
Portfolio

Fidelity Variable Insurance Products
Fund II (VIP II) Index 500 Portfolio

Janus Aspen Aggressive Growth
Portfolio

Janus Aspen Growth Portfolio

Janus Aspen Worldwide Growth
Portfolio

Lexington Emerging Markets Fund,
Inc.

Lexington Natural Resources Trust*

MFS Total Return Series

Oppenheimer Global Securities
Fund/VA

Oppenheimer Strategic Bond
Fund/VA

Portfolio Partners MFS Emerging
Equities Portfolio

Portfolio Partners MFS Research
Growth Portfolio

Portfolio Partners MFS Value
Equity Portfolio

Portfolio Partners Scudder
International Growth Portfolio

Portfolio Partners T. Rowe Price
Growth Equity Portfolio

[END SIDEBAR]

The Contracts. The contracts described in this prospectus are group deferred
variable annuity contracts issued by Aetna Life Insurance and Annuity Company
(the Company). They are intended to be used as funding vehicles for certain
types of retirement plans, including those that qualify for beneficial tax
treatment and/or to provide current income reduction under certain sections of
the Internal Revenue Code of 1986, as amended (Tax Code).

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Why Reading this Prospectus is Important. Before you participate in the
contract through a retirement plan, you should read this prospectus. It
provides facts about the contract and its investment options. Plan sponsors
(generally your employer) should read this prospectus to help determine if the
contract is appropriate for their plan. Keep this document for future
reference.

Table of Contents . . . page 3
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Contract Design. The contracts are designed to:

>Help you save for retirement while receiving beneficial tax treatment

>Offer a variety of investment options to help meet long-term financial goals

>Provide a benefit to a beneficiary in the event of death

>Provide future income payments over a lifetime or for a specified period

You may participate in this contract if you are an eligible employee
participating in the State University of New York (SUNY) defined contribution
retirement plan or any predecessor SUNY plan under section 403(b) of the Tax
Code.

Investment Options. The contracts offer variable investment options and fixed
interest options. When we establish your account, you instruct us to direct
account dollars to any of the available options. Some investment options may be
unavailable through certain contracts and plans.

Variable Investment Options. These options are called subaccounts. Each
subaccount invests in one of the mutual funds (funds) listed on this page.
Earnings on amounts invested in a subaccount will vary depending on the
performance of its underlying fund. The subaccounts are within Variable Annuity
Account C (the separate account), a separate account of the Company. You do not
invest directly in or hold shares of the funds.

The funds in which the subaccounts invest have various risks. For information
about risks of investing in the funds see "Investment Options" in this
prospectus and each fund prospectus. Retain the fund prospectuses for future
reference.

Fixed Interest Options.

>Guaranteed Accumulation Account

>Fixed Plus Account

Except as specifically mentioned, this prospectus describes only the variable
investment options. However, we describe the fixed interest options in the
appendices to this prospectus. There is also a separate prospectus for the
Guaranteed Accumulation Account.

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

* Transfers or deposits are not allowed into the subaccount investing in this
fund, except from accounts established under the contract before May 1,
1998. As soon as all those who have current allocations to the subaccount
under the contract have redirected their allocations to other investment
options, we will close the subaccount to all investments.
<PAGE>

Prospectus - May 3, 1999 (continued)
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Getting Additional Information. You may obtain the May 3, 1999, Statement of
Additional Information (SAI) by indicating your request on your enrollment
materials or calling the Aetna Processing Office at 1-800-677-4636. You may
also obtain an SAI for any of the funds by calling that number. This
prospectus, the SAI and other information about the separate account are posted
on the Securities and Exchange Commission (SEC) web site, http://www.sec.gov
and may also be obtained, free of charge, by contacting the SEC Public
Reference Room at 202-942-8090. The SAI table of contents is listed on page 34
of this prospectus. The SAI is incorporated into this prospectus by reference.

Additional Disclosure Information. Neither the SEC, nor any state securities
commission, has approved or disapproved the securities offered through this
prospectus or passed on the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense. This prospectus is valid
only when accompanied by current prospectuses of the funds and the Guaranteed
Accumulation Account. We do not intend for this prospectus to be an offer to
sell or a solicitation of an offer to buy these securities in any state that
does not permit their sale. We have not authorized anyone to provide you with
information that is different than that contained in this prospectus.

<PAGE>

TABLE OF CONTENTS

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<TABLE>
<S> <C>
Contract Overview ........................................................... 4
Who's Who
The Contract and Your Retirement Plan
Contract Rights
Contract Facts
Contract Phases: Accumulation Phase, Income Phase
Questions: Contacting the Company (sidebar)
Sending Requests in Good Order (sidebar)
</TABLE>
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<TABLE>
<S> <C>
Fee Table ................................................................... 6
Condensed Financial Information ............................................. 10
Investment Options .......................................................... 10
Transfers ................................................................... 11
Contract Purchase or Participation .......................................... 12
Contract Ownership and Rights ............................................... 13
Right to Cancel ............................................................. 13
Fees ........................................................................ 14
Your Account Value .......................................................... 15
Withdrawals ................................................................. 18
Systematic Distribution Options ............................................. 19
Death Benefit ............................................................... 20
The Income Phase ............................................................ 21
Taxation .................................................................... 25
Other Topics ................................................................ 29
</TABLE>

The Company -- Variable Annuity Account C -- Performance Reporting -- Voting
Rights -- Contract Distribution -- Contract Modification -- Legal Matters and
Proceedings -- Payment Delay or Suspension -- Year 2000 Readiness

<TABLE>
<S> <C>
Contents of the Statement of Additional Information ......................... 34
Appendix I -- Guaranteed Accumulation Account ............................... 35
Appendix II -- Fixed Plus Account ........................................... 37
Appendix III -- Fund Descriptions ........................................... 39
Appendix IV -- Condensed Financial Information .............................. 42
</TABLE>

3
<PAGE>

[START SIDEBAR]

Questions: Contacting the Company. To answer your questions, contact your local
representative or write or call the Company through:

Aetna Processing Office
P.O. Box 12894
Albany, New York 12212-2894
(1-800-677-4636)

Sending Forms and Written Requests in Good Order.
If you are writing to change your beneficiary, request a withdrawal, or for any
other purpose, contact your local representative or the Company through the
Aetna Processing Office to learn what information is required in order for the
request to be in "good order." We can only act upon written requests that are
received in good order.

[END SIDEBAR]

Contract Overview

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The following is a summary. Please read each section of this prospectus for
additional information.

Who's Who

You (the participant): The individual participating in a retirement plan, where
the plan uses the contracts as funding options.

Plan Sponsor: The sponsor of your retirement plan. Generally, your employer.

Contract Holder: The person or entity to whom we issue the contracts. The
contract holder is the trustee of a multiple employer trust approved by the
Company to apply for and own the contracts as authorized by SUNY.

We (the Company): Aetna Life Insurance and Annuity Company. We issue the
contract.

The Contract and Your Retirement Plan

Retirement plan (plan). A plan sponsor has established a retirement plan for
you. The contracts are offered as funding options for that plan. We are not a
party to the plan, so the terms and the conditions of the contracts and the
plan may differ.

Plan Type. We refer to plans in this prospectus as 403(b), 401(a) and 414(h)
plans. For a description, see "Taxation."

Contract Rights

Under each contract, we establish an employee account and an employer account
for you. You have a nonforfeitable right to the value of your employee account
and employer account, as determined by the plan administrator in accordance
with the terms of the plan. You may exercise certain rights under the contract
as permitted by the plan. See "Contract Ownership and Rights."

Contract Facts

Free look/Right to Cancel. Participants may cancel their purchase no later than
10 days after they receive the document evidencing their participation in the
contract. See "Right To Cancel."

Death Benefit. A beneficiary may receive a benefit in the event of your death
prior to the income phase. Death benefits during the income phase depend on the
payment option selected. See "Death Benefit" and "The Income Phase."

Withdrawals. During the accumulation phase, you may, subject to the limits in
the contract and certification from the plan administrator that you are
eligible, withdraw all or a part of your account value. Certain fees and taxes
may apply. See "Withdrawals" and "Taxation."

Systematic Distribution Options. Subject to state regulatory approval and to
the terms of the plan, you may elect to receive regular payments from your
account, while retaining the account in the accumulation phase. See "Systematic
Distribution Options."

Fees. Certain fees are deducted from your account value. See "Fee Table" and
"Fees."

Taxation. The Tax Code has certain rules that apply to amounts accumulated and
distributed under the contract. Tax penalties may apply if rules are not
followed. See "Taxation."

4
<PAGE>

Contract Phases

I. The Accumulation Phase. (accumulating retirement benefits)

<TABLE>
<S> <C>
+--------------+
STEP 1: You or the contract | Payments to |
holder provide Aetna Life | Your Account |
Insurance and Annuity +--------------+
Company with your completed Step 1 [arrow down]
enrollment materials. The +------------------------------------------+
contract holder directs | Aetna Life Insurance and Annuity Company |
us to set up an employee account +------------------------------------------+
and employer account under each a. [arrow down] Step 2 b. [arrow down]
contract. +--------+ +----------------------------+
| Fixed | | Variable Annuity |
STEP 2: You direct us to invest |Interest| | Account C |
your account dollars in any of |Options | | |
the: | | | Variable Investment Options|
a) Fixed Interest Options +--------+ +----------------------------+
b) Variable Investment | The Subaccounts |
Options. (The variable +--------+---------+---------+
investment options are the | A | B | Etc. |
subaccounts of Variable +--------+---------+---------+
Annuity Account C. Each one [arrow down] Step 2(b)[arrow down]
invests in a specific +--------+---------+
mutual fund.) | Mutual | Mutual |
| Fund A | Fund B |
STEP 2(b), continued: +--------+---------+
The subaccount(s) selected
purchases shares of its
corresponding fund.

</TABLE>

II. The Income Phase. The contract offers several payment options, if you wish
to elect one (see "The Income Phase.") In general, you may:

>Receive payments over a lifetime or for a specified period

>Receive payments monthly, quarterly, semi-annually or annually

>Select an option that provides a death benefit to beneficiaries

>Select fixed payments or payments that vary based on the performance of the
variable investment options you select.

5
<PAGE>

In This Section:

[START SIDEBAR]

>Fees Deducted from the Subaccounts

>Fund Fees

>Examples of Fee Deductions

Also see the "Fees" section for:

>How, When and Why Fees are Deducted

>Premium and Other Taxes

See "The Income Phase" for:

> Fees During the Income Phase

[END SIDEBAR]

Fee Table
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The tables and examples in this section show the fees your account may incur
while accumulating dollars under the contract (the Accumulation Phase). See "The
Income Phase" for fees that may apply after you begin receiving payments under
the contract. The fees shown below do not include premium taxes that may be
applicable.

Fees Deducted from the Subaccounts

(Daily deductions equal to the given percentage on an annual basis)

Mortality and Expense Risk Charge......................................1.25%

Administrative Expense Charge..........................................0.00%(1)
----
Total Separate Account Expenses........................................1.25%
====

(1) We do not currently impose an administrative expense charge. However, we
reserve the right to deduct a daily charge of not more than 0.25% on an
annual basis from the subaccounts.

6
<PAGE>

Fees Deducted by the Funds

Using this Information. The following table shows the investment advisory fees
and other expenses charged annually by each fund. Fund fees are one factor that
impacts the value of a fund share. To learn about additional factors, refer to
the fund prospectus.

How Fees are Deducted. Fund fees are not deducted from account values. Instead,
fees are deducted from the value of fund shares on a daily basis, which in turn
will affect the value of each subaccount on a daily basis. Except as noted
below, the following figures are a percentage of the average net assets of each
fund, and are based on figures for the year ended December 31, 1998.

Fund Expense Table

<TABLE>
<CAPTION>
Total Fund Net Fund
Annual Annual
Expenses Expenses
Investment Without Total After
Advisory Other Waivers or Waivers and Waivers or
Fund Name Fees(1) Expenses Reductions Reductions Reductions
--------- ------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>

Aetna Ascent VP(2)(3) 0.60% 0.15% 0.75% 0.00% 0.75%
Aetna Balanced VP, Inc.(3) 0.50% 0.09% 0.59% -- 0.59%
Aetna Bond VP(3) 0.40% 0.10% 0.50% -- 0.50%
Aetna Crossroads VP(2)(3) 0.60% 0.15% 0.75% 0.00% 0.75%
Aetna Growth and Income VP(3) 0.50% 0.08% 0.58% -- 0.58%
Aetna Index Plus Bond VP(2)(3) 0.30% 0.26% 0.56% 0.11% 0.45%
Aetna Index Plus Large Cap VP(2)(3) 0.35% 0.10% 0.45% 0.00% 0.45%
Aetna Index Plus Mid Cap VP(2)(3) 0.40% 0.51% 0.91% 0.31% 0.60%
Aetna Index Plus Small Cap VP(2)(3) 0.40% 0.61% 1.01% 0.41% 0.60%
Aetna Legacy VP(2)(3) 0.60% 0.16% 0.76% 0.00% 0.76%
Aetna Money Market VP(3) 0.25% 0.09% 0.34% -- 0.34%
Aetna Value Opportunity VP(2)(3) 0.60% 0.14% 0.74% 0.00% 0.74%
Calvert Social Balanced Portfolio(4) 0.70% 0.18% 0.88% 0.02% 0.86%
Fidelity VIP Equity-Income Portfolio(5) 0.49% 0.09% 0.58% 0.01% 0.57%
Fidelity VIP High Income Portfolio(5) 0.58% 0.12% 0.70% 0.00% 0.70%
Fidelity VIP II Asset Manager Portfolio(5) 0.54% 0.10% 0.64% 0.01% 0.63%
Fidelity VIP II Contrafund Portfolio(5) 0.59% 0.11% 0.70% 0.04% 0.66%
Fidelity VIP II Index 500 Portfolio(5) 0.24% 0.11% 0.35% 0.07% 0.28%
Janus Aspen Aggressive Growth Portfolio(6) 0.72% 0.03% 0.75% 0.00% 0.75%
Janus Aspen Growth Portfolio(6) 0.72% 0.03% 0.75% 0.07% 0.68%
Janus Aspen Worldwide Growth Portfolio(6) 0.67% 0.07% 0.74% 0.02% 0.72%
Lexington Emerging Markets Fund, Inc.(7) 0.85% 1.23% 2.08% 0.00% 2.50%
Lexington Natural Resources Trust(7) 1.00% 0.29% 1.29% 0.00% 2.50%
MFS Total Return Series(8) 0.75% 0.16% 0.91% 0.00% 0.91%
Oppenheimer Global Securities Fund/VA(9) 0.68% 0.06% 0.74% -- 0.74%
Oppenheimer Strategic Bond Fund/VA(9) 0.74% 0.06% 0.80% -- 0.80%
Portfolio Partners MFS Emerging Equities
Portfolio(10) 0.68% 0.13% 0.81% 0.00% 0.83%
Portfolio Partners MFS Research Growth Portfolio(10) 0.70% 0.15% 0.85% -- 0.85%
Portfolio Partners MFS Value Equity Portfolio(10) 0.65% 0.25% 0.90% -- 0.90%
Portfolio Partners Scudder International Growth
Portfolio(10) 0.80% 0.20% 1.00% -- 1.00%
Portfolio Partners T. Rowe Price Growth Equity
Portfolio(10) 0.60% 0.15% 0.75% -- 0.75%
</TABLE>

7
<PAGE>

Footnotes to the "Fund Expense Table"

(1) Certain of the 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 generally
paid out of the management fees and are not charged to investors.

(2) The investment adviser is contractually obligated through December 31,
1999 to waive all or a portion of its investment advisory fee and/or its
administrative services fee and/or to reimburse a portion of other
expenses in order to ensure that the portfolio's Total Fund Annual
Expenses do not exceed the percentage reflected under Net Fund Annual
Expenses After Waivers or Reductions.

(3) Prior to May 1, 1998, the portfolio's investment adviser provided
administrative services to the portfolio and assumed the portfolio's
ordinary recurring direct costs under an administrative services
agreement. After that date, the portfolio's investment adviser provided
administrative services but no longer assumed all of the portfolio's
ordinary recurring direct costs under an administrative services
agreement. The administrative fee is 0.075% on the first $5 billion in
assets and 0.050% on all assets over $5 billion. The "Other Expenses"
shown are not based on actual figures for the year ended December 31,
1998, but reflect the fee payable under the new administrative services
agreement and estimates the portfolio's ordinary recurring direct costs.

(4) The figures above are based on expenses for fiscal year 1998, and have
been restated to reflect the elimination of a performance adjustment. The
restatement includes the addition of 0.01% to the portfolio management
fee. Other Expenses reflect an indirect fee of 0.02% relating to an
expense offset arrangement with the portfolio's custodian. Amounts shown
under Total Waivers and Reductions reflect a voluntary reduction of fees
paid indirectly.

(5) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds, or the investment
adviser on behalf of certain funds, have entered into arrangements with
their custodian whereby credits realized as a result of uninvested cash
balances were used to reduce custodian expenses. These credits are
included under Total Waivers and Reductions.

(6) All expenses are stated both with and without contractual waivers and fee
reductions by Janus Capital. Fee reductions for the Aggressive Growth,
Growth and Worldwide Growth Portfolios reduce the Management fee to the
level of the corresponding Janus retail fund. Other waivers, if
applicable, are first applied against the Management Fee and then against
Other Expenses. Janus Capital has agreed to continue the other waivers
and fee reduction until at least the next annual renewal of the advisory
agreement.

(7) For 1998, the fund's investment adviser voluntarily agreed to limit the
total expenses of the fund (excluding interest, taxes, brokerage
commissions, and extraordinary expense, but including management fees and
operating expenses) to an annual rate of 2.50% of the fund's average
daily net assets. This voluntary agreement will remain in effect through
December 31, 1999.

(8) Each series has an expense offset arrangement which reduces the series'
custodian fee based upon the amount of cash maintained by the series with
its custodian and dividend disbursing agent. Each series may enter into
other such arrangements and directed brokerage arrangements, which would
also have the effect of reducing the series' expenses. Expenses do not
take into account these expense reductions, and are therefore higher than
the actual expenses of the series.

(9) Fee waiver/expense reimbursement obligations do not apply to these
portfolios.

(10) The investment adviser has agreed to reimburse the portfolios for
expenses and/or waive its fees, so that, through at least April 30, 2000,
the aggregate of each portfolio's expenses will not exceed the combined
investment advisory fees and other expenses shown under the Net Fund
Annual Expenses After Waivers or Reductions column above. For the
Portfolio Partners MFS Emerging Equities Portfolio, the Total Fund Annual
Expenses Without Waivers or Reductions for 1998 were less than the
percentage reflected under the Net Fund Annual Expenses After Waivers or
Reductions column. Nevertheless, the investment adviser will waive fees
and/or reimburse expenses if that portfolio's Total Fund Annual Expenses
Without Waivers or Reductions for 1999 exceed the percentage reflected
under the Net Fund Annual Expenses After Waivers or Reductions column.

8
<PAGE>

Hypothetical Examples

Account Fees Incurred Over Time. The following hypothetical examples show the
fees paid over time if $1,000 is invested in a subaccount, assuming a 5% annual
return on the investment. For the purpose of these examples, we deducted a
mortality and expense risk charge of 1.25% annually. The total fund expenses
are those shown in the column "Total Annual Expenses Without Waivers or
Reductions" in the Fund Expense Table.

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

> These examples are purely hypothetical

> They should not be considered a
representation of past or future expenses
or expected returns

> Actual expenses and/or returns may be
more or less than those shown in these
examples

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

<TABLE>
<CAPTION>
Whether or not you withdraw or if you select an income
phase payment option at the end of the periods shown, you
would pay the following fees:

1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Aetna Ascent VP $20 $ 63 $108 $233
Aetna Balanced VP, Inc. $19 $ 58 $100 $216
Aetna Bond VP $18 $ 55 $ 95 $206
Aetna Crossroads VP $20 $ 63 $108 $233
Aetna Growth and Income VP $19 $ 58 $ 99 $215
Aetna Index Plus Bond VP $18 $ 57 $ 98 $213
Aetna Index Plus Large Cap VP $17 $ 54 $ 92 $201
Aetna Index Plus Mid Cap VP $22 $ 68 $116 $249
Aetna Index Plus Small Cap VP $23 $ 71 $121 $260
Aetna Legacy VP $20 $ 63 $108 $234
Aetna Money Market VP $16 $ 50 $ 87 $189
Aetna Value Opportunity VP $20 $ 62 $107 $232
Calvert Social Balanced Portfolio $22 $ 67 $114 $246
Fidelity VIP Equity-Income Portfolio $19 $ 58 $ 99 $215
Fidelity VIP High Income Portfolio $20 $ 61 $105 $227
Fidelity VIP II Asset Manager Portfolio $19 $ 59 $102 $221
Fidelity VIP II Contrafund Portfolio $20 $ 61 $105 $227
Fidelity VIP II Index 500 Portfolio $16 $ 51 $ 87 $190
Janus Aspen Aggressive Growth Portfolio $20 $ 63 $108 $233
Janus Aspen Growth Portfolio $20 $ 63 $108 $233
Janus Aspen Worldwide Growth Portfolio $20 $ 62 $107 $232
Lexington Emerging Markets Fund, Inc. $34 $102 $174 $362
Lexington Natural Resources Trust $26 $ 79 $135 $288
MFS Total Return Series $22 $ 68 $116 $249
Oppenheimer Global Securities Fund/VA $20 $ 62 $107 $232
Oppenheimer Strategic Bond Fund/VA $21 $ 64 $110 $238
Portfolio Partners MFS Emerging Equities Portfolio $21 $ 65 $111 $239
Portfolio Partners MFS Research Growth Portfolio $21 $ 66 $113 $243
Portfolio Partners MFS Value Equity Portfolio $22 $ 67 $115 $248
Portfolio Partners Scudder International Growth
Portfolio $23 $ 70 $120 $258
Portfolio Partners T. Rowe Price Growth Equity
Portfolio $20 $ 63 $108 $233
</TABLE>

9
<PAGE>

Condensed Financial Information
- --------------------------------------------------------------------------------

Understanding Condensed Financial Information. In Appendix IV, we provide
condensed financial information about the Variable Annuity Account C (the
separate account) subaccounts available under the contracts. The tables show
the value of the subaccounts over the past 10 years. For subaccounts that were
not available 10 years ago, we give a history from the date of first
availability.

Investment Options
- --------------------------------------------------------------------------------

The contract offers variable investment options and fixed interest options.
When we establish your account(s), you instruct us to direct account dollars to
any of the available options.

Variable Investment Options. These options are called subaccounts. The
subaccounts are within Variable Annuity Account C (the separate account), a
separate account of the Company. Earnings on amounts invested in a subaccount
will vary depending on the performance and fees of its underlying fund. You do
not invest directly in or hold shares of the funds.

>Fund Descriptions. We provide brief descriptions of the funds in Appendix III.
Please refer to the fund prospectuses for additional information. Fund
prospectuses may be obtained free of charge, from the Aetna Processing Office
at the address and phone number listed in "Contract Overview" or by contacting
the SEC's website, or the SEC Public Reference Room.

Fixed Interest Options. For descriptions of the fixed interest options, see
Appendix I and II and the Guaranteed Accumulation Account prospectus.

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

Selecting Investment Options

o Choose options appropriate for you. Your Aetna representative can help you
evaluate which funds or fixed interest options may be appropriate for your
financial goals.

o Understand the risks associated with the options you choose. Some subaccounts
invest in funds that are considered riskier than others. Funds with
additional risks are expected to have a value that rises and falls more
rapidly and to a greater degree than other funds. For example, funds
investing in foreign or international securities are subject to additional
risks not associated with domestic investments, and their performance may
vary accordingly. Also, funds using derivatives in their investment strategy
may be subject to additional risks.

o Be informed. Read this prospectus, the fund prospectus, fixed interest option
appendices and the Guaranteed Accumulation Account prospectus.

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

Limits on Option Availability. Some funds and fixed interest options may not be
available through certain contracts or plans. We may add, withdraw or
substitute funds, subject to the conditions in the contract and regulatory
requirements.

Limits on Number of Options Selected. No more than 18 investment options may be
selected for your account at any one time during the accumulation phase of your
account. Each subaccount, the Fixed Plus Account and each classification of the
Guaranteed Accumulation Account selected counts toward these limits.

10
<PAGE>

Limits Imposed by the Underlying Fund. Orders for the purchase of fund shares
may be subject to acceptance by the fund. We reserve the right to reject,
without prior notice, any allocation of payments to a subaccount if the
subaccount's investment in the corresponding fund is not accepted by the fund
for any reason.

Additional Risks of Investing in the Funds. (Mixed and Shared Funding)

"Shared funding" occurs when shares of a fund, which the subaccounts buy for
variable annuity contracts, are also bought by other insurance companies for
their variable annuity contracts.

"Mixed funding" occurs when shares of a fund, which the subaccounts buy for
variable annuity contracts, is bought for variable life insurance contracts
issued by us or other insurance companies.

>Shared--bought by more than one company

>Mixed--bought for annuities and life insurance

It is possible that a conflict of interest may arise due to mixed and/or shared
funding, that could adversely impact the fund. For example, if a conflict of
interest occurred and one of the subaccounts withdrew its investment in a fund,
the fund may be forced to sell its securities at disadvantageous prices,
causing its share values to decrease. Each fund's board of directors or
trustees will monitor events to identify any conflicts which might arise and to
determine what action, if any, should be taken to address such conflicts.

Transfers
- --------------------------------------------------------------------------------

Transfers Among Investment Options. During the accumulation phase, you may
transfer among investment options. You may make a request in writing, by
telephone or, where applicable, electronically. Transfers must be made in
accordance with the terms of the contract and your plan. Transfers from fixed
interest options are restricted as outlined in Appendices I and II. You may not
make transfers once you enter the income phase.

Value of Transferred Dollars. The value of amounts transferred in or out of the
funds will be based on the subaccount unit values next determined after we
receive your request in good order at the Aetna Processing Office. (See
"Contract Overview -- Questions.")

Telephone Transfers: Security Measures. To prevent fraudulent use of telephone
transactions, we have established security procedures. These include recording
calls on our toll-free telephone lines and requiring use of a personal
identification number (PIN) to execute transactions. You are responsible for
keeping your PIN and account information confidential. If we fail to follow
reasonable security procedures, we may be liable for losses due to unauthorized
or fraudulent telephone transactions. We are not liable for losses resulting
from telephone instructions we believe to be genuine. If a loss occurs when we
rely on such instructions, you will bear the loss.

Limits on Frequent Transfers. The contracts are not designed to serve as
vehicles for frequent trading in response to short-term fluctuations in the
market. Such frequent trading can disrupt management of a fund and raise its

11
<PAGE>

expenses. This in turn can have an adverse effect on fund performance.
Accordingly, organizations or individuals that use market-timing investment
strategies and make frequent transfers should not purchase the contracts.

We reserve the right to restrict, in our sole discretion and without prior
notice, transfers initiated by a market-timing organization or individual or
other party authorized to give transfer instructions on behalf of multiple
contract holders or participants. Such restrictions could include: (1) not
accepting transfer instructions from an agent acting on behalf of more than one
contract holder or participant; and (2) not accepting preauthorized transfer
forms from market timers or other entities acting on behalf of more than one
contract holder or participant at a time.

We further reserve the right to impose, without prior notice, restrictions on
any transfers that we determine, in our sole discretion, will disadvantage or
potentially hurt the rights or interests of other contract holders or
participants.

Contract Purchase or Participation
- --------------------------------------------------------------------------------

Contracts Available for Purchase. The contracts available for purchase are
group flexible premium deferred variable annuity contracts that the Company
offers in connection with retirement plans under Code Section 403(b), 401(a)
and 414(h). They are designed to fund the State University of New York (SUNY)
defined contribution retirement plan, (the SUNY Plan) and to accept transfers of
amounts made to the predecessor program which is qualified under Section 403(b)
of the Code.

There are two group deferred variable annuity contracts:

1) The rollover contracts, for transferred assets from the predecessor Section
403(b) optional retirement program; and

2) The modal contracts for ongoing contributions and transferred assets from
the SUNY Plan, a plan qualified under sections 401(a) and 414(h) of the
Code.

Purchasing the Contract. The contract holder submits the required forms and
application to the Company. We approve the forms and issue a contract to the
contract holder.

Participating in the Contract. To participate in the contract, complete an
enrollment form and submit it to the Aetna Processing Office. (See "Contract
Overview -- Questions.") If your enrollment is accepted, we establish an
employee account and an employer account for each participant.

>Under the rollover contract, we will allocate payments attributable to
transfers of after-tax employee contributions made to a predecessor 403(b)
plan to the employee account, and payments attributable to a transfer of
employer contributions made under the same plan to the employer account.

>Under the modal contract, we will allocate funds attributable to Code section
414(h) contributions from another investment provider under the SUNY Plan to an
employee account, and ongoing payments under Code section 401(a) and
transferred funds attributable to Code section 401(a) contributions from
another investment provider to an employer account.

12
<PAGE>

Acceptance or Rejection of Applications or Enrollment Forms. We must accept or
reject an application or your enrollment materials within two business days of
receipt. If the forms are incomplete, we may hold any forms and accompanying
payments for five days, unless you consent to our holding them longer. Under
limited circumstances, we may also agree, for a particular plan, to hold
payments for longer periods with the permission of the contract holder. If we
agree to this, we will deposit the payments in the Aetna Money Market VP
subaccount until the forms are completed (for a maximum of 105 days). If we
reject the application or enrollment forms, we will return the forms and any
payments.

Allocation of Payments. You direct us to allocate initial contributions to the
investment options available under the plan. Generally you will specify this
information on your enrollment materials. After your enrollment, changes to
allocations for future payments or transfer of existing balances among
investment options may be requested in writing and, where available, by
telephone or electronically.

Allocations must be in whole percentages and there may be limitations on the
number of investment options that can be selected at any one time. (See
"Investment Options" and "Transfers.")

Contract Ownership and Rights
- --------------------------------------------------------------------------------

Who owns the Contract? We issue the contract to a trustee of a multiple
employer trust that has applied for and owns the contract as authorized by SUNY
and the Company.

Who Owns Money Accumulated under the Contract? You have a nonforfeitable value
of your employee account and employer account, as determined by the plan
administrator in accordance with the terms of the plan.

What Rights Do I Have under The Contract? You may select the investment options
to be used for allocations to your employee account and employer account. You
may elect an income phase payment if the plan administrator certifies that you
are eligible for a distribution and that the form of annuity is permitted under
the terms of the plan.

Right to Cancel
- --------------------------------------------------------------------------------

When and How to Cancel. You may cancel your purchase within ten days after
receiving the document evidencing your interest by returning it to the Aetna
Processing Office along with a written notice of cancellation.

Refunds. We will produce a refund to you not later than seven days after we
receive the document evidencing your interest and the written notice of
cancellation at the Aetna Processing Office. The refund will equal the dollars
contributed to your accounts plus any earnings or less any losses attributable
to those contributions allocated to the variable investment options.

13
<PAGE>

[START SIDEBAR]

Types of Fees

There are two types of fees your account may incur:

>Fees Deducted from the Subaccounts

o Mortality and Expense
Risk Charge

o Administrative Expense
Charge

>Fees Deducted by the Funds

o Investment Advisory Fees

o Other Expenses

[END SIDEBAR]

Fees
- --------------------------------------------------------------------------------

The following repeats and adds to information provided in the "Fee Table"
section. Please review both this section and the Fee Table for information
on fees.

Fees Deducted from the Subaccounts

Mortality and Expense Risk Charge

Amount. 1.25% annually of your account value invested in the subaccounts.

When/How. This fee is deducted daily from the subaccounts. We do not deduct
this from any fixed interest option.

Purpose. The fee compensates us for the mortality and expense risks we assume
under the contracts.

>The mortality risks are those risks associated with our promise to make
lifetime payments based on annuity rates specified in the contracts and our
funding of the death benefit and other payments we make to owners or
beneficiaries of the accounts

>The expense risk is the risk that the actual expenses we incur under the
contracts will exceed the maximum costs that we can charge

If the amount we deduct for this fee is not enough to cover our mortality costs
and expenses under the contracts, we will bear the loss. We may use any excess
to recover distribution costs relating to the contract and as a source of
profit. We expect to make a profit from this fee.

Administrative Expense Charge

Maximum Amount. 0.25% We currently do not impose this fee. We reserve the
right, however, to charge up to 0.25% on an annual basis from your account
value invested in the funds.

When/How. If imposed, we will deduct this fee daily from your account value
held in the subaccounts corresponding to the funds you select. This fee may be
assessed during the accumulation phase and/or the income phase. If we are
imposing this fee under the contract when you enter the income phase, the fee
will apply to you during the entire income phase.

Purpose. This fee helps defray our administrative expenses that cannot be
covered by the mortality and expense risk charge described above. The fee is
not intended to exceed the average expected cost of administering the
contracts. We do not expect to make a profit from this fee.

Fund Expenses

Amount. Each fund determines its own advisory fee and expenses. For a list of
fund fees see "Fee Table." The fees are described in more detail in each fund
prospectus.

When/How. Fund fees are not deducted from your account. Fund advisory fees and
expenses are reflected in the daily value of the fund shares, which will in
turn affect the daily value of each subaccount.

Purpose. These amounts help to pay the funds' investment advisor and operating
expenses.

14
<PAGE>

Premium and Other Taxes. Currently, there is no premium tax on annuities under
New York regulations. If the state does impose a premium tax, it would be
deducted from the amount applied to an income option. We reserve the right to
deduct a state premium tax at any time from the purchase payments(s) or from
the account value at any time, but no earlier than when we have a tax liability
under state law.

In addition, the Company reserves the right to assess a charge for any federal
taxes due against the separate account. (See "Taxation.")

Your Account Value
- --------------------------------------------------------------------------------

During the accumulation phase, your account value at any given time equals:

>Account dollars directed to the fixed interest options, including interest
earnings to date

>Less any deductions from the fixed interest options (e.g. withdrawals, fees)

>Plus the current dollar value of amounts invested in the subaccounts.

Subaccount Accumulation Units. When a fund is selected as an investment option,
your account dollars invest in "accumulation units" of the Variable Annuity
Account C subaccount corresponding to that fund. The subaccount invests
directly in the fund shares. The value of your interests in a subaccount is
expressed as the number of accumulation units you hold multiplied by an
"Accumulation Unit Value," as described below, for each unit.

Accumulation Unit Value (AUV). The value of each accumulation unit in a
subaccount is called the accumulation unit value or AUV. The value of
accumulation units vary daily in relation to the underlying fund's investment
performance. The value also reflects deductions for fund fees and expenses, the
mortality and expense risk charge, and the administrative charge (if any). We
discuss these deductions in more detail in "Fee Table" and "Fees."

Valuation. We determine the AUV every business day after the close of the New
York Stock Exchange. At that time, we calculate the current AUV by multiplying
the AUV last calculated by the "net investment factor" of the subaccount. The
net investment factor measures the investment performance of the subaccount
from one valuation to the next.

Current AUV = Prior AUV x Net Investment Factor

Net Investment Factor. The net investment factor for a subaccount between two
consecutive valuations, equals the sum of 1.0000 plus the net investment rate.

Net Investment Rate. The net investment rate is computed according to a formula
that is equivalent to the following:

>The net assets of the fund held by the subaccount as of the current valuation,
minus;

>The net assets of the fund held by the subaccount at the preceding valuation,
plus or minus;

>Taxes or provisions for taxes, if any, due to subaccount operations (with any
federal income tax liability offset by foreign tax credits to the extent
allowed);

15
<PAGE>

>Divided by the total value of the subaccount units at the preceding valuation;

>Less a daily deduction for the mortality and expense risk charge and the
administrative expense charge (if any). See "Fees."

The net investment rate may be either positive or negative.

16
<PAGE>

Hypothetical Illustration. As a hypothetical illustration, assume that an
investor contributes $5,000 to his account and directs us to invest $3,000 in
Fund A and $2,000 in Fund B. After receiving the contribution and following the
next close of business of the New York Stock Exchange, the applicable AUV's are
$10 for Subaccount A, and $25 for Subaccount B. The investor's account is
credited with 300 accumulation units of Subaccount A and 80 accumulation units
of Subaccount B.

The fund's subsequent investment performance, expenses and charges, and the
daily charges deducted from the subaccount, will cause the AUV to move up or
down on a daily basis.

Payments to Your Account. If all or a portion of initial payments are directed
to the subaccounts, they will purchase subaccount accumulation units at the AUV
next computed after our acceptance of the applicable application or enrollment
forms. Subsequent payments or transfers directed to the subaccounts that we
receive by the close of business of the New York Stock Exchange (Exchange) will
purchase subaccount accumulation units at the AUV computed after the close of
the Exchange on that day. The value of subaccounts may vary day to day.

17
<PAGE>

[START SIDEBAR]

Taxes, Fees and Deductions

Amounts withdrawn may be subject to one or more of the following:

>Market Value Adjustment (see Appendix I)

>Tax Penalty (see "Taxation")

>Tax Withholding (see "Taxation")

To determine which may apply, refer to the appropriate sections of this
prospectus, contact your Aetna representative or call the Aetna Processing
Office at the number listed in "Contract Overview--Questions."

[END SIDEBAR]

Withdrawals
- --------------------------------------------------------------------------------

Making a Withdrawal. Subject to limitations on withdrawals from the Fixed Plus
Account, you may withdraw all or a portion of your account value at any time
during the accumulation phase. Your plan administrator must certify that you are
eligible, both as to the timing and form of distribution.

Steps for Making A Withdrawal. You must:

>Select the Withdrawal Amount

1) Full Withdrawal: You will receive, reduced by any required withholding tax,
your account value allocated to the subaccounts, the Guaranteed
Accumulation Account (plus or minus any applicable market value adjustment)
plus the amount available for withdrawal from the Fixed Plus Account.

2) Partial Withdrawal (Percentage or Specified Dollar Amount): You will
receive, reduced by any required withholding tax, the amount you specify,
subject to the value available in your account. The amounts available from
the Fixed Plus Account may be limited.

For a description of limitations on withdrawals from the Fixed Plus
Account, see Appendix II.

>Select Investment Options. If this is not specified, we will withdraw dollars
proportionally from each investment option in which you have an account value.

>Properly complete a disbursement form and submit it to the Aetna Processing
Office.

Calculation of Your Withdrawal. We determine your account value every normal
business day after the close of the New York Stock Exchange. We pay withdrawal
amounts based on your account value either: (1) As of the next valuation after
we receive a request for withdrawal in good order at the Aetna Processing
Office, or (2) On such later date as specified on the disbursement form.

Delivery of Payment. Payments for withdrawal requests will be made in
accordance with SEC requirements. Normally, the payment will be sent not later
than seven calendar days following our receipt of the disbursement form in good
order.

Reinvestment Privilege. The contracts allow one-time use of a reinvestment
privilege. Within 30 days after a full withdrawal, if allowed by law and the
contract, you may elect to reinvest all or a portion of the proceeds. We must
receive reinvested amounts within 60 days of the withdrawal. We will credit the
account for the amount reinvested based on the subaccount values next computed
following our receipt of your request and the amount to be reinvested. We will
credit the amount reinvested proportionally for early withdrawal charges
imposed at the time of withdrawal. We will reinvest in the same investment
options and proportions in place at the time of withdrawal. Special rules apply
to reinvestments of amounts withdrawn from the Guaranteed Accumulation Account
(see Appendix I). Seek competent advice regarding the tax consequences
associated with reinvestment.

18
<PAGE>

[START SIDEBAR]

Features of a Systematic Distribution Option (SDO)

An SDO allows you to receive regular payments from your account, without moving
into the income phase. By maintaining your account in the accumulation phase,
certain rights and flexibility are retained and any accumulation phase fees may
apply.

[END SIDEBAR]

Systematic Distribution Options
- --------------------------------------------------------------------------------

Availability of Systematic Distribution Options (SDOs). To exercise one of
these options the account value must meet any minimum dollar amount and age
criteria applicable to that option. In addition, for the employer account and
certain employee accounts, the contract holder must provide written
certification that the distribution is in accordance with the terms of the
plan. The SDO is subject to state regulatory approval. To determine what SDO's
are available, check with the Company at the Aetna Processing Office.

The SDOs currently available under the contract include the following:
>SWO--Systematic Withdrawal Option. SWO is a series of automatic partial
withdrawals from your account based on the payment method selected. It is
designed for those who want a periodic income while retaining investment
flexibility for amounts accumulated under the contract. You may not elect this
option 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 Tax Code requires each year.

Under ECO, we calculate the minimum distribution amount required by law at the
later of age 701/2 or retirement, and pay you that amount once a year.

>Other Systematic Distribution Options. We may add additional SDOs from time to
time. You may obtain additional information relating to any of the SDOs from
your local representative or from the Company at the Aetna Processing Office.

Availability of Systematic Distribution Options. The Company may discontinue
the availability of one or all of the SDOs at any time, and/or change the terms
of future elections.

Terminating a Systematic Distribution Option. Once an SDO is elected, you may
revoke it at any time by submitting a written request to the Aetna Processing
Office. Any revocation will apply only to the amount not yet paid. Once an
option is revoked for an account, it may not be elected again, nor may any
other SDO be elected unless the Tax Code permits it.

Charges and Taxation. When you elect an SDO, your account value remains in the
accumulation phase and subject to the charges and deductions described in the
"Fees" section. Taking a withdrawal through an SDO may have tax consequences.
If you are concerned about tax implications consult a tax advisor before one of
these options is elected.

19
<PAGE>

[START SIDEBAR]

During the Income Phase
This section provides information about the accumulation phase. For death
benefit information applicable to the income phase (see "The Income Phase.")

[END SIDEBAR]

Death Benefit
- --------------------------------------------------------------------------------

The contract provides a death benefit in the event of your death, which is
payble to the beneficiary you name for your account.

During the Accumulation Phase

Payment Process

1. Following your death, your beneficiary must provide the Company with proof
of death acceptable to us and a payment request in good order

2. The payment request should include selection of a benefit payment option

3. Within seven days after we receive proof of death acceptable to us and
payment request in good order at the Aetna Processing Office, we will mail
payment, unless otherwise requested

Until a payment option is selected, account dollars will remain invested as at
the time of your death, and no distribution will be made.

If you die during the accumulation phase of your account, the following payment
options are available to your beneficiary, if allowed by the Tax Code:

>Lump sum payment

>Payment in accordance with any of the available income phase payment options
(see "The Income Phase--Payment Options")

>If the beneficiary is your spouse, payment in accordance with an available SDO
(See "Systematic Distribution Options")

The following options are also available; however, the Tax Code limits how long
the death benefit proceeds may be left in these options:

>Leaving your account value invested in the contract; or

>Under some contracts, leaving your account value on deposit in the Company's
general account, and receiving monthly, quarterly, semi-annual or annual
interest payments at the interest rate then being credited on such deposits.
The beneficiary may withdraw the balance on deposit at any time or request to
receive payment in accordance with any of the available income phase payment
options (See "The Income Phase--Payment Options.")

The Value of the Death Benefit. The death benefit will be based on your account
value as calculated on the next valuation following the date on which we
receive proof of death in good order. Interest, if any, will be paid from the
date of death at a rate no less than required by law. For amounts held in the
Guaranteed Accumulation Account (GAA), any positive aggregate market value
adjustment (the sum of all market value adjustments calculated due to a
withdrawal) will be included in your account value. If a negative aggregate
market value adjustment applies, it would be deducted only if the death benefit
is withdrawn more than six months after your death. We describe the market
value adjustment in Appendix I and in the GAA prospectus.

Tax Code Requirements. The Tax Code requires distribution of death benefit
proceeds within a certain period of time. Failure to begin receiving death
benefit payments within those 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 "Taxation" for additional information.)

20
<PAGE>
[START SIDEBAR]

We may have used the
following terms in prior
prospectuses:

Annuity Phase--Income Phase

Annuity Option--Payment
Option

Annuity Payment--Income
Phase Payment

Annuitization--Initiating
Income Phase Payments

[END SIDEBAR]

The Income Phase
- --------------------------------------------------------------------------------

During the income phase you receive payments from your accumulated account
value.

Initiating Payments. At least 30 days prior to the date you want to start
receiving payments, you must notify us in writing of the following:

>Start date

>Payment option (see the payment options table in this section)

>Payment frequency (i.e., monthly, quarterly, semi-annually or annually)

>Choice of fixed or variable payments

>Selection of an assumed net investment rate (only if variable payments are
elected)

The account will continue in the accumulation phase until you properly initiate
payments. Once a payment option is selected, it may not be changed; however,
certain options allow you to withdraw a lump sum.

What Affects Payment Amounts? Some of the factors that may affect payment
amounts include: your age, your account value, the payment option selected,
number of guaranteed payments (if any) selected, and whether variable or fixed
payments are selected.

Fixed Payments. Amounts funding fixed payments will be held in the Company's
general account. Fixed payment amounts do not vary over time.

Variable Payments. Amounts funding your income payments will be held in the
subaccount(s) selected or a combination of subaccounts and the general account.
The contracts may restrict the subaccounts available during the income phase,
and you may not make transfers once you enter the income phase. For variable
payments, an assumed net investment rate must be selected.

Payments from the Fixed Plus Account. If a nonlifetime payment option is
selected, payments from the Fixed Plus Account may only be made on a fixed
basis.

Assumed Net Investment Rate. If you select a 5% rate, your first payment will
be higher, but subsequent payments will increase only if the investment
performance of the subaccounts selected, is greater than 5% annually, after
deduction of fees. Payment amounts will decline if the investment performance
is less than 5%, after deduction of fees.

If you select a 31/2% rate, your first payment will be lower and subsequent
payments will increase more rapidly or decline more slowly depending on the
investment performance of the subaccounts selected. For more information about
selecting an assumed net investment rate, request a copy of the Statement of
Additional Information by calling the Company. (See "Contract
Overview--Questions.")

Minimum Payment Amounts. The payment option selected must result in one or both
of the following:

>A first payment of at least $20

>Total yearly payments of at least $100

21
<PAGE>

If your account value is too low to meet these minimum payment amounts, you
must elect a lump sum payment.

Charges Deducted. We make a daily deduction for mortality and expense risks
from amounts held in the subaccounts. Therefore, if you choose variable
payments and a nonlifetime payment option, we still make this deduction from
the subaccounts selected, even though we no longer assume any mortality risk
for you. We may also deduct a daily administrative charge from amounts held in
the subaccounts. (See "Fees.")

Death Benefit During the Income Phase. The death benefits that may be available
to a beneficiary are outlined in the payment option table below. If a lump sum
payment is due as a death benefit, we will make payment within seven calendar
days after we receive proof of death acceptable to us and the payment request
in good order at the Aetna Processing Office.

Taxation. To avoid certain tax penalties, you and any beneficiary must meet the
distribution rules imposed by the Tax Code. (See "Taxation.")

22
<PAGE>

Payment Options
The following tables list the payment options and accompanying death benefits
which may be available under the contracts. Some contracts restrict the options
and the terms available. Check with your contract holder for details. We may
offer additional payment options under the contract from time to time.

Terms used in the Tables:

Annuitant: The person(s) on whose life expectancy the income phase payments are
calculated.

Beneficiary: The person designated to receive the death benefit payable under
the contract.

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------

Lifetime Payment Options

- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Length of Payments: For as long as the annuitant lives. It is possible that only one payment will be
Life Income made should the annuitant die prior to the second payment's due date.
Death Benefit--None: All payments end upon the annuitant's death.

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

Length of Payments: For as long as the annuitant lives, with payments guaranteed for a choice of
Life Income-- 5-20 years or as otherwise specified in the contract.
Guaranteed Death Benefit--Payment to the Beneficiary: If the annuitant dies before we have made all the
Payments guaranteed payments, we will pay the beneficiary a lump sum (unless otherwise requested) equal
to the present value of the remaining guaranteed payments.

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

Length of Payments: For as long as either annuitant lives. It is possible that only one payment will
be made should both annuitants die before the second payment's due date.
Continuing Payments:
Life Income-- (a) This option allows a choice of 100%, 662/3% or 50% of the payment to continue to the
Two Lives surviving annuitant after the first death; or
(b) 100% of the payment to continue to the annuitant on the second annuitant's death, and 50%
of the payment to continue to the second annuitant on the annuitant's death.
Death Benefit--None: Payments end after the deaths of both annuitants.

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

Length of Payments: For as long as either annuitant lives, with payments guaranteed for a
minimum of 120 months, or as otherwise specified in the contract.
Life Income-- Continuing Payments: 100% of the payment will continue to the surviving annuitant after the first
Two Lives-- death.
Guaranteed Death Benefit--Payment to the Beneficiary: If both annuitants die before the guaranteed
Payments payments have all been paid, we will pay the beneficiary a lump sum (unless otherwise requested)
equal to the present value of the remaining guaranteed payments.

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Table continued ---->

23
<PAGE>

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------

Nonlifetime Payment Options

- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Length of Payments: Payments generally may be fixed or variable and may be made for 3-30 years.
However, for amounts held in the Fixed Plus Account during the accumulation phase, the
payment must be on a fixed basis and must be for 6-30 years. In certain cases a lump sum
Nonlifetime-- payment may be requested at any time (see below).
Guaranteed Death Benefit--Payment to the Beneficiary: If the annuitant dies before we make all the
Payments guaranteed payments, we will pay the beneficiary a lump sum (unless otherwise requested) equal
to the present value of the remaining guaranteed payments, and we will not impose any early
withdrawal charge.

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

Lump Sum Payment: If the Nonlifetime--Guaranteed Payments option is elected with variable payments, you may
request at any time that all or a portion of the present value of the remaining payments be paid in one sum. Lump sum
payments will be sent within seven calendar days after we receive the request for payment in good order at the Aetna
Processing Office.

Calculation of Lump Sum Payments. If a lump sum payment is available to a beneficiary or to you in the options above,
the rate we use to calculate the present value of the remaining guaranteed payments is the same rate we use to calculate
the income payments (i.e., the actual fixed rate used for fixed payments, or the 3-1/2% or 5% assumed net investment
rate for variable payments).

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

24
<PAGE>

[START SIDEBAR]

In This Section

>Introduction

>The Contract

>Withdrawals and other
Distributions

o Taxation of Distributions

o 10% Penalty Tax

>Withholding for Federal
Income Tax Liability

>Minimum Distribution
Requirements

>Assignment or Transfer of
Contracts

>Exclusion From Gross
Income

>Rules Specific to Certain
Plans

>Restrictions on
Distributions

>Taxation of Gains Prior to
Distribution

>Taxation of the Company

When consulting a tax adviser, be certain that he or she has expertise in the
Tax Code sections applicable to your tax concerns.

[END SIDEBAR]

Taxation
- --------------------------------------------------------------------------------

Introduction.

This section discusses our understanding of current federal income tax laws
affecting the contracts. You should keep the following in mind when reading it:

>Your tax position (or the tax position of the beneficiary, as applicable)
determines federal taxation of amounts held or paid out under the contract.

>Tax laws change. It is possible that a change in the future could affect
contracts issued in the past.

>This section addresses federal income tax rules and does not discuss federal
estate and gift tax implications, state and local taxes or any other tax
provisions.

>We do not make any guarantee about the tax treatment of the contract or
transaction involving the contract.

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

We do not intend this information to be tax advice. For advice about the
effect of federal income taxes or any other taxes on amounts held or paid out
under the contract, consult a tax adviser. For more comprehensive information
contact the Internal Revenue Service.

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

The Contract

The contracts are designed to provide retirement benefits to participants under
the SUNY Plan. Payments made under Tax Code sections 401(a), 414(h) and 403(b)
are permitted under the contracts. SUNY and participants are responsible for
determining that contributions, distributions and other transactions satisfy
applicable laws. Legal counsel and a tax adviser should be consulted regarding
the suitability of the contract. If the contract is purchased in conjunction
with a retirement plan, the plan is not a part of the contract and we are not
bound by the plan's terms or conditions.

Withdrawals and Other Distributions

Certain tax rules apply to distributions from the contracts. A distribution is
any amount taken from the contract including withdrawals, income payments,
rollovers, exchanges and death benefit proceeds. The tax rules vary according
to plan type and the terms and conditions of the plan.

We report the taxable portion of all distributions to the IRS.

Taxation of Distributions

All distributions from a 401(a) or a 403(b) plan are taxed as received unless:

>The distribution is rolled over to another plan of the same type or to a
traditional individual retirement annuity/account (IRA) in accordance with the
Tax Code; or

>You made after-tax contributions to the plan. In this case, depending on the
type of distribution, a portion of the distribution may be excluded from gross
income according to the rules detailed in the Tax Code.

In general, payments received by your beneficiaries after your death are taxed
in the same manner as if you had received those payments.

25
<PAGE>

10% Penalty Tax

Under certain circumstances, the Tax Code may impose a 10% penalty tax on the
taxable portion of any distribution from a contract used with a 401(a) or
403(b) plan.

The 10% penalty tax applies to the taxable portion of a distribution unless one
or more of the following have occurred:

(a) You have attained age 59-1/2,

(b) You have become totally and permanently disabled,

(d) You have separated from service with the plan sponsor at or after age 55,

(e) The distribution is rolled over into another plan of the same type or to an
IRA in accordance with the Tax Code, or

(f) The distribution 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 beneficiary. Also, you must 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 Tax Code.

Withholding for Federal Income Tax Liability

Any distributions under the contracts are generally subject to withholding.
Federal income tax liability rates vary according to the type of distribution
and the recipient's tax status. Generally, distributions from these plans are
subject to a mandatory 20% federal income tax withholding. However, you or a
beneficiary may elect not to have tax withheld from certain distributions.

If you or your beneficiary is a non-resident alien, then any withholding is
governed by Tax Code section 1441 based on the individual's citizenship, the
country of domicile and treaty status.

Minimum Distribution Requirements

To avoid certain tax penalties, you and any beneficiary must meet the minimum
distribution requirements imposed by the Tax Code. These rules may dictate one
or more of the following:

>Start date for distributions

>The time period in which all amounts in your account(s) must be distributed

>Distribution amounts

Start Date. Generally, you must begin receiving distributions by April 1 of the
calendar year following the calendar year in which you attain age 70-1/2 or
retire, whichever occurs later, unless under 403(b) plans, if the Company
maintains separate records of amounts held as of December 31, 1986. In this
case, distribution of these amounts generally must begin by the end of the
calendar year in which you attain age 75 or retire, if later. However, if you
take any distributions in excess of the minimum required amount, then special
rules require that some or all of the December 31, 1986 balance be distributed
earlier.

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<PAGE>

Time Period. We must pay out distributions from the contracts over one of the
following time periods:

>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.

50% Excise Tax. 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.

Minimum Distribution of Death Benefit Proceeds. Different distribution
requirements apply if your death occurs:

>After you begin receiving minimum distributions under the contract, or

>Before you begin receiving such distributions.

If your death occurs after you begin receiving minimum distributions under the
contract, distributions must be made at least as rapidly as under the method in
effect at the time of your death. Tax Code section 401(a)(9) provides specific
rules for calculating the minimum required distributions at your death. The
rules differ, dependent upon:

>Whether your minimum required distribution was calculated each year based on
your single life expectancy or the joint life expectancies of you and your
beneficiary, and

>Whether life expectancy was recalculated.

The rules are complex and any beneficiary should consult with a tax adviser
before electing the method of calculation to satisfy the minimum distribution
requirements.

If your death occurs before you begin receiving minimum distributions under the
contract, your entire balance must be distributed by December 31 of the
calendar year containing the fifth anniversary of the date of your death. For
example, if you die September 1, 1999, your entire balance must be distributed
to the beneficiary by December 31, 2004. However, if the distribution begins by
December 31 of the calendar year following the calendar year of your death,
then payments may be made in either of the following timeframes:

>Over the life of the beneficiary, or

>Over a period not extending beyond the life expectancy of the beneficiary.

Start Dates for Spousal Beneficiaries. If the beneficiary is your spouse, the
distribution must begin on or before the later of the following:

>December 31 of the calendar year following the calendar year of your death.

>December 31 of the calendar year in which you would have attained age 701/2.

Assignment or Transfer of Contracts

Adverse tax consequences to the plan and/or to you may result if your
beneficial interest in the contract is assigned or transferred to persons other
than: a plan participant as a means to provide benefit payments; an alternate
payee under a qualified domestic relations order in accordance with Tax Code
section 414(p); or to the Company as collateral for a loan.

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<PAGE>

Exclusion From Gross Income

The Tax Code imposes a maximum limit on annual payments to your account(s) that
may be excluded from gross income. The employer must calculate this limit under
the plan in accordance with Tax Code section 415. This limit is generally the
lesser of 25% of your compensation or $30,000. Compensation means your
compensation from the employer sponsoring the plan and, for years beginning
after December 31, 1997, includes any elective deferrals under Tax Code section
402(g) and any amounts not includible in gross income under Tax Code sections
125 or 457. The limit applies to your contribution as well as any contributions
made by your employer on your behalf. In addition, payments to your account(s)
will be excluded from your gross income only if the plan meets certain
nondiscrimination requirements.

Under Tax Code section 403(b), contributions made by public school systems or
nonprofit healthcare organizations and other Tax Code 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 gross income, total annual contributions made by
you and your employer to a 403(b) plan cannot exceed the limits set by the Tax
Code.

Rules Specific to Certain Plans

401(a) Plans.

Tax Code section 401(a) permits certain 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.

414(h) Plans.

Under Tax Code section 414(h), where a governmental employer "picks up" plan
contributions otherwise designated as employee contributions, the contributions
are treated as employer contributions. The 414(h) contributions are excluded
from the employee's taxable income and are not subject to federal income tax
withholding.

Restrictions on Distributions

The SUNY Plan permitted only employee after-tax and employer contributions to
the 403(b) plan. The Tax Code imposes no restrictions on distribution of
employee after-tax contributions or employer contributions.

Taxation of Gains Prior to Distribution

Generally no amounts accumulated under the 403(b) 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 Tax Code 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.

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<PAGE>

The Treasury announced that it will issue guidance 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 holder from being
considered the federal tax owner of a pro rata share of the assets of the
separate account.

Taxation of the Company

We are taxed as a life insurance company under the Tax Code. Variable Annuity
Separate Account C is not a separate entity from us. Therefore, it is not taxed
separately as a "regulated investment company", but is taxed as part of the
Company.

We automatically apply investment income and capital gains attributable to the
separate account to increase reserves under the contracts. Because of this,
under existing federal tax law we believe that any such income and gains will
not be taxed to the extent that such income and gains are applied to increase
reserves under the contracts. In addition, any foreign tax credits attributable
to the separate account will be first used to reduce any income taxes imposed
on the separate account before being used by the Company.

In summary, we do not expect that we will incur any federal income tax
liability attributable to the separate account and we do not intend to make any
provision for such taxes. However, changes in federal tax laws and/or their
interpretation may result in our being taxed on income or gains attributable to
the separate account. In this case, we may impose a charge against the separate
account (with respect to some or all of the contracts) to set aside provisions
to pay such taxes. We may deduct this amount from the separate account,
including from your account value invested in the subaccounts.

Other Topics
- --------------------------------------------------------------------------------

The Company

Aetna Life Insurance and Annuity Company (the Company, we) issues the contracts
described in this prospectus and is responsible for providing each contract's
insurance and annuity benefits.

We are a stock life insurance company organized under the insurance laws of the
State of Connecticut in 1976 and an indirect wholly owned subsidiary of Aetna
Inc. Through a merger, our operations include the business of Aetna Variable
Annuity Life Insurance Company (formerly known as Participating Annuity Life
Insurance Company, an Arkansas life insurance company organized in 1954).

We are engaged in the business of issuing life insurance and annuities. Our
principal executive offices are located at:

151 Farmington Avenue
Hartford Connecticut 06156

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<PAGE>

Variable Annuity Account C

We established Variable Annuity Account C (the separate account) in 1976 as a
segregated asset account to fund our variable annuity contracts. The separate
account is registered as a unit investment trust under the Investment Company
Act of 1940 (the "40 Act"). It also meets the definition of "separate account"
under the federal securities laws.

The separate account is divided into "subaccounts." These subaccounts invest
directly in shares of a pre-assigned fund.

Although we hold title to the assets of the separate account, such assets are
not chargeable with the liabilities of any other business that we conduct.
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
obligations of the Company.

Performance Reporting

We may advertise different types of historical performance for the subaccounts
including:

>standardized average annual total returns

>non-standardized average annual total returns

We may also advertise certain ratings, rankings or other information related to
the Company, the subaccounts or the funds. For further details regarding
performance reporting and advertising request a Statement of Additional
Information at the number listed in "Contract Overview--Questions."

Standardized Average Annual Total Returns. We calculate standardized average
annual total returns according to a formula prescribed by the SEC. This shows
the percentage return applicable to $1,000 invested in the subaccount over the
most recent one, five and 10-year periods. If the investment option was not
available for the full period, we give a history from the date money was first
received in that option under the separate account. We include all recurring
charges during each period (e.g., mortality and expense risk charges,
administrative expense charges (if any) and any applicable early withdrawal
charges).

Non-Standardized Average Annual Total Returns. We calculate non-standardized
average annual total returns in a similar manner as that stated above, except
that we may also include performance from the Fund's inception date, if that
date is earlier than the one we use for standardized returns.

Voting Rights

Each of the subaccounts holds shares in a fund and each is entitled to vote at
regular and special meetings of that fund. Under our current view of applicable
law, we will vote the shares for each subaccount as instructed by persons
having a voting interest in the separate account. Under the contracts described
in this prospectus, you have a fully vested interest in the value of your
account. Therefore, under the plan you generally have the right to instruct the
contract holder how to direct us to vote shares attributable to your account.
Currently, we obtain participant voting instructions directly from
participants, subject to receipt of authorization from the contract holder to
accept such instructions. We will vote shares for which instructions have not

30
<PAGE>

been received in the same proportion as those for which we received
instructions. Each person who has a voting interest in the separate account
will receive periodic reports relating to the funds 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 a written communication
at least 14 days before the meeting.

The number of votes (including fractional votes) any person is entitled to
direct will be determined as of the record date set by any fund in which that
person invests through the subaccounts.

>During the accumulation phase the number of votes is equal to the portion of
the account value invested in the fund, divided by the net asset value of one
share of that fund.

>During the income phase, the number of votes is equal to the portion of
reserves set aside for the contract's share of the fund, divided by the net
asset value of one share of that fund.

Contract 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 SEC and
is a member of the National Association of Securities Dealers, Inc.

As principal underwriter, the Company will enter into arrangements with one or
more registered broker-dealers, including at least one affiliate of the
Company, to offer and sell the contracts described in this prospectus. We call
these entities "distributors."

We and one or more of our affiliates may also sell the contracts directly. All
individuals offering and selling the contracts must be registered
representatives of a broker-dealer and must be licensed as insurance agents to
sell variable annuity contracts.

Commission Payments. We may pay commissions to persons who offer and sell the
contracts. The maximum percentage amount we ever pay with respect to a given
purchase payment is the first-year percentage which ranges from 1% to 4% of the
first year of payments to an account. We may also pay renewal commissions on
payments made after the first year and asset-based service fees. The average of
all commissions and asset-based service fees paid is estimated to equal
approximately 3% of the total payments made over the life of an average
contract. Some sales personnel may receive various types of non-cash
compensation as special sales incentives, including trips and educational and/
or business seminars. However, any such compensation will be paid in accordance
with NASD rules.

We may reimburse the distributor for certain expenses. The name of the
distributor and the registered representative responsible for your account are
stated in your enrollment materials. Commissions and sales related expenses are
paid by us and are not deducted from payments to your account.

Third Party Compensation Arrangements. Occasionally, we may:

>Pay commissions and fees to distributors affiliated or associated with the
contract holder, you and/or other contract participants.

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<PAGE>

>Enter into agreements with entities associated with the contract holder, you
and/or other participants. Through such agreements, we may pay the entities
for certain services in connection with administering the contract.

In both these circumstances there may be an understanding that the distributor
or entities would endorse us as a provider of the contract. You will be
notified if you are purchasing a contract that is subject to these
arrangements.

Transfer of Ownership; Assignment. No assignment of a contract will be binding
on us unless made in writing and sent to us at the Aetna Processing Office. We
will use reasonable procedures to confirm that the assignment is authentic,
including verification of signature. If we fail to follow our own procedures, we
will be liable for any losses to you directly resulting from the failure.
Otherwise, we are not responsible for the validity of any assignment. The rights
of the contract holder and the interest of the annuitant and any beneficiary
will be subject to the rights of any assignee of record.

Contract Modification

We may change the contract as required by federal or state law. In addition, we
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 group
contract holder does not agree to a change, we reserve the right to refuse to
establish new accounts under the contract. Certain changes will require the
approval of appropriate state or federal regulatory authorities.

Legal Matters and Proceedings

We are aware of no material legal proceedings pending which involve the
separate account or the Company as a party or which would materially affect the
separate account. The validity of the securities offered by this prospectus has
been passed upon by Counsel to the Company.

Payment Delay or Suspension

We reserve the right to suspend or postpone the date of any payment of benefits
or values under the following circumstances: (a) on any valuation date when the
New York Stock Exchange is closed (except customary weekend and holidays) when
trading on the Exchange is restricted; b) when an emergency exists as
determined by the SEC so that disposal of the securities held in the
subaccounts is not reasonably practicable or it is not reasonably practicable
fairly to determine the value of the subaccount's assets; (c) during any other
periods 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.

Year 2000 Readiness

As a healthcare and financial services enterprise, Aetna Inc. (referred to
collectively with its affiliates and subsidiaries as "Aetna"), is dependent on
computer systems and applications to conduct its business. Aetna has developed
and is currently executing a comprehensive risk-based plan designed to make its
mission-critical information technology (IT) systems and embedded systems Year
2000 ready. The plan for IT systems covers five stages including (i)
assessment, (ii) remediation, (iii) testing, (iv) implementation and (v) Year

32
<PAGE>

2000 approval. At year end 1997, Aetna, including the Company, had
substantially completed the assessment stage. The remediation of mission-
critical IT systems was completed year end 1998. Testing of all
mission-critical IT systems is underway with Year 2000 approval targeted for
completion by mid-1999. The costs of these efforts will not affect the separate
account.

The Company, its affiliates and the mutual funds that serve as investment
options for the separate account also have relationships with investment
advisers, broker dealers, transfer agents, custodians or other securities
industry participants or other service providers that are not affiliated with
Aetna. Aetna, including the Company, has initiated communication with its
critical external relationships to determine the extent to which Aetna may be
vulnerable to such parties' failure to resolve their own Year 2000 issues.
Aetna and the Company have assessed and are prioritizing responses in an
attempt to mitigate risks with respect to the failure of these parties to be
Year 2000 ready. There can be no assurance that failure of third parties to
complete adequate preparations in a timely manner, and any resulting systems
interruptions or other consequences, would not have an adverse effect, directly
or indirectly, on the separate account, including, without limitation, its
operation or the valuation of its assets and units.

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<PAGE>

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:

General Information and History

Variable Annuity Account C

Offering and Purchase of Contracts

Performance Data

General

Average Annual Total Return Quotations

Income Phase Payments

Sales Material and Advertising

Independent Auditors

Financial Statements of the Separate Account

Financial Statements of Aetna Life Insurance and Annuity Company

You may request an SAI by calling the Aetna Processing Office at the number
listed in "Contract Overview--Questions."

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<PAGE>

Appendix I
Guaranteed Accumulation Account
- --------------------------------------------------------------------------------

The Guaranteed Accumulation Account (GAA) is a fixed interest option that may
be available during the accumulation phase under the contracts. This appendix
is only a summary of certain facts about GAA. Please read the GAA prospectus
before investing in this option.

In General. Amounts that you invest in GAA will earn a guaranteed interest rate
if amounts are left in GAA for the specified period of time. If you withdraw or
transfer those amounts before the specified period of time has elapsed, we may
apply a "market value adjustment," which may be positive or negative.

When you decide to invest money in GAA, you will want to contact your
representative or the Company to learn:

>The interest rate we will apply to the amounts that you invest in GAA. We
change this rate periodically, so be certain you know what rate we guarantee
on the day your account dollars are invested into GAA.

>The period of time your account dollars need to remain in GAA in order to earn
that rate. You are required to leave your account dollars in GAA for a
specified period of time (guaranteed term), in order to earn the guaranteed
interest rate.

Deposit Periods. A deposit period is the time during which we offer a specific
interest rate if you deposit dollars for a certain guaranteed term. For a
particular interest rate and guaranteed term to apply to your account dollars,
you must invest them during the deposit period during which that rate and term
are offered.

Interest Rates. We guarantee different interest rates, depending on when
account dollars are invested in GAA. The interest rate we guarantee is an
annual effective yield; that means that the rate reflects a full year's
interest. We credit interest daily at a rate that will provide the guaranteed
annual effective yield over one year. The guaranteed interest rate will never
be less than the rate stated in the contract.

Fees and Other Deductions. If all or a portion of your account value in GAA is
withdrawn, you may incur the following:

>Market Value Adjustment (MVA)--as described in this appendix and in the GAA
prospectus;

>Tax Penalties and/or Tax withholding--see "Taxation"

We do not make deductions from amounts in GAA to cover mortality and expense
risks. Rather, we consider these risks when determining the credited rate.

Market Value Adjustment (MVA). If you withdraw or transfer your account value
from GAA before the guaranteed term is completed, an MVA may apply. The MVA
reflects the change in the value of the investment due to changes in interest
rates since the date of deposit. The MVA may be positive or negative.

>If interest rates at the time of withdrawal have increased since the date of
deposit, the value of the investment decreases and the MVA will be negative.
This could result in your receiving less than the amount you paid into GAA.

>If interest rates at the time of withdrawal have decreased since the date of
deposit, the value of the investment increases and the MVA will be positive.

Guaranteed Terms. The guaranteed term is the period of time account dollars must
be left in GAA in order to earn the guaranteed interest rate specified for that
guaranteed term. We offer different guaranteed terms at different times. Check
with your representative or the Company to learn the details about the
guaranteed term(s) currently being offered.

In general we offer the following guaranteed terms:

>Short-term--three years or fewer

>Long-term--ten years or less, but greater than three years

At the end of a guaranteed term, you may:

>Transfer dollars to a new guaranteed term

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<PAGE>

>Transfer dollars to other available investment options

>Withdraw dollars

Deductions may apply to withdrawals. See "Fees and Other Deductions" in this
section.

Transfer of Account Dollars. Generally, account dollars invested in GAA may be
transferred among guaranteed terms offered through GAA, and/or to other
investment options offered through the contract. However, transfers may not be
made during the deposit period in which your account dollars are invested in
GAA or for 90 days after the close of that deposit period. We will apply an MVA
to transfers made before the end of a guaranteed term.

Income Phase. GAA can not be used as an investment option during the income
phase. However, you may notify us at least 30 days in advance to elect a
variable payment option and to transfer your GAA account dollars to any of the
subaccounts available during the income phase.

Reinvesting Amounts Withdrawn from GAA. If amounts are withdrawn from GAA and
then reinvested in GAA, we will apply the reinvested amount to the current
deposit period. This means that the guaranteed annual interest rate, and
guaranteed terms available on the date of reinvestment will apply. Amounts will
be reinvested proportionately in the same way as they were allocated before
withdrawal. Your account value will not be credited for any negative MVA that
was deducted at the time of withdrawal.

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<PAGE>

Appendix II
Fixed Plus Account
- --------------------------------------------------------------------------------

The Fixed Plus Account is an investment option available under the contracts.
Amounts allocated to the Fixed Plus Account are held in the Company's general
account which supports insurance and annuity obligations.

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

Additional information about this option may be found in the contract.

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

General Disclosure. 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 this prospectus about the Fixed Plus Account
may be subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of the statements.
Disclosure in this Appendix regarding the Fixed Plus Account has not been
reviewed by the SEC.

Interest Rates. The Fixed Plus Account guarantees that amounts allocated to
this option will earn the minimum interest rate specified in the contract. We
may credit a higher interest rate from time to time, but the rate we credit
will never fall below the guaranteed minimum specified in the contract. We
credit amounts held in the Fixed Plus Account with a rate 0.25% higher than the
then-declared rate beginning in the tenth year after your account was
established. Amounts applied to the Fixed Plus Account will earn the interest
rate in effect at the time money is applied. Amounts in the Fixed Plus Account
will reflect a compound interest rate as credited by us. The rate we quote is
an annual effective yield. We do not make deductions from amounts in the Fixed
Plus Account to cover mortality and expense risks. We consider these risks in
determining the credited rate.

Our 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 this option, we assume the risk
of investment gain or loss by guaranteeing the amounts you allocate to this
option and promising a minimum interest rate and income phase payment.

Partial Withdrawal. Partial withdrawals are limited to 20% of the amount held in
the Fixed Plus Account on the day we receive a request in good order at the
Aetna Processing Office. The 20% is reduced by any Fixed Plus withdrawals,
transfers or income phase payments made in last 12 months. In calculating the
20% limit, we reserve the right to include payments made through a Systematic
Distribution Option.

Full Withdrawal. Full withdrawals are paid, with interest, in five annual
payments equal to:

>One-fifth of the Fixed Plus Account value on the day we receive the request,
reduced by any Fixed Plus Account withdrawals, loans, transfers or income
phase payments made during the past 12 months

>One-fourth of the remaining Fixed Plus Account value 12 months later

>One-third of the remaining Fixed Plus Account value 12 months later

>One-half of the remaining Fixed Plus Account value 12 months later, and

>The balance of the Fixed Plus Account value 12 months later

A full withdrawal may be canceled at any time before the end of the
five-payment period.

Once we receive a request for full withdrawal, no further withdrawals or
transfers will be permitted from Fixed Plus Account.

We will waive the above full withdrawal five-payment period if full withdrawal
is made due to any of the following:

>Your death before income phase payments have begun

>Election of any income phase payment option with fixed payments or a lifetime
payment option with variable payments

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<PAGE>

>Your account value in the Fixed Plus Account value is $3,500 or less and the
amount withdrawn is to be transferred to another investment program under the
SUNY Plan provided no withdrawals, transfers or income phase payments have been
made from your account within the past 12 months

>When the account value is $4,000 or less and paid to you in a lump sum

Alternative Payment of Fixed Plus Account Values. As an alternative to the
payment of Fixed Plus Account values in five annual payments, the contract
holder may instead elect an alternative method of payment.

Under the alternative method of payment, within 60 days of the proposed
withdrawal date, the contract holder must notify the Company that it intends to
surrender the entire contract. Within 30 days after receiving that notice, the
Company will tell the contract holder the specific period and interest rate
that would apply to a complete surrender of the contract in level, annual
payments for a period of up to ten years. Under that payment method, the
Company may reduce the interest rate credited to the Fixed Plus Account up to
1.5% from the interest rate being credited upon the date of withdrawal, and the
interest rate would remain constant throughout the payment period.

When the contract holder receives the specific information from the Company
about the alternative method of payment, the contract holder must irrevocably
elect in writing to use either the alternative method of payment, or the
payment of Fixed Plus Account values in five annual payments.

Transfers. Transfers are limited to 20% of the amount held in the Fixed Plus
Account on the day a request in good order is received at our Home Office. The
20% is reduced by any Fixed Plus Account withdrawals, transfers or income phase
payments made in the past 12 months. We reserve the right to include payments
made through a Systematic Distribution Option in calculating the 20% limit. The
20% limit will be waived if your account value in Fixed Plus Account is $1,000
or less.

Income Phase. Amounts accumulating under the Fixed Plus Account can be
transferred to the subaccounts to fund variable lifetime income options during
the income phase. However, Fixed Plus Account values may not be used to fund
nonlifetime income options with variable payments.

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<PAGE>

Appendix III
Fund Descriptions
- --------------------------------------------------------------------------------

The investment results of the mutual funds (funds) are likely to differ
significantly and there is no assurance that any of the funds will achieve
their respective investment objectives. Shares of the funds will rise and fall
in value and you could lose money by investing in the funds. Shares of the
funds are not bank deposits and are not guaranteed, endorsed or insured by any
financial institution, the Federal Deposit Insurance Corporation or any other
government agency. Except as noted, all funds are diversified, as defined under
the Investment Company Act of 1940.
>Aetna Balanced VP, Inc. seeks to maximize investment return, consistent with
reasonable safety of principal by investing in a diversified portfolio of one
or more of the following asset classes: stocks, bonds, and cash equivalents,
based on the investment adviser's judgment of which of those sectors or mix
thereof offers the best investment prospects.(1)

>Aetna Income Shares d/b/a Aetna Bond VP seeks to maximize total return,
consistent with reasonable risk, through investments in a diversified
portfolio consisting primarily of debt securities. It is anticipated that
capital appreciation and investment income will both be major factors in
achieving total return.(1)

>Aetna Variable Fund d/b/a Aetna Growth and Income VP seeks to maximize total
return through investments in a diversified portfolio of common stocks and
securities convertible into common stock. It is anticipated that capital
appreciation and investment income will both be major factors in achieving
total return.(1)

>Aetna Variable Encore Fund d/b/a Aetna Money Market VP 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)

>Aetna Generation Portfolios, Inc.--Aetna Ascent VP seeks to provide capital
appreciation. The Portfolio is designed 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 VP seeks to provide total
return (i.e., income and capital appreciation, both realized and unrealized).
The Portfolio is designed 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 VP seeks to provide total
return consistent with preservation of capital. The Portfolio is designed for
investors who generally have an investment horizon exceeding five years and
who have a low level of risk tolerance.(1)

>Aetna Variable Portfolios, Inc. --Aetna Index Plus Bond VP seeks maximum total
return, consistent with preservation of capital, primarily through investment
in a diversified portfolio of fixed-income securities, which will be
chosen to substantially replicate the characteristics of the Lehman
Brothers Aggregate Bond Index (LBAB), an unmanaged index comprised of
approximately 6,900 securities.(1)

>Aetna Variable Portfolios, Inc.--Aetna Index Plus Large Cap VP seeks to
outperform the total return performance of the Standard & Poor's 500 Composite
Index (S&P 500), while maintaining a market level of risk.(1)

>Aetna Variable Portfolios, Inc.--Aetna Index Plus Mid Cap VP seeks to
outperform the total return performance of the Standard & Poor's MidCap 400
Index (S&P 400), while maintaining a market level of risk.(1)

>Aetna Variable Portfolios, Inc.--Aetna Index Plus Small Cap VP seeks to
outperform the total return performance of the Standard & Poor's SmallCap 600
Index (S&P 600), while maintaining a market level of risk.(1)

>Aetna Variable Portfolios, Inc.--Aetna Value Opportunity VP seeks growth of
capital primarily through investment in a diversified portfolio of common
stocks and securities convertible into common stocks.(1)(a)

39
<PAGE>

>Calvert Social Balanced Portfolio is a nondiversified portfolio that seeks to
achieve a competitive total return through an actively managed, nondiversified
portfolio of stocks, bonds, and money market instruments which offer income
and capital growth opportunity and which satisfy the investment and social
criteria established for the Portfolio.(2)

>Fidelity Variable Insurance Products Fund --Equity-Income Portfolio seeks
reasonable income. The fund will also consider the potential for capital
appreciation. The fund seeks a yield which exceeds the composite yield on
the securities comprising the S&P 500.(3)

>Fidelity Variable Insurance Products Fund --High Income Portfolio seeks a
high level of current income while also considering growth of capital.(3)

>Fidelity Variable Insurance Products Fund II --Asset Manager Portfolio seeks
high total return with reduced risk over the long term by allocating its
assets among stocks, bonds and short-term instruments.(3)

>Fidelity Variable Insurance Products Fund II --Contrafund Portfolio seeks long
term capital appreciation by investing primarily in common stocks of companies
whose value the investment adviser believes is not fully recognized by the
public.(3)

>Fidelity Variable Insurance Products Fund II -- Index 500 Portfolio seeks
investment results that correspond to the total return of common stocks
publicly traded in the United States, as represented by the S&P 500.(3a)

>Janus Aspen Series--Aggressive Growth Portfolio is a nondiversified portfolio
that seeks long-term growth of capital. The Portfolio pursues its investment
objective by investing primarily in common stocks selected for their growth
potential, and normally invests at least 50% of its equity assets in
medium-sized companies. Medium-sized companies are those whose market
capitalizations at the time of investment fall within the range of companies
in the S&P MidCap 400 Index. Market capitalization is a commonly used measure
of the size and value of a company. The market capitalizations within the
Index will vary, but as of December 31, 1998, they ranged from approximately
$142 million to $73 billion.(4)

>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 primarily in common stocks
selected for their growth potential. Although the Portfolio can invest in
companies of any size, it generally invests in larger, more established
issuers.(4)

>Janus Aspen Series--Worldwide 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 primarily in common stocks of
companies of any size throughout the world. The Portfolio normally invests in
issuers from at least five different countries, including the United States.
The Portfolio may at times invest in fewer than five countries or even a
single country.(4)

>Lexington Emerging Markets Fund, Inc. seeks long-term growth of capital
primarily through investment in equity securities of companies domiciled in,
or doing business in emerging countries and emerging markets. Investments in
emerging markets involve risks not present in domestic markets. See the Fund's
prospectus for information on risks inherent in this investment.(5)

>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.

Transfers or deposits are not allowed into the subaccount investing in this
fund, except from accounts established under the contract before May 1, 1998.
As soon as all those who have current allocations to the subaccount under the
contract have redirected their allocations to other investment options, we will
close the subaccount to all investments.(5)

>MFS Total Return Series primarily seeks to provide above average income
(compared to a portfolio invested entirely in equity securities) consistent
with the prudent employment of capital. Its secondary objective is to take
advantage of opportunities for growth of capital and income. The series is a
"balanced fund." Under normal market conditions, the series invests (i) at
least 40%, but not more than 75%, of its net assets in equity securities; and
(ii) at least 25% of its net assets in non-convertible fixed income
securities.(6)

40
<PAGE>

>Oppenheimer Global Securities Fund/VA seeks long-term capital appreciation by
investing a substantial portion of its assets in securities of foreign
issuers, "growth-type" companies, cyclical industries and special situations
which are considered to have appreciation possibilities.(7)

>Oppenheimer Strategic Bond Fund/VA seeks a high level of current income
principally derived from interest on debt securities and seeks to enhance such
income by writing covered call options on debt securities.(7)

>Portfolio Partners, Inc.--MFS Emerging Equities Portfolio seeks to provide
long-term growth of capital.(8(a))

>Portfolio Partners, Inc.--MFS Research Growth Portfolio seeks long-term growth
of capital and future income.(8(a))

>Portfolio Partners, Inc.--MFS Value Equity Portfolio seeks capital
appreciation.(8(a))

>Portfolio Partners, Inc.--Scudder International Growth Portfolio seeks
long-term growth of capital.(8(b))

>Portfolio Partners, Inc.--T. Rowe Price Growth Equity Portfolio seeks
long-term capital growth and, secondarily, increasing dividend income.(8(c))

Investment Advisers for each of the Funds:

(1) Aeltus Investment Management, Inc. (adviser)

(a) Bradley, Foster & Sargent, Inc. (subadviser)

(2) Calvert Asset Management Company, Inc.

(3) Fidelity Management & Research Company (adviser)

(a) Bankers Trust Company (subadviser)

(4) Janus Capital Corporation

(5) Lexington Management Corporation (adviser);

Market Systems Research Advisors, Inc. (subadviser)

(6) Massachusetts Financial Services Company ("MFS")

(7) OppenheimerFunds, Inc.

(8) Aetna Life Insurance and Annuity Company (adviser);

(a) Massachusetts Financial Services Company (subadviser)

(b) Scudder Kemper Investments, Inc. (subadviser)

41
<PAGE>

Appendix IV
Condensed Financial Information
- --------------------------------------------------------------------------------

(Selected data for accumulation units outstanding throughout each period)
================================================================================

The condensed financial information presented below for each of the periods in
the ten-year period ended December 31, 1998 (as applicable), is derived from
the financial statements of the separate account, which have been audited by
KPMG LLP, independent auditors. The financial statements and the independent
auditors' report thereon for the year ended December 31, 1998 are included in
the Statement of Additional Information.

<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
AETNA ASCENT VP
Value at beginning of
period $15.422 $13.291(1)
Value at end of period $15.886 $15.422
Number of accumulation
units outstanding at
end of period 21,430 380
AETNA BALANCED
VP, INC
Value at beginning of
period $24.700 $20.419 $17.954 $14.270
Value at end of period $28.524 $24.700 $20.419 $17.954
Number of accumulation
units outstanding at
end of period 2,294,877 2,160,305 2,716,641 9,193,181
AETNA BOND VP
Value at beginning of
period $51.330 $47.992 $46.913 $40.173
Value at end of period $54.819 $51.330 $47.992 $46.913
Number of accumulation
units outstanding at
end of period 994,987 959,336 835,724 2,377,622
AETNA
CROSSROADS VP
Value at beginning of
period $14.456 $12.577(1)
Value at end of period $15.120 $14.456
Number of accumulation
units outstanding at
end of period 31,468 873
AETNA GROWTH
AND INCOME VP
Value at beginning of
period $217.359 $169.448 $137.869 $105.558
Value at end of period $245.765 $217.359 $169.448 $137.869
Number of accumulation
units outstanding at
end of period 1,747,097 1,826,355 2,071,139 6,364,000
AETNA INDEX PLUS
BOND VP
Value at beginning of
period $10.128(3)
Value at end of period $10.578
Number of accumulation
units outstanding at
end of period 134,777
AETNA INDEX PLUS
LARGE CAP VP
Value at beginning of
period $14.444 $14.493(13)
Value at end of period $18.772 $14.444
Number of accumulation
units outstanding at
end of period 1,302,825 17,771
AETNA INDEX PLUS
MID CAP VP
Value at beginning of
period $9.928(3)
Value at end of period $11.338
Number of accumulation
units outstanding at
end of period 35,201

<CAPTION>
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
AETNA ASCENT VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
AETNA BALANCED
VP, INC
Value at beginning of
period $14.519 1$3.379 $12.736 $10.896 $10.437 $10.000(2)
Value at end of period $14.270 1$4.519 $13.379 $12.736 $10.896 $10.437
Number of accumulation
units outstanding at
end of period 21,990,186 30,784,750 34,802,433 22,898,099 17,078,985 9,535,986
AETNA BOND VP
Value at beginning of
period $42.283 $39.038 $36.789 $31.192 $28.943 $25.574
Value at end of period $40.173 $42.283 $39.038 $36.789 $31.192 $28.943
Number of accumulation
units outstanding at
end of period 5,108,720 8,210,666 8,507,292 7,844,412 6,984,793 6,202,834
AETNA
CROSSROADS VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
AETNA GROWTH
AND INCOME VP
Value at beginning of
period $107.925 $102.383 $97.165 $77.845 $76.311 $59.871
Value at end of period $105.558 $107.925 $102.383 $97.165 $77.845 $76.311
Number of accumulation
units outstanding at
end of period 13,966,072 21,148,863 24,201,565 20,948,226 18,362,906 17,142,820
AETNA INDEX PLUS
BOND VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
AETNA INDEX PLUS
LARGE CAP VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
AETNA INDEX PLUS
MID CAP VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
</TABLE>

42
<PAGE>

Condensed Financial Information (continued)

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

<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
AETNA INDEX PLUS
SMALL CAP VP
Value at beginning of
period $10.193(3)
Value at end of period $9.157
Number of accumulation
units outstanding at
end of period 81,388
AETNA LEGACY VP
Value at beginning of
period $13.491 $12.296(4)
Value at end of period $14.248 $13.491
Number of accumulation
units outstanding at
end of period 95,526 2,279
AETNA MONEY
MARKET VP
Value at beginning of
period $41.174 $39.528 $37.988 $36.271
Value at end of period $42.883 $41.174 $39.528 $37.988
Number of accumulation
units outstanding at
end of period 564,537 455,502 597,656 1,836,260
AETNA VALUE
OPPORTUNITY VP
Value at beginning of
period $11.472(3)
Value at end of period $12.088
Number of accumulation
units outstanding at
end of period 33,957
CALVERT SOCIAL
BALANCED
PORTFOLIO
Value at beginning of
period $23.675 $19.965 $17.951 $13.990
Value at end of period $27.186 $23.675 $19.965 $17.951
Number of accumulation
units outstanding at
end of period 917,567 929,282 898,279 856,361
FIDELITY VIP EQUITY-
INCOME PORTFOLIO
Value at beginning of
period $16.587 $13.110 $11.617 $10.000(6)
Value at end of period $18.285 $16.587 $13.110 $11.617
Number of accumulation
units outstanding at
end of period 2,533,673 2,139,178 1,454,755 628,582
FIDELITY VIP II ASSET
MANAGER PORTFOLIO
Value at beginning of
period $14.715 $12.349 $10.912 $9.447
Value at end of period $16.719 $14.715 $12.349 $10.912
Number of accumulation
units outstanding at
end of period 1,596,943 1,576,603 1,384,927 1,316,916
FIDELITY VIP II
CONTRAFUND
PORTFOLIO
Value at beginning of
period $17.276 $14.092 $11.763 $10.000(6)
Value at end of period $22.177 $17.276 $14.092 $11.763
Number of accumulation
units outstanding at
end of period 3,333,320 2,706,862 1,522,169 525,476
FIDELITY VIP II
INDEX 500
PORTFOLIO
Value at beginning of
period $18.662 $14.240 $11.740 $10.000(6)
Value at end of period $23.650 $18.662 $14.240 $11.740
Number of accumulation
units outstanding at
end of period 3,947,187 3,093,080 1,490,937 290,547

<CAPTION>
1994 1993 1992 1991 1990 1989
---------------- ------------- ------------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
AETNA INDEX PLUS
SMALL CAP VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
AETNA LEGACY VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
AETNA MONEY
MARKET VP
Value at beginning of
period $35.282 $34.619 $33.812 $32.138 $30.012 $27.783
Value at end of period $36.271 $35.282 $34.619 $33.812 $32.138 $30.012
Number of accumulation
units outstanding at
end of period 3,679,802 5,086,515 7,534,662 8,430,082 10,220,110 8,286,033
AETNA VALUE
OPPORTUNITY VP
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
CALVERT SOCIAL
BALANCED
PORTFOLIO
Value at beginning of
period $14.640 $13.726 $12.913 $11.233 $10.568 $10.000(5)
Value at end of period $13.990 $14.640 $13.726 $12.913 $11.233 $10.568
Number of accumulation
units outstanding at
end of period 743,464 705,415 503,006 355,851 148,576 20,710
FIDELITY VIP EQUITY-
INCOME PORTFOLIO
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
FIDELITY VIP II ASSET
MANAGER PORTFOLIO
Value at beginning of
period $10.000(7)
Value at end of period $9.447
Number of accumulation
units outstanding at
end of period 1,254,504
FIDELITY VIP II
CONTRAFUND
PORTFOLIO
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
FIDELITY VIP II
INDEX 500
PORTFOLIO
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
</TABLE>

43
<PAGE>

Condensed Financial Information (continued)

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

<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
JANUS ASPEN
AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of
period $18.174 $16.334 $15.323 $12.169
Value at end of period $24.098 $18.174 $16.334 $15.323
Number of accumulation
units outstanding at
end of period 2,142,130 1,939,607 1,893,718 1,280,953
JANUS ASPEN
GROWTH PORTFOLIO
Value at beginning of
period $16.816 $13.872 $11.859 $10.000(9)
Value at end of period $22.529 $16.816 $13.872 $11.859
Number of accumulation
units outstanding at
end of period 1,354,047 1,109,942 663,945 109,717
JANUS ASPEN
WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of
period $18.690 $15.493 $12.158 $10.000(9)
Value at end of period $23.797 $18.690 $15.493 $12.158
Number of accumulation
units outstanding at
end of period 4,687,167 3,873,511 2,090,908 314,653
LEXINGTON EMERGING
MARKETS FUND, INC.
Value at beginning of
period $7.715 $8.832 $8.323 $8.772
Value at end of period $5.470 $7.715 $8.832 $8.323
Number of accumulation
units outstanding at
end of period 745,856 750,330 548,618 371,156
LEXINGTON NATURAL
RESOURCES TRUST
Value at beginning of
period $14.403 $13.611 $10.862 $9.412
Value at end of period $11.433 $14.403 $13.611 $10.862
Number of accumulation
units outstanding at
end of period 534,962 650,486 587,248 530,562
MFS TOTAL RETURN
SERIES
Value at beginning of
period $10.182(3)
Value at end of period $10.531
Number of accumulation
units outstanding at
end of period 36,633
OPPENHEIMER GLOBAL
SECURITIES FUND/VA
Value at beginning of
period $10.077(11)
Value at end of period $10.303
Number of accumulation
units outstanding at
end of period 20,548
OPPENHEIMER STRATEGIC
BOND FUND/VA
Value at beginning of
period $10.055(3)
Value at end of period $9.935
Number of accumulation
units outstanding at
end of period 100,555

<CAPTION>
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
JANUS ASPEN
AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of
period $10.000(8)
Value at end of period $12.169
Number of accumulation
units outstanding at
end of period 393,553
JANUS ASPEN
GROWTH PORTFOLIO
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
JANUS ASPEN
WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
LEXINGTON EMERGING
MARKETS FUND, INC.
Value at beginning of
period $10.000(10)
Value at end of period $8.772
Number of accumulation
units outstanding at
end of period 144,750
LEXINGTON NATURAL
RESOURCES TRUST
Value at beginning of
period $10.071 $9.193 $9.018 $9.608 $11.441 $10.000(5)
Value at end of period $9.412 $10.071 $9.193 $9.018 $9.608 $11.441
Number of accumulation
units outstanding at
end of period 533,016 341,771 198,338 144,139 75,052 11,481
MFS TOTAL RETURN
SERIES
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
OPPENHEIMER GLOBAL
SECURITIES FUND/VA
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
OPPENHEIMER STRATEGIC
BOND FUND/VA
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
</TABLE>

44
<PAGE>

Condensed Financial Information (continued)

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

<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PORTFOLIO
PARTNERS MFS
EMERGING EQUITIES
PORTFOLIO
Value at beginning of
period $15.046 $15.236(12)
Value at end of period $19,268 $15.046
Number of accumulation
units outstanding at
end of period 3,101,880 2,707,904
PORTFOLIO
PARTNERS MFS
RESEARCH GROWTH
PORTFOLIO
Value at beginning of
period $11.960 $12.195(12)
Value at end of period $14.528 $11.960
Number of accumulation
units outstanding at
end of period 1,379,653 232,418
PORTFOLIO
PARTNERS MFS
VALUE EQUITY
PORTFOLIO
Value at beginning of
period $23.440 $23.106(12)
Value at end of period $29.339 $23.440
Number of accumulation
units outstanding at
end of period 2,244,308 2,018,219
PORTFOLIO PARTNERS
SCUDDER
INTERNATIONAL
GROWTH PORTFOLIO
Value at beginning of
period $17.709 $17.490(12)
Value at end of period $20.829 $17.709
Number of accumulation
units outstanding at
end of period 2,962,631 3,237,710
PORTFOLIO PARTNERS
T ROWE PRICE
GROWTH PORTFOLIO
Value at beginning of
period $16.608 $16.276(12)
Value at end of period $20.929 $16.608
Number of accumulation
units outstanding at
end of period 1,564,888 1,317,058
</TABLE>

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

(1) Funds were first received in this option during February 1997.

(2) The initial accumulation unit value was established at $10.000 on June 23,
1989, the date on which the fund commenced operations.

(3) Funds were first received in this option during May 1998.

(4) Funds were first received in this option during May 1997.

(5) The initial accumulation unit value was established at $10.000 on May 31,
1989, the date on which the fund became available under the contract.

(6) The initial accumulation unit value was established at $10.000 during May
1995, when the fund became available under the contract.

(7) The initial accumulation unit value was established at $10.000 during March
1994, when funds were first received under this option.

(8) The initial accumulation unit value was established at $10.000 during June
1994, when funds were first received in this option.

(9) The initial accumulation unit value was established at $10.000 during July
1995, when the fund became available under the contract.

(10) Funds were first received in this option during October 1994.

(11) Funds were first received in this option during June 1998.

(12) Funds were first received in this option during November 1997.

(13) Funds were first received in this option during December 1997.

45
<PAGE>

For Master Applications Only

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

I hereby acknowledge receipt of an Account C State University of New York SUNY
group deferred variable annuity prospectus dated May 3, 1999 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.
SAI.81216-99) dated May 3, 1999.

- --------------------------------------------------------------------------------
CONTRACT HOLDER'S SIGNATURE

- --------------------------------------------------------------------------------
DATE

PROS.81216-99