PFL LIFE VARIABLE ANNUITY ACCOUNT A, N-4 EL, 1997-04-30

PFL LIFE VARIABLE ANNUITY ACCOUNT A
N-4 EL, 1997-04-30

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As filed with the Securities and Exchange Commission on April 30, 1997
------------------------
Registration No. 333 -
811 -
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.
-----

Post-Effective Amendment No.
-----

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No.
------

PFL LIFE VARIABLE ANNUITY ACCOUNT A
-----------------------------------
(Exact Name of Registrant)

PFL LIFE INSURANCE COMPANY
--------------------------
(Name of Depositor)

4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499-0001
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number, including Area Code

(319) 297-8468

Frank A. Camp, Esquire
PFL Life Insurance Company
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
(Name and Address of Agent for Service)

Copy to:

Frederick R. Bellamy, Esquire
Sutherland, Asbill and Brennan L.L.P.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404
<PAGE>

DECLARATION PURSUANT TO RULE 24f-2

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
declares that an indefinite number of Securities is being registered under the
Securities Act of 1933. The Securities Act registration filing fee of $500 has
been paid.

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

Approximate date of proposed public offering:

As soon as practicable after effectiveness of the Registration Statement, as the
Commission, acting pursuant to said Section 8(a), shall determine.

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

The Registrant hereby amends this Registrastion Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.

<PAGE>

CROSS REFERENCE SHEET
Pursuant to Rule 495

Showing Location in Part A (Prospectus) and
Part B (Statement of Additional Information)
of Registration Statement of Information Required by Form N-4
-------------------------------------------------------------

PART A
------
<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
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<S> <C> <C>
1. Cover Page............................... Cover Page

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

3. Synopsis................................. Summary; Historical
Performance Data

4. Condensed Financial Information.......... Condensed Financial Information;
................................... Financial Statements

5. General Description of Registrant,
Depositor and Portfolio Companies
(a) Depositor.......................... PFL Life Insurance Company
(b) Registrant......................... The Atlas Portfolio Builder
Accounts
(c) Portfolio Company.................. The Mutual Fund Account
(d) Fund Prospectus.................... Underlying Funds
(e) Voting Rights...................... Voting Rights

6. Deductions and Expenses
(a) General............................ Charges and Deductions
(b) Sales Load %....................... Surrender Charge
(c) Special Purchase Plan.............. N/A
(d) Commissions........................ Distribution of the Policies
(e) Expenses - Registrant.............. N/A
(f) Fund Expenses...................... Other Expenses including
................................... Investment
................................... Advisory Fees
(g) Organizational Expenses............ N/A

7. Policies
(a) Persons with Rights................ The Policy; Election of Payment
................................... Option; Annuity Payments; Annuity
................................... Commencement Date; Voting Rights

(b) (i) Allocation of Premium
Payments...................... Allocation of Premium Payments
(ii) Transfers..................... Transfers
(iii)Exchanges..................... N/A

(c) Changes............................ The Policy; Amendments; Annuity
................................... Payment Options; Premium
................................... Payments; Possible changes in
................................... taxation; Addition, Deletion, or
................................... Substitution of Investments
</TABLE>

<PAGE>

<TABLE>

<S> <C> <C>
(d) Inquiries.......................... Summary

8. Annuity Period.......................... Annuity Payment Options;
................................... Annuity Commencement Date

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

10. Purchases and Contract Value
(a) Purchases.......................... Policy Application and Issuance
................................... of Policies; Premium Payments
(b) Valuation.......................... Policy Value; The Mutual Fund
................................... Policy Value
(c) Daily Calculation.................. The Mutual Fund Policy Value
(d) Underwriter........................ Distribution of the Policies

11. Redemptions
(a) By Owners.......................... Surrenders
By Annuitant....................... N/A
(b) Texas ORP.......................... Restrictions Under the Texas
................................... Optional Retirement Program
(c) Check Delay........................ Payment Not Honored by Bank
(d) Lapse.............................. N/A
(e) Free Look.......................... Summary

12. Taxes................................... Certain Federal Income Tax
................................... Consequences

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

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

PART B
------

Item of Form N-4 Statement of Additional
- ---------------- Information Caption
-------------------
<S> <C> <C>

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

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

17. General Information
and History............................. (Prospectus) PFL Life Insurance
................................... Company

18. Services
(a) Fees and Expenses
of Registrant...................... N/A
(b) Management Policies................ N/A
(c) Custodian.......................... Custody of Assets
</TABLE>
<PAGE>

<TABLE>

<S> <C> <C>
Independent
Auditors........................... Independent Auditors
(d) Assets of Registrant............... Custody of Assets
(e) Affiliated Person.................. N/A
(f) Principal Underwriter.............. Distribution of the Policies

19. Purchase of Securities
Being Offered........................... Distribution of the Policies
Offering Sales Load..................... N/A

20. Underwriters............................ Distribution of the Policies;
................................... (also Prospectus)

21. Calculation of Performance
Data.................................... Historical Performance Data

22. Annuity Payments........................ (Prospectus) Annuity Payment
Options

23. Financial Statements.................... Financial Statements

PART C -- OTHER INFORMATION
---------------------------

<CAPTION>
Item of Form N-4 Part C Caption
- ---------------- --------------
<S> <C> <C>

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

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

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

27. Number of Contractowners................ Number of Contractowners

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

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

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

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

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

Signature Page.......................... Signature Page
</TABLE>
<PAGE>

PROSPECTUS May 1, 1997

THE ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Issued Through

PFL LIFE VARIABLE ANNUITY ACCOUNT A

PFL LIFE INSURANCE COMPANY

The Atlas Portfolio Builder Variable Annuity Policy is a Flexible Premium
Variable Annuity that is offered by PFL Life Insurance Company ("PFL") through
Atlas Securities, Inc. ("Atlas"). Atlas is a corporate affiliate of World
Savings and Loan Association and World Savings Bank, FSB (collectively, "World
Savings"). You can use the Policy to accumulate funds for retirement or other
long-term financial planning purposes. You are generally not taxed on any
earnings on amounts you invest until you withdraw them or begin to receive
annuity payments. The Policy is a "variable" annuity because the value of your
investments can go up or down based on the performance of mutual fund
portfolios that you select. It is a flexible premium policy because after you
purchase it you can generally make additional investments of any amount of
$500 or more, until the Annuity Commencement Date when PFL begins making
annuity payments to you.

You have sixteen investment options to choose from. They include these
fifteen mutual fund portfolios of the Atlas Insurance Trust, Dreyfus Variable
Investment Fund, the Endeavor Series Trust, Federated Insurance Series and the
WRL Series Funds, Inc.:

ATLAS DREYFUS ENDEAVOR
Balanced Growth Capital Appreciation Dreyfus Small Cap Value
Disciplined Stock T. Rowe Price Equity
Growth & Income Income
Quality Bond T. Rowe Price Growth
Small Cap Stock
Value Equity (OpCap
Advisors)

FEDERATED WRL
High Income Bond Fund II Emerging Growth (Van Kampen American
Utility Fund II Capital Asset Management, Inc.)
Global (Janus Capital Corp.)
Growth (Janus Capital Corp.)

YOU AS THE OWNER OF THE POLICY, BEAR THE ENTIRE INVESTMENT RISK FOR ALL
AMOUNTS THAT YOU ALLOCATE TO ANY OF THE MUTUAL FUNDS. THIS MEANS THAT YOU
COULD LOSE THE AMOUNT THAT YOU INVEST. But if the mutual fund shares increase
in value, then the value of your Policy will also increase.

The sixteenth investment option is the Fixed Account. If you invest in one
of the alternatives offered in the Fixed Account, then PFL guarantees to
return your investment with interest at rates that PFL will declare from time
to time.

Of course, you can choose any combination of these investment options. You
can also transfer amounts among these options (subject to some restrictions).

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

ATVAPO597
<PAGE>

You should only purchase a Policy as a long-term investment. However, you do
have access to all or some of the current cash value of your investments at
any time before the Annuity Commencement Date. But, if you do withdraw cash
from your Policy, there may be a surrender charge. You may also have to pay
income taxes on some or all of the amount you withdraw, and if you are under
the age 59 1/2 there may also be a tax penalty. Finally, there may be an
interest penalty if you make a premature withdrawal from certain options
within the Fixed Account (this is called an "Excess Interest Adjustment," and
it could also result in your earning extra interest). PFL has the right to
postpone withdrawals from the Fixed Account.

Prospectuses for the mutual fund portfolios are attached to the back of this
prospectus. This prospectus and the mutual fund prospectuses give you vital
information about the Policies and the mutual funds. Please read them
carefully before you invest. Keep them for future reference.

PLEASE NOTE THAT THE POLICIES AND THE MUTUAL FUNDS:

.ARE NOT WORLD SAVINGS DEPOSITS

.ARE NOT FEDERALLY INSURED

.ARE NOT ENDORSED BY WORLD SAVINGS OR ANY GOVERNMENT AGENCY

.ARE NOT GUARANTEED TO ACHIEVE THEIR GOAL.

This Prospectus sets forth the information that a prospective purchaser
should consider before purchasing a Policy. A Statement of Additional
Information about the Policy and the Mutual Fund Account which has the same
date as this Prospectus has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The Statement of
Additional Information is available at no cost to any person requesting a copy
by writing Atlas or by calling 1-800-933-2852. The table of contents of the
Statement of Additional Information is included at the end of this Prospectus.
Additional information may also be obtained directly from PFL.

This Prospectus and the Statement of Additional Information generally
describe only the Policies and the Mutual Fund Account, except when the Fixed
Account is specifically mentioned.

Atlas Securities, Inc.
794 Davis Street, PO Box 1894
San Leandro CA 94577

PFL Life Insurance Company
Administrative and Service Office:
Financial Markets Division--Variable Annuity Department
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001

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<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
DEFINITIONS............................................................... 5
SUMMARY................................................................... 8
FINANCIAL STATEMENTS...................................................... 18
HISTORICAL PERFORMANCE DATA............................................... 18
Standardized Performance Data........................................... 18
Hypothetical Performance Data of Subaccounts............................ 18
Non-Standardized Performance Data....................................... 20
PUBLISHED RATINGS......................................................... 21
PFL LIFE INSURANCE COMPANY................................................ 21
THE ATLAS PORTFOLIO BUILDER ACCOUNTS...................................... 21
The Mutual Fund Account................................................. 21
The Fixed Account....................................................... 25
Guaranteed Periods.................................................... 26
One Year Fixed Option................................................. 26
Transfers............................................................... 27
Reinstatements.......................................................... 28
Telephone Transactions.................................................. 28
Dollar Cost Averaging................................................... 28
Asset Rebalancing....................................................... 29
THE POLICY................................................................ 29
Policy Application and Issuance of Policies--Premium Payments........... 29
Additional Premium Payments........................................... 30
Maximum Total Premium Payments........................................ 30
Allocation of Premium Payments........................................ 30
Payment Not Honored by Bank........................................... 30
Policy Value............................................................ 30
The Mutual Fund Policy Value.......................................... 31
Amendments.............................................................. 31
Non-participating Policy................................................ 31
DISTRIBUTIONS UNDER THE POLICY............................................ 31
Surrenders.............................................................. 31
Nursing Care and Terminal Condition Withdrawal Option................... 32
Excess Interest Adjustments (EIA)....................................... 33
Systematic Payout Option................................................ 33
Minimum Required Distributions and Restrictions Under Qualified Poli-
cies................................................................... 34
Restrictions Under the Texas Optional Retirement Program................ 34
Restrictions Under Section 403(b) Plans................................. 34
Annuity Payments........................................................ 34
Annuity Commencement Date............................................. 34
Election of Payment Option............................................ 35
Premium Tax........................................................... 35
Supplementary Contract................................................ 35
Annuity Payment Options................................................. 35
Death Benefit........................................................... 38
Death of Annuitant Prior to Annuity Commencement Date................. 38
Death On or After Annuity Commencement Date........................... 39
Beneficiary........................................................... 39
Death of Owner.......................................................... 39
CHARGES AND DEDUCTIONS.................................................... 40
Surrender Charge........................................................ 40
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Mortality and Expense Risk Fee........................................... 40
Administrative Charge.................................................... 41
Premium Taxes............................................................ 41
Federal, State and Local Taxes........................................... 41
Transfer Fee............................................................. 41
Other Expenses Including Investment Advisory Fees........................ 41
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 42
Tax Status of Policy..................................................... 42
Taxation of Annuities.................................................... 43
DISTRIBUTION OF THE POLICIES............................................... 46
VOTING RIGHTS.............................................................. 47
LEGAL PROCEEDINGS.......................................................... 47
STATEMENT OF ADDITIONAL INFORMATION........................................ 48
Appendix A............................................................... A-1
</TABLE>

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<PAGE>

DEFINITIONS

Accumulation Unit--An accounting unit of measure used in calculating the
Policy Value in the Mutual Fund Account before the Annuity Commencement Date.

Adjusted Policy Value--An amount equal to the Policy Value increased or
decreased by any Excess Interest Adjustments.

Administrative and Service Office--PFL Life Insurance Company, Financial
Markets Division--Variable Annuity Department, 4333 Edgewood Road, N.E., Cedar
Rapids, Iowa 52499-0001.

Annuitant--The person entitled to receive Annuity Payments after the Annuity
Commencement Date and during whose life any Annuity Payments involving life
contingencies will continue.

Annuity Commencement Date--The date upon which Annuity Payments are to
commence. The Annuity Commencement Date may not be later than the last day of
the policy month starting after the Annuitant attains age 95. The Annuity
Commencement Date may be required to be earlier for Qualified Policies.

Annuity Payment Option or Payment Option--A method of receiving a stream of
Annuity Payments selected by the Owner.

Annuity Unit--An accounting unit of measure used in the calculation of the
amount of the second and each subsequent Variable Annuity Payment after the
Annuity Commencement Date.

Atlas--Atlas Securities, Inc. A registered broker/dealer and the exclusive
selling agent for the Atlas Portfolio Builder Variable Annuity.

Asset Rebalancing--The process by which the Owner may authorize automatic
transfers of amounts among the Subaccounts of the Separate Account and the One
Year Fixed Option periodically to maintain a desired allocation of the Policy
Value among these Investment Options.

Beneficiary--The person who has the right to the death benefit set forth in
the Policy.

Business Day--Any day when the New York Stock Exchange is open for business.

Cash Value--The Policy Value, increased or decreased by any Excess Interest
Adjustment, less the Surrender Charge, if any.

Code--The Internal Revenue Code of 1986, as amended.

Cumulative Free Percentage--The percentage (as applied to the Cumulative
Premium Payments) which is available to the Owner free of any Surrender
Charge.

Current Interest Rate--The interest rate or rates currently guaranteed to be
credited on amounts allocated to the Fixed Account. The effective annual
interest rate will always equal or exceed a minimum of 3%.

Dollar Cost Averaging--The process by which the Owner may elect to
systematically transfer amounts from the One Year Fixed Option in order to
invest them in the Mutual Fund Account.

Due Proof of Death--A certified copy of a death certificate, a certified
copy of a decree of a court of competent jurisdiction as to the finding of
death, a written statement by the attending physician, or any other proof
satisfactory to PFL, will constitute Due Proof of Death.

Excess Interest Adjustment--A positive or negative adjustment to amounts
partially withdrawn, to amounts surrendered by the Owner from the Fixed
Account Guaranteed Period Options, or to amounts applied to Annuity Payment
Options. The adjustment reflects changes in the interest rates

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<PAGE>

declared by PFL since the date any payment was received by or an amount was
transferred to the Guaranteed Period Option. The Excess Interest Adjustment
can either decrease or increase the amount to be received by the Owner upon
surrender or commencement of Annuity Payments, depending upon whether there
has been an increase or decrease in interest rates, respectively.

Fixed Account--A group of Investment Options under the Policy, other than
the Mutual Fund Account, that are part of the general assets of PFL that are
not in separate accounts.

Fixed Annuity Payments--Payments made pursuant to an Annuity Payment Option
which do not fluctuate in amount.

Gross Partial Withdrawal--The total amount which will be deducted from the
Policy Value as a result of each partial withdrawal.

Guaranteed Period Options--The various guaranteed interest rate periods
which may be offered by PFL under the Fixed Account into which Premium
Payments may be paid or amounts transferred.

Investment Options--Any of the Guaranteed Period Options of the Fixed
Account, the One Year Fixed Option, and any of the Subaccounts of the Mutual
Fund Account.

Mutual Fund Account--The PFL Life Variable Annuity Account A, a separate
account established and registered as a unit investment trust under the
Investment Company Act of 1940, to which Premium Payments under the Policies
may be allocated.

Nonqualified Policy--A Policy other than a Qualified Policy.

One Year Fixed Option--An account in the Fixed Account into or from which
Premium Payments may be paid or amounts transferred, and which may be used for
Dollar Cost Averaging, Asset Rebalancing other transfers and partial
withdrawals.

PFL--PFL Life Insurance Company, the issuer of the Policies.

Policy--One of the Atlas Portfolio Builder Variable Annuity policies offered
by this Prospectus.

Policy Anniversary--Each anniversary of the Policy Date.

Policy Date--The date shown on the Policy data page attached to the Policy
and the date on which the Policy becomes effective.

Policy Owner or Owner--The person who may exercise all rights and privileges
under the Policy. The Owner during the lifetime of the Annuitant and prior to
the Annuity Commencement Date is the person designated as the Owner or a
Successor Owner in the application.

Policy Value--On or before the Annuity Commencement Date, this is an amount
equal to (a) the Premium Payments; minus (b) partial withdrawals taken
(including any applicable Excess Interest Adjustments and Surrender Charges on
such partial withdrawals); plus (c) interest credited in the Fixed Account;
plus or minus (d) accumulated gains or losses in the Mutual Fund Account
(including applicable fees and charges); minus (e) any applicable premium or
other taxes and transfer fees, if any.

Policy Year--Each 12-month period beginning on the Policy Date shown on the
Policy data page and each Policy Anniversary thereafter.

Premium Payment--An amount paid to PFL by the Policy Owner or on the Policy
Owner's behalf as consideration for the benefits provided by the Policy.

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<PAGE>

Qualified Policy--A Policy issued in connection with retirement plans that
qualify for special Federal income tax treatment under the Code.

Subaccount--A subdivision within the Mutual Fund Account, the assets of
which are invested in a specified Portfolio of the Underlying Funds.

Successor Policy Owner--A person appointed by the Policy Owner to succeed to
ownership of the Policy in the event of the death of the Policy Owner (if the
Policy Owner is not the Annuitant) before the Annuity Commencement Date.

Surrender Charge--The applicable contingent deferred sales charge, assessed
on certain surrenders or partial withdrawals of Premium Payments to cover
expenses relating to the sale of the Policies.

Systematic Payout Option--A process by which the Owner may elect to receive
periodic automatic payments to be made from the Policy Value subject to
certain requirements.

Underlying Funds--The portfolios of the Atlas Insurance Trust, the Dreyfus
Variable Investment Fund, the Endeavor Series Trust, Federated Insurance
Series and the WRL Series Funds, Inc., that are described in this Prospectus.

Valuation Period--The period of time from one determination of Accumulation
Unit and Annuity Unit values to the next subsequent determination of values.
Such determination is made as of the close of trading on the New York Stock
Exchange on each Business Day.

Variable Annuity Payments--Payments made pursuant to an Annuity Payment
Option which fluctuate as to dollar amount or payment term in relation to the
investment performance of the specified Subaccounts within the Mutual Fund
Account.

Written Notice or Written Request--Written notice, signed by the Owner, that
gives PFL the information it requires and is received at the Administrative
and Service Office. For some transactions, PFL may accept an electronic notice
such as telephone instructions. Such electronic notice must meet the
requirements PFL establishes for such notices.

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<PAGE>

THE ATLAS PORTFOLIO BUILDER
VARIABLE ANNUITY

SUMMARY

The following summary is intended to provide a brief overview of the Policy.
More detailed information can be found in the sections of this Prospectus that
follow, all of which should be read in their entirety.

THE POLICY

The Atlas Portfolio Builder Variable Annuity is a tax-deferred flexible
premium variable annuity policy which can be purchased on a non-tax qualified
basis or with the proceeds from certain plans qualifying for special federal
income tax treatment. The Policy gives the Owner the ability to accumulate
funds on a tax-deferred basis and to receive periodic annuity payments on a
variable basis, a fixed basis, or a combination of both. The Owner allocates
the Premium Payments among the various options available under the Mutual Fund
Account and the Fixed Account. The Policy is intended for long-term purposes,
such as retirement, and for persons who have maximized their use of other
retirement savings methods, such as 401(k) plans and individual retirement
accounts (IRAs).

THE ACCOUNTS

The Mutual Fund Account. The Mutual Fund Account is a separate account of
PFL, which currently is divided into fifteen Subaccounts. Each Subaccount
invests exclusively in shares of a portfolio of the Atlas Insurance Trust, the
Dreyfus Variable Investment Fund, the Endeavor Series Trust, ("Endeavor"),
Federated Insurance Series, and the WRL Series Funds, Inc. ("WRL"). The
following portfolios are available, as shown under the various managers or
subadvisers to the portfolios:

Managed by Atlas Advisers, Inc.:
.Balanced Growth

Managed by the Dreyfus Corporation:
.Capital Appreciation
.Disciplined Stock
.Growth & Income
.Quality Bond
.Small Cap
.Small Cap Value (Endeavor)

Managed by Federated Advisers:
.High Income Bond Fund II
.Utility Fund II

Managed by Janus Capital Corporation:
.Global (WRL)
.Growth (WRL)

Managed by OpCap Advisors:
.Value Equity (Endeavor)

Managed by T. Rowe Price Associates, Inc.:
.Equity Income (Endeavor)
.Growth Stock (Endeavor)

Managed by Van Kampen American Capital Asset Management, Inc.:
.Emerging Growth (WRL)

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<PAGE>

Each of the fifteen Subaccounts of the Mutual Fund Account invests solely in
a corresponding Portfolio of the Underlying Funds. Because the Policy Value
will depend on the investment experience of the selected Subaccounts, the
Owner bears the entire investment risk with respect to Premium Payments
allocated to, and amounts transferred to, the Mutual Fund Account. (See "THE
ATLAS PORTFOLIO BUILDER ACCOUNTS--The Mutual Fund Account" p. 21.)

The Fixed Account. The Fixed Account guarantees an effective annual rate of
at least 3% on: Premium Payments and transfers to, less partial withdrawals
and transfers from, the Fixed Account. Upon surrender, PFL guarantees return
of at least the Premium Payments made to, less prior partial withdrawals and
transfers from the Fixed Account. PFL will always offer a Current Interest
Rate which will be guaranteed for at least one year from the date of the
Premium Payment or transfer. PFL may, in its sole discretion, declare a higher
Current Interest Rate from time-to-time. PFL may offer optional guaranteed
interest rate periods into which Premium Payments may be made or amounts
transferred. PFL also offers a One Year Fixed Option with a one-year interest
rate guarantee. There will be no Excess Interest Adjustments on transfers,
partial withdrawals or surrenders from the One Year Fixed Option. Systematic
Dollar Cost Averaging transfers will also be allowed from this account. (See
"THE ATLAS PORTFOLIO BUILDER ACCOUNTS--The Fixed Account" p. 25.)

PREMIUM PAYMENTS

A Nonqualified Policy may be purchased with an initial Premium Payment of at
least $5,000, and a Qualified Policy generally may be purchased with an
initial Premium Payment of at least $2,000. For 403(b) annuities, PFL must
receive the initial Premium Payment (in any amount selected by the Owner)
within ninety (90) days following the Policy Date or the Policy will be
canceled. An Owner may make subsequent additional Premium Payments of at least
$500 each at any time before the Annuity Commencement Date. The maximum total
Premium Payments allowed without prior approval of PFL is $1,000,000. Unless
otherwise required by applicable law, at the time of each Premium Payment no
charges or fees are deducted, so the entire Premium Payment is invested
immediately. (See "CHARGES AND DEDUCTIONS--Surrender Charge," p. 40 and
CHARGES AND DEDUCTIONS--Premium Taxes," p. 41.)

The Owner must allocate the initial Premium Payment among the various
Investment Options according to allocation percentages in the Policy
application or transmittal form. Any allocation must be in whole percents, and
the total allocation must equal 100%. Allocations specified by the Owner for
the Initial Premium Payment will be used for additional Premium Payments
unless the Owner requests a change in allocation. Allocations of additional
Premium Payments may be changed by sending Written Notice to Atlas. Changes in
allocations will not be effective until they are received at PFL's
Administrative and Service Office. (See "THE POLICY--Policy Application and
Issuance of Policies--Premium Payments," p. 29.)

RIGHT TO CANCEL PERIOD

The Owner may, until the end of the period of time specified in the Policy
(the Right to Cancel period), examine the Policy and return it for a refund.
The applicable period will depend on the state in which the Policy is issued.
In most states the period is ten (10) days after the Policy is delivered to
the Owner. Several states allow for a longer period to return the Policy. The
amount of the refund will also depend on the state in which the Policy is
issued. Ordinarily the amount of the refund will be the Policy Value. However,
some states may require a return of the Premium Payments, or the greater of
the Premium Payments or the Policy Value. PFL will pay the refund within seven
(7) days after it receives written notice of cancellation and the returned
Policy. The Policy will then be deemed void.

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TRANSFERS BEFORE THE ANNUITY COMMENCEMENT DATE

An Owner can transfer values from any one of the Investment Options to any
other Investment Option, subject to the limits established by PFL. Transfers
of funds among Investment Options are only allowed as follows:

. Before the Guaranteed Period ends, a maximum amount equal to the interest
credited to any of the Guaranteed Period Options may be transferred
("interest transfers"). No Excess Interest Adjustment will apply to
interest transfers. PFL's interest crediting rates on amounts in the
Fixed Account, however, are determined using a "first-in first-out
("FIFO") method, and interest transfers may affect the credited rate on
the remaining amounts. There is a $50 minimum for each interest transfer.

. When any Guaranteed Period ends, Policy Values may be transferred to any
of the other Investment Options. No Excess Interest Adjustment will apply
to these transfers.

. Dollar Cost Averaging transfers from the One Year Fixed Account Option
may be made to one or more other Investment Options (subject to limits
established by PFL).

. Transfers other than Dollar Cost Averaging transfers from the One Year
Fixed Option may be made to one or more Subaccounts of the Mutual Fund
Account. Each such transfer must be at least $500.

. The minimum amount that may be transferred from a Subaccount of the
Mutual Fund Account to any other Investment Option is the lesser of $500
or the entire Subaccount value. PFL reserves the right to include the
remaining Subaccount value in the transfer if the remaining value is less
than $500.

(See "THE ATLAS PORTFOLIO BUILDER ACCOUNTS--Transfers," p .27, and
"DISTRIBUTIONS UNDER THE POLICY--Excess Interest Adjustment," p. 33.)
Transfers currently may be made either by telephone or by sending Written
Notice to Atlas. (See "THE ATLAS PORTFOLIO BUILDER ACCOUNTS--Telephone
Transactions," p. 28.)

PFL reserves the right to impose a $10 fee for each transfer in excess of 12
transfers per Policy Year. At the present time, however, PFL does not charge
for transfers. (See "THE ATLAS PORTFOLIO BUILDER ACCOUNTS--Transfers," p. 27.)

SURRENDERS AND PARTIAL WITHDRAWALS

The Owner may elect to surrender the Policy or make a partial withdrawal
from the Policy ($250 minimum) in exchange for a cash payment from PFL at any
time prior to the earlier of the Annuitant's death or the Annuity Commencement
Date. A surrender or partial withdrawal may be subject to deductions for
Surrender Charges and Excess Interest Adjustments. (See "CHARGES AND
DEDUCTIONS," p. 40.) A surrender or partial withdrawal request must be made by
Written Request, and a request for a partial withdrawal must specify the
Investment Options from which the withdrawal is requested. There is currently
no limit on the frequency or timing of partial withdrawals. (See
"DISTRIBUTIONS UNDER THE POLICY--Surrenders," p. 31). For Qualified Policies
the retirement plan or applicable law may restrict or penalize withdrawals. In
addition to the applicable charges and deductions under the Policy, surrenders
and partial withdrawals may be subject to premium taxes, income taxes and a
10% Federal penalty tax.

NURSING CARE AND TERMINAL CONDITION WITHDRAWAL OPTION

If the Annuitant, Annuitant's spouse, Owner or Owner's spouse (only the
Annuitant or Annuitant's spouse if the Owner is not a natural person): (1) has
been confined in a hospital or nursing facility for 30 consecutive days or (2)
has been diagnosed as having a terminal condition as defined in the Policy or
endorsement, (generally a life expectancy of not more than 12 months) then
partial withdrawals or surrenders may be taken with no Surrender Charge or
Excess Interest Adjustment. (This benefit may not be available in New Jersey--
see the Policy or endorsement for details.) (See "DISTRIBUTIONS UNDER THE
POLICY--Nursing Care and Terminal Condition Withdrawal Option," p. 32).

- 10 -
<PAGE>

CHARGES AND DEDUCTIONS

Surrender Charge. In order to permit investment of the entire Premium
Payment, PFL does not deduct sales or other charges at the time the Policy is
purchased. However, a Surrender Charge of up to 7% of the Premium Payment is
imposed on certain surrenders or partial withdrawals of Premium Payments in
order to cover expenses relating to the distribution of the Policies. The
applicable Surrender Charge is based on the Policy Year. There will be no
Surrender Charge imposed five or more years after the Policy Date. (See
"CHARGES AND DEDUCTIONS--Surrender Charge," p. 40.)

In each Policy Year the Owner may request partial withdrawals ($250 minimum)
of up to 10% of the Cumulative Premium Payments free of Surrender Charges. The
amount that may be taken free of Surrender Charges each Policy Year is
cumulative. This is referred to as the "Cumulative Free Percentage." That is,
Cumulative Free Percentages which are not taken are carried forward and are
available to be taken in the following Policy Year free of Surrender Charges.
Cumulative Free Percentage withdrawals previously taken reduce the Cumulative
Free Percentage that is available. (See "DISTRIBUTIONS UNDER THE POLICY--
Surrenders," p. 31.) Amounts withdrawn in the first five Policy Years in
excess of the available Cumulative Free Percentage will be subject to a
Surrender Charge.

Excess Interest Adjustment. Full surrenders and partial withdrawals from the
Guaranteed Period Options of the Fixed Account prior to the end of the
Guaranteed Period, and amounts applied to a Payment Option (prior to the end
of the Guaranteed Period) and which are in excess of the cumulative interest
credited up to the time of the withdrawal, are subject to an Excess Interest
Adjustment. Depending upon rates of interest being offered by PFL, the effect
of an Excess Interest Adjustment could eliminate all interest in excess of the
minimum guaranteed effective annual interest rate of 3%, or it could result in
the crediting of additional interest. (See "DISTRIBUTIONS UNDER THE POLICY--
Excess Interest Adjustments," p. 33.)

Account Charges. PFL deducts a daily charge equal to a percentage of the net
assets in the Mutual Fund Account for the mortality and expense risks assumed
by PFL. The effective annual rate of this charge is 1.25%. (See "CHARGES AND
DEDUCTIONS--Mortality and Expense Risk Fee," p. 40)

PFL also deducts a daily Administrative Charge from the net assets of the
Mutual Fund Account to partially cover expenses incurred by PFL in connection
with the administration of the Account and the Policies. The effective annual
rate of this charge is .15% of the value of the Mutual Fund Account's net
assets. (See "CHARGES AND DEDUCTIONS--Administrative Charge," p. 41.)

PFL guarantees that the account charges for mortality and expense risks and
administrative expenses will not exceed a total of 1.40%. These account
charges do not apply to amounts in the Fixed Account.

Taxes. PFL may incur premium taxes relating to the Policies. When permitted
by state law, PFL will not deduct any premium taxes related to a particular
Policy from the Policy Value until withdrawal of Policy Value, payment of the
death benefit, or the Annuity Commencement Date. Premium taxes currently range
from 0% to 3.50% of Premium Payments. (See "CHARGES AND DEDUCTIONS--Premium
Taxes," p. 41.)

No charges are currently made against any of the Accounts for federal,
state, or local income taxes. Should PFL determine that any such taxes be
imposed with respect to any of the Accounts, PFL may deduct such taxes from
amounts held in the relevant Account. (See "CHARGES AND DEDUCTIONS--Federal,
State and Local Taxes," p. 41.)

Charges Against the Underlying Funds. The value of the net assets of the
Subaccounts of the Mutual Fund Account will reflect the investment advisory
fees and other expenses incurred by the Underlying Funds.

- 11 -
<PAGE>

Expense Data. The charges and deductions are summarized in the following
tables. This tabular information regarding expenses assumes that the entire
Policy Value is in the Mutual Fund Account.

<TABLE>
<CAPTION>
ATLAS DREYFUS CORPORATION
--------- -------------------------------------------------------------
SMALL CAP
BALANCED CAPITAL DISCIPLINED GROWTH & QUALITY VALUE
GROWTH(5) APPRECIATION STOCK(7) INCOME BOND SMALL CAP (END.)
--------- ------------ ----------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
POLICY OWNER TRANSACTION
EXPENSES (1)
Sales Load on Purchase
Payments................ 0 0 0 0 0 0 0
Maximum Surrender Charge
(as a % of Premium
Payment
Surrendered)(2)......... 7% 7% 7% 7% 7% 7% 7%
Surrender Fees........... 0 0 0 0 0 0 0
----------------------------------------------------------------------------
Service Charge........... none
----------------------------------------------------------------------------
Transfer Fee............. Currently No Fee
MUTUAL FUND ACCOUNT ANNUAL
EXPENSES
(AS A PERCENTAGE OF
ACCOUNT VALUE)
Mortality and Expense
Risk Fees............... 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Administrative Charge.... 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15%
---- ---- ---- ---- ---- ---- ----
Total Mutual Fund Account
Annual Expenses......... 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40%
UNDERLYING FUND ANNUAL
EXPENSES (3) (4)
(AS A PERCENTAGE OF
AVERAGE NET ASSETS, AFTER
WAIVERS AND
REIMBURSEMENTS)
Management/Administrative
Fees.................... -- 0.75% 0.59% 0.75% 0.65% 0.75% 0.80%
Other Expenses........... -- 0.09% 0.21% 0.08% 0.14% 0.04% 0.12%
---- ---- ---- ---- ---- ---- ----
Rule 12b-1 Fees.......... -- -- -- -- -- -- --
Total Underlying Fund
Annual Expenses......... -- 0.84% 0.80% 0.83% 0.79% 0.79% 0.92%
</TABLE>

<TABLE>
<CAPTION>
VAN KAMPEN
FEDERATED OPCAP T.ROWE PRICE AMERICAN
ADVISERS JANUS CAPITAL CORP. ADVISORS ASSOCIATES, INC. CAPITAL
--------------- ---------------------- -------- ------------------- ----------
HIGH
INCOME VALUE EQUITY EMERGING
BOND UTILITY GLOBAL GROWTH EQUITY INCOME GROWTH STOCK GROWTH
FUND II FUND II (WRL)(6) (WRL)(6) (END.) (END.) (END.) (WRL) (6)
------- ------- --------- --------- -------- ------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
POLICY OWNER TRANSACTION
EXPENSES (1)
Sales Load on Purchase
Payments................ 0 0 0 0 0 0 0 0
Maximum Surrender Charge
(as a % of Premium
Payment Surrendered)
(2)..................... 7% 7% 7% 7% 7% 7% 7% 7%
Surrender Fees........... 0 0 0 0 0 0 0 0
------------------------------------------------------------------------------------
Service Charge none
------------------------------------------------------------------------------------
Transfer Fee............. Currently No Fee
MUTUAL FUND ACCOUNT ANNUAL
EXPENSES
(AS A PERCENTAGE OF
ACCOUNT VALUE)
Mortality and Expense
Risk Fees............... 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Administrative Charge.... 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15%
---- ---- --------- --------- ---- ---- ---- ----
Total Mutual Fund Account
Annual Expenses......... 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40%
UNDERLYING FUND ANNUAL
EXPENSES (3) (4)
(AS A PERCENTAGE OF
AVERAGE NET ASSETS, AFTER
WAIVERS AND
REIMBURSEMENTS)
Management/Administrative
Fees.................... 0.60% 0.75% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%
Other Expenses........... 0.20% 0.10% 0.19% 0.08% 0.11% 0.16% 0.21% 0.14%
---- ---- --------- --------- ---- ---- ---- ----
Rule 12b-1 Fees
Total Underlying Fund
Annual Expenses......... 0.80% 0.85% 0.99% 0.88% 0.91% 0.96% 1.01% 0.94%
</TABLE>

- 12 -
<PAGE>

- -------------------------
(1) The Surrender Charge and Transfer Fee, if any is imposed, apply to each
Policy, regardless of how Policy Value is allocated among the Mutual Fund
Account and the Fixed Account. Mutual Fund Account Annual Expenses do not
apply to the Fixed Account.
(2) The Surrender Charge is decreased based on the number of years since the
Policy Date, from 7% in the first Policy Year to 0% in the sixth Policy
Year.
(3) The fee table information relating to the Underlying Funds was provided to
PFL by the Underlying Funds, relative to the year ended December 31, 1996,
and PFL has not independently verified such information. (See "CHARGES AND
DEDUCTIONS--Other Expenses Including Investment Advisory Fees," p. 41.)
Expense information for the Atlas Balanced Growth Portfolio, which had not
commenced operations at the date of this Prospectus, is an annualized
estimate for 1997.
(4) Net of advisory fee waivers or expense reimbursements by the respective
investment advisor. For the year ended December 31, 1996, Federated
Advisers waived fees or reimbursed 0.59% to the High Income Bond Fund II,
and 0.51% to the Utility Fund II. For the year ended December 31, 1996,
Dreyfus Corporation waived management fees of 0.16% to the Capital
Appreciation portfolio.
(5) The Balanced Growth Portfolio will also indirectly bear its pro rata share
of fees and expenses incurred by the underlying Atlas Funds. The
prospectus for the Balanced Growth Portfolio provides specific information
on the expense ratios for each of the underlying Atlas Funds in which the
portfolio will invest. The range of the average weighted expense ratio for
the portfolio, including such indirect expenses is expected to be % to
%. A range is provided since the average assets of the Portfolio
invested in each of the underlying Atlas Funds will fluctuate.
(6) Effective January 1, 1997, the WRL Series Fund, Inc. has adopted a Plan of
Distribution pursuant to Rule 12b-1 under the Investment Company Act of
1940 (the "1940 Act") ("Distribution Plan") and pursuant to the
Distribution Plan, has entered into a Distribution Agreement with
InterSecurities, Inc. ("ISI"), principal underwriter for the WRL Series
Fund, Inc. Under the Distribution Plan, the WRL Series Fund, Inc., on
behalf of the WRL Growth Portfolio, the Global Portfolio and the Emerging
Growth Portfolios authorized to pay to various service providers, as
direct payment for expenses incurred in connection with the distribution
of the Portfolio's shares, amounts equal to actual expenses associated
with distributing the Portfolio's shares, up to a maximum rate of 0.15%
(fifteen one-hundredths of one percent) on an annualized basis of the
average daily net assets. This fee is measured and accrued daily and paid
monthly. ISI has determined that it will not seek payment by the WRL
Series Fund, Inc. of distribution expenses with respect to any portfolio
(including the WRL Growth Portfolio) during the fiscal year ending
December 31, 1997. Owners will be notified in advance prior to ISI's
seeking such reimbursement.
(7) Annualized Expenses from April 30, 1996, (commencement of portfolio
operations) to December 31, 1996, for Underlying Fund.

- 13 -
<PAGE>

Examples

An Owner would pay the following expenses on a $1,000 investment, assuming a
hypothetical 5% annual return on assets and assuming the entire Policy Value
is in the applicable Subaccount:

1. If the Policy is surrendered at the end of the applicable time period:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Atlas Advisers, Inc.
Balanced Growth Subaccount...............................
Dreyfus Corporation
Capital Appreciation Subaccount..........................
Disciplined Stock Subaccount.............................
Growth & Income Subaccount...............................
Quality Bond Subaccount..................................
Small Cap Subaccount.....................................
Small Cap Value (End.) Subaccount........................
Federated Advisers
High Income Bond Fund II Subaccount......................
Utility Fund II Subaccount...............................
Janus Capital Corp.
Global (WRL) Subaccount..................................
Growth (WRL) Subaccount..................................
OpCap Advisors
Value Equity (End.) Subaccount...........................
T. Rowe Price Associates, Inc.
Equity Income (End.) Subaccount..........................
Growth Stock (End.) Subaccount...........................
Van Kampen American Capital Asset Management, Inc.
Emerging Growth (WRL) Subaccount.........................
</TABLE>

2. If the Policy is annuitized at the end of the applicable time period:

- 14 -
<PAGE>

3. If the Policy is not surrendered or annuitized:

The above tables are intended to assist the Owner in understanding the costs
and expenses of the Mutual Fund Account and the Underlying Funds that the
Owner will bear, directly or indirectly. These include the 1996 expenses of
the Underlying Funds, or in the case of the Atlas Insurance Trust, its
estimated expenses for 1997. (See "CHARGES AND DEDUCTIONS," p. 40, and the
Underlying Funds' prospectuses.) In addition to the expenses listed above,
premium taxes, currently ranging from 0% to 3.50% of Premium Payments may be
applicable.

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS
THAN THE ASSUMED RATE. THE FIGURES AND DATA FOR UNDERLYING FUND ANNUAL
EXPENSES HAVE BEEN PROVIDED (OR ESTIMATED) BY THE UNDERLYING FUNDS FOR 1996
AND PFL HAS NOT INDEPENDENTLY VERIFIED THEIR ACCURACY.

DEATH BENEFIT

In the event that the Annuitant who is not the Owner dies prior to the
Annuity Commencement Date, the Owner will become the Annuitant unless the
Owner specifically requests on the application or in a Written Request that
the death benefit be paid upon the Annuitant's death and PFL agrees to such an
election. If the Annuitant is also the Owner, upon receipt of proof that the
Annuitant has died before the Annuity Commencement Date, the Death Benefit is
calculated and is payable to the Beneficiary when we receive an election of
the method of settlement and return of the Policy.

The amount of the Death Benefit will depend on the state where the Policy is
purchased and the age(s) of the Annuitant(s) on the Policy Date. The death
benefit is equal to the greatest of: (1) the Policy Value on the date PFL
receives due proof of the Annuitant's death and an election of a method of
settlement; (2) the Cash Value on the date PFL receives due proof of the
Annuitant's death and an election of a method of settlement; and (3) the
Guaranteed Minimum Death Benefit, plus any additional Premium Payments
received less any Gross Partial Withdrawals, from the date of the Annuitant's
death to the date of payment of death proceeds.

- 15 -
<PAGE>

PFL guarantees that the Death Benefit will be at least a minimum amount (the
"Guaranteed Minimum Death Benefit") as follows: When all of the Annuitants are
younger than age 75 on the Policy Date, the Guaranteed Minimum Death Benefit
is the greater of a "5% Annually Compounding" Death Benefit or a "Step-Up"
Death Benefit. The "5% Annually Compounding" Death Benefit is equal to: (a)
the total Premium Payments; minus (b) Adjusted Partial Withdrawals, (as
described below); plus (c) interest accumulated at 5% per year from the
Premium Payment or withdrawal date to the earlier of the Annuitant's date of
death or the Annuitant's 76th birthday. The "Step-Up" Death Benefit is equal
to (a) the largest Policy Value on the Policy Date or on any Policy
Anniversary prior to the earlier of the Annuitant's date of death or prior to
the Annuitant's 76th birthday; plus (b) any Premium Payments subsequent to the
date of the Policy Anniversary with the largest Policy Value; minus (c) any
Adjusted Partial Withdrawals (as described below), subsequent to the date of
the Policy Anniversary with the largest Policy Value.

When any Annuitant is age 75 or older on the Policy Date, the Guaranteed
Minimum Death Benefit is a "Return of Premium" Death Benefit, which is equal
to: (a) the total Premium Payments; minus (b) Adjusted Partial Withdrawals,
(as described below) as of the Annuitant's date of death.

The Adjustment factor is equal to: the amount of the death proceeds prior to
the partial withdrawal; divided by the Policy Value prior to the partial
withdrawal.

The Death Benefit is not paid on the death of an Owner if the Owner is not
the Annuitant. If an Owner who is not the Annuitant dies before the Annuity
Commencement date, the amount payable under the Policy upon surrender will be
the Policy Value increased or decreased by any applicable Excess Interest
Adjustment.

If the age or sex of an Annuitant has been misstated, the death benefit will
be that which the Premium Payments would have purchased for the correct age or
sex of that Annuitant.

VARIATIONS IN POLICY PROVISIONS

Certain provisions of the Policies may vary from the descriptions in this
Prospectus in order to comply with different state laws. See the Policy itself
for variations. Any such state variations will be included in the Policy
itself or in riders or endorsements attached to the Policy.

New Jersey residents: Annuity payments must begin on or before the Policy
Anniversary that is closest to the Annuitant's 70th birthday or the 10th
Policy Anniversary, whichever occurs last. The Owner may not select a
Guaranteed Period Option that would extend beyond that date. The Owner's
options at the Annuity Commencement Date are to elect a lump sum payment, or
elect to receive annuity payments under one of the Fixed Payment Options. New
Jersey residents cannot elect Variable Payment Options. Consult your agent and
the policy form itself for details regarding these and other terms applicable
to policies sold in New Jersey.

FEDERAL INCOME TAX CONSEQUENCES OF INVESTMENT IN THE POLICY

With respect to Owners who are natural persons, there should be no federal
income tax on increases in the Policy Value until a distribution under the
Policy occurs (e.g., a surrender or Annuity Payment) or is deemed to occur
(e.g., a pledge or assignment of a Policy). Generally, a portion of any
distribution or deemed distribution will be taxable as ordinary income. The
taxable portion of certain distributions will be subject to withholding unless
the recipient elects otherwise. In addition, a penalty tax may apply to
certain distributions or deemed distributions under the Policy. (See "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES," p. 42.)

- 16 -
<PAGE>

REQUESTS FOR INFORMATION

Any telephone requests and inquiries should be made to Atlas at 1-800-933-
2852.

Any Written Notices or Written Requests should be sent to the following
address:

Atlas Securities, Inc.
794 Davis Street, PO Box 1894
San Leandro CA 94577

Written Notices or Written Requests may also be sent to:

PFL Life Insurance Company
Administrative and Service Office:
Financial Markets Division--Variable Annuity Dept.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001

Note: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this Prospectus and in the Statement of
Additional Information and in the prospectuses for the Underlying Funds and in
the Policy, all of which should be referred to for more detailed information.
This Prospectus generally describes only the Policy and the Mutual Fund
Account. Separate prospectuses describe the Underlying Funds. (There is no
prospectus for the Fixed Account since interests in the Fixed Account are
deemed not to be securities. See "THE ATLAS PORTFOLIO BUILDER ACCOUNTS--The
Fixed Account, " p. 25.)

- 17 -
<PAGE>

FINANCIAL STATEMENTS

The financial statements of PFL and the independent auditors' report thereon
are contained in the Statement of Additional Information which is available
free upon request to Atlas.

HISTORICAL PERFORMANCE DATA

STANDARDIZED PERFORMANCE DATA

From time to time, PFL and Atlas may advertise historical yields and total
returns for the Subaccounts of the Mutual Fund Account. These figures will be
calculated according to standardized methods prescribed by the Securities and
Exchange Commission ("SEC"). They will be based on historical returns and are
not intended to indicate future performance.

The yield of a Subaccount of the Mutual Fund Account for a Policy refers to
the annualized income generated by an investment under a Policy in the
Subaccount over a specified 30-day period. The yield is calculated by assuming
that the income generated by the investment during that 30-day period is
generated each 30-day period over a 12-month period and is shown as a
percentage of the investment.

The total return of a Subaccount of the Mutual Fund Account refers to return
quotations assuming an investment under a Policy has been held in the
Subaccount for various periods of time including, but not limited to, a period
measured from the date the Subaccount commenced operations. When a Subaccount
has been in operation for 1, 5, and 10 years, respectively, the total return
for these periods will be provided. The total return quotations for a
Subaccount will represent the average annual compounded rates of return that
equate an initial investment of $1,000 in the Subaccount to the redemption
value of that investment as of the last day of each of the periods for which
total return quotations are provided.

The yield and total return calculations for a Subaccount do not reflect the
effect of any premium taxes that may be applicable to a particular Policy. The
yield calculations also do not reflect the effect of any Surrender Charge that
may be applicable to a particular Policy. To the extent that any or all of a
premium tax and/or Surrender Charge is applicable to a particular Policy, the
yield and/or total return of that Policy will be reduced. For additional
information regarding yields and total returns calculated using the standard
formats briefly summarized above, please refer to the Statement of Additional
Information, a copy of which may be obtained from PFL's Administrative and
Service Office upon request.

HYPOTHETICAL PERFORMANCE DATA OF SUBACCOUNTS

The following performance data is for hypothetical subaccounts which would
be subject to the same fees, charges and deductions as the Subaccounts of the
Mutual Fund Account, but which are shown as if the hypothetical subaccounts
actually commenced operations on the same date as the underlying Portfolio.
Accordingly, the following hypothetical performance data is for periods before
the Subaccounts actually commenced operations, and is based on the performance
of the Underlying Funds adjusted to reflect the Mutual Fund Account charges.

- 18 -
<PAGE>

The following information is also based on the method of calculation
described in the Statement of Additional Information. The average annual total
returns for periods ended December 31, 1996, were as follows:

HYPOTHETICAL AVERAGE ANNUAL TOTAL RETURNS(1)

<TABLE>
<CAPTION>
FROM
PORTFOLIO CORRESPONDING
INCEPTION OR PORTFOLIO
1 YEAR 5 YEARS 10 YEARS INCEPTION DATE
------ ------- ------------ --------------
<S> <C> <C> <C> <C>
Atlas Advisers, Inc.
Balanced Growth Subaccount....... N/A N/A N/A (2)
Dreyfus Corporation
Capital Appreciation Subaccount..
Disciplined Stock Subaccount.....
Growth & Income Subaccount.......
Quality Bond Subaccount..........
Small Cap Subaccount.............
Small Cap Value (End.)
Subaccount......................
Federated Advisers
High Income Bond Fund II
Subaccount......................
Utility Fund II Subaccount.......
Janus Capital Corp.
Global (WRL) Subaccount..........
Growth (WRL) Subaccount..........
OpCap Advisors
Value Equity (End.) Subaccount...
T. Rowe Price Associates, Inc.
Equity Income (End.) Subaccount..
Growth Stock (End.) Subaccount...
Van Kampen American Capital Asset
Management, Inc.
Emerging Growth (WRL)
Subaccount......................
</TABLE>
- --------
(1) This performance data is hypothetical for the Atlas Portfolio Builder
Variable Annuity. For purposes of this calculation, the deductions for the
Mortality and Expense Risk Fee and Administrative Charge are made on a
monthly basis, rather than a daily basis. Accumulation Unit values and
yields will fluctuate and there is no guarantee the Owner will receive
back the Owner's original premium payments. Average Annual Total Returns
and Yield include all insurance contract charges.
(2) The Atlas Balanced Growth Portfolio is expected to commence operations on
or about the date of this Prospectus, therefore no comparable information
is available.

- 19 -
<PAGE>

NON-STANDARDIZED PERFORMANCE DATA

PFL may from time to time also advertise or disclose average annual total
return or other performance data in non-standard formats for a Subaccount of
the Mutual Fund Account. The non-standard performance data may assume that no
Surrender Charge is applicable, and may also make other assumptions such as
the amount invested in a Subaccount, differences in time periods to be shown,
or the effect of partial withdrawals or annuity payments.

The following hypothetical non-standardized average annual total return
figures are based on the assumption that the Policy is not surrendered, and
therefore no Surrender Charge is imposed.

HYPOTHETICAL AVERAGE ANNUAL TOTAL RETURNS
(ASSUMING NO SURRENDER CHARGE)(1)

All non-standard performance data will be advertised only if the standard
performance data is also disclosed. For additional information regarding the
calculation of other performance data, please refer to the Statement of
Additional Information, a copy of which may be obtained free from Atlas.

- 20 -
<PAGE>

PUBLISHED RATINGS

PFL may from time to time publish in advertisements, sales literature and
reports to Owners, the ratings and other information assigned to it by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's Insurance Ratings Services, Moody's Investors Service, and Duff &
Phelps Credit Rating Co. The purpose of the ratings is to reflect the
financial strength and/or claims-paying ability of PFL and they should not be
considered as bearing on the investment performance of assets held in the
Mutual Fund Account or of the safety or riskiness of an investment in the
Mutual Fund Account. Each year the A.M. Best Company reviews the financial
status of thousands of insurers, culminating in the assignment of Best's
ratings. These ratings reflect their current opinion of the relative financial
strength and operating performance of an insurance company in comparison to
the norms of the life/health insurance industry. In addition, the claims-
paying ability of PFL as measured by Standard & Poor's Insurance Ratings
Services, Moody's Investors Service or Duff & Phelps Credit Rating Co. may be
referred to in advertisements or sales literature or in reports to Owners.
These ratings are opinions of an operating insurance company's financial
capacity to meet the obligations of its insurance policies in accordance with
their terms. Claims-paying ability ratings do not refer to an insurer's
ability to meet non-policy obligations such as debt or commercial paper
obligations.

PFL LIFE INSURANCE COMPANY

PFL Life Insurance Company ("PFL"), 4333 Edgewood Road, N.E., Cedar Rapids,
Iowa 52499-0001, is a stock life insurance company. It was incorporated under
the name NN Investors Life Insurance Company, Inc. under the laws of the State
of Iowa on April 19, 1961. It is principally engaged in the sale of life
insurance and annuity policies, and is licensed in the District of Columbia,
Guam, and in all states except New York. As of December 31, 1996, PFL had
assets of approximately $7.9 billion. PFL is a wholly-owned indirect
subsidiary of AEGON USA, Inc. which conducts substantially all of its
operations through subsidiary companies engaged in the insurance business or
in providing non-insurance financial services. All of the stock of AEGON USA,
Inc., is indirectly owned by AEGON n.v. of the Netherlands, the securities of
which are publicly traded. AEGON n.v., a holding company, conducts its
business through subsidiary companies engaged primarily in the insurance
business.

THE ATLAS PORTFOLIO BUILDER ACCOUNTS

Premium Payments made under a Policy may be allocated to the Mutual Fund
Account, to the Fixed Account, or to a combination of these Accounts.

THE MUTUAL FUND ACCOUNT

The Mutual Fund Account was established as a separate investment account of
PFL under the laws of the State of Iowa on February 17, 1997. The Mutual Fund
Account receives and currently invests the Premium Payments under the Policies
that are allocated to it for investment only in shares of the Underlying
Funds.

The Mutual Fund Account currently is divided into fifteen Subaccounts.
Additional Subaccounts may be established in the future at the discretion of
PFL. Each Subaccount invests exclusively in shares of one of the Portfolios of
the Underlying Funds. Under Iowa law, the assets of the Mutual Fund Account
are owned by PFL but they are held separately from the other assets of PFL. To
the extent that these assets are attributable to the Policy Value of the
Policies, these assets are not chargeable with liabilities incurred in any
other business operation of PFL. Income, gains, and losses incurred on the
assets in the Subaccounts of the Mutual Fund Account, whether or not realized,
are credited to or charged against that Subaccount without regard to other
income, gains or losses of any other Account or Subaccount of PFL. Therefore,
the investment performance of any Subaccount should be entirely independent of
the investment performance of PFL's general account assets or any other
Account or Subaccount maintained by PFL.

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The Mutual Fund Account is registered with the SEC under the Investment
Company Act of 1940 (the "1940 Act") as a unit investment trust and meets the
definition of a separate account under federal securities laws. However, the
SEC does not supervise the management or the investment practices or policies
of the Mutual Fund Account or PFL.

Underlying Funds. The available Subaccounts of the Mutual Fund Account
currently invest exclusively in shares of the Underlying Funds. Each of the
Underlying Funds are diversified, open-end management investment companies,
except for the Atlas Insurance Trust because it invests in a limited number of
mutual funds. Although the Atlas Insurance Trust is a "nondiversified"
investment company, the underlying Atlas Funds in which it invests are
themselves diversified investment companies.

Certain information concerning the Underlying Funds is set forth below. More
detailed information may be found in the Underlying Funds' current
prospectuses, which accompany or precede this Prospectus, and the Underlying
Funds' current Statements of Additional Information. The following description
is qualified in its entirety by reference to each Underlying Fund's prospectus
and Statement of Additional Information where more detailed information may be
found.

The fifteen Portfolios offered by the Underlying Funds provide a range of
investment alternatives that vary according to the different investment
objectives described in the Underlying Funds' prospectuses and summarized
below. The assets of each Portfolio are separate from the others, and each
Portfolio has separate investment objectives and policies. As a result, each
Portfolio operates as a separate investment fund, and the investment
performance of one Portfolio has no effect on the investment performance of
any other Portfolio. Each of the Portfolios may not be available for
investment in every state.

The ATLAS BALANCED GROWTH PORTFOLIO seeks long-term growth of capital, and
moderate current income. The Portfolio is designed to provide broad one-step
diversification among equity, fixed income, and money market securities. The
Portfolio is a "fund of funds" that diversifies its assets within set limits
among several underlying Atlas Funds. The Portfolio's strategy of investment
in other mutual funds results in greater expenses than may be incurred by
investing in the underlying Atlas Funds directly. However, the underlying
Atlas Funds are not available through the purchase of variable annuity
contracts.

The DREYFUS CAPITAL APPRECIATION PORTFOLIO seeks to provide long-term
capital growth consistent with the preservation of capital, current income is
a secondary investment objective. This portfolio invests primarily in the
common stocks of domestic and foreign issuers.

The DREYFUS DISCIPLINED STOCK PORTFOLIO seeks to provide investment results
that are greater than the total return performance of publicly-traded common
stocks in the aggregate, as represented by the Standard & Poor's 500 Composite
Stock Price Index. This portfolio will use quantitative statistical modeling
techniques to construct a portfolio in an attempt to achieve its investment
objective, without assuming undue risk relative to the broad stock market.

The DREYFUS GROWTH AND INCOME PORTFOLIO seeks to provide long-term capital
growth, current income and growth of income, consistent with reasonable
investment risk. This portfolio invests primarily in equity securities, debt
securities and money market instruments of domestic and foreign issuers.

The DREYFUS QUALITY BOND PORTFOLIO seeks to provide the maximum amount of
current income to the extent consistent with the preservation of capital and
the maintenance of liquidity. This portfolio invests principally in debt
obligations of corporations, the U.S. Government and its agencies and
instrumentalities, and U.S. major banking institutions.

The DREYFUS SMALL CAP PORTFOLIO seeks to maximize capital appreciation. This
portfolio invests primarily in common stocks of domestic and foreign issuers.
This portfolio will be particularly alert to companies that The Dreyfus
Corporation considers to be emerging smaller-sized

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<PAGE>

companies which are believed to be characterized by new or innovative
products, services or processes which would enhance prospects for growth in
future earnings.

The DREYFUS SMALL CAP VALUE (ENDEAVOR) PORTFOLIO seeks capital appreciation
through investments in a diversified portfolio of equity securities of
companies with a median market capitalization of approximately $750 million,
provided that under normal market conditions at least 75% of the portfolio's
investments will be in equity securities of companies with capitalizations at
the time of purchase between $150 million and $1.5 billion.

The FEDERATED HIGH INCOME BOND FUND II PORTFOLIO seeks high current income.
The portfolio endeavors to achieve its objective by investing primarily in a
professionally managed, diversified portfolio of fixed income securities. The
fixed income securities in which the Fund intends to invest are lower-rated
corporate debt obligations, which are commonly referred to as "junk bonds."
Some of these fixed income securities may involve equity features. Capital
growth will be considered, but only when consistent with the investment
objective of high current income.

The FEDERATED UTILITY FUND II PORTFOLIO seeks moderate capital appreciation
and high current income by investing in a professionally-managed, diversified
portfolio of utility company equity and debt securities. The portfolio is
actively managed to help reduce interest rate risk through the use of
convertible securities.

The VALUE EQUITY (ENDEAVOR) PORTFOLIO MANAGED BY OPCAP ADVISORS seeks long-
term capital appreciation through investment in securities (primarily equity
securities) of companies that are believed by the portfolio's investment
advisor to be undervalued in the marketplace in relation to factors such as
the companies' assets or earnings.

The GLOBAL (WRL) PORTFOLIO MANAGED BY JANUS CAPITAL CORP. seeks long-term
growth of capital in a manager consistent with preservation of capital,
primarily through investments in common stocks of foreign and domestic
issuers. The portfolio seeks to invest in companies and other organizations on
a worldwide basis, regardless of country of organizations or place of
principal business activity, as well as domestic and foreign governments,
government agencies and other governmental entities. Realization of income is
not a significant investment consideration and any income realized on the
portfolio's investments will, therefore, be incidental to the portfolio's
objective.

The GROWTH (WRL) PORTFOLIO MANAGED BY JANUS CAPITAL CORP. seeks growth of
capital. The portfolio will invest substantially all of its assets in common
stocks when the portfolio manager believes that the relevant market
environment favors profitable investing in those securities. Common stock
investments are selected in industries and companies that the portfolio
manager believes are experiencing favorable demand for their products and
services, and which operate in a favorable competitive environment and
regulatory climate. The portfolio manager's analysis and selection process
focuses on stocks issued by companies with earnings growth potential. In
particular, the WRL Growth Portfolio intends to buy stocks with earnings
growth potential that may not be recognized by the market. Securities are
selected solely for their growth potential; investment income is not a
consideration.

The T. ROWE PRICE EQUITY INCOME (ENDEAVOR) PORTFOLIO seeks to provide
substantial dividend income and also capital appreciation by investing
primarily in dividend-paying common stocks of established companies. In
pursuing its objective, the portfolio emphasizes companies with favorable
prospects for increasing dividend income, and secondarily, capital
appreciation. Over time, the income component (dividends and interest earned)
of the portfolio's investments is expected to be a significant contributor to
the portfolio's total return. The portfolio's yield is expected to be
significantly above that of the Standard & Poor's 500 Composite Stock Price
Index. Total return will consist primarily of dividend income and secondarily
of capital appreciation (or depreciation).

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<PAGE>

THE T. ROWE PRICE GROWTH STOCK (ENDEAVOR) PORTFOLIO seeks long-term growth
of capital and to increase dividend income through investment primarily in
common stocks of well-established growth companies. A growth company is
defined by the portfolio's investment adviser as one which: (1) has
demonstrated historical growth of earnings faster than the growth of inflation
and the economy in general; and (2) has indications of being able to continue
this growth pattern in the future. Total return will consist primarily of
capital appreciation or depreciation and secondarily of dividend income.

THE EMERGING GROWTH (WRL) PORTFOLIO MANAGED BY VAN KAMPEN AMERICAN CAPITAL
MANAGEMENT, INC. seeks capital appreciation. The portfolio seeks to achieve
its objective by investing primarily in common stocks of small and medium
sized companies. Under normal conditions, at least 65% of the portfolio's
total assets will be invested in common stocks of small and medium sized
companies, both domestic and foreign, in the early stages of their life cycle,
that the portfolio's sub-adviser believes have the potential to become major
enterprises. Investments in such companies may offer greater opportunities for
growth of capital than larger, more established companies, but also involve
certain special risks. Emerging growth companies often have limited product
lines, markets, or financial resources, and they may be dependent upon one or
a few key people for management. The securities of such companies may be
subject to more abrupt or erratic market movements than securities of larger,
more established companies or the market averages in general.

THERE IS NO ASSURANCE THAT ANY OF THE UNDERLYING FUNDS' PORTFOLIOS WILL
ACHIEVE ITS INVESTMENT OBJECTIVE.

The investment adviser for the Atlas Insurance Trust is Atlas Advisers,
Inc., a subsidiary of Golden West Financial Corporation.

The Dreyfus Variable Investment Fund's investment adviser is the Dreyfus
Corporation, a wholly owned subsidiary of Mellon Bank, N.A., which is a wholly
owned subsidiary of Mellon Bank Corporation.

The Endeavor Series Trust's investment adviser is Endeavor Investment
Advisers, which is a general partnership of which Endeavor Management Co. is
the managing partner. Endeavor Management Co. holds a 50.01% interest in
Endeavor Investment Advisers. AUSA Financial Markets, Inc., an affiliate of
PFL, holds the remaining 49.99% interest.

Federated Insurance Series was originally established as "Insurance
Management Series" in 1993. The investment adviser for the fund is Federated
Advisers.

WRL Series Funds, Inc.'s investment adviser is WRL Investment Management,
Inc., a wholly owned subsidiary of Western Reserve Life Assurance Co. of Ohio,
Inc., which is an affiliate of PFL.

The Underlying Funds' prospectuses should be read carefully before any
decision is made concerning the allocation of Premium Payments to a particular
Subaccount. The Underlying Funds are not limited to selling their shares to
the Mutual Fund Account and are permitted to accept investments from any
separate account of an insurance company and qualified retirement plans. Since
the Portfolios of the Underlying Funds are available to registered separate
accounts offering variable annuity products of PFL, as well as variable
annuity and variable life products of other insurance companies and qualified
retirement plans, there is a possibility that a material conflict may arise
between the interests of the Mutual Fund Account and one or more of the
separate accounts of another participating insurance company. In the event of
a material conflict, the affected insurance companies, including PFL, agree to
take any necessary steps, including removing their separate accounts from the
Underlying Funds, to resolve the matter. See the Underlying Funds'
prospectuses for further details.

PFL may receive expense reimbursements or other revenues from the Underlying
Funds, their portfolios or their investment advisers.

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<PAGE>

Addition, Deletion, or Substitution of Investments. PFL cannot and does not
guarantee that any of the Subaccounts or portfolios will always be available
for Premium Payments, allocations, or transfers. PFL retains the right,
subject to any applicable law, to make certain changes in the Mutual Fund
Account and its investments. PFL reserves the right to eliminate the shares of
any Portfolio held by a Subaccount and to substitute shares of another
Portfolio of the Underlying Funds, or of another registered open-end
management investment company for the shares of any Portfolio, if the shares
of the Portfolio are no longer available for investment or if, in PFL's
judgment, investment in any Portfolio would be inappropriate in view of the
purposes of the Mutual Fund Account. To the extent required by the 1940 Act,
substitutions of shares attributable to an Owner's interest in a Subaccount
will not be made without prior notice to the Owner and the prior approval of
the SEC. Nothing contained herein shall prevent the Mutual Fund Account from
purchasing other securities for other series or classes of variable annuity
policies, or from effecting an exchange between series or classes of variable
annuity policies on the basis of requests made by Owners.

New Subaccounts may be established when, in the discretion of PFL and Atlas,
marketing, tax, investment or other conditions warrant. Any new Subaccounts
may be made available to existing Owners on a basis to be determined by PFL
and Atlas. Each additional Subaccount will purchase shares in a mutual fund
portfolio or other investment vehicle. PFL may also eliminate one or more
Subaccounts if, PFL and Atlas determine that, marketing, tax, investment or
other conditions warrant such change. In the event any Subaccount is
eliminated, PFL and Atlas will notify Owners and request a reallocation of the
amounts invested in the eliminated Subaccount. If no such reallocation is
provided by the Owner, PFL will reinvest the amounts invested in the
eliminated Subaccount in another Subaccount, that PFL deems to be appropriate.

In the event of any such substitution or change, PFL may, by appropriate
endorsement, make such changes in the Policies as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to
be in the best interests of persons having voting rights under the Policies,
the Mutual Fund Account may be (i) operated as a management company under the
1940 Act or any other form permitted by law, (ii) deregistered under the 1940
Act in the event such registration is no longer required or (iii) combined
with one or more other separate accounts. To the extent permitted by
applicable law, PFL also may (1) transfer the assets of the Mutual Fund
Account associated with the Policies to another account or accounts, (2)
restrict or eliminate any voting rights of Owners or other persons who have
voting rights as to the Mutual Fund Account, (3) create new mutual fund
accounts, (4) add new Subaccounts to or remove existing Subaccounts from the
Mutual Fund Account, or combine Subaccounts, or (5) add new underlying funds,
or substitute a new fund for an existing fund.

THE FIXED ACCOUNT

This Prospectus is generally intended to serve as a disclosure document only
for the Policy and the Mutual Fund Account. For complete details regarding the
Fixed Account, see the Policy itself.

Premium Payments allocated and amounts transferred to the Fixed Account
become part of the general account of PFL, which supports insurance and
annuity obligations. Interests in the general account have not been registered
under the Securities Act of 1933 (the "1933 Act"), nor is the general account
registered as an investment company under the 1940 Act. Accordingly, neither
the general account nor any interests therein are generally subject to the
provisions of the 1933 or 1940 Acts. PFL has been advised that while the staff
of the SEC has not reviewed the disclosures in this Prospectus which relate to
the Fixed Account, the disclosures may be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of the statements made in the Prospectus.

The Fixed Account is part of the general assets of PFL, other than those in
the Mutual Fund Account or in any other segregated asset account. The Policy
Owner may allocate Premium Payments to the Fixed Account at the time of
Premium Payment or by subsequent transfers from the Mutual Fund Account.
Rather than the Policy Owner bearing the investment risk, as is the case for
Policy Value allocated to the Mutual Fund Account, PFL bears the full
investment risk for all

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<PAGE>

Policy Value allocated to the Fixed Account. PFL has sole discretion to invest
the assets of its general account, including the Fixed Account, subject to
applicable law. While PFL bears the full investment risk for all Policy Value
in the Fixed Account, the Owner bears the risk that PFL would not be able to
satisfy its contractual obligations.

Premium Payments applied to, and any amounts transferred to, the Fixed
Account will reflect a fixed interest rate. The interest rates PFL sets will
be credited for increments of at least one year measured from each Premium
Payment or transfer date. These rates will never be less than an effective
annual interest rate of 3%.

Upon surrender of the Policy the Owner will receive at least the Premium
Payments applied to, less prior partial withdrawals and transfers from the
Fixed Account.

Guaranteed Periods. PFL may offer optional guaranteed interest rate periods
("Guaranteed Period Options" or "GPOs") into which Premium Payments may be
paid or amounts transferred. Currently, PFL offers Guaranteed Period Options
for periods of 5 or 7 years. The current interest rate PFL sets for funds
placed in each Guaranteed Period Option will apply to those funds until the
end of the Guaranteed Period. At the end of the Guaranteed Period, the Premium
Payment or amount transferred into the Guaranteed Period Option less any
partial withdrawals or transfers from that Guaranteed Period Option, including
the effect of any Excess Interest Adjustment or Surrender Charge due to
partial withdrawals prior to the end of the Guaranteed Period, plus accrued
interest, will be rolled into a new Guaranteed Period Option.

The Owner may choose the Guaranteed Period Option into which the funds are
to be placed by giving PFL notice within 30 days before the end of the
expiring Guaranteed Period. In the absence of such election, the new
Guaranteed Period will be the same as the expiring one. If that Guaranteed
Period Option is no longer offered by PFL, the next shorter Guaranteed Period
Option then being offered will be used. If there is not a shorter Guaranteed
Period Option being offered, PFL will roll the funds into the One Year Fixed
Option.

Surrenders or partial withdrawals from a Guaranteed Period Option prior to
the end of the Guaranteed Period and which are in excess of the cumulative
interest credited at the time of, but prior to, the withdrawal are subject to
an Excess Interest Adjustment on the amount withdrawn. See "DISTRIBUTIONS
UNDER THE POLICY--Excess Interest Adjustment," p. 33.) Transfers of amounts up
to the cumulative interest credited up to the time of the transfer are allowed
with no Excess Interest Adjustment. No other transfers from any Guaranteed
Period Option to any other Investment Option will be allowed prior to the end
of the Guaranteed Period. (See "Transfers," p. 27.)

For purposes of crediting interest, the oldest Premium Payment or transfer
into a Guaranteed Period Option within the Fixed Account, plus interest
allocable to that Premium Payment or transfer, is considered to be withdrawn
first; the next oldest Premium Payment or transfer plus interest is considered
to be withdrawn next, and so on (this is a "first-in, first-out" procedure).

One Year Fixed Option. PFL will offer a One Year Fixed Option, into which
Premium Payments may be paid or amounts transferred. The current interest rate
PFL sets for funds entering this option is guaranteed for one year.
Surrenders, partial withdrawals and transfers from the One Year Fixed Option
to any of the other Investment Options are permitted without incurring any
Excess Interest Adjustments. In addition, Dollar Cost Averaging transfers are
only available from the One Year Fixed Option.

Dollar Cost Averaging. Transfers under a Dollar Cost Averaging program will
not be subject to an Excess Interest Adjustment. Dollar cost averaging
requires regular investment regardless of fluctuating prices and does not
guarantee profits nor prevent losses in a declining market. Before electing
this option, individuals should consider their financial ability to continue
transfers through periods of both high and low price levels. (See "THE ATLAS
PORTFOLIO BUILDER ACCOUNTS--Dollar Cost Averaging" p. 28.)

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<PAGE>

Guaranteed Interest Rates. PFL periodically will establish an applicable
Guaranteed Interest Rate for each of the Guaranteed Period Options within the
Fixed Account, and the One Year Fixed Account Option. Current Guaranteed
Interest Rates may be changed by PFL frequently or infrequently depending on
interest rates on investments available to PFL and other factors as described
below, but once established, the rate will be guaranteed for the entire
duration of the Guaranteed Period. However, any amount withdrawn or
transferred may be subject to an Excess Interest Adjustment, except at the end
of the Guaranteed Period. (See "DISTRIBUTIONS UNDER THE POLICY--Excess
Interest Adjustment," p. 33.)

The Guaranteed Interest Rate will not be less than an effective rate of 3%
per year, regardless of any application of the Excess Interest Adjustment. PFL
has no specific formula for determining the rate of interest that it will
declare as a Guaranteed Interest Rate, as this rate will be reflective of
interest rates available on the types of debt instruments in which PFL intends
to invest amounts allocated to the Fixed Account. In addition, PFL's
management may consider other factors in determining Guaranteed Interest Rates
for a particular Guaranteed Period including but not limited to: regulatory
and tax requirements; sales commissions and administrative expenses borne by
the Company; general economic trends; and consultation with Atlas regarding
competitive factors. There is no obligation to declare a rate in excess of 3%;
the Policy Owner assumes the risk that declared rates will not exceed 3%. PFL
has complete discretion to declare any rate of at least 3%, regardless of
market interest rates, the amounts earned by PFL on its investments, or any
other factors.

PFL'S MANAGEMENT HAS COMPLETE AND SOLE DISCRETION TO DETERMINE THE
GUARANTEED INTEREST RATES. PFL CANNOT PREDICT OR GUARANTEE THE LEVEL OF FUTURE
GUARANTEED INTEREST RATES, EXCEPT THAT PFL GUARANTEES THAT FUTURE GUARANTEED
EFFECTIVE INTEREST RATES WILL NOT BE BELOW 3% PER YEAR.

TRANSFERS

Prior to the Annuity Commencement Date, an Owner can transfer Policy Values
from any of the Investment Options to another Investment Option within certain
limits. Subject to the limitations and restrictions described below, transfers
from an Investment Option may be made, up to thirty days prior to the Annuity
Commencement Date, by sending Written Notice, signed by the Owner, to Atlas.

Transfers currently may be made without charge as often as the Owner wishes,
subject to the minimum dollar amounts specified below. PFL reserves the right
to limit these transfers to no more than 12 per Policy Year in the future or
to charge up to $10 per transfer in excess of 12 per Policy Year.

Transfers of funds among Investment Options are only allowed as follows:

.. Before the Guaranteed Period ends, a maximum amount equal to the interest
credited to any of the Guaranteed Period Options may be transferred
("interest transfers"). No Excess Interest Adjustment will apply to
interest transfers. PFL's interest crediting rates on amounts in the Fixed
Account, however, are determined using a "first-in first-out" ("FIFO")
method, and interest transfers may affect the credited rate on the
remaining amounts. There is a $50 minimum for each interest transfer.
.. When any Guaranteed Period ends, Policy Values may be transferred to any of
the other Investment Options. No Excess Interest Adjustment will apply to
these transfers.
.. Dollar Cost Averaging transfers from the One Year Fixed Account Option may
be made to one or more other Investment Options(subject to limits
established by PFL).
.. Transfers other than Dollar Cost Averaging transfers from the One Year
Fixed Option may be made to one or more Subaccounts of the Mutual Fund
Account. Each such transfer must be at least $500.
.. The minimum amount that may be transferred from a Subaccount of the Mutual
Fund Account to any other Investment Option is the lesser of $500 or the
entire Subaccount value. PFL

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<PAGE>

reserves the right to include the remaining Subaccount value in the
transfer if the remaining value is less than $500.

After the Annuity Commencement Date, transfers out of the Fixed Account are
not permitted. The Owner may transfer the value of the variable annuity units
from one Subaccount to another within the Mutual Fund Account, or to the Fixed
Account. The minimum amount that may be transferred is the lesser of $10
monthly income or the entire monthly income of the variable annuity units in
the Subaccount from which the transfer is being made. If the monthly income of
the remaining units in a Subaccount is less than $10, PFL reserves the right
to include the value of those variable annuity units as part of the transfer.
(See "DISTRIBUTIONS UNDER THE POLICY--Annuity Payment Options," p. 35.)

Transfers may be made by telephone, subject to the provisions described
below under "Telephone Transactions."

REINSTATEMENTS

Requests are occasionally received by PFL to reinstate funds which had been
transferred to another life insurance company pursuant to a Section 1035
exchange or trustee-to-trustee transfer under the Code. In this situation PFL
will require the Owner to replace the same total dollar amount of funds in the
applicable Subaccounts and/or Fixed Accounts as was taken from them to effect
the exchange. The total dollar amount of funds reapplied to the Mutual Fund
Account will be used to purchase a number of Accumulation Units available for
each Subaccount based on the Accumulation Unit values at the date of
reinstatement (within two days of the date the funds are received by PFL). It
should be noted that the number of Accumulation Units available on the
Reinstatement date may be more or less than the number surrendered for the
exchange. Amounts reapplied to the Fixed Account will be entitled to receive
the interest rate they would otherwise have received had they not been
withdrawn. However, an adjustment will be made to the amount reapplied to
compensate PFL for the additional interest credited during the period of time
between the withdrawal and the reapplication of the funds. Owners should
consult a qualified personal tax adviser concerning the tax consequences of
any Internal Revenue Code Section 1035 exchanges or reinstatements.

TELEPHONE TRANSACTIONS

Owners may make transfers and/or change the allocation of subsequent Premium
Payments by telephone if "Telephone Transfer/Reallocation Authorization" has
been requested on the Policy application or subsequent authorization by the
Owner by appropriate Written Request. PFL and Atlas will not be liable for
following instructions communicated by telephone that it reasonably believes
to be genuine. However, PFL and Atlas will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. If either PFL
or Atlas fails to do so, it may be liable for any losses due to unauthorized
or fraudulent instructions. All telephone requests will be recorded on voice
recorder equipment for the protection of the Owner. The Owner, when making
telephone requests, will be required to provide the Owner's social security
number, and/or other information for identification purposes.

Telephone requests must be received by Atlas no later than 1:00 p.m. Pacific
(3:00 p.m. Eastern) time in order to receive same-day pricing of the
transaction.

The telephone transaction privilege may be discontinued at any time as to
some or all Owners and PFL may require written confirmation of a telephone
transaction request at its discretion.

DOLLAR COST AVERAGING (DCA)

Under the Dollar Cost Averaging program, prior to the Annuity Commencement
Date, the Owner can instruct PFL to automatically transfer a dollar amount
specified by the Owner from the One Year Fixed Option to any other Subaccount
or Subaccounts of the Mutual Fund Account. The automatic transfers can occur
monthly or quarterly and will occur on the 28th day of the month. If

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<PAGE>

the DCA request is received prior to the 28th day of any month, the first
transfer will occur on the 28th day of that month. If the DCA request is
received on or after the 28th day of any month, the first transfer will occur
on the 28th day of the following month.

Dollar Cost Averaging results in the purchase of more Accumulation Units
when the Accumulation Unit value is low, and fewer Accumulation Units when the
Accumulation Unit value is high. However, there is no guarantee that the
Dollar Cost Averaging program will result in higher Policy Values or will
otherwise be successful.

The Owner may request Dollar Cost Averaging either at the time of purchase
of the Policy or later. The program will terminate when the amount in the One
Year Fixed Account is insufficient for the next transfer, at which time the
entire remaining balance is transferred. The Owner may start, stop, increase
or decrease the amount of the Dollar Cost Averaging transfers by submitting a
new Dollar Cost Averaging form or a Written Notice which gives PFL the facts
needed. There is no charge for participation in this program.

ASSET REBALANCING

Prior to the Annuity Commencement Date the Owner may instruct PFL to
automatically transfer amounts among the Subaccounts of the Mutual Fund
Account and the One Year Fixed Option on a regular basis to maintain a desired
allocation of the Policy Value among the One Year Fixed Option and the various
Subaccounts offered. Rebalancing will occur on a monthly, quarterly, semi-
annual, or annual basis based on the Policy Date, and beginning on a date
selected by the Owner. The Owner must select the percentage of the One Year
Fixed Option Policy Value and the Mutual Fund Account Policy Value desired in
each of the various Subaccounts offered (totaling 100%). Any amounts in the
Guaranteed Period Options of the Fixed Account are ignored for purposes of
asset rebalancing. Rebalancing may be started, stopped, or changed at any
time, except that rebalancing will not be available when: (1) a Dollar Cost
Averaging program is in effect; or (2) any other transfer is requested.

Asset rebalancing transactions are not subject to an Excess Interest
Adjustment. There is no charge for participation in this program.

THE POLICY

The Atlas Portfolio Builder Variable Annuity Policy is a flexible premium
variable annuity policy. The rights and benefits under the Policy are
summarized below; however, the description of the Policy contained in this
Prospectus is qualified in its entirety by reference to the Policy itself, a
copy of which is available upon request from PFL. The Policy may be purchased
on a non-tax qualified basis ("Nonqualified Policy"). The Policy may also be
purchased and used in connection with retirement plans or individual
retirement accounts that qualify for favorable federal income tax treatment
("Qualified Policy").

POLICY APPLICATION AND ISSUANCE OF POLICIES--PREMIUM PAYMENTS

Before it will issue a Policy, PFL must receive a completed Policy
application or transmittal form and a minimum initial Premium Payment of
$5,000 for a Nonqualified Policy or $2,000 for a Qualified Policy at its
Administrative and Service Office. There is no minimum initial Premium Payment
required for tax deferred 403(b) annuities, the Owner may specify any amount
for such annuities. PFL reserves the right to increase or decrease these
amounts for a class of Policies issued after some future date. For 403(b)
annuities, PFL must receive the initial Premium Payment within ninety days
following the Policy Date or the Policy will be canceled. A Policy ordinarily
will be issued only in respect of Owners and Annuitants Age 0 through 80.
Acceptance or declination of an application shall be based on PFL's
underwriting standards, and PFL reserves the right to reject any application
or Premium Payment based on those underwriting standards. The initial Premium
Payment is the only Premium Payment required to be paid under a Policy.

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<PAGE>

If the application or transmittal form can be accepted in the form received,
the initial Premium Payment will be credited to the Policy Value within two
Business Days after the later of receipt of the information needed to issue
the Policy and receipt of the initial Premium Payment. If the initial Premium
Payment cannot be credited because the application or other issuing
requirements are incomplete, the applicant will be contacted within five
Business Days and given an explanation for the delay and the initial Premium
Payment will be returned at that time unless the applicant consents to PFL's
retaining the initial Premium Payment and crediting it as soon as the
necessary requirements are fulfilled.

The date on which the initial Premium Payment is credited to the Policy
Value is the Policy Date. The Policy Date is the date used to determine Policy
Years and Policy Anniversaries.

All checks or drafts for Premium Payments should be made payable to PFL Life
Insurance Company. The Death Benefit will not take effect until the Premium
Payment is received and any check or draft for the Premium Payment is honored.

Additional Premium Payments. While the Annuitant is living and prior to the
Annuity Commencement Date, the Owner may make Additional Premium Payments at
any time, and in any frequency. The minimum Additional Premium Payment under
both a Nonqualified Policy and a Qualified Policy is $500. Additional Premium
Payments will be credited to the Policy and added to the Policy Value as of
the Business Day when the premium and required information are received by PFL
at its Administrative and Service Office.

Maximum Total Premium Payments. The maximum total Premium Payments allowed
without prior approval of PFL is $1,000,000.

Allocation of Premium Payments. An Owner must allocate Premium Payments to
one or more of the Investment Options. THE OWNER MUST SPECIFY THE INITIAL
ALLOCATION IN THE POLICY APPLICATION OR TRANSMITTAL FORM. THIS ALLOCATION WILL
BE USED FOR ADDITIONAL PREMIUM PAYMENTS UNLESS THE OWNER REQUESTS A CHANGE OF
ALLOCATION. All allocations must be made in whole percentages and must total
100%. If the Owner fails to specify how Premium Payments are to be allocated,
the Premium Payment(s) cannot be accepted.

The Owner may change the allocation instructions for future Additional
Premium Payments by sending a Written Notice or by telephone (subject to the
provisions described under "THE ATLAS PORTFOLIO BUILDER ACCOUNTS--Telephone
Transactions," p. 28). The allocation change will apply to Premium Payments
received after the date the Written Notice or telephone request is received.

Payment Not Honored by Bank. Any payment due under the Policy which is
derived, all or in part, from any amount paid to PFL by check or draft may be
postponed until such time as PFL determines that such instrument has been
honored.

POLICY VALUE

On or before the Annuity Commencement Date, the Policy Value is equal to the
Owner's:

(1) Premium Payments; minus
(2) Partial withdrawals (including any applicable Excess Interest
Adjustments and/or Surrender Charges on such withdrawals); plus
(3) interest credited in the Fixed Account; plus or minus
(4) accumulated gains or losses in the Mutual Fund Account; minus
(5) Premium taxes and transfer fees, if any.

The Policy Value is expected to change from Valuation Period to Valuation
Period, reflecting the investment experience of the selected Subaccount(s), as
well as the deductions for charges. A Valuation Period is the period between
successive Business Days. It begins at the close of business

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<PAGE>

on each Business Day and ends at the close of business on the next succeeding
Business Day. A Business Day is each day that the New York Stock Exchange is
open for trading. Holidays are generally not Business Days.

The Mutual Fund Policy Value. When a Premium Payment is allocated or an
amount is transferred to a Subaccount of the Mutual Fund Account, it is
credited to the Policy Value in the form of Accumulation Units. Each
Subaccount of the Mutual Fund Account has a distinct Accumulation Unit value.
The number of units credited is determined by dividing the Premium Payment or
amount transferred to the Subaccount by the Accumulation Unit value of the
Subaccount as of the end of the Valuation Period during which the allocation
is made. When amounts are transferred out of, or fully surrendered or
partially withdrawn from a Subaccount, Accumulation Units are canceled or
redeemed in a similar manner.

For each Subaccount, the Accumulation Unit Value for a given Business Day is
based on the net asset value of a share of the corresponding Portfolio of the
Underlying Funds less any applicable charges or fees. Therefore, the
Accumulation Unit Values will fluctuate from day to day based on the
investment experience of the corresponding Portfolio. The determination of
Subaccount Accumulation Unit Values is described in detail in the Statement of
Additional Information.

AMENDMENTS

No change in the Policy is valid unless made in writing by PFL and approved
by one of PFL's officers. No Registered Representative has authority to change
or waive any provision of the Policy.

PFL reserves the right to amend the Policies to meet the requirements of the
Internal Revenue Code, regulations or published rulings. An Owner can refuse
such a change by giving Written Notice, but a refusal may result in adverse
tax consequences.

NON-PARTICIPATING POLICY

The Policy does not participate or share in the profits or surplus earnings
of PFL. No dividends are payable on the Policy.

DISTRIBUTIONS UNDER THE POLICY

SURRENDERS

Prior to the Annuity Commencement Date, the Owner may surrender all or a
portion of the Cash Value in exchange for a payment from PFL. The Cash Value
is the Adjusted Policy Value, less the Surrender Charge, if any. (See
"DISTRIBUTIONS UNDER THE POLICY--Annuity Payment Options," p. 35.) The Policy
cannot be surrendered after the Annuity Commencement Date. (See "DISTRIBUTIONS
UNDER THE POLICY--Annuity Payments," p. 34.)

When requesting a partial withdrawal ($250 minimum), the Owner must instruct
PFL how the amount withdrawn is to be allocated among the various Investment
Options. If the Owner's request for a partial withdrawal from a Fixed Account
Option is greater than the Cash Value of that Fixed Account Option, PFL will
pay the Owner the amount of the Cash Value of that Fixed Account Option. If no
allocation instructions are given, the withdrawal will be deducted from each
Investment Option in the same proportion that the Owner's interest in each
Investment Option bears to the total Policy Value. If any partial withdrawal
reduces the Cash Value below $500, PFL reserves the right to pay the full Cash
Value and terminate the Policy. PFL reserves the right to defer payment of the
Cash Value from the Fixed Account for up to six months. If the Annuitant dies
after PFL receives the request, but before the request is processed, the
request will be processed before the death proceeds are determined.

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<PAGE>

In each Policy Year the Owner may request partial surrenders ($250 minimum)
of up to 10% of the cumulative premiums at the time of withdrawal free of
Surrender Charges. The amount that may be taken free of Surrender Charges each
Policy Year is cumulative. This is referred to as the Cumulative Free
Percentage. That is, Cumulative Free Percentages which are not taken are
carried forward and are available to be taken in subsequent Policy Years free
of Surrender Charges. Cumulative Free percentage withdrawals previously taken
reduce the Cumulative Free Percentage that is available. For example, 10%
Cumulative Free Percentage is available at the beginning of the first Policy
Year. If no partial withdrawals are taken in the first Policy Year, the first
year unused Cumulative Free Percentage of 10% is carried forward to the second
Policy Year. The unused 10% from year one plus 10% additional Cumulative Free
Percentage available at the beginning of Policy Year two accumulates to a 20%
Cumulative Free Percentage as of the beginning of Policy Year two. Assume only
5% is used in Policy Year two. Thus the Cumulative Free Percentage available
as of the beginning of Policy Year three would be 25% (i.e., 20% - 5% = 15%
unused from Policy Year two, plus an additional 10% available at the beginning
of Policy Year three). Amounts withdrawn in excess of the available Cumulative
Free Percentage will be subject to a Surrender Charge (up to 7%).

Upon surrender or Partial Withdrawal, the cumulative interest credited at
the time of, but prior to, the surrender or Partial Withdrawal will not be
subject to an Excess Interest Adjustment.

The Gross Partial Withdrawal is the total amount which will be deducted from
the Policy Value as a result of each partial withdrawal and is equal to R
minus E plus SC, where:

R is the requested partial withdrawal;
E is the Excess Interest Adjustment;
SC equals the Surrender Charge on (EPW minus E), where:
EPW is the Excess Partial Withdrawal Amount

The total amount which will be deducted from the Policy Value may be more or
less than the requested partial withdrawal amount, depending on whether
Surrender Charges and/or Excess Interest Adjustments apply at the time the
Owner requests the partial withdrawal. The Excess Partial Withdrawal Amount is
the portion of the requested partial withdrawal that is subject to Surrender
Charge. (See "CHARGES AND DEDUCTIONS--Surrender Charge," p. 40, "DISTRIBUTIONS
UNDER THE POLICY--Excess Interest Adjustment," p. 33 and Appendix A.)

Since the Owner assumes the investment risk with respect to all Premium
Payments allocated to the Mutual Fund Account, and because withdrawals may be
subject to a Surrender Charge, and possibly premium taxes, and withdrawals
from the Fixed Account may be subject to an Excess Interest Adjustment, the
total amount paid upon total surrender of the Cash Value (taking any prior
surrenders into account) may be more or less than the total Premium Payments
made. Following a surrender of the total Cash Value, or at any time the Policy
Value is zero, all rights of the Owner and Annuitant will terminate.

In addition to the Excess Interest Adjustment and Surrender Charge and any
applicable premium taxes, surrenders and partial withdrawals may be subject to
income taxes and, if taken prior to age 59 1/2, a ten percent penalty tax.
(See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES," p. 42.)

NURSING CARE AND TERMINAL CONDITION WITHDRAWAL OPTION

In some states, if the Annuitant, Annuitant's spouse, Owner or Owner's
spouse (only the Annuitant or Annuitant's spouse if the Owner is not a natural
person)-(1) has been confined in a hospital or nursing facility for 30
consecutive days or (2) has been diagnosed as having a terminal condition as
defined in the Policy or endorsement, (generally a life expectancy of not more
than 12 months) then the Surrender Charge and the Excess Interest Adjustment
are not imposed on surrenders or partial withdrawals. (Since this benefit may
not be available in New Jersey--see the Policy or endorsement for details.)

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<PAGE>

EXCESS INTEREST ADJUSTMENT (EIA)

An Excess Interest Adjustment applies in the following situations:

(1) Withdrawal of all or any portion of the Cash Value,
(2) Exercise of the Annuity Payment Options,
(3) When death proceeds are calculated.

The Excess Interest Adjustment is only applied to transactions affecting the
Guaranteed Period Options of the Fixed Account and is based on any change in
interest rates declared by PFL from the time the affected Guaranteed Periods
started until the time the Excess Interest Adjustment Occurs. The Excess
Interest Adjustment is applied as follows:

. The Excess Interest Adjustment is only applied when the transactions
occur before any Guaranteed Period ends;
. Transfers to the Guaranteed Period Options of the Fixed Account are
considered Premium Payments for purposes of determining the Excess
Interest Adjustment;
. The Excess Interest Adjustment is distinct from, and is applied prior
to, the Surrender Charge;
. The Excess Interest Adjustment may affect the Guaranteed Minimum Death
Benefit;
. If interest rates declared by PFL have decreased from the time the
affected Guaranteed Period(s) started until the time the transaction
occurs, the Excess Interest Adjustment will result in additional funds
available to the Owner;
. If interest rates declared by PFL have increased from the time the
affected Guaranteed Period(s) started until the time the transaction
occurs, the Adjustment will result in a decrease in the funds available
to the Owner. However, this decrease, if any, will be limited such that
the interest credited will not fall below the amount determined using
the 3% guaranteed effective annual interest rate;
. At the time of Surrender, the cumulative interest credited to the
Guaranteed Period Options of the Fixed Account will not be subject to an
Excess Interest Adjustment.
. Certain amounts are not subject to the Excess Interest Adjustment.

At the time of surrender of the Policy, the Excess Interest Adjustment for
each Guaranteed Period Option will not reduce the Adjusted Policy Value for
that Guaranteed Period Option below the amount paid into, less any prior
withdrawals and transfers from that Guaranteed Period Option, plus interest at
the 3% guaranteed effective annual interest rate.

The formula for calculating the Excess Interest Adjustment and examples of
the application of the Excess Interest Adjustment are set forth in Appendix A
to this Prospectus.

SYSTEMATIC PAYOUT OPTION

Under the Systematic Payout Option, the Owner can instruct PFL to make, free
from Surrender Charges, automatic payments to the Owner monthly, quarterly,
semi-annually or annually from one or more specified Subaccounts. Monthly and
quarterly payments can only be accomplished by electronic funds transfer
directly to a checking or savings account. The minimum payment is $50. The
maximum payment is 10% of the cumulative Premium Payments at the time the
Systematic Payout is made divided by the number of payments made per year (for
example, 12 for monthly). Any applicable Excess Interest Adjustment would only
apply to systematic payouts which are in excess of the cumulative interest
credited to the Guaranteed Period Options of the Fixed Account (less any prior
withdrawals of interest) at the time of the payout. The "Request for
Systematic Payout" form must specify a date for the first payment, which must
be at least 30 days but not more than one year after the form is submitted
(that is, Systematic Payouts will start at the end of the payment mode
selected, but not earlier than 30 days from the date of request).

The Surrender Charge and Excess Interest Adjustment will be waived for
Owners under age 59 1/2 on Qualified Policies if they take Systematic Payouts
using one of the payout methods described in IRS Notice 89-25, Q&A-12 (the
Life Expectancy Recalculation Option, Amortization, or Annuity Factor) which
generally requires payments for life or life expectancy. These payments must

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<PAGE>

be continued until the later of age 59 1/2 or five years from commencement of
the payments. No additional withdrawals may be taken during the time these
payments are made. For Qualified Policies, Owners age 59 1/2 or older, the
Surrender Charge and Excess Interest Adjustment will be waived if payments are
made using the Life Expectancy Recalculation Option.

Qualified Policies are subject to complex rules with respect to restrictions
on and taxation of distributions, including the applicability of penalty
taxes. In addition, the tax treatment of systematic payouts from Nonqualified
Policies has had an unfavorable ruling regarding the ability to avoid the 10%
penalty tax. Therefore, the Owner should consult a qualified tax adviser
before requesting a Systematic Payout. In certain circumstances withdrawn
amounts may be included in the Owner's gross income. (See "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES," p. 42.)

MINIMUM REQUIRED DISTRIBUTIONS AND RESTRICTIONS UNDER QUALIFIED POLICIES

For Qualified Policies, partial withdrawals taken to satisfy minimum
distribution requirements under section 401(a)(9) of the Code are available
free from Surrender Charges and Excess Interest Adjustments. The amount that
will be available under the Policy will be calculated solely on the basis of
amounts in the Policy, and not other sources. The Owner must submit a Written
Request and be at least 70 1/2 years old in the calendar year that the
distribution is taken. Any amounts taken that are more than needed to satisfy
the minimum required distribution under the Code will have the appropriate
Surrender Charges and Excess Interest Adjustments applied, unless that amount
of the distribution qualifies for another exemption from Surrender Charges and
Excess Interest Adjustments as described in this Prospectus.

Other restrictions with respect to the election, commencement, or
distribution of benefits may apply under Qualified Policies or under the terms
of the plans in respect of which Qualified Policies are issued.

RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM

Section 36.105 of the Texas Educational Code permits participants in the
Texas Optional Retirement Program (ORP) to withdraw their interest in a
variable annuity Policy issued under the ORP only upon: (1) termination of
employment in the Texas public institutions of higher education; (2)
retirement; or (3) death. Accordingly, a participant in the ORP (or the
participant's estate if the participant has died) will be required to obtain a
certificate of termination from the employer or a certificate of death before
the account can be redeemed.

RESTRICTIONS UNDER SECTION 403(B) PLANS

Section 403(b) of the Internal Revenue Code provides for tax-deferred
retirement savings plans for employees of certain non-profit and educational
organizations. In accordance with the requirements of Section 403(b), any
Policy used for a 403(b) plan will prohibit distributions of elective
contributions and earnings on elective contributions except upon death of the
employee, attainment of age 59 1/2, separation from service, disability, or
financial hardship. In addition, income attributable to elective contributions
may not be distributed in the case of hardship.

ANNUITY PAYMENTS

Annuity Commencement Date. Unless the Annuity Commencement Date is changed,
Annuity Payments under a Policy will begin on the Annuity Commencement Date.
The Annuity Commencement Date may be changed from time to time by the Owner by
Written Notice, provided that notice of each change is received by PFL at its
Administrative and Service Office at least thirty (30) days prior to the then
current Annuity Commencement Date. Except as otherwise permitted by PFL, a new
Annuity Commencement Date must be a date which is: (1) at least thirty (30)
days after the date notice of the change is received by PFL and (2) not later
than the last day of the Policy month starting after the Annuitant attains age
85. In no event will an Annuity Commencement Date be permitted to be later
than the last day of the Policy month following the month in which the

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Annuitant attains age 95. The Annuity Commencement Date may also be changed by
the Beneficiary's election of the Annuity Option after the Annuitant's death.

Election of Payment Option. During the lifetime of the Annuitant and prior
to the Annuity Commencement Date, the Owner may choose a Payment Option or
change the election, but Written Notice of any election or change of election
must be received by PFL at its Administrative and Service Office at least
thirty (30) days prior to the Annuity Commencement Date. If no election is
made prior to the Annuity Commencement Date, Annuity Payments will be made
under (i) Option 3, life income with level payments for 10 years certain,
using the existing Adjusted Policy Value of the Fixed Account, or (ii) under
Option 3-V, life income with variable payments for 10 years certain using the
existing Policy Value of the Mutual Fund Account, or (iii) in a combination of
(i) and (ii). If the Adjusted Policy Value on the Annuity Commencement Date is
less than $2000, PFL reserves the right to pay it in one lump sum in lieu of
applying it under a Payment Option.

Prior to the Annuity Commencement Date, the Beneficiary may elect to receive
the Death Benefit in a lump sum or under one of the Payment Options, to the
extent allowed by law and subject to the terms of any settlement agreement.
(See "Death Benefit," p. 38.) Annuity Payments will be made on either a fixed
basis or a variable basis as selected by the Owner (or the Beneficiary, after
the Annuitant's death).

The person who elects a Payment Option can also name one or more successor
payees to receive any unpaid amount PFL has at the death of a payee. Naming
these payees cancels any prior choice of a successor payee.

A payee who did not elect the Payment Option does not have the right to
advance or assign payments, take the payments in one sum, or make any other
change. However, the payee may be given the right to do one or more of these
things if the person who elects the option tells PFL in writing and PFL
agrees.

Unless the Owner specifies otherwise, the payee shall be the Annuitant, or,
after the Annuitant's death, the Beneficiary. PFL may require written proof of
the age of any person who has an annuity purchased under Option 3, 3-V, 5 or
5-V.

Premium Tax. PFL may be required by state law to pay premium tax on the
amount applied to a payment option or upon withdrawal. If so, PFL will deduct
the premium tax before applying or paying the proceeds.

Supplementary Contract. Once proceeds become payable and a Payment Option
has been selected, the Policy will terminate and PFL will issue a
Supplementary Contract to reflect the terms of the option selected. The
Supplementary Contract will name the payees and will describe the payment
schedule.

ANNUITY PAYMENT OPTIONS

The Policy provides five Payment Options which are described below. Two of
these are offered as either "Fixed Payment Options" or "Variable Payment
Options," and three are only available as Fixed Payment Options. The Owner may
elect a Fixed Payment Option, a Variable Payment Option, or a combination of
both. If the Owner elects a combination, he must specify what part of the
Policy proceeds are to be applied to the Fixed and Variable Payment Options
(and he must also specify which Subaccounts for the Variable Payment Options).

NOTE CAREFULLY: Under Payment Options 3(l) and 5 (including 3-V(l) and 5-V),
it would be possible for only one Annuity Payment to be made if the
Annuitant(s) were to die before the due date of the second Annuity Payment;
only two Annuity Payments if the Annuitant(s) were to die before the due date
of the third Annuity Payment; and so forth.

On the Annuity Commencement Date, the Adjusted Policy Value will be applied
to provide for Annuity Payments under the selected Annuity Option as
specified. The Adjusted Policy Value is the

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Policy Value for the Valuation Period which ends immediately preceding the
Annuity Commencement Date, increased or decreased by any applicable Excess
Interest Adjustment.

The effect of choosing a Fixed Payment Option is that the amount of each
payment will be set on the Annuity Commencement Date and will not change. If a
Fixed Payment Option is selected, the Adjusted Policy Value will be
transferred to the general account of PFL, and the Annuity Payments will be
fixed in amount by the fixed annuity provisions selected and the age and sex
(if consideration of sex is allowed under applicable law) of the Annuitant.

Guaranteed Values. There are five Fixed Payment Options. Options 1, 2 and 4
are based on a guaranteed effective annual interest rate of 3%. Options 3 and
5 are based on a guaranteed interest rate of 3% using the "1983 Table a"
(male, female, and unisex if required by law) mortality table improved to the
year 2000 with projection scale G. ("The 1983 Table a" mortality rates are
adjusted based on improvements in mortality since 1983 to more appropriately
reflect increased longevity. This is accomplished using a set of improvement
factors referred to as projection scale G.)

Option 1--Interest Payments. The Adjusted Policy Value may be left with PFL
for any term agreed by PFL and the Owner. PFL will pay the interest in equal
payments or it may be left to accumulate. Withdrawal rights will be agreed
upon by the Owner and PFL when the option is elected.

Option 2--Income for a Specified Period. Level payments of the proceeds with
interest are made for the fixed period elected, at which time the funds are
exhausted.

Option 3--Life Income. An election may be made between:

1. "No Period Certain"--Level payments will be made during the lifetime
of the Annuitant.

2. "10 Years Certain"--Level Payments will be made for the longer of
the Annuitant's lifetime or ten years.

3. "Guaranteed Return of Policy Proceeds"--Level payments will be made
for the longer of the Annuitant's lifetime or until the total dollar
amount of payments made equals the proceeds applied to the income
option.

Option 4--Income of a Specified Amount. Payments are made for any specified
amount until the proceeds with interest are exhausted.

Option 5--Joint and Survivor Annuity. Payments are made during the joint
lifetime of the payee and a joint payee of the Owner's selection. Payments
will be made as long as either person is living.

For Options 2, 3, and 4, in the event of the death of the person receiving
payments prior to the end of the Guaranteed Period, payments will be continued
to that person's beneficiary or their present value may be paid in a single
sum.

Other options may be arranged by agreement with PFL. Certain options may not
be available in some states.

Current immediate annuity rates for the same class of annuities will be used
if higher than the guaranteed rates (guaranteed rates are based upon the
mortality tables and/or guaranteed interest rates specified in the Policy
under the section entitled "Annuity Payments").

Variable Payment Options. The dollar amount of the first Variable Annuity
Payment will be determined in accordance with the annuity payment rates set
forth in the applicable table contained in the Policy. The tables are based on
a 5% effective annual Assumed Investment Return and the "1983 Table a" (male,
female, and unisex if required by law) mortality table improved to the year
2000 with projection Scale G. ("The 1983 Table a" mortality rates are adjusted
based on improvements in mortality since 1983 to more appropriately reflect
increased longevity. This is accomplished using a set of improvement factors
referred to as projection scale G.) The dollar

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<PAGE>

amount of subsequent Variable Annuity Payments will vary based on the
investment performance of the Subaccount(s) of the Mutual Fund Account
selected by the Annuitant or Beneficiary. If the actual investment performance
exactly matched the Assumed Investment Return of 5% at all times, the amount
of each Variable Annuity Payment would remain equal. If actual investment
performance exceeds the Assumed Investment Return, the amount of the Variable
Annuity Payments would increase. Conversely, if actual investment performance
is lower than the Assumed Investment Return, the amount of the Variable
Annuity Payments would decrease.

Determination of the First Variable Payment. The amount of the first
variable payment depends upon the sex (if consideration of sex is allowed
under state law) and adjusted age of the Annuitant. The adjusted age is the
Annuitant's actual age on the Annuitant's nearest birthday, on the Annuity
Commencement Date, adjusted as follows:

<TABLE>
<CAPTION>
ANNUITY COMMENCEMENT DATE ADJUSTED AGE
------------------------- ------------
<S> <C>
Before 2001............................ Actual Age
2001-2010.............................. Actual Age minus 1
2011-2020.............................. Actual Age minus 2
2021-2030.............................. Actual Age minus 3
2031-2040.............................. Actual Age minus 4
After 2040............................. As determined by PFL
</TABLE>

This adjustment assumes an increase in life expectancy, and therefore it
results in lower payments than without such an adjustment.

The following Variable Payment Options generally are available:

Option 3-V--Life Income. An election may be made between:

l. "No Period Certain"--Payments will be made during the lifetime of
the Annuitant.

2. "10 Years Certain"--Payments will be made for the longer of the
Annuitant's lifetime or ten years.

Option 5-V--Joint and Survivor Annuity. Payments are made as long as either
the Annuitant or the joint Annuitant is living.

Certain options may not be available in some states.

Determination of Subsequent Variable Payments. All Variable Annuity Payments
other than the first are calculated using "Annuity Units" which are credited
to the Policy. The number of Annuity Units to be credited in respect of a
particular Subaccount is determined by dividing that portion of the first
Variable Annuity Payment attributable to that Subaccount by the Annuity Unit
Value of that Subaccount on the Annuity Commencement Date. The number of
Annuity Units of each particular Subaccount credited to the Policy then
remains fixed, assuming no transfers to or from that Subaccount occur. The
dollar value of variable Annuity Units in the chosen Subaccount will increase
or decrease reflecting the investment experience of the chosen Subaccount. The
dollar amount of each Variable Annuity Payment after the first may increase,
decrease or remain constant, and is equal to the sum of the amounts determined
by multiplying the number of Annuity Units of each particular Subaccount
credited to the Policy by the Annuity Unit value for the particular Subaccount
on the date the payment is made.

Transfers. A Policy Owner may transfer the value of the Annuity Units from
one Subaccount to another within the Mutual Fund Account or to the Fixed
Account. However, after the Annuity Commencement Date no transfers may be made
from the Fixed Account to the Mutual Fund Account. The minimum amount which
may be transferred is the lesser of $10 of monthly income or the entire
monthly income of the variable Annuity Units in the Subaccount from which the
transfer is being made. The remaining Annuity Units in the Subaccount must
provide at least $10 of monthly income. If, after a transfer, the monthly
income of the remaining Annuity Units in a Subaccount

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<PAGE>

would be less than $10, PFL reserves the right to include those Annuity Units
as part of the transfer. PFL reserves the right to limit transfers between
Subaccounts or from the Mutual Fund Account to the Fixed Account after the
Annuity Commencement Date to once per Policy Year.

Tax Withholding. A portion or the entire amount of the Annuity Payments may
be taxable as ordinary income. If, at the time the Annuity Payments begin, the
Owner has not provided PFL with a written election not to have federal income
taxes withheld, PFL must by law withhold such taxes from the taxable portion
of such annuity payments and remit that amount to the federal government.
Withholding is mandatory for certain qualified Policies. (See "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES," p. 42)

Adjustment of Annuity Payments. Payments will be made at 1, 3, 6, or 12
month intervals. If the individual payments provided for would be or become
less than $50, PFL may change, at its discretion, the frequency of payments to
such intervals as will result in payments of at least $50. If the Adjusted
Policy Value on the Annuity Commencement Date is less than $2,000, PFL may pay
such value in one sum in lieu of the payments otherwise provided for.

DEATH BENEFIT

Death of Annuitant Prior to Annuity Commencement Date. A Death Benefit will
be paid to the Beneficiary if the Owner, who is the Annuitant, dies prior to
the Annuity Commencement Date. The amount of the Death Benefit will be the
greatest of a) the Policy Value on the date proof of the Annuitant's death and
an election of the method of settlement are received by PFL's Administrative
and Service Office, b) the Cash Value on the date PFL receives due proof of
the Annuitant's death and an election of a method of settlement, or c) the
Guaranteed Minimum Death Benefit ("GMDB") described below, plus any additional
Premium Payments less any Gross Partial Withdrawals from the date of the
Annuitant's death to the date of payment of the death proceeds.

PFL guarantees that the Guaranteed Minimum Death Benefit will be at least a
minimum amount as follows: When all of the Annuitants are younger than age 75
on the Policy Date, the Guaranteed Minimum Death Benefit is the greater of a
"5% Annually Compounding" Death Benefit or a "Step-Up" Death Benefit. The "5%
Annually Compounding Death Benefit is equal to: (a) the total Premium
Payments; minus (b) Adjusted Partial Withdrawals, (as described below); plus
(c) interest accumulated at 5% per year from the Premium Payment or withdrawal
date to the earlier of the Annuitant's date of death or the Annuitant's 76th
birthday. The "Step-Up" Death Benefit is equal to (a) the largest Policy Value
on the Policy Date or on any Policy Anniversary prior to the earlier of the
Annuitant's date of death or prior to the Annuitant's 76th birthday; plus (b)
any Premium Payments subsequent to the date of the Policy Anniversary with the
largest Policy Value; minus (c) any Adjusted Partial Withdrawals (as described
below), subsequent to the date of the Policy Anniversary with the largest
Policy Value.

When any Annuitant is age 75 or older on the Policy Date, the Guaranteed
Minimum Death Benefit is a "Return of Premium" Death Benefit, which is equal
to: (a) the total Premium Payments; minus (b) Adjusted Partial Withdrawals (as
described below), as of the date of death of the Annuitant.

A partial withdrawal will reduce the Guaranteed Minimum Death Benefit by an
amount referred to as the "Adjusted Partial Withdrawal." Each Adjusted Partial
Withdrawal is equal to the Gross Partial Withdrawal multiplied by an
Adjustment Factor. The Adjustment Factor is equal to the amount of the death
proceeds prior to the partial withdrawal, divided by the Policy Value prior to
the partial withdrawal.

If a partial withdrawal is taken when the Guaranteed Minimum Death Benefit
exceeds the Policy Value, then the Guaranteed Minimum Death Benefit will be
reduced in an amount greater than the amount of the partial withdrawal. In
that case, the total proceeds of a partial withdrawal followed by a Death
Benefit could be less than total Premium Payments.

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<PAGE>

If the Annuitant who is not the Owner dies, the Owner will become the
Annuitant and no Death Benefits are payable unless the Owner specifically
requests on the Policy application or in writing that the Death Benefit be
paid upon the Annuitant's death and PFL agrees to such election. See your
Policy's provisions.

Due Proof of Death of the Annuitant is proof that the Annuitant who is the
Owner died prior to the commencement of Annuity Payments. Upon receipt of this
proof and an election of a method of settlement and return of the Policy, the
Death Benefit generally will be paid within seven days, or as soon thereafter
as PFL has sufficient information about the Beneficiary to make the payment.
The Beneficiary may receive the amount payable in a lump sum cash benefit, or,
subject to any limitation under any state or federal law, rule, or regulation,
under one of the Payment Options described above, unless a settlement
agreement is effective at the death of the Annuitant preventing such election.

If the Annuitant was the Owner, and the Beneficiary was not the Annuitant's
spouse, the Death Benefit must (1) be distributed within five years of the
date of the deceased Annuitant's death, or (2) payments under a Payment Option
must begin within one year of the deceased Annuitant's death and must be made
for the Beneficiary's lifetime or for a period certain (so long as any certain
period does not exceed the Beneficiary's life expectancy). Death Proceeds
which are not paid to or for the benefit of a natural person must be
distributed within five years of the date of the deceased Annuitant's death.
If the sole Beneficiary is the deceased Annuitant's surviving spouse, such
spouse may elect to continue the Policy as the new Annuitant and Owner instead
of receiving the Death Benefit. An amount equal to the excess, if any, of the
Guaranteed Minimum Death Benefit over the Policy Value, will then be added to
the Policy Value. This amount will be added only once, at the time of such
election.(See "FEDERAL TAX MATTERS" in the Statement of Additional
Information.)

If the Annuitant is not the Owner, and the Owner dies prior to the Annuity
Commencement Date, a Successor Owner may surrender the Policy at any time for
the amount of the Adjusted Policy Value. If the Successor Owner is not the
deceased Owner's spouse, however, the Adjusted Policy Value must be
distributed within five years after the date of death of the Owner, or
payments under a Payment Option must begin within one year of the deceased
Owner's death and must be made for the Beneficiary's lifetime or for a period
certain (so long as any certain period does not exceed the Beneficiary's life
expectancy).

Death On or After Annuity Commencement Date. The Death Benefit payable on or
after the Annuity Commencement Date, if any, depends on the Payment Option
selected. If any Owner dies on or after the Annuity Commencement Date, but
before the entire interest in the Policy is distributed, the remaining portion
of such interest in the Policy will be distributed at least as rapidly as
under the method of distribution being used as of the date of that Owner's
death.

Beneficiary. The Beneficiary designation in the application will remain in
effect until changed. The Owner may change the designated Beneficiary by
sending Written Notice to PFL. The Beneficiary's consent to such change is not
required unless the Beneficiary was irrevocably designated or consent is
required by law. (If an irrevocable Beneficiary dies, the Owner may then
designate a new Beneficiary.) The change will take effect as of the date the
Owner signs the Written Notice, whether or not the Owner is living when the
Notice is received by PFL. PFL will not be liable for any payment made before
the Written Notice is received. If more than one Beneficiary is designated,
and the Owner fails to specify their interests, they will share equally.

DEATH OF OWNER

Federal tax law requires that if any Owner (including any joint Owner or any
Successor Owner who has become a current Owner) dies before the Annuity
Commencement Date, then the entire value of the Policy must generally be
distributed within five years of the date of death of such Owner. Certain
rules apply where 1) the spouse of the deceased Owner is the sole beneficiary,
2) the Owner is not a natural person and the primary Annuitant dies or is
changed, or 3) any Owner dies after the Annuity Commencement Date. (See
"FEDERAL TAX MATTERS" in the Statement of Additional Information.) Other rules
may apply to Qualified Policies. (See also "Death Benefit" p. 38.)

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<PAGE>

CHARGES AND DEDUCTIONS

When permitted by state law, no deductions are made from Premium Payments
when made, so that the full amount of each Premium Payment is invested in one
or more of the Accounts. PFL will make certain charges and deductions in
connection with the Policy in order to compensate it for incurring expenses in
distributing the Policy, bearing mortality and expense risks under the Policy,
and administering the Accounts and the Policies. Charges may also be made for
premium taxes, federal, state or local taxes, or for certain transfers or
other transactions. Charges and expenses are also deducted from the Underlying
Funds.

SURRENDER CHARGE

PFL will incur expenses relating to the sale of Policies, including
commissions to registered representatives and other promotional expenses. PFL
may apply a Surrender Charge, which is a contingent deferred sales charge, to
any amount withdrawn in connection with a Partial Withdrawal or surrender in
order to cover distribution expenses. A Surrender Charge, if applicable, will
only be applied to withdrawals which exceed the Cumulative Free Percentage up
to the time of the withdrawal. (See "DISTRIBUTIONS UNDER THE POLICY--
Surrenders" p. 31.)

The Surrender Charge is not imposed upon exercise of the Nursing Care and
Terminal Condition Option. This feature may not be available in all states.
(See "DISTRIBUTIONS UNDER THE POLICY--Nursing Care and Terminal Condition
Withdrawal Option," p. 32.)

Amounts withdrawn in excess of the Surrender Charge-Free withdrawal amount
are subject to a Surrender Charge. The amount of the Surrender Charge is
determined by multiplying the amount of the Premium Payment withdrawn by the
applicable Surrender Charge Percentage. The applicable Surrender Charge
Percentage will depend upon the number of years that have elapsed since the
Policy Date. Premium Payments are deemed to be withdrawn before earnings, and
after all Premium Payments have been withdrawn, the remaining Adjusted Policy
Value may be withdrawn without any Surrender Charge. The following is the
table of Surrender Charge Percentages:

<TABLE>
<CAPTION>
APPLICABLE SURRENDER
CHARGE PERCENTAGE
(AS PERCENTAGE OF
PREMIUM PAYMENT
POLICY YEAR WITHDRAWN)
----------- --------------------
<S> <C>
1................................................... 7%
2................................................... 7%
3................................................... 6%
4................................................... 5%
5................................................... 4%
6 or later............................................ 0%
</TABLE>

No Surrender Charge will be applied after the fifth Policy Year. For
example, additional Premium Payments made in year four in the above schedule
would only be subject to a Surrender Charge for two years, in the amount of 5%
of the premium payment for withdrawals during year four and 4% for withdrawals
during year five.

PFL anticipates that the Surrender Charge will not generate sufficient funds
to pay the cost of distributing the Policies. If this charge is insufficient
to cover the distribution expenses, the deficiency will be met from PFL's
general funds, which will include amounts derived from the fee for mortality
and expense risks.

MORTALITY AND EXPENSE RISK FEE

PFL imposes a charge as compensation for bearing certain mortality and
expense risks in connection with the Policies. This charge is equal to an
effective annual rate of 1.25% of the daily net asset value of the Mutual Fund
Account. The Mortality and Expense Risk Fee is reflected in the Accumulation
or Annuity Unit Values for the Policy for each Subaccount.

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<PAGE>

Policy Values and Annuity Payments are not affected by changes in actual
mortality experience nor by actual expenses incurred by PFL. The mortality
risks assumed by PFL arise from its contractual obligations to make Annuity
Payments (determined in accordance with the Annuity tables and other
provisions contained in the Policy) and to pay Death Benefits prior to the
Annuity Commencement Date. Thus, Owners are assured that neither an
Annuitant's own longevity nor an unanticipated improvement in general life
expectancy will adversely affect the periodic Annuity Payments that the
Annuitant will receive under the Policy.

PFL also bears substantial risk in connection with the Death Benefit
Guarantee since PFL will pay a Death Benefit equal to the Guaranteed Minimum
Death Benefit if that amount is higher than the greater of the Policy Value or
the Cash Value.

The expense risk assumed by PFL is the risk that PFL's actual expenses in
administering the Policy and the Accounts will exceed the amount recovered
through the Mortality and Expense Risk Fee and the Administrative Charge.

If the Mortality and Expense Risk Fee is insufficient to cover PFL's actual
costs, PFL will bear the loss; conversely, if the charge is more than
sufficient to cover costs, the excess will be profit to PFL. PFL expects a
profit from this charge. To the extent that the Surrender Charge is
insufficient to cover the actual cost of Policy distribution, the deficiency
will be met from PFL's general corporate assets, which may include amounts, if
any, derived from the Mortality and Expense Risk Fee. A Mortality and Expense
Risk Fee is also assessed during the annuity phase for all Variable Payment
Options.

ADMINISTRATIVE CHARGE

PFL deducts a daily Administrative Charge from the net assets of the Mutual
Fund Account to partially cover expenses incurred by PFL in connection with
the administration of the Mutual Fund Account and the Policies. The effective
annual rate of this charge is .15% of the net assets in the Mutual Fund
Account.

PREMIUM TAXES

PFL currently makes no deduction from the Premium Payments for any state
premium taxes PFL pays in connection with Premium Payments under the Policies.
However, PFL will deduct the aggregate premium taxes paid on behalf of a
particular Policy from the Policy Value on (i) the Annuity Commencement Date
(thus reducing the Policy Value), (ii) the total surrender of a Policy, or
(iii) payment of the death proceeds of a Policy. Premium taxes currently range
from 0% to 3.50% of Premium Payments depending upon the state.

FEDERAL, STATE AND LOCAL TAXES

No charges are currently made for federal, state, or local taxes other than
premium taxes. However, PFL reserves the right to deduct charges in the future
for any taxes or other economic burden resulting from the application of any
tax laws that PFL determines to be attributable to the accounts or the
policies.

TRANSFER FEE

There is no charge for the first 12 allowable transfers among Investment
Options in each Policy Year. PFL reserves the right to impose a $10 charge for
the thirteenth and each subsequent transfer request made by the Owner during a
single Policy Year. For the purpose of determining whether a Transfer Fee is
payable, Premium Payment allocations are not considered transfers. All
transfer requests made simultaneously will be treated as a single request.

OTHER EXPENSES INCLUDING INVESTMENT ADVISORY FEES

Each of the Portfolios of the Underlying Funds is responsible for all of its
expenses. In addition, charges will be made against each of the Portfolios of
the Underlying Funds for investment advisory

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<PAGE>

services provided to the Portfolio. The net assets of each Portfolio of the
Underlying Funds will reflect deductions in connection with the investment
advisory fee and other expenses. The Atlas Insurance Trust is a "Fund of
Funds" that invests in other mutual fund portfolios, therefore, total expenses
may be higher than other investment options, since an investment in the Atlas
Balanced Growth subaccount involves two sets of advisory fees and expenses.

For more information concerning the investment advisory fee and other
charges against the Portfolios, see the prospectuses for the Underlying Funds,
current copies of which accompany this Prospectus.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary does not constitute tax advice. It is a general
discussion of certain of the expected federal income tax consequences of
investment in and distributions with respect to a Policy, based on the
Internal Revenue Code of 1986, as (the "Code"), proposed and final Treasury
Regulations thereunder, judicial authority, and current administrative rulings
and practice. This summary discusses only certain federal income tax
consequences to "United States Persons," and does not discuss state, local, or
foreign tax consequences. United States Persons means citizens or residents of
the United States, domestic corporations, domestic partnerships and trusts or
estates that are subject to United States federal income tax regardless of the
source of their income.

At the time the initial Premium Payment is paid, a prospective purchaser
must specify whether he or she is purchasing a Nonqualified Policy or a
Qualified Policy. If the initial Premium Payment is derived from an exchange
or surrender of another annuity policy, PFL may require that the prospective
purchaser provide information with regard to the federal income tax status of
the previous annuity policy. PFL will require that persons purchase separate
Policies if they desire to invest monies qualifying for different annuity tax
treatment under the Code. Each such separate Policy would require the minimum
initial Premium Payment stated above. Subsequent Additional Premium Payments
under a Policy must qualify for the same federal income tax treatment as the
initial Premium Payment under the Policy; PFL will not accept a Subsequent
Additional Premium Payment under a Policy if the federal income tax treatment
of such Premium Payment would be different from that of the initial Premium
Payment.

The Qualified Policies were designed for use by retirement plans and
individual retirement accounts that qualify for special federal income tax
treatment under Sections 401(a), 403(b), or 408(a), or 457 of the Code and
individuals purchasing individual retirement annuities that qualify for
special federal income tax treatment under Section 408(b) of the Code. Certain
requirements must be satisfied in purchasing a Qualified Policy in order for
the plan, account or annuity to retain its special tax treatment. This summary
is not intended to cover such requirements, and assumes that Qualified
Policies are purchased pursuant to retirement plans or individual retirement
accounts, or are individual retirement annuities, that qualify for such
special tax treatment. This summary was prepared by PFL after consultation
with tax counsel, but no opinion of tax counsel has been obtained.

THE DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL PURPOSES ONLY. EACH
POTENTIAL PURCHASER IS URGED TO CONSULT HIS/HER OWN TAX ADVISER AS TO THE
CONSEQUENCES OF INVESTMENT IN A POLICY UNDER FEDERAL AND APPLICABLE STATE,
LOCAL AND FOREIGN TAX LAWS.

TAX STATUS OF THE POLICY

The following discussion is based on the assumption that the Policy
qualifies as an annuity contract for federal income tax purposes. The
Statement of Additional Information discusses the tax requirements for
qualifying as an annuity contract.

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<PAGE>

TAXATION OF ANNUITIES

The discussion below applies only to those Policies owned by natural
persons, and that qualify as annuity contracts for federal income tax
purposes. With respect to Owners who are natural persons, the Policy should be
treated as an annuity contract for federal income tax purposes.

In General. Except as described below with respect to Owners who are not
natural persons, an Owner who holds a Policy satisfying the diversification
and distribution requirements described in the Statement of Additional
Information should not be taxed on increases in the Policy Value until an
amount is received or deemed received, e.g., upon a partial or full surrender,
assignment, or as Annuity Payments under the Annuity Option selected.
Generally, any amount received or deemed received under a Nonqualified Annuity
Contract prior to the Annuity Commencement Date is deemed to come first from
any "Income on the Contract" and then from the "Investment in the Contract."
The "Investment in the Contract" generally equals total premium payments less
amounts received which were not includable in gross income. To the extent that
the Policy Value (ignoring any surrender charges except on a full surrender)
exceeds the "Investment in the Contract," such excess constitutes the "Income
on the Contract." For these purposes such "Income on the Contract" shall be
computed by reference to the aggregation rules described below, and the amount
includable in gross income will be taxable as ordinary income. If at the time
that any amount is received or deemed received there is no "Income on the
Contract" (e.g., because the gross Policy Value does not exceed the
"Investment in the Contract" and no aggregation rule applies), then such
amount received or deemed received will not be includable in gross income, and
will simply reduce the "Investment in the Contract."

For this purpose, the assignment, pledge or agreement to assign or pledge
any portion of the Policy Value (including assignment of Owner's right to
receive Annuity Payments prior to the Annuity Commencement Date) generally
will be treated as a distribution in the amount of such portion of the Policy
Value. Additionally, if an Owner designates a new Owner prior to the Annuity
Commencement Date without receiving full and adequate consideration, the old
Owner generally will be treated as receiving a distribution under the Policy
in an amount equal to the Policy Value. A transfer of ownership or an
assignment of a Policy, or designation of an Annuitant or Beneficiary who is
not also the Owner, as well as the selection of certain Annuity Commencement
Dates, may result in certain tax consequences to the Owner that are not
discussed herein. An Owner contemplating any such transfer, designation,
selection or assignment of a Policy should contact a competent tax adviser
with respect to the potential tax effects of such a transaction.

Aggregation Rules. Generally all Nonqualified deferred annuity contracts
issued by the same company (or an affiliated company) to the same owner during
any calendar year shall be treated as one annuity contract, and "aggregated"
for purposes of determining the amount includable in gross income. In
addition, for such purposes all individual retirement annuities and accounts
under Section 408 of the Code for an individual are aggregated, and generally
all distributions therefrom during a calendar year are treated as one
distribution made as of the end of such year.

Surrenders or Partial Withdrawals. In the case of a partial withdrawal
(including systematic payouts) under a Nonqualified Policy, the amount
received generally will be includable in gross income to the extent that it
does not exceed the "Income on the Contract" which is generally equal to the
excess of the Policy Value immediately before the partial withdrawal over the
"Investment in the Contract" at that time. However, for these purposes the
Policy Value immediately before a partial withdrawal may have to be increased
by any positive Excess Interest Adjustment which results from such a partial
withdrawal or which could result from a simultaneous full surrender, and may
need further adjustments if the aggregation rules apply. There is, however, no
definitive guidance on the proper tax treatment of Excess Interest
Adjustments, and the Owner should contact a competent tax adviser with respect
to the potential tax consequences of an Excess Interest Adjustment that may
apply in the case of a Non-Qualified Policy or a Qualified Policy. In the case
of a partial surrender (including systematic payouts) under a Qualified Policy
(other than one qualified under Section 457 of the Code), a ratable portion of
the amount received is generally excludable from gross income, based on the
ratio of the "Investment in the Contract" to the individual's total account
balance or accrued benefit under the retirement plan at the time of each such
payment. For a Qualified Policy,

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<PAGE>

the "Investment in the Contract" can be zero, and generally any distribution
would therefore be fully taxable. Special tax rules may be available for
certain distributions from a Qualified Policy. In the case of a surrender
under a Nonqualified Policy or a Qualified Policy, the amount received
generally will be taxable only to the extent it exceeds the "Investment in the
Contract," unless the aggregation rules apply.

Annuity Payments. Although the tax consequences may vary depending on the
Annuity Payment Option elected under the Policy, in general, for Nonqualified
and certain Qualified Policies, only a portion of the Annuity Payments
received after the Annuity Commencement Date will be includable in the gross
income of the recipient.

For Fixed Annuity Payments, in general the excludable portion of each
payment is determined by dividing the "Investment in the Contract" on the
Annuity Commencement Date by the total expected value of the Annuity Payments
for the term of the payments. The remainder of each Annuity Payment is
includable in gross income. Once the "Investment in the Contract" has been
fully recovered, the full amount of any additional Annuity Payments is
includable in gross income.

For Variable Annuity Payments, the includable portion is generally
determined by an equation that establishes a specific dollar amount of each
payment that is excludable from gross income. This dollar amount is determined
by dividing the "Investment in the Contract" on the Annuity Commencement Date
by the total number of expected periodic payments. The remainder of each
Annuity Payment is includable in gross income. Once the "Investment in the
Contract" has been fully recovered, the full amount of any additional Annuity
Payments is includable in gross income.

Where an Owner allocates a portion of the Adjusted Annuity Purchase Value on
the Annuity Commencement Date to more than one annuity payment option (fixed
or variable), special rules govern the allocation of the Policy's entire
"Investment in the Contract" on such date to each such option, for purposes of
determining the excludable amount of each payment received under that option.
PFL makes no attempt to describe these allocation rules, because they would
prescribe a complex variety of results, depending on how the allocations were
made among the various types of options. Instead, any Owner is advised to
consult a competent tax adviser as to the potential tax effects of allocating
any amount of Adjusted Annuity Purchase Value to any particular annuity
payment option.

If, after the Annuity Commencement Date, Annuity Payments cease by reason of
the death of the Annuitant, the excess (if any) of the "Investment in the
Contract" as of the Annuity Commencement Date over the aggregate amount of
Annuity Payments received on or after the Annuity Commencement Date that was
excluded from gross income is allowable as a deduction for the last taxable
year of the Annuitant.

Taxation of Death Benefit Proceeds. Amounts may be distributed from the
Policy because of the death of an Annuitant. Generally, such amounts are
includable in the income of the recipient as follows: (1) if distributed in a
lump sum, they are taxed in the same manner as a full surrender, as described
above, or (2) if distributed under an Annuity Payment Option, they are taxed
in the same manner as Annuity Payments, as described above. For these
purposes, the "Investment in the Contract" is not affected by the Owner's or
Annuitant's death. That is, the "Investment in the Contract" remains generally
the total premium payments less amounts received which were not includable in
gross income.

Penalty Taxes. In the case of any amount received or deemed received from a
Nonqualified Policy, e.g., upon a surrender of a Policy (including systematic
payouts) or a deemed distribution under a Policy resulting from a pledge,
assignment or agreement to pledge or assign or an Annuity Payment with respect
to a Policy, there may be imposed on the recipient a federal penalty tax equal
to 10% of the amount includable in gross income. The penalty tax generally
will not apply to any distribution: (i) made on or after the date on which the
taxpayer attains age 59 1/2; (ii) made as a result of the death of the holder
(generally the Owner); (iii) attributable to the disability of the taxpayer,
or (iv) which is part of a series of substantially equal periodic payments
made (not less frequently

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<PAGE>

than annually) for the life (or life expectancy) of the taxpayer or the joint
lives (or joint life expectancies) of such taxpayer and the taxpayer's
beneficiary. Other rules may apply to Qualified Policies.

Withholding. The portion of any distribution under a Policy that is
includable in gross income will be subject to federal income tax withholding
unless the recipient of such distribution elects not to have federal income
tax withheld. Election forms will be provided at the time distributions are
requested or made. For certain Qualified Policies, certain distributions are
subject to mandatory withholding.

Qualified Policies. The Qualified Policy is designed for use with several
types of tax-qualified retirement plans. The tax rules applicable to
participants and beneficiaries in tax-qualified retirement plans vary
according to the type of plan and the terms and conditions of the plan.
Special favorable tax treatment may be available for certain types of
contributions and distributions. Adverse tax consequences may result from
contributions in excess of specified limits; distributions prior to age 59 1/2
(subject to certain exceptions); distributions that do not conform to
specified commencement and minimum distribution rules; aggregate distributions
in excess of a specified annual amount; and in other specified circumstances.
Some retirement plans are subject to distribution and other requirements that
are not incorporated into PFL's Policy administration procedures. Owners,
participants and beneficiaries are responsible for determining that
contributions, distributions and other transactions with respect to the
Policies comply with applicable law.

PFL makes no attempt to provide more than general information about use of
the Policy with the various types of retirement plans. Purchasers of Policies
for use with any retirement plan should consult their legal counsel and tax
adviser regarding the suitability of the Policy.

Individual Retirement Annuities. In order to qualify as an individual
retirement annuity under Section 408(b) of the Code, a Policy must contain
certain provisions: (i) the Owner must be the Annuitant; (ii) the Policy
generally is not transferable by the Owner, e.g., the Owner may not designate
a new Owner, designate a Contingent Owner or assign the Policy as collateral
security; (iii) the total Premium Payments for any calendar year on behalf of
any individual may not exceed $2,000, except in the case of a rollover amount
or contribution under Sections 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of
the Code; (iv) Annuity Payments or partial withdrawals must begin no later
than April 1 of the calendar year following the calendar year in which the
Annuitant attains age 70 1/2; (v) an Annuity Payment Option with a Period
Certain that will guarantee Annuity Payments beyond the life expectancy of the
Annuitant and the Beneficiary may not be selected; (vi) certain payments of
Death Benefits must be made in the event the Annuitant dies prior to the
distribution of the Policy Value; and (vii) the entire interest of the Owner
is non-forfeitable. Policies intended to qualify as individual retirement
annuities under Section 408(b) of the Code contain such provisions.

Section 408 of the Code also indicates that no part of the funds for an
individual retirement account or annuity ("IRA") may be invested in a life
insurance contract, but the regulations thereunder allow such funds to be
invested in an annuity policy that provides a death benefit that equals the
greater of the premiums paid or the Cash Value for the contract. The Policy
provides an enhanced death benefit that could exceed the amount of such a
permissible death benefit, but it is unclear to what extent such an enhanced
death benefit could disqualify the Policy under Section 408 of the Code. The
Internal Revenue Service has not reviewed the Policy for qualification as an
IRA, and has not addressed in a ruling of general applicability whether an
enhanced death benefit provision, such as the provision in the Policy,
comports with IRA qualification requirements.

Section 403(b) Plans. Under Section 403(b) of the Code, payments made by
public school systems and certain tax exempt organizations to purchase
Policies for their employees are excludable from the gross income of the
employee, subject to certain limitations. However, such payments may be
subject to FICA (Social Security) taxes. Additionally, in accordance with the
requirements of the Code, Section 403(b) annuities generally may not permit
distribution of (i) elective contributions made in years beginning after
December 31, 1988, and (ii) earnings on those contributions and (iii) earnings
on amounts attributed to elective contributions held as of the end of

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<PAGE>

the last year beginning before January 1, 1989. Distributions of such amounts
will be allowed only upon the death of the employee, on or after attainment of
age 59 1/2, separation from service, disability, or financial hardship, except
that income attributable to elective contributions may not be distributed in
the case of hardship.

Corporate Pension and Profit Sharing Plans and H.R. 10 Plans. Sections
401(a) and 403(a) of the Code permit corporate employers to establish various
types of retirement plans for employees and self-employed individuals to
establish qualified plans for themselves and their employees. Such retirement
plans may permit the purchase of the Policies to accumulate retirement
savings. Adverse tax consequences to the plan, the participant or both may
result if the Policy is assigned or transferred to any individual as a means
to provide benefit payments.

Deferred Compensation Plans. Section 457 of the Code, while not actually
providing for a qualified plan (as that term is not used in the Code),
provides for certain deferred compensation plans with respect to service for
state governments, local governments, political sub-divisions, agencies,
instrumentalities and certain affiliates of such entities and tax exempt
organizations which enjoy special treatment. The Policies can be used with
such plans. Under such plans a participant may specify the form of investment
in which his or her participation will be made. With respect to non-government
plans, all such investments, however, are owned by, and are subject to, the
claims of the general creditors of the sponsoring employer, and, depending on
the terms of the particular plan, the employer may be entitled to draw on
deferred amounts for purposes unrelated to its Section 457 plan obligations.
In general, all amounts received under a Section 457 plan are taxable and are
subject to federal income tax withholding as wages.

Non-natural Persons. Pursuant to Section 72(u) of the Code, an annuity
contract held by a taxpayer other than a natural person generally will not be
treated as an annuity contract under the Code; accordingly, an Owner who is
not a natural person will recognize as ordinary income for a taxable year the
excess of (i) the sum of the Cash Value as of the close of the taxable year
and all previous distributions under the Policy over (ii) the sum of the
Premium Payments paid for the taxable year and any prior taxable year and the
amounts includable in gross income for any prior taxable year with respect to
the Policy. For these purposes, the Policy Value at year end may have to be
increased by any positive Excess Interest Adjustment which could result from a
full surrender at such time. There is, however, no definitive guidance on the
proper tax treatment of Excess Interest Adjustments and the Owner should
contact a competent tax adviser with respect to the potential tax consequences
of an Excess Interest Adjustment. Notwithstanding the preceding sentences in
that paragraph, Section 72(u) of the Code does not apply to (i) a Policy the
nominal Owner of which is not a natural person but the beneficial Owner of
which is a natural person, (ii) a Policy acquired by the estate of a decedent
by reason of such decedent's death, (iii) a Qualified Policy (other than one
qualifying under Section 457) or (iv) a single-payment annuity the
Commencement Date for which is no later than one year from the date of the
single Premium Payment; such Policies are taxed as described above under the
heading "Taxation of Annuities."

Possible Changes in Taxation. In past years, legislation has been proposed
in the U.S. Congress that would have adversely modified federal taxation of
certain annuities. For example, one such proposal would have changed the tax
treatment of Nonqualified annuities that did not have "substantial life
contingencies" by taxing income as it is credited to the annuity. Although as
of the date of this Prospectus Congress was not actively considering any
legislation regarding the taxation of annuities, there is always the
possibility that the tax treatment of annuities could change because of
legislation or other means (such as IRS regulations, revenue rulings, judicial
decisions, etc.). Moreover, it is also possible that any change could be
retroactive (that is, effective prior to the date of the change).

DISTRIBUTION OF THE POLICIES

AEGON USA Securities, Inc., (the "Distributor") an affiliate of PFL, located
at 4333 Edgewood Road N.E., Cedar Rapids, Iowa, 52499-0001, is the principal
underwriter of the Policies. The

- 46 -
<PAGE>

Distributor was incorporated under the laws of the State of Iowa in 1959 and
is registered as a broker/dealer under the Securities Exchange Act of 1934. It
is a member of the National Association of Securities Dealers, Inc. ("NASD").

Policies are sold by registered representatives of Atlas Securities, Inc.
PFL has entered into a distribution agreement with the Distributor and a
companion sales agreement with Atlas through which agreements the Policies are
sold and Atlas is compensated. Atlas will generally receive sales commissions
of up to 6.58% of Premium Payments. These commissions are not deducted from
Premium Payments, they are paid by PFL. In addition, Atlas may receive
additional commissions, expense allowances, and additional annual continuing
fees based upon sales volume, agent or service training responsibilities, and
other factors. No amounts will be retained by AEGON USA Securities, Inc. for
acting as Distributor for the Policies. The offering of Policies will be made
on a continuing basis.

VOTING RIGHTS

To the extent required by law, PFL will vote the Underlying Fund shares held
by the Mutual Fund Account at regular and special shareholder meetings of the
Underlying Funds in accordance with instructions received from persons having
voting interests in the portfolios. (The Underlying Funds may not hold regular
annual meetings.) If, however, the 1940 Act or any regulation thereunder
should be amended or if the present interpretation thereof should change, and
as a result PFL determines that it is permitted to vote the Underlying Funds'
shares in its own right, it may elect to do so.

Before the Annuity Commencement Date, the Owner holds voting interest in the
selected Portfolios. The number of votes that an Owner has the right to
instruct will be calculated separately for each Subaccount. The number of
votes that an Owner has the right to instruct for a particular Subaccount will
be determined by dividing the Owner's Policy Value in the Subaccount by the
net asset value per share of the corresponding Portfolio in which the
Subaccount invests. Fractional shares will be counted.

After the Annuity Commencement Date, the person receiving Annuity Payments
has the voting interest, and the number of votes decreases as Annuity Payments
are made and as the reserves for the Policy decrease. The person's number of
votes will be determined by dividing the reserve for the Policy allocated to
the applicable Subaccount by the net asset value per share of the
corresponding Portfolio. Fractional shares will be counted.

The number of votes that the Owner or person receiving income payments has
the right to instruct will be determined as of the date established by the
Underlying Funds for determining shareholders eligible to vote at the meeting
of the Underlying Funds. PFL will solicit voting instructions by sending
Owners or other persons entitled to vote written requests for instructions
prior to that meeting in accordance with procedures established by the
Underlying Funds. Portfolio shares as to which no timely instructions are
received and shares held by PFL in which Owners or other persons entitled to
vote have no beneficial interest will be voted in proportion to the voting
instructions that are received with respect to all Policies participating in
the same Subaccount.

Each person having a voting interest in a Subaccount will receive proxy
material, reports, and other materials relating to the appropriate Portfolio.

LEGAL PROCEEDINGS

There are no legal proceedings to which the Mutual Fund Account is a party
or to which the assets of the Account are subject. PFL is not involved in any
litigation that is of material importance in relation to its total assets or
that relate to the Mutual Fund Account.

- 47 -
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

A Statement of Additional Information is available (at no cost) which
contains more details concerning the subjects discussed in this Prospectus.
The following is the Table of Contents for that Statement:

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Policy-General Provisions.............................................. 3
Owner.................................................................... 3
Entire Policy............................................................ 3
Delay of Payment and Transfers........................................... 3
Misstatement of Age or Sex............................................... 4
Reallocation of Policy Values After the Annuity Commencement Date........ 4
Assignment............................................................... 4
Evidence of Survival..................................................... 4
Non Participating........................................................ 5
Federal Tax Matters........................................................ 5
Tax Status of the Policy................................................. 5
Taxation of PFL.......................................................... 6
Investment Experience...................................................... 6
State Regulation of PFL.................................................... 10
Administration............................................................. 10
Records and Reports........................................................ 10
Distribution of the Policies............................................... 10
Custody of Assets.......................................................... 11
Historical Performance Data................................................ 11
Subaccount Yields........................................................ 11
Total Returns............................................................ 12
Other Performance Data................................................... 12
Legal Matters.............................................................. 13
Independent Auditors....................................................... 13
Other Information.......................................................... 13
Financial Statements....................................................... 13
</TABLE>

- 48 -
<PAGE>

APPENDIX A

EXCESS INTEREST ADJUSTMENT

The formula used to determine the Excess Interest Adjustment (EIA) is (1):

S* (G - C)* (M/12)

S= Gross amount being withdrawn that is subject to the EIA

G= Guaranteed Interest Rate applicable to S.

C= Current Guaranteed Interest Rate then being offered on new Premium Payments
for the next longer Guaranteed Period than "M". If this policy form or such
a Guaranteed period is no longer offered, "C" will be the U.S. Treasury rate
for the next longer maturity (in whole years) than "M" on the 25th day of
the previous calendar month, plus up to 2%.

M= Number of months remaining in the current Guaranteed Period, rounded up to
the next higher whole number of months.

EXAMPLE 1 (FULL SURRENDER, RATES INCREASE BY 3%):

Assumptions:
Single Premium: $50,000
Guarantee Period: 5 Years
Guarantee Rate: 5.50% per annum
Full Surrender: Middle of Policy Year 3

POLICY VALUE ("PV") before
surrender = $50,000* (1.055) (caret) 2.5 = $57,161.18
SURRENDER CHARGE FREE AMOUNT = $50,000* .3 = $15,000.00
EIA FREE AMOUNT = $57,161.18 - $50,000 = $7,161.18
AMOUNT SUBJECT TO EIA = $57,161.18 - $7,161.18 = $50,000.00
EIA FLOOR = $50,000* (1.03) (caret) 2.5 = $53,834.80

Excess Interest Adjustment
Assumptions: "G" = .055; "C" = .085; "M" = 30

EXCESS INTEREST ADJUSTMENT = S* (G - C)* (M/12)
= $50,000.00* (.055 - .085)* (30/12)
= (-$3,750.00), but Excess Interest
Adjustment cannot cause the Adjusted
Policy Value to fall below the EIA
floor, so the adjustment is limited to:
$53,834.80 - $57,161.18 = (-$3,326.38)
ADJUSTED POLICY VALUE = PV + EIA
= $57,161.18 + (-$3,326.38) = $53,834.80
SURRENDER CHARGE = ($50,000 - $15,000.00)* .06 = $2,100.00
CASH VALUE AT MIDDLE OF POLICY
YEAR 3 = PV + EIA - Surrender Charge
= $57,161.18 + (-$3,326.38) - $2,100.00 =
$51,734.80
- --------
(1)*represents multiplication;
(caret) represents exponentiation;

A-1
<PAGE>

EXAMPLE 2 (FULL SURRENDER, RATES DECREASE BY 1%):
Assumptions:
Single Premium: $50,000
Guarantee Period: 5 Years
Guarantee Rate: 5.50% per annum
Full Surrender: Middle of Policy Year 3
POLICY VALUE before surrender = $50,000* (1.055) (caret) 2.5 = $57,161.18
SURRENDER CHARGE FREE AMOUNT = $50,000* .30 = $15,000.00
EIA FREE AMOUNT = $57,161.18 - $50,000 = $7,161.18

AMOUNT SUBJECT TO EIA = $57,161.18 - $7,161.18 = $50,000.00
EIA FLOOR = $50,000* (1.03) (caret) 2.5 = $53,834.80

Excess Interest Adjustment
Assumptions: "G" = .055; "C" = .045; "M"= 30

EXCESS INTEREST ADJUSTMENT = S* (G - C)* (M/12)
= $50,000* (.055 - .045) * (30/12)
= $1,250.00
ADJUSTED POLICY VALUE = PV + EIA
= $57,161.18 + $1,250.00 = $58,411.18
SURRENDER CHARGE = ($50,000 - $15,000.00)* .06 = $2,100.00
CASH VALUE AT MIDDLE OF POLICY
YEAR 3 = PV + EIA - Surrender Charge
= $57,161.18 + ($1,250) - $2,100.00 =
$56,311.18

On a partial withdrawal, PFL will pay the Owner the full amount of withdrawal
requested (as long as the Policy Value is sufficient).

EXAMPLE 3 (PARTIAL WITHDRAWAL, RATES INCREASE BY 1%):

Assumptions:
Single Premium: $50,000
Guarantee Period: 5 Years
Guarantee Rate: 5.50% per annum
Partial Withdrawal: $30,000; Middle of Policy Year 3

POLICY VALUE before withdrawal = $50,000* (1.055) (caret) 2.5 = $57,161.18

SURRENDER CHARGE FREE AMOUNT = $50,000.00* .30 = $15,000.00

EIA FREE AMOUNT = $57,161.18 - $50,000 = $7,161.18

"S" = $30,000 - $7,161.18 = $22,838.82

EXCESS INTEREST ADJUSTMENT = $22,838.82* (.055 - .065)* (30/12)
= - $570.97
SURRENDER CHARGE = [($30,000.00 - $15,000.00) -
(-$570.97)]* (.06) = $934.26
GROSS PARTIAL WITHDRAWAL: = $30,000.00 - (-$570.97) + $934.26
= $31,505.23
POLICY VALUE after withdrawal = $57,161.18 - [$30,000.00 - (-$570.97)
+ ($934.26)]
= $57,161.18 - $31,505.23 = $25,655.95

A-2
<PAGE>

EXAMPLE 4 (PARTIAL WITHDRAWAL, RATES DECREASE BY 1%):

Assumptions:
Single Premium: $50,000
Guarantee Period: 5 Years
Guaranteed Rate: 5.50% per annum
Partial Surrender: $30,000; Middle of Policy Year 3

POLICY VALUE before withdrawal = $50,000* (1.055) (caret) 2.5 = $57,161.18
SURRENDER CHARGE FREE AMOUNT = $50,000.00* .30 = $15,000.00
EIA FREE AMOUNT = $57,161.18 - $50,000 = $7,161.18
"S" = $30,000.00 - $7,161.18 = $22,838.82
EXCESS INTEREST ADJUSTMENT = $22,838.82* (.055 - .045)* (30/12)
= $570.97
SURRENDER CHARGE = [($30,000.00 - $15,000.00) - $570.97]*
(.06)
= $865.74
GROSS PARTIAL WITHDRAWAL = $30,000.00 - ($570.97) + $865.74
= $30,294.77
POLICY VALUE after withdrawal = $57,161.18 - [$30,000.00 - ($570.97)
+ $865.74]
= $57,161.18 - $30,294.77 = $26,866.41

A-3
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

THE ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY
Issued through
PFL LIFE VARIABLE
ANNUITY ACCOUNT A

Offered by
PFL LIFE INSURANCE COMPANY

4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001

This Statement of Additional Information expands upon subjects discussed in
the current Prospectus for the Atlas Portfolio Builder Variable Annuity (the
"Policy") offered by PFL Life Insurance Company. You may obtain a copy of the
Prospectus dated _______, 1997 by calling Atlas at 1-800-933-2852, or by
writing to Atlas Securities, Inc., 794 Davis Street, P.O. Box 1894, San
Leandro, CA, 94577. You may also contact PFL Life Insurance Company at the
Administrative and Service Office, Financial Markets Division-Variable Annuity
Dept., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001. The Prospectus
sets forth information that a prospective investor should know before investing
in a Policy. Terms used in the current Prospectus for the Policy are
incorporated in this Statement of Additional Information.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE POLICY AND THE PFL LIFE
VARIABLE ANNUITY ACCOUNT A.

Dated: ____________, 1997
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>

Page
<S> <C>
The Policy-- General Provisions...................................... 3
Owner.............................................................. 3
Entire Policy...................................................... 3
Delay of Payment and Transfers..................................... 3
Misstatement of Age or Sex......................................... 4
Reallocation of Policy Values After the Annuity Commencement Date.. 4
Assignment......................................................... 4
Evidence of Survival............................................... 4
Non Participating.................................................. 5
Federal Tax Matters.................................................. 5
Tax Status of the Policy........................................... 5
Taxation of PFL.................................................... 6
Investment Experience................................................ 6
State Regulation of PFL.............................................. 10
Administration....................................................... 10
Records and Reports.................................................. 10
Distribution of the Policies......................................... 10
Custody of Assets.................................................... 11
Historical Performance Data.......................................... 11

Subaccount Yields.................................................. 11
Total Returns...................................................... 12
Other Performance Data............................................. 12
Legal Matters........................................................ 13
Independent Auditors................................................. 13
Other Information.................................................... 13
Financial Statements................................................. 13
</TABLE>
(Numbers in parenthesis indicate corresponding pages of the Prospectus).

2
<PAGE>

In order to supplement the description in the Prospectus, the following
provides additional information about PFL and the Policy which may be of
interest to a prospective purchaser.

THE POLICY-GENERAL PROVISIONS

Owner

The Policy shall belong to the Owner upon issuance of the Policy after
completion of an application and delivery of the initial Premium Payment. While
the Annuitant is living, the Owner may: (1) assign the Policy; (2) surrender the
Policy; (3) amend or modify the Policy with PFL's consent; (4) receive annuity
payments or name a Payee to receive the payments; and (5) exercise, receive and
enjoy every other right and benefit contained in the Policy. The exercise of
these rights may be subject to the consent of any assignee or irrevocable
Beneficiary; and of the Owner's spouse in a community or marital property state.

A Successor Owner can be named in the Policy application or in a Written
Notice. The Successor Owner will become the new Owner upon the Owner's death,
if the Owner predeceases the Annuitant. If no Successor Owner survives the
Owner and the Owner predeceases the Annuitant, the Owner's estate will become
the Owner.

The Owner may change the ownership of the Policy in a Written Notice. When
this change takes effect, all rights of ownership in the Policy will pass to the
new Owner. A change of ownership may have adverse tax consequences.

When there is a change of Owner or Successor Owner, the change will take
effect as of the date the Owner signs the Written Notice, subject to any payment
PFL has made or action PFL has taken before recording the change. Changing the
Owner or naming a new Successor Owner cancels any prior choice of Successor
Owner, but does not change the designation of the Beneficiary or the Annuitant.

If ownership is transferred (except to the Owner's spouse) because the
Owner dies before the Annuitant, the Adjusted Policy Value generally must be
distributed to the Successor Owner within five years of the Owner's death, or if
the first payment begins within one year of the Owner's death, payments must be
made for a period certain which does not exceed that Successor Owner's life
expectancy.

Entire Policy

The Policy and any endorsements thereon and the Policy application
constitute the entire contract between PFL and the Owner. All statements in the
application are representations and not warranties. No statement will cause the
Policy to be void or to be used in defense of a claim unless contained in the
application.

Delay of Payment and Transfers

Payment of any amount due from the Mutual Fund Account in respect of a
surrender, the Death Benefit or the death of the Owner generally will occur
within seven business days from the date the Written Notice (and any other
required documentation or information) is received, except that PFL may be
permitted to defer such payment from the Mutual Fund Account if: (1) the New
York Stock Exchange is closed for other than usual weekends or holidays or
trading on the Exchange is otherwise restricted; or (2) an emergency exists as
defined by the SEC or the SEC requires that trading be restricted; or (3) the
SEC permits a delay for the protection of Owners. In addition, transfers of
amounts from the Subaccounts may be deferred under these circumstances.

3
<PAGE>

Certain delays and restrictions apply to transfers of amounts out of the
---------
Fixed Account. See p. 33 of the Policy Prospectus.

Misstatement of Age or Sex

If the age or sex of the Annuitant has been misstated, PFL will change the
annuity benefit payable to that which the Premium Payments would have purchased
for the correct age or sex. The dollar amount of any underpayment made by PFL
shall be paid in full with the next payment due such person or the Beneficiary.
The dollar amount of any overpayment made by PFL due to any misstatement shall
be deducted from payments subsequently accruing to such person or Beneficiary.
Any underpayment or overpayment will include interest at 5% per year, from the
date of the wrong payment to the date of the adjustment. The age of the
Annuitant may be established at any time by the submission of proof satisfactory
to PFL.

Reallocation of Policy Values After the Annuity Commencement Date

After the Annuity Commencement Date, the Owner may reallocate the value of
a designated number of Annuity Units of a Subaccount of the Mutual Fund Account
then credited to a Policy into an equal value of Annuity Units of one or more
other Subaccounts of the Mutual Fund Account, or the Fixed Account. The
reallocation shall be based on the relative value of the Annuity Units of the
Account(s) or Subaccount(s) at the end of the Business Day on the next payment
date. The minimum amount which may be reallocated is the lesser of (1) $10 of
monthly income or (2) the entire monthly income of the Annuity Units in the
Account or Subaccount from which the transfer is being made. If the monthly
income of the Annuity Units remaining in an Account or Subaccount after a
reallocation is less than $10, PFL reserves the right to include the value of
those Annuity Units as part of the transfer. The request must be in writing to
PFL's Administrative and Service Office. There is no charge assessed in
connection with such reallocation. PFL reserves the right to limit the number
of times a reallocation of Policy Value may be made in any given Policy Year.

After the Annuity Commencement Date, no transfers may be made from the Fixed
Account to the Mutual Fund Account.

Assignment

During the lifetime of the Annuitant the Owner may assign any rights or
benefits provided by a Nonqualified Policy. An assignment will not be binding
on PFL until a copy has been filed at its Administrative and Service Office.
The rights and benefits of the Owner and Beneficiary are subject to the rights
of the assignee. PFL assumes no responsibility for the validity or effect of
any assignment. Any claim made under an assignment shall be subject to proof of
interest and the extent of the assignment. An assignment may have adverse tax
consequences.

Unless the Owner so directs by filing Written Notice with PFL, no
Beneficiary may assign any payments under the Policy before they are due. To
the extent permitted by law, no payments will be subject to the claims of any
Beneficiary's creditors.

Ownership under Qualified Policies is restricted to comply with the Internal
Revenue Code.

Evidence of Survival

PFL reserves the right to require satisfactory evidence that a person is
alive if a payment is based on that person being alive. No payment will be made
until PFL receives such evidence.

4
<PAGE>

Non-Participating

The Policy will not share in PFL's surplus earnings; no dividends will be
paid.

FEDERAL TAX MATTERS

Tax Status of the Policy

Diversification Requirements. Section 817(h) of the Code provides that in
order for a variable contract which is based on a segregated asset account to
qualify as an annuity contract under the Code, the investments made by such
account must be "adequately diversified" in accordance with Treasury
regulations. The Treasury regulations issued under Section 817(h) (Treas. Reg.
(S) 1.817-5) apply a diversification requirement to each of the Subaccounts of
the Mutual Fund Account. The Mutual Fund Account, through the Underlying Funds
and their Portfolios, intends to comply with the diversification requirements of
the Treasury. PFL has entered into agreements regarding participation in the
Atlas Portfolio Builder Variable Annuity that require the Underlying Funds and
their Portfolios to be operated in compliance with the Treasury regulations.

Owner Control. In certain circumstances, owners of variable annuity contracts
may be considered the owners, for Federal income tax purposes, of the assets of
the separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includable in the
variable annuity contractowner's gross income. Several years ago, the IRS stated
in published rulings that a variable contract owner will be considered the owner
of separate account assets if the contractowner possesses incidents of ownership
in those assets, such as the ability to exercise investment control over the
assets. More recently, the Treasury Department announced, in connection with the
issuance of regulations concerning investment diversification, that those
regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause the
investor, rather than the insurance company, to be treated as the owner of the
assets in the account." This announcement also stated that guidance would be
issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular subaccounts without being treated as
owners of underlying assets."

The ownership rights under the contract are similar to, but different in
certain respects from those described by the IRS in rulings in which it was
determined that contractowners were not owners of separate account assets. For
example, the Owner of a Policy has the choice of one or more Subaccounts in
which to allocate premiums and Policy Values, and may be able to transfer among
these accounts more frequently than in such rulings. These differences could
result in policyowners being treated as the owners of the assets of the Mutual
Fund Account. In addition, PFL does not know what standards will be set forth,
if any, in the regulations or rulings with the Treasury Department has stated it
expects to issue. PFL therefore reserves the right to modify the Policies as
necessary to attempt to prevent the policyowners from being considered the
owners of a pro rata share of the assets of the Mutual Fund Account.

Distribution Requirements. The Code also requires that Nonqualified Policies
contain specific provisions for distribution of Policy proceeds upon the death
of any Owner. In order to be treated as an annuity contract for federal income
tax purposes, the Code requires that such Policies provide that if any Owner
dies on or after the Annuity Commencement Date and before the entire interest in
the Policy has been distributed, the remaining portion must be distributed at
least as rapidly as under the method in effect on such Owners death. If any
Owner dies before the Annuity Commencement Date, the entire interest in the
Policy must generally be distributed within 5 years after such Owner's date of
death or be applied to provide an immediate annuity under which payments will
begin within one year of such Owner's death and will be made for the life of the
Beneficiary or for a period not extending beyond the

5
<PAGE>

life expectancy of the Beneficiary. However, if such Owner's death occurs prior
to the Annuity Commencement Death, and such Owner's surviving spouse is named
beneficiary , then the Policy may be continued with the surviving spouse as the
new Owner receiving the one-time adjustment to the Policy Value. See
"DISTRIBUTIONS UNDER THE POLICY--Death Benefit," p.38 of the Prospectus.) If
any Owner is not a natural person, then for purposes of these distribution
requirements, the primary Annuitant shall be treated as the Owner and any death
or change of such primary Annuitant shall be treated as the Death of the Owner.
The Nonqualified Policy contains provisions intended to comply with these
requirements of the Code. No regulations interpreting these requirements of the
Code have yet been issued and thus no assurance can be given that the provisions
contained in the Policies satisfy all such Code requirements. The provisions
contained in the Policies will be reviewed and modified if necessary to maintain
their compliance with the Code requirements when clarified by regulation or
otherwise.

Taxation of PFL

PFL at present is taxed as a life insurance company under part I of
Subchapter L of the Code. The Mutual Fund Account is treated as part of PFL
and, accordingly, will not be taxed separately as a "regulated investment
company" under Subchapter M of the Code. PFL does not expect to incur any
federal income tax liability with respect to investment income and net capital
gains arising from the activities of the Mutual Fund Account retained as part of
the reserves under the Policy. Based on this expectation, it is anticipated
that no charges will be made against the Mutual Fund Account for federal income
taxes. If, in future years, any federal income taxes are incurred by PFL with
respect to the Mutual Fund Account, PFL may make a charge to the Mutual Fund
Account.

INVESTMENT EXPERIENCE

A "Net Investment Factor" is used to determine the value of Accumulation
Units and Annuity Units, and to determine annuity payment rates.

Accumulation Units

Upon allocation to the selected Subaccount of the Mutual Fund Account,
Premium Payments are converted into Accumulation Units of the Subaccount. The
number of Accumulation Units to be credited is determined by dividing the dollar
amount allocated to each Subaccount by the value of an Accumulation Unit for
that Subaccount as next determined after the Premium Payment is received at the
Administrative and Service Office or, in the case of the initial Premium
Payment, when the Policy application is completed, whichever is later. The
value of an Accumulation Unit was arbitrarily established at $1.000000 at the
inception of each Subaccount. Thereafter, the value of an Accumulation Unit is
determined as of the close of trading on each day the New York Stock Exchange
and PFL's Administrative and Service Office are open for business.

An index (the "Net Investment Factor") which measures the investment
performance of a Subaccount during a Valuation Period, is used to determine the
value of an Accumulation Unit for the next subsequent Valuation Period. The Net
Investment Factor may be greater or less than or equal to one; therefore, the
value of an Accumulation Unit may increase, decrease or remain the same from one
Valuation Period to the next. The Owner bears this investment risk. The net
investment performance of a Subaccount and deduction of certain charges affect
the Accumulation Unit Value.

The Net Investment Factor for any Subaccount for any Valuation Period is
determined by dividing (a) by (b) and subtracting (c) from the result, where:

(a) is the net result of:

6
<PAGE>

(1) the net asset value per share of the shares held in the Subaccount
determined at the end of the current Valuation Period, plus

(2) the per share amount of any dividend or capital gain distribution
made with respect to the shares held in the Subaccount if the ex-
dividend date occurs during the current Valuation Period, plus or
minus

(3) a per share charge or credit for any taxes determined by PFL to
have resulted from the investment operations of the Subaccount;

(b) the net asset value per share of the shares held in the Subaccount
determined as of the end of the immediately preceding Valuation Period;
and

(c) is the charge for mortality and expense risk during the Valuation Period
(equal to an annual rate of 1.25%) of the daily net asset value of the
Subaccount) plus the .15% administrative charge.

Illustration of Accumulation Unit Value Calculations

Formula and Illustration for Determining
the Net Investment Factor

Investment Experience Factor = A + B - C - E
---------
D

<S> <C> <C>
Where: A = The Net Asset Value of an Underlying Fund share as of the
end of the current Valuation Period.
Assume.............................. A = $11.57

B = The per share amount of any dividend or capital gains
distribution since the end of the immediately preceding
Valuation Period.
Assume.............................. B = 0

C = The per share charge or credit for any taxes reserved for at
the end of the current Valuation Period.
Assume.............................. C = 0

D = The Net Asset Value of an Underlying Fund share at the end
of the immediately preceding Valuation Period.
Assume.............................. D = $11.40

E = The daily deduction for the Mortality and Expense
Risk Fee and Administrative Charge, which totals 1.40% on an
annual basis.
On a daily basis..................... = .0000380909

Then, the Investment Experience Factor = 11.57 + 0 - 0 - .0000380909 = Z = 1.0148741898
-------------
11.40

</TABLE>

7
<PAGE>

Formula and Illustration for Determining Accumulation Unit Value

Accumulation Unit Value = A x B

<TABLE>
<S> <C> <C>
Where: A = The Accumulation Unit Value for the immediately
preceding Valuation Period.
Assume.................................. = $ X

B = The Net Investment Factor for the current Valuation Period.
Assume.................................... = Y

</TABLE>

Then, the Accumulation Unit Value = $ X * Y = $ Z

Annuity Unit Value And Annuity Payment Rates

The amount of Variable Annuity Payments will vary with Annuity Unit Values.
Annuity Unit Values rise if the net investment performance of the Subaccount
exceeds the assumed interest rate of 5% annually. Conversely, Annuity Unit
Values fall if the net investment performance of the Subaccount is less than the
assumed rate. The value of a variable Annuity Unit in each Subaccount was
established at $1.00 on the date operations began for that Subaccount. The value
of a variable Annuity Unit on any subsequent Business Day is equal to (a)
multiplied by (b) multiplied by (c), where:

(a) is the variable Annuity Unit Value for that Subaccount on the immediately
preceding Business Day;
(b) is the net investment factor for that Subaccount for the valuation period;
and
(c) is the investment result adjustment factor for the valuation period.

The investment result adjustment factor for the valuation period is the
product of discount factors of .99986634 per day to recognize the 5% effective
annual Assumed Investment Return. The valuation period is the period from the
close of the immediately preceding Business Day to the close of the current
Business Day.

The net investment factor for the Policy used to calculate the value of a
variable Annuity Unit in each Subaccount for the valuation period is determined
by dividing (i) by (ii) and subtracting (iii) from the result, where:

(i) is the result of:

(1) the net asset value of a fund share held in that Subaccount determined
at the end of the current valuation period; plus

(2) the per share amount of any dividend or capital gain distributions
made by the fund for shares held in that Subaccount if the ex-dividend
date occurs during the valuation period; plus or minus

(3) a per share charge or credit for any taxes reserved for, which PFL
determines to have resulted from the investment operations of the
Subaccount.

(ii) is the net asset value of a fund share held in that Subaccount determined
as of the end of the immediately preceding valuation period.

(iii) is a factor representing the Mortality and Expense Risk Fee and
Administrative Charge. This factor is equal, on an annual basis, to
1.40% of the net asset value of that Subaccount.

8
<PAGE>

The dollar amount of subsequent Variable Annuity Payments will depend upon
changes in applicable Annuity Unit Values.

The annuity payment rates vary according to the Annuity Option elected and
the sex and adjusted age of the Annuitant at the Annuity Commencement Date. The
Policy also contains a table for determining the adjusted age of the Annuitant.

Illustration of Calculations for Annuity Unit Value
and Variable Annuity Payments

Formula and Illustration for Determining Annuity Unit Value

Annuity Unit Value = A x B x C

<TABLE>
<S> <C> <C>
Where: A = Annuity Unit Value for the immediately preceding Valuation
Period.
Assume............................. = $ X

B = Investment Experience Factor for the Valuation Period for which the
Annuity Unit Value is being calculated.
Assume............................. = Y

C = A factor to neutralize the assumed interest rate of 5% built into
the Annuity Tables used.
Assume............................. = Z
</TABLE>

Then, the Annuity Unit Value is:
$ X * Y * Z = $ Q

Formula and Illustration for Determining Amount of First Monthly
Variable Annuity Payment

First Monthly Variable Annuity Payment = A * B
----
$1,000
<TABLE>
<S> <C> <C>
Where: A = The Policy Value as of the Annuity Commencement Date.
Assume.................................. = $ X

B = The Annuity purchase rate per $1,000 based upon the option
selected, the sex and adjusted age of the Annuitant according to
the tables contained in the Policy.
Assume.................................. = $ Y

</TABLE>
Then, the first Monthly Variable Annuity Payment
= $ X * $ Y = $ Z
----
1,000

9
<PAGE>

Formula and Illustration for Determining the Number of Annuity
Units Represented by Each Monthly Variable Annuity Payment

Number of Annuity Units = A
-
B

<TABLE>
<S> <C> <C>
Where: A = The dollar amount of the first monthly Variable Annuity
Payment.
Assume....................................... = $ X

B = The Annuity Unit Value for the Valuation Date on which the first
monthly payment is due.
Assume....................................... = $ Y

</TABLE>
Then, the number of Annuity Units = $ X = Z
---
$ Y

STATE REGULATION OF PFL

PFL is subject to the laws of Iowa governing insurance companies and
to regulation by the Iowa Division of Insurance. An annual statement in a
prescribed form is filed with the Division of Insurance each year covering the
operation of PFL for the preceding year and its financial condition as of the
end of such year. Regulation by the Division of Insurance includes periodic
examination to determine PFL's contract liabilities and reserves so that the
Division may determine the items are correct. PFL's books and accounts are
subject to review by the Division of Insurance at all times and a full
examination of its operations is conducted periodically by the National
Association of Insurance Commissioners. In addition, PFL is subject to
regulation under the insurance laws of other jurisdictions in which it may
operate.

ADMINISTRATION

PFL performs administrative services for the Policies. These services
include issuance of the Policies, maintenance of records concerning the
Policies, and certain valuation services.

RECORDS AND REPORTS

All records and accounts relating to the Mutual Fund Account will be
maintained by PFL. As presently required by the Investment Company Act of 1940
and regulations promulgated thereunder, PFL will mail to all Policy Owners at
their last known address of record, at least annually, reports containing such
information as may be required under that Act or by any other applicable law or
regulation. Policy Owners will also receive confirmation of each financial
transaction and any other reports required by law or regulation.

DISTRIBUTION OF THE POLICIES

The Policies are offered to the public through Atlas Securities, Inc., a
licensed broker-dealer under the federal securities laws and a licensed agent
under state insurance laws. The offering of the Policies is continuous and PFL
and Atlas do not anticipate discontinuing the offering of the Policies. However,
PFL and Atlas reserve the right to discontinue the offering of the Policies.

10
<PAGE>

AEGON USA Securities, Inc., an affiliate of PFL, will be the principal
underwriter of the Policies. AEGON USA Securities, Inc. has entered into an
agreement with Atlas Securities, Inc. for the exclusive distribution of
the Policies.

CUSTODY OF ASSETS

The assets of each of the Subaccounts of the Mutual Fund Account are held
by PFL. The assets of each of the Subaccounts of the Mutual Fund Account are
segregated and held separate and apart from the assets of the other Subaccounts
and from PFL's general account assets. PFL maintains records of all purchases
and redemptions of shares of the Underlying Funds held by each of the
Subaccounts. Additional protection for the assets of the Mutual Fund Account is
afforded by PFL's fidelity bond, presently in the amount of $5,000,000, covering
the acts of officers and employees of PFL.

HISTORICAL PERFORMANCE DATA

Subaccount Yields

PFL may from time to time advertise or disclose the current annualized
yield of one or more of the Subaccounts of the Mutual Fund Account for 30-day
periods. The annualized yield of a Subaccount refers to income generated by the
Subaccount over a specific 30-day period. Because the yield is annualized, the
yield generated by a Subaccount during the 30-day period is assumed to be
generated each 30-day period over a 12-month period. The yield is computed by:
(i) dividing the net investment income of the Subaccount less Subaccount
expenses for the period, by (ii) the maximum offering price per unit on the last
day of the period times the daily average number of units outstanding for the
period, compounding that yield for a 6-month period, and (iv) multiplying that
result by 2. Expenses attributable to the Subaccount include (i) the
Administrative Charge and (ii) the Mortality and Expense Risk Fee. The 30-day
yield is calculated according to the following formula:

Yield = 2 x ((((NI - ES)/(U x UV)) + 1)/6/ - 1)

Where:
<TABLE>

<S> <C>
NI = Net investment income of the Subaccount for the 30-day period attributable
to the Subaccount's unit.

ES = Expenses of the Subaccount for the 30-day period.

U = The average number of units outstanding.

UV = The unit value at the close (highest) of the last day in the 30-day
period.
</TABLE>

Because of the charges and deductions imposed by the Mutual Fund Account,
the yield for a Subaccount of the Mutual Fund Account will be lower than the
yield for its corresponding Portfolio. The yield calculations do not reflect
the effect of any premium taxes or Surrender Charges that may be applicable to a
particular Policy. Surrender Charges range from 7% to 0% of the amount of
Premium Payments withdrawn based on the number of years since the Policy Date.
However, Surrender Charges will not be assessed after the fifth Policy Year.

The yield on amounts held in the Subaccounts of the Mutual Fund Account
normally will fluctuate over time. Therefore, the disclosed yield for any given
past period is not an indication or

11
<PAGE>

representation of future yields or rates of return. A Subaccount's actual yield
is affected by the types and quality of its investments and its operating
expenses.

Total Returns

PFL may from time to time also advertise or disclose total returns for one
or more of the Subaccounts of the Mutual Fund Account for various periods of
time. One of the periods of time will include the period measured from the date
the Subaccount commenced operations. When a Subaccount has been in operation
for 1, 5 and 10 years, respectively, the total return for these periods will be
provided. Total returns for other periods of time may from time to time also be
disclosed. Total returns represent the average annual compounded rates of
return that would equate an initial investment of $1,000 to the redemption value
of that investment as of the last day of each of the periods. The ending date
for each period for which total return quotations are provided will be for the
most recent month end practicable, considering the type and media of the
communication and will be stated in the communication.

Total returns will be calculated using Subaccount Unit Values which PFL
calculates on each Business Day based on the performance of the Subaccount's
underlying Portfolio, and the deductions for the Mortality and Expense Risk Fee
and the Administrative Charge. Standard total return calculations will reflect
the effect of Surrender Charges that may be applicable to a particular period.
The total return will then be calculated according to the following formula:

P(1 + T)/N/ = ERV
<TABLE>

<S> <C> <C>
Where: T = The average annual total return net of Subaccount recurring
charges.

ERV = The ending redeemable value of the hypothetical account at
the end of the period.

P = A hypothetical initial payment of $1,000.

N = The number of years in the period.
</TABLE>
Other Performance Data

PFL may from time to time also disclose average annual total returns in a
non-standard format in conjunction with the standard format described above.
The non-standard format will be identical to the standard format except that the
Surrender Charge percentage will be assumed to be 0%.

PFL may from time to time also disclose cumulative total returns in
conjunction with the standard format described above. The cumulative returns
will be calculated using the following formula assuming that the Surrender
Charge percentage will be 0%.

CTR=(ERV/P) - 1

Where:
<TABLE>

<S> <C>
CTR = The cumulative total return net of Subaccount recurring charges for
the period.

ERV = The ending redeemable value of the hypothetical investment at the
end of the period.

P = A hypothetical initial payment of $1,000.
</TABLE>

All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required period, is
also disclosed.

12
<PAGE>

Hypothetical Performance Data

From time to time, sales literature or advertisements may quote average
annual total returns for periods prior to the date the Mutual Fund Account
commenced operations. Such performance information for the Subaccounts will be
calculated based on the performance of the various Portfolios and the assumption
that the Subaccounts were in existence for the same periods as those indicated
for the Portfolios, with the level of Policy charges that were in effect at the
inception of the Subaccounts.

LEGAL MATTERS

Legal advice relating to certain matters under the federal securities laws
applicable to the issue and sale of the Policies has been provided to PFL by
Sutherland, Asbill & Brennan L.L.P., of Washington D.C.

INDEPENDENT AUDITORS

The Financial Statements of PFL as of December 31, 1996 and 1995, and for
each of the three years in the period ended December 31, 1996, included in this
Statement of Additional Information have been audited by Ernst & Young LLP,
Independent Auditors, Suite 3400, 801 Grand Avenue, Des Moines, Iowa 50309.

OTHER INFORMATION

A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
Policies discussed in this Statement of Additional Information. Not all of the
information set forth in the Registration Statement, amendments and exhibits
thereto has been included in the Prospectus or this Statement of Additional
Information. Statements contained in the Prospectus and this Statement of
Additional Information concerning the content of the Policies and other legal
instruments are intended to be summaries. For a complete statement of the terms
of these documents, reference should be made to the instruments filed with the
Securities and Exchange Commission.

FINANCIAL STATEMENTS

The values of the interest of Owners in the Mutual Fund Account will be
affected solely by the investment results of the selected Subaccount(s). The
Financial Statements of PFL, which are included in this Statement of Additional
Information, should be considered only as bearing on the ability of PFL to meet
its obligations under the Policies. They should not be considered as bearing on
the investment performance of the assets held in the Mutual Fund Account.

13
<PAGE>

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

All required financial statements will be included in a future
amendment.

(b) Exhibits:

(1) (a) Resolution of the Board of Directors of PFL Life Insurance
Company authorizing establishment of the Mutual Fund
Account. Note 1.

(2) Not Applicable.

(3) (a) Form of Principal Distribution Agreement by and between PFL
Life Insurance Company on its own behalf and on the behalf
of the Mutual Fund Account, and AEGON USA Securities, Inc.
Note 1.

(b) Form of Broker/Dealer Supervision and Sales Agreement by and
between AEGON USA Securities, Inc. and the Broker/Dealer.
Note 1.

(4) Form of Policy for the Atlas Portfolio Builder Variable
Annuity. Note 2.

(5) Form of Application for the Atlas Portfolio Builder Variable
Annuity. Note 2.

(6) (a) Articles of Incorporation of PFL Life
Insurance Company. Note 1.

(b) ByLaws of PFL Life Insurance Company. Note 1.

(7) Not Applicable.

(8) (a) Participation Agreement by and between PFL
Life Insurance Company and Atlas Insurance
Trust. Note 2.

(8) (b) Participation Agreement by and between PFL
Life Insurance Company and Dreyfus Variable
Investment Fund. Note 1.

<PAGE>

(8) (c) Participation Agreement by and between PFL
Life Insurance Company and the Endeavor
Series Trust.
Note 2.

(8) (d) Participation Agreement by and between PFL
Life Insurance Company and Federated
Insurance Series.
Note 2.

(8) (e) Participation Agreement by and between PFL
Life Insurance Company and WRL Series Funds,
Inc.
Note 2.

(9) Opinion and Consent of Counsel. Note 2.

(10) (a) Consent of Independent Auditors. Note 2.

(b) Opinion and Consent of Actuary. Note 2.

(11) Not applicable.

(12) Not applicable.

(13) Performance Data Calculations. Note 2.

(14) Powers of Attorney. Note 1. (Patrick S. Baird, Craig D.
Vermie, William L. Busler, Patrick E. Falconio, Douglas C.
Kolsrud, Robert J. Kontz, Brenda K. Clancy.)

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

Note 1. Filed herewith.

Note 2. To be filed in a future amendment.
<PAGE>

Item 25. Directors and Officers of the Depositor

Principal Positions
Name and and Offices with
Business Address Depositor
- ---------------- ---------

William L. Busler Director, Chairman of the Board and
4333 Edgewood Road N.E. President
Cedar Rapids, Iowa
52499-0001

Patrick S. Baird Director, Senior Vice President and
4333 Edgewood Road N.E. Chief Financial Officer
Cedar Rapids, Iowa
52499-0001

Craig D. Vermie Director, Vice President, Secretary
4333 Edgewood Road N.E. and Corporate Counsel
Cedar Rapids, Iowa
52499-0001

Douglas C. Kolsrud Director, Vice President and
4333 Edgewood Road N.E. Corporate Actuary
Cedar Rapids, Iowa
52499-0001

Patrick E. Falconio Director, Senior Vice President and
4333 Edgewood Road N.E. Chief Investment Officer
Cedar Rapids, Iowa
52499-0001

Robert J. Kontz Vice President and
4333 Edgewood Road N.E. Controller
Cedar Rapids, Iowa
52499-0001

Brenda K. Clancy Vice President, Treasurer and
4333 Edgewood Road N.E. Chief Financial Officer
Cedar Rapids, Iowa
52499-0001

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

<PAGE>

-------------------------
VERENIGING AEGON
NETHERLANDS MEMBERSHIP
ASSOCIATION
-------------------------

53.63%
-------------------------
AEGON N.V.
NETHERLANDS CORPORATION
-------------------------
<S> <C> <C> <C>
100% 100% 100% 100%
------------------------- ------------------------- ------------------------- -----------------------------
AEGON Nederland N.V. AEGON INTERNATIONAL N.V. AEGON NEVAK HOLDING B.V. GRONINGER FINANCIERINGEN B.V.
Netherlands Corporation Netherlands Corporation Netherlands Corporation Netherlands Corporation
------------------------- ------------------------- ------------------------- -----------------------------

DE
-------------------------
VOTING TRUST
Trustees: K.J. Storm
Donald J. Sheperd
H.B. Van Wijk
Dennis Hersch
-------------------------

DE 100%
-------------------------
AEGON U.S. HOLDING
CORPORATION
-------------------------

IA 100%(1)
-------------------------
AEGON USA, INC.
-------------------------

MD 100% MD 100%
----------------------------- -----------------------------
FIRST AUSA LIFE AUSA HOLDING
INSURANCE COMPANY COMPANY
----------------------------- -----------------------------

NJ 100% NY 100% MD 100%
- ----------------------------- --------------------------- ---------------------------
SHORT HILLS AUSA LIFE INSURANCE MONUMENTAL LIFE
MANAGEMENT COMPANY COMPANY, INC. INSURANCE COMPANY
- ----------------------------- --------------------------- ---------------------------

NY 100% IA 100% MD 100%
- ----------------------------- --------------------------- ---------------------------
CORPA REINSURANCE LIFE INVESTORS MONUMENTAL GENERAL
COMPANY INSURANCE COMPANY CASUALTY COMPANY
- ----------------------------- OF AMERICA ---------------------------
---------------------------
IN 100% MD 100%
- ----------------------------- IA 100% ---------------------------
AEGON MANAGEMENT --------------------------- UNITED FINANCIAL
COMPANY BANKERS UNITED LIFE SERVICES, INC.
- ----------------------------- ASSURANCE COMPANY ---------------------------
---------------------------
DE 100%(8) AZ (8)
- ----------------------------- IA 100% ---------------------------
RCC NORTH AMERICA --------------------------- BANKERS FINANCIAL LIFE
INC. PFL LIFE INSURANCE COMPANY
- ----------------------------- INSURANCE COMPANY ---------------------------
---------------------------
IA 100%
AZ 100% Voting Common (2) ---------------------------
--------------------------- THE WHITESTONE
SOUTHWEST EQUITY LIFE CORPORATION
INSURANCE COMPANY ---------------------------
---------------------------
IA 100%
AZ 100% Voting Common ---------------------------
--------------------------- CADET HOLDING CORP.
IOWA FIDELITY LIFE ---------------------------
INSURANCE COMPANY
---------------------------

OH 100%
---------------------------
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
---------------------------
(3)

MD
----------------------
WRL SERIES FUND
INC.
----------------------

MD 100%
----------------------
AUSA HOLDING
COMPANY
----------------------

MD 100% IA 100% DE 100%
----------------------------- --------------------------- ---------------------------
MONUMENTAL GENERAL AUSA FINANCIAL DIVERSIFIED INVESTMENT
INSURANCE GROUP, INC. MARKETS, INC. ADVISORS, INC.
----------------------------- --------------------------- ---------------------------

MD 100% IA 100% DE 100%
----------------------------- --------------------------- ---------------------------
MONUMENTAL GENERAL UNIVERSAL BENEFITS DIVERSIFIED INVESTORS
ADMINISTRATORS, INC. CORPORATION SECURITIES CORP.
----------------------------- --------------------------- ---------------------------

MD 100% IA 100% IA 100%
----------------------------- --------------------------- ---------------------------
EXECUTIVE MANAGEMENT INVESTORS WARRANTY AEGON USA
AND CONSULTANT OF AMERICA, INC. SECURITIES, INC.
SERVICES, INC. --------------------------- ---------------------------
----------------------------- (3)
IA 100% MD
MD 100% --------------------------- ---------------------------
----------------------------- MASSACHUSETTS FIDELITY AEGON USA MANAGED
MONUMENTAL GENERAL TRUST COMPANY PORTFOLIOS, INC.
MASS MARKETING, INC. --------------------------- ---------------------------
-----------------------------
DE 100% IA 100%
--------------------------- ---------------------------
MONEY SERVICES, INC. AMERICAN FORUM FOR
--------------------------- FISCAL FITNESS, INC.
---------------------------
CA 100%
--------------------------- TN 100%
ZAHORIK COMPANY, INC. ---------------------------
--------------------------- SUPPLEMENTAL
INSURANCE
AL 100% DIVISION, INC.
---------------------- ---------------------------
ZCI, INC.
---------------------- MI 100%
---------------------------
DE 100% MN 100% CREDITOR RESOURCES,
(3) ----------------------------- --------------------------- INC.
INTERSECURITIES, AUSA INSTITUTIONAL ---------------------------
INC. MARKETING GROUP, INC.
----------------------------- --------------------------- CN 100%
---------------------------
MA CA 100%(8) MN 100% CRC CREDITOR
--------------- ----------------------------- --------------------------- RESOURCES CANADIAN
INDEX FUND ISI INSURANCE COLORADO ANNUITY DEALER NETWORK, INC.
--------------- AGENCY, INC. AND AGENCY, INC. ---------------------------
ITS SUBSIDIARIES ---------------------------
----------------------------- IA 100%
MA ---------------------------
--------------- MI 100% AEGON USA INVESTMENT
IDEX II ----------------------------- MANAGEMENT, INC.
SERIES FUND ASSOCIATED MARINER ---------------------------
--------------- FINANCIAL GROUP, INC.
----------------------------- IA 100%(12)
MA ---------------------------
--------------- MI 100% AEGON USA REALTY (3)
INDEX FUND 3 ----------------------------- ADVISORS, INC.
--------------- MARINER FINANCIAL ---------------------------
SERVICES, INC.
----------------------------- DE 100%
---------------------------
MI 100% QUANTRA
----------------------------- CORPORATION
MARINER PLANNING ---------------------------
CORPORATION
----------------------------- DE 100%
---------------------------
MI 100%(10) QUANTRA SOFTWARE
----------------------------- CORPORATION
ASSOCIATED MARINER ---------------------------
AGENCY, INC. AND ITS
SUBSIDIARIES IA 100%
----------------------------- ---------------------------
LANDAUER REALTY
MI 100% ADVISORS, INC.
----------------------------- ---------------------------
MARINER MORTGAGE
CORP. IA 100%
----------------------------- ---------------------------
LANDAUER
FL 100% ASSOCIATES, INC.
----------------------------- ---------------------------
IDEX INVESTOR
SERVICES, INC. IA 100%
----------------------------- ---------------------------
AEGON USA REALTY
DE 50%(7) MANAGEMENT, INC.
----------------------------- ---------------------------
IDEX MANAGEMENT,
INC. IA 100%(11)
----------------------------- ---------------------------
REALTY INFORMATION
SYSTEMS, INC.
---------------------------

IA (4)
---------------------------
USP REAL ESTATE
INVESTMENT TRUST
---------------------------

IA (5)
---------------------------
CEDAR INCOME FUND
LTD.
---------------------------
</TABLE>

See Footnotes Page 2
Effective January 1, 1997

<PAGE>

Page 2

Footnotes

(1) 150,000 shares of Class B Non-Voting Common Stock owned by Ennia
Reinsurance Antilles N.V.

(2) Ordinary common stock is allowed 60% of total cumulative vote.
Participating common stock is allowed 40% of total cumulative vote.

(3) Denotes relationships as advisor, administrator, sponsor, underwriter or
general partner.

(4) First AUSA Life Insurance Company owns 12.89%. PFL Life Insurance Company
owns 13.11%. Bankers United Life Assurance Company owns 4.86%.

(5) PFL Life Insurance Company owns 16.73%. Bankers United Life Assurance
Company owns 3.77%. Life Investors Insurance Company of America owns
3.38%. AEGON USA Realty Advisors, Inc. owns 1.97%. First AUSA Life
Insurance Company owns .18%.

(6) Class B Common stock is allocated 75% of total cumulative vote. Class A
Common stock is allocated 25% of total cumulative vote.

(7) 50% of Idex Management, Inc. is owned by Janus Capital Corporation, a
Colorado corporation.

(8) RCC Group: FGH Realty Credit Corp., FGH USA, Inc., RCC North America,
Inc., FGH USA Realty, Inc., FGH Eastern Region, Inc., FGH Appraisal
Services, Inc., FGH Western Region, Inc., ALH Properties, Inc., First FGP,
Inc., Second FGP, Inc., Third FGP, Inc., Fourth FGP, Inc., Fifth FGP, Inc.,
Sixth FGP, Inc., Seventh FGP, Inc., FGP Midwood, Inc., FGP Parsippany,
Inc., ALH Properties Two, Inc., ALH Properties Three, Inc., ALH Properties
Four, Inc., ALH Properties Five, Inc., ALH Properties Six, Inc., ALH
Properties Seven, Inc., ALH Properties Eight, Inc., ALH Properties Nine,
Inc., ALH Properties Ten, Inc., ALH Properties Eleven, Inc., ALH Properties
Twelve, Inc., ALH Properties Thirteen, Inc., ALH Properties Fourteen, Inc.,
ALH Properties Fifteen, Inc., ALH Properties Sixteen, Inc., ALH Properties
Seventeen, Inc., FGP Keene, Inc., FGP Broadway, Inc., FGP West Street,
Inc., FGP West Street Two, Inc., FGP 90 West Street, Inc., FGP Branford,
Inc., FGP Franklin, Inc., FGP Bala, Inc., FGP Twenty-One, Inc., FGP Twenty-
Two, Inc., FGP Twenty-Five, Inc., FGP Schenectady, Inc., FGP Country
Estates, Inc., FGP Eleventh Street, Inc., FGP 109th Street, Inc., FGP
Seventy-Second Street, Inc., FGP Gaithersburg, Inc., FGP West 32nd Street,
Inc., FGP Beekman, Inc., Dutch Hotel Management, Inc., FGP Landmark, Inc.,
FGP Islandia, Inc., FGP Bridgeport, Inc., FGP Varick, Inc., The RCC Group,
Inc., FGP Union Gardens, Inc., FGP Burkewood, Inc., FGP Stamford, Inc., FGP
Meadow Lane, Inc., FGP Main Street, Inc., FGP Property Services, Inc., FGP
Merrick, Inc., FGP West 14th Street, Inc., FGP 106 Fulton, Inc., FGP Bush
Terminal, Inc., FGP Northern Boulevard, Inc., FGP Seventh Avenue, Inc., FGP
Parsons, Inc., FGP City Hall, Inc., FGP West 88th Street, Inc., FGP
Lincoln, Inc., FGP Emerson, Inc., FGP Brooke, Inc., FGP 86th Street, Inc.,
FGP Edison, Inc., FGP Rider Avenue, Inc., FGP Remsen, Inc., FGP Rockbeach,
Inc., FGP Carter Drive,

<PAGE>

Inc., FGP Centereach, Inc., FGP Colonial Plaza, Inc., FGP Coram, Inc., FGP
Herald Center, Inc., Eighty Six Yorkville, Inc.

(9) Subsidiaries of ISI Insurance Agency, Inc. are: ISI Insurance Agency of
Ohio, Inc., ISI Insurance Agency of Massachusetts, Inc., and ISI Insurance
Agency of Texas, Inc.

(10) Subsidiaries of Associated Mariner Agency, Inc. are Associated Mariner
Agency of Hawaii, Inc., Associated Mariner Insurance Agency of
Massachusetts, Inc., Associated Mariner Agency Ohio, Inc., Associated
Mariner Agency Texas, Inc., and Associated Mariner Agency New Mexico, Inc.

(11) Owns 50% interest in DJA Partners (a.k.a. "Teleres"), a Delaware general
partnership. Also owns 10% interest in Datalytics, Inc., an Ohio
corporation.

(12) Owns 49% of Quantra Consulting, Inc., a Delaware corporation.

*Includes qualifying shares for Directors.

AEGON USA, Inc. - Holding Company

Life Investors Insurance Company of America - Insurance

International Life Investors Insurance Company - Insurance

Transunion Casualty Company - Insurance

Investors Warranty of America, Inc. - Provider of automobile extended
maintenance contracts

Supplemental Insurance Division, Inc. - Insurance

Creditor Resources, Inc. - Credit Insurance

AEGON USA Investment Management, Inc. - Investment Advisor

AEGON USA Realty Advisors, Inc. - Provides real estate administrative and real
estate investment services

AEGON USA Realty Management, Inc. - Real Estate Management

AEGON USA Securities, Inc. - Broker-Dealer

AEGON USA Managed Portfolios, Inc. - Mutual Fund

USP Real Estate Investment Trust - Real Estate Investment Trust

Cedar Income Fund, Ltd. - Real Estate Investment Trust

First AUSA Life Insurance Company - Insurance

<PAGE>

Bankers United Life Assurance Company - Insurance

Universal Benefits Corporation - Third party administrator

Massachusetts Fidelity Trust Company - Trust company

Money Services, Inc. - Provides financial counseling for employees and agents of
affiliated companies

Zahorik Company, Inc. - Broker-Dealer

Cadet Holding Corp. - Holding company

ISI Insurance Agency, Inc. - Broker/Dealer

Southwest Equity Life Insurance Company - Insurance

Iowa Fidelity Life Insurance Company - Insurance

The Whitestone Corporation - Insurance agency

Monumental Life Insurance Company - Insurance

United Financial Services, Inc. - General agency

Monumental General Insurance Group, Inc. - Holding company

Monumental General Administrators, Inc. - Provides management services to
unaffiliated third party administrator

Executive Management and Consultant Services, Inc. - Provides actuarial
consulting services

Monumental General Mass Marketing, Inc. - Marketing arm for sale of mass
marketed insurance coverages

Bankers Financial Life Insurance Company - Insurance

Monumental General Casualty Company - Insurance

AUSA Holding Company - Holding company

JLW Financial Management Systems, Inc. - Management and Administrative Services

ZCI, Inc. - Insurance agency

AUSA Financial Markets, Inc. - Marketing

CRC Creditor Resources Canadian Dealer Network Inc. - Insurance agency

American Forum For Fiscal Fitness, Inc. - Marketing

<PAGE>

Western Reserve Life Assurance Co. of Ohio - Insurance

Landauer Realty Advisors, Inc. - Real estate counseling

Landauer Associates, Inc. - Real estate counseling

WRL Series Fund, Inc. - Mutual fund

Intersecurities, Inc. - Broker-dealer

Idex Investor Services, Inc. - Shareholder services

Idex Management, Inc. - Investment advisor

Idex Total Income Trust - Mutual fund

Idex Fund - Mutual fund

Idex II Series Fund - Mutual fund

Idex Fund 3 - Mutual fund

AUSA Life Insurance Company, Inc. - Insurance

Diversified Investment Advisors, Inc. - Registered Investment Advisor

Diversified Investors Securities Corp. - Broker-Dealer

Associated Mariner Financial Group, Inc. - Holding company management
services

Mariner Financial Services, Inc. - Broker/Dealer

Mariner/ISI Planning Corporation - Financial planning

Associated Mariner Agency, Inc. - Insurance agency

Mariner Mortgage Corp. - Mortgage origination

AUSA Institutional Marketing Group, Inc. - Insurance agency

Colorado Annuity Agency, Inc. - Insurance agency

Realty Information Systems, Inc. - Information Systems for real estate
investment management

Melson and Associates, Inc. - Real estate financial management consulting

Item 27. Number of Contract Owners

As of the date of this Registration there were 0 Owners of the Policies.

<PAGE>

Item 28. Indemnification

The Iowa Code (Sections 490.850 et. seq.) provides for permissive
--------
indemnification in certain situations, mandatory indemnification in other
situations, and prohibits indemnification in certain situations. The Code also
specifies procedures for determining when indemnification payments can be made.

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

Item 29. Principal Underwriters

AEGON USA Securities, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001

The directors and officers of
AEGON USA Securities, Inc.
are as follows:

Patrick E. Falconio Linda Gilmer
Director Vice President and Treasurer

William L. Busler Lisa Wachendorf
Director Vice President

Brenda K. Clancy Donna M. Craft
Director Vice President

Robert A. Thelen Frank A. Camp
Senior Vice President Secretary

Lorri E. Mehaffey Shelley Davenport
President Assistant Vice President

Billy J. Berger
Vice President and Assistant Treasurer

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

The principal business address of each person listed is AEGON USA Securities,
Inc., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001.

<PAGE>

Commissions and Other Compensation Received by Principal Underwriter.
- --------------------------------------------------------------------

AEGON USA Securities, Inc. and/or the broker-dealers received $0 from the
Registrant during the last fiscal year for its services in distributing the
Policies. No other commission or compensation was received by the principal
underwriter, directly or indirectly, from the Registrant during the fiscal year.

AEGON USA Securities, Inc. also serves as the principal underwriter for the PFL
Endeavor Variable Annuity Account, the PFL Endeavor Platinum Variable Annuity
Account, and the AUSA Endeavor Variable Annuity Account. These accounts are
separate accounts of PFL Life Insurance Company or AUSA Life Insurance Company,
Inc., life insurance company affiliates of AEGON USA Securities, Inc.

Item 30. Location of Accounts and Records

The records required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, are maintained by
PFL Life Insurance Company at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa
52499-0001.

Item 31. Management Services.

All management Contracts are discussed in Part A or Part B.

Item 32. Undertakings

(a) Registrant undertakes that it will file a post-effective amendment to this
registration statement as frequently as necessary to ensure that the
audited financial statements in the registration statement are never more
than 16 months old for so long as Premiums under the Policy may be
accepted.

(b) Registrant undertakes that it will include either (i) a postcard or similar
written communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional Information or
(ii) a space in the Policy application that an applicant can check to
request a Statement of Additional Information.

(c) Registrant undertakes to deliver any Statement of Additional Information
and any financial statements required to be made available under this Form
promptly upon written or oral request to PFL at the address or phone number
listed in the Prospectus.

(d) PFL Life Insurance Company hereby represents that the fees and changes
deducted under the policies, in the aggregate, are reasonable in relation
to the services rendered, the expenses expected to be incurred, and the
risks assumed by PFL Life Insurance Company.

Section 403(b) Representations
- ------------------------------

PFL represents that it is relying on a no-action letter dated November 28, 1988,
to the American Council of Life Insurance (Ref. No. IP-6-88), regarding Sections
22(e), 27(c)(1), and 27(d) of the Investment Company Act of 1940, in connection
with redeemability restrictions on Section 403(b) Policies, and that paragraphs
numbered (1) through (4) of that letter will be complied with.

<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on its
behalf, in the City of Cedar Rapids and State of Iowa, on this 25th day of
April, 1997.

PFL LIFE VARIABLE
ANNUITY ACCOUNT A

PFL LIFE INSURANCE COMPANY
Depositor

/s/ William L. Busler
----------------------
William L. Busler
President

As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>

Signatures Title Date
- ---------- ----- ----
<S> <C> <C>

/s/ Patrick S. Baird Director April 25, 1997
- --------------------------
Patrick S. Baird

/s/ Craig D. Vermie Director April 25, 1997
- --------------------------
Craig D. Vermie

/s/ William L. Busler Director April 25, 1997
- --------------------------
William L. Busler (Principal Executive Officer)

/s/ Patrick E. Falconio Director April 25, 1997
- --------------------------
Patrick E. Falconio

/s/ Douglas C. Kolsrud Director April 25, 1997
- --------------------------
Douglas C. Kolsrud

/s/ Robert J. Kontz Vice President and April 25, 1997
- --------------------------
Robert J. Kontz Corporate Controller

/s/ Brenda K. Clancy Treasurer April 25, 1997
- --------------------------
Brenda K. Clancy
</TABLE>
<PAGE>

EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>

Exhibit No. Description of Exhibit Page No./*/
- ----------- ---------------------- -----------
<S> <C> <C>

(1)(a) Resolution of the Board of Directors
of PFL Life Insurance Company
authorizing establishment of the
Mutual Fund Account.

(3)(a) Form of Principal Distribution
Agreement by and between PFL Life
Insurance Company, on its own behalf
and on the behalf of the Mutual Fund
Account, and AEGON USA Securities,
Inc.

(3)(b) Form of Broker/Dealer Supervision and
Sales Agreement by and between AEGON
USA Securities, Inc. and the
Broker/Dealer

(6)(a) Articles of Incorporation of PFL Life
Insurance Company

(6)(b) Bylaws of PFL Life Insurance Company

(8)(b) Participation Agreement by and
between PFL Life Insurance Company
and Dreyfus Variable Investment Fund.

(14) Powers of Attorney
</TABLE>

- -----------------------
/*/Page numbers included only in manually executed original.
<PAGE>

Registration No.
333 -

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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

EXHIBITS

FORM N-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

FOR

PFL LIFE VARIABLE ANNUITY ACCOUNT A

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

<PAGE>

EXHIBIT (1)(a)
--------------

RESOLUTION OF THE BOARD OF DIRECTORS OF
PFL LIFE INSURANCE COMPANY AUTHORIZING ESTABLISHMENT
OF THE MUTUAL FUND ACCOUNT.
<PAGE>

WRITTEN CONSENT OF THE
BOARD OF DIRECTORS OF
PFL LIFE INSURANCE COMPANY

FEBRUARY 17, 1997

The undersigned, being all of the Directors of PFL Life Insurance Company, an
Iowa corporation (hereafter referred to as the "Company"), acting as authorized
in Section 490.821 of the Iowa Business Corporation Act and Article II, Section
8, of the Company's Bylaws, HEREBY ADOPT, unanimously, the following resolutions
by Written Consent and authorize the actions therein to be taken by the Company
upon the filing of the Written Consent in the Minute Book of the Company:

RESOLVED, that the officers of the Company be and they hereby are
authorized to establish the "PFL Life Variable Annuity Account A" and the
"PFL Life Variable Annuity Account B," separate accounts for the purpose of
selling approved variable insurance contracts;

BE IT FURTHER RESOLVED, that the officers of this company be and they
hereby are authorized and instructed to take any and all actions necessary
in order to carry out the powers hereby conferred, including but not
limited to, the filing of any statement and amendments thereto with the
Securities and Exchange Commission, execution of any and all required
underwriting agreements, state regulatory filings, Blue Sky filings, policy
filings, and to execute any and all other documents that may be required by
any Federal, state or local regulatory agency in order to operate the
separate accounts.

This Written Consent may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same Written Consent.

IN WITNESS WHEREOF, the undersigned have executed this Written Consent of the
Board of Directors of PFL Life Insurance Company as of the date first
hereinabove set forth.

/s/ Patrick S. Baird /s/ Douglas C. Kolsrud
- -------------------- ----------------------
Patrick S. Baird Douglas C. Kolsrud

/s/ William L. Busler /s/ Craig D. Vermie
- --------------------- -------------------
William L. Busler Craig D. Vermie

/s/ Patrick E. Falconio
- -----------------------
Patrick E. Falconio
<PAGE>

CERTIFICATION
-------------

I, Craig D. Vermie, being the duly constituted Secretary of PFL Life Insurance

Company, an Iowa corporation with its principal place of business located at

4333 Edgewood Road N.E., Cedar Rapids, Iowa, hereby certify that the following

is a true and correct copy of a resolution adopted by the Board of Directors of

said corporation by written consent dated as of February 17, 1997, and that said

resolution is still in full force and effect:

RESOLVED, that the officers of the Company be and they hereby are
authorized to establish the "PFL Life Variable Annuity Account A," a
separate account for the purpose of selling approved variable insurance
contracts;

Dated at Cedar Rapids, Iowa, this 18th day of February, 1997.

(SEAL)

By: /s/ Craig D. Vermie
--------------------
Craig D. Vermie

<PAGE>

EXHIBIT (3)(a)
--------------

FORM OF PRINCIPAL DISTRIBUTION AGREEMENT
BY AND BETWEEN PFL LIFE INSURANCE COMPANY,
ON ITS OWN BEHALF AND ON THE BEHALF OF
THE MUTUAL FUND ACCOUNT, AND AEGON USA SECURITIES, INC.
<PAGE>

PRINCIPAL DISTRIBUTION AGREEMENT

THIS PRINCIPAL DISTRIBUTION AGREEMENT is made this 20th day of
November, 1996, by and between AEGON USA Securities, Inc. (hereinafter the
"Distributor") and PFL Life Insurance Company (hereinafter the "Insurance
Company"), on its own behalf and on behalf of PFL Life Variable Annuity Account
A (hereinafter the "Account"), a separate account of the Insurance Company, as
follows:

WHEREAS, the Account was established under authority of a resolution
of the Insurance Company's Board of Directors on March 29, 1996, in order to set
aside and invest assets attributable to certain flexible premium variable
annuity contracts (hereinafter "Policies") issued by the Insurance Company;

WHEREAS, the Insurance Company has registered the PFL Life Variable
Annuity Account A as a unit investment trust under the Investment Company Act of
1940 (the "Investment Company Act") and has registered the Policies under the
Securities Act of 1933;

WHEREAS, the Distributor is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and is a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and

WHEREAS, the Insurance Company and the Account desire to have Policies
sold and distributed through the Distributor and the Distributor is willing to
sell and distribute such Policies under the terms stated herein.

NOW THEREFORE, the parties hereto agree as follows:

1. The Insurance Company grants to the Distributor the right to be,
and the Distributor agrees to serve as, distributor and principal underwriter of
the Policies during the term of this agreement. The Distributor agrees to use
its best efforts to solicit applications for the Policies, and to undertake, at
its own expense, to provide all sales services relative to the Policies and
otherwise to perform all duties and functions which are necessary and proper for
the distribution of the Policies.
<PAGE>

2. All premiums for Policies shall be remitted promptly in full
together with such application, forms and any other required documentation to
the Insurance Company. Checks or money orders in payment of premiums shall be
drawn to the order of "PFL Life Insurance Company".

3. The Distributor agrees to offer the Policies for sale in
accordance with the prospectus therefor then in effect. The Distributor is not
authorized to give any information or to make any representations concerning the
Policies other than those contained in the current prospectus therefore filed
with the Securities and Exchange Commissions or in such sales literature as may
be authorized by the Insurance Company.

4. On behalf of the Account, the Insurance Company shall furnish the
Distributor with copies of all prospectuses, financial statements and other
documents which the Distributor reasonably requests for use in connection with
the distribution of the Policies.

5. The Distributor represents that it is duly registered as a
broker/dealer under the Securities Exchange Act of 1934 ("1934 Act") and is a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD") and, to the extent necessary to offer the Policies, shall be duly
registered or otherwise qualified under the securities laws of any state or
other jurisdiction. The Distributor shall be responsible for carrying out its
sales and underwriting obligations hereunder in continued compliance with the
NASD Rules of Fair Practice and federal and state securities laws and
regulations. Without limiting the generality of the foregoing, the Distributor
agrees that it shall be fully responsible for:

(a) ensuring that no person shall offer or sell the Policies on its
behalf until such person is duly registered as a representative of the
Distributor, duly licensed and appointed by the Insurance Company, and
appropriately licensed, registered or otherwise qualified to offer and sell
such Policies under the federal securities laws and any applicable
securities laws of each state or other jurisdiction in which such Policies
may be lawfully sold, in which the Insurance Company is licensed to sell
the Policies and in which such persons shall offer or sell the Policies;
and

2
<PAGE>

(b) training, supervising, and controlling of all such persons for
purposes of complying on a continuos basis with the NASD Rules of Fair
Practice and with federal and state securities law requirements applicable
in connection with the offering and sale of the Policies. In this
connection, the Distributor shall:
(1) conduct such training (including the preparation and
utilization of training materials) as in the opinion of the
Distributor is necessary to accomplish the purposes of this Agreement;
(2) establish and implement reasonable written procedures for
supervision of sales practices of agents, representatives or brokers
selling the Policies; and
(3) take reasonable steps to ensure that its associated persons
shall not make recommendations to an applicant to purchase a Policy
and shall not sell a Policy in the absence of reasonable grounds to
believe that the purchase of the Policy is suitable for such
applicant.

6. Notwithstanding anything in the Agreement to the contrary, the
Distributor or the Insurance Company may enter into sales agreements with the
independent broker/dealers for the sale of the Policies. All such sales
agreements entered into by the Insurance Company or the Distributor shall
provide that each independent broker/dealer will assume full responsibility for
continued compliance by itself and its associated persons with the NASD Rules of
Fair Practice and applicable federal and state securities laws. All associated
persons of such independent broker/dealers soliciting applications for the
Policies shall be duly and appropriately licensed or appointed for the sale of
the Policies under the insurance laws of the applicable states or jurisdictions
in which such Policies may be lawfully sold.

7. The Insurance Company shall apply for the proper insurance licenses in
the appropriate states or jurisdictions for the designated persons associated
with the Distributor or with other independent broker/dealers which have entered
into agreements

3
<PAGE>

with the Distributor for the sale of the Policies, provided that the Insurance
Company reserves the right to refuse to appoint any proposed registered
representative as an agent or broker, and to terminate an agent or broker once
appointed.

8. The Insurance Company and the Distributor shall cause to be maintained
and preserved for the periods prescribed such accounts, books, and other
documents as are required of them by the Investment Company Act of 1940, the
1934 Act, and any other applicable laws and regulations. The books, accounts
and records of the Insurance Company, the Account, and the Distributor as to all
transactions hereunder shall be maintained so as to disclose clearly and
accurately the nature and details of the transactions. The Insurance Company
shall maintain such books and records of the Distributor pertaining to the sale
of the Policies and required by the 1934 Act as may be mutually agreed upon from
time to time by the Insurance Company and the Distributor; provided that such
books and records shall be the property of the Distributor, and shall at all
times be subject to such reasonable periodic, special or other examination by
the SEC and all other regulatory bodies having jurisdiction. The Insurance
Company or the Distributor, as may be mutually agreed upon, shall be responsible
for sending all required confirmations on customer transactions in compliance
with applicable regulations, as modified by an exemptions or other relief
obtained by the Insurance Company or Distributor. The Distributor shall cause
the Insurance Company to be furnished with such reports as the Insurance Company
may reasonably request for the purpose of meetings its reporting and
recordkeeping requirements under the insurance laws of the Insurance Company's
domicile state and any other applicable states or jurisdictions.

9. The Distributor shall have the responsibility for paying (i) all
commission or other fees to its associate persons which are due for the sale of
the Policies and (ii) any compensation to other independent broker/dealer and
their associated persons due under the terms of any sales agreements between the
Distributor and such broker/dealers. Notwithstanding the preceding sentence, no
associated person or broker/dealer shall have an interest in any deductions or
other fees payable to the Distributor as set forth herein. The Distributor
shall have the responsibility for calculating and furnishing periodic

4
<PAGE>

reports to the Insurance Company as to the sale of the Policies, and as to the
commissions and service fees payable to persons selling the Policies.

10. The Distributor shall be compensated for its distribution services as
set forth in a schedule to be determined by Insurance Company and Distributor.
Any commission paid to the Distributor in connection with a Policy must be
returned to the Insurance Company if the Policy is tendered for redemption
within the "free-look" period as defined in the Account's prospectus.

11. The services of the Distributor to the Account hereunder are not to be
deemed exclusive and the Distributor shall be free to render similar services to
other so long as its services hereunder are not impaired or interfered with
thereby.

12. (a) This Agreement may be terminated by either party hereto upon 60
days' written notice to the other party.

(b) This Agreement may be terminated upon written notice of one party
to the other party hereto in the event of bankruptcy or insolvency of such party
to which notice is given.

(d) This Agreement shall automatically be terminated in the event of
its assignment.

(e) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the obligations to settle accounts hereunder,
including payments or premiums or contributions subsequently received for
Policies in effect at the time of termination or issued pursuant to applications
received by the Insurance Company prior to terminations.

13. This Agreement shall be subject to the provisions of the Investment
Company Act and the Securities Exchange Act and the rules, regulations, and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the Investment Company Act as the Securities and Exchange
Commission may grant, and the terms hereof shall be interpreted and construed in
accordance therewith. Without

5
<PAGE>

limiting the generality of the foregoing, the term "assigned" shall not include
any transaction exempted from Section 15(b)(2) of the Investment Company Act.

The Distributor shall submit to all regulatory and administrative bodies
having jurisdiction over the operations of the Account, present or further, any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws or regulations.

14. If any provision of this Agreement shall be held or made invalid by a
court decision, statue, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.

15. This Agreement shall be construed and enforced in accordance with the
governed by the laws of the State of Iowa.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunder duly authorized and seals to be
affixed, as of the day and year first above written.

PFL LIFE INSURANCE
COMPANY
Attest:

By:
- ------------------- --------------------------
William L. Busler

AEGON USA SECURITIES, INC.
Attest:

By:
- ----------------- --------------------------
Lorri E. Mehaffey

<PAGE>

EXHIBIT (3)(b)
--------------

FORM OF BROKER/DEALER SUPERVISION AND SALES AGREEMENT
BY AND BETWEEN AEGON USA SECURITIES, INC.
AND THE BROKER/DEALER
<PAGE>

SELECTED BROKER AGREEMENT

AGREEMENT dated________________,19___, by and between AEGON USA Securities,

Inc. (Distributor), an Iowa corporation and____________________________________

(Broker), a __________________________ corporation. This Agreement supersedes

and replaces any prior Selected Broker Agreement regarding the subject matter

between the parties hereto.

WITNESSETH:
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
A. Definitions
-----------
(1) Contracts--Variable life insurance contracts and/or variable annuity
contracts described in Schedule A attached hereto and issued by PFL Life
Insurance Company ("Company") and for which Distributor has been
appointed the principal underwriter pursuant to Distribution Agreements,
copies of which have been furnished to Broker.
(2) Accounts--Separate accounts established and maintained by Company
pursuant to the laws of Iowa, as applicable, to fund the benefits under
the Contracts.
(3) The Funds--, open-end management investment companies registered under
the 1940 Act, shares of which are sold to the Accounts in connection
with the sale of the Contracts, as described in the Prospectus for the
Contracts.
(4) Registration Statement--The registration statements and amendments
thereto relating to the Contracts, the Accounts, and the Funds,
including financial statements and all exhibits.
(5) Prospectus--The prospectuses included within the Registration
Statements.
(6) 1933 Act--The Securities Act of 1933, as amended.
(7) 1934 Act--The Securities Exchange Act of 1934, as amended.
(8) 1940 Act--The Investment Company Act of 1940, as amended.
(9) SEC--The Securities and Exchange Commission.
(10) NASD--The National Association of Securities Dealers, Inc.
B. Agreements of Distributor
-------------------------
(1) Pursuant to the authority delegated to it by Company, Distributor hereby
authorizes Broker during the term of this Agreement to solicit
applications for Contracts from eligible persons provided that there is
an effective Registration Statement relating to such Contracts and
provided further that Broker has been notified by Distributor that the
Contracts are qualified for sale under all applicable securities and
insurance laws of the state or jurisdiction in which the application
will be solicited. In connection with the solicitation of applications
for Contracts, Broker is hereby authorized to offer riders that are
available with the Contracts in accordance with instructions furnished
by Distributor or Company.
(2) Distributor, during the term of this Agreement, will notify Broker of
the issuance by the SEC of any stop order with respect to the
Registration Statement or any amendments thereto or the initiation of
any proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts and of any other
action or circumstance that may prevent the lawful sale of the Contracts
in any state or jurisdiction.
(3) During the term of this Agreement, Distributor shall advise Broker of
any amendment to the Registration Statement or any amendment or
supplement to any Prospectus.
C. Agreements of Broker
--------------------
(1) It is understood and agreed that Broker is a registered broker/dealer
under the 1934 Act and a member of the NASD and that the agents or
representatives of Broker who will be soliciting applications for the
Contracts also will be duly registered representative of Broker.
(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to use commercially reasonable efforts to find purchasers
for the Contracts acceptable to Company. In meeting its obligation to
use its commercially reasonable efforts to solicit applications for
Contracts, Broker shall, during the term of this Agreement, engage in
the following activities:

(a) Regularly utilize only training, sales and promotional materials
relating to the Contracts which have been approved by Company.
(b) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of its agents or
representatives and submit periodic reports to Distributor as may be
requested on the results of such inspections and the compliance with
such procedures.
(c) Broker shall take reasonable steps to ensure that the various
representatives appointed by it shall not make recommendations to an
applicant to purchase a Contract in the absence of reasonable grounds to
believe that
<PAGE>

the purchase of the Contract is suitable for such applicant. While not
limited to the following, a determination of suitability shall be based
on information furnished to a representative after reasonable inquiry of
such applicant concerning the applicant's insurance and investment
objectives, financial situation and needs, and, if applicable, the
likelihood that the applicant will make the premium payments
contemplated by the Contract.
(3) All payments for Contracts collected by agents or representatives of
Broker shall be held at all times in a fiduciary capacity and shall be
remitted promptly in full together with such applications, forms and
other required documentation to an office of the Company designated by
Distributor. Checks or money orders in payment of initial premiums shall
be drawn to the order of "PFL Life Insurance Company." Broker
acknowledges that the Company retains the ultimate right to control the
sale of the Contracts and that the Distributor or Company shall have the
unconditional right to reject, in whole or part, any application for the
Contract. In the event Company or Distributor rejects an application,
Company immediately will return all payments directly to the purchaser
and Broker will be notified of such action. In the event that any
purchaser of an Contract elects to return such Contract pursuant to the
free look right, the purchaser will receive a refund of the greater of
premium payments or the value of the invested portion of such premiums.
The Broker will be notified of any such action.
(4) Broker shall act as an independent contractor, and nothing herein
contained shall constitute Broker, its agents or representatives, or any
employees thereof as employees of Company or Distributor in connection
with solicitation of applications for Contracts. Broker, its agents or
representatives, and its employees shall not hold themselves out to be
employees of Company or Distributor in this connection or in any
dealings with the public.
(5) Broker agrees that any material, including material it develops,
approves or uses for sales, training, explanatory or other purposes in
connection with the solicitation of applications for Contracts hereunder
(other than generic advertising materials which do not make specific
reference to the Company or the Contracts) will only be used after
receiving the written consent of Distributor to such material and, where
appropriate, the endorsement of Company to be obtained by Distributor.
(6) Solicitation and other activities by Broker shall be undertaken only in
accordance with applicable laws and regulations. No agent or
representative of Broker shall solicit applications for the contracts
until duly licensed and appointed by Company (such appointment not to be
unreasonably withheld by the Company) as a life insurance and variable
contract broker or agent of Company in the appropriate states or other
jurisdictions. Broker shall ensure that such agents or representatives
fulfill any training requirements necessary to be licensed and that such
agents or representatives are properly supervised and controlled
pursuant to the rules and regulations of the SEC and the NASD. Broker
shall certify agents' and representatives' qualifications to the
satisfaction of Distributor, including certifying a General Letter of
Recommendation set forth in Exhibit A hereto. Broker understands and
acknowledges that neither it nor its agents or representatives is
authorized by Distributor or Company to give any information or make any
representation in connection with this Agreement or the offering of the
Contracts other than those contained in the Prospectus or other
solicitation material authorized in writing by Distributor or Company.
(7) Broker shall not have authority on behalf of Distributor or Company to:
make, alter or discharge any Contract or other form; waive any
forfeiture, extend the time of paying any premium; receive any monies or
premiums due, or to become due, to Company, except as set forth in
Section C(3) of this Agreement. Broker shall not expend, nor contract
for the expenditure of the funds of Distributor, nor shall Broker
possess or exercise any authority on behalf of Broker by this Agreement.
(8) Broker shall have the responsibility for maintaining the records of its
representatives licensed, registered and otherwise qualified to sell the
Contracts. Broker shall maintain such other records as are required of
it by applicable laws and regulations. The books, accounts and records
of the Company, the Account, Distributor and Broker relating to the sale
of the Contracts shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions. All records
maintained by the Broker in connection with this Agreement shall be the
property of the Company and shall be returned to the Company upon
termination of this Agreement, free from any claims or retention of
rights by the Broker. Nothing in this Section C(8) shall be interpreted
to prevent the Broker from retaining copies of any such records which
the Broker, in its discretion, deems necessary or desirable to keep. The
Broker shall keep confidential any information obtained pursuant to this
Agreement and shall disclose such information only if the Company has
authorized such disclosure or if such disclosure is expressly required
by applicable federal or state regulatory authorities.
D. Compensation
------------
(1) Pursuant to the Distribution Agreement between Distributor and Company,
Distributor shall cause Company to arrange for the payment of
commissions to Broker as compensation for the sale of each contract sold
by an agent or representative of Broker. Such amounts shall be paid to
Broker or its subsidiary insurance agency, whichever is authorized to
receive insurance commissions under applicable insurance laws, in
accordance with the schedules attached hereto, the General Agent
Agreement, and the commission schedules attached thereto. All terms and
conditions of the General Agent Agreement not otherwise conflicting with
the terms herein, shall be
<PAGE>

incorporated by reference herein. Company shall identify to Broker with
each such payment the name of the agent or representative of Broker who
solicited each Contract covered by the payment.
(2) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any premium it shall receive for
purposes of payment of commission or otherwise. Neither Broker nor any
of its agents or representatives shall have an interest in any
compensation paid by Company to Distributor, now or hereafter, in
connection with the sale of any Contracts hereunder.
E. Complaints and Investigations
-----------------------------
(1) Broker and Distributor jointly agree to cooperate fully in any insurance
or securities regulatory investigation or proceeding or judicial
proceeding arising in connection with the Contracts marketed under this
Agreement. Broker, upon receipt, will notify Distributor of any customer
complaint or notice of any regulatory investigation or proceeding or
judicial proceeding in connection with the Contracts. Broker and
Distributor further agree to cooperate fully in any securities
regulatory investigation or proceeding or judicial proceeding with
respect to Broker, Distributor, their affiliates and their agents or
representatives to the extent that such investigation or proceeding is
in connection with Contracts marketed under this Agreement. Broker shall
furnish applicable federal and state regulatory authorities with any
information or reports in connection with its services under this
Agreement which such authorities may request in order to ascertain
whether the Company's operations are being conducted in a manner
consistent with any applicable law or regulation. Each party shall bear
its own costs and expenses of complying with any regulatory requests,
subject to any right of indemnification that may be available pursuant
to Section G of this Agreement.
F. Term of Agreement
-----------------
(1) This Agreement shall continue in force for one year from its effective
date and thereafter shall automatically be renewed every year for a
further one year period; provided that either party may unilaterally
terminate this Agreement upon thirty (30) days' written notice to the
other party of its intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in Section E
hereof; (b) the indemnity set forth in Section G hereof; and (c) the
obligations to settle accounts hereunder, including commission payments
on premiums subsequently received for Contracts in effect at the time of
termination or issued pursuant to applications received by Broker prior
to termination.
(3) Distributor and Company reserve the right, without notice to Broker, to
suspend, withdraw or modify the offering of the Contracts or to change
the conditions of their offering.
G. Indemnity
---------
(1) Broker shall be held to the exercise of reasonable care in carrying out
the provisions of this Agreement.
(2) Distributor agrees to indemnify and hold harmless Broker and each
officer or director of Broker against any losses, claims, damages or
liability, joint or several, to which Broker or such officer or director
become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of
a material fact, required to be stated therein or necessary to make the
statements therein not misleading, contained in any Registration
Statement or any post-effective amendment thereto or in the Prospectus
or any amendment or supplement to the Prospectus, or any sales
literature provided by the Company or by the Distributor.
(3) Broker agrees to indemnify and hold harmless Company and Distributor and
each of their current and former directors and officers and each person,
if any, who controls or has controlled Company or Distributor within the
meaning of the 1933 Act or the 1934 Act, against any losses, claims,
damages or liabilities to which Company or Distributor and any such
director or officer or controlling person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon:
(a) Any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the
Contracts by Brokers, its agents, employees or representatives; or
(b) Claims by agents or representatives or employees of Broker for
commissions, service fees, development allowances or other compensation
or remuneration of any type;
(c) The failure of Broker, its officers, employees, or agents to comply
with the provisions of this Agreement; and Broker will reimburse Company
and Distributor and any director or officer or controlling person of
either for any legal or other expenses reasonably incurred by Company,
Distributor, or such director, officer of controlling person in
connection with investigating or defending any such loss, claims,
damage, liability or action. This indemnity agreement will be in
addition to any liability which Broker may otherwise have.
H. Assignability
-------------
This Agreement shall not be assigned by either party without the
written consent of the other.

I. Governing Law
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of Iowa.
<PAGE>

J. Notices
-------
All communications under the Agreement shall be in writing and shall be
deemed delivered when mailed by certified mail, postage prepaid.
Alternatively, communications shall be deemed delivered by timely
transmission of the writing, delivery charges prepaid, to a third party
company or governmental entity providing delivery services in the
ordinary course of business, which guarantees delivery to the other
party on the next business day. Notices shall be sent to the following
addresses unless and until the addressee notifies the other party of a
change in address according to the terms of this Section:

(1) if to Broker, to: (2) if to the Distributor, to:
______________________________ AEGON USA Securities, Inc.
_______________________ 4333 Edgewood Road NE
_______________________(street address) Cedar Rapids, Iowa 52499-0001
_______________________(telephone no.) (319) 369-2345 (telephone no.)
_______________________(fax no.) (319)369-2591 (fax no.)
Attention:_____________ Attention: Lorri E. Mehaffey,
___________ President

In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

_________________________________
(Broker Name)

By:______________________________

Title:___________________________

AEGON USA SECURITIES, INC.
(Distributor)

By:______________________________
President
<PAGE>

EXHIBIT A

General Letter of Recommendation

BROKER-DEALER hereby certifies to the Company that all the following
requirements will be fulfilled in conjunction with the submission of licensing/
appointment papers for all applicants as agents of the Company submitted by
BROKER-DEALER. BROKER-DEALER will, upon request, forward proof of compliance
with same to the Company in a timely manner.

1. We have made a thorough and diligent inquiry and investigation relative
to each applicant's identity, residence and business reputation and
declare that each applicant is personally known to us, has been examined
by us, is known to be of good moral character, has a good business
reputation, is reliable, is financially responsible and is worthy of a
license. Each individual is trustworthy, competent and qualified to act
as an agent for the Company to hold himself out in good faith to the
general public.

2. We have on file a U-4 form which was completed (and has been amended, as
required) by each applicant. We have fulfilled all the necessary
investigative requirements for the registration of each applicant as a
registered representative through our NASD member firm, including but not
limited to: (i) checking for and investigating criminal arrest and
conviction records available to Broker-Dealer on the CRD system; and (ii)
communicating with each employer of the applicant for 3 years prior to
the applicant's registration with our firm. Each applicant is presently
registered as an NASD registered representative.

The above information in our files indicates no fact or condition which
would disqualify the applicant from receiving a license and all the findings of
all investigative information is favorable.

At the time of application, in those states required by the Company, we
shall provide the Company with a copy of the entire U-4 form, or
designated pages, thereof, completed by each applicant, including any
amendments or updates thereto, and we certify those items are true copies
of the original.

3. We certify that all educational requirements have been met for the
specified state each applicant is requesting a license in, and that all
such persons have fulfilled the appropriate examination, education and
training requirements.

4. If the applicant is required to submit his picture, his signature, and
securities registration in the state in which he is applying for a
license, we certify that those items forwarded to the Company are those
of the applicant and the securities registration is a true copy of the
original.

5. We hereby warrant that the applicant is not applying for a license with
the Company in order to place insurance chiefly and solely on his life or
property, or lives or property of his relatives, or property or liability
of his associates.

6. We will not permit any applicant to transact insurance in a state as an
agent until duly licensed and appointed therefor with the appropriate
State Insurance Department. No applicants have been given a contract or
furnished supplies, nor have any applicants been permitted to write,
solicit business, or act as an agent in any capacity, and they will not
be so permitted until the certificate of authority or license applied for
is received.

<PAGE>

EXHIBIT (6)(a)
--------------

ARTICLES OF INCORPORATION OF
PFL LIFE INSURANCE COMPANY
<PAGE>

QUALIFICATION ARTICLES OF INCORPORATION
PURSUANT TO THE PROVISIONS OF
CHAPTER 508.12 OF THE 1975 CODE OF IOWA
OF
NN INVESTORS LIFE INSURANCE COMPANY, INC.

ARTICLE I
---------
NAME

The name of this corporation is NN Investors Life Insurance Company, Inc.
The corporation was incorporated under the laws of the State of Wisconsin on
April 19, 1961 , but pursuant to Chapter 508.12, of the 1975 Code of Iowa, the
corporation will become a corporation organized for pecuniary profit under
Chapter 491 of the Iowa Code effective June 30, l976.

ARTICLE II
----------

PLACE OF BUSINESS

The location of the corporation's principal place of business and resident
office is the Life Investors building, 4333 Edgewood Road NE, Cedar Rapids, Linn
County, Iowa.

ARTICLE III
-----------

OBJECTS AND POWERS

The objects and powers of this corporation shall be:

1. To insure the lives of individuals on the level premium or level
reserve plans; to grant, purchase and dispose of annuities- (including variable
annuities), receive and execute trusts, including the power to hold in trust the
proceeds of any life insurance policy issued by it; to insure either
Individually, or on the group or franchise plan the health : of persons and
against personal injuries, disablement, or death, resulting from accident; and
to reinsure any part of said risks. To have all the powers conferred by the
laws of the State of Iowa upon corporations organized for the purposes of
insuring the lives of individuals, and to issue all such form of insurance
contracts as pertain to or may be connected with the business of life insurance
as it now is or may be hereafter carried on in the United States.

2. To have the right to buy, hold, sell, and convey personal property and
such real estate as may be necessary or convenient for the proper conduct of the
affairs of the corporation, or as may be permitted by law.

3. To have all the powers conferred by law on a life insurance company
organized for the purposes above set forth, and in connection therewith to have
all powers conferred by law on all corporations organized and doing business
under and by authority of Chapters 491, 506, 507, 508, 509, 511 and 515 of the
Code of Iowa, 1958.

4. To organize an investment company or companies within the meaning of
Section 508.33, Code of Iowa, as now or hereafter amended, and to own stock in
such investment company.
<PAGE>

ARTICLE IV
----------
CAPITAL STOCK

The authorized capital stock of the Company shall be Five Million Dollars
($5,000,000.00) divided into Five Hundred Thousand (500,000) shares of Common
Stock of a Par Value of Ten Dollars ($10.00) each . All stock issued by the
corporation shall be Common Stock. All stock shall be issued for cash or
property as provided by law and when issued shall be fully paid and non-
assessable and shall be issued at such times and in such amounts as the Board of
Directors of the corporation may from time to time determine, subject to such
approval of the Insurance Commissioner as may be required by law. One Hundred
Ten Thousand (110,000) shares of the Common Stock shall be the initial issued
and outstanding shares of the Company.

ARTICLE V
---------

CORPORATE PERIOD

The corporate period of this corporation is perpetual, and shall continue
to be, unless sooner dissolved by a majority vote of the stockholders at any
annual meeting or a special meeting called for that purpose or by unanimous
consent as by law provided.

ARTICLE VI
----------

DIRECTORS AND OFFICERS

The affairs of this corporation shall be managed by a Board of Directors of
not less than five (5) nor more than ten (10).

The Directors shall elect a Chairman of the Board, a President, one or more
Vice Presidents, a Secretary, a Treasurer and such other officers, including an
Executive Committee with authority to act for the Board, as they see fit or as
may be provided for by the By-Laws of the corporation. The term of such officers
shall be for one (1) year.

The Directors who now constitute the Board and who will continue to serve
until the next annual stockholders' meeting are: Ronald L. Jensen,
Donald E. Flynn, Harvey L. Clark, Theron P. Thomsen, Meal A. Farmer,
William L. Busler, and Delbert L. Brehmer, all of Cedar Rapids, Iowa and
Leo C. Barry and Robert W. Warner of Marion, Iowa.

The number of Directors shall be fixed by the By-Laws. Directors and
officers shall serve until their successors have been elected and qualified. The
Board of Directors shall have the authority to fill all vacancies for the
unexpired portion of a term.

The stock of the Company shall be entitled to one vote per share. In all
elections for Directors every shareholder shall have the right to vote, in
person or by proxy, the number of shares owned by him for as many persons as
there are Directors to be elected or to cumulate said votes, and give one
candidate as many votes as the number of Directors multiplied by the number of
his cumulative votes shall equal or to distribute them on the same principle
among the number of candidates he shall think fit.
<PAGE>

ARTICLE VII
-----------

ANNUAL AND SPECIAL MEETINGS

The annual meeting of this corporation shall be held on the last Thursday
of April of each calendar year at Ten O'Clock (10:00) A.M. The meeting shall be
at the office of the corporation unless otherwise specified by the Board of
Directors. No notice of said meeting shall required if held at the
corporation's office, but if held elsewhere, or in the event of a special
meeting, a notice shall be mailed to each stockholder by regular mail at least
ten (10) days prior to the date of such meeting, addressed to the last address
of the stockholder as it appears on the stock books of the corporation, on a day
to be fixed by the Board of Directors, which shall not be more than thirty (30)
days prior to the meeting date. Five percent (5%) of the number of shares of
outstanding stock, represented personally or by proxy shall constitute a quorum.
In the event a quorum is not present when the meeting is called, the meeting
shall be adjourned from day to day, until a quorum is achieved.

ARTICLE VIII
------------
PROXIES

No proxy shall be valid for more than sixty (60) days from the date of its
execution, and shall not be valid more than thirty (30) days after the meeting
for which it is executed. It may be revoked at any time by the stockholder who
executed it.

Corporate shareholders may vote through a properly designated
representative or through a properly executed proxy. All proxies must be filed
with the Secretary at least one (1) day prior to an election or meeting at which
they are to be used or for such additional time as may be provided by the By-
Laws.

ARTICLE IX
----------

CORPORATE INSTRUMENTS - SEAL

All instruments executed by the corporation which are required to be
acknowledged and which affect an interest in real estate, shall be executed by
the President or any Vice President and attested by the Secretary or Assistant
Secretary, and all other instruments executed by the corporation, including any
releases, mortgages or liens, may be-executed by the President or any Vice
President, or the Secretary or the Treasurer or any Assistant Secretary or
Assistant Treasurer. Notwithstanding any of the foregoing provisions, any
written instrument may be executed by any officer or officers, agent or agents
or other person or persons specifically designated by resolution of the Board of
Directors of this corporation. The corporation shall have a corporate seal
which shall bear the words, "NN Investors Life Insurance Company, Inc." around
the edge, with the words, "Corporate Seal" in the middle.

ARTICLE X
---------

STOCKHOLDERS' LIABILITY

The private property of the shareholders of this corporation shall be
exempt from corporate liabilities, and this Article shall not be amended.
<PAGE>

ARTICLE XI
----------
BY-LAWS

The Board of Directors, at any regular or special meeting, is authorized to
adopt, alter, amend or repeal By-Laws and to adopt new By-Laws not inconsistent
with the law or these Articles of Incorporation, by an affirmative vote of a
majority of the membership of the Board as distinguished from a majority of a
quorum.

The stockholders of the corporation may at any regular or special meeting
called for the purpose, repeal, alter, or amend any existing By-Laws made by the
Board of Directors, or adopt such By-Laws as they deem appropriate by a majority
vote.

ARTICLE XII
-----------

AMENDMENTS

Subject to the approval of the Insurance Commissioner of the State of Iowa,
these Articles, except Article X, may be amended at any annual meeting of the
shareholders or at any special meeting thereof called for that purpose, and such
amendment shall be made by the affirmative vote of a majority of the shares of
Common Stock in attendance at said meeting, in person or by proxy, provided,
however, that a quorum is present at said meeting. For the purpose of this
Article. as well as all other Articles of these Articles of Incorporation, a
quorum is hereby established to be the stockholders in person or by proxy
representing five percent (5%) of the issued and outstanding stock of the
corporation. At any meeting of the stockholders to consider and act upon any
proposed amendment to the Articles of Incorporation, the stockholders may adopt
any modification or revision thereof proposed at said meeting.

ARTICLE XIII
------------

DIRECTORS

LIABILITY OF OFFICERS AND DIRECTORS

Each Director and Officer of this corporation, and his heirs, executors and
administrators. shall be and are hereby indemnified by the corporation against
personal liability arising out of judgments, decrees, demands and claims of
every name nature and description whatsoever, together with related expenses
(including attorneys' fees). Including payments in compromise and related
expenses (including attorneys' fees), in settling cases, reasonably incurred by
him in connection with any claim, action, suit or proceeding made or instituted
by or on behalf of any person, firm or corporation, against him by reason of his
being or having been a Director or Officers of this corporation, except as to
which: 1) he shall have been adjudged in any such action, suit or proceeding to
have been derelict in the performance of his duty as such Director or Officer,
or 2) in the event no adjudication shall have been made in any action, suit or
proceeding with respect to the presence or absence of such dereliction, he shall
be adjudged by the Board of Directors to have been derelict in the performance
of his duties as such Director or Officer; provided, however, that in the event
the liability and expenses against which indemnification is hereby granted shall
be incurred by more than one Director, then, if the Directors who shall have not
incurred such liability and expenses shall not constitute a majority of the
Directors, such an adjudication may be made by the stockholders of the
corporation holding a majority of the voting stock of the corporation
outstanding and entitled to vote.

Without limiting or affecting the scope of the foregoing obligation to
Indemnify said Officers and Directors, each Officer and Director shall be fully
indemnified and protected by this corporation in any action or omission to act
taken in good faith in accordance with the advice, recommendation or opinion of
the attorneys for this corporation or the accountants employed from time to time
to supervise or audit the books and accounts of this corporation. The foregoing
right of indemnification shall not be exclusive of other rights to which each
such person may be entitled by law, and shall be available whether or not the
Director or Officer shall be a Director or Officer at the time of incurring such
expense and liability.
<PAGE>

ARTICLE XIV
-----------

PROPORTIONATE REPRESENTATION

The holder or holders, jointly or severally, of not less than one-fifth but
less than a majority of the shares of the capital stock of the corporation shall
be entitled to nominate Directors as provided in Section 523.5, Code of Iowa.

The foregoing Qualification Articles of Incorporation (which in effect also
serve to amend the existing Articles of Incorporation) were adopted by the
shareholders of the corporation on June 28, 1976. There were 33 shares of
outstanding capital stock entitled to vote on the adoption or rejection of these
Qualification Articles of Incorporation and all 33 shares voted in favor of
same.

Simultaneously with the effective date of these Qualification Articles
Incorporation (June 30, 1976) the corporation shall cancel the existing 33
shares of Common Stock, $50,000 par value, which are currently outstanding and
shall immediately issue in lieu thereof 110,000 shares of Common Stock, $10 par
value, which stock, when issued, shall represent the initial outstanding capital
stock of the corporation.

Dated this 29th day of June, 1976.

NN INVESTORS LIFE INSURANCE COMPANY, INC.

BY /s/ Ronald L. Jensen
----------------------------------------
Ronald L. Jensen, President

ATTEST:
/s/ Harvey L. Clark
- ---------------------------------------
Harvey L. Clark, Secretary

STATE OF IOWA )
) ss.
COUNTY OF LINN )

Subscribed and sworn to before me by Ronald L. Jensen and Harvey L. Clark this
29th day of June, 1976.

/s/ Judy K. Neve
------------------------------------------------
Judy K. Neve, Notary Public in and for the State
of Iowa

My Commission expires: September 30, 1976
<PAGE>

ARTICLES OF AMENDMENT TO THE

QUALIFICATION ARTICLES OF INCORPORATION OF
NN INVESTORS LIFE INSURANCE COMPANY, INC.

(1) The name of the Corporation is NN Investors Life Insurance Company,
Inc. The Corporation was originally incorporated under the laws of the State of
Wisconsin on April 19, 1961, but pursuant to Chapter 508.12 of the 1975 Code of
Iowa, the Corporation become a corporation organized for pecuniary profit under
Chapter 491 of the Iowa Code effective June 20, 1976.

(2) The first sentence of Article VI of the Qualification Articles of
Incorporation of NN Investors Life Insurance Company, Inc., be and it hereby is
amended to read as follows:

"The affairs of this Corporation shall be managed by a Board of
Directors of not less than five (5) nor more than twelve (12)".

(3) The foregoing Amendment to said Articles of Incorporation was adopted
by the stockholders at a special stockholders' meeting held on January 24, 1984.

(4) There were 100,000 shares of stock outstanding and entitled to vote
thereon, and all such shares were voted in favor of the foregoing Amendment to
said Articles of Incorporation.

(5) The foregoing Amendment shall become effective on June 20, 1984.

Dated this 18th day of May, 1984.

NN INVESTORS LIFE INSURANCE COMPANY, INC.

By: /s/ Robert D. Ray
--------------------------------------------------
Robert D. Ray, Chairman of the Board and President

By: /s/ George R. Lambert
--------------------------------------------------
George R. Lambert, Secretary
State of Iowa )
) SS
County of Linn )

On this 18th day of May, 1984, before me, a Notary Public in and for said
County and State, personally appeared Robert D. Ray and George R. Lambert, to me
personally known, who being duly sworn did say that they are the Chairman of the
Board and President and Secretary of NN Investors Life Insurance Company, Inc.,
respectively, that the seal affixed to said instrument is the seal of said
Company by authority of the Board of Directors and the said Robert D. Ray and
George R. Lambert acknowledged the execution of said instrument to be the
voluntary act and deed of said Company by them voluntarily executed.

/s/ LuAnn Roby
-----------------------------------------
LuAnn Roby, Notary Public in and for
said County and State

My Commission expires September 8, 1985.

<PAGE>

CERTIFICATE OF APPROVAL

The foregoing Articles of Amendment to the Qualification Articles of
Incorporation of NN Investors Life Insurance Company, Inc. are approved as being
in accordance with Title XX of the Iowa Code, the laws of the United States, and
the Constitution and laws of the state.

Dated this 13th day of June, 1984.

THOMAS J. MILLER
Attorney General

/s/ Thomas J. Miller
--------------------------------------

By: /s/ Fred M. Haskins
---------------------------------
FRED M. HASKINS
Assistant Attorney General
<PAGE>

ARTICLES OF AMENDMENT

TO THE QUALIFICATION ARTICLES OF INCORPORATION

NN INVESTORS LIFE INSURANCE COMPANY, INC.

TO THE SECRETARY OF STATE OF THE STATE OF IOWA:

Pursuant to Section 1006 of the Iowa Business Corporation Act, the
undersigned corporation adopts the following amendment to the Corporation's
Qualification Articles of Incorporation.

1. The name of the corporation is NN Investors Life Insurance Company, Inc.

2. The first sentence of Article I is amended to read as follows:

"The name of the corporation is PFL Life Insurance Company."

3. The date of adoption of the amendment was April 26, 1990.

4. The amendment was approved by the sole shareholder. The designation,
number of outstanding shares, number of votes entitled to be cast by each voting
group entitled to vote separately on the amendment, and the number of votes of
each voting group indisputably represented at the meeting is as follows:
<TABLE>
<CAPTION>

Votes Votes
Designation of Group Shares Entitled To Represented
Outstanding Be Cast On At Meeting
Amendment

<S> <C> <C> <C>
Sole Shareholder 266,000 266,000 266,000

4B. The total number of undisputed votes cast for the amendment by each voting
group was:

Voting Group Votes For

Sole Shareholder 266,000
</TABLE>

The number of votes cast for the amendment by each voting group was sufficient
for approval by that voting group.

The effective date of this document is January 1, 1991 or such later date
as the appropriate regulatory authorities have approved such name change.

NN INVESTORS LIFE
INSURANCE COMPANY, INC.

By: /s/ Donald J. Shepard
--------------------------------
Donald J. Shepard
Chairman of the Board and President
<PAGE>

CERTIFICATE OF APPROVAL

The foregoing Articles of Amendment to the Qualification Articles of
Incorporation of NN Investors Life Insurance Company are approved as being in
accordance with Title XX of the Iowa Code, the laws of the United States, and
the Constitution and laws of the State.

Dated this 10th day of May, 1990.

THOMAS J. MILLER
Attorney General

By: /s/ Fred M. Haskins
-----------------------------------
FRED M. HASKINS
Assistant Attorney General
<PAGE>

No. 81507
IOWA
SECRETARY OF STATE

CERTIFICATE OF INCORPORATION

June 30, 1976

NN INVESTORS LIFE INSURANCE COMPANY, INC.
Cedar Rapids, Iowa

has filed new articles of incorporation in this office and is hereby authorized
to transact business as a corporation from June 30, 1976, perpetually, under
the provisions of Chapters 491, 515, 508 and 270, 1973 Code of Iowa, Acts of the
1973 Regular Session, 65th General Assembly of Iowa.

(New articles of incorporation in Iowa for
purposes of Domiciliary relocation Under Chapter
270 Acts of 1973 Regular Session 65th General
Assembly, Corporation originally incorporated
April 19, 1961 in Wisconsin.)

(SEAL) Fees Paid:

Filing . . . . . . . $5,591.50
Recording . . . . . . $ 2.50

/s/ Illegible
------------------------------------------
Secretary of State

By:
------------------------
Deputy

<PAGE>

EXHIBIT (6)(b)
--------------

BYLAWS OF PFL LIFE INSURANCE COMPANY
<PAGE>

PFL LIFE INSURANCE COMPANY
(FORMERLY NN INVESTORS LIFE INSURANCE COMPANY, INC.)

BYLAWS

(Effective June 30, 1976)

(As amended to January 2, 1991)

ARTICLE I

SECTION 1. The principal office of the Corporation shall be in the City of
Cedar Rapids, Linn County, Iowa.

SECTION 2. The business of the Corporation may be conducted, and the branch
offices and agencies may be established, anywhere in the United States of
America.

SECTION 3. The Corporation will have a corporate seal.

ARTICLE II

DIRECTORS

SECTION 1. The number of directors shall be not less than five (5) nor more
than twelve (12); such directors to be elected in the manner provided in the
Articles of Incorporation; each shall have the power to do all lawful acts or
things pertaining to the business and affairs of the Corporation as are not by
law, by the Articles of Incorporation or done otherwise.

SECTION 2. Regular meetings of the Board of Directors shall be held without
notice at some place within the State of Iowa as the Board of Directors shall
determine, immediately following the annual shareholders' meeting or, at the
discretion of the president, not later than thirty (30) days subsequent to the
annual shareholders' meeting. If such meeting is not held immediately following
the annual shareholders' meeting, the president shall give five (5) days written
notice of the time and place of such meeting. Members of the Board of
Directors, or any committee designated by the Board, may participate in any
regular or special meeting of the Board or any such committee by conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this provision shall constitute presence in person at such meeting.

SECTION 3. Special meetings of the Board of Directors may be called by the
president and shall be called by him upon the written request of two (2)
directors specifying the purpose for which the meeting is to be called, by
giving three (3) days written notice thereof to each director, specifying the
time and place of the meeting.

SECTION 4. Special meetings of the directors may be held at any time and
place and for any purpose, without notice, when all of the directors have
executed written waivers consenting to said meeting and when a quorum of
directors is present.
<PAGE>

SECTION 5. A majority of all of the directors shall be requisite to
constitute a quorum for the transaction of business at all meetings, provided a
lesser number may adjourn the meeting from time to time without notice other
than announcement at the meeting. A majority of the vote of those present shall
be sufficient to adopt any measure, unless these Bylaws or the Articles of
Incorporation prescribe a different vote.

SECTION 6. Except as otherwise provided by law, by the Articles of
Incorporation, or by these Bylaws, the Board of Directors shall have power to
delegate any of its powers to any committee, officer or agent and to grant the
power to redelegate.

SECTION 7. Notice of special meetings of the shareholders or directors
shall be in writing and shall be deemed to have been given by depositing the
same in the United States post office mailbox in a postpaid wrapper, addressed
to such person at his address as the same appears on the books of the
corporation; and such notice shall be regarded as having been given on the day
of such deposit.

SECTION 8. Any action required to be taken at a meeting of the shareholders
or directors or any action which may be taken at a meeting of the shareholders
or directors or a committee of directors, may be taken without a meeting if a
consent in writing setting forth the action so taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter thereof or
all of the directors or all of the members of the committee of directors, as the
case may be. Such consent shall have the same force and effect as a unanimous
vote.

ARTICLE III

OFFICERS

SECTION 1. The Board of Directors at its regular meeting following the
annual meeting of stockholders each year shall elect a Chairman of the Board, a
President, a Secretary, and a Treasurer; and the Board of Directors may from
time to time appoint such other officers and employees as they choose, including
an actuarial consultant, a medical director, and legal counsel. One person may
hold more than one office, except that the offices of President, Secretary, and
Treasurer may not be combined.

SECTION 2. Subordinate Officers. The Board of Directors may appoint such
other officers as it may deem desirable who shall serve at the pleasure of the
board and have such authority and perform such duties as from time to time may
be prescribed by the board.

ARTICLE IV

SALARIES

Salaries of all officers shall be fixed by the Board of Directors by
resolution entered of record on their minutes. Such compensation may be per
diem as to officers who do not devote a regular or substantial time to the
business. Annual or monthly compensation, with or without bonus arrangements,
may be provided for any officer.
<PAGE>

ARTICLE V

COMMITTEES

The board may appoint an Executive Committee of three (3) or more directors
and/or officers, a majority of whom shall constitute a quorum. The Executive
Committee shall keep minutes of its Proceedings in the minute book of the
Corporation and shall meet on the call of the president. The board may
establish such other committees as it deems appropriate.

ARTICLE VI

STOCK AND RESTRICTIONS ON STOCK TRANSFERS

The stock of the Corporation shall be issued at such times and under such
conditions as shall be determined by the Board of Directors, and shall be paid
for in cash or in property as provided by law.

ARTICLE VII

Attorney-in Fact, Departmental Managers, Branch Managers, Agents, Clerks,
and other employees may be appointed or engaged by the president, subject to the
control of directors, upon such terms and with such powers and duties as they
may prescribe.

ARTICLE VIII

FUNDS AND INVESTMENTS

SECTION 1. The funds of the Corporation shall be deposited in the name of
the Corporation in such depositories as the Board of Directors shall designate;
and shall be disbursed only upon checks, drafts, or other orders bearing such
personal or facsimile signatures as may be authorized from time to time by
resolution of the Board of Directors.

SECTION 2. The funds of the Corporation shall be invested or otherwise
employed in the manner authorized or permitted by the statutes of the State of
Iowa.

ARTICLE IX

SECTION 1. All policies shall be valid when signed by the president and the
secretary.

SECTION 2. The fiscal year of the Corporation shall commence on the first
day of January and terminate on the thirty first day of December in each year.
<PAGE>

ARTICLE X

AMENDMENTS

The Bylaws may be amended, altered, or repealed, and new Bylaws may be
adopted by the Board of Directors at any regular or special meeting of the Board
of Directors by a majority vote of the Board of Directors.

Adopted June 30, 1976.

As Amended to April 27, 1989.

Amendment effective January 1, 1991.

<PAGE>

EXHIBIT (8)(b)
--------------

PARTICIPATION AGREEMENT BY AND BETWEEN PFL LIFE INSURANCE
COMPANY AND DREYFUS VARIABLE INVESTMENT FUND.
<PAGE>

FUND PARTICIPATION AGREEMENT
----------------------------

This Agreement is entered into as of the ____ day of _________, 1997, between
PFL Life Insurance Company, a life insurance company organized under the laws of
the State of Iowa ("Insurance Company"), and each of DREYFUS VARIABLE INVESTMENT
FUND, THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. and DREYFUS LIFE AND
ANNUITY INDEX FUND, INC. (d/b/a DREYFUS STOCK INDEX FUND) (each a "Fund").

1.1 "Act" shall mean the Investment Company Act of 1940, as amended.

1.2 "Board" shall mean the Board of Directors or Trustees, as the case may
be, of a Fund, which has the responsibility for management and control
of the Fund.

1.3 "Business Day" shall mean any day for which a Fund calculates net asset
value per share as described in the Fund's Prospectus.

1.4 "Commission" shall mean the Securities and Exchange Commission.

1.5 "Contract" shall mean a variable annuity or life insurance contract
that uses any Participating Fund (as defined below) as an underlying
investment medium. Individuals who participate under a group Contract
are "Participants."

1.6 "Contractholder" shall mean any entity that is a party to a Contract
with a Participating Company (as defined below).

1.7 "Disinterested Board Members" shall mean those members of the Board of
a Fund that are not deemed to be "interested persons" of the Fund, as
defined by the Act.

1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.

1.9 "Participating Companies" shall mean any insurance company (including
Insurance Company) that offers variable annuity and/or variable life
insurance contracts to the public and that has entered into an
agreement with one or more of the Funds.

1.10 "Participating Fund" shall mean each Fund, including, as applicable,
any series thereof, specified in Exhibit A, as such Exhibit may be
amended from time to time by agreement of the parties hereto, the
shares of which are available to
<PAGE>

serve as the underlying investment medium for the aforesaid Contracts.

1.11 "Prospectus" shall mean the current prospectus and statement of
additional information of a Fund, as most recently filed with the
Commission.

1.12 "Separate Account" shall mean PFL Life Separate Account A, a separate
account established by Insurance Company in accordance with the laws of
the State of Iowa.

1.13 "Software Program" shall mean the software program used by a Fund for
providing Fund and account balance information including net asset
value per share. Such Program may include the Lion System. In
situations where the Lion System or any other Software Program used by
a Fund is not available, such information may be provided by telephone.
The Lion System shall be provided to Insurance Company at no charge.

1.14 "Insurance Company's General Account(s)" shall mean the general
account(s) of Insurance Company and its affiliates that invest in a
Fund.

ARTICLE II
REPRESENTATIONS

2.1 Insurance Company represents and warrants that (a) it is an insurance
company duly organized and in good standing under applicable law; (b)
it has legally and validly established the Separate Account pursuant to
the Iowa Insurance Code for the purpose of offering to the public
certain individual and group variable annuity and life insurance
contracts; (c) it has registered the Separate Account as a unit
investment trust under the Act to serve as the segregated investment
account for the Contracts; and (d) the Separate Account is eligible to
invest in shares of each Participating Fund without such investment
disqualifying any Participating Fund as an investment medium for
insurance company separate accounts supporting variable annuity
contracts or variable life insurance contracts.

2.2 Insurance Company represents and warrants that (a) the Contracts will
be described in a registration statement filed under the Securities Act
of 1933, as amended ("1933 Act"); (b) the Contracts will be issued and
sold in compliance in all material respects with all applicable federal
and state laws; and (c) the sale of the Contracts shall comply in all
material respects with state insurance law requirements. Insurance
Company agrees to notify each Participating Fund promptly of any
investment restrictions imposed by state insurance law and applicable
to the Participating Fund.

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<PAGE>

2.3 Insurance Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to the Separate
Account are, in accordance with the applicable Contracts, to be
credited to or charged against such Separate Account without regard to
other income, gains or losses from assets allocated to any other
accounts of Insurance Company. Insurance Company represents and
warrants that the assets of the Separate Account are and will be kept
separate from Insurance Company's General Account and any other
separate accounts Insurance Company may have, and will not be charged
with liabilities from any business that Insurance Company may conduct
or the liabilities of any companies affiliated with Insurance Company.

2.4 Each Participating Fund represents that it is registered with the
Commission under the Act as an open-end, management investment company
and possesses, and shall maintain, all legal and regulatory licenses,
approvals, consents and/or exemptions required for the Participating
Fund to operate and offer its shares as an underlying investment medium
for Participating Companies.

2.5 Each Participating Fund represents that it is currently qualified as
a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and that it will make
every effort to maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify Insurance
Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the
future.

2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make every
effort to maintain such treatment and that it will notify each
Participating Fund and Dreyfus immediately upon having a reasonable
basis for believing that the Contracts have ceased to be so treated or
that they might not be so treated in the future. Insurance Company
agrees that any prospectus offering a Contract that is a "modified
endowment contract," as that term is defined in Section 7702A of the
Code, will identify such Contract as a modified endowment contract (or
policy).

2.7 Each Participating Fund agrees that its assets shall be managed and
invested in a manner that complies with the requirements of Section
817(h) of the Code.

2.8 Insurance Company agrees that each Participating Fund shall be
permitted (subject to the other terms of this Agreement)

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<PAGE>

to make its shares available to other Participating Companies and
Contractholders.

2.9 Each Participating Fund represents and warrants that any of its
directors, trustees, officers, employees, investment advisers, and
other individuals/entities who deal with the money and/or securities of
the Participating Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit
of the Participating Fund in an amount not less than that required by
Rule 17g-1 under the Act. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.

2.10 Insurance Company represents and warrants that all of its employees
and agents who deal with the money and/or securities of each
Participating Fund are and shall continue to be at all times covered by
a blanket fidelity bond or similar coverage in an amount not less than
the coverage required to be maintained by the Participating Fund. The
aforesaid Bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.

2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.

ARTICLE III
FUND SHARES

3.1 The Contracts funded through the Separate Account will provide for
the investment of certain amounts in shares of each Participating Fund.

3.2 Each Participating Fund agrees to make its shares available for
purchase at the then applicable net asset value per share by Insurance
Company and the Separate Account on each Business Day pursuant to rules
of the Commission. Notwithstanding the foregoing, each Participating
Fund may refuse to sell its shares to any person, or suspend or
terminate the offering of its shares, if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole
discretion of its Board, acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, necessary
and in the best interests of the Participating Fund's shareholders.

3.3 Each Participating Fund agrees that shares of the Participating Fund
will be sold only to (a) Participating Companies and their separate
accounts or (b) "qualified pension or retirement plans" as determined
under Section 817(h)(4) of the Code. Except as otherwise set forth in

-4-
<PAGE>

this Section 3.3, no shares of any Participating Fund will be sold to
the general public.

3.4 Each Participating Fund shall use its best efforts to provide
closing net asset value, dividend and capital gain information on a
per-share basis to Insurance Company by 6:00 p.m. Eastern time on each
Business Day. Any material errors in the calculation of net asset
value, dividend and capital gain information shall be reported
immediately upon discovery to Insurance Company. Non-material errors
will be corrected in the next Business Day's net asset value per share.

3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the unit
values of the Separate Account for the day. Using this unit value,
Insurance Company will process the day's Separate Account transactions
received by it by the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m. Eastern time) to determine the net
dollar amount of each Participating Fund's shares that will be
purchased or redeemed at that day's closing net asset value per share.
The net purchase or redemption orders will be transmitted to each
Participating Fund by Insurance Company by 11:00 a.m. Eastern time on
the Business Day next following Insurance Company's receipt of that
information. Subject to Sections 3.6 and 3.8, all purchase and
redemption orders for Insurance Company's General Accounts shall be
effected at the net asset value per share of each Participating Fund
next calculated after receipt of the order by the Participating Fund or
its Transfer Agent.

3.6 Each Participating Fund appoints Insurance Company as its agent for
the limited purpose of accepting orders for the purchase and redemption
of Participating Fund shares for the Separate Account. Each
Participating Fund will execute orders at the applicable net asset
value per share determined as of the close of trading on the day of
receipt of such orders by Insurance Company acting as agent ("effective
trade date"), provided that the Participating Fund receives notice of
such orders by 11:00 a.m. Eastern time on the next following Business
Day and, if such orders request the purchase of Participating Fund
shares, the conditions specified in Section 3.8, as applicable, are
satisfied. A redemption or purchase request that does not satisfy the
conditions specified above and in Section 3.8, as applicable, will be
effected at the net asset value per share computed on the Business Day
immediately preceding the next following Business Day upon which such
conditions have been satisfied in accordance with the requirements of
this Section and Section 3.8.

-5-
<PAGE>

3.7 Insurance Company will make its best efforts to notify each
applicable Participating Fund in advance of any unusually large
purchase or redemption orders.

3.8 If Insurance Company's order requests the purchase of a Participating
Fund's shares, Insurance Company will pay for such purchases by wiring
Federal Funds to the Participating Fund or its designated custodial
account on the day the order is transmitted. Insurance Company shall
make all reasonable efforts to transmit to the applicable Participating
Fund payment in Federal Funds by 12:00 noon Eastern time on the
Business Day the Participating Fund receives the notice of the order
pursuant to Section 3.5. Each applicable Participating Fund will
execute such orders at the applicable net asset value per share
determined as of the close of trading on the effective trade date if
the Participating Fund receives payment in Federal Funds by 12:00
midnight Eastern time on the Business Day the Participating Fund
receives the notice of the order pursuant to Section 3.5. If payment in
Federal Funds for any purchase is not received or is received by a
Participating Fund after 12:00 noon Eastern time on such Business Day,
Insurance Company shall promptly, upon each applicable Participating
Fund's request, reimburse the respective Participating Fund for any
charges, costs, fees, interest or other expenses incurred by the
Participating Fund in connection with any advances to, or borrowings or
overdrafts by, the Participating Fund, or any similar expenses incurred
by the Participating Fund, as a result of portfolio transactions
effected by the Participating Fund based upon such purchase request. If
Insurance Company's order requests the redemption of any Participating
Fund's shares valued at or greater than $1 million dollars, the
Participating Fund will wire such amount to Insurance Company within
seven days of the order.

3.9 Each Participating Fund has the obligation to ensure that its shares
are registered with applicable federal agencies at all times.

3.10 Each Participating Fund will confirm each purchase or redemption
order made by Insurance Company. Transfer of Participating Fund shares
will be by book entry only. No share certificates will be issued to
Insurance Company. Insurance Company will record shares ordered from a
Participating Fund in an appropriate title for the corresponding
account.

3.11 Each Participating Fund shall credit Insurance Company with the
appropriate number of shares.

3.12 On each ex-dividend date of a Participating Fund or, if not a
Business Day, on the first Business Day thereafter, each Participating
Fund shall communicate to Insurance Company

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<PAGE>

the amount of dividend and capital gain, if any, per share. All
dividends and capital gains shall be automatically reinvested in
additional shares of the applicable Participating Fund at the net asset
value per share on the ex-dividend date. Each Participating Fund shall,
on the day after the ex-dividend date or, if not a Business Day, on the
first Business Day thereafter, notify Insurance Company of the number
of shares so issued.

ARTICLE IV
STATEMENTS AND REPORTS

4.1 Each Participating Fund shall provide monthly statements of account
as of the end of each month for all of Insurance Company's accounts by
the fifteenth (15th) Business Day of the following month.

4.2 Each Participating Fund shall distribute to Insurance Company copies
of the Participating Fund's Prospectuses, proxy materials, notices,
periodic reports and other printed materials (which the Participating
Fund customarily provides to its shareholders) in quantities as
Insurance Company may reasonably request for distribution to each
Contractholder and Participant.

4.3 Each Participating Fund will provide to Insurance Company at least one
complete copy of all registration statements, Prospectuses, reports,
proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Participating Fund
or its shares, contemporaneously with the filing of such document with
the Commission or other regulatory authorities.

4.4 Insurance Company will provide to each Participating Fund at least one
copy of all registration statements, Prospectuses, reports, proxy
statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Contracts or the
Separate Account, contemporaneously with the filing of such document
with the Commission.

-7-
<PAGE>

ARTICLE V
EXPENSES

5.1 The charge to each Participating Fund for all expenses and costs of
the Participating Fund, including but not limited to management fees,
administrative expenses and legal and regulatory costs, will be made in
the determination of the Participating Fund's daily net asset value per
share so as to accumulate to an annual charge at the rate set forth in
the Participating Fund's Prospectus. Excluded from the expense
limitation described herein shall be brokerage commissions and
transaction fees and extraordinary expenses.

5.2 Except as provided in this Article V and, in particular in the next
sentence, Insurance Company shall not be required to pay directly any
expenses of any Participating Fund or expenses relating to the distribution
of its shares. Insurance Company shall pay the following expenses or costs:

a. Such amount of the production expenses of any Participating
Fund materials, including the cost of printing a Participating
Fund's Prospectus, or marketing materials for prospective
Insurance Company Contractholders and Participants as Dreyfus
and Insurance Company shall agree from time to time.

b. Distribution expenses of any Participating Fund materials or marketing
materials for prospective Insurance Company Contractholders and
Participants.

c. Distribution expenses of any Participating Fund materials or marketing
materials for Insurance Company Contractholders and Participants.

Except as provided herein, all other expenses of each Participating Fund
shall not be borne by Insurance Company.

ARTICLE VI
EXEMPTIVE RELIEF

6.1 Insurance Company has reviewed a copy of the order dated December 23, 1987
of the Securities and Exchange Commission under Section 6(c) of the Act
with respect to Dreyfus Variable Investment Fund and a copy of the order
dated August 23, 1989 of the Securities and Exchange Commission under
Section 6(c) of the Act with respect to Dreyfus Life and Annuity Index
Fund, Inc. and, in particular, has reviewed the conditions to the relief
set forth in each related Notice. As set forth therein, if Dreyfus Variable
Investment Fund or Dreyfus Life and Annuity Index Fund, Inc. is a
Participating Fund, Insurance Company agrees, as applicable, to report any
potential or existing conflicts

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<PAGE>

promptly to the respective Board of Dreyfus Variable Investment Fund and/or
Dreyfus Life and Annuity Index Fund, Inc. and, in particular, whenever
contract voting instructions are disregarded, and recognizes that it will
be responsible for assisting each applicable Board in carrying out its
responsibilities under such application. Insurance Company agrees to carry
out such responsibilities with a view to the interests of existing
Contractholders.

The Dreyfus Socially Responsible Growth Fund, Inc., if it is a
Participating Fund, shall furnish Insurance Company with a copy of its
application for an order of the Securities and Exchange Commission under
Section 6(c) of the Act for mixed and shared funding relief, and the notice
of such application and order when issued by the SEC. Insurance Company
agrees to comply with the conditions on which such order is issued,
including reporting any potential or existing conflicts promptly to the
Board of The Dreyfus Socially Responsible Growth Fund, Inc., and in
particular whenever Contractholder voting instructions are disregarded, to
the extent such conditions are not materially different from the conditions
of the mixed and shared funding relief obtained by Dreyfus Variable
Investment Fund and Dreyfus Life and Annuity Index Fund, Inc.,
respectively; and recognizes that it shall be responsible for assisting the
Board of The Dreyfus Socially Responsible Growth Fund, Inc. in carrying out
its responsibilities in connection with such order. Insurance Company
agrees to carry out such responsibilities with a view to the interests of
existing Contractholders.

6.2 If a majority of the Board, or a majority of Disinterested Board Members,
determines that a material irreconcilable conflict exists with regard to
Contractholder investments in a Participating Fund, the Board shall give
prompt notice to all Participating Companies and any other Participating
Fund. If the Board determines that Insurance Company is responsible for
causing or creating said conflict, Insurance Company shall at its sole cost
and expense, and to the extent reasonably practicable (as determined by a
majority of the Disinterested Board Members), take such action as is
necessary to remedy or eliminate the irreconcilable material conflict. Such
necessary action may include, but shall not be limited to:

a. Withdrawing the assets allocable to the Separate Account from the
Participating Fund and reinvesting such assets in another
Participating Fund (if applicable) or a different investment medium,
or submitting the question of whether such segregation should be
implemented to a vote of all affected Contractholders; and/or

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<PAGE>

b. Establishing a new registered management investment company.

6.3 If a material irreconcilable conflict arises as a result of a decision by
Insurance Company to disregard Contractholder voting instructions and said
decision represents a minority position or would preclude a majority vote
by all Contractholders having an interest in a Participating Fund,
Insurance Company may be required, at the Board's election, to withdraw the
investments of the Separate Account in that Participating Fund.

6.4 For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will any
Participating Fund be required to bear the expense of establishing a new
funding medium for any Contract. Insurance Company shall not be required by
this Article to establish a new funding medium for any Contract if an offer
to do so has been declined by vote of a majority of the Contractholders
materially adversely affected by the irreconcilable material conflict.

6.5 No action by Insurance Company taken or omitted, and no action by the
Separate Account or any Participating Fund taken or omitted as a result of
any act or failure to act by Insurance Company pursuant to this Article VI,
shall relieve Insurance Company of its obligations under, or otherwise
affect the operation of, Article V.

ARTICLE VII
VOTING OF PARTICIPATING FUND SHARES

7.1 Each Participating Fund shall provide Insurance Company with copies, at no
cost to Insurance Company, of the Participating Fund's proxy material,
reports to shareholders and other communications to shareholders in such
quantity as Insurance Company shall reasonably require for distributing to
Contractholders or Participants.

Insurance Company shall:

(a) solicit voting instructions from Contractholders or Participants on a
timely basis and in accordance with applicable law;

(b) vote the Participating Fund shares in accordance with instructions
received from Contractholders or Participants; and

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<PAGE>

(c) vote the Participating Fund shares for which no instructions have been
received in the same proportion as Participating Fund shares for which
instructions have been received.

Insurance Company agrees at all times to vote its General Account shares in
the same proportion as the Participating Fund shares for which instructions
have been received from Contractholders or Participants. Insurance Company
further agrees to be responsible for assuring that voting the Participating
Fund shares for the Separate Account is conducted in a manner consistent
with other Participating Companies.

7.2 Insurance Company agrees that it shall not, without the prior written
consent of each applicable Participating Fund and Dreyfus, solicit, induce
or encourage Contractholders to (a) change or supplement the Participating
Fund's current investment adviser or (b) change, modify, substitute, add to
or delete from the current investment media for the Contracts.

ARTICLE VIII
MARKETING AND REPRESENTATIONS

8.1 Each Participating Fund or its underwriter shall periodically furnish
Insurance Company with the following documents, in quantities as Insurance
Company may reasonably request:

a. Current Prospectus and any supplements thereto; and

b. Other marketing materials.

Expenses for the production of such documents shall be borne by Insurance
Company in accordance with Section 5.2 of this Agreement.

8.2 Insurance Company shall designate certain persons or entities that shall
have the requisite licenses to solicit applications for the sale of
Contracts. No representation is made as to the number or amount of
Contracts that are to be sold by Insurance Company. Insurance Company shall
make reasonable efforts to market the Contracts and shall comply with all
applicable federal and state laws in connection therewith.

8.3 Insurance Company shall furnish, or shall cause to be furnished, to each
applicable Participating Fund or its designee, each piece of sales
literature or other promotional material in which the Participating Fund,
its

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<PAGE>

investment adviser or the administrator is named, at least fifteen Business
Days prior to its use. No such material shall be used unless the
Participating Fund or its designee approves such material. Such approval
(if given) must be in writing and shall be presumed not given if not
received within ten Business Days after receipt of such material. Each
applicable Participating Fund or its designee, as the case may be, shall
use all reasonable efforts to respond within ten days of receipt.

8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of a Participating Fund or
concerning a Participating Fund in connection with the sale of the
Contracts other than the information or representations contained in the
registration statement or Prospectus of, as may be amended or supplemented
from time to time, or in reports or proxy statements for, the applicable
Participating Fund, or in sales literature or other promotional material
approved by the applicable Participating Fund.

8.5. Each Participating Fund shall furnish, or shall cause to be furnished, to
Insurance Company, each piece of the Participating Fund's sales literature
or other promotional material in which Insurance Company or the Separate
Account is named, at least fifteen Business Days prior to its use. No such
material shall be used unless Insurance Company approves such material.
Such approval (if given) must be in writing and shall be presumed not given
if not received within ten Business Days after receipt of such material.
Insurance Company shall use all reasonable efforts to respond within ten
days of receipt.

8.6 Each Participating Fund shall not, in connection with the sale of
Participating Fund shares, give any information or make any representations
on behalf of Insurance Company or concerning Insurance Company, the
Separate Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as may be amended or supplemented from time to time, or in
published reports for the Separate Account that are in the public domain or
approved by Insurance Company for distribution to Contractholders or
Participants, or in sales literature or other promotional material approved
by Insurance Company.

8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for
use, in a newspaper, magazine or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards,

-12-
<PAGE>

motion pictures or other public media), sales literature (such as any
written communication distributed or made generally available to
customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, statements of
additional information, shareholder reports and proxy materials, and
any other material constituting sales literature or advertising under
National Association of Securities Dealers, Inc. rules, the Act or the
1933 Act.

ARTICLE IX
INDEMNIFICATION

9.1 Insurance Company agrees to indemnify and hold harmless each
Participating Fund, Dreyfus, each respective Participating Fund's
investment adviser and sub-investment adviser (if applicable), each
respective Participating Fund's distributor, and their respective
affiliates, and each of their directors, trustees, officers, employees,
agents and each person, if any, who controls or is associated with any
of the foregoing entities or persons within the meaning of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of Section 9.1),
against any and all losses, claims, damages or liabilities joint or
several (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted)
for which the Indemnified Parties may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect to thereof) (i) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in information furnished by Insurance Company
for use in the registration statement or Prospectus or sales literature
or advertisements of the respective Participating Fund or with respect
to the Separate Account or Contracts, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; (ii) arise out of or as a result of conduct,
statements or representations (other than statements or representations
contained in the Prospectus and sales literature or advertisements of
the respective Participating Fund) of Insurance Company or its agents,
with respect to the sale and distribution of Contracts for which the
respective Participating Fund's shares are an underlying investment;
(iii) arise out of the wrongful conduct of Insurance Company or persons
under its control with respect

-13-
<PAGE>

to the sale or distribution of the Contracts or the respective
Participating Fund's shares; (iv) arise out of Insurance Company's
incorrect calculation and/or untimely reporting of net purchase or
redemption orders; or (v) arise out of any breach by Insurance Company
of a material term of this Agreement or as a result of any failure by
Insurance Company to provide the services and furnish the materials or
to make any payments provided for in this Agreement. Insurance Company
will reimburse any Indemnified Party in connection with investigating
or defending any such loss, claim, damage, liability or action;
provided, however, that with respect to clauses (i) and (ii) above
Insurance Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission or alleged omission made in
such registration statement, prospectus, sales literature, or
advertisement in conformity with written information furnished to
Insurance Company by the respective Participating Fund specifically for
use therein. This indemnity agreement will be in addition to any
liability which Insurance Company may otherwise have.

9.2 Each Participating Fund severally agrees to indemnify and hold
harmless Insurance Company and each of its directors, officers,
employees, agents and each person, if any, who controls Insurance
Company within the meaning of the 1933 Act against any losses, claims,
damages or liabilities to which Insurance Company or any such director,
officer, employee, agent or controlling person may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) (1) arise out of
or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement or Prospectus
or sales literature or advertisements of the respective Participating
Fund; (2) arise out of or are based upon the omission to state in the
registration statement or Prospectus or sales literature or
advertisements of the respective Participating Fund any material fact
required to be stated therein or necessary to make the statements
therein not misleading; or (3) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the registration statement or Prospectus or sales
literature or advertisements with respect to the Separate Account or
the Contracts and such statements were based on information provided to
Insurance Company by the respective Participating Fund; and the
respective Participating Fund will reimburse any legal or other
expenses reasonably incurred by Insurance Company or any such director,
officer, employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided,

-14-
<PAGE>

however, that the respective Participating Fund will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
omission or alleged omission made in such registration statement,
Prospectus, sales literature or advertisements in conformity with
written information furnished to the respective Participating Fund by
Insurance Company specifically for use therein. This indemnity
agreement will be in addition to any liability which the respective
Participating Fund may otherwise have.

9.3 Each Participating Fund severally shall indemnify and hold Insurance
Company harmless against any and all liability, loss, damages, costs or
expenses which Insurance Company may incur, suffer or be required to
pay due to the respective Participating Fund's (1) incorrect
calculation of the daily net asset value, dividend rate or capital gain
distribution rate; (2) incorrect reporting of the daily net asset
value, dividend rate or capital gain distribution rate; and (3)
untimely reporting of the net asset value, dividend rate or capital
gain distribution rate; provided that the respective Participating Fund
shall have no obligation to indemnify and hold harmless Insurance
Company if the incorrect calculation or incorrect or untimely reporting
was the result of incorrect information furnished by Insurance Company
or information furnished untimely by Insurance Company or otherwise as
a result of or relating to a breach of this Agreement by Insurance
Company.

9.4 Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Article, notify the indemnifying party of the
commencement thereof. The omission to so notify the indemnifying party
will not relieve the indemnifying party from any liability under this
Article IX, except to the extent that the omission results in a failure
of actual notice to the indemnifying party and such indemnifying party
is damaged solely as a result of the failure to give such notice. In
case any such action is brought against any indemnified party, and it
notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such indemnified party, and to the extent that the
indemnifying party has given notice to such effect to the indemnified
party and is performing its obligations under this Article, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation.
Notwithstanding the

-15-
<PAGE>

foregoing, in any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent.

A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article IX.
The provisions of this Article IX shall survive termination of this
Agreement.

9.5 Insurance Company shall indemnify and hold each respective
Participating Fund, Dreyfus and sub-investment adviser of the
Participating Fund harmless against any tax liability incurred by the
Participating Fund under Section 851 of the Code arising from purchases
or redemptions by Insurance Company's General Accounts or the account
of its affiliates.

ARTICLE X
COMMENCEMENT AND TERMINATION

10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions
herein.

10.2 This Agreement shall terminate without penalty:

a. As to any Participating Fund, at the option of Insurance Company
or the Participating Fund at any time from the date hereof upon
180 days' notice, unless a shorter time is agreed to by the
respective Participating Fund and Insurance Company;

b. As to any Participating Fund, at the option of Insurance Company,
if shares of that Participating Fund are not reasonably available
to meet the requirements of the Contracts as determined by
Insurance Company. Prompt notice of election to terminate shall be
furnished by Insurance Company, said termination to be effective
ten days after receipt of notice unless the Participating Fund
makes available a sufficient number of shares to meet the
requirements of the Contracts within said ten-day period;

-16-
<PAGE>

c. As to a Participating Fund, at the option of Insurance Company,
upon the institution of formal proceedings against that
Participating Fund by the Commission, National Association of
Securities Dealers or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would, in
Insurance Company's reasonable judgment, materially impair that
Participating Fund's ability to meet and perform the Participating
Fund's obligations and duties hereunder. Prompt notice of election
to terminate shall be furnished by Insurance Company with said
termination to be effective upon receipt of notice;

d. As to a Participating Fund, at the option of each Participating
Fund, upon the institution of formal proceedings against Insurance
Company by the Commission, National Association of Securities
Dealers or any other regulatory body, the expected or anticipated
ruling, judgment or outcome of which would, in the Participating
Fund's reasonable judgment, materially impair Insurance Company's
ability to meet and perform Insurance Company's obligations and
duties hereunder. Prompt notice of election to terminate shall be
furnished by such Participating Fund with said termination to be
effective upon receipt of notice;

e. As to a Participating Fund, at the option of that Participating
Fund, if the Participating Fund shall determine, in its sole
judgment reasonably exercised in good faith, that Insurance
Company has suffered a material adverse change in its business or
financial condition or is the subject of material adverse
publicity and such material adverse change or material adverse
publicity is likely to have a material adverse impact upon the
business and operation of that Participating Fund or Dreyfus, such
Participating Fund shall notify Insurance Company in writing of
such determination and its intent to terminate this Agreement, and
after considering the actions taken by Insurance Company and any
other changes in circumstances since the giving of such notice,
such determination of the Participating Fund shall continue to
apply on the sixtieth (60th) day following the giving of such
notice, which sixtieth day shall be the effective date of
termination;

f. As to a Participating Fund, upon termination of the Investment
Advisory Agreement between that Participating Fund and Dreyfus or
its successors unless Insurance Company specifically approves the
selection of a new Participating Fund investment adviser. Such

-17-
<PAGE>

Participating Fund shall promptly furnish notice of such
termination to Insurance Company;

g. As to a Participating Fund, in the event that Participating Fund's
shares are not registered, issued or sold in accordance with
applicable federal law, or such law precludes the use of such
shares as the underlying investment medium of Contracts issued or
to be issued by Insurance Company. Termination shall be effective
immediately as to that Participating Fund only upon such
occurrence without notice;

h. At the option of a Participating Fund upon a determination by its
Board in good faith that it is no longer advisable and in the best
interests of shareholders of that Participating Fund to continue
to operate pursuant to this Agreement. Termination pursuant to
this Subsection (h) shall be effective upon notice by such
Participating Fund to Insurance Company of such termination;

i. At the option of a Participating Fund if the Contracts cease to
qualify as annuity contracts or life insurance policies, as
applicable, under the Code, or if such Participating Fund
reasonably believes that the Contracts may fail to so qualify;

j. At the option of any party to this Agreement, upon another
party's breach of any material provision of this Agreement;

k. At the option of a Participating Fund, if the Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law; or

l. Upon assignment of this Agreement, unless made with the written
consent of every other non-assigning party.

Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2f or
10.2k herein shall not affect the operation of Article V of this
Agreement. Any termination of this Agreement shall not affect the
operation of Article IX of this Agreement.

10.3 Notwithstanding any termination of this Agreement pursuant to Section
10.2 hereof, each Participating Fund and Dreyfus may, at the option of
the Participating Fund, continue to make available additional shares of
that Participating Fund for as long as the Participating Fund desires
pursuant to the terms and conditions of this Agreement as provided
below, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as

-18-
<PAGE>

"Existing Contracts"). Specifically, without limitation, if that
Participating Fund and Dreyfus so elect to make additional
Participating Fund shares available, the owners of the Existing
Contracts or Insurance Company, whichever shall have legal authority to
do so, shall be permitted to reallocate investments in that
Participating Fund, redeem investments in that Participating Fund
and/or invest in that Participating Fund upon the making of additional
purchase payments under the Existing Contracts. In the event of a
termination of this Agreement pursuant to Section 10.2 hereof, such
Participating Fund and Dreyfus, as promptly as is practicable under the
circumstances, shall notify Insurance Company whether Dreyfus and that
Participating Fund will continue to make that Participating Fund's
shares available after such termination. If such Participating Fund
shares continue to be made available after such termination, the
provisions of this Agreement shall remain in effect and thereafter
either of that Participating Fund or Insurance Company may terminate
the Agreement as to that Participating Fund, as so continued pursuant
to this Section 10.3, upon prior written notice to the other party,
such notice to be for a period that is reasonable under the
circumstances but, if given by the Participating Fund, need not be for
more than six months.

10.4 Termination of this Agreement as to any one Participating Fund shall
not be deemed a termination as to any other Participating Fund unless
Insurance Company or such other Participating Fund, as the case may be,
terminates this Agreement as to such other Participating Fund in
accordance with this Article X.

ARTICLE XI
AMENDMENTS

11.1 Any other changes in the terms of this Agreement, except for the
addition or deletion of any Participating Fund as specified in Exhibit
A, shall be made by agreement in writing between Insurance Company and
each respective Participating Fund.

-19-
<PAGE>

ARTICLE XII
NOTICE

12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:

Insurance Company: PFL Life Insurance Company
4333 Edgewood Road NE
Cedar Rapids, Iowa 52499-0001
Attn: Financial Markets Division Legal
Department

Participating Funds: [Name of Fund]
c/o Premier Mutual Fund Services, Inc.
200 Park Avenue, 6th Floor West
New York, New York 10166
Attn: Elizabeth A. Bachman, Esq.

with copies to: [Name of Fund]
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Attn: Mark N. Jacobs, Esq.
Lawrence B. Stoller, Esq.

Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Attn: Lewis G. Cole, Esq.
Stuart H. Coleman, Esq.

Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.

ARTICLE XIII
MISCELLANEOUS

13.1 This Agreement has been executed on behalf of each Fund by the
undersigned officer of the Fund in his capacity as an officer of the
Fund. The obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any
director, trustee, officer or shareholder of the Fund individually. It
is agreed that the obligations of the Funds are several and not joint,
that no Fund shall be liable for any amount owing by another Fund and
that the Funds have executed one instrument for convenience only.

-20-
<PAGE>

ARTICLE XIV
LAW

14.1 This Agreement shall be construed in accordance with the internal laws
of the State of New York, without giving effect to principles of
conflict of laws.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be duly
executed and attested as of the date first above written.

PFL LIFE INSURANCE COMPANY

By: /s/ William L. Busler
-----------------------

Its: President
----------------------

Attest:/s/ Dawn L. Krousie
-----------------------

DREYFUS LIFE AND ANNUITY INDEX FUND,
INC. (d/b/a DREYFUS STOCK INDEX FUND)

By: /s/ Elizabeth Keeley
-----------------------
Its: Vice President
----------------------
Attest:/s/ Illegible
-----------------------

THE DREYFUS SOCIALLY RESPONSIBLE GROWTH
FUND, INC.

By: /s/ Elizabeth Keeley
-----------------------
Its: Vice President
----------------------
Attest:/s/ Illegible
-----------------------

DREYFUS VARIABLE INVESTMENT FUND

By: Elizabeth Keeley
-----------------------
Its: Vice President
----------------------

Attest:/s/ Illegible
-----------------------

-21-
<PAGE>

EXHIBIT A

LIST OF PARTICIPATING FUNDS

Dreyfus Variable Investment Fund - Small Cap Portfolio

Dreyfus Variable Investment Fund - Quality Bond Portfolio

Dreyfus Variable Investment Fund - Capital Appreciation Portfolio

Dreyfus Variable Investment Fund - Growth and Income Portfolio

Dreyfus Variable Investment Fund - Disciplined Stock Portfolio

-22-

<PAGE>

EXHIBIT 14
----------

POWERS OF ATTORNEY
<PAGE>

POWER OF ATTORNEY
WITH RESPECT TO
ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Know all men by these presents that Patrick S. Baird, whose signature appears

below, constitutes and appoints Brenda K. Clancy and Craig D. Vermie, and each

of them, his attorneys-in-fact, each with the power of substitution, for him in

any and all capacities, to sign any registration statements and amendments

thereto for the Atlas Portfolio Builder Variable Annuity, and to file the same,

with exhibits thereto and other documents in connection therewith, with the

Securities and Exchange Commission, hereby ratifying and confirming all that

each of said attorneys-in-fact, or his substitute, may do or cause to be done by

virtue hereof.

/s/ Patrick S. Baird
------------------------
Patrick S. Baird
Director
PFL Life Insurance Company

April 25, 1997
- -------------------
Date

<PAGE>

POWER OF ATTORNEY
WITH RESPECT TO
ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Know all men by these presents that Craig D. Vermie, whose signature appears

below, constitutes and appoints Brenda K. Clancy and Craig D. Vermie, and each

of them, his attorneys-in-fact, each with the power of substitution, for him in

any and all capacities, to sign any registration statements and amendments

thereto for the Atlas Portfolio Builder Variable Annuity, and to file the same,

with exhibits thereto and other documents in connection therewith, with the

Securities and Exchange Commission, hereby ratifying and confirming all that

each of said attorneys-in-fact, or his substitute, may do or cause to be done by

virtue hereof.

/s/ Craig D. Vermie
-----------------------
Craig D. Vermie
Director
PFL Life Insurance Company

April 25, 1997
- ------------------
Date

<PAGE>

POWER OF ATTORNEY
WITH RESPECT TO
ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Know all men by these presents that William L. Busler, whose signature appears

below, constitutes and appoints Brenda K. Clancy and Craig D. Vermie, and each

of them, his attorneys-in-fact, each with the power of substitution, for him in

any and all capacities, to sign any registration statements and amendments

thereto for the Atlas Portfolio Builder Variable Annuity, and to file the same,

with exhibits thereto and other documents in connection therewith, with the

Securities and Exchange Commission, hereby ratifying and confirming all that

each of said attorneys-in-fact, or his substitute, may do or cause to be done by

virtue hereof.

/s/ William L. Busler
-------------------------
William L. Busler
Director
PFL Life Insurance Company

April 25, 1997
- -------------------
Date

<PAGE>

POWER OF ATTORNEY
WITH RESPECT TO
ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Know all men by these presents that Patrick E. Falconio, whose signature appears

below, constitutes and appoints Brenda K. Clancy and Craig D. Vermie, and each

of them, his attorneys-in-fact, each with the power of substitution, for him in

any and all capacities, to sign any registration statements and amendments

thereto for the Atlas Portfolio Builder Variable Annuity, and to file the same,

with exhibits thereto and other documents in connection therewith, with the

Securities and Exchange Commission, hereby ratifying and confirming all that

each of said attorneys-in-fact, or his substitute, may do or cause to be done by

virtue hereof.

/s/ Patrick E. Falconio
---------------------------
Patrick E. Falconio
Director
PFL Life Insurance Company

April 25, 1997
- ------------------
Date

<PAGE>

POWER OF ATTORNEY
WITH RESPECT TO
ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Know all men by these presents that Douglas C. Kolsrud, whose signature appears

below, constitutes and appoints Brenda K. Clancy and Craig D. Vermie, and each

of them, his attorneys-in-fact, each with the power of substitution, for him in

any and all capacities, to sign any registration statements and amendments

thereto for the Atlas Portfolio Builder Variable Annuity, and to file the same,

with exhibits thereto and other documents in connection therewith, with the

Securities and Exchange Commission, hereby ratifying and confirming all that

each of said attorneys-in-fact, or his substitute, may do or cause to be done by

virtue hereof.

/s/ Douglas C. Kolsrud
----------------------
Douglas C. Kolsrud
Director
PFL Life Insurance Company

April 25, 1997
- ------------------
Date

<PAGE>

POWER OF ATTORNEY
WITH RESPECT TO
ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Know all men by these presents that Robert J. Kontz, whose signature appears

below, constitutes and appoints Brenda K. Clancy and Craig D. Vermie, and each

of them, his attorneys-in-fact, each with the power of substitution, for him in

any and all capacities, to sign any registration statements and amendments

thereto for the Atlas Portfolio Builder Variable Annuity, and to file the same,

with exhibits thereto and other documents in connection therewith, with the

Securities and Exchange Commission, hereby ratifying and confirming all that

each of said attorneys-in-fact, or his substitute, may do or cause to be done by

virtue hereof.

/s/ Robert J. Kontz
------------------------
Robert J. Kontz
Vice President and Corporate Controller
PFL Life Insurance Company

April 25, 1997
- -------------------
Date

<PAGE>

POWER OF ATTORNEY
WITH RESPECT TO
ATLAS PORTFOLIO BUILDER VARIABLE ANNUITY

Know all men by these presents that Brenda K. Clancy, whose signature appears

below, constitutes and appoints Brenda K. Clancy and Craig D. Vermie, and each

of them, her attorneys-in-fact, each with the power of substitution, for her in

any and all capacities, to sign any registration statements and amendments

thereto for the Atlas Portfolio Builder Variable Annuity, and to file the same,

with exhibits thereto and other documents in connection therewith, with the

Securities and Exchange Commission, hereby ratifying and confirming all that

each of said attorneys-in-fact, or his substitute, may do or cause to be done by

virtue hereof.

/s/ Brenda K. Clancy
---------------------------
Brenda K. Clancy
Treasurer
PFL Life Insurance Company

April 25, 1997
- ------------------
Date